N-able, which spun off from SolarWinds in July 2021, for the first time has announced quarterly results as a standalone business. The MSP software company's Q2 2021 results reveal various business and financial metrics for N-able as well as its MSP partner base.
Here are some key takeaways, according to an SEC filing from N-able:
1. Total MSP Partner Base: N-able now has roughly 25,000 MSP partners as customers.
2. MSP Spending With N-able: Roughly 1,647 MSP partners spend at least $50,000 annually with N-able as of June 2021, up 32 percent from 1,252 MSPs at that spending level as of June 30, 2020.
3. N-able quarterly revenue was $85.3 million for Q2 2021, up 16 percent compared to $73.4 million in Q2 of 2020.
4. N-able net income was $500,000 for Q2 of 2021, down from $3.2 million for Q2 of 2020. The reduction in net income was primarily due to an increase in costs associated with our separation from SolarWinds, the MSP software provider said.
5. Annual revenue retention rate was 110 percent for the 12 months ended June 30, 2021, compared to 109 percent for the 12 months ended June 2020. Basically, the calculation suggests that N-able is retaining MSPs, and those MSPs are generally increasing their spend with the MSP software provider.
N-able CEO John Pagliuca's Perspectives
In a prepared statement about the earnings, N-able CEO John Pagliuca said:
“We are excited about our opportunity ahead as we continue on our standalone journey following completion of the spin-off from SolarWinds on July 19. I want to express my sincere gratitude to our more than 1,300 employees around the world for their dedication in achieving this milestone.
Our second quarter financial results exceeded the high end of our outlook, which we view as further valuation of the strength of our business model. As I look ahead, with a complete leadership team and enhanced strategic focus, I believe we are well-positioned to further execute on our mission to empower managed services providers (MSPs) to support the digital evolution of small and medium enterprises (SMEs). We believe we're still in the early stages of a large and growing opportunity for MSPs to further penetrate the global market for SME IT spending, and we have confidence in our ability to strengthen our position as the preferred partner for MSPs around the world.”
N-able and Datto: MSP Software and Technology Market Bellwethers
N-able ($NABL) and rival Datto ($MSP) both are are both publicly held — and therefore serve as bellwethers for the health of the MSP-SMB market. (Datto's Q2 of 2021 quarterly financial results are here.) Other MSP software and technology rivals such as Barracuda, ConnectWise, Kaseya and NinjaRMM (among others) are privately held and backed by private equity and/or venture capital investors.
The N-able and Datto financial results reinforce the continued, growing popularity of MSP (managed IT services provider) business models in the SMB (small and midsize business) segment. Datto’s portfolio of products and cloud-based services include backup and disaster recovery (BDR), data protection, IT management, business automation and cybersecurity tools that MSPs consume and/or manage on behalf of small business customers.