NABL - Earnings call transcript Q2 2024

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Welcome to the N-able Second Quarter 2024 Earnings Call. My name is Sam, and I will be coordinating your call today. I will now hand you over to your host, Griffin Gyr, to begin. Griffin, please go ahead.

Griffin Gyr

Thanks, operator, and welcome, everyone, to N-able's Second Quarter 2024 Earnings Call. John and President CFO. are Tim CEO; today EVP O'Brien, me Pagliuca, and N-able's and With

including being These of in are our Following during prepared the with There, release, question-and-answer market the currently a to made is global and which line today's filings and our statements prepared required you today's for webcast forward-looking the highlighted to our opportunities remarks, financial our risks this outlook, statements those on to during of a call. and session. information our we number can law. business. also is information statements impact concerning we uncertainties, This earnings Certain are earnings at on intended Relations the based our also this remarks including website economic Investor duty will SEC. and statements, find those no open as simultaneously update are subject call environment release and undertake investors.n-able.com. on press assumptions, call our These supplement except available our by

in our non-GAAP website. A otherwise is the press Additional filings we Copies Investor information measures. and the and measures them to Investor and will refer to is we call non-GAAP the on risks with statements financial Unless referring financial to today's Relations SEC our from when available call. specified, will we highlighted today's Relations earnings of or financial in Furthermore, concerning discussed certain non-GAAP on release on are be on reconciliation GAAP measures measures, earnings website. release uncertainties available associated SEC. today's various financial and these with our our discuss

the John. call I over to Now will turn

John Pagliuca

update second everyone joining an Thank you, call. objectives the our other Today, strategic progress on us I market results, initiatives. and and and our on share discuss business on environment will welcome top quarter the Griffin, to

on of a quarter and end was representing XX% XX%. bottom-line Small consecutive Revenue the our pressure currency And and revenue our reported concern. top we cite EBITDA growth basis. guidance. operations. an standout growing to with surveyed the companies theme currency where results, their XX our Security the EBITDA the businesses Let's Small Rule north Business was EBITDA was on a XX% protect report, basis. of are U.S. a top $XXX.X constant exceeded marks adjusted Index of constant seventh in of acute feeling million, high This and According adjusted of a as quarter. operating margin medium-sized of Commerce start approximately on $XX.X adjusted Chamber million, to and cybersecurity a year-over-year

security Our and and response, management of protection portfolio extensive they protection critical endpoint deserve. password detection the and offers e-mail detection managed advanced response,

protect enterprise-grade SMBs and across multi-tenant now in Powerful key our capabilities security to are our easy solution environment our and X-minute time As the approximately configuration self-provisioning the our success. robust million endpoints seamlessly with SMB, protect delivering and money. while to this success Enabling frictionless experience deployment, we the MSP's one testament X.X to protection saving helped EDR MSP's solution. buying

launched MDR newly Our resonating. also solution is

considerable While stage quarter. still this cycle of with incidents, at themselves its add is innings, and alerts human interpretation to ability democratizes provide to fastest-growing them human our the empowering eyes true glass game MSP's tracking with increased SKUs and MDR This internal operations, augment to in as N-able staff. on changer. one the MSP of without early a burdening life spot a MDR bright in secure

market. We fast-growing are continue confident this we that are positioned penetrating to MDR well multibillion-dollar

loss. get any event software data affordably quickly, to Cove, also disaster, cyber-attack, our is and to outage to systems protection cause unexpected a and ensure they that natural attack must place an successful can does restore MSPs data just stopping due Cove, that. back in With While data or recover comprehensively business. have paramount, businesses that solution data could

Our our share protection Security across this XXX segment. data protecting market Microsoft backup in solution grow priority continue and to is is a critical users, X.X organizations. now million we

paradigm Our believers quarterly growth. and critical we product deserve, management to proud data MSPs platform. results protection efficiently demand rising and and are security creating IT our into reflect long-term protection SMBs, the levels considerable and they are the integrated this cyber With with regulatory requirements leading group security the our threat software and for risk, steadfast bring pressure in

now objectives. look made business Let's at the on our top progress

our In new data development capabilities. improved engine capabilities, compliance and to requirements. product allowing meet changing dramatically protection, retention legal we continues variable Our deliver to partners

product also cloud-first multi-tenant architecture capabilities. and ease highlights usage integration the advantages capabilities information, These with strong use This on product PSA cases, of We further greatly our cost build of enhancing bolstered billing. ownership. clear integration foundational PSA of value-added Cove's favorable

what We a as most assets, our continue data. enterprise's to critical cost of further trusted protector position

boosting time-saving that feature and are customer means face our are critical led IT and strong deals the top quarter. improvements mark. MSP RMM advocates third-party One update list provisioning scaling list are considerable the into like customer efforts strengthening representing X presence the complexity requested their year-over-year. capabilities. top powerful In manage gives XX% progress they way us industry meeting enhancement. often for heterogeneous the the systems rose of new process our MSPs centralization over N-able as highly users in our our operations. multiple our MSPs offer new of our great partner clients. Central, of And with for identity an a the tedious This platform, made RMM These improvements confidence is central, platforms. repetitive Efficiency centralization deprovisioning A in in the number partners X growing resonating acquisition MSP also product the in motion, on customer and market. leading We automated of of now exciting management identity is We N-able.

simpler software to Our are MSPs empower and IT delivering. is and mission that we makes with safer

key geographic invested our a front, year. beginning sales German go-to-market in we market perspective, From in the of the direct at motion advancements. the we the On made

lead the part the of already generation in curve, investment doubled. While we nearly early still are has

region representing MSP return investment the significant the months strong over years. we With and coming spending, will believe a have and this GDP

model We with peers. are recovery their security and These co-master programs product approach with with and we of digital market, to believe partners purpose repairing, business human set that resonating success our prospects. our with serve disaster is seeing part also learn customers and customer of fragmented engagement technology in go a our them dual us to initiatives loop SME classes. our the access on educating that the allows model them and of our connecting from MSPs, efficient Strategic profitably enabling is beyond the

and enterprise-focused perspective, outsource segments. achievement. success across a expands trends their upmarket the portions have From MSPs. both grow In And mature also seeing operational IT to market. of central MSPs. operational with at increasing continue fast front, seen larger work market reflects on and clip, success appeal to enterprises are our our sales market our traction innovation specialized we the to and complexity, prompting IG product This We continued direct larger we a customer with our saw

testament the Our XXX to this recognition stands in a on our as MES mid-market sector. success

our our on to the initiative to customer environment. update XXXX entered strategic a an We and relationship. with market contract long-term turning transform Now objective

began year N-able, annual for customers to scaling flexibility. the a from and agreements. over have the so from multiyear market to our deals. relationship effort month-to-month our MSPs with level needs, contracts and consumption we MSP demand this more We XX% ramped meet revenue prefer than operational predictability stability drive to up predictable transition customer As of To a commercial matures, consumption multiyear and/or annual less growing

operations be MRR into We frees of the predictability fluctuations partner this drive a up downward allowing help of multiple gross by will XX% and discussions, contracts, spend for long-term Providing minimize from better committed to which the believe resources, net expansion-focused we customers our our symbiotic strong Now retention. support long-term retention. high will revenue can for N-able. alignment cross-sell cements long-term This expect success and believe time our contracts initiative approximately drives with strategic entering position on partner long-term also and initiative will both MSPs is more year. stronger our economics most with drive sides. our end future as benefits and customers' spending and them We our help

the for success. We strategy been are sustained as are contracts impact right signing optimize said, there long-term have long-term near-term their estates customers that confident That negative financial before deals.

market. the to Turning

diligent MSPs excellence, remain and face maturing. also strive for As they space endpoint budgets. cost is tight customer security The scale to continue and operational

weighed with investing term. hundreds year-over-year. XX% up of focus and year, growth these bookings our our navigate rigor MSPs continue security with thousands Although to with enterprise N-able, on positive, term, on to MSPs over have Customers while remain checks organizations with value globally. continue channel business our executing of short factors provide IT to is mission-critical and long services the our their grow drive to And we and this

upgrades believe execute clear expanding a and of is management capture delivered game will a new have growth. core our on cloud Modernization IT to Our slice top estate allow streamlined user deeper One objectives. a continuing strategic fixed broader modernizing efforts us experience. to SMB already objective is and the X management that platform. We IT the propel and capabilities, our area performance focus

to security platform, would Protection to to positions and than results for discuss faster to attractive management grow tailored to And then With these is I and broader outlook. to and backup budgets. Tim? turn that, remarks. our to MSP's believe objective paramount projected in Another is presence and We security. deepening closing Cove, which over unique back our IT generally needs powerful cloud our circle call resilience I'll growth MDR the spending win are financial Tim some IT in us and categories. like customers

Tim OBrien

John, you, us and you today. thank joining for all Thank

protection line. outcomes security results on IT exceeding quarter. our rely in continue Our MSPs SMEs leading were the growth on second the to and produce management, with business security and data critical our data bottom quarter strong, solutions and top and to protection guidance

constant total trailing or ARR, basis XX% of on calculated quarter ARR, million. up We a X,XXX sale up services represent XX-month more and contributing XX% ARR revenue $XX,XXX historical associated was of of with $XX,XXX XXX% Partners a revenue approximately retention, XX% basis. of which revenue XX% from licenses sales For million, representing reported was results, million, $XXX.X approximately total consists growth $XXX.X our perpetual basis. professional Other representing approximately growth Subscription revenue quarter which year-over-year reported now with which is basis. and a partners ago. was constant on year on a primarily a with over approximately of the constant year-over-year on second approximately revenue and X% is the currency revenue, currency year-over-year. the maintenance ended our or from net $X was of currency from approximately Dollar-based XXX% services

As quarter. in our a changes, pricing with began our packaging related coupled the materially impacting rationalization net retention and second reminder, to initiative contract long-term starting revenue

Turning profit in non-GAAP all Note in press unless are to otherwise to stated, the references basis items margins. provided non-GAAP profit reconciliations and a measures the and GAAP exclude on that and calculated outlined to release. expenses today's

margin to the period gross XXXX. in quarter XX.X% compared same was Second XX.X% in

Second an $X.X free was $XXX the Unlevered million per margin year-over-year, was approximately based million million approximately up our $X.XX We $XX.X development Approximately approximately in million, in XXX revenue. XX% was share of net loan in weighted X.X% shares. software EBITDA of principal million revenue approximately outstanding diluted the earnings quarter North average balance and approximately Non-GAAP of representing million, capitalized million of $XXX costs adjusted representing with inclusive of was leverage X.Xx. second was of outside $XX.X quarter. cash quarter. EBITDA $X.X CapEx flow on or the of America the XX% XX% ended of adjusted cash quarter quarter

above will of our end our Before second guidance our turning was results. the Revenue range. outlook, to commentary financial give I quarter high on

adjusted ASC with from rationalization long-term the revenue amount The results, EBITDA performance of be steady and positive driven a triggered some treatment effect of customers revenue partially standards EBITDA revenue FX long-term positive lump quarter increased the and impact our to spend impact of by month to and month-to-month remainder in of contracts demand, in and our is from that long-term long-term from in expectations contract a relative ARR mentioned. by was accounting which for XXX future portion in-period About the net reflects with initiative the XX% arrangements contract a contract accordance the signing an of through recognized nature, will transitioned Our that net ASC our on-premise offset adjusted lumpiness by XXX flows John approximately a initiatives. accelerated in contracts. sum to drives revenue to from recognition ratably in customers the the on-premise impact a $XXX,XXX in contracts, in positive our periods. XXX impact over long-term This in term. contract of revenue begins resulted recognized as recognized call from

the expect positive positive the contract in pronounced the and in from impact a long-term net revenue We to initiative for the be to impact second to net result quarter most year.

to Turning financial outlook. our

for guidance following the elements. accounts Our

our call. closely FX of million euro and impact X.XX approximately are pound of we May other remainder for the environment. First, current our the rates assuming to rates positive of updates of XXXX relative rate updated reflect currencies XXXX, the the FX during for the with for $X.X to more along X.XX remainder These to for drive assumptions revenue

long-term anticipate in initiative be revenue customers drive reflects less moderate half to of Second, second our the our converting associated anticipate to impact net We retention in long-term with We near-term contracts. contract net long-term pronounced the pressures year. continued will guidance benefits. the success face will

expect Third, revenue in a we representing $XXX anticipate $XXX.X growth in for X% on of an the X% basis. uncertain XXXX, quarter reported a million we that X% total currency and year-over-year million, in to environment. basis the to approximately mind, on constant With macro third growth of range operating

EBITDA adjusted in range EBITDA representing million adjusted quarter to of an XX%. third $XX expect of margin We $XX.X the million,

constant approximately currency $XXX the year-over-year a revenue we on total and year now million, XXXX, expect reported For representing $XXX basis. of million growth full to XX%

of approximately raising We adjusted up and adjusted EBITDA EBITDA margin. million the our $XXX.X now adjusted full million an midpoint XX% and at range year approximately EBITDA expect outlook $XXX.X year-over-year in to are XX% the representing

relative dynamics the CapEx, capitalized year While X% We quarters, expect full within approximately XXXX. outlook revenue slightly guidance. last reiterate of XXX costs revenue total we to and shifts profit which outlook raising our of we are be our software midpoint development that for created will includes the

We adjusted XX% also free cash year. to approximately for EBITDA to conversion be unlevered expect full flow the

shares the approximately $XXX $XXX diluted third average million and weighted million the $XXX for million full total outstanding expect to year. to We of $XXX million quarter for

to XX% approximately rate be XX% our expect the our third the for year the raise year. were tax quarter we of adjusted ability EBITDA full In Finally, full the our non-GAAP to midpoint revenue we pleased and with in closing, second quarter and and outlook.

remained transitory pressures, and set While new customer which a we level growth. steady, for see have we strong believe some retention acquisitions future MSP foundation

growing We will continue sheet, aim margins, opportunity. profit our growth. inorganic to and make balance also generation selective explore growth for investments to And we cash capture avenues market the strong with to

turn over will to closing remarks. I for Now John it

John Pagliuca

year believe the ambitious We goals have business progress the tremendous for made beyond. and the Tim. half in and Thanks, quarter across of the we've second second

aim our additional total, drive to drivers forward. to believe our high and range and to of include IT, long-term in growth opportunity remains the both successful of gross we towards In an customer market our XXX% outlook with of the and MSPs our with platform growth. security MSPs With coupled the tactical sustain growing retention the view and in market Primary new the product XXs N-able low larger we fuel solution of retention to and cross-selling can MDR product Successful to mid-single contribute algorithm XXs. shift in vision, our business new drive the presence initiatives meaningfully Our expanded net and set mid-teens. the internal digits acquisition growth modernization steadfast. Cove, execution grow fueling contract

important, questions. running. globe. for and leading As empower never up successful are with drive is we mission with MSPs to keep the the our open technology needed the more We global to has across that demonstrated, IT for been believe IT continue excited we'll businesses world outcomes to to recent outage Operator? that, the And line

Operator

Thank We you first Hedberg Instructions] very from have from RBC. [Operator Matthew much. question our

Michael Richards

from you've optimization customers that you was quarter? quantify And customers? like Mike about in portfolio? Where Maybe could impact into to you're It's you your expectations? guidance seen? heading the that are is come you seeing your already in seeing that from this And Matt. in positive Richard it for guys terms product more the of then contemplated could talk relative Like how on

John Pagliuca

Mike, ask realize. Look, second so device on The start. really that about a this that think in and to exercise John. that. month. in this important it's the realizing for it. of little have of can part our the to your is are base, go part more really is strategy expansion folks I'll within I'll audience give timing our also the on $X we've the the I expand. per to bit that. color add broader the Tim strategy And We and picture an of per customers, and then opportunity the this of to make sure have into them question. to $XX-plus the more the aligned been predictability to to group understand at And mentioned related $X is we lock reason of We've we look offerings. focus we our just about

Now added opportunity, thing now with would space we've cross-sell customer. we've be the growing, bits Cove we that that to that MDR in that right the in additional lock white opportunity felt added

wants. And us, have choice, N-able see X/X usually or which consumption technology where we locking opportunity consolidation. be we call the when lean stack remain years really there has but I the that go the what customers to market to of MSP we're not we're and better itself, trying When X is or a it X consolidation, also but much So we believe that's notably, MSP customer we in, based, then arrangement itself, be. billings offense, those market And into on what most see in X/X to would a our fluctuations defense. the we MSP month-to-month would may now do

in it's base and us, on is in on equation really space the just therefore, massive. growth the our for white opportunity the so, also we customers, And able that to lock the within part focusing get of because going expand being those can

of So be them and say That's consumption you XX-month that's $XX,XXX a really I'd things. can based, $XX,XXX in or seeing some recurring that customer the of to big rationalization. Where asking a I anecdote the collection might Look, more us we're it's period. give a bits. giving revenue. we're if of monthly to commit of completely an

the concessions in for that customer exchange look long-term some imagine that for might pricing can commitment. You

are we situations we're pricing like where asking term. that long And partner. to commitment fine in So seeing we're frankly in that for in concessions it lock the them with strategic giving as a customer exchange some

that So then necessarily if we're there. solutions to might they their seeing no it if type go XX, to There's "Hey, when And somebody there's it. some some might you're months. there asking that commit area, try product asking months, that's It's seeing me XX really software I they nature, about, and of have more estate realize. devices in going by to through they're not heightened XX say, you're thing see to be might to just or would commit, some

bottom manner. at and me, responsible make -- to they make look to these and their estate a commit" that top Let sure SMEs, because willing end line sure the of excuse my the day, me or MSPs driving in and they're at want these I'm that SMEs

customers as the this. expected as Overall, far willing to has to the of we wanting commit, of So commit. ahead LTC expectation program some been

as a we're So of and up ends that is market. a in seeing bit And right ahead good in result, products pull that XXX. happening I more we're little what related confidence to us the of that that gives vote you're think program, a putting

customers base commit. that more of we kind ago. So we a an more to had indicator the than months is on revenue XXX as of even And are pull-in result, have a a willing the resilient X

Michael Richards

seen volatility the guys Was follow-up. the quick perspective from and now shape with that software some anything up of heightened some and macro market macro given like have peers linearity in a July quarter a the then maybe And saw heading you uncertainty. Great. some How of did there things out into worsened quarter?

color on more as that some Just well.

John Pagliuca

acquisition remarks, as best both far our north The being with XX%. is of in the indicator in our Overall, XX%. of Sure. also as we bookings of market new the referenced some sales, bookings. velocity and up new elements customer our prepared bookings SKU And were up

really. late price. continuing are These that support the they're their resonating demand, to SMEs we're that high really I'd health to financial the a continuing this MSPs our products what to checking all that, The overall, just sure service resilient, in seeing in institutes, MSPs are demand and customers the making really in in high out those there, market. the demand that's some are double be they're because SMEs, government. care, a channel they're Again, as as see call indicator. the part, to within So in quite good Anything the mission-critical Not quarter, for state is we're most more they're are SMEs. say local checks our providing And in right? the even month?

price recession endpoint in they're make security, And But making those resilient their sure for that would I and, we're markets. as they're double an that best are MSPs paying getting right sure to they're overall things seeing being So their value. checking like say, that example. SME SMEs said, resilient

Operator

Ader Our Jason from next William from comes question Blair.

Jason Ader

just do that's bookings, a factor on going is understand, was up going why XX%, I bookings going that XX that's help if number. to month, to Is some bookings a the there? that shift of that multiyear On Because so annual to the really the wanted strong? in you're

John Pagliuca

you asked could that this I'm Jason. we Great clarify. so question. glad

the So that our bookings the it's contract way annual define we are value.

value XX the the So of months.

multiyear was deal, it counting we if that wouldn't even be So way. frankly, a

contract N-able customer new acquisition, purely new landed from and of XX the So new annual is first and then to the customers some months value this our SKU.

Cove, you new are customer and be and consume that SKU. made would you go decision central if So the a right a now to

contract, I'd year, say X or anything of months. type And type XX it's of multiyear any so, all it excludes

Jason Ader

data then growth. the I guess That's under trying the just with is the second helpful half, All bookings I'm reconcile XX% for clarification. to which guidance And right.

you how us do help So reconcile delta. that

Tim OBrien

And we've referenced, Tim. is or this quarter X, quarters. quarter, A spoken last of grow before, the X, we quarter of One it's year, spoke into couple things. to last and X that that packaging pricing headwind of last couple over Jason, one about the and to will the X-point next in that's well. we to X.X as a carry QX year changes

And some of headwinds X quarters. for carry the transitory really

that's part not of long-term And John spoke is moving that of that part equation. part as That's have so that our our these of into rationalization to bookings. of customers What's not bookings also been contracts. any

factored So things say, those second performance the are year our in bookings versus dragging guidance would X year-over-year combined the the into half the component. what I of that's

So business we're fundamentals strong. are the the highlight of really that trying to very

the with into half XXXX, acutely with on Our those and us really year up in this the will the a those is we headwinds through and half. benefit of carry grow this to are acceleration couple the transitory we'll through part XXXX. and into these half customers thesis of more next what but second drive year of transitory beyond we'll X the that committed last the in headwinds second dollar the focusing MSP and in that, second have long-term retention cross-selling We of post growth quarters. believe and line just is into of strong, through Bookings early XX% year-over-year. But have year

Jason Ader

a quick All right. follow-up. X-part Then just

to market tied annual there? moving rec from monthly? monthly in did are Or QX then guys second that in unique in-period are half shift the you secondly, the annual. vendors is you other in like to from wouldn't why rev to also see more you And First

Tim OBrien

take take the I'll Maybe can one. the and second you Sure. one first

yes, this. are the of we X/X the little offense a bit X/X defense. So competitors, fact, in and seeing I mentioned

competitors, to and by customers are deals, large, multiyear locking in Our actually.

ways, type an a a some bit they're mature a much say, relationship. of the propensity good I in little to as even getting longer there's term, a It's would And for actually, willingness. akin more procurement indicator in more we're So as also contracts playing to the larger, lock MSPs enterprise catch-up.

larger long-term over So the do part. other space I to in the the pass Tim we second can it are the seeing And players bit. on

John Pagliuca

future Jason, does of of in accelerated And revenue is rec, on versus upfront, of take dynamics the some some lumpy Yes. periods. on it away rev as the from or it becomes over the more time, revenue

of So the in contracts year. revenue these success quarter, of first for and getting and half the and all rest the committed we in some the on has XXXX more QX takes long-term revenue customers out second the the had acutely of pulled into that QX into first

So like we...

Jason Ader

customers If wouldn't XXX to you're why converting more more annual, see you in of the. that impact

Tim OBrien

will. But headwinds the not from quarters. those QX prior have customers QX We did to and committing us

the at of So this initiative we really year. started the beginning

bigger from a in QX QX because QX. So headwinds and QX there would that in were no same tax them QX QX saw, committed have ARR that QX and and not in headwinds did minimal tax success we the of real have the dynamics. bigger on and the a now have QX of QX in say, I QX portion when where we started this. There period. were

have into into we that continue offsetting some We assumed have that have to of the fashion, revenue we the that in QX there. and was success that commit customers from we it's baked and pulled but QX forward

Operator

you very Thank much.

question Our JPMorgan. Brian from comes Essex from next

Unknown Analyst

you question the above, headwind of pricing Quick periods? Can give level Charlotte guidance? at to What dollar normalized? or extent in that an it like This mentioned on future retention what know to, you with much the go we have some point expected at headwinds how to on point the do packaging. for us hit the expect what and is do And like rate. associated XXX I you back factored net be into should is Brian. guess, maybe I

Tim OBrien

some have we the previously I'll the and on gave the will XXXX beginning of retention the for Yes, revenue parts of absolutely. net headwinds half part transitory on reiterate I year of Yes, of color be we that some the implemented. to of second X points the X.X is we've last pricing changes rationalization from initiative the About long-term well. packaging some contract with mentioned that seen the we've related as from impact the of some to quarter, coupled of and the

through of pension expect half of that half XXXX. to of the carry and impact rate net So year revenue timing expect normalized second a and terms XXXX, the would impact, in QX I and in the more dollar-based second I into of QX this

Operator

you much. Thank very

Cikos next Our from from Mike question comes Needham.

Michael Cikos

where to headwinds abate should like in this like of think headwinds, next biggest and you we is to for plays we XQ will the -- of this Or out? a think continue time we the to how should just do QX If thereafter? by it point mounting slope it then about year. the a Like a get on be expect the Maybe acute be that there be pressure about as second. those way headwind actually most

Tim OBrien

to But through on velocity I our steady to the a I retention steady rate dollar-based retention trailing XX-month in revenue end of improving would chart I be prepared mentioned and as expect is we we pressure additional from that how we gradually kind the a it would gradually standpoint, on to would expect in XXXX. it net rate. of XXXX average. be the expect do math the on remarks

Michael Cikos

out as you're the just out last receiving? question, what it's think And guess trying versus macro the know our push? do just with is given belts talking Okay. I of Like preserve X And annual the little that saying I now. first see of is they would quarter, wanted feedback to for were this the also if this seems trying we cognizant far is I this there, But to understand other reason as the players as like find under pain bit about well the months to some uncertain John that shift other to what so a and and more I of people there are competitors capital in. be a catch-up but ourselves this we commitments.

John Pagliuca

it's actually John. Mike, the resonating it's well. Look, quite customers,

make lot force we're We're -- not option. of our them by I it this customers kind think an forced also customer -- unlike a and elected to appreciate competitors giving the way, level base. We the predictability. of competitors, on their of this our the

should And that so, clear. I make

appreciated you're And them. will so was, stay increases. month-to-month, be that afforded stream consumption-based I hey, this think of option the or look, a And the effectively, steady to the there customer going optionality price if base

that into you're turn that to predictability that to to commit you. stability economics If looking for better turn us, will will and you into better provide

X- their long when additional these conversations tech MDR And It's of grow think optionality and the so or stack, overall, services. our their lot And work expand conversations with we thing. about helping opportunity. base. that's over them what earth put trying A the do, code And the one goals having X-year additional on the given their their they're term. resonating that's on business, opportunity thing, focus to been them other our then we're opportunities I is collective can really customer unearthing

at forward. we're us So in, locking they're their business can partner looking and we as driving strategic focus how a on

think I market other So believe is the have resonating done and in of what the overall, is tone from appreciated. I the it's been folks differentiated some

Operator

Instructions] have William We Thank much. [Operator Jason from from Ader a question you Blair. follow-up very

Jason Ader

thought terms you think shift MSP sort own just the this to IT. MSPs the would in out a towards been for you help of speeds up of market trend, versus has how the running to frame approach I I IT kind But are a their investors to just on in or has backdrop where MSP which IT And MSP model. Do would actually weak have down and the you, it IT obviously shifted zoom macro much think internally? space. we SMB of a I model market the sense John, and outsourced do slows question of ask of SMB

John Pagliuca

Sure.

it. midsized What large it's the that choice. medium they're monitor, Fortune best with let of more So enterprises XXX that are for I left we're and actually And is and Jason, so cost-effective to professionals. all the everyone those how is now XXXX professionals more larger provide growing IT do servicing who's more security to Why? rate is manage which to more mid-market actually choice unemployment because MSPs And small, companies, more Fortune business, my mid-market part using struggling of finding, this getting it's what And companies, we're specializing seeing to is MSP someone to with protect harder, Because and MSPs the looking very ultimately, and saying assets? part companies, are companies of TAM do companies right? that. are a low in are augment, on and

stack. help with MDR So of be offering. they're can recovery offering an their the could be part with with to MSPs to patching that looking That disaster could be that like security a backup service

go under. And the XX demand are servicing for of large, were enterprises. employees that service were MSPs I've MSPs part further happening a we're these this are enterprises over started, and market. in that primarily publicly companies. able Fortune several a traded. to companies industry And the they're as larger these to and are to of now I for when seeing been servicing now now result MSPs XX XXXX their and VSME, by up. years. are is MSPs MSPs now maturity billion-dollar growing of MSPs now larger what's their scale, also So

has provide now industry, like MSP of tailwinds are were a a costs or budget if critical. you CISO CFO labor higher of rely with on augment or of and to these that provide confident large offload or maybe they The To the CIO now or can that your you're the of with the a cost-effective augment, the N-able a us your this faced to the a long-term mid-market CEO, CISO the level midsized some it MSPs a CIO And what company service to point, from So a way pressures and folks a provide, in a if do that's nice good of if augment. company maturity tailwind companies you're company, tools space. yourself. and these mission overall you're as a your other plays

glass And outsource labor my it's a number this to a for where in can I the ways, do secure and some my more where have. MSP can internal for and one, technology have actually, IT eyes larger but cost step so, of so can play "Hey, co-managed for mid-market believe, our companies back some of number companies on cost, that so, I take two, say, nice in a effective, allows play eyes an on And a the department of manner." same glass, lot

transparency the the some So it very industry. of gives want, labor on which but of the of saves that IT bunch much a they because that them recession-resilient it the relying internal MSP expertise, believe, cost why and a factors, it's for I department overall, to is it's provide some that

Operator

will no Instructions] further hand very I to back Thank [Operator you remarks. John have now much. questions. closing over We John? for

John Pagliuca

Thank today. you, you operator, all thank and us for joining

talking forward Looking to next quarter. you to

Operator

That concludes today's call. Thank you for joining.

disconnect may You now your lines.

N-able (NABL) 8 Aug 242024 Q2 Earnings call transcript