N-ABLE, INC., 10-K filed on 3/14/2023
Annual Report
v3.22.4
Cover Page - USD ($)
$ in Millions
 12 Months Ended
Dec. 31, 2022
Mar. 06, 2023
Jun. 30, 2022
Cover [Abstract]      
Document Type 10-K    
Document Annual Report true    
Document Period End Date Dec. 31, 2022    
Current Fiscal Year End Date --12-31    
Document Transition Report false    
Entity File Number 001-40297    
Entity Registrant Name N-able, Inc.    
Entity Incorporation, State or Country Code DE    
Entity Tax Identification Number 85-4069861    
Entity Address, Address Line One 30 Corporate Drive    
Entity Address, Address Line Two Suite 400    
Entity Address, City or Town Burlington,    
Entity Address, State or Province MA    
Entity Address, Postal Zip Code 01803    
City Area Code 781    
Local Phone Number 328-6490    
Title of 12(b) Security Common stock, $0.001 par value    
Trading Symbol NABL    
Security Exchange Name NYSE    
Entity Well-known Seasoned Issuer No    
Entity Voluntary Filers No    
Entity Current Reporting Status Yes    
Entity Interactive Data Current Yes    
Entity Filer Category Non-accelerated Filer    
Entity Small Business false    
Entity Emerging Growth Company true    
Entity Ex Transition Period false    
ICFR Auditor Attestation Flag false    
Entity Shell Company false    
Entity Public Float     $ 609.5
Entity Common Stock, Shares Outstanding   182,034,721  
Documents Incorporated by Reference Part III of this Annual Report on Form 10-K incorporates certain information by reference from the definitive proxy statement for the registrant’s 2023 Annual Meeting of Stockholders to be filed within 120 days of the registrant’s fiscal year ended December 31, 2022 (the “Proxy Statement”). Except with respect to information specifically incorporated by reference in this Annual Report on Form 10-K, the Proxy Statement is not deemed to be filed as part of this Annual Report on Form 10-K.    
Entity Central Index Key 0001834488    
Document Fiscal Year Focus 2022    
Document Fiscal Period Focus FY    
Amendment Flag false    
v3.22.4
Audit Information
 12 Months Ended
Dec. 31, 2022
Audit Information [Abstract]  
Auditor Firm ID 238
Auditor Name PricewaterhouseCoopers LLP
Auditor Location Austin, Texas
v3.22.4
Consolidated Balance Sheets - USD ($)
$ in Thousands
Dec. 31, 2022
Dec. 31, 2021
Current assets:    
Cash and cash equivalents $ 98,847 $ 66,736
Accounts receivable, net of allowances of $1,330 and $1,653 as of December 31, 2022 and 2021, respectively 34,798 33,041
Income tax receivable 7,814 7,250
Prepaid and other current assets 12,697 13,962
Total current assets 154,156 120,989
Property and equipment, net 37,404 38,748
Operating lease right-of-use assets 31,752 36,206
Deferred taxes 795 1,681
Goodwill 828,795 840,923
Intangible assets, net 8,873 8,066
Other assets, net 17,082 9,086
Total assets 1,078,857 1,055,699
Current liabilities:    
Accounts payable 3,544 5,865
Due to affiliates 0 464
Accrued liabilities and other 35,630 30,944
Current operating lease liabilities 5,771 4,830
Income taxes payable 1,629 4,600
Current portion of deferred revenue 11,740 10,675
Current debt obligation 3,500 3,500
Total current liabilities 61,814 60,878
Long-term liabilities:    
Deferred revenue, net of current portion 387 223
Non-current deferred taxes 2,783 2,632
Non-current operating lease liabilities 33,110 37,822
Long-term debt, net of current portion 333,488 335,379
Other long-term liabilities 5,204 410
Total liabilities 436,786 437,344
Commitments and contingencies (Note 15)
Stockholders’ equity:    
Common stock, $0.001 par value: 550,000,000 shares authorized and 180,849,537 and 179,049,429 shares issued and outstanding as of December 31, 2022 and 2021, respectively 181 179
Preferred stock, $0.001 par value: 50,000,000 shares authorized and 50,000,000 shares issued and outstanding as of December 31, 2022 and 2021, respectively 0 0
Additional paid-in capital 632,871 602,996
Accumulated other comprehensive (loss) income (7,815) 15,053
Retained earnings 16,834 127
Total stockholders' equity 642,071 618,355
Total liabilities and stockholders' equity $ 1,078,857 $ 1,055,699
v3.22.4
Consolidated Balance Sheets (Parentheticals) - USD ($)
$ in Thousands
Dec. 31, 2022
Dec. 31, 2021
Current assets:    
Allowance for doubtful accounts receivable $ 1,330 $ 1,653
Common Stock    
Common stock, par value (in dollars per share) $ 0.001 $ 0.001
Common stock, authorized (in shares) 550,000,000 550,000,000
Common stock, issued (in shares) 180,849,537 179,049,429
Common stock, outstanding (in shares) 180,849,537 179,049,429
Preferred Stock    
Preferred stock, par value (in dollars per share) $ 0.001 $ 0.001
Preferred stock, authorized (in shares) 50,000,000 50,000,000
Preferred stock, issued (in shares) 50,000,000 50,000,000
Preferred stock, outstanding (in shares) 50,000,000 50,000,000
v3.22.4
Consolidated Statements of Operations - USD ($)
shares in Thousands, $ in Thousands
 12 Months Ended
Dec. 31, 2022
Dec. 31, 2021
Dec. 31, 2020
Revenue:      
Subscription and other revenue $ 371,769 $ 346,456 $ 302,871
Cost of revenue:      
Cost of revenue 56,133 46,677 38,916
Amortization of acquired technologies 2,477 5,755 24,257
Total cost of revenue 58,610 52,432 63,173
Gross profit 313,159 294,024 239,698
Operating expenses:      
Sales and marketing 125,301 112,678 82,034
Research and development 63,484 53,959 42,719
General and administrative 71,125 80,575 57,331
Amortization of acquired intangibles 5,853 13,482 23,848
Total operating expenses 265,763 260,694 205,932
Operating income 47,396 33,330 33,766
Other expense:      
Interest expense, net (18,852) (20,472) (28,137)
Other income (expense), net 1,881 (1,266) (773)
Total other expense (16,971) (21,738) (28,910)
Income before income taxes 30,425 11,592 4,856
Income tax expense 13,718 11,479 12,014
Net income (loss) $ 16,707 $ 113 $ (7,158)
Net income (loss) per share:      
Basic earnings (loss) per share (in dollars per share) $ 0.09 $ 0.00 $ (0.05)
Diluted earnings (loss) per share (in dollars per share) $ 0.09 $ 0.00 $ (0.05)
Weighted-average shares used to compute net income (loss) per share:      
Shares used in computation of basic earnings (loss) per share (in shares) 180,136 167,460 158,124
Shares used in computation of diluted earnings (loss) per share (in shares) 181,297 168,667 158,124
v3.22.4
Consolidated Statements of Comprehensive (Loss) Income - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2022
Dec. 31, 2021
Dec. 31, 2020
Statement of Comprehensive Income [Abstract]      
Net income (loss) $ 16,707 $ 113 $ (7,158)
Other comprehensive (loss) income:      
Foreign currency translation adjustment (22,868) (33,938) 42,414
Other comprehensive (loss) income (22,868) (33,938) 42,414
Comprehensive (loss) income $ (6,161) $ (33,825) $ 35,256
v3.22.4
Consolidated Statements of Stockholders' Equity - USD ($)
$ in Thousands
Total
Common Stock
Parent Company Net Investment
Additional Paid-in Capital
Accumulated Other Comprehensive Income (Loss)
Retained Earnings
Balance at beginning of period (in shares) at Dec. 31, 2019   0        
Balance at beginning of period at Dec. 31, 2019 $ 563,696 $ 0 $ 557,119 $ 0 $ 6,577 $ 0
Increase (Decrease) in Stockholders' Equity [Roll Forward]            
Foreign currency translation adjustment 42,414       42,414  
Net income (loss) (7,158)   (7,158)      
Net transfers from Parent 11,192   11,192      
Stock-based compensation 21,053   21,053      
Balance at end of period (in shares) at Dec. 31, 2020   0        
Balance at end of period at Dec. 31, 2020 631,197 $ 0 582,206 0 48,991 0
Increase (Decrease) in Stockholders' Equity [Roll Forward]            
Foreign currency translation adjustment (13,912)       (13,912)  
Net income (loss) (14)   (14)      
Net transfers from Parent 10,783   10,783      
Issuance of stock (in shares)   20,623,000        
Issuance of stock 216,000 $ 21 216,000 (21)    
Distribution of net proceeds from Private Placement to Parent (216,000)   (216,000)      
Net transfers to Parent (18,161)   (18,161)      
Consummation of Separation transaction (in shares)   158,020,000        
Consummation of Separation transaction 179 $ 158 (583,837) 583,858    
Stock-based compensation 9,023   9,023      
Balance at end of period (in shares) at Jul. 19, 2021   178,643,000        
Balance at end of period at Jul. 19, 2021 619,095 $ 179 0 583,837 35,079 0
Balance at beginning of period (in shares) at Dec. 31, 2020   0        
Balance at beginning of period at Dec. 31, 2020 631,197 $ 0 582,206 0 48,991 0
Increase (Decrease) in Stockholders' Equity [Roll Forward]            
Foreign currency translation adjustment (33,938)          
Net income (loss) $ 113          
Balance at end of period (in shares) at Dec. 31, 2021 179,049,429 179,049,000        
Balance at end of period at Dec. 31, 2021 $ 618,355 $ 179 0 602,996 15,053 127
Balance at beginning of period (in shares) at Jul. 19, 2021   178,643,000        
Balance at beginning of period at Jul. 19, 2021 619,095 $ 179 0 583,837 35,079 0
Increase (Decrease) in Stockholders' Equity [Roll Forward]            
Foreign currency translation adjustment (20,026)       (20,026)  
Net income (loss) 127         127
Issuance of stock (in shares)   11,000        
Issuance of stock 0          
Consummation of Separation transaction 863     863    
Exercise of stock options (in shares)   39,000        
Exercise of stock options 23     23    
Restricted stock units issued, net of shares withheld for taxes (in shares)   356,000        
Restricted stock units issued, net of shares withheld for taxes (2,209)     (2,209)    
Stock-based compensation $ 20,482     20,482    
Balance at end of period (in shares) at Dec. 31, 2021 179,049,429 179,049,000        
Balance at end of period at Dec. 31, 2021 $ 618,355 $ 179 0 602,996 15,053 127
Increase (Decrease) in Stockholders' Equity [Roll Forward]            
Foreign currency translation adjustment (22,868)       (22,868)  
Net income (loss) 16,707         16,707
Issuance of stock (in shares)   61,000        
Issuance of stock 0          
Issuance of stock under employee stock purchase plan $ 1,315     1,315    
Issuance of stock under employee stock purchase plan (in shares)   142,000        
Exercise of stock options (in shares) 40,695,000 42,000        
Exercise of stock options $ 108     108    
Restricted stock units issued, net of shares withheld for taxes (in shares)   1,556,000        
Restricted stock units issued, net of shares withheld for taxes (8,323) $ 2   (8,325)    
Stock-based compensation $ 36,777     36,777    
Balance at end of period (in shares) at Dec. 31, 2022 180,849,537 180,850,000        
Balance at end of period at Dec. 31, 2022 $ 642,071 $ 181 $ 0 $ 632,871 $ (7,815) $ 16,834
v3.22.4
Consolidated Statements of Cash Flows - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2022
Dec. 31, 2021
Dec. 31, 2020
Cash flows from operating activities      
Net income (loss) $ 16,707 $ 113 $ (7,158)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:      
Depreciation and amortization 24,440 33,771 56,450
(Benefit from) provision for doubtful accounts (323) 2,153 1,483
Stock-based compensation expense 36,527 29,430 21,053
Amortization of debt issuance costs 1,623 732 0
Loss on lease modification 0 271 0
Deferred taxes (1,423) (1,913) (4,051)
Operating lease right-of-use assets, net (1,168) (741) 0
(Gain) loss on foreign currency exchange rates (1,246) 1,433 1,707
Gain on contingent consideration (83) 0 0
Other non-cash expenses 148 0 0
Changes in operating assets and liabilities, net of assets acquired and liabilities assumed in business combinations:      
Accounts receivable (3,432) (5,567) (3,458)
Income taxes receivable (567) (5,999) (233)
Prepaid expenses and other assets 283 (10,673) (581)
Accounts payable (1,624) (455) 3,273
Due to and from affiliates (402) (8,302) 6,155
Accrued liabilities and other 3,003 11,923 7,970
Accrued related party interest payable 0 (2,477) 1,540
Income taxes payable (3,188) 158 389
Deferred revenue 1,358 1,253 1,126
Other long-term assets 780 231 0
Net cash provided by operating activities 71,413 45,341 85,665
Cash flows from investing activities      
Purchases of property and equipment (12,834) (30,664) (11,919)
Purchases of intangible assets (8,176) (4,169) (4,221)
Acquisitions, net of cash acquired (9,199) 0 0
Net cash used in investing activities (30,209) (34,833) (16,140)
Cash flows from financing activities      
Proceeds from Private Placement, net of $9,000 of issuance costs 0 216,000 0
Distribution of net proceeds from Private Placement to Parent 0 (216,000) 0
Payments of tax withholding obligations related to restricted stock units (8,325) (2,230) 0
Exercise of stock options 108 23 0
Proceeds from issuance of common stock under employee stock purchase plan 1,315 0 0
Proceeds from Credit Agreement 0 350,000 0
Repayments of borrowings due to affiliates 0 (372,650) (21,750)
Repayments of borrowings from Credit Agreement (3,500) (875) 0
Net transfers (to) from Parent 0 (6,515) 11,192
Payment for debt issuance costs 0 (10,075) 0
Net cash used in financing activities (10,402) (42,322) (10,558)
Effect of exchange rate changes on cash and cash equivalents 1,309 (1,240) 1,475
Net increase (decrease) in cash and cash equivalents 32,111 (33,054) 60,442
Cash and cash equivalents      
Beginning of period 66,736 99,790 39,348
End of period 98,847 66,736 99,790
Supplemental disclosure of cash flow information      
Cash paid for interest 15,570 20,387 26,602
Cash paid for income taxes 16,303 19,029 14,205
Supplemental disclosure of non-cash activities:      
Change in purchases of property, equipment and leasehold improvements included in accounts payable and accrued expenses 728 1,138 2,653
Right-of-use assets obtained in exchange for operating lease liabilities $ 967 $ 31,079 $ 5,765
v3.22.4
Consolidated Statements of Cash Flows (Parenthetical)
$ in Thousands
 12 Months Ended
Dec. 31, 2022
USD ($)
Statement of Cash Flows [Abstract]  
Stock issuance costs $ 9,000
v3.22.4
Organization and Nature of Operations
 12 Months Ended
Dec. 31, 2022
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Organization and Nature of Operations Organization and Nature of Operations
Background
On August 6, 2020, SolarWinds Corporation (“SolarWinds” or “Parent”) announced that its board of directors had authorized management to explore a potential spin-off of its managed service provider (“MSP”) business into our company, a newly created and separately traded public company, and separate into two distinct, publicly traded companies (the “Separation”).
On July 19, 2021, SolarWinds completed the Separation through a pro-rata distribution (the “Distribution”) of all the outstanding shares of our common stock it held to the stockholders of record of SolarWinds as of the close of business on July 12, 2021 (the “Record Date”). Each SolarWinds stockholder of record received one share of our common stock, $0.001 par value, for every two shares of SolarWinds common stock, $0.001 par value, held by such stockholder as of the close of business on the Record Date. SolarWinds distributed 158,020,156 shares of our common stock in the Distribution, which was effective at 11:59 p.m., Eastern Time, on July 19, 2021. The Distribution reflected 316,040,312 shares of SolarWinds common stock outstanding on July 12, 2021 at a distribution ratio of one share of our common stock for every two shares of SolarWinds common stock. In addition, on July 19, 2021, and prior to completion of the Distribution, we issued 20,623,282 newly-issued shares of our common stock in connection with a private placement of N-able’s common stock (the “Private Placement”). As a result of the Distribution, we became an independent public company and our common stock is listed under the symbol “NABL” on the New York Stock Exchange. Our financial statements for the periods through the Separation and Distribution date of July 19, 2021 are prepared on a “carve-out” basis as described below.
Description of Business
N-able, Inc., a Delaware corporation, together with its subsidiaries is a leading global provider of cloud-based software solutions for MSPs, enabling them to support digital transformation and growth for small and medium-sized enterprises (“SMEs”), which we define as those enterprises having less than 1,000 employees. With a flexible technology platform and powerful integrations, N-able makes it easy for MSPs to monitor, manage, and protect their end-customer systems, data, and networks. Our growing portfolio of security, automation, and backup and recovery solutions is built for IT services management professionals. N-able simplifies complex ecosystems and enables customers to solve their most pressing challenges. In addition, we provide extensive, proactive support—through enriching partner programs, hands-on training, and growth resources—to help MSPs deliver exceptional value and achieve success at scale. Through our multi-dimensional land and expand model and global presence, we are able to drive strong recurring revenue growth and profitability.
N-able qualifies as an “emerging growth company” (“EGC”) as defined in Section 2(a) of the Securities Act of 1933, as amended, (the “Securities Act”), as modified by the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”).
v3.22.4
Summary of Significant Accounting Policies
 12 Months Ended
Dec. 31, 2022
Accounting Policies [Abstract]  
Summary of Significant Accounting Policies Summary of Significant Accounting Policies
Basis of Presentation
Prior to the Separation from SolarWinds
Our financial statements for the periods through the Separation and Distribution date of July 19, 2021 are Consolidated Financial Statements prepared on a “carve-out” basis. The Consolidated Statements of Operations include all revenues and costs directly attributable to N-able as well as an allocation of expenses related to facilities, functions and services provided by SolarWinds prior to the Separation and Distribution. These corporate expenses have been allocated to us based on direct usage or benefit, where identifiable, with the remainder allocated based on headcount. See Note 13. Relationship with Parent and Related Entities for further details. The allocated costs were deemed to be settled by N-able to SolarWinds in the period in which the expense was recorded in the Consolidated Statements of Operations and these settlements were reflected in cash flows from operating activities in the Consolidated Statements of Cash Flows. Current and deferred income taxes and related tax expense have been determined based on the stand-alone results of N-able by applying Accounting Standards Codification (“ASC”) No. 740, Income Taxes (“ASC 740”), to N-able’s operations in each country as if it were a separate taxpayer (i.e. following the Separate Return Methodology).
SolarWinds maintains various stock-based compensation plans at a corporate level. N-able employees participated in those programs prior to the Separation and Distribution and a portion of the compensation cost associated with those plans is included in N-able’s Consolidated Statements of Operations. The stock-based compensation expense is included within Parent company net investment for periods prior to the Separation and Distribution, with the accumulated balance included within Parent company net investment being transferred to additional paid-in capital upon consummation of the Separation and Distribution. The amounts presented in the Consolidated Financial Statements are not necessarily indicative of future awards. See Note 13. Relationship with Parent and Related Entities for further details.
SolarWinds' third party debt and the related interest have not been allocated to us for any of the applicable periods presented because SolarWinds' borrowings were primarily for corporate cash purposes and were not directly attributable to N-able. In addition, none of the N-able legal entities guaranteed the debt nor were they jointly and severally liable for SolarWinds' debt.
Any transactions which have been included in the Consolidated Financial Statements from legal entities which are not exclusively operating as N-able legal entities are considered to be effectively settled in the Consolidated Financial Statements at the time the transaction is recorded between SolarWinds and the N-able business. The total net effect of the settlement of these intercompany transactions is reflected in the Consolidated Statements of Cash Flows as a financing activity. See Note 13. Relationship with Parent and Related Entities for further details.
All of the allocations and estimates in the Consolidated Financial Statements are based on assumptions that management believes are reasonable. However, the Consolidated Financial Statements included herein may not be indicative of the results of operations and cash flows of N-able in the future or if N-able had been a separate, stand-alone publicly traded entity during the applicable periods presented. Actual costs that may have been incurred if we had been a standalone company would depend on a number of factors, including the organizational structure, whether functions were outsourced or performed by employees, and strategic decisions made in areas such as information technology and infrastructure. Going forward, we may perform these functions using our own resources or outsourced services. For a period following the Separation and Distribution, however, some of these functions continued to be provided by SolarWinds under a Transition Services Agreement. Additionally, we provided some services to SolarWinds under such Transition Services Agreement. The Transition Services Agreement terminated during the year ended December 31, 2022, on the expiration of the term of the last service provided under it. See Note 13. Relationship with Parent and Related Entities for further details regarding allocated shared costs with SolarWinds.
Following the Separation from SolarWinds
Our financial statements for periods from July 20, 2021 forward are Consolidated Financial Statements based on our reported results as a standalone company. We prepared our Consolidated Financial Statements in conformity with GAAP and the reporting regulations of the Securities and Exchange Commission (“SEC”). The accompanying Consolidated Financial Statements include the accounts of N-able, Inc. and the accounts of its wholly owned subsidiaries. We have eliminated all intercompany balances and transactions.
Emerging Growth Company
Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration
statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non‑emerging growth companies but any such election to opt out is irrevocable. N-able has elected not to opt out of such extended transition period, which means that when a standard is issued or revised and it has different application dates for public or private companies, N-able, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard.
N-able's historical results are included as a part of the Parent's financial statements prior to the Separation and Distribution, which are filed with the Securities and Exchange Commission (“SEC”). Prior to the Separation and Distribution, N-able tracked the effective dates and adopted all guidance applicable to it consistent with the manner that the Parent tracked and adopted all applicable guidance.
This may make comparison of N-able’s financial statements with another public company, which is neither an emerging growth company nor an emerging growth company which has not opted out of using the extended transition period, difficult because of the potential differences in accounting standards used.
Segment Information
Operating segments are components of an enterprise for which separate financial information is available and is evaluated regularly by the company’s chief operating decision‑maker in deciding how to allocate resources and in assessing performance. N-able currently operates in one reportable business segment.
Use of Estimates
The preparation of Consolidated Financial Statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts and the disclosure of assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting periods. The impact from the rapidly changing market and economic conditions due to the coronavirus disease 2019 (“COVID-19”) pandemic on our business, results of operations and financial condition is uncertain. We have made estimates of the impact of the COVID-19 pandemic within our financial statements as of and for the years ended December 31, 2022 and 2021 which did not result in material adjustments. The estimates assessed included, but were not limited to, allowances for credit losses, the carrying values of goodwill and intangible assets and other long-lived assets, valuation allowances for tax assets and revenue recognition and may change in future periods. The actual results that we experience may differ materially from our estimates. The accounting estimates that require our most significant, difficult and subjective judgments include:
•the valuation of goodwill, intangibles, long-lived assets and contingent consideration;
•revenue recognition;
•income taxes; and
•management’s assessment of allocations of expenses prior to the Separation and Distribution.
Foreign Currency Translation
The functional currency of our foreign subsidiaries is determined in accordance with authoritative guidance issued by the Financial Accounting Standards Board (“FASB”). We translate assets and liabilities for these subsidiaries at exchange rates in effect at the balance sheet date. We translate income and expense accounts for these subsidiaries at the average monthly exchange rates for the periods. We record resulting translation adjustments as a component of accumulated other comprehensive income (loss) within total Parent company net investment prior to the Separation and Distribution and within stockholders' equity following the Separation and Distribution. We record gains and losses from currency transactions denominated in currencies other than the functional currency as other income (expense), net in our Consolidated Statements of Operations. Local currency transactions of international subsidiaries that have the U.S. dollar as the functional currency are remeasured into U.S. dollars using current rates of exchange for monetary assets and liabilities and historical rates of exchange for non-monetary assets and liabilities. The foreign currency transactional and re-measurement exchange gains and (losses) were $2.2 million, $(1.8) million, and $(0.8) million for the years ended December 31, 2022, 2021 and 2020, respectively.
Cash and Cash Equivalents
All cash and cash equivalents included in the Consolidated Financial Statements are legally owned by N-able legal entities. We consider highly liquid investments with a maturity of three months or less when purchased to be cash equivalents. As of December 31, 2022, we have money market fund financial assets of $48.4 million, which are included in “cash and cash
equivalents” in our Consolidated Balance Sheets. We had no money market fund financial assets as of December 31, 2021. See “Fair Value Measurements” below and Note 7. Fair Value Measurements for further details regarding the fair value measurements of our money market fund financial assets.
Parent Company Net Investment
For periods prior to the Separation and Distribution, N-able's equity on the Consolidated Balance Sheets represents SolarWinds’ historical net investment in the Business, and is presented as “Parent company net investment” in lieu of stockholders' equity. For periods prior to the Separation and Distribution, the Consolidated Statements of Stockholders' Equity and Parent Company Net Investment include corporate allocations, net cash transfers and other property transfers between SolarWinds and the Business, as well as short term due to affiliates, short term due from affiliates and long term due to affiliates between N-able and other SolarWinds affiliates that were settled on a current basis.
All transactions reflected in Parent company net investment in the accompanying Consolidated Balance Sheets have been considered cash receipts and payments for purposes of the Consolidated Statements of Cash Flows and are reflected as financing activities in the accompanying Consolidated Statements of Cash Flows.
Acquisitions
The purchase price of our acquired businesses is allocated to the assets acquired and the liabilities assumed based on their estimated fair values, with the excess recorded as goodwill in the reporting unit expected to benefit from the business combination. If applicable, we estimate the fair value of contingent consideration payments in determining the purchase price. During the measurement period, which may be up to one year from the acquisition date, we may record adjustments to the fair value of the tangible and intangible assets acquired and liabilities assumed, including the deferred tax asset valuation allowances and acquired income tax uncertainties, with the corresponding offset to goodwill. We include the operating results of acquisitions in our Consolidated Financial Statements from the acquisition date. Acquisition related costs are expensed separately from the acquisition as incurred and are primarily included in general and administrative expenses in our Consolidated Statements of Operations.
The fair value of identifiable intangible assets is based on significant judgments made by management. We typically engage third party valuation appraisal firms to assist us in determining the fair values and useful lives of the assets acquired. The valuation estimates and assumptions are based on historical experience and information obtained by management, and include, but are not limited to, future expected cash flows earned from the product technology and discount rates applied in determining the present value of those cash flows. Unanticipated events and circumstances may occur that could affect the accuracy or validity of such assumptions, estimates or actual results. Acquired identifiable intangible assets are amortized on the straight-line method over their estimated economic lives, which are generally two to seven years for trademarks, customer relationships and developed product technologies. We include amortization of acquired developed product technologies in cost of revenue and amortization of other acquired intangible assets in operating expenses in our Consolidated Statements of Operations.
Impairment of Goodwill, Intangible Assets and Long-lived Assets
Goodwill
Goodwill represents the amount of the purchase price in excess of the estimated fair value of net assets of businesses acquired in a business combination. Our goodwill was primarily derived from the take private transaction of SolarWinds in February 2016 and subsequent business combinations, where the purchase price exceeded the fair value of the net identifiable assets acquired. We test goodwill at least annually during the fourth quarter or sooner when circumstances indicate an impairment may exist. An impairment of goodwill is recognized when the carrying amount of a reporting unit exceeds its fair value. For purposes of the annual impairment test, we first assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying value, a “Step 0” analysis. If, based on a review of qualitative factors, it is more likely than not that the fair value of a reporting unit is less than its carrying value we perform “Step 1” of the goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. If the carrying value exceeds the fair value, an impairment loss is recognized for the amount by which the reporting unit's carrying value exceeds its fair value, not to exceed the carrying value of goodwill in that reporting unit.
In October 2022, we performed a qualitative, “Step 0,” assessment for our single reporting unit. For “Step 0,” we assessed several events and circumstances that could affect the significant inputs used to determine the fair value of the reporting unit, including the significance of the amount of excess fair value over carrying value, consistency of operating margins and cash flows, budgeted-to-actual performance from prior year, overall change in economic climate, changes in the industry and competitive environment, key management turnover, and earnings quality and sustainability. As of October 1, 2022, there were
no unanticipated changes or negative indicators in the above qualitative factors that would impact the fair value of the Business as of the annual impairment date. As such, we determined there were no indicators of impairment and that it is more likely than not that the fair value of a reporting unit is greater than its carrying value and therefore performing the next step of impairment test was unnecessary.
Fair value determination of our reporting unit requires considerable judgment and is sensitive to changes in underlying assumptions and factors. As a result, there can be no assurance that the estimates and assumptions made for purposes of the quantitative goodwill impairment test will prove to be an accurate prediction of future results. If an event occurs that would cause us to revise our estimates and assumptions used in analyzing the value of our goodwill, the revision could result in a non-cash impairment charge that could have a material impact on our financial results.
Long-Lived Assets
We evaluate the recoverability of our long-lived assets, including finite-lived intangible assets and other assets, for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable. Our finite-lived intangible assets are primarily related to assets acquired at the take private transaction of SolarWinds and subsequent business combinations. Events or changes in circumstances that could result in an impairment review include, but are not limited to, significant underperformance relative to historical or projected future operating results, significant changes in the manner of use of the acquired assets or the strategy for our overall business, and significant negative industry or economic trends. In the event that the net book value of our long-lived assets exceeds the future undiscounted net cash flows attributable to such assets, an impairment charge would be required. Impairment, if any, is recognized in the period of identification to the extent the carrying amount of an asset or asset group exceeds the fair value of such asset or asset group. For the year ended December 31, 2022 and 2021, there were no indicators that our long-lived assets were impaired.
Fair Value Measurements
We apply the authoritative guidance on fair value measurements for financial assets and liabilities, such as our money market fund financial assets and contingent consideration liabilities, that are measured at fair value on a recurring basis and non-financial assets and liabilities, such as goodwill, intangible assets and property, plant and equipment that are measured at fair value on a non-recurring basis.
The guidance establishes a three-tiered fair value hierarchy that prioritizes inputs to valuation techniques used in fair value calculations. The three levels of inputs are defined as follows:
Level 1: Unadjusted quoted prices for identical assets or liabilities in active markets accessible by us.
Level 2: Inputs that are observable in the marketplace other than those inputs classified as Level 1.
Level 3: Inputs that are unobservable in the marketplace and significant to the valuation.
The carrying amounts reported in our Consolidated Balance Sheets for cash, accounts receivable, accounts payable and other accrued expenses approximate fair value due to relatively short periods to maturity. Our related party debt with SolarWinds Holdings, Inc. prior to the Separation was not carried at fair value. See Note 13. Relationship with Parent and Related Entities for further details regarding our related party debt. See Note 7. Fair Value Measurements for a summary of our financial instruments accounted for at fair value on a recurring basis as of December 31, 2022. We held no financial instruments as of December 31, 2021. As of December 31, 2022 and 2021, the carrying value of our outstanding debt approximates its estimated fair value as the interest rate on the debt is adjusted for changes in market rates. See Note 9. Debt for additional information regarding our debt.
Accounts Receivable
Accounts receivable represent trade receivables from customers when we have sold subscriptions for software-as-a-service (“SaaS”) offerings as well as subscription-based term licenses and from the sale of maintenance services associated with our perpetual license products and have not yet received payment. We present accounts receivable net of an allowance for doubtful accounts. We maintain an allowance for doubtful accounts for estimated losses resulting from the inability of customers to make required payments. In doing so, we consider the current financial condition of the customer, the specific details of the customer account, the age of the outstanding balance and the current economic environment. Any change in the assumptions used in analyzing a specific account receivable might result in an additional allowance for doubtful accounts being recognized in the period in which the change occurs. Our allowance for doubtful accounts was $1.3 million, $1.7 million and $0.8 million for the years ended December 31, 2022, 2021 and 2020, respectively.
Property and Equipment
We record property and equipment at cost and depreciate them using the straight-line method over their estimated useful lives as follows:
Useful Life
(in years)
Equipment, servers and computers
3 - 5
Furniture and fixtures
5 - 7
Software
3 - 5
Leasehold improvementsLesser of lease term or useful life
Upon retirement or sale of property and equipment, we remove the cost of assets disposed of and any related accumulated depreciation from our accounts and credit or charge any resulting gain or loss to operating expense. We expense repairs and maintenance as they are incurred.
Research and Development Costs
Research and development expenses primarily consist of personnel costs and contractor fees related to the development of new software products and enhancements to existing software products. Personnel costs include salaries, bonuses and stock-based compensation and related employer-paid payroll taxes, as well as an allocation of our facilities, depreciation, benefits and IT costs. Research and development costs are charged to operations as incurred.
Internal-Use Software Costs
We capitalize costs related to developing new functionality for our suite of products that are hosted and accessed by our customers on a subscription basis. We also capitalize costs related to specific upgrades and enhancements when it is probable the expenditures will result in additional functionality. Costs incurred in the preliminary stages of development are expensed as incurred. Once an application has reached the development stage, internal and external costs, if direct and incremental, are capitalized until the software is substantially complete and ready for its intended use. Capitalized costs are recorded as part of other assets, net in our Consolidated Balance Sheets. Maintenance and training costs are expensed as incurred. Internal-use software costs are amortized on a straight-line basis over its estimated useful life, generally three years, and included in cost of revenue in the Consolidated Statements of Operations. There were no impairments to internal-use software costs during the periods presented.
On December 14, 2022, we completed the acquisition of certain assets, primarily in the form of intellectual property, from a third party for a total consideration of up to $6.5 million, including $3.1 million of cash paid on the acquisition date, $1.0 million of product delivery fees, and up to $2.5 million payable upon the achievement of certain software engineering and knowledge transfer milestones as of September 1, 2023, and December 1, 2023. We funded the transaction with cash on hand. We incurred less than $0.1 million in acquisition-related costs during the three months ended December 31, 2022, which are included in general and administrative expense. Prior to the acquisition, N-able had an existing Original Equipment Manufacturing Agreement (“OEM Agreement”) with the third party, whereby $1.0 million had previously been recorded as a prepaid royalty. The OEM Agreement was terminated as of the acquisition date, and the $1.0 million previously recorded as a prepaid royalty is now classified as product delivery fees. The total consideration of $6.5 million has been capitalized as costs to obtain internal-use computer software from third parties and will be amortized over an estimated useful life of three years, beginning when the related technology is deemed ready for its intended use, in accordance with our policy for the capitalization of internal-use software costs.
The $3.1 million of cash paid on the acquisition date and $1.0 million of product delivery fees is deemed to be the total value of technology ready for its intended use as of the acquisition date and will be amortized over an estimated useful life of three years, beginning on the acquisition date. The $2.5 million of contingent consideration is deemed to be the total value of technology not ready for its intended use as of the acquisition date. The contingent consideration liabilities will be re-evaluated periodically, but at least quarterly, with the resulting gains and losses recognized as an adjustment to the amount capitalized as costs to obtain internal-use computer software from third parties. See Note 8. Accrued Liabilities and Other and Note 15. Commitments and Contingencies for additional information regarding the contingent consideration liabilities. Once the technology has been deemed ready for its intended use, upon the achievement of certain software engineering and knowledge transfer milestones as of September 1, 2023, and December 1, 2023, the final capitalized amounts will be amortized over an estimated useful life of three years.
We had $13.7 million, $5.1 million, and $4.9 million of internal-use software costs, net capitalized for the years ended December 31, 2022, 2021 and 2020, respectively. Amortization expense of internal-use software costs was $2.5 million, $2.2 million, and $1.8 million for the years ended December 31, 2022, 2021 and 2020, respectively.
Debt Issuance Costs
Debt issuance costs for our secured credit facilities are presented as a deduction from the corresponding debt liability on our Consolidated Balance Sheets and amortized on an effective interest rate method over the term of the associated debt as interest expense in our Consolidated Statements of Operations. Amortization of debt issuance costs included in interest expense was $1.6 million and $0.7 million for the year ended December 31, 2022 and 2021, respectively. See Note 9. Debt for discussion of our secured credit facilities.
Contingencies
We account for claims and contingencies in accordance with authoritative guidance that requires we record an estimated loss from a claim or loss contingency when information available prior to issuance of our Consolidated Financial Statements indicates a liability has been incurred at the date of our Consolidated Financial Statements and the amount of the loss can be reasonably estimated. If we determine that it is reasonably possible but not probable that an asset has been impaired or a liability has been incurred, we disclose the amount or range of estimated loss if material or that the loss cannot be reasonably estimated. Accounting for claims and contingencies requires us to use our judgment. We consult with legal counsel on those issues related to litigation and seek input from other experts and advisors with respect to matters in the ordinary course of business. See Note 15. Commitments and Contingencies for a discussion of contingencies.
Revenue Recognition
We generate revenue from fees received for our SaaS solutions as well as subscriptions for our subscription-based term licenses and from the sale of maintenance services associated with our perpetual licenses. We recognize revenue related to contracts from customers when we transfer promised goods or services in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. This is determined by following a five-step process which includes (1) identifying the contract with a customer, (2) identifying the performance obligations in the contract, (3) determining the transaction price, (4) allocating the transaction price and (5) recognizing revenue when or as we satisfy a performance obligation, as described below.
•Identify the contract with a customer. We generally use an electronic or manually signed order form, purchase order, an authorized credit card, or the receipt of a cash payment as evidence of a contract provided that collection is considered probable. We sell our products through our direct inside sales force and through our distributors and resellers. Sales through resellers and distributors are typically evidenced by a reseller or distributor agreement, together with purchase orders or authorized credit cards on a transaction-by-transaction basis. Our distributors and resellers do not carry inventory of our software and we generally require them to specify the end user of the software at the time of the order. Our distributors and resellers have no rights of return or exchange for software that they purchase from us and payment for these purchases is due to us without regard to whether the distributors or resellers collect payment from their customers.
•Identify the performance obligations in the contract. Performance obligations promised in a contract are identified based on the goods or services that will be transferred to the MSP partner that are separately identifiable from other promises in the contract, or distinct. If not considered distinct, the promised goods or services are combined with other goods or services and accounted for as a combined performance obligation. Determining the distinct performance obligations in a contract requires judgment. Our performance obligations primarily include SaaS solutions, subscription-based term licenses and maintenance support including unspecified upgrades or enhancements to new versions of our software solutions. See additional discussion of our performance obligations below.
•Determine the transaction price. We determine the transaction price based on the contractual consideration and the amount of consideration we expect to receive in exchange for transferring the promised goods or services to the customer. We account for sales incentives to MSP partners, resellers or distributors as a reduction of revenue at the time we recognize the revenue from the related product sale. We report revenue net of any sales tax collected. Our return policy generally does not allow our MSP partners to return software products or services.
•Allocate the transaction price. For contracts that contain multiple performance obligations, we allocate the transaction price of the contract to each distinct performance obligation based on a relative stand-alone selling price basis. Determining stand-alone selling prices for our performance obligations requires judgment and are based on multiple factors primarily including historical selling prices and discounting practices for products and services. We review the stand-alone selling
price for our performance obligations periodically and update, if needed, to ensure that the methodology utilized reflects our current pricing practices.
•Recognize revenue when or as we satisfy a performance obligation. Revenue is recognized when or as performance obligations are satisfied either over time or at a point in time by transferring a promised good or service. We consider this transfer to have occurred when risk of loss transfers to the MSP partner, reseller or distributor or the MSP partner has access to their subscription which is generally upon electronic activation of the licenses purchased or access being granted which provides immediate availability of the product to the purchaser. See further discussion below regarding the timing of revenue recognition for each of our performance obligations.
The following summarizes our performance obligations from which we generate revenue:
Performance obligationWhen performance obligation is typically satisfied
SaaS solutionsOver the subscription term, once the service is made available to the MSP partner (over time)
Subscription-based term and perpetual licensesUpon the delivery of the license key or password that provides immediate availability of the product (point in time)
Technical support and unspecified software upgradesRatably over the contract period (over time)

Our revenue consists of the following:
Year Ended December 31,
202220212020
(in thousands)
Subscription revenue$362,609 $336,845 $292,027 
Other revenue9,160 9,611 10,844 
Total subscription and other revenue$371,769 $346,456 $302,871 
•Subscription Revenue. We primarily derive subscription revenue from the sale of subscriptions to our SaaS solutions and our subscription-based term licenses. Subscription revenue for our SaaS solutions is generally recognized ratably over the subscription term once the service is made available to the MSP partner or when we have the right to invoice for services performed. Our MSP partners do not have the right to take possession of the software for our SaaS solutions. Revenue from the license performance obligation of our subscription-based term licenses is recognized at a point in time upon delivery of the access to the licenses and the revenue from the performance obligation related to the technical support and unspecified software upgrades of our subscription-based term licenses is recognized ratably over the contract period. We generally invoice subscription agreements monthly based on usage or in advance over the subscription period on either a monthly or annual basis.
•Other Revenue. Other revenue consists primarily of revenue from the sale of our maintenance renewal services associated with the historical sales of perpetual license products. Customers with maintenance agreements are entitled to receive technical support and unspecified upgrades or enhancements to new versions of their software products on a when-and-if-available basis for the specified contract period. We believe that our technical support and unspecified upgrades or enhancements performance obligations each have the same pattern of transfer to the customer and are therefore accounted for as a single distinct performance obligation. We recognize maintenance revenue ratably on a daily basis over the contract period.
During the years ended December 31, 2022, 2021 and 2020, respectively, we recognized the following revenue from subscription and other services at a point in time and over time:
Year Ended December 31,
202220212020
(in thousands)
Revenue recognized at a point in time$59,970 $62,204 $57,943 
Revenue recognized over time311,799 284,252 244,928 
Total revenue recognized$371,769 $346,456 $302,871 
Deferred Revenue
Deferred revenue primarily consists of transaction prices allocated to remaining performance obligations from annually billed subscription agreements and maintenance services associated with our historical sales of perpetual license products which are delivered over time. Certain of our maintenance agreements are billed annually in advance for services to be performed over a 12-month period. We initially record the amounts allocated to maintenance performance obligations as deferred revenue and recognize these amounts ratably on a daily basis over the term of the maintenance agreement.
Details of our total deferred revenue balance was as follows:
Total Deferred Revenue
(in thousands)
Balance as of December 31, 2020$9,670 
Deferred revenue recognized(17,517)
Additional amounts deferred18,745 
Balance as of December 31, 2021$10,898 
Deferred revenue recognized(19,922)
Additional amounts deferred21,151 
Balance as of December 31, 2022$12,127 

Remaining Performance Obligations
We expect to recognize revenue related to the following remaining performance obligations as of December 31, 2022:
Revenue Recognition Expected by Period
TotalLess than 1
year		1-3 yearsMore than
3 years
(in thousands)
Expected recognition of remaining performance obligations$12,593 $12,079 $514 $— 

Cost of Revenue
Cost of Revenue. Cost of revenue consists of technical support personnel costs which includes salaries, bonuses and stock-based compensation and related employer-paid payroll taxes for technical support personnel, as well as an allocation of overhead costs. Public cloud infrastructure and hosting fees and royalty fees are also included in cost of revenue.
Amortization of Acquired Technologies. Amortization of acquired technologies included in cost of revenue relate to our subscription products and was $2.5 million, $5.8 million and $24.3 million for the years ended December 31, 2022, 2021 and 2020, respectively.
Advertising
We expense advertising costs as incurred. Advertising expense is included in sales and marketing expenses in our Consolidated Statements of Operations.
Advertising expense was as follows for the years ended December 31, 2022, 2021, and 2020:
Year Ended December 31,
202220212020
(in thousands)
Advertising expense$19,560 $18,534 $13,903 

Leases
We lease facilities worldwide and certain equipment under non-cancellable lease agreements. During 2019, we adopted the new lease accounting guidance, FASB Accounting Standards Update No. 2016-02 “Leases,” or ASC 842. Under ASC 842, we
evaluate if a contract is or contains a lease at inception of the contract. If we determine that a contract is or contains a lease, we determine the appropriate lease classification and recognize a right-of-use asset and lease liability at the commencement date of the lease based on the present value of fixed lease payments over the lease term reduced by lease incentives. To determine the present value of lease payments, we use an estimated incremental borrowing rate based on the interest rate a similar borrowing on a collateralized basis would incur based on information available on the lease commencement date as none of our leases provide an implicit rate. We generally base this discount rate on the interest rate incurred on our secured credit facilities and, prior to the Separation and Distribution, by our Parent's senior secured debt, adjusted for considerations for the value, term and currency of the lease. Lease terms include options to extend or terminate the lease when it is reasonably certain that we will exercise those options.
We recognize right-of-use assets and lease liabilities for leasing arrangements with terms greater than one year. Certain lease contracts include obligations to pay for other services, such as operations and maintenance. We account for lease and non-lease components in a contract as a single lease component for all classes of underlying assets except certain classes of equipment. Right-of-use assets are tested for impairment in the same manner as long-lived assets.
The terms of some of our lease agreements provide for rental payments on a graduated basis. Operating lease costs are recognized on a straight-line basis over the lease term and recorded in the appropriate income statement line item based on the asset or a headcount allocation for office leases. Certain of our office leases require the payment of our proportionate share of common area maintenance or service charges. As we have elected to account for lease and non-lease components as a single lease component for our real estate leases, these costs are included in variable lease costs. In addition, certain of our leases may include variable payments based on measures that include changes in price indices or market interest rates which are included in variable lease costs and expensed as incurred. We had no finance leases as of and for the periods ended December 31, 2022 and 2021, respectively. See Note 6. Leases for additional information regarding our lease arrangements.
Income Taxes
We use the liability method of accounting for income taxes as set forth in the authoritative guidance for accounting for income taxes. Under this method, we recognize deferred tax liabilities and assets for the expected future tax consequences of temporary differences between the respective carrying amounts and tax basis of our assets and liabilities. For the years ended December 31, 2020 and 2019, as well as the period ended July 19, 2021, income taxes as presented in the Consolidated Financial Statements attribute current and deferred income taxes of SolarWinds to the stand-alone financial statements of N-able in a manner that is systematic, rational and consistent with the asset and liability method prescribed by ASC 740. Accordingly, the income tax provision of N-able was prepared following the separate return method for these periods. The separate return method applies ASC 740 to the stand-alone financial statements of each member of the consolidated group as if the group members were a separate taxpayer and a stand-alone enterprise. The calculation of our income taxes on a separate return basis requires a considerable amount of judgment and use of both estimates and allocations. As a result, actual transactions included in the Consolidated Financial Statements of SolarWinds may not be included in the separate financial statements of N‑able. Similarly, the tax treatment of certain items reflected in the financial statements of N-able may not be reflected in the Consolidated Financial Statements and tax returns of SolarWinds. Therefore, items such as net operating losses, credit carryforwards and valuation allowances may exist in the stand-alone financial statements that may or may not exist in SolarWinds’ Consolidated Financial Statements. As such, the income taxes of N-able as presented in the Consolidated Financial Statements may not be indicative of the income taxes that N-able will report in the future. Certain operations of N-able have historically been included in a combined or consolidated return with other SolarWinds entities. Current obligations for taxes in certain jurisdictions, where N-able files a combined or consolidated tax return with SolarWinds, are deemed settled with SolarWinds for purposes of the Consolidated Financial Statements. Current obligations for tax in jurisdictions where N-able does not file a combined or consolidated return with SolarWinds, including certain foreign jurisdictions, are recorded within the income tax receivable or income taxes payable on the Consolidated Balance Sheets.
On December 22, 2017, the U.S. Tax Cuts and Jobs Act (the “Tax Act”) was enacted. As a result, income tax attributable to previously undistributed earnings of N-able international subsidiaries was recognized in 2017. This liability, which SolarWinds elected to pay over time, remains with SolarWinds and is not reflected in the financial statements of N-able.
In the ordinary course of business, there is inherent uncertainty in quantifying our income tax positions. We assess our income tax positions and record tax benefits for all years subject to examination based upon management’s evaluation of the facts, circumstances and information available at the reporting date. For those tax positions where it is more-likely-than-not that a tax benefit will be sustained, we have recorded the largest amount of tax benefit with a greater than 50% likelihood of being realized upon ultimate settlement with a taxing authority that has full knowledge of all relevant information. For those income tax positions where it is not more-likely-than-not that a tax benefit will be sustained, no tax benefit has been recognized in the
financial statements. Where applicable, the associated interest expense and penalties has been recognized as a component of income tax expense.
We establish valuation allowances when necessary to reduce deferred tax assets to the amounts expected to be realized. On a quarterly basis, we evaluate the need for, and the adequacy of, valuation allowances based on the expected realization of our deferred tax assets. The factors used to assess the likelihood of realization include our latest forecast of future taxable income, available tax planning strategies that could be implemented, reversal of taxable temporary differences and carryback potential to realize the net deferred tax assets. See Note 14. Income Taxes for additional information regarding our income taxes.
Concentrations of Risks
Financial instruments that potentially subject us to concentrations of credit risk consist principally of cash and cash equivalents and accounts receivable. Our cash and cash equivalents consisted of cash deposited with banks in demand deposit accounts which may exceed the amount of insurance provided on these deposits. Generally, we may withdraw our cash deposits and redeem our invested cash equivalents upon demand. We strive to maintain our cash deposits with multiple financial institutions of reputable credit and therefore bear minimal credit risk.
We provide credit to distributors, resellers and direct customers in the normal course of business. We generally extend credit to new customers based upon industry reputation and existing customers based upon prior payment history. For the years ended December 31, 2022, 2021 and 2020, no distributor, reseller or direct customer represented a significant concentration of our revenue.
At December 31, 2022 and 2021, no distributor, reseller or direct customer represented a significant concentration of our outstanding accounts receivable balance. We do not believe that our business is substantially dependent on any distributor or that the loss of a distributor relationship would have a material adverse effect on our business.
Accumulated Other Comprehensive Income (Loss)
Changes in accumulated other comprehensive income (loss) by component are summarized below:
Foreign Currency Translation AdjustmentsAccumulated Other Comprehensive Income (Loss)
(in thousands)
Balance as of December 31, 2020$48,991 $48,991 
Other comprehensive loss before reclassification(33,938)(33,938)
Net current period other comprehensive loss(33,938)(33,938)
Balance as of December 31, 202115,053 15,053 
Other comprehensive loss before reclassification(22,868)(22,868)
Net current period other comprehensive loss(22,868)(22,868)
Balance as of December 31, 2022$(7,815)$(7,815)
Stock-Based Compensation
We have granted our employees, directors and certain contractors stock-based incentive awards. These awards are in the form of stock options, restricted common stock, restricted stock units and performance stock units. We measure stock-based compensation expense for all share-based awards granted to employees and directors based on the estimated fair value of those awards on the date of grant. The fair value of stock option awards is estimated using a Black-Scholes valuation model. The fair value of restricted common stock, restricted stock units and performance stock units is determined using the fair market value of the underlying common stock on the date of grant less any amount paid at the time of the grant, or intrinsic value. Our stock awards vest on service-based or performance-based vesting conditions. For our service-based awards, we recognize stock-based compensation expense on a straight-line basis over the service period of the award. For our performance-based awards, we recognize stock-based compensation expense on a graded-vesting basis over the service period of each separately vesting tranche of the award, if it is probable that the performance target will be achieved.
In connection with the Separation and Distribution, all of the outstanding and unvested SolarWinds equity awards held by our employees were converted to N-able awards (the “Conversion”). As a result of the Conversion, 224,638 stock options, 91,477 shares of restricted common stock, and 2,207,824 shares of restricted stock units were granted during the year ended December 31, 2021. No stock option awards were granted during the year ended December 31, 2022. See Note 10. Stock-Based
Compensation and Note 13. Relationship with Parent and Related Entities for information on the incremental compensation expense recognized during the year ended December 31, 2022 and 2021 as a result of the Conversion.
We estimated the fair value for stock options at the date of grant using the Black-Scholes option pricing model. We have not paid and do not anticipate paying cash dividends on our common stock; therefore, we assume the expected dividend yield to be zero. We estimate the expected volatility using the historical volatility of comparable public companies from a representative peer group. We base the risk-free rate of return on the average U.S. treasury yield curve for the most appropriate terms for the respective periods. As allowed under current guidance, we have elected to apply the “simplified method” in developing our estimate of expected life for “plain vanilla” stock options by using the midpoint between the vesting date and contractual termination date since we do not have sufficient historical exercise data to provide a reasonable basis upon which to estimate expected term. For all awards, we grant employees stock awards at exercise prices equal to the fair value of the underlying common stock on the date the award was approved. Performance-based awards are not considered granted under the applicable accounting guidance until the performance attainment targets for each applicable tranche have been defined. We recognize the impact of forfeitures in stock-based compensation expense when they occur. See Note 10. Stock-Based Compensation for additional information.
Net Income (Loss) Per Share
We calculate basic and diluted net income (loss) per share attributable to common stockholders in conformity with the two-class method required for companies with participating securities. We compute basic net income (loss) per share available to common stockholders by dividing net income (loss) available to common stockholders by the weighted-average number of common shares outstanding during the reporting period. We compute diluted net income (loss) per share similarly to basic net income (loss) per share except that it reflects the potential dilution that could occur if dilutive securities or other obligations to issue common stock were exercised or converted into common stock using the treasury stock method. Refer to Note 9. Earnings Per Share for additional information regarding the computation of net income per share.
Recently Issued Accounting Pronouncements
In March 2020, the FASB issued Accounting Standards Update (“ASU”) No. 2020-04, “Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting,” which provides temporary optional expedients and exceptions to the existing guidance on contract modifications and hedge accounting to ease the financial reporting burdens related to the expected market transition from the London Interbank Offered Rate (“LIBOR”) and other interbank offered rates to alternative reference rates. The standard became effective upon issuance and may be applied to any new or amended contracts, hedging relationships, and other transactions that reference LIBOR through December 31, 2022. In December 2022, the FASB issued ASU No. 2022-06, “Reference Rate Reform (Topic 848): Deferral of the Sunset Date of Topic 848,” extending the sunset date of the relief provided under ASU No. 2020-04 to December 31, 2024. We do not believe this standard will have a material impact on our consolidated financial statements.
In October 2021, the FASB issued ASU No. 2021-08, “Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers,” which requires an entity to recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with ASC 606, “Revenue from Contracts with Customers,” instead of at fair value on the acquisition date as previously required by ASC 805, “Business Combinations.” The amendments improve comparability after the business combination by providing consistent recognition and measurement guidance for acquired revenue contracts and revenue contracts not acquired in a business combination. The updated guidance is effective for public companies for fiscal years beginning after December 15, 2022, and early adoption is permitted. The updated guidance will be applied prospectively to business combinations occurring during or after the fiscal year of adoption. We do not believe this standard will have a material impact on our consolidated financial statements.
v3.22.4
Acquisitions
 12 Months Ended
Dec. 31, 2022
Business Combination and Asset Acquisition [Abstract]  
Acquisitions Acquisitions
Spinpanel B.V.
On July 1, 2022, we completed the acquisition of all the outstanding equity of Spinpanel B.V. (“Spinpanel”) for a total consideration of up to approximately $20.0 million, including up to $10.0 million payable upon the achievement of certain revenue metrics through July 1, 2025. We funded the transaction with cash on hand. Based in the Netherlands, Spinpanel is a multi-tenant Microsoft 365 management and automation platform built for Microsoft Cloud Solution Providers to automate the provisioning, security, and management of all Microsoft tenants, users, and licenses in a single consolidated hub. The acquisition of Spinpanel is intended to help our partners optimize the value of their Microsoft Cloud products and, in turn, give Spinpanel customers access to a wider array of IT management and security solutions. We incurred net acquisition-related costs of $0.3 million during the year ended December 31, 2022, which are included in general and administrative expense. Goodwill and acquired identifiable intangible assets for this acquisition are not deductible for tax purposes.
The initial determination of the fair value of the assets acquired and liabilities assumed is based on a preliminary valuation and the estimates and assumptions for these items are subject to change as we obtain additional information during the measurement period. Subsequent changes to the purchase price or other fair value adjustments determined during the measurement period will be recorded as an adjustment to goodwill.

The following table summarizes the amounts recognized for the assets acquired and liabilities assumed:
(in thousands)
Current assets, including cash acquired of $6
$128 
Property and equipment, net48 
Current liabilities(1,199)
Non-current deferred tax liabilities(2,314)
Identifiable intangible assets
Developed technology8,890 
Customer relationships80 
Goodwill8,726 
Total assets acquired, net$14,359 

The following table summarizes the total consideration for the assets acquired and liabilities assumed:
(in thousands)
Cash paid, net of cash acquired of $6
$9,199 
Contingent consideration5,160 
Total consideration, net$14,359 
The following table summarizes the fair value of the acquired identifiable intangible assets and weighted-average useful life by category:
Fair ValueWeighted-Average Useful Life
(in thousands)(in years)
Developed technology$8,890 5
Customer relationships80 3
Total identifiable intangible assets$8,970 

The results of operations related to Spinpanel since the acquisition date are included in our Consolidated Financial Statements during the year ended December 31, 2022. As noted above, total consideration includes up to $10.0 million payable upon the achievement of certain revenue metrics through July 1, 2025. The contingent consideration liabilities will be re-evaluated periodically, but at least quarterly, with the resulting gains and losses recognized within general and administrative expense in our Consolidated Statements of Operations. At the date of acquisition, the fair value of this contingent consideration was $5.2 million. As of December 31, 2022, the fair value of this contingent consideration is $5.1 million, resulting in the recognition of a gain of $0.1 million for the year ended December 31, 2022. The current portion of the contingent consideration of $0.3 million is included in “accrued liabilities and other” and the non-current portion of $4.8 million is included in “other long-term liabilities” in our Consolidated Balance Sheets as of December 31, 2022. See Note 7. Fair Value Measurements, Note 8. Accrued Liabilities and Other and Note 15. Commitments and Contingencies for additional information regarding the contingent consideration liabilities.
Pro forma information for the acquisition has not been provided because the impact of the historical financials on our revenue, net income (loss) and net income (loss) per share is not material. We recognize revenue on the acquired products in accordance with our revenue recognition policy as described in Note 2. Summary of Significant Accounting Policies.
v3.22.4
Goodwill and Intangible Assets
 12 Months Ended
Dec. 31, 2022
Goodwill and Intangible Assets Disclosure [Abstract]  
Goodwill and Intangible Assets Goodwill and Intangible Assets
Goodwill
The following table reflects the changes in goodwill for the years ended December 31, 2022 and 2021:
(in thousands)
Balance as of December 31, 2020$874,083 
Foreign currency translation(33,160)
Balance as of December 31, 2021840,923 
Acquisitions 8,726 
Foreign currency translation(20,854)
Balance as of December 31, 2022$828,795 
Intangible Assets
Intangible assets consisted of the following as of December 31, 2022 and 2021:
December 31, 2022December 31, 2021
Gross
Carrying
Amount		Accumulated
Amortization		NetGross
Carrying
Amount		Accumulated
Amortization		Net
(in thousands)
Developed product technologies$30,054 $(21,803)$8,251 $35,210 $(33,542)$1,668 
Customer relationships92,662 (92,040)622 95,010 (88,612)6,398 
Trademarks713 (713)— 1,136 (1,136)— 
Total intangible assets$123,429 $(114,556)$8,873 $131,356 $(123,290)$8,066 
Intangible asset amortization expense was as follows:
Year Ended December 31,
202220212020
(in thousands)
Intangible asset amortization expense$8,330 $19,065 $48,105 
As of December 31, 2022, we estimate aggregate intangible asset amortization expense to be as follows:
Estimated Amortization
(in thousands)
2023$2,414 
20241,860 
20251,847 
20261,833 
2027919 
Total amortization expense$8,873 
The expected amortization expense is an estimate. Actual amounts of amortization expense may differ from estimated amounts due to additional intangible asset acquisitions, changes in foreign currency exchange rates, impairment of intangible assets, future changes to expected asset lives of intangible assets and other events.
v3.22.4
Fair Value Measurements
 12 Months Ended
Dec. 31, 2022
Fair Value Disclosures [Abstract]  
Fair Value Measurements Fair Value Measurements
The following table summarizes the fair value of our money market fund financial assets and contingent consideration financial liabilities that were measured on a recurring basis as of December 31, 2022. We held no financial assets and liabilities as of December 31, 2021. See Note 3. Acquisitions, Note 8. Accrued Liabilities and Other and Note 15. Commitments and Contingencies for additional information regarding our contingent consideration liabilities. There have been no transfers between fair value measurement levels during the year ended December 31, 2022.
Fair Value Measurements at
December 31, 2022 Using
Quoted Prices in
Active Markets
for Identical Assets
(Level 1)		Significant
Other
Observable
Inputs
(Level 2)		Significant
Unobservable
Inputs
(Level 3)		Total
(in thousands)
Assets:
Money market funds$48,389 $— $— $48,389 
Liabilities:
Contingent consideration$— $— $5,090 $5,090 
As of December 31, 2022, the carrying value of our outstanding debt approximates its estimated fair value as the interest rate on the debt is adjusted for changes in market rates. See Note 9. Debt for additional information regarding our debt.
v3.22.4
Property and Equipment
 12 Months Ended
Dec. 31, 2022
Property, Plant and Equipment [Abstract]  
Property and Equipment Property and Equipment
Property and equipment, net, including software, consisted of the following:
December 31,
20222021
(in thousands)
Servers, equipment and computers$38,669 $32,524 
Furniture and fixtures6,386 6,409 
Software885 602 
Leasehold improvements21,450 21,408 
$67,390 $60,943 
Less: Accumulated depreciation and amortization(29,986)(22,195)
Property and equipment, net$37,404 $38,748 
Depreciation and amortization expense on property and equipment was as follows for the years ended December 31, 2022, 2021, and 2020:
Year Ended December 31,
202220212020
(in thousands)
Depreciation and amortization$13,249 $12,226 $6,581 
v3.22.4
Leases
 12 Months Ended
Dec. 31, 2022
Leases [Abstract]  
Leases Leases
We lease our offices and do not own any real estate. Our corporate headquarters is located in Burlington, Massachusetts. We lease office space domestically and internationally in various locations for our operations, including facilities located in Austin, Texas; Bucharest, Romania; Calgary, Canada; Coimbra, Portugal; Dundee, United Kingdom; Edinburgh, United Kingdom; Emmeloord, Netherlands; Lisbon, Portugal; Manila, Philippines; Minsk, Belarus; Morrisville, North Carolina; Ottawa, Canada; Sydney, Australia; Utrecht, Netherlands; Warsaw, Poland; Uster, Switzerland; and Vienna, Austria. Our leases are all classified as operating and have remaining terms of less than one year to 9.4 years.
The components of operating lease costs for the years ended December 31, 2022 and 2021 were as follows:
Year Ended December 31,
20222021
(in thousands)
Operating lease costs$6,888 $5,444 
Variable lease costs(1)
1,293 1,046 
Short-term lease costs299 476 
Total lease costs$8,480 $6,966 
____________
(1)     Primarily includes common area maintenance and other service charges for leases in which we pay a proportionate share of those costs as we have elected to not separate lease and non-lease components for our office leases.
Maturities of our operating lease liabilities as of December 31, 2022 were as follows:
December 31, 2022
(in thousands)
2023$7,280 
20247,118 
20255,532 
20265,464 
20274,489 
Thereafter15,752 
Total minimum lease payments45,635 
Less: imputed interest(6,754)
Present value of operating lease liabilities$38,881 
As of December 31, 2022, the weighted-average remaining lease term of our operating leases was 7.7 years and the weighted-average discount rate used in the calculation of our lease liabilities was 4.1%.
v3.22.4
Accrued Liabilities and Other
 12 Months Ended
Dec. 31, 2022
Payables and Accruals [Abstract]  
Accrued Liabilities and Other Accrued Liabilities and Other
Accrued liabilities and other current liabilities were as follows:
December 31,
20222021
(in thousands)
Payroll-related accruals$19,622 $16,657 
Value-added and other tax1,904 1,805 
Purchasing accruals4,390 3,593 
Accrued royalties1,104 1,938 
Accrued contingent consideration liability2,746 — 
Accrued other liabilities5,864 6,951 
Total accrued liabilities and other$35,630 $30,944 
v3.22.4
Debt
 12 Months Ended
Dec. 31, 2022
Debt Disclosure [Abstract]  
Debt Debt
In connection with the Separation and Distribution, on July 19, 2021, certain subsidiaries of the Company, including N-able International Holdings I, Inc. (as guarantor) and N-able International Holdings II, Inc. (as borrower), entered into a credit agreement (the “Credit Agreement”) with JPMorgan Chase, Bank, N.A. as administrative agent and collateral agent and the lenders from time to time party thereto. N-able International Holdings I, Inc. is a holding company with no other operations, cash flows, material assets or liabilities other than the equity interests in N-able International Holdings II, Inc. The Credit Agreement provides for $410.0 million of first lien secured credit facilities (the “Credit Facilities”), consisting of a $60.0 million revolving credit facility (the “Revolving Facility”), and a $350.0 million term loan facility (the “Term Loan”). On July 19, 2021, prior to the completion of the Distribution, the Company distributed approximately $16.5 million, representing the proceeds from the Term Loan, net of the repayment of related party debt due to SolarWinds Holdings, Inc., payment of intercompany trade payables, and fees and other transaction-related expenses, to SolarWinds. The Revolving Facility will primarily be available for general corporate purposes.
The following table summarizes information relating to our outstanding debt as of December 31, 2022:
As of December 31,
2022
Amount OutstandingEffective Rate
(in thousands, except interest rates)
Term loan facility$345,625 7.73 %
Revolving credit facility— — %
Total principal amount345,625 
Unamortized discount and debt issuance costs(8,637)
Total debt, net336,988 
Less: Current debt obligation(3,500)
Long-term debt, net of current portion$333,488 

Borrowings denominated in U.S. dollars under the Revolving Facility bear interest at a floating rate of an Adjusted LIBOR rate (subject to a “floor” of 0.0%) for a specified interest period plus an applicable margin of 3.00%. The borrowings denominated in Euros under the Revolving Facility bear interest at a floating rate of an Adjusted EURIBOR rate (subject to a “floor” of 0.0%) for a specified interest period plus an applicable margin of 3.0%. Borrowings under the Term Loan bear interest at a floating rate of an Adjusted LIBOR rate (subject to a “floor” of 0.5%) for a specified interest period plus an applicable margin of 3.0%. Each margin is subject to reductions to 2.75% and 1.75%, respectively, based on our first lien net leverage ratio.
In addition to paying interest on loans outstanding under the Revolving Facility, we are required to pay a commitment fee of 0.375% per annum in respect of unused commitments thereunder, subject to a reduction to 0.25% per annum based on our first lien net leverage ratio.
The Term Loan requires quarterly repayments equal to 0.25% of the original principal amount, commencing in December 2021 through June 2028. The final maturity dates of the Revolving Facility and Term Loan are July 18, 2026 and July 18, 2028, respectively.
The Credit Agreement contains a number of covenants that, among other things, restrict, subject to certain exceptions, our ability to: incur additional indebtedness; create liens; engage in mergers or consolidations; sell or transfer assets; pay dividends and distributions or repurchase our capital stock; make investments, loans, or advances; prepay certain junior indebtedness; engage in certain transactions with affiliates; and enter into negative pledge agreements. In addition, the Revolving Facility is subject to a financial covenant requiring compliance with a maximum first lien net leverage ratio of 7.50 to 1.00 at the end of each fiscal quarter, which will trigger when loans outstanding under the Revolving Facility exceed 35% of the aggregate commitments under the Revolving Facility. The Credit Agreement contains certain customary events of default, including, among others, failure to pay principal, interest or other amounts; inaccuracy of representations and warranties; violation of covenants; cross events of default; certain bankruptcy and insolvency events; certain ERISA events; certain undischarged judgments; and change of control.
As of December 31, 2022, we were in compliance with all covenants of the Credit Agreement.
The following table summarizes the future minimum principal payments under Credit Agreement as of December 31, 2022:
(in thousands)
2023$3,500 
20243,500 
20253,500 
20263,500 
20273,500 
Thereafter328,125 
Total minimum principal payments$345,625 
v3.22.4
Stock-Based Compensation
 12 Months Ended
Dec. 31, 2022
Share-Based Payment Arrangement [Abstract]  
Stock-Based Compensation Stock-Based Compensation
Common Stock and Preferred Stock
As set by our certificate of incorporation, the Company has authorized 550,000,000 shares of common stock, par value of $0.001 per share, and 50,000,000 shares of preferred stock, par value of $0.001 per share. Each share of common stock entitles the holder thereof to one vote on each matter submitted to a vote at any meeting of stockholders.
Equity Incentive Awards
2021 Equity Incentive Plan
In August 2021, our board of directors adopted and our stockholders approved our 2021 Equity Incentive Plan (the “2021 Plan”). It is intended to make available incentives that will assist us to attract, retain and motivate employees, including officers, consultants and directors. We may provide these incentives through the grant of stock options, stock appreciation rights, restricted stock, restricted stock units, performance shares and units and other cash-based or stock-based awards. As of December 31, 2022, 13,574,211 shares were reserved for future grants under the 2021 Plan.
Awards may be granted under the 2021 Plan to our employees, including officers, directors or consultants or those of any present or future parent or subsidiary corporation or other affiliated entity. All awards must be evidenced by a written agreement between us and the holder of the award and may include stock options, stock appreciation rights, restricted stock, restricted stock units (“RSUs”), performance shares and performance units (“PSUs”), and cash-based awards and other stock-based awards. In the event of a change in control as described in the 2021 Plan, the acquiring or successor entity may assume or continue all or any awards outstanding under the 2021 Plan or substitute substantially equivalent awards. Any awards that are not assumed or continued in connection with a change in control or are not exercised or settled prior to the change in control will terminate effective as of the time of the change in control. Our compensation committee may provide for the acceleration of vesting of any or all outstanding awards upon such terms and to such extent as it determines, except that the vesting of all awards held by members of the board of directors who are not employees will automatically be accelerated in full. The 2021 Plan also authorizes our compensation committee, in its discretion and without the consent of any participant, to cancel each or any outstanding award denominated in shares upon a change in control in exchange for a payment to the participant with respect to each share subject to the canceled award of an amount equal to the excess of the consideration to be paid per share of common stock in the change in control transaction over the exercise price per share, if any, under the award.
The 2021 Plan will continue in effect until it is terminated by the compensation committee; provided, however, that all awards must be granted, if at all, within ten years of its effective date. The compensation committee may amend, suspend or terminate the 2021 Plan at any time; provided that without stockholder approval, the plan cannot be amended to increase the number of shares authorized, change the class of persons eligible to receive incentive stock options, or effect any other change that would require stockholder approval under any applicable law, regulation or listing rule.
RSUs generally vest over the requisite service period of four years, subject to continued employment through each applicable vesting date. PSUs generally vest over a three-year period based on the achievement of specified performance targets for the fiscal year and subject to continued service through the applicable vesting dates. Based on the extent to which the performance targets are achieved, PSUs vest at a specified range of the target award amount.
We have granted employees restricted stock and options at exercise prices equal to the fair value of the underlying common stock at the time of grant, as determined by our board of directors on a contemporaneous basis. As of December 31, 2022,
common stock-based incentive awards of 7,361,678 shares were outstanding under the 2021 Plan, consisting of 125,841 stock options, 3,416 shares of restricted common stock, 5,745,906 shares of restricted stock units, and 1,486,515 shares of performance stock units. For the year ended December 31, 2022, we repurchased 10,850 shares of vested and unvested restricted common stock upon employee terminations.
Conversion of SolarWinds Equity Stock Awards
In connection with the Separation and Distribution, all of the outstanding and unvested SolarWinds equity awards held by our employees were converted to N-able awards through the Conversion. As a result of the Conversion, 224,638 stock options, 91,477 shares of restricted common stock, and 2,207,824 shares of restricted stock units were granted during the year ended December 31, 2021. See Note 13. Relationship with Parent and Related Entities for information on the incremental compensation expense recognized during the year ended December 31, 2021 as a result of the Conversion.
Stock-Based Compensation Expense
Stock-based compensation expense for the years ended December 31, 2022, 2021 and 2020 was $36.5 million, $29.4 million and $21.1 million, respectively, as summarized below:
Year Ended December 31,
202220212020
(in thousands)
Cost of revenue$1,146 $1,010 $670 
Sales and marketing12,043 8,761 4,409 
Research and development6,118 4,659 3,189 
General and administrative17,220 15,000 12,785 
Total stock-based compensation expense$36,527 $29,430 $21,053 

The impact to our income before income taxes due to stock-based compensation expense and the related income tax benefits were as follows:
Year Ended December 31,
202220212020
(in thousands)
Impact to income before income taxes due to stock-based compensation$36,527 $29,430 $21,053 
Income tax benefit related to stock-based compensation872 310 241 
Stock Option Awards
Stock option grant activity under the 2021 Plan was as follows during the year ended December 31, 2022:
Number of
Shares
Outstanding		Weighted-
Average
Exercise
Price		Aggregate
Intrinsic
Value
(in thousands)		Weighted-
Average
Remaining
Contractual
Term
(in years)
Outstanding balances as of December 31, 2021
169,168 $1.32 
Options exercised(40,695)2.65 
Options forfeited(1,316)0.57 
Options expired (1,316)1.60 
Outstanding balances as of December 31, 2022
125,841 $0.89 
Options exercisable as of December 31, 2022
120,049 $0.86 $1,131 4.4
Options vested and expected to vest as of December 31, 2022
125,841 $0.89 $1,182 4.5
No stock option awards were granted during the year ended December 31, 2022. For stock option awards granted during the year ended December 31, 2021, we estimated the fair value at the date of grant using the Black-Scholes option pricing model with the following weighted-average assumptions:
Year Ended December 31,
2021
Expected dividend yield— %
Volatility 45.5 %
Risk-free rate of return0.5 %
Expected life3.47 years
See Note 2. Summary of Significant Accounting Policies for additional information on determining the fair value of our stock-based incentive awards.
The unrecognized stock-based compensation expense related to unvested stock options and subject to recognition in future periods was less than $0.1 million as of December 31, 2022. We expect to recognize this expense over weighted average periods of approximately 0.2 years as of December 31, 2022.
Restricted Stock
The following table summarizes information about restricted stock activity subject to vesting under the 2021 Plan during the year ended December 31, 2022:
Number of
Shares
Outstanding
Unvested balances as of December 31, 2021
75,815 
Restricted stock vested (61,549)
Restricted stock repurchased - unvested shares (10,850)
Unvested balances as of December 31, 2022
3,416 
Restricted stock was purchased at fair market value by the employee receiving the restricted stock award and restricted common stock was issued at the date of grant. The weighted-average grant date fair market value of restricted common stock purchased was $1.52 per share. The aggregate intrinsic value of restricted stock vested during the year ended December 31, 2022 was $0.6 million.
Restricted stock is subject to certain restrictions, such as vesting and a repurchase right. The common stock acquired by the employee is restricted stock because vesting is conditioned upon (i) continued employment through the applicable vesting date and (ii) for employees at the level of group vice president and above, the achievement of certain financial performance targets determined by the board of directors. Pursuant to the Separation and Distribution, the restricted stock is subject to repurchase by SolarWinds in the event the stockholder ceases to be employed or engaged (as applicable) by the Company for any reason or in the event of a change of control or due to certain regulatory burdens. As a result, we have no liability for unvested shares as of December 31, 2022 and 2021, respectively.
Restricted Stock Units
The following table summarizes information about restricted stock unit activity under the 2021 Plan during the year ended December 31, 2022:
Number of
Units
Outstanding		Weighted-Average Grant Date Fair Value Per ShareAggregate Intrinsic Value
(in thousands)		Weighted-Average Remaining Contractual Term
(in years)
Unvested balances as of December 31, 2021
4,764,213 $13.03 $52,883 1.3
Restricted stock units granted3,876,745 11.44 
Restricted stock units vested (2,036,843)13.11 
Restricted stock units forfeited (858,209)12.12 
Unvested balances as of December 31, 2022
5,745,906 $12.07 $59,068 1.3
The total fair value of restricted stock units vested during the year ended December 31, 2022 was $22.0 million. The total unrecognized stock-based compensation expense related to unvested restricted stock units and subject to recognition in future periods is $56.0 million as of December 31, 2022 and we expect to recognize this expense over a weighted-average period of 2.6 years.
Performance Stock Units
The following table summarizes information about performance stock unit activity under the 2021 Plan during the year ended December 31, 2022:
Number of
Units
Outstanding		Weighted-Average Grant Date Fair Value Per ShareAggregate Intrinsic Value
(in thousands)		Weighted-Average Remaining Contractual Term
(in years)
Unvested balances as of December 31, 2021
989,914 $12.50 $10,988 1.1
Performance stock units granted772,452 11.60 
Performance stock units vested (275,851)12.50 
Unvested balances as of December 31, 2022
1,486,515 $12.03 $15,281 0.9
The total unrecognized stock-based compensation expense related to unvested performance stock units and subject to recognition in future periods is $5.6 million as of December 31, 2022 and we expect to recognize this expense over a weighted-average period of 0.9 years.
Employee Stock Purchase Plan
In August 2021, our board of directors adopted and our stockholders approved our 2021 Employee Stock Purchase Plan (the “ESPP”). We reserved a total of 2,500,000 shares of our common stock available for sale under our ESPP, and 2,358,012 shares remained available for future issuance as of December 31, 2022.
Our ESPP permits eligible participants to purchase common stock through payroll deductions of up to 20% of their eligible compensation during the offering period. The ESPP will typically be implemented through consecutive six-month offering periods. Amounts deducted and accumulated from participant compensation, or otherwise funded in any participating non-U.S. jurisdiction in which payroll deductions are not permitted, are used to purchase shares of our common stock at the end of each offering period. The purchase price of the shares will be 85% of the lesser of the fair market value of our common stock on the first day of the offering period and the fair market value on the last day of the offering period. No participant may purchase more than $25,000 worth of common stock per calendar year.
Stock-based compensation expense related to our ESPP plan was $0.5 million and $0.1 million for the years ended December 31, 2022 and 2021, respectively.
v3.22.4
Earnings Per Share
 12 Months Ended
Dec. 31, 2022
Earnings Per Share [Abstract]  
Earnings Per Share Earnings Per Share
A reconciliation of the number of shares in the calculation of basic and diluted earnings (loss) per share follows:
Year Ended December 31,
202220212020
(in thousands)
Basic earnings (loss) per share:
Numerator:
Net income (loss)$16,707 $113 $(7,158)
Net income (loss) available to common stockholders$16,707 $113 $(7,158)
Denominator:
Weighted-average common shares outstanding used in computing basic earnings (loss) per share180,136 167,460 158,124 
Basic earnings (loss) per share$0.09 $0.00 $(0.05)
Diluted earnings (loss) per share:
Numerator:
Net income (loss) available to common stockholders$16,707 $113 $(7,158)
Denominator:
Weighted-average shares used in computing basic earnings (loss) per share180,136 167,460 158,124 
Add dilutive impact of employee equity plans1,161 1,207 — 
Weighted-average shares used in computing diluted earnings (loss) per share181,297 168,667 158,124 
Diluted earnings (loss) per share$0.09 $0.00 $(0.05)
The following weighted-average outstanding shares of common stock equivalents were excluded from the computation of the diluted net income per share attributable to common stockholders for the periods presented because their effect would have been anti-dilutive or for which the performance condition had not been met at the end of the period:
Year Ended December 31,
202220212020
(in thousands)
Restricted stock units2,957 203 — 
Total anti-dilutive shares2,957 203 — 
The calculation of diluted earnings per share requires us to make certain assumptions related to the use of proceeds that would be received upon the assumed exercise of stock options, purchase of restricted stock or proceeds from the employee stock purchase plan.
v3.22.4
Employee Benefit Plans
 12 Months Ended
Dec. 31, 2022
Retirement Benefits [Abstract]  
Employee Benefit Plans Employee Benefit Plans
401(k) Plan
Our eligible employees participate in a 401(k) matching program. We, as sponsor of the plan, use an independent third party to provide administrative services to the plan. We have the right to terminate the plan at any time. Employees are fully vested in all contributions to the plan. Our expense related to the plan was as follows:
Year Ended December 31,
202220212020
(in thousands)
Employee benefit plan expense$1,495 $1,440 $1,203 
v3.22.4
Relationship with Parent and Related Entities
 12 Months Ended
Dec. 31, 2022
Related Party Transactions [Abstract]  
Relationship with Parent and Related Entities Relationship with Parent and Related Entities
Prior to the Separation and Distribution, the N-able business was managed and operated in the normal course of business consistent with other affiliates of SolarWinds. Accordingly, certain shared costs for the periods through the Separation and Distribution date of July 19, 2021 have been allocated to N-able and reflected as expenses in the Consolidated Financial Statements. Management considers the allocation methodologies used to be reasonable and appropriate reflections of the historical SolarWinds expenses attributable to N-able for purposes of the stand-alone financial statements. However, the expenses reflected in the Consolidated Financial Statements may not be indicative of the actual expenses that would have been incurred during the periods presented if N-able historically operated as a separate, stand-alone entity. In addition, the expenses reflected in the Consolidated Financial Statements may not be indicative of related expenses that will be incurred in the future by N-able.
General Corporate Overhead
For the periods through the Separation and Distribution date of July 19, 2021, SolarWinds provided facilities, information technology services and certain corporate and administrative services to the N-able business. Expenses relating to these services have been allocated to N-able and are reflected in the Consolidated Financial Statements. Where direct assignment is not possible or practical, these costs were allocated based on headcount. The following table summarizes the components of general allocated corporate expenses for the years ended December 31, 2021 and 2020:
Year Ended December 31,
20212020
(in thousands)
General and administrative$20,357 $31,357 
Research and development253 1,672 
Sales and marketing297 1,969 
Cost of revenue140 149 
Total$21,047 $35,147 

Due to and from Affiliates
In connection with the Separation and Distribution, we repaid all related party debt due to SolarWinds Holdings, Inc. and had no remaining related party debt due to SolarWinds Holdings, Inc. as of December 31, 2022.
On February 25, 2016, we entered into a loan agreement with SolarWinds Holdings, Inc. with an original principal amount of $250.0 million and a maturity date of February 25, 2023. Borrowings under the loan agreement bear interest at a floating rate which is equal to an adjusted LIBOR for a three-month interest period plus 9.8%. Prepayments of borrowings under the loan are permitted. In connection with the Separation and Distribution, we repaid this debt in full.
On May 27, 2016, we entered into an additional loan agreement with SolarWinds Holdings, Inc. The loan agreement, as amended, has an original principal amount of $200.0 million and a maturity date of May 27, 2026. Borrowings under the loan agreement bear interest at a fixed rate of 2.24%. Prepayments of borrowings under the loan are permitted. In connection with the Separation and Distribution, we repaid this debt in full.
Interest expense related to the loan agreements with SolarWinds Holdings, Inc. was $13.8 million and $28.1 million for the years ended December 31, 2021 and 2020, respectively. The repayment of principal for these related party borrowings is reflected as a financing activity in the Consolidated Statements of Cash Flows.
Due to affiliates within current liabilities primarily comprises $0.5 million relating to transition services provided by SolarWinds as of December 31, 2021. There were no amounts due to or from SolarWinds as of December 31, 2022.
Equity-Based Incentive Plans
Prior to the Separation and Distribution, certain of our employees participated in Parent’s equity-based incentive plans. Under the SolarWinds Corporation 2016 Equity Incentive Plan (the “2016 Plan”), our employees, consultants, directors, managers and advisors were awarded stock-based incentive awards in a number of forms, including non-qualified stock options. The ability to grant any future equity awards under the 2016 Plan terminated in October 2018. Under the SolarWinds Corporation 2018 Equity Incentive Plan, our employees were eligible to be awarded stock-based incentive awards, including non-statutory stock options or incentive stock options, stock appreciation rights, restricted stock, restricted stock units,
performance stock units and other cash-based or share-based awards. Awards granted to our employees under the Parent incentive plans generally vested over periods ranging from one to five years. We measure stock-based compensation for all stock-based incentive awards at fair value on the grant date. Stock-based compensation expense is generally recognized on a straight-line basis over the requisite service periods of the awards.
For the periods through the Separation and Distribution date of July 19, 2021, compensation costs associated with our employees’ participation in Parent's incentive plans have been specifically identified for employees who exclusively supported our operations and were allocated to us as part of the cost allocations from Parent. Total costs charged to us related to our employees’ participation in Parent’s incentive plans were $9.3 million and $20.6 million for the years ended December 31, 2021 and 2020, respectively. In connection with the Separation and Distribution, all of the vested and outstanding and unvested SolarWinds equity awards held by our employees were converted to N-able awards through the Conversion. The modification of these equity awards resulted in incremental compensation expense to the extent the estimated fair value of the awards immediately following the modification exceeded the estimated fair value of the awards immediately prior to the modification. This expense is to be recognized upfront for all vested and outstanding awards and over the remaining vesting term for all unvested awards. For the year ended December 31, 2022 and 2021, we recognized $2.2 million and $2.7 million, respectively, of incremental expense in connection with the Conversion. We include stock-based compensation expense in operating expense (general and administrative, sales and marketing and research and development) and cost of revenue on our Consolidated Statements of Operations, depending on the nature of the employee’s role in our operations.
Agreements with SolarWinds
In connection with the completion of the Separation and Distribution on July 19, 2021, we entered into several agreements with SolarWinds that, among other things, provide a framework for our relationship with SolarWinds after the Separation and Distribution. The following summarizes some of the most significant agreements and relationships that we continue to have with SolarWinds.
Separation and Distribution Agreement
The Separation and Distribution Agreement sets forth our agreements with SolarWinds regarding the principal actions taken in connection with the Separation and Distribution. It also sets forth other agreements that govern aspects of our relationship with SolarWinds following the Separation and Distribution, including (i) the manner in which legal matters and claims are allocated and certain liabilities are shared between N-able and SolarWinds; (ii) other matters including transfers of assets and liabilities, treatment or termination of intercompany arrangements and the settlement or extinguishment of certain liabilities and other obligations between N-able and SolarWinds; and (iii) mutual indemnification clauses. The Separation and Distribution Agreement also provides that SolarWinds will be liable and obligated to indemnify us for all liabilities based upon, arising out of, or relating to the Cyber Incident other than certain specified expenses for which we will be responsible. The term of the Separation and Distribution Agreement is indefinite and it may only be terminated with the prior written consent of both N-able and SolarWinds.
Transition Services Agreement
We entered into a Transition Services Agreement pursuant to which N-able and SolarWinds provide various services to each other. Under this agreement, SolarWinds continues to provide us with certain corporate and shared services, such as engineering, marketing, internal audit and travel support in exchange for the fees specified in the agreement. The Transition Services Agreement terminated during the year ended December 31, 2022, on the expiration of the term of the last service provided under it. We incurred $0.1 million and $1.7 million of costs under the Transition Services Agreement during the years ended December 31, 2022 and 2021, respectively.
Tax Matters Agreement
We entered into a Tax Matters Agreement with SolarWinds that governs the parties’ respective rights, responsibilities and obligations with respect to tax liabilities and benefits, tax attributes, the preparation and filing of tax returns, the control of audits and other tax proceedings and other matters regarding taxes. Costs incurred under the Tax Matters Agreement were insignificant during the years ended December 31, 2022 and 2021, respectively.
Software OEM Agreements
We entered into Software OEM Agreements with SolarWinds pursuant to which SolarWinds granted to N-able, and N-able granted to SolarWinds, a non-exclusive and royalty-bearing license to market, advertise, distribute and sublicense certain SolarWinds and N-able software products, respectively, to customers on a worldwide basis. Each agreement has a two year term, and may be terminated by the applicable licensor in certain instances. We earned $1.5 million and $0.5 million of revenue and incurred $0.3 million and $0.1 million of costs, respectively, under the Software OEM Agreements during the years ended December 31, 2022 and 2021, respectively.
Employee Matters Agreement
We entered into an Employee Matters Agreement with SolarWinds that governs N-able's and SolarWinds’ compensation and employee benefit obligations with respect to the employees and other service providers of each company, and generally allocated liabilities and responsibilities relating to employment matters and employee compensation and benefit plans and programs. Costs incurred under the Employee Matters Agreement were insignificant during the years ended December 31, 2022 and 2021, respectively.
Intellectual Property Matters Agreement
We entered into an Intellectual Property Matters Agreement with SolarWinds pursuant to which each party granted to the other party a generally irrevocable, non-exclusive, worldwide, and royalty-free license to use certain intellectual property rights retained by the other party. Under the Intellectual Property Matters Agreement, the term for the licensed or sublicensed know-how is perpetual and the term for each licensed or sublicensed patent is until expiration of the last valid claim of such patent. The Intellectual Property Matters Agreement will terminate only if N-able and SolarWinds agree in writing to terminate it. Costs incurred under the Intellectual Property Matters Agreement were insignificant during the years ended December 31, 2022 and 2021, respectively.
Trademark License Agreement
We entered into a Trademark License Agreement with SolarWinds pursuant to which SolarWinds granted to N-able a generally limited, worldwide, non-exclusive and royalty-free license to use certain trademarks retained by SolarWinds that were used by SolarWinds in the conduct of its business prior to the Separation and Distribution. The Trademark License Agreement will terminate once we cease to use all of the licensed trademarks. Costs incurred under the Trademark License Agreement were insignificant during the years ended December 31, 2022 and 2021, respectively.
Software Cross License Agreement
We entered into a Software Cross License Agreement with SolarWinds pursuant to which each party granted to the other party a generally perpetual, irrevocable, non-exclusive, worldwide and, subject to certain exceptions, royalty-free license to certain software libraries and internal tools for limited uses. The term of the Software Cross License Agreement will be perpetual unless N-able and SolarWinds agree in writing to terminate the agreement. We earned $0.1 million and $0.1 million of revenue and incurred $0.5 million and $0.7 million of costs, respectively, under the Software Cross License Agreement during the years ended December 31, 2022 and 2021, respectively.
Sublease Agreement
We entered into a Sublease Agreement with SolarWinds for our office space in Austin, Texas. We incurred operating lease costs of $0.6 million and $0.2 million under the Sublease Agreement during the years ended December 31, 2022 and 2021, respectively.
v3.22.4
Income Taxes
 12 Months Ended
Dec. 31, 2022
Income Tax Disclosure [Abstract]  
Income Taxes Income Taxes
U.S. and international components of income before income taxes were as follows:
Year Ended December 31,
202220212020
(in thousands)
U.S.$(22,574)$(37,028)$(46,444)
International52,999 48,620 51,300 
Income before income taxes$30,425 $11,592 $4,856 
Income tax expense was composed of the following:
Year Ended December 31,
202220212020
(in thousands)
Current:
Federal$— $— $— 
State10 2 — 
International15,661 13,324 16,065 
15,671 13,326 16,065 
Deferred:
Federal— — 86 
State— — 5 
International(1,953)(1,847)(4,142)
(1,953)(1,847)(4,051)
Income tax expense$13,718 $11,479 $12,014 
The difference between the income tax expense (benefit) derived by applying the federal statutory income tax rate to our income before income taxes and the amount recognized in our Consolidated Financial Statements is as follows:
Year Ended December 31,
202220212020
(in thousands)
Expense derived by applying the federal statutory income tax rate to income before income taxes$6,389 $2,434 $1,020 
State taxes, net of federal benefit50 (105)(185)
Research and experimentation tax credits(170)— (786)
Global intangible low-taxed income3,128 — — 
Withholding tax— — (44)
Transaction costs488 1,999 — 
Pre-Separation and Distribution net operating losses and other deferred tax assets
— 21,130 — 
Non-deductible executive compensation1,246 — — 
Valuation allowance for deferred tax assets(827)(15,383)11,680 
Stock-based compensation2,856 1,258 (333)
Meals and entertainment140 75 15 
Acquisition costs— — 35 
Effect of foreign operations465 (88)612 
Other(47)159 — 
$13,718 $11,479 $12,014 
The effective tax rate for the year ended December 31, 2022 decreased from the year ended December 31, 2021 primarily due to changes in income before income taxes by jurisdiction, offset by the valuation allowance recognized on the deferred tax assets in the U.S. and non-deductible stock-based compensation and costs associated with the Separation and Distribution.
The effective tax rate for the year ended December 31, 2021 decreased from the year ended December 31, 2020 primarily due to changes in income before income taxes by jurisdiction, offset by the valuation allowance recognized on the deferred tax assets in the U.S. and non-deductible stock-based compensation and costs associated with the Separation and Distribution.
The components of the net deferred tax amounts recognized in the accompanying Consolidated Balance Sheets were:
December 31,
20222021
(in thousands)
Deferred tax assets:
Allowance for doubtful accounts$331 $465 
Accrued expenses149 99 
Net operating loss1,892 1,573 
Stock-based compensation4,442 2,967 
Interest12 1,195 
Deferred revenue74 62 
Leases806 726 
Other credits7 14 
Total deferred tax assets7,713 7,101 
Valuation allowance(3,637)(2,873)
Deferred tax assets, net of valuation allowance4,076 4,228 
Deferred tax liabilities:
Property and equipment2,522 1,787 
Prepaid expenses474 646 
Leases931 894 
Intangibles2,137 1,852 
Total deferred tax liabilities6,064 5,179 
Net deferred tax asset (liability)$(1,988)$(951)
As of December 31, 2021, we had net operating loss carry forwards for U.S. federal income tax purposes of approximately $5.8 million, all of which was utilized during fiscal year ended December 31, 2022. Pursuant to the Separation and Distribution that occurred on July 19, 2021, all pre-Separation and Distribution federal net operating losses remain with SolarWinds. The U.S. federal net operating losses generated after the Separation and Distribution are available to offset future U.S. federal taxable income and do not expire.
As of December 31, 2022 and 2021, we had net operating loss carry forwards for certain state income tax purposes of approximately $3.9 million. Pursuant to the Separation and Distribution that occurred on July 19, 2021, all pre-Separation and Distribution combined state net operating losses remain with SolarWinds. These state net operating losses are available to offset future state taxable income and begin to expire in 2029.
As of December 31, 2022, we had foreign net operating loss carry forwards of approximately $6.2 million. As of December 31, 2020, we had foreign net operating loss carry forwards of approximately $14.8 million, which were available to offset future foreign taxable income and began to expire in 2022. These foreign net operating loss carry forwards primarily related to the United Kingdom and Canada and were fully utilized during the year ended December 31, 2021.
As of December 31, 2020, we had research and experimentation tax credit carry forwards of approximately $1.3 million, which are available to offset future U.S. federal income tax. These U.S. federal tax credits remain with SolarWinds and are no longer applicable following the Separation and Distribution.
We establish valuation allowances when necessary to reduce deferred tax assets to amounts expected to be realized. As of December 31, 2022, we have recorded a valuation allowance of $2.0 million in the U.S. and $1.6 million outside the U.S., respectively. As of December 31, 2021, we have recorded a valuation allowance of $2.9 million in the U.S. The valuation allowances are primarily related to net operating loss carryforwards.
The Tax Act imposes a mandatory transition tax on accumulated foreign earnings as of December 31, 2017. Effective January 1, 2018, the Tax Act creates a new territorial tax system in which we will recognize the tax impact of including certain foreign earnings in U.S. taxable income as a period cost. For the years ended December 31, 2021 and 2020, we did not incur a global intangible low-taxed income, or GILTI, liability; however, to the extent that we incur expense under the GILTI provisions, we will treat it as a component of income tax expense in the period incurred. As a result of the Tax Act, our accumulated foreign earnings as of December 31, 2017 have been subjected to U.S. tax. Moreover, all future foreign earnings will be subject to a new territorial tax system and dividends received deduction regime in the U.S. As of December 31, 2022, the undistributed earnings of our foreign subsidiaries of approximately $23.3 million are permanently reinvested outside the U.S. Accordingly, no provision for foreign withholding tax or state income taxes associated with a distribution of these earnings has been made. Determination of the amount of the unrecognized deferred tax liability on these unremitted earnings is not practicable.
As of December 31, 2022, we do not have any accrued interest and penalties related to unrecognized tax benefits.
The aggregate changes in the balance of our gross unrecognized tax benefits, excluding accrued interest and penalties, were as follows:
Year Ended December 31,
202220212020
(in thousands)
Balance, beginning of year$— $87 $87 
Increases for tax positions related to the current year— — — 
Decreases for tax positions related to the current year— — — 
Increases for tax positions related to prior years— — — 
Decreases for tax positions related to prior years— (87)— 
Settlement with taxing authorities — — — 
Reductions due to lapsed statute of limitations— — — 
Balance, end of year$— $— $87 
We do not believe that it is reasonably possible that our unrecognized tax benefits will significantly change in the next twelve months.
We file U.S., state and foreign income tax returns in jurisdictions with varying statutes of limitations. The 2012 through 2021 tax years generally remain open and subject to examination by federal, state and foreign tax authorities. We are currently under examination by the IRS for the tax years 2013 through the period ending February 2016. During the three months ended
March 31, 2021, we finalized a settlement agreement with the IRS for the tax years 2011 to 2012. We are currently under audit by the Massachusetts Department of Revenue for the 2015 through February 2016 tax years, and the Texas Comptroller for the 2015 through 2018 tax years. We are not currently under audit in any other taxing jurisdictions.
v3.22.4
Commitments and Contingencies
 12 Months Ended
Dec. 31, 2022
Commitments and Contingencies Disclosure [Abstract]  
Commitments and Contingencies Commitments and Contingencies
Legal Proceedings
From time to time, we have been and may be involved in various legal proceedings arising in our ordinary course of business. In the opinion of management, resolution of any pending claims (either individually or in the aggregate) is not expected to have a material adverse impact on our Consolidated Financial Statements, cash flows or financial position and it is not possible to provide an estimated amount of any such loss. However, the outcome of disputes is inherently uncertain. Therefore, although management considers the likelihood of such an outcome to be remote, an unfavorable resolution of one or more matters could materially affect our future results of operations or cash flows, or both, in a particular period.
Commitments as a Result of Acquisitions
On July 1, 2022, we completed the acquisition of all the outstanding equity of Spinpanel B.V. (“Spinpanel”) for a total consideration of up to approximately $20.0 million, including up to $10.0 million payable upon the achievement of certain revenue metrics through July 1, 2025. The contingent consideration liabilities will be re-evaluated periodically, but at least quarterly, with the resulting gains and losses recognized within general and administrative expense in our Consolidated Statements of Operations and acquisition related costs within our non-GAAP financial measures. As of July 1, 2022, the fair value of this contingent consideration was $5.2 million. As of December 31, 2022, the fair value of this contingent consideration is $5.1 million, resulting in the recognition of a gain of $0.1 million for the year ended December 31, 2022. The current portion of the contingent consideration of $0.3 million is included in “accrued liabilities and other” and the non-current portion of $4.8 million is included in “other long-term liabilities” in our Consolidated Balance Sheets as of December 31, 2022. See Note 3. Acquisitions, Note 7. Fair Value Measurements, and Note 8. Accrued Liabilities and Other for additional information regarding the contingent consideration liabilities.
On December 14, 2022, we completed the acquisition of certain assets, primarily in the form of intellectual property, from a third party for a total consideration of up to $6.5 million, including $3.1 million of cash paid on the acquisition date, $1.0 million of product delivery fees, and up to $2.5 million payable upon the achievement of certain software engineering and knowledge transfer milestones as of September 1, 2023, and December 1, 2023. The total consideration of $6.5 million has been capitalized as costs to obtain internal-use computer software from third parties and will be amortized over an estimated useful life of three years, beginning when the related technology is deemed ready for its intended use, in accordance with our policy for the capitalization of internal-use software costs. The $2.5 million of contingent consideration is deemed to be the total value of technology not ready for its intended use as of the acquisition date. The contingent consideration liabilities will be re-evaluated periodically, but at least quarterly, with the resulting gains and losses recognized as an adjustment to the amount capitalized as costs to obtain internal-use computer software from third parties. See Note 2. Summary of Significant Accounting Policies and Note 8. Accrued Liabilities and Other for additional information regarding the contingent consideration liabilities.
v3.22.4
Operating Segments and Geographic Information
 12 Months Ended
Dec. 31, 2022
Segment Reporting [Abstract]  
Operating Segments and Geographic Information Operating Segments and Geographic Information
We operate as a single segment. The chief operating decision-maker is considered to be our Chief Executive Officer of N-able. The chief operating decision-maker allocates resources and assesses performance of the business at the combined N-able level.
The authoritative guidance for disclosures about segments of an enterprise establishes standards for reporting information about operating segments. It defines operating segments as components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision-maker in deciding how to allocate resources and in assessing performance. Our Chief Executive Officer manages the business as a multi-product business that utilizes its model to deliver software products to customers regardless of their geography or IT environment. Operating results including discrete financial information and profitability metrics are reviewed at the consolidated entity level for purposes of making resource allocation decisions and for evaluating financial performance. Accordingly, we considered ourselves to be in a single operating and reporting segment structure.
We based revenue by geography on the shipping address of each MSP partner. Other than the United States and the United Kingdom, no single country accounted for 10% or more of our total revenue during these periods. The following tables set forth revenue and net long-lived assets by geographic area:
Year Ended December 31,
202220212020
(in thousands)
Revenue
United States, country of domicile$181,033 $160,833 $144,776 
United Kingdom38,414 38,526 31,649 
All other international152,322 147,097 126,446 
Total revenue$371,769 $346,456 $302,871 
December 31,
20222021
(in thousands)
Long-lived assets, net
United States, country of domicile$17,713 $20,130 
Switzerland12,629 11,293 
Canada1,169 895 
All other international5,893 6,430 
Total long-lived assets, net$37,404 $38,748 
v3.22.4
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS
 12 Months Ended
Dec. 31, 2022
SEC Schedule, 12-09, Valuation and Qualifying Accounts [Abstract]  
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS
Additions
Beginning BalanceCharge to ExpenseCharge to Other AccountsDeductions
(Write-Offs, Net of Recoveries)		Ending Balance
(in thousands)
Allowance for doubtful accounts, customers and other:
Year ended December 31, 2020
$1,150 $1,483 $— $(1,882)$751 
Year ended December 31, 2021
751 3,260 — (2,358)1,653 
Year ended December 31, 2022
1,653 3,265 — (3,588)1,330 
Tax valuation allowances:
Year ended December 31, 2020
$6,576 $11,680 $— $— $18,256 
Year ended December 31, 2021
18,256 — — (15,383)2,873 
Year ended December 31, 2022
2,873 — 1,591 (827)3,637 
v3.22.4
Summary of Significant Accounting Policies (Policies)
 12 Months Ended
Dec. 31, 2022
Accounting Policies [Abstract]  
Basis of Presentation
Our financial statements for the periods through the Separation and Distribution date of July 19, 2021 are Consolidated Financial Statements prepared on a “carve-out” basis. The Consolidated Statements of Operations include all revenues and costs directly attributable to N-able as well as an allocation of expenses related to facilities, functions and services provided by SolarWinds prior to the Separation and Distribution. These corporate expenses have been allocated to us based on direct usage or benefit, where identifiable, with the remainder allocated based on headcount. See Note 13. Relationship with Parent and Related Entities for further details. The allocated costs were deemed to be settled by N-able to SolarWinds in the period in which the expense was recorded in the Consolidated Statements of Operations and these settlements were reflected in cash flows from operating activities in the Consolidated Statements of Cash Flows. Current and deferred income taxes and related tax expense have been determined based on the stand-alone results of N-able by applying Accounting Standards Codification (“ASC”) No. 740, Income Taxes (“ASC 740”), to N-able’s operations in each country as if it were a separate taxpayer (i.e. following the Separate Return Methodology).
SolarWinds maintains various stock-based compensation plans at a corporate level. N-able employees participated in those programs prior to the Separation and Distribution and a portion of the compensation cost associated with those plans is included in N-able’s Consolidated Statements of Operations. The stock-based compensation expense is included within Parent company net investment for periods prior to the Separation and Distribution, with the accumulated balance included within Parent company net investment being transferred to additional paid-in capital upon consummation of the Separation and Distribution. The amounts presented in the Consolidated Financial Statements are not necessarily indicative of future awards. See Note 13. Relationship with Parent and Related Entities for further details.
SolarWinds' third party debt and the related interest have not been allocated to us for any of the applicable periods presented because SolarWinds' borrowings were primarily for corporate cash purposes and were not directly attributable to N-able. In addition, none of the N-able legal entities guaranteed the debt nor were they jointly and severally liable for SolarWinds' debt.
Any transactions which have been included in the Consolidated Financial Statements from legal entities which are not exclusively operating as N-able legal entities are considered to be effectively settled in the Consolidated Financial Statements at the time the transaction is recorded between SolarWinds and the N-able business. The total net effect of the settlement of these intercompany transactions is reflected in the Consolidated Statements of Cash Flows as a financing activity. See Note 13. Relationship with Parent and Related Entities for further details.
All of the allocations and estimates in the Consolidated Financial Statements are based on assumptions that management believes are reasonable. However, the Consolidated Financial Statements included herein may not be indicative of the results of operations and cash flows of N-able in the future or if N-able had been a separate, stand-alone publicly traded entity during the applicable periods presented. Actual costs that may have been incurred if we had been a standalone company would depend on a number of factors, including the organizational structure, whether functions were outsourced or performed by employees, and strategic decisions made in areas such as information technology and infrastructure. Going forward, we may perform these functions using our own resources or outsourced services. For a period following the Separation and Distribution, however, some of these functions continued to be provided by SolarWinds under a Transition Services Agreement. Additionally, we provided some services to SolarWinds under such Transition Services Agreement. The Transition Services Agreement terminated during the year ended December 31, 2022, on the expiration of the term of the last service provided under it. See Note 13. Relationship with Parent and Related Entities for further details regarding allocated shared costs with SolarWinds.
Following the Separation from SolarWinds
Our financial statements for periods from July 20, 2021 forward are Consolidated Financial Statements based on our reported results as a standalone company. We prepared our Consolidated Financial Statements in conformity with GAAP and the reporting regulations of the Securities and Exchange Commission (“SEC”). The accompanying Consolidated Financial Statements include the accounts of N-able, Inc. and the accounts of its wholly owned subsidiaries. We have eliminated all intercompany balances and transactions.
Emerging Growth Company Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration
statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non‑emerging growth companies but any such election to opt out is irrevocable. N-able has elected not to opt out of such extended transition period, which means that when a standard is issued or revised and it has different application dates for public or private companies, N-able, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard.
N-able's historical results are included as a part of the Parent's financial statements prior to the Separation and Distribution, which are filed with the Securities and Exchange Commission (“SEC”). Prior to the Separation and Distribution, N-able tracked the effective dates and adopted all guidance applicable to it consistent with the manner that the Parent tracked and adopted all applicable guidance.
This may make comparison of N-able’s financial statements with another public company, which is neither an emerging growth company nor an emerging growth company which has not opted out of using the extended transition period, difficult because of the potential differences in accounting standards used.
Segment Information Operating segments are components of an enterprise for which separate financial information is available and is evaluated regularly by the company’s chief operating decision‑maker in deciding how to allocate resources and in assessing performance. N-able currently operates in one reportable business segment.
Use of Estimates
The preparation of Consolidated Financial Statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts and the disclosure of assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting periods. The impact from the rapidly changing market and economic conditions due to the coronavirus disease 2019 (“COVID-19”) pandemic on our business, results of operations and financial condition is uncertain. We have made estimates of the impact of the COVID-19 pandemic within our financial statements as of and for the years ended December 31, 2022 and 2021 which did not result in material adjustments. The estimates assessed included, but were not limited to, allowances for credit losses, the carrying values of goodwill and intangible assets and other long-lived assets, valuation allowances for tax assets and revenue recognition and may change in future periods. The actual results that we experience may differ materially from our estimates. The accounting estimates that require our most significant, difficult and subjective judgments include:
•the valuation of goodwill, intangibles, long-lived assets and contingent consideration;
•revenue recognition;
•income taxes; and
•management’s assessment of allocations of expenses prior to the Separation and Distribution.
Foreign Currency Translation The functional currency of our foreign subsidiaries is determined in accordance with authoritative guidance issued by the Financial Accounting Standards Board (“FASB”). We translate assets and liabilities for these subsidiaries at exchange rates in effect at the balance sheet date. We translate income and expense accounts for these subsidiaries at the average monthly exchange rates for the periods. We record resulting translation adjustments as a component of accumulated other comprehensive income (loss) within total Parent company net investment prior to the Separation and Distribution and within stockholders' equity following the Separation and Distribution. We record gains and losses from currency transactions denominated in currencies other than the functional currency as other income (expense), net in our Consolidated Statements of Operations. Local currency transactions of international subsidiaries that have the U.S. dollar as the functional currency are remeasured into U.S. dollars using current rates of exchange for monetary assets and liabilities and historical rates of exchange for non-monetary assets and liabilities. The foreign currency transactional and re-measurement exchange gains and (losses) were $2.2 million, $(1.8) million, and $(0.8) million for the years ended December 31, 2022, 2021 and 2020, respectively.
Cash and cash equivalents All cash and cash equivalents included in the Consolidated Financial Statements are legally owned by N-able legal entities. We consider highly liquid investments with a maturity of three months or less when purchased to be cash equivalents. As of December 31, 2022, we have money market fund financial assets of $48.4 million, which are included in “cash and cash equivalents” in our Consolidated Balance Sheets. We had no money market fund financial assets as of December 31, 2021. See “Fair Value Measurements” below and Note 7. Fair Value Measurements for further details regarding the fair value measurements of our money market fund financial assets.
Parent Company Net Investment
For periods prior to the Separation and Distribution, N-able's equity on the Consolidated Balance Sheets represents SolarWinds’ historical net investment in the Business, and is presented as “Parent company net investment” in lieu of stockholders' equity. For periods prior to the Separation and Distribution, the Consolidated Statements of Stockholders' Equity and Parent Company Net Investment include corporate allocations, net cash transfers and other property transfers between SolarWinds and the Business, as well as short term due to affiliates, short term due from affiliates and long term due to affiliates between N-able and other SolarWinds affiliates that were settled on a current basis.
All transactions reflected in Parent company net investment in the accompanying Consolidated Balance Sheets have been considered cash receipts and payments for purposes of the Consolidated Statements of Cash Flows and are reflected as financing activities in the accompanying Consolidated Statements of Cash Flows.
Acquisitions The purchase price of our acquired businesses is allocated to the assets acquired and the liabilities assumed based on their estimated fair values, with the excess recorded as goodwill in the reporting unit expected to benefit from the business combination. If applicable, we estimate the fair value of contingent consideration payments in determining the purchase price. During the measurement period, which may be up to one year from the acquisition date, we may record adjustments to the fair value of the tangible and intangible assets acquired and liabilities assumed, including the deferred tax asset valuation allowances and acquired income tax uncertainties, with the corresponding offset to goodwill. We include the operating results of acquisitions in our Consolidated Financial Statements from the acquisition date. Acquisition related costs are expensed separately from the acquisition as incurred and are primarily included in general and administrative expenses in our Consolidated Statements of Operations.The fair value of identifiable intangible assets is based on significant judgments made by management. We typically engage third party valuation appraisal firms to assist us in determining the fair values and useful lives of the assets acquired. The valuation estimates and assumptions are based on historical experience and information obtained by management, and include, but are not limited to, future expected cash flows earned from the product technology and discount rates applied in determining the present value of those cash flows. Unanticipated events and circumstances may occur that could affect the accuracy or validity of such assumptions, estimates or actual results. Acquired identifiable intangible assets are amortized on the straight-line method over their estimated economic lives, which are generally two to seven years for trademarks, customer relationships and developed product technologies. We include amortization of acquired developed product technologies in cost of revenue and amortization of other acquired intangible assets in operating expenses in our Consolidated Statements of Operations.
Goodwill
Goodwill represents the amount of the purchase price in excess of the estimated fair value of net assets of businesses acquired in a business combination. Our goodwill was primarily derived from the take private transaction of SolarWinds in February 2016 and subsequent business combinations, where the purchase price exceeded the fair value of the net identifiable assets acquired. We test goodwill at least annually during the fourth quarter or sooner when circumstances indicate an impairment may exist. An impairment of goodwill is recognized when the carrying amount of a reporting unit exceeds its fair value. For purposes of the annual impairment test, we first assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying value, a “Step 0” analysis. If, based on a review of qualitative factors, it is more likely than not that the fair value of a reporting unit is less than its carrying value we perform “Step 1” of the goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. If the carrying value exceeds the fair value, an impairment loss is recognized for the amount by which the reporting unit's carrying value exceeds its fair value, not to exceed the carrying value of goodwill in that reporting unit.
In October 2022, we performed a qualitative, “Step 0,” assessment for our single reporting unit. For “Step 0,” we assessed several events and circumstances that could affect the significant inputs used to determine the fair value of the reporting unit, including the significance of the amount of excess fair value over carrying value, consistency of operating margins and cash flows, budgeted-to-actual performance from prior year, overall change in economic climate, changes in the industry and competitive environment, key management turnover, and earnings quality and sustainability. As of October 1, 2022, there were
no unanticipated changes or negative indicators in the above qualitative factors that would impact the fair value of the Business as of the annual impairment date. As such, we determined there were no indicators of impairment and that it is more likely than not that the fair value of a reporting unit is greater than its carrying value and therefore performing the next step of impairment test was unnecessary. Fair value determination of our reporting unit requires considerable judgment and is sensitive to changes in underlying assumptions and factors. As a result, there can be no assurance that the estimates and assumptions made for purposes of the quantitative goodwill impairment test will prove to be an accurate prediction of future results. If an event occurs that would cause us to revise our estimates and assumptions used in analyzing the value of our goodwill, the revision could result in a non-cash impairment charge that could have a material impact on our financial results.
Long-lived Assets We evaluate the recoverability of our long-lived assets, including finite-lived intangible assets and other assets, for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable. Our finite-lived intangible assets are primarily related to assets acquired at the take private transaction of SolarWinds and subsequent business combinations. Events or changes in circumstances that could result in an impairment review include, but are not limited to, significant underperformance relative to historical or projected future operating results, significant changes in the manner of use of the acquired assets or the strategy for our overall business, and significant negative industry or economic trends. In the event that the net book value of our long-lived assets exceeds the future undiscounted net cash flows attributable to such assets, an impairment charge would be required. Impairment, if any, is recognized in the period of identification to the extent the carrying amount of an asset or asset group exceeds the fair value of such asset or asset group. For the year ended December 31, 2022 and 2021, there were no indicators that our long-lived assets were impaired.
Long-lived Assets We evaluate the recoverability of our long-lived assets, including finite-lived intangible assets and other assets, for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable. Our finite-lived intangible assets are primarily related to assets acquired at the take private transaction of SolarWinds and subsequent business combinations. Events or changes in circumstances that could result in an impairment review include, but are not limited to, significant underperformance relative to historical or projected future operating results, significant changes in the manner of use of the acquired assets or the strategy for our overall business, and significant negative industry or economic trends. In the event that the net book value of our long-lived assets exceeds the future undiscounted net cash flows attributable to such assets, an impairment charge would be required. Impairment, if any, is recognized in the period of identification to the extent the carrying amount of an asset or asset group exceeds the fair value of such asset or asset group. For the year ended December 31, 2022 and 2021, there were no indicators that our long-lived assets were impaired.
Fair Value Measurements
We apply the authoritative guidance on fair value measurements for financial assets and liabilities, such as our money market fund financial assets and contingent consideration liabilities, that are measured at fair value on a recurring basis and non-financial assets and liabilities, such as goodwill, intangible assets and property, plant and equipment that are measured at fair value on a non-recurring basis.
The guidance establishes a three-tiered fair value hierarchy that prioritizes inputs to valuation techniques used in fair value calculations. The three levels of inputs are defined as follows:
Level 1: Unadjusted quoted prices for identical assets or liabilities in active markets accessible by us.
Level 2: Inputs that are observable in the marketplace other than those inputs classified as Level 1.
Level 3: Inputs that are unobservable in the marketplace and significant to the valuation.
The carrying amounts reported in our Consolidated Balance Sheets for cash, accounts receivable, accounts payable and other accrued expenses approximate fair value due to relatively short periods to maturity. Our related party debt with SolarWinds Holdings, Inc. prior to the Separation was not carried at fair value. See Note 13. Relationship with Parent and Related Entities for further details regarding our related party debt. See Note 7. Fair Value Measurements for a summary of our financial instruments accounted for at fair value on a recurring basis as of December 31, 2022. We held no financial instruments as of December 31, 2021. As of December 31, 2022 and 2021, the carrying value of our outstanding debt approximates its estimated fair value as the interest rate on the debt is adjusted for changes in market rates. See Note 9. Debt for additional information regarding our debt.
Accounts Receivable Accounts receivable represent trade receivables from customers when we have sold subscriptions for software-as-a-service (“SaaS”) offerings as well as subscription-based term licenses and from the sale of maintenance services associated with our perpetual license products and have not yet received payment. We present accounts receivable net of an allowance for doubtful accounts. We maintain an allowance for doubtful accounts for estimated losses resulting from the inability of customers to make required payments. In doing so, we consider the current financial condition of the customer, the specific details of the customer account, the age of the outstanding balance and the current economic environment. Any change in the assumptions used in analyzing a specific account receivable might result in an additional allowance for doubtful accounts being recognized in the period in which the change occurs. Our allowance for doubtful accounts was $1.3 million, $1.7 million and $0.8 million for the years ended December 31, 2022, 2021 and 2020, respectively.
Property and Equipment
We record property and equipment at cost and depreciate them using the straight-line method over their estimated useful lives as follows:
Useful Life
(in years)
Equipment, servers and computers
3 - 5
Furniture and fixtures
5 - 7
Software
3 - 5
Leasehold improvementsLesser of lease term or useful life
Upon retirement or sale of property and equipment, we remove the cost of assets disposed of and any related accumulated depreciation from our accounts and credit or charge any resulting gain or loss to operating expense. We expense repairs and maintenance as they are incurred.
Research and Development Costs Research and development expenses primarily consist of personnel costs and contractor fees related to the development of new software products and enhancements to existing software products. Personnel costs include salaries, bonuses and stock-based compensation and related employer-paid payroll taxes, as well as an allocation of our facilities, depreciation, benefits and IT costs. Research and development costs are charged to operations as incurred.
Internal-Use Software Costs
We capitalize costs related to developing new functionality for our suite of products that are hosted and accessed by our customers on a subscription basis. We also capitalize costs related to specific upgrades and enhancements when it is probable the expenditures will result in additional functionality. Costs incurred in the preliminary stages of development are expensed as incurred. Once an application has reached the development stage, internal and external costs, if direct and incremental, are capitalized until the software is substantially complete and ready for its intended use. Capitalized costs are recorded as part of other assets, net in our Consolidated Balance Sheets. Maintenance and training costs are expensed as incurred. Internal-use software costs are amortized on a straight-line basis over its estimated useful life, generally three years, and included in cost of revenue in the Consolidated Statements of Operations. There were no impairments to internal-use software costs during the periods presented.
On December 14, 2022, we completed the acquisition of certain assets, primarily in the form of intellectual property, from a third party for a total consideration of up to $6.5 million, including $3.1 million of cash paid on the acquisition date, $1.0 million of product delivery fees, and up to $2.5 million payable upon the achievement of certain software engineering and knowledge transfer milestones as of September 1, 2023, and December 1, 2023. We funded the transaction with cash on hand. We incurred less than $0.1 million in acquisition-related costs during the three months ended December 31, 2022, which are included in general and administrative expense. Prior to the acquisition, N-able had an existing Original Equipment Manufacturing Agreement (“OEM Agreement”) with the third party, whereby $1.0 million had previously been recorded as a prepaid royalty. The OEM Agreement was terminated as of the acquisition date, and the $1.0 million previously recorded as a prepaid royalty is now classified as product delivery fees. The total consideration of $6.5 million has been capitalized as costs to obtain internal-use computer software from third parties and will be amortized over an estimated useful life of three years, beginning when the related technology is deemed ready for its intended use, in accordance with our policy for the capitalization of internal-use software costs.
The $3.1 million of cash paid on the acquisition date and $1.0 million of product delivery fees is deemed to be the total value of technology ready for its intended use as of the acquisition date and will be amortized over an estimated useful life of three years, beginning on the acquisition date. The $2.5 million of contingent consideration is deemed to be the total value of technology not ready for its intended use as of the acquisition date. The contingent consideration liabilities will be re-evaluated periodically, but at least quarterly, with the resulting gains and losses recognized as an adjustment to the amount capitalized as costs to obtain internal-use computer software from third parties. See Note 8. Accrued Liabilities and Other and Note 15. Commitments and Contingencies for additional information regarding the contingent consideration liabilities. Once the technology has been deemed ready for its intended use, upon the achievement of certain software engineering and knowledge transfer milestones as of September 1, 2023, and December 1, 2023, the final capitalized amounts will be amortized over an estimated useful life of three years.
Debt Issuance Costs Debt issuance costs for our secured credit facilities are presented as a deduction from the corresponding debt liability on our Consolidated Balance Sheets and amortized on an effective interest rate method over the term of the associated debt as interest expense in our Consolidated Statements of Operations. Amortization of debt issuance costs included in interest expense was $1.6 million and $0.7 million for the year ended December 31, 2022 and 2021, respectively. See Note 9. Debt for discussion of our secured credit facilities.
Contingencies We account for claims and contingencies in accordance with authoritative guidance that requires we record an estimated loss from a claim or loss contingency when information available prior to issuance of our Consolidated Financial Statements indicates a liability has been incurred at the date of our Consolidated Financial Statements and the amount of the loss can be reasonably estimated. If we determine that it is reasonably possible but not probable that an asset has been impaired or a liability has been incurred, we disclose the amount or range of estimated loss if material or that the loss cannot be reasonably estimated. Accounting for claims and contingencies requires us to use our judgment. We consult with legal counsel on those issues related to litigation and seek input from other experts and advisors with respect to matters in the ordinary course of business. See Note 15. Commitments and Contingencies for a discussion of contingencies.
Revenue Recognition
We generate revenue from fees received for our SaaS solutions as well as subscriptions for our subscription-based term licenses and from the sale of maintenance services associated with our perpetual licenses. We recognize revenue related to contracts from customers when we transfer promised goods or services in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. This is determined by following a five-step process which includes (1) identifying the contract with a customer, (2) identifying the performance obligations in the contract, (3) determining the transaction price, (4) allocating the transaction price and (5) recognizing revenue when or as we satisfy a performance obligation, as described below.
•Identify the contract with a customer. We generally use an electronic or manually signed order form, purchase order, an authorized credit card, or the receipt of a cash payment as evidence of a contract provided that collection is considered probable. We sell our products through our direct inside sales force and through our distributors and resellers. Sales through resellers and distributors are typically evidenced by a reseller or distributor agreement, together with purchase orders or authorized credit cards on a transaction-by-transaction basis. Our distributors and resellers do not carry inventory of our software and we generally require them to specify the end user of the software at the time of the order. Our distributors and resellers have no rights of return or exchange for software that they purchase from us and payment for these purchases is due to us without regard to whether the distributors or resellers collect payment from their customers.
•Identify the performance obligations in the contract. Performance obligations promised in a contract are identified based on the goods or services that will be transferred to the MSP partner that are separately identifiable from other promises in the contract, or distinct. If not considered distinct, the promised goods or services are combined with other goods or services and accounted for as a combined performance obligation. Determining the distinct performance obligations in a contract requires judgment. Our performance obligations primarily include SaaS solutions, subscription-based term licenses and maintenance support including unspecified upgrades or enhancements to new versions of our software solutions. See additional discussion of our performance obligations below.
•Determine the transaction price. We determine the transaction price based on the contractual consideration and the amount of consideration we expect to receive in exchange for transferring the promised goods or services to the customer. We account for sales incentives to MSP partners, resellers or distributors as a reduction of revenue at the time we recognize the revenue from the related product sale. We report revenue net of any sales tax collected. Our return policy generally does not allow our MSP partners to return software products or services.
•Allocate the transaction price. For contracts that contain multiple performance obligations, we allocate the transaction price of the contract to each distinct performance obligation based on a relative stand-alone selling price basis. Determining stand-alone selling prices for our performance obligations requires judgment and are based on multiple factors primarily including historical selling prices and discounting practices for products and services. We review the stand-alone selling
price for our performance obligations periodically and update, if needed, to ensure that the methodology utilized reflects our current pricing practices.
•Recognize revenue when or as we satisfy a performance obligation. Revenue is recognized when or as performance obligations are satisfied either over time or at a point in time by transferring a promised good or service. We consider this transfer to have occurred when risk of loss transfers to the MSP partner, reseller or distributor or the MSP partner has access to their subscription which is generally upon electronic activation of the licenses purchased or access being granted which provides immediate availability of the product to the purchaser. See further discussion below regarding the timing of revenue recognition for each of our performance obligations.
The following summarizes our performance obligations from which we generate revenue:
Performance obligationWhen performance obligation is typically satisfied
SaaS solutionsOver the subscription term, once the service is made available to the MSP partner (over time)
Subscription-based term and perpetual licensesUpon the delivery of the license key or password that provides immediate availability of the product (point in time)
Technical support and unspecified software upgradesRatably over the contract period (over time)
Subscription Revenue. We primarily derive subscription revenue from the sale of subscriptions to our SaaS solutions and our subscription-based term licenses. Subscription revenue for our SaaS solutions is generally recognized ratably over the subscription term once the service is made available to the MSP partner or when we have the right to invoice for services performed. Our MSP partners do not have the right to take possession of the software for our SaaS solutions. Revenue from the license performance obligation of our subscription-based term licenses is recognized at a point in time upon delivery of the access to the licenses and the revenue from the performance obligation related to the technical support and unspecified software upgrades of our subscription-based term licenses is recognized ratably over the contract period. We generally invoice subscription agreements monthly based on usage or in advance over the subscription period on either a monthly or annual basis.•Other Revenue. Other revenue consists primarily of revenue from the sale of our maintenance renewal services associated with the historical sales of perpetual license products. Customers with maintenance agreements are entitled to receive technical support and unspecified upgrades or enhancements to new versions of their software products on a when-and-if-available basis for the specified contract period. We believe that our technical support and unspecified upgrades or enhancements performance obligations each have the same pattern of transfer to the customer and are therefore accounted for as a single distinct performance obligation. We recognize maintenance revenue ratably on a daily basis over the contract period. Deferred Revenue Deferred revenue primarily consists of transaction prices allocated to remaining performance obligations from annually billed subscription agreements and maintenance services associated with our historical sales of perpetual license products which are delivered over time. Certain of our maintenance agreements are billed annually in advance for services to be performed over a 12-month period. We initially record the amounts allocated to maintenance performance obligations as deferred revenue and recognize these amounts ratably on a daily basis over the term of the maintenance agreement.
Cost of Revenue Cost of Revenue. Cost of revenue consists of technical support personnel costs which includes salaries, bonuses and stock-based compensation and related employer-paid payroll taxes for technical support personnel, as well as an allocation of overhead costs. Public cloud infrastructure and hosting fees and royalty fees are also included in cost of revenue. Amortization of Acquired Technologies. Amortization of acquired technologies included in cost of revenue relate to our subscription products and was $2.5 million, $5.8 million and $24.3 million for the years ended December 31, 2022, 2021 and 2020, respectively.
Advertising We expense advertising costs as incurred. Advertising expense is included in sales and marketing expenses in our Consolidated Statements of Operations.
Leases We lease facilities worldwide and certain equipment under non-cancellable lease agreements. During 2019, we adopted the new lease accounting guidance, FASB Accounting Standards Update No. 2016-02 “Leases,” or ASC 842. Under ASC 842, we
evaluate if a contract is or contains a lease at inception of the contract. If we determine that a contract is or contains a lease, we determine the appropriate lease classification and recognize a right-of-use asset and lease liability at the commencement date of the lease based on the present value of fixed lease payments over the lease term reduced by lease incentives. To determine the present value of lease payments, we use an estimated incremental borrowing rate based on the interest rate a similar borrowing on a collateralized basis would incur based on information available on the lease commencement date as none of our leases provide an implicit rate. We generally base this discount rate on the interest rate incurred on our secured credit facilities and, prior to the Separation and Distribution, by our Parent's senior secured debt, adjusted for considerations for the value, term and currency of the lease. Lease terms include options to extend or terminate the lease when it is reasonably certain that we will exercise those options.
We recognize right-of-use assets and lease liabilities for leasing arrangements with terms greater than one year. Certain lease contracts include obligations to pay for other services, such as operations and maintenance. We account for lease and non-lease components in a contract as a single lease component for all classes of underlying assets except certain classes of equipment. Right-of-use assets are tested for impairment in the same manner as long-lived assets.
The terms of some of our lease agreements provide for rental payments on a graduated basis. Operating lease costs are recognized on a straight-line basis over the lease term and recorded in the appropriate income statement line item based on the asset or a headcount allocation for office leases. Certain of our office leases require the payment of our proportionate share of common area maintenance or service charges. As we have elected to account for lease and non-lease components as a single lease component for our real estate leases, these costs are included in variable lease costs. In addition, certain of our leases may include variable payments based on measures that include changes in price indices or market interest rates which are included in variable lease costs and expensed as incurred. We had no finance leases as of and for the periods ended December 31, 2022 and 2021, respectively. See Note 6. Leases for additional information regarding our lease arrangements.
Income Taxes
We use the liability method of accounting for income taxes as set forth in the authoritative guidance for accounting for income taxes. Under this method, we recognize deferred tax liabilities and assets for the expected future tax consequences of temporary differences between the respective carrying amounts and tax basis of our assets and liabilities. For the years ended December 31, 2020 and 2019, as well as the period ended July 19, 2021, income taxes as presented in the Consolidated Financial Statements attribute current and deferred income taxes of SolarWinds to the stand-alone financial statements of N-able in a manner that is systematic, rational and consistent with the asset and liability method prescribed by ASC 740. Accordingly, the income tax provision of N-able was prepared following the separate return method for these periods. The separate return method applies ASC 740 to the stand-alone financial statements of each member of the consolidated group as if the group members were a separate taxpayer and a stand-alone enterprise. The calculation of our income taxes on a separate return basis requires a considerable amount of judgment and use of both estimates and allocations. As a result, actual transactions included in the Consolidated Financial Statements of SolarWinds may not be included in the separate financial statements of N‑able. Similarly, the tax treatment of certain items reflected in the financial statements of N-able may not be reflected in the Consolidated Financial Statements and tax returns of SolarWinds. Therefore, items such as net operating losses, credit carryforwards and valuation allowances may exist in the stand-alone financial statements that may or may not exist in SolarWinds’ Consolidated Financial Statements. As such, the income taxes of N-able as presented in the Consolidated Financial Statements may not be indicative of the income taxes that N-able will report in the future. Certain operations of N-able have historically been included in a combined or consolidated return with other SolarWinds entities. Current obligations for taxes in certain jurisdictions, where N-able files a combined or consolidated tax return with SolarWinds, are deemed settled with SolarWinds for purposes of the Consolidated Financial Statements. Current obligations for tax in jurisdictions where N-able does not file a combined or consolidated return with SolarWinds, including certain foreign jurisdictions, are recorded within the income tax receivable or income taxes payable on the Consolidated Balance Sheets.
On December 22, 2017, the U.S. Tax Cuts and Jobs Act (the “Tax Act”) was enacted. As a result, income tax attributable to previously undistributed earnings of N-able international subsidiaries was recognized in 2017. This liability, which SolarWinds elected to pay over time, remains with SolarWinds and is not reflected in the financial statements of N-able.
In the ordinary course of business, there is inherent uncertainty in quantifying our income tax positions. We assess our income tax positions and record tax benefits for all years subject to examination based upon management’s evaluation of the facts, circumstances and information available at the reporting date. For those tax positions where it is more-likely-than-not that a tax benefit will be sustained, we have recorded the largest amount of tax benefit with a greater than 50% likelihood of being realized upon ultimate settlement with a taxing authority that has full knowledge of all relevant information. For those income tax positions where it is not more-likely-than-not that a tax benefit will be sustained, no tax benefit has been recognized in the
financial statements. Where applicable, the associated interest expense and penalties has been recognized as a component of income tax expense.We establish valuation allowances when necessary to reduce deferred tax assets to the amounts expected to be realized. On a quarterly basis, we evaluate the need for, and the adequacy of, valuation allowances based on the expected realization of our deferred tax assets. The factors used to assess the likelihood of realization include our latest forecast of future taxable income, available tax planning strategies that could be implemented, reversal of taxable temporary differences and carryback potential to realize the net deferred tax assets. See Note 14. Income Taxes for additional information regarding our income taxes.
Concentrations of Risk
Financial instruments that potentially subject us to concentrations of credit risk consist principally of cash and cash equivalents and accounts receivable. Our cash and cash equivalents consisted of cash deposited with banks in demand deposit accounts which may exceed the amount of insurance provided on these deposits. Generally, we may withdraw our cash deposits and redeem our invested cash equivalents upon demand. We strive to maintain our cash deposits with multiple financial institutions of reputable credit and therefore bear minimal credit risk.
We provide credit to distributors, resellers and direct customers in the normal course of business. We generally extend credit to new customers based upon industry reputation and existing customers based upon prior payment history. For the years ended December 31, 2022, 2021 and 2020, no distributor, reseller or direct customer represented a significant concentration of our revenue.
At December 31, 2022 and 2021, no distributor, reseller or direct customer represented a significant concentration of our outstanding accounts receivable balance. We do not believe that our business is substantially dependent on any distributor or that the loss of a distributor relationship would have a material adverse effect on our business.
Stock-Based Compensation
We have granted our employees, directors and certain contractors stock-based incentive awards. These awards are in the form of stock options, restricted common stock, restricted stock units and performance stock units. We measure stock-based compensation expense for all share-based awards granted to employees and directors based on the estimated fair value of those awards on the date of grant. The fair value of stock option awards is estimated using a Black-Scholes valuation model. The fair value of restricted common stock, restricted stock units and performance stock units is determined using the fair market value of the underlying common stock on the date of grant less any amount paid at the time of the grant, or intrinsic value. Our stock awards vest on service-based or performance-based vesting conditions. For our service-based awards, we recognize stock-based compensation expense on a straight-line basis over the service period of the award. For our performance-based awards, we recognize stock-based compensation expense on a graded-vesting basis over the service period of each separately vesting tranche of the award, if it is probable that the performance target will be achieved.
In connection with the Separation and Distribution, all of the outstanding and unvested SolarWinds equity awards held by our employees were converted to N-able awards (the “Conversion”). As a result of the Conversion, 224,638 stock options, 91,477 shares of restricted common stock, and 2,207,824 shares of restricted stock units were granted during the year ended December 31, 2021. No stock option awards were granted during the year ended December 31, 2022. See Note 10. Stock-Based
Compensation and Note 13. Relationship with Parent and Related Entities for information on the incremental compensation expense recognized during the year ended December 31, 2022 and 2021 as a result of the Conversion. We estimated the fair value for stock options at the date of grant using the Black-Scholes option pricing model. We have not paid and do not anticipate paying cash dividends on our common stock; therefore, we assume the expected dividend yield to be zero. We estimate the expected volatility using the historical volatility of comparable public companies from a representative peer group. We base the risk-free rate of return on the average U.S. treasury yield curve for the most appropriate terms for the respective periods. As allowed under current guidance, we have elected to apply the “simplified method” in developing our estimate of expected life for “plain vanilla” stock options by using the midpoint between the vesting date and contractual termination date since we do not have sufficient historical exercise data to provide a reasonable basis upon which to estimate expected term. For all awards, we grant employees stock awards at exercise prices equal to the fair value of the underlying common stock on the date the award was approved. Performance-based awards are not considered granted under the applicable accounting guidance until the performance attainment targets for each applicable tranche have been defined. We recognize the impact of forfeitures in stock-based compensation expense when they occur.
Net Income (Loss) Per Share We calculate basic and diluted net income (loss) per share attributable to common stockholders in conformity with the two-class method required for companies with participating securities. We compute basic net income (loss) per share available to common stockholders by dividing net income (loss) available to common stockholders by the weighted-average number of common shares outstanding during the reporting period. We compute diluted net income (loss) per share similarly to basic net income (loss) per share except that it reflects the potential dilution that could occur if dilutive securities or other obligations to issue common stock were exercised or converted into common stock using the treasury stock method.
Recently Issued Accounting Pronouncements
Recently Issued Accounting Pronouncements
In March 2020, the FASB issued Accounting Standards Update (“ASU”) No. 2020-04, “Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting,” which provides temporary optional expedients and exceptions to the existing guidance on contract modifications and hedge accounting to ease the financial reporting burdens related to the expected market transition from the London Interbank Offered Rate (“LIBOR”) and other interbank offered rates to alternative reference rates. The standard became effective upon issuance and may be applied to any new or amended contracts, hedging relationships, and other transactions that reference LIBOR through December 31, 2022. In December 2022, the FASB issued ASU No. 2022-06, “Reference Rate Reform (Topic 848): Deferral of the Sunset Date of Topic 848,” extending the sunset date of the relief provided under ASU No. 2020-04 to December 31, 2024. We do not believe this standard will have a material impact on our consolidated financial statements.
In October 2021, the FASB issued ASU No. 2021-08, “Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers,” which requires an entity to recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with ASC 606, “Revenue from Contracts with Customers,” instead of at fair value on the acquisition date as previously required by ASC 805, “Business Combinations.” The amendments improve comparability after the business combination by providing consistent recognition and measurement guidance for acquired revenue contracts and revenue contracts not acquired in a business combination. The updated guidance is effective for public companies for fiscal years beginning after December 15, 2022, and early adoption is permitted. The updated guidance will be applied prospectively to business combinations occurring during or after the fiscal year of adoption. We do not believe this standard will have a material impact on our consolidated financial statements.
v3.22.4
Summary of Significant Accounting Policies (Tables)
 12 Months Ended
Dec. 31, 2022
Accounting Policies [Abstract]  
Schedule of Property and Equipment
We record property and equipment at cost and depreciate them using the straight-line method over their estimated useful lives as follows:
Useful Life
(in years)
Equipment, servers and computers
3 - 5
Furniture and fixtures
5 - 7
Software
3 - 5
Leasehold improvementsLesser of lease term or useful life
Property and equipment, net, including software, consisted of the following:
December 31,
20222021
(in thousands)
Servers, equipment and computers$38,669 $32,524 
Furniture and fixtures6,386 6,409 
Software885 602 
Leasehold improvements21,450 21,408 
$67,390 $60,943 
Less: Accumulated depreciation and amortization(29,986)(22,195)
Property and equipment, net$37,404 $38,748 
Depreciation and amortization expense on property and equipment was as follows for the years ended December 31, 2022, 2021, and 2020:
Year Ended December 31,
202220212020
(in thousands)
Depreciation and amortization$13,249 $12,226 $6,581 
Disaggregation of Revenue
Our revenue consists of the following:
Year Ended December 31,
202220212020
(in thousands)
Subscription revenue$362,609 $336,845 $292,027 
Other revenue9,160 9,611 10,844 
Total subscription and other revenue$371,769 $346,456 $302,871 
During the years ended December 31, 2022, 2021 and 2020, respectively, we recognized the following revenue from subscription and other services at a point in time and over time:
Year Ended December 31,
202220212020
(in thousands)
Revenue recognized at a point in time$59,970 $62,204 $57,943 
Revenue recognized over time311,799 284,252 244,928 
Total revenue recognized$371,769 $346,456 $302,871 
Details of Total Deferred Revenue Balance
Details of our total deferred revenue balance was as follows:
Total Deferred Revenue
(in thousands)
Balance as of December 31, 2020$9,670 
Deferred revenue recognized(17,517)
Additional amounts deferred18,745 
Balance as of December 31, 2021$10,898 
Deferred revenue recognized(19,922)
Additional amounts deferred21,151 
Balance as of December 31, 2022$12,127 
Remaining Performance Obligations for Revenue Recognition
We expect to recognize revenue related to the following remaining performance obligations as of December 31, 2022:
Revenue Recognition Expected by Period
TotalLess than 1
year		1-3 yearsMore than
3 years
(in thousands)
Expected recognition of remaining performance obligations$12,593 $12,079 $514 $— 
Schedule of Advertising Expense
Advertising expense was as follows for the years ended December 31, 2022, 2021, and 2020:
Year Ended December 31,
202220212020
(in thousands)
Advertising expense$19,560 $18,534 $13,903 
Changes in Accumulated Other Comprehensive Income (Loss) by Component
Changes in accumulated other comprehensive income (loss) by component are summarized below:
Foreign Currency Translation AdjustmentsAccumulated Other Comprehensive Income (Loss)
(in thousands)
Balance as of December 31, 2020$48,991 $48,991 
Other comprehensive loss before reclassification(33,938)(33,938)
Net current period other comprehensive loss(33,938)(33,938)
Balance as of December 31, 202115,053 15,053 
Other comprehensive loss before reclassification(22,868)(22,868)
Net current period other comprehensive loss(22,868)(22,868)
Balance as of December 31, 2022$(7,815)$(7,815)
v3.22.4
Acquisitions (Tables)
 12 Months Ended
Dec. 31, 2022
Business Combination and Asset Acquisition [Abstract]  
Summary of Consideration Paid and Amounts Recognized
The following table summarizes the amounts recognized for the assets acquired and liabilities assumed:
(in thousands)
Current assets, including cash acquired of $6
$128 
Property and equipment, net48 
Current liabilities(1,199)
Non-current deferred tax liabilities(2,314)
Identifiable intangible assets
Developed technology8,890 
Customer relationships80 
Goodwill8,726 
Total assets acquired, net$14,359 

The following table summarizes the total consideration for the assets acquired and liabilities assumed:
(in thousands)
Cash paid, net of cash acquired of $6
$9,199 
Contingent consideration5,160 
Total consideration, net$14,359 
Finite-Lived and Indefinite-Lived Intangible Assets Acquired as Part of Business Combination
The following table summarizes the fair value of the acquired identifiable intangible assets and weighted-average useful life by category:
Fair ValueWeighted-Average Useful Life
(in thousands)(in years)
Developed technology$8,890 5
Customer relationships80 3
Total identifiable intangible assets$8,970 
v3.22.4
Goodwill and Intangible Assets (Tables)
 12 Months Ended
Dec. 31, 2022
Goodwill and Intangible Assets Disclosure [Abstract]  
Changes in Goodwill
The following table reflects the changes in goodwill for the years ended December 31, 2022 and 2021:
(in thousands)
Balance as of December 31, 2020$874,083 
Foreign currency translation(33,160)
Balance as of December 31, 2021840,923 
Acquisitions 8,726 
Foreign currency translation(20,854)
Balance as of December 31, 2022$828,795 
Intangible Assets
Intangible assets consisted of the following as of December 31, 2022 and 2021:
December 31, 2022December 31, 2021
Gross
Carrying
Amount		Accumulated
Amortization		NetGross
Carrying
Amount		Accumulated
Amortization		Net
(in thousands)
Developed product technologies$30,054 $(21,803)$8,251 $35,210 $(33,542)$1,668 
Customer relationships92,662 (92,040)622 95,010 (88,612)6,398 
Trademarks713 (713)— 1,136 (1,136)— 
Total intangible assets$123,429 $(114,556)$8,873 $131,356 $(123,290)$8,066 
Intangible Asset Amortization Expense
Intangible asset amortization expense was as follows:
Year Ended December 31,
202220212020
(in thousands)
Intangible asset amortization expense$8,330 $19,065 $48,105 
Estimated Intangible Asset Amortization Expense
As of December 31, 2022, we estimate aggregate intangible asset amortization expense to be as follows:
Estimated Amortization
(in thousands)
2023$2,414 
20241,860 
20251,847 
20261,833 
2027919 
Total amortization expense$8,873 
v3.22.4
Fair Value Measurements (Tables)
 12 Months Ended
Dec. 31, 2022
Fair Value Disclosures [Abstract]  
Fair Value of Financial Assets Measured on a Recurring Basis There have been no transfers between fair value measurement levels during the year ended December 31, 2022.
Fair Value Measurements at
December 31, 2022 Using
Quoted Prices in
Active Markets
for Identical Assets
(Level 1)		Significant
Other
Observable
Inputs
(Level 2)		Significant
Unobservable
Inputs
(Level 3)		Total
(in thousands)
Assets:
Money market funds$48,389 $— $— $48,389 
Liabilities:
Contingent consideration$— $— $5,090 $5,090 
v3.22.4
Property and Equipment (Tables)
 12 Months Ended
Dec. 31, 2022
Property, Plant and Equipment [Abstract]  
Schedule of Property and Equipment
We record property and equipment at cost and depreciate them using the straight-line method over their estimated useful lives as follows:
Useful Life
(in years)
Equipment, servers and computers
3 - 5
Furniture and fixtures
5 - 7
Software
3 - 5
Leasehold improvementsLesser of lease term or useful life
Property and equipment, net, including software, consisted of the following:
December 31,
20222021
(in thousands)
Servers, equipment and computers$38,669 $32,524 
Furniture and fixtures6,386 6,409 
Software885 602 
Leasehold improvements21,450 21,408 
$67,390 $60,943 
Less: Accumulated depreciation and amortization(29,986)(22,195)
Property and equipment, net$37,404 $38,748 
Depreciation and amortization expense on property and equipment was as follows for the years ended December 31, 2022, 2021, and 2020:
Year Ended December 31,
202220212020
(in thousands)
Depreciation and amortization$13,249 $12,226 $6,581 
v3.22.4
Leases (Tables)
 12 Months Ended
Dec. 31, 2022
Leases [Abstract]  
Operating Lease Costs
The components of operating lease costs for the years ended December 31, 2022 and 2021 were as follows:
Year Ended December 31,
20222021
(in thousands)
Operating lease costs$6,888 $5,444 
Variable lease costs(1)
1,293 1,046 
Short-term lease costs299 476 
Total lease costs$8,480 $6,966 
____________
(1)     Primarily includes common area maintenance and other service charges for leases in which we pay a proportionate share of those costs as we have elected to not separate lease and non-lease components for our office leases.
Lease Liabilities
Maturities of our operating lease liabilities as of December 31, 2022 were as follows:
December 31, 2022
(in thousands)
2023$7,280 
20247,118 
20255,532 
20265,464 
20274,489 
Thereafter15,752 
Total minimum lease payments45,635 
Less: imputed interest(6,754)
Present value of operating lease liabilities$38,881 
v3.22.4
Accrued Liabilities and Other (Tables)
 12 Months Ended
Dec. 31, 2022
Payables and Accruals [Abstract]  
Schedule of Accrued Liabilities and Other Current Liabilities
Accrued liabilities and other current liabilities were as follows:
December 31,
20222021
(in thousands)
Payroll-related accruals$19,622 $16,657 
Value-added and other tax1,904 1,805 
Purchasing accruals4,390 3,593 
Accrued royalties1,104 1,938 
Accrued contingent consideration liability2,746 — 
Accrued other liabilities5,864 6,951 
Total accrued liabilities and other$35,630 $30,944 
v3.22.4
Debt (Tables)
 12 Months Ended
Dec. 31, 2022
Debt Disclosure [Abstract]  
Summary of Debt
The following table summarizes information relating to our outstanding debt as of December 31, 2022:
As of December 31,
2022
Amount OutstandingEffective Rate
(in thousands, except interest rates)
Term loan facility$345,625 7.73 %
Revolving credit facility— — %
Total principal amount345,625 
Unamortized discount and debt issuance costs(8,637)
Total debt, net336,988 
Less: Current debt obligation(3,500)
Long-term debt, net of current portion$333,488 
Summary of Future Minimum Principal Payments of Debt
The following table summarizes the future minimum principal payments under Credit Agreement as of December 31, 2022:
(in thousands)
2023$3,500 
20243,500 
20253,500 
20263,500 
20273,500 
Thereafter328,125 
Total minimum principal payments$345,625 
v3.22.4
Stock-Based Compensation (Tables)
 12 Months Ended
Dec. 31, 2022
Share-Based Payment Arrangement [Abstract]  
Schedule of Stock-Based Compensation Expense
Stock-based compensation expense for the years ended December 31, 2022, 2021 and 2020 was $36.5 million, $29.4 million and $21.1 million, respectively, as summarized below:
Year Ended December 31,
202220212020
(in thousands)
Cost of revenue$1,146 $1,010 $670 
Sales and marketing12,043 8,761 4,409 
Research and development6,118 4,659 3,189 
General and administrative17,220 15,000 12,785 
Total stock-based compensation expense$36,527 $29,430 $21,053 

The impact to our income before income taxes due to stock-based compensation expense and the related income tax benefits were as follows:
Year Ended December 31,
202220212020
(in thousands)
Impact to income before income taxes due to stock-based compensation$36,527 $29,430 $21,053 
Income tax benefit related to stock-based compensation872 310 241 
Option Grant Activity
Stock option grant activity under the 2021 Plan was as follows during the year ended December 31, 2022:
Number of
Shares
Outstanding		Weighted-
Average
Exercise
Price		Aggregate
Intrinsic
Value
(in thousands)		Weighted-
Average
Remaining
Contractual
Term
(in years)
Outstanding balances as of December 31, 2021
169,168 $1.32 
Options exercised(40,695)2.65 
Options forfeited(1,316)0.57 
Options expired (1,316)1.60 
Outstanding balances as of December 31, 2022
125,841 $0.89 
Options exercisable as of December 31, 2022
120,049 $0.86 $1,131 4.4
Options vested and expected to vest as of December 31, 2022
125,841 $0.89 $1,182 4.5
Schedule of Stock Option Valuation Assumptions For stock option awards granted during the year ended December 31, 2021, we estimated the fair value at the date of grant using the Black-Scholes option pricing model with the following weighted-average assumptions:
Year Ended December 31,
2021
Expected dividend yield— %
Volatility 45.5 %
Risk-free rate of return0.5 %
Expected life3.47 years
Summary of Restricted Stock Activity
The following table summarizes information about restricted stock activity subject to vesting under the 2021 Plan during the year ended December 31, 2022:
Number of
Shares
Outstanding
Unvested balances as of December 31, 2021
75,815 
Restricted stock vested (61,549)
Restricted stock repurchased - unvested shares (10,850)
Unvested balances as of December 31, 2022
3,416 
Summary of Restricted Stock Unit Activity
The following table summarizes information about restricted stock unit activity under the 2021 Plan during the year ended December 31, 2022:
Number of
Units
Outstanding		Weighted-Average Grant Date Fair Value Per ShareAggregate Intrinsic Value
(in thousands)		Weighted-Average Remaining Contractual Term
(in years)
Unvested balances as of December 31, 2021
4,764,213 $13.03 $52,883 1.3
Restricted stock units granted3,876,745 11.44 
Restricted stock units vested (2,036,843)13.11 
Restricted stock units forfeited (858,209)12.12 
Unvested balances as of December 31, 2022
5,745,906 $12.07 $59,068 1.3
Summary of Performance Stock Unit Activity
The following table summarizes information about performance stock unit activity under the 2021 Plan during the year ended December 31, 2022:
Number of
Units
Outstanding		Weighted-Average Grant Date Fair Value Per ShareAggregate Intrinsic Value
(in thousands)		Weighted-Average Remaining Contractual Term
(in years)
Unvested balances as of December 31, 2021
989,914 $12.50 $10,988 1.1
Performance stock units granted772,452 11.60 
Performance stock units vested (275,851)12.50 
Unvested balances as of December 31, 2022
1,486,515 $12.03 $15,281 0.9
v3.22.4
Earnings Per Share (Tables)
 12 Months Ended
Dec. 31, 2022
Earnings Per Share [Abstract]  
Reconciliation of Shares in the Calculation of Basic and Diluted Income Per Share
A reconciliation of the number of shares in the calculation of basic and diluted earnings (loss) per share follows:
Year Ended December 31,
202220212020
(in thousands)
Basic earnings (loss) per share:
Numerator:
Net income (loss)$16,707 $113 $(7,158)
Net income (loss) available to common stockholders$16,707 $113 $(7,158)
Denominator:
Weighted-average common shares outstanding used in computing basic earnings (loss) per share180,136 167,460 158,124 
Basic earnings (loss) per share$0.09 $0.00 $(0.05)
Diluted earnings (loss) per share:
Numerator:
Net income (loss) available to common stockholders$16,707 $113 $(7,158)
Denominator:
Weighted-average shares used in computing basic earnings (loss) per share180,136 167,460 158,124 
Add dilutive impact of employee equity plans1,161 1,207 — 
Weighted-average shares used in computing diluted earnings (loss) per share181,297 168,667 158,124 
Diluted earnings (loss) per share$0.09 $0.00 $(0.05)
Weighted Average Outstanding Shares of Common Stock Equivalents Excluded
The following weighted-average outstanding shares of common stock equivalents were excluded from the computation of the diluted net income per share attributable to common stockholders for the periods presented because their effect would have been anti-dilutive or for which the performance condition had not been met at the end of the period:
Year Ended December 31,
202220212020
(in thousands)
Restricted stock units2,957 203 — 
Total anti-dilutive shares2,957 203 — 
v3.22.4
Employee Benefit Plans (Tables)
 12 Months Ended
Dec. 31, 2022
Retirement Benefits [Abstract]  
Schedule of Costs of Retirement Plans Our expense related to the plan was as follows:
Year Ended December 31,
202220212020
(in thousands)
Employee benefit plan expense$1,495 $1,440 $1,203 
v3.22.4
Relationship with Parent and Related Entities (Tables)
 12 Months Ended
Dec. 31, 2022
Related Party Transactions [Abstract]  
Schedule of the Components of General Allocated Corporate Expenses The following table summarizes the components of general allocated corporate expenses for the years ended December 31, 2021 and 2020:
Year Ended December 31,
20212020
(in thousands)
General and administrative$20,357 $31,357 
Research and development253 1,672 
Sales and marketing297 1,969 
Cost of revenue140 149 
Total$21,047 $35,147 
v3.22.4
Income Taxes (Tables)
 12 Months Ended
Dec. 31, 2022
Income Tax Disclosure [Abstract]  
Schedule of Components of Income Before Income Taxes
U.S. and international components of income before income taxes were as follows:
Year Ended December 31,
202220212020
(in thousands)
U.S.$(22,574)$(37,028)$(46,444)
International52,999 48,620 51,300 
Income before income taxes$30,425 $11,592 $4,856 
Schedule of Income Tax Expense (Benefit)
Income tax expense was composed of the following:
Year Ended December 31,
202220212020
(in thousands)
Current:
Federal$— $— $— 
State10 2 — 
International15,661 13,324 16,065 
15,671 13,326 16,065 
Deferred:
Federal— — 86 
State— — 5 
International(1,953)(1,847)(4,142)
(1,953)(1,847)(4,051)
Income tax expense$13,718 $11,479 $12,014 
Schedule of Effective Income Tax Rate Reconciliation
The difference between the income tax expense (benefit) derived by applying the federal statutory income tax rate to our income before income taxes and the amount recognized in our Consolidated Financial Statements is as follows:
Year Ended December 31,
202220212020
(in thousands)
Expense derived by applying the federal statutory income tax rate to income before income taxes$6,389 $2,434 $1,020 
State taxes, net of federal benefit50 (105)(185)
Research and experimentation tax credits(170)— (786)
Global intangible low-taxed income3,128 — — 
Withholding tax— — (44)
Transaction costs488 1,999 — 
Pre-Separation and Distribution net operating losses and other deferred tax assets
— 21,130 — 
Non-deductible executive compensation1,246 — — 
Valuation allowance for deferred tax assets(827)(15,383)11,680 
Stock-based compensation2,856 1,258 (333)
Meals and entertainment140 75 15 
Acquisition costs— — 35 
Effect of foreign operations465 (88)612 
Other(47)159 — 
$13,718 $11,479 $12,014 
Components of Net Deferred Tax Amounts
The components of the net deferred tax amounts recognized in the accompanying Consolidated Balance Sheets were:
December 31,
20222021
(in thousands)
Deferred tax assets:
Allowance for doubtful accounts$331 $465 
Accrued expenses149 99 
Net operating loss1,892 1,573 
Stock-based compensation4,442 2,967 
Interest12 1,195 
Deferred revenue74 62 
Leases806 726 
Other credits7 14 
Total deferred tax assets7,713 7,101 
Valuation allowance(3,637)(2,873)
Deferred tax assets, net of valuation allowance4,076 4,228 
Deferred tax liabilities:
Property and equipment2,522 1,787 
Prepaid expenses474 646 
Leases931 894 
Intangibles2,137 1,852 
Total deferred tax liabilities6,064 5,179 
Net deferred tax asset (liability)$(1,988)$(951)
Schedule of Unrecognized Tax Benefits
The aggregate changes in the balance of our gross unrecognized tax benefits, excluding accrued interest and penalties, were as follows:
Year Ended December 31,
202220212020
(in thousands)
Balance, beginning of year$— $87 $87 
Increases for tax positions related to the current year— — — 
Decreases for tax positions related to the current year— — — 
Increases for tax positions related to prior years— — — 
Decreases for tax positions related to prior years— (87)— 
Settlement with taxing authorities — — — 
Reductions due to lapsed statute of limitations— — — 
Balance, end of year$— $— $87 
v3.22.4
Operating Segments and Geographic Information (Tables)
 12 Months Ended
Dec. 31, 2022
Segment Reporting [Abstract]  
Schedule of Revenue by Geographic Area The following tables set forth revenue and net long-lived assets by geographic area:
Year Ended December 31,
202220212020
(in thousands)
Revenue
United States, country of domicile$181,033 $160,833 $144,776 
United Kingdom38,414 38,526 31,649 
All other international152,322 147,097 126,446 
Total revenue$371,769 $346,456 $302,871 
Schedule of Long-lived Assets by Geographic Area
December 31,
20222021
(in thousands)
Long-lived assets, net
United States, country of domicile$17,713 $20,130 
Switzerland12,629 11,293 
Canada1,169 895 
All other international5,893 6,430 
Total long-lived assets, net$37,404 $38,748 
v3.22.4
Organization and Nature of Operations (Details)
 12 Months Ended
Jul. 19, 2021
$ / shares
shares
Dec. 31, 2022
employee
$ / shares
Dec. 31, 2021
$ / shares
Subsidiary, Sale of Stock [Line Items]      
Spinoff transaction, conversion ratio 1    
Common stock, par value (in dollars per share) | $ / shares $ 0.001 $ 0.001 $ 0.001
Maximum threshold of number of employees for consideration of a small and medium-sized enterprise | employee   1,000  
Private Placement      
Subsidiary, Sale of Stock [Line Items]      
Number of shares issued (in shares) 20,623,282    
SolarWinds Holdings, Inc.      
Subsidiary, Sale of Stock [Line Items]      
Spinoff transaction, conversion ratio 2    
Common stock, par value (in dollars per share) | $ / shares $ 0.001    
Stock issued during period distributed for spinoff (in shares) 158,020,156    
Common stock outstanding after distribution due to spinoff (in shares) 316,040,312    
v3.22.4
Summary of Significant Accounting Policies - Other Narrative (Details)
$ in Thousands
 12 Months Ended
Dec. 31, 2022
USD ($)
segment
shares
Dec. 31, 2021
USD ($)
shares
Dec. 31, 2020
USD ($)
Accounting Policies [Abstract]      
Number of reportable segments | segment 1    
Unrealized net transaction gains (losses) related to remeasurement | $ $ 2,200 $ (1,800) $ (800)
Provision for doubtful accounts | $ 1,300 1,700 800
Amortization of debt issuance costs | $ 1,623 732 $ 0
Money market funds      
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]      
Money market funds | $ $ 48,400 $ 0  
Stock options to purchase common stock      
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]      
Stock units granted (in shares) | shares 0 224,638  
Restricted Stock      
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]      
Stock units granted (in shares) | shares   91,477  
Restricted Stock Units (RSUs)      
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]      
Stock units granted (in shares) | shares 3,876,745,000    
Restricted Stock Units (RSUs) | 2021 Equity Incentive Plan      
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]      
Stock units granted (in shares) | shares   2,207,824  
v3.22.4
Summary of Significant Accounting Policies - Acquisitions (Details)
 12 Months Ended
Dec. 31, 2022
Minimum  
Finite-Lived Intangible Assets [Line Items]  
Estimated useful life 2 years
Maximum  
Finite-Lived Intangible Assets [Line Items]  
Estimated useful life 7 years
v3.22.4
Summary of Significant Accounting Policies - Property and Equipment (Details)
 12 Months Ended
Dec. 31, 2022
Minimum | Servers, equipment and computers  
Property, Plant and Equipment [Line Items]  
Useful life 3 years
Minimum | Furniture and fixtures  
Property, Plant and Equipment [Line Items]  
Useful life 5 years
Minimum | Software  
Property, Plant and Equipment [Line Items]  
Useful life 3 years
Maximum | Servers, equipment and computers  
Property, Plant and Equipment [Line Items]  
Useful life 5 years
Maximum | Furniture and fixtures  
Property, Plant and Equipment [Line Items]  
Useful life 7 years
Maximum | Software  
Property, Plant and Equipment [Line Items]  
Useful life 5 years
v3.22.4
Summary of Significant Accounting Policies - Internal-Use Software Costs (Details) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 14, 2022
Dec. 31, 2022
Dec. 31, 2021
Dec. 31, 2020
Dec. 13, 2022
Asset Acquisition [Line Items]          
Internal-use software useful life   3 years      
Impairments to internal-use software   $ 0 $ 0 $ 0  
Capitalized internal-use software, net   13,700 5,100 4,900  
Capitalized internal-use software and website development costs   $ 2,500 $ 2,200 $ 1,800  
Third Party          
Asset Acquisition [Line Items]          
Prepaid royalties         $ 1,000
Intellectual Property Acquisition          
Asset Acquisition [Line Items]          
Internal-use software useful life 3 years        
Asset acquisition, consideration transferred $ 6,500        
Payments for asset acquisition 3,100        
Product delivery fees 1,000        
Contingent consideration 2,500        
Asset acquisition, consideration transferred, transaction cost $ 100        
v3.22.4
Summary of Significant Accounting Policies - Revenue Disaggregation (Details) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2022
Dec. 31, 2021
Dec. 31, 2020
Disaggregation of Revenue [Line Items]      
Subscription and other revenue $ 371,769 $ 346,456 $ 302,871
Revenue recognized at a point in time      
Disaggregation of Revenue [Line Items]      
Subscription and other revenue 59,970 62,204 57,943
Revenue recognized over time      
Disaggregation of Revenue [Line Items]      
Subscription and other revenue 311,799 284,252 244,928
Subscription Revenue      
Disaggregation of Revenue [Line Items]      
Subscription and other revenue 362,609 336,845 292,027
Other Revenue      
Disaggregation of Revenue [Line Items]      
Subscription and other revenue $ 9,160 $ 9,611 $ 10,844
v3.22.4
Summary of Significant Accounting Policies - Deferred Revenue (Details) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2022
Dec. 31, 2021
Accounting Policies [Abstract]    
Revenue, advance billing period 12 months  
Change In Contract With Customer, Liability [Roll Forward]    
Beginning balance $ 10,898 $ 9,670
Deferred revenue recognized (19,922) (17,517)
Additional amounts deferred 21,151 18,745
Ending balance $ 12,127 $ 10,898
v3.22.4
Summary of Significant Accounting Policies - Expected Recognition of Deferred Revenue (Details)
$ in Thousands
Dec. 31, 2022
USD ($)
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]  
Expected recognition of deferred revenue $ 12,593
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-01-01  
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]  
Expected recognition of deferred revenue $ 12,079
Deferred revenue, remaining performance obligation, period 1 year
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-01-01  
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]  
Expected recognition of deferred revenue $ 514
Deferred revenue, remaining performance obligation, period 2 years
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2026-01-01  
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]  
Expected recognition of deferred revenue $ 0
Deferred revenue, remaining performance obligation, period
v3.22.4
Summary of Significant Accounting Policies - Cost of Revenue (Details) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2022
Dec. 31, 2021
Dec. 31, 2020
Accounting Policies [Abstract]      
Amortization of acquired technologies $ 2,477 $ 5,755 $ 24,257
v3.22.4
Summary of Significant Accounting Policies - Advertising Costs Incurred (Details) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2022
Dec. 31, 2021
Dec. 31, 2020
Accounting Policies [Abstract]      
Advertising expense $ 19,560 $ 18,534 $ 13,903
v3.22.4
Summary of Significant Accounting Policies - Changes in Accumulated Other Comprehensive Income (Loss) (Details) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2022
Dec. 31, 2021
Dec. 31, 2020
AOCI Attributable to Parent, Net of Tax [Roll Forward]      
Balance at beginning of period $ 618,355 $ 631,197 $ 563,696
Other comprehensive loss before reclassification (22,868) (33,938)  
Other comprehensive (loss) income (22,868) (33,938) 42,414
Balance at end of period 642,071 618,355 631,197
Foreign Currency Translation Adjustments      
AOCI Attributable to Parent, Net of Tax [Roll Forward]      
Balance at beginning of period 15,053 48,991  
Other comprehensive loss before reclassification (22,868) (33,938)  
Other comprehensive (loss) income (22,868) (33,938)  
Balance at end of period (7,815) 15,053 48,991
Accumulated Other Comprehensive Income (Loss)      
AOCI Attributable to Parent, Net of Tax [Roll Forward]      
Balance at beginning of period 15,053 48,991 6,577
Balance at end of period $ (7,815) $ 15,053 $ 48,991
v3.22.4
Summary of Significant Accounting Policies - Estimated the Fair Value for Stock Options (Details)
 12 Months Ended
Dec. 31, 2022
Dec. 31, 2021
Stock Options    
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]    
Expected dividend yield 0.00% 0.00%
v3.22.4
Acquisitions - Narrative (Details) - USD ($)
$ in Thousands
 12 Months Ended
Jul. 01, 2022
Dec. 31, 2022
Dec. 31, 2021
Dec. 31, 2020
Business Acquisition [Line Items]        
Gain on contingent consideration   $ (83) $ 0 $ 0
Contingent consideration current   2,746 $ 0  
Spinpanel BV        
Business Acquisition [Line Items]        
Payments to acquire businesses, gross $ 20,000      
Contingent consideration maximum 10,000      
Acquisition related costs   300    
Contingent consideration $ 5,160 5,100    
Gain on contingent consideration   100    
Contingent consideration current   300    
Accrued contingent consideration liability   $ 4,800    
v3.22.4
Acquisitions (Details) - USD ($)
$ in Thousands
 12 Months Ended
Jul. 01, 2022
Dec. 31, 2022
Dec. 31, 2021
Dec. 31, 2020
Business Acquisition [Line Items]        
Cash acquired $ 6      
Goodwill   $ 828,795 $ 840,923 $ 874,083
Acquisitions, net of cash acquired   9,199 $ 0 $ 0
Spinpanel BV        
Business Acquisition [Line Items]        
Current assets, including cash acquired of $6 128      
Property and equipment, net 48      
Current liabilities (1,199)      
Non-current deferred tax liabilities (2,314)      
Identifiable intangible assets 8,970      
Goodwill 8,726      
Total consideration 14,359      
Acquisitions, net of cash acquired 9,199      
Contingent consideration 5,160 $ 5,100    
Total consideration, net 14,359      
Spinpanel BV | Developed product technologies        
Business Acquisition [Line Items]        
Identifiable intangible assets $ 8,890      
Weighted-average useful life 5 years      
Spinpanel BV | Customer relationships        
Business Acquisition [Line Items]        
Identifiable intangible assets $ 80      
Weighted-average useful life 3 years      
v3.22.4
Goodwill and Intangible Assets - Changes in Goodwill (Details) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2022
Dec. 31, 2021
Goodwill [Roll Forward]    
Balance at beginning of period $ 840,923 $ 874,083
Acquisitions 8,726  
Foreign currency translation (20,854) (33,160)
Balance at end of period $ 828,795 $ 840,923
v3.22.4
Goodwill and Intangible Assets - Intangible Assets (Details) - USD ($)
$ in Thousands
Dec. 31, 2022
Dec. 31, 2021
Finite-Lived Intangible Assets [Line Items]    
Gross Carrying Amount $ 123,429 $ 131,356
Accumulated Amortization (114,556) (123,290)
Net 8,873 8,066
Developed product technologies    
Finite-Lived Intangible Assets [Line Items]    
Gross Carrying Amount 30,054 35,210
Accumulated Amortization (21,803) (33,542)
Net 8,251 1,668
Customer relationships    
Finite-Lived Intangible Assets [Line Items]    
Gross Carrying Amount 92,662 95,010
Accumulated Amortization (92,040) (88,612)
Net 622 6,398
Trademarks    
Finite-Lived Intangible Assets [Line Items]    
Gross Carrying Amount 713 1,136
Accumulated Amortization (713) (1,136)
Net $ 0 $ 0
v3.22.4
Goodwill and Intangible Assets - Intangible Assets Amortization Expense (Details) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2022
Dec. 31, 2021
Dec. 31, 2020
Goodwill and Intangible Assets Disclosure [Abstract]      
Intangible asset amortization expense $ 8,330 $ 19,065 $ 48,105
v3.22.4
Goodwill and Intangible Assets - Estimated Intangible Asset Amortization Expense (Details) - USD ($)
$ in Thousands
Dec. 31, 2022
Dec. 31, 2021
Estimated Amortization    
2023 $ 2,414  
2024 1,860  
2025 1,847  
2026 1,833  
2027 919  
Net $ 8,873 $ 8,066
v3.22.4
Fair Value Measurements - Fair Value of Financial Assets Measured on a Recurring Basis (Details) - USD ($)
$ in Thousands
Dec. 31, 2022
Dec. 31, 2021
Money market funds    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Money market funds $ 48,400 $ 0
Recurring    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Contingent consideration 5,090  
Recurring | Quoted Prices in Active Markets for Identical Assets (Level 1)    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Contingent consideration 0  
Recurring | Significant Other Observable Inputs (Level 2)    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Contingent consideration 0  
Recurring | Significant Unobservable Inputs (Level 3)    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Contingent consideration 5,090  
Recurring | Money market funds    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Money market funds 48,389  
Recurring | Money market funds | Quoted Prices in Active Markets for Identical Assets (Level 1)    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Money market funds 48,389  
Recurring | Money market funds | Significant Other Observable Inputs (Level 2)    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Money market funds 0  
Recurring | Money market funds | Significant Unobservable Inputs (Level 3)    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Money market funds $ 0  
v3.22.4
Property and Equipment - Schedule of Property and Equipment (Details) - USD ($)
$ in Thousands
Dec. 31, 2022
Dec. 31, 2021
Property, Plant and Equipment [Line Items]    
Property and equipment, gross $ 67,390 $ 60,943
Less: Accumulated depreciation and amortization (29,986) (22,195)
Property and equipment, net 37,404 38,748
Servers, equipment and computers    
Property, Plant and Equipment [Line Items]    
Property and equipment, gross 38,669 32,524
Furniture and fixtures    
Property, Plant and Equipment [Line Items]    
Property and equipment, gross 6,386 6,409
Software    
Property, Plant and Equipment [Line Items]    
Property and equipment, gross 885 602
Leasehold improvements    
Property, Plant and Equipment [Line Items]    
Property and equipment, gross $ 21,450 $ 21,408
v3.22.4
Property and Equipment - Schedule of Depreciation and Amortization (Details) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2022
Dec. 31, 2021
Dec. 31, 2020
Property, Plant and Equipment [Abstract]      
Depreciation and amortization $ 13,249 $ 12,226 $ 6,581
v3.22.4
Leases - Additional Information (Details)
Dec. 31, 2022
Property, Plant and Equipment [Line Items]  
Remaining lease term (in years) 7 years 8 months 12 days
Weighted-average discount rate of lease liabilities (as a percent) 4.10%
Minimum  
Property, Plant and Equipment [Line Items]  
Operating lease terms (in years) 1 year
Maximum  
Property, Plant and Equipment [Line Items]  
Operating lease terms (in years) 9 years 4 months 24 days
v3.22.4
Leases - Operating Lease Costs (Details) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2022
Dec. 31, 2021
Leases [Abstract]    
Operating lease costs $ 6,888 $ 5,444
Variable lease costs 1,293 1,046
Short-term lease costs 299 476
Total lease costs $ 8,480 $ 6,966
v3.22.4
Leases - Lease Liabilities (Details)
$ in Thousands
Dec. 31, 2022
USD ($)
Leases [Abstract]  
2023 $ 7,280
2024 7,118
2025 5,532
2026 5,464
2027 4,489
Thereafter 15,752
Total minimum lease payments 45,635
Less: imputed interest (6,754)
Present value of operating lease liabilities $ 38,881
v3.22.4
Accrued Liabilities and Other - Schedule of Accrued Liabilities and Other Current Liabilities (Details) - USD ($)
$ in Thousands
Dec. 31, 2022
Dec. 31, 2021
Payables and Accruals [Abstract]    
Payroll-related accruals $ 19,622 $ 16,657
Value-added and other tax 1,904 1,805
Purchasing accruals 4,390 3,593
Accrued royalties 1,104 1,938
Contingent consideration current 2,746 0
Accrued other liabilities 5,864 6,951
Total accrued liabilities and other $ 35,630 $ 30,944
v3.22.4
Debt - Additional Information (Details) - Credit Agreement - USD ($)
 12 Months Ended
Jul. 19, 2021
Dec. 31, 2022
Debt Instrument [Line Items]    
Maximum borrowing capacity $ 410,000,000  
Secured Debt    
Debt Instrument [Line Items]    
Face amount of debt 350,000,000  
Payments of line of credit proceeds to former parent 16,500,000  
LIBOR floor   0.50%
Basis spread on variable rate   3.00%
Margin is subject to reductions based on our first lien net leverage ratio, percentage   1.75%
Quarterly periodic payment, as a percentage of original principal   0.25%
Revolving Credit Facility | Line of Credit    
Debt Instrument [Line Items]    
Maximum borrowing capacity $ 60,000,000  
Margin is subject to reductions based on our first lien net leverage ratio, percentage   2.75%
Commitment fee percentage   0.375%
Covenant, commitment fee percentage, net leverage ratio, reduction per annum   0.25%
Covenant, leverage ratio, maximum   7.50
Covenant, borrowing percentage of commitments, maximum   35.00%
Revolving Credit Facility | Line of Credit | LIBOR    
Debt Instrument [Line Items]    
Basis spread on variable rate   3.00%
Revolving Credit Facility | Line of Credit | Eurodollar    
Debt Instrument [Line Items]    
LIBOR floor   0.00%
Basis spread on variable rate   3.00%
Revolving Credit Facility | Line of Credit | US Dollars    
Debt Instrument [Line Items]    
LIBOR floor   0.00%
v3.22.4
Debt - Summary of Debt (Details) - USD ($)
$ in Thousands
Dec. 31, 2022
Dec. 31, 2021
Debt Instruments [Abstract]    
Total principal amount $ 345,625  
Unamortized discount and debt issuance costs (8,637)  
Total minimum principal payments 336,988  
Less: Current debt obligation (3,500) $ (3,500)
Long-term debt, net of current portion 333,488 $ 335,379
Credit Agreement    
Debt Instruments [Abstract]    
Total principal amount 345,625  
Credit Agreement | Secured Debt    
Debt Instruments [Abstract]    
Total principal amount $ 345,625  
Effective Rate 7.73%  
Credit Agreement | Line of Credit | Revolving Credit Facility    
Debt Instruments [Abstract]    
Total principal amount $ 0  
Effective Rate 0.00%  
v3.22.4
Debt - Summary of Future Minimum Principal Payments of Debt (Details)
$ in Thousands
Dec. 31, 2022
USD ($)
Long-term Debt, Fiscal Year Maturity [Abstract]  
Total minimum principal payments $ 345,625
Credit Agreement  
Long-term Debt, Fiscal Year Maturity [Abstract]  
2023 3,500
2024 3,500
2025 3,500
2026 3,500
2027 3,500
Thereafter 328,125
Total minimum principal payments $ 345,625
v3.22.4
Stock-Based Compensation - Additional Information (Details)
 1 Months Ended 12 Months Ended
Aug. 31, 2021
USD ($)
shares
Aug. 31, 2021
shares
Dec. 31, 2022
USD ($)
vote
$ / shares
shares
Dec. 31, 2021
USD ($)
$ / shares
shares
Dec. 31, 2020
USD ($)
Jul. 19, 2021
$ / shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]            
Common stock, authorized (in shares)     550,000,000 550,000,000    
Common stock, par value (in dollars per share) | $ / shares     $ 0.001 $ 0.001   $ 0.001
Preferred stock, authorized (in shares)     50,000,000 50,000,000    
Preferred stock, par value (in dollars per share) | $ / shares     $ 0.001 $ 0.001    
Number of votes per share | vote     1      
Stock options outstanding (in shares)     125,841,000 169,168,000    
Stock-based compensation expense | $     $ 36,527,000 $ 29,430,000 $ 21,053,000  
Stock-based compensation expense subject to future recognition | $     $ 100,000      
Stock Options            
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]            
Stock units granted (in shares)     0 224,638    
Recognition period of stock-based compensation expense     2 months 12 days      
Restricted Stock            
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]            
Awards outstanding (in shares)     3,416 75,815    
Stock units granted (in shares)       91,477    
Stock units granted (in dollars per share) | $ / shares     $ 1.52      
Intrinsic value of shares vested | $     $ 600,000      
Restricted Stock Units (RSUs)            
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]            
Awards outstanding (in shares)     5,745,906,000 4,764,213,000    
Stock units granted (in shares)     3,876,745,000      
Recognition period of stock-based compensation expense     2 years 7 months 6 days      
Stock units granted (in dollars per share) | $ / shares     $ 11.44      
Fair value of restricted stock units vested | $     $ 22,000,000      
Compensation expense not yet recognized | $     $ 56,000,000      
Performance Stock Units            
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]            
Awards outstanding (in shares)     1,486,515 989,914    
Stock units granted (in shares)     772,452      
Recognition period of stock-based compensation expense     10 months 24 days      
Stock units granted (in dollars per share) | $ / shares     $ 11.60      
Compensation expense not yet recognized | $     $ 5,600,000      
ESPP            
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]            
Common stock, capital shares reserved for future issuance (in shares) 2,500,000 2,500,000 2,358,012      
Stock-based compensation expense | $     $ 500,000 $ 100,000    
Maximum stock purchase, percentage of compensation 20.00% 20.00%        
Offering period length 6 months          
Purchase price of common stock, percent of market value 85.00%          
Maximum value of common stock purchase, per year | $ $ 25,000          
2021 Equity Incentive Plan            
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]            
Common stock, capital shares reserved for future issuance (in shares)     13,574,211      
Expiration period   10 years        
Awards outstanding (in shares)     7,361,678      
Repurchase of stock (in shares)     10,850      
2021 Equity Incentive Plan | Restricted Stock Units (RSUs)            
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]            
Vesting period   4 years        
Stock units granted (in shares)       2,207,824    
2021 Equity Incentive Plan | Performance Stock Units            
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]            
Vesting period   3 years        
v3.22.4
Stock-Based Compensation - Schedule of Stock-Based Compensation Expense (Details) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2022
Dec. 31, 2021
Dec. 31, 2020
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]      
Stock-based compensation expense $ 36,527 $ 29,430 $ 21,053
Income tax benefit related to stock-based compensation 872 310 241
Cost of revenue      
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]      
Stock-based compensation expense 1,146 1,010 670
Sales and marketing      
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]      
Stock-based compensation expense 12,043 8,761 4,409
Research and development      
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]      
Stock-based compensation expense 6,118 4,659 3,189
General and administrative      
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]      
Stock-based compensation expense 17,220 15,000 12,785
Operating Expense      
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]      
Stock-based compensation expense $ 36,527 $ 29,430 $ 21,053
v3.22.4
Stock-Based Compensation - Schedule of Stock Option Awards (Details)
$ / shares in Units, $ in Thousands
 12 Months Ended
Dec. 31, 2022
USD ($)
$ / shares
shares
Number of Shares Outstanding  
Outstanding balances at beginning of period (in shares) | shares 169,168,000
Options exercised (in shares) | shares (40,695,000)
Options forfeited (in shares) | shares (1,316,000)
Options expired (in shares) | shares (1,316,000)
Outstanding balances at end of period (in shares) | shares 125,841,000
Options exercisable at end of period (in shares) | shares 120,049,000
Options vested and expected to vest at end of period (in shares) | shares 125,841,000
Weighted- Average Exercise Price  
Outstanding balances at beginning of period (in dollars per share) | $ / shares $ 1.32
Options exercised (in dollars per share) | $ / shares 2.65
Options forfeited (in dollars per share) | $ / shares 0.57
Options expired (in dollars per share) | $ / shares 1.60
Outstanding balances at the end of period (in dollars per share) | $ / shares 0.89
Options exercisable at end of period (in dollars per share) | $ / shares 0.86
Options vested and expected to vest at end of period (in dollars per share) | $ / shares $ 0.89
Options exercisable as of December 31, 2022 | $ $ 1,131
Options exercisable as of December 31, 2022 4 years 4 months 24 days
Options vested and expected to vest as of December 31, 2022 | $ $ 1,182
Options vested and expected to vest as of December 31, 2022 4 years 6 months
v3.22.4
Stock-Based Compensation - Summary of Fair Value of Stock Options (Details) - Stock options to purchase common stock
 12 Months Ended
Dec. 31, 2022
Dec. 31, 2021
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]    
Expected dividend yield 0.00% 0.00%
Volatility   45.50%
Risk-free rate of return   0.50%
Expected life   3 years 5 months 19 days
v3.22.4
Stock-Based Compensation - Schedule of Restricted Stock Unit Activity (Details) - Restricted Stock Units (RSUs) - USD ($)
$ / shares in Units, $ in Thousands
 12 Months Ended
Dec. 31, 2022
Dec. 31, 2021
Number of Shares Outstanding    
Unvested balances at beginning of period (in shares) 4,764,213,000  
Restricted stock granted and issued (in shares) 3,876,745,000  
Restricted stock vested (in shares) (2,036,843,000)  
Stock units forfeited (in shares) (858,209,000)  
Unvested balances at end of period (in shares) 5,745,906,000 4,764,213,000
Weighted-Average Grant Date Fair Value Per Share    
Unvested balances at beginning of period (in dollars per share) $ 13.03  
Stock units granted (in dollars per share) 11.44  
Stock units vested (in dollars per share) 13.11  
Stock units forfeited (in dollars per share) 12.12  
Unvested balances at end of period (in dollars per share) $ 12.07 $ 13.03
Aggregate intrinsic value, nonvested $ 59,068 $ 52,883
Weighted average remaining contractual period, outstanding 1 year 3 months 18 days 1 year 3 months 18 days
v3.22.4
Stock-Based Compensation - Restricted Stock Activity Subject to vesting (Details) - Restricted Stock
 12 Months Ended
Dec. 31, 2022
shares
Number of Shares Outstanding  
Unvested balances at beginning of period (in shares) 75,815
Restricted stock vested (in shares) (61,549)
Restricted stock repurchased - unvested shares (in shares) (10,850)
Unvested balances at end of period (in shares) 3,416
v3.22.4
Stock-Based Compensation - Schedule of Restricted Stock Unit Activity (Details) - Restricted Stock Units (RSUs) - USD ($)
$ / shares in Units, $ in Thousands
 12 Months Ended
Dec. 31, 2022
Dec. 31, 2021
Number of Shares Outstanding    
Unvested balances at beginning of period (in shares) 4,764,213,000  
Stock units granted (in shares) 3,876,745,000  
Restricted stock vested (in shares) (2,036,843,000)  
Stock units forfeited (in shares) (858,209,000)  
Unvested balances at end of period (in shares) 5,745,906,000 4,764,213,000
Weighted-Average Grant Date Fair Value Per Share    
Unvested balances at beginning of period (in dollars per share) $ 13.03  
Stock units granted (in dollars per share) 11.44  
Stock units vested (in dollars per share) 13.11  
Stock units forfeited (in dollars per share) 12.12  
Unvested balances at end of period (in dollars per share) $ 12.07 $ 13.03
Aggregate Intrinsic Value    
Aggregate intrinsic value, nonvested $ 59,068 $ 52,883
Weighted-Average Remaining Contractual Term (in years)    
Weighted average remaining contractual period, outstanding 1 year 3 months 18 days 1 year 3 months 18 days
v3.22.4
Stock-Based Compensation - Schedule of Performance Stock Unit Activity (Details) - Performance Stock Units - USD ($)
$ / shares in Units, $ in Thousands
 12 Months Ended
Dec. 31, 2022
Dec. 31, 2021
Number of Shares Outstanding    
Unvested balances at beginning of period (in shares) 989,914  
Stock units granted (in shares) 772,452  
Stock units vested (in shares) (275,851)  
Unvested balances at end of period (in shares) 1,486,515 989,914
Weighted-Average Grant Date Fair Value Per Share    
Unvested balances at beginning of period (in dollars per share) $ 12.50  
Stock units granted (in dollars per share) 11.60  
Stock units vested (in dollars per share) 12.50  
Unvested balances at end of period (in dollars per share) $ 12.03 $ 12.50
Aggregate Intrinsic Value    
Aggregate intrinsic value, nonvested $ 15,281 $ 10,988
Weighted-Average Remaining Contractual Term (in years)    
Weighted average remaining contractual period, outstanding 10 months 24 days 1 year 1 month 6 days
v3.22.4
Earnings Per Share - Reconciliation of Shares in the Calculation of Basic and Diluted Income Per Share (Details) - USD ($)
$ / shares in Units, shares in Thousands, $ in Thousands
 5 Months Ended 7 Months Ended 12 Months Ended
Dec. 31, 2021
Jul. 19, 2021
Dec. 31, 2022
Dec. 31, 2021
Dec. 31, 2020
Basic earnings (loss) per share:          
Net income (loss) $ 127 $ (14) $ 16,707 $ 113 $ (7,158)
Net income (loss) available to common stockholders     $ 16,707 $ 113 $ (7,158)
Weighted-average common shares outstanding used in computing basic earnings (loss) per share (in shares)     180,136 167,460 158,124
Basic earnings (loss) per share (in dollars per share)     $ 0.09 $ 0.00 $ (0.05)
Diluted earnings (loss) per share:          
Net income (loss) available to common stockholders     $ 16,707 $ 113 $ (7,158)
Weighted-average common shares outstanding used in computing basic earnings (loss) per share (in shares)     180,136 167,460 158,124
Add stock-based incentive stock awards (in shares)     1,161 1,207 0
Weighted-average shares used in computing diluted earnings (loss) per share (in shares)     181,297 168,667 158,124
Diluted earnings (loss) per share (in dollars per share)     $ 0.09 $ 0.00 $ (0.05)
v3.22.4
Earnings Per Share - Weighted Average Outstanding Shares of Common Stock Equivalents Excluded (Details) - shares
shares in Thousands
 12 Months Ended
Dec. 31, 2022
Dec. 31, 2021
Dec. 31, 2020
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]      
Total anti-dilutive shares (in shares) 2,957 203 0
Restricted stock units      
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]      
Total anti-dilutive shares (in shares) 2,957 203 0
v3.22.4
Employee Benefit Plans - Schedule of Costs of Retirement Plans (Details) (10-K) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2022
Dec. 31, 2021
Dec. 31, 2020
Retirement Benefits [Abstract]      
Employee benefit plan expense $ 1,495 $ 1,440 $ 1,203
v3.22.4
Relationship with Parent and Related Entities - Components of General Allocated Corporate Expenses (Details) - Affiliated Entity - SolarWinds Holdings, Inc. - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2021
Dec. 31, 2020
Related Party Transaction [Line Items]    
Expenses from transactions with related party $ 21,047 $ 35,147
General and administrative    
Related Party Transaction [Line Items]    
Expenses from transactions with related party 20,357 31,357
Research and development    
Related Party Transaction [Line Items]    
Expenses from transactions with related party 253 1,672
Sales and marketing    
Related Party Transaction [Line Items]    
Expenses from transactions with related party 297 1,969
Cost of revenue    
Related Party Transaction [Line Items]    
Expenses from transactions with related party $ 140 $ 149
v3.22.4
Relationship with Parent and Related Entities - Additional Information (Details) - USD ($)
 12 Months Ended
May 27, 2016
Feb. 25, 2016
Dec. 31, 2022
Dec. 31, 2021
Dec. 31, 2020
Related Party Transaction [Line Items]          
Related party transaction, term     2 years    
Minimum | Equity-Based Incentive Plan          
Related Party Transaction [Line Items]          
Vesting period     1 year    
Maximum | Equity-Based Incentive Plan          
Related Party Transaction [Line Items]          
Vesting period     5 years    
Affiliated Entity | SolarWinds Holdings, Inc.          
Related Party Transaction [Line Items]          
Interest expense, related party       $ 13,800,000 $ 28,100,000
Accounts payable, related parties     $ 0 500,000  
Accounts receivable, related parties     0    
Expenses (credits) from transactions with related party       21,047,000 35,147,000
Affiliated Entity | SolarWinds Holdings, Inc. | Transition Services Agreement          
Related Party Transaction [Line Items]          
Expenses (credits) from transactions with related party     100,000 1,700,000  
Affiliated Entity | SolarWinds Holdings, Inc. | Software OEM Agreements          
Related Party Transaction [Line Items]          
Expenses (credits) from transactions with related party     300,000 100,000  
Revenue from related parties     1,500,000 500,000  
Affiliated Entity | SolarWinds Holdings, Inc. | Software Cross License Agreement          
Related Party Transaction [Line Items]          
Expenses (credits) from transactions with related party     500,000 700,000  
Revenue from related parties     100,000 100,000  
Affiliated Entity | SolarWinds Holdings, Inc. | Sublease Agreement          
Related Party Transaction [Line Items]          
Expenses (credits) from transactions with related party     600,000 200,000  
Affiliated Entity | SolarWinds Holdings, Inc. | Equity-Based Incentive Plan          
Related Party Transaction [Line Items]          
Expenses (credits) from transactions with related party       9,300,000 $ 20,600,000
Conversion incremental compensation expense     2,200,000 $ 2,700,000  
Affiliated Entity | SolarWinds Holdings, Inc. | Loans Payable          
Related Party Transaction [Line Items]          
Face amount of debt   $ 250,000,000      
Affiliated Entity | SolarWinds Holdings, Inc. | Loans Payable | Loan Agreement With SolarWinds Holdings, Inc.          
Related Party Transaction [Line Items]          
Face amount of debt $ 200,000,000        
Related party transaction, rate 2.24%        
Affiliated Entity | SolarWinds Holdings, Inc. | Loans Payable | LIBOR          
Related Party Transaction [Line Items]          
Basis spread on variable rate   9.80%      
Affiliated Entity | SolarWinds Holdings, Inc. | Other Noncurrent Liabilities          
Related Party Transaction [Line Items]          
Due to affiliates     $ 0    
v3.22.4
Income Taxes - Schedule of Components of Loss Before Income Taxes (Details) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2022
Dec. 31, 2021
Dec. 31, 2020
Income Tax Disclosure [Abstract]      
U.S. $ (22,574) $ (37,028) $ (46,444)
International 52,999 48,620 51,300
Income before income taxes $ 30,425 $ 11,592 $ 4,856
v3.22.4
Income Taxes - Schedule of Income Tax Expense (Benefit) (Details) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2022
Dec. 31, 2021
Dec. 31, 2020
Current:      
Federal $ 0 $ 0 $ 0
State 10 2 0
International 15,661 13,324 16,065
Total current income tax expense (benefit) 15,671 13,326 16,065
Deferred:      
Federal 0 0 86
State 0 0 5
International (1,953) (1,847) (4,142)
Total deferred income tax expense (benefit) (1,953) (1,847) (4,051)
Total income tax expense (benefit) $ 13,718 $ 11,479 $ 12,014
v3.22.4
Income Taxes - Schedule of Effective Income Tax Rate Reconciliation (Details) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2022
Dec. 31, 2021
Dec. 31, 2020
Income Tax Disclosure [Abstract]      
Expense derived by applying the federal statutory income tax rate to income before income taxes $ 6,389 $ 2,434 $ 1,020
State taxes, net of federal benefit 50 (105) (185)
Research and experimentation tax credits (170) 0 (786)
Global intangible low-taxed income 3,128 0 0
Withholding tax 0 0 (44)
Transaction costs 488 1,999 0
Pre-Separation and Distribution net operating losses and other deferred tax assets 0 21,130 0
Non-deductible executive compensation 1,246 0 0
Valuation allowance for deferred tax assets (827) (15,383) 11,680
Stock-based compensation 2,856 1,258 (333)
Meals and entertainment 140 75 15
Acquisition costs 0 0 35
Effect of foreign operations 465 (88) 612
Other (47) 159 0
Total income tax expense (benefit) $ 13,718 $ 11,479 $ 12,014
v3.22.4
Income Taxes - Components of Net Deferred Tax Amounts (Details) - USD ($)
$ in Thousands
Dec. 31, 2022
Dec. 31, 2021
Deferred tax assets:    
Allowance for doubtful accounts $ 331 $ 465
Accrued expenses 149 99
Net operating loss 1,892 1,573
Stock-based compensation 4,442 2,967
Interest 12 1,195
Deferred revenue 74 62
Leases 806 726
Other credits 7 14
Total deferred tax assets 7,713 7,101
Valuation allowance (3,637) (2,873)
Deferred tax assets, net of valuation allowance 4,076 4,228
Deferred tax liabilities:    
Property and equipment 2,522 1,787
Prepaid expenses 474 646
Leases 931 894
Intangibles 2,137 1,852
Total deferred tax liabilities 6,064 5,179
Net deferred tax liability $ (1,988) $ (951)
v3.22.4
Income Taxes - Additional Information (Details) - USD ($)
$ in Thousands
Dec. 31, 2022
Dec. 31, 2021
Dec. 31, 2020
Operating Loss Carryforwards [Line Items]      
Valuation allowance $ 3,637 $ 2,873  
Undistributed earnings of foreign subsidiaries   23,300  
Research Tax Credit Carryforward      
Tax Credit Carryforward [Line Items]      
Tax credit carryforward     $ 1,300
Domestic Tax Authority      
Operating Loss Carryforwards [Line Items]      
Operating loss carryforwards   5,800  
Valuation allowance 2,000 2,900  
State and Local Jurisdiction      
Operating Loss Carryforwards [Line Items]      
Operating loss carryforwards 3,900 $ 3,900  
Foreign Tax Authority      
Operating Loss Carryforwards [Line Items]      
Operating loss carryforwards 6,200   $ 14,800
Valuation allowance $ 1,600    
v3.22.4
Income Taxes - Schedule of Unrecognized Tax Benefits, Rollforward (Details) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2022
Dec. 31, 2021
Dec. 31, 2020
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward]      
Balance, beginning of year $ 0 $ 87 $ 87
Increases for tax positions related to the current year 0 0 0
Decreases for tax positions related to the current year 0 0 0
Increases for tax positions related to prior years 0 0 0
Decreases for tax positions related to prior years 0 (87) 0
Settlement with taxing authorities 0 0 0
Reductions due to lapsed statute of limitations 0 0 0
Balance, end of year $ 0 $ 0 $ 87
v3.22.4
Commitment and Contingencies - Narrative (Details) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 14, 2022
Jul. 01, 2022
Dec. 31, 2022
Dec. 31, 2021
Dec. 31, 2020
Asset Acquisition [Line Items]          
Gain on contingent consideration     $ (83) $ 0 $ 0
Contingent consideration current     $ 2,746 $ 0  
Internal-use software useful life     3 years    
Spinpanel BV          
Asset Acquisition [Line Items]          
Payments to acquire businesses, gross   $ 20,000      
Contingent consideration maximum   10,000      
Contingent consideration   $ 5,160 $ 5,100    
Gain on contingent consideration     100    
Contingent consideration current     300    
Accrued contingent consideration liability     $ 4,800    
Intellectual Property Acquisition          
Asset Acquisition [Line Items]          
Asset acquisition, consideration transferred $ 6,500        
Payments for asset acquisition 3,100        
Product delivery fees 1,000        
Contingent consideration $ 2,500        
Internal-use software useful life 3 years        
v3.22.4
Operating Segments and Geographic Information - Additional Information (Details)
 12 Months Ended
Dec. 31, 2022
segment
Segment Reporting [Abstract]  
Number of operating segments 1
v3.22.4
Operating Segments and Geographic Information - Schedule of Revenue by Geographic Area (Details) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2022
Dec. 31, 2021
Dec. 31, 2020
Revenues from External Customers and Long-Lived Assets [Line Items]      
Revenue $ 371,769 $ 346,456 $ 302,871
United States, country of domicile      
Revenues from External Customers and Long-Lived Assets [Line Items]      
Revenue 181,033 160,833 144,776
United Kingdom      
Revenues from External Customers and Long-Lived Assets [Line Items]      
Revenue 38,414 38,526 31,649
All other international      
Revenues from External Customers and Long-Lived Assets [Line Items]      
Revenue $ 152,322 $ 147,097 $ 126,446
v3.22.4
Operating Segments and Geographic Information - Schedule of Long-lived Assets by Geographic Area (Details) - USD ($)
$ in Thousands
Dec. 31, 2022
Dec. 31, 2021
Revenues from External Customers and Long-Lived Assets [Line Items]    
Total long-lived assets, net $ 37,404 $ 38,748
United States, country of domicile    
Revenues from External Customers and Long-Lived Assets [Line Items]    
Total long-lived assets, net 17,713 20,130
Switzerland    
Revenues from External Customers and Long-Lived Assets [Line Items]    
Total long-lived assets, net 12,629 11,293
Canada    
Revenues from External Customers and Long-Lived Assets [Line Items]    
Total long-lived assets, net 1,169 895
All other international    
Revenues from External Customers and Long-Lived Assets [Line Items]    
Total long-lived assets, net $ 5,893 $ 6,430
v3.22.4
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS (Details) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2022
Dec. 31, 2021
Dec. 31, 2020
Allowance for doubtful accounts, customers and other      
SEC Schedule, 12-09, Movement in Valuation Allowances and Reserves [Roll Forward]      
Beginning Balance $ 1,653 $ 751 $ 1,150
Charge to Expense 3,265 3,260 1,483
Charge to Other Accounts 0 0 0
Deductions (Write-Offs, Net of Recoveries) (3,588) (2,358) (1,882)
Ending Balance 1,330 1,653 751
Tax valuation allowances      
SEC Schedule, 12-09, Movement in Valuation Allowances and Reserves [Roll Forward]      
Beginning Balance 2,873 18,256 6,576
Charge to Expense 0 0 11,680
Charge to Other Accounts 1,591 0 0
Deductions (Write-Offs, Net of Recoveries) (827) (15,383) 0
Ending Balance $ 3,637 $ 2,873 $ 18,256