Former parent company SolarWinds, however, did better. The Austin, Texas-based network and systems management and security developer saw its share price rise by over 14 percent Tuesday to close at US$10.20 per share, with the price continuing to rise in after-hours trading, albeit at a slower rate.
As an independent company, N-able will be better positioned to grow going forward, and expects to be a “rule of 50” company, Pagliuca said.
He said most companies are happy with being “rule of 40 companies,” which refers to the sum of a company’s revenue and EBITDA profit growth rate.
“Typically, industry says, ‘Hey, that’s a healthy business,’” he said. “We think that means you’re not trying hard enough. So we like to be a ‘rule of 50’ company. So we’re about a 15 percent [revenue] grower, and we’re about in the low- to mid-thirties from an EBITDA point of view. And we believe that’s the right mix. That’s actually one of the reasons why we’re spinning out. We want to focus a little bit more on growth. So it’s just a little bit higher on profit, a little bit lower on revenue growth. We’re really targeting that growth to help put better services to our MSP partners. They grow, and we grow.”
Going forward, N-able for the second half of 2021 plans to invest in developing additional technologies to market, including DNS filtering for MSPs, Pagliuca said. The company is also looking at enhancing the ability of MSPs to leverage more analytics and reporting and dashboarding so that they can be more responsive to customers’ requirements.
On the security side, N-able will add more security services for MSPs to bring to their small and midsize enterprise clients in the second half of the year, Pagliuca said. Also on tap is focusing more on helping MSPs evolve to provide higher-level services, he said.
“Our No. 1 job is to help MSPs enable the small and medium enterprises to continue on their evolutionary journey,” he said. “Obviously that’s pushing to the cloud. Obviously that’s making sure that their data is protected. Obviously, as [clients’] workforces are becoming more and more distributed, hybrid, ensure they are gaining access to everything. But that’s complicated. And where we really matter the most is where it’s the messiest for the most for the MSPs. And that’s what separates us from our competitors.”