N-able Spin-Off: 10 Financial Details From SEC Filing

An SEC filing revealed more financial details about SolarWinds‘ plan to potentially spin-off N-able, a software business that supports roughly 25,000 MSPs worldwide.

SolarWinds, backed by private equity firms Thoma Bravo and Silver Lake, unveiled the pending N-able spin-off plan in 2020. Fast forward to March 2021, and an SEC filing revealed the following:

1. Proposed Stock Symbol: N-able, if publicly held, will be traded on the New York Stock Exchange under the ticker symbol NABL.

2. MSP Installed Base: More than 25,000 MSP partners leverage N-able’s RMM (remote monitoring and management), security and data protection software to deploy, manage and secure the IT environments of over 500,000 SMEs around the world, N-able says.

3. MSPs – Annual Recurring Revenue Growth: Roughly 1,473 MSPs generated at least $50,000 in annual recurring revenue on N-able’s software platform in 2020, up 34 percent from 1,117 in 2019.

4. International Revenues: Roughly 47 percent of N-able’s revenues are generated outside of North America.

5. Annual Revenue: N-able revenue was $302.9 million in 2020, up 14.9 percent from $263.5 million in 2019 and $228.3 million in 2018.

6. Net Loss: N-able had a $7.2 million net loss in 2020, compared to a $2.5 million net loss in 2019 and a $13.7 million net loss in 2018.

7. Adjusted EBITDA: N-able’s adjusted EBITDA was $120.6 million in 2020 compared to $103.3 million in 2019.

8. Adjusted EBITDA Margin: N-able’s adjusted EBITDA margin was 39.8 percent in 2020 compared to 39.2 percent in 2019.

9. Total Addressable MSP Market: The potential market for N-able’s remote monitoring, security and data protection solutions will be $43.9 billion by 2025, up from $23.3 billion in 2020, according to Frost & Sullivan research commissioned by N-able. That’s a compound annual growth rate (CAGR) of 13.5 percent. The addressable market, according to the SEC filing, is based on the sum of:

  • The estimate of MSP’s average revenue per SME customer for remote monitoring, security and data protection solutions multiplied by their estimate of the total number of SMEs serviced by MSPs; and
  • the estimate of the average cost for business management solutions used by MSPs multiplied by the estimate of the total number of addressable MSPs.

10. N-able Rivals: N-able mentions MSP pure-play rivals such as Datto and Kaseya, along with niche/domain-specific rivals as Auvik, Mimecast and Veeam. Ironically, ConnectWise is not mentioned as a rival. Private equity firm Thoma Bravo backs both ConnectWise and N-able parent SolarWinds.

Next Moves: Although an N-able spin-off is not guaranteed, it appears highly likely that SolarWinds will proceed with the move in the first half of 2021, based on ChannelE2E’s ongoing coverage of the companies.

Note: SolarWinds announced the exploratory N-able spin-off plan in 2020. The journey so far has included rebranding SolarWinds MSP to N-able ahead of the proposed spin-off.

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