N-able, Inc.

Hello, everyone, and welcome to the Enable Third Quarter 2021 Earnings Call. My name is Charlie, and I'll be the coordinator for today's call. You'll have the opportunity to ask a question at the end of the presentation. If you'd like to register a question, please press star followed by one on your telephone keypad. I'll now hand you over to your host, Howard Ma, Senior Director of Investor Relations, to begin. Howard, please go ahead.

Thank you, Charlie, and welcome, everyone, to Enable's Third Quarter 2021 Earnings Call. With me today are John Pagliuca, Enable's president and CEO, and Tim O'Brien, EVP and CFO. Following our prepared remarks, we will open the line for a question and answer session. This call is being simultaneously webcast on our investor relations website at investors.en-able.com. There you can also find our earnings press release, which is intended to supplement our prepared remarks during today's call. Certain statements made during this call are forward-looking statements, including those concerning our financial outlook, our market opportunities, Our continued expectations following the spinoff of our business from SolarWinds in July 2021 and the impact of the global economic environment on our business. These statements are based on currently available information and assumptions, and we undertake no duty to update this information except as required by law. These statements are also subject to a number of risks and uncertainties, including those related to the spinoff transaction completed in July. Additional information concerning these statements and the risks and uncertainties associated with them is highlighted in today's earnings release and in our filings with the SEC. Copies are available from the SEC or on our IR website. Furthermore, we will discuss various non-GAAP financial measures on today's call unless otherwise specified. When we refer to financial measures, we will be referring to the non-GAAP financial measure. A reconciliation of certain GAAP to non-GAAP financial measures discussed on today's call is available on our earnings press release on our IR website. and now I will turn the call over to John.

Thanks, Howard. And thank you all for joining us today. First off, I want to express my gratitude to the entire Enable team for staying focused on operational execution. We rallied around the phrase forward together and leveraged that sentiment to our MSP partners and Enableite employee base to deliver on a successful spinoff. It's still hard to believe that the transaction was only a few months ago. and with that milestone in our rear view mirror, everyone really has a renewed energy. It has been rewarding to witness the ownership and drive to serve our MSP partners across the entire organization and it shows in our performance in the third quarter and what we are already seeing in the fourth quarter. Our third quarter revenue of $88.4 million exceeded the high end of our outlook, representing approximately 16% year over year growth, which included approximately 2% percentage points of FX benefit. Our net retention rates remain consistent at 110% on a trailing 12-month basis, reflecting healthy expansion across our partner base while leveraging customers. For those that represent $50,000 or more of ARR on our platform, now represent 46% of total ARR as of quarter end. We believe Enable is well-positioned in a dynamic industry with increasing tailwinds. Businesses both big and small around the world don't have the means to deal with ever-growing IT complexity and cyber threats. The digital evolution is accelerating, with small and medium enterprises looking to differentiate their business and enable distributed workforces across a variety of environments and devices. As a result, SMEs increasingly rely on MSPs for proactive and recurring IT services. We believe MSPs are and will continue to be the essential workforce for SMEs to serve mission-critical IT needs. Meanwhile, MSPs and more broadly IT service providers of all types need platforms aligned with the needs of their end customers. We saw continued robust demand for security and data protection offerings in the quarter, which have been outpacing our overall revenue growth. Cybersecurity is increasingly top of mind for service providers of all sizes. as cyber criminals exploit vulnerabilities in the supply chain and ransomware and phishing attacks become more prevalent. Partners are more intensely scrutinizing both the built-in security mechanisms within vendor products and vendor security protocols. Security is a core aspect of Enable's culture. We are committed to the shared responsibility we all have as technology companies within the MSP ecosystem. The increased investments we have made in effective security management in our people, processes, and technology is a strength we bring to our conversations with partners. With that in mind, I wanted to share some wins in the quarter that illustrate the power of Enable's model and our ability to capitalize on key industry trends, including platform standardization, MSP consolidation, and heightened focus on cybersecurity. First, a U.S.-based MSP with a dedicated security practice signed a multi-product, six-figure ARR deal, including our RMM, EDR, backup, and risk intelligence, which displaced an incumbent competitor. Our breadth of offerings, partner success programs, and security capabilities were the deciding factors in this win. Second, a Netherlands-based MSP that recently acquired four partners chose to standardize on our RMM platform, also a six-figure ARR deal, due to our ease of use, extensibility, and our strong automation capabilities. Third, in a similar situation, an existing US-based partner was acquired as part of a roll-up strategy. The acquirer was looking to standardize multiple RMM platforms onto one, and after a competitive process, ultimately chose Enable, due to our scalability, automation capabilities, and partner success programs, which resulted in a large five-figure ARR deal. These standardization plays reflect our leadership in RMM and indicate that our strategy, product mix and approach to partner success are resonating with market demands. We matter the most where it's the messiest for our MSPs and tens of thousands of partners around the world prove that. We also had some notable expansion deals in the quarter. First, a U.S.-based partner that was using a competitive RMM vendor for a separate company's division standardized on our RMM while also adopting EDR, resulting in a six-figure ARR deal. We were the preferred vendor due to our ability to drive efficiency via automation of key processes, resulting in reduction of labor costs for the MSP. We had a five-figure ARR-EDR cross-sell win to a Canadian MSP that has been an RMM customer for over five years as they upgraded their endpoint security posture. Third, we had a large five-figure ARR data protection cross-sell deal to a UK-based MSP. Here, we displaced a competitor with our fully cloud-based image recovery approach to backup that is fast, comprehensive, and highly cost-effective. We are seeing success across several areas that reflect fundamental pillars of our go-to-market strategy. From a technology perspective, we win because of our platform's scalability, security, and extensibility. Our partners need technology that's powerful and easy to use, which enables them to deliver high value to their end customers while earning higher profits for themselves. For instance, our EDR solution Powered Bar Ad native integration with Sentinel-1 is being leveraged by many MSPs to increase both revenue within their existing customer base and to win new customers. Our EDR allows partners to create advanced security packages containing behavior-based threat detection and faster return to operation times with rollback capabilities. It makes it possible for partners to decrease risk to their customers while increasing their margins. The expansion deals I highlighted are all-around team efforts and evidence that our partner success investments are paying off. Every day, partner success managers work to help partners identify business challenges and leverage our proprietary resources, such as the MSP Institute, Head Nerds, and Market Builder to solve those challenges. They also help connect success engineers and sales engineers with partners to resolve technical issues while educating them on automation security features. Partner success is a critical component of our customer-centric culture. Our focus on partner success allows us to listen and learn from our customers, which directly informs innovation, what new products to bring to market, and how to best meet customer needs. Moving along, I wanted to share some third quarter product highlights. We were recognized in CRN's 2021 Annual Report Card as the best-in-class MSP platform, ranking first in three of four major categories scored, including product innovation, partnership, and managed and cloud services. Our Mail Assure email security solution received Virus Bulletin's verified spam plus rating with zero false positives. Our Microsoft Intune integration continues to provide value for customers looking to manage Microsoft devices. We now have over 400 MSPs using this capability. And as we look ahead to Q4 on the product front, our DNS filtering offering is in preview in a limited number of customer live environments, and the early feedback has been positive. This not only marks an important addition to our security stack, but also illustrates our differentiated ecosystem approach. By enabling our solution via a single pane of glass and natively integrating with leading third-party technology providers, our ecosystem framework powers the flexibility and extensibility that our partners desire. Additionally, our solutions fully support the recently released Microsoft Windows 11 operating system. This was a significant release and a major event for our partners to upgrade and migrate their customers. Enable continues to work diligently to help ensure that partners and prospects experienced a smooth transition to the upgrade. We will fully support Apple's new Mac OS Monterey by the end of this quarter. Now I'll touch on the progress we've made through branding, marketing, and recruiting efforts before turning the call over to Tim. While we officially rebranded in March, it takes time for a new brand to fully resonate. About six months after the rebrand, the number of monthly search queries for Enable has multiplied nearly tenfold surpassing what we were getting at SolarWinds MSP. In addition, the number of monthly qualified opportunities generated from brand queries has increased significantly in comparison to the same period a year ago before our name change. We will continue to improve and refine the why enable story by demonstrating the differentiated value of our solutions relative to competitors. Our website is a key vehicle for the story, and we are evolving our online presence and positioning to demonstrate our value proposition, prospects, and existing partners. Additionally, we plan to increase our marketing activities with more enable hosted events, participation in trade shows, and engaging videos and webinars. And last but not least, we remain focused on hiring and retaining top talent to support our growth initiatives. In the third quarter, we launch what we call the way we work. which is a hybrid working model based on trust and flexibility that supports meaningful interactions for our colleagues. We are committed to exploring innovative ways to support our growing base of more than 1,300 enablites around the world. Thank you. I will now turn the call over to Tim for a review of our Q3 financial results and outlook.