N-ABLE, INC., 10-K filed on 3/8/2022
Annual Report
v3.22.0.1
Cover Page - USD ($)
 12 Months Ended
Dec. 31, 2021
Feb. 28, 2022
Jun. 30, 2021
Cover [Abstract]      
Document Type 10-K    
Document Annual Report true    
Document Period End Date Dec. 31, 2021    
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     $ 0
Entity Common Stock, Shares Outstanding   179,842,790  
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 2022 Annual Meeting of Stockholders to be filed within 120 days of the registrant’s fiscal year ended December 31, 2021 (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 2021    
Document Fiscal Period Focus FY    
Amendment Flag false    
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Audit Information
 12 Months Ended
Dec. 31, 2021
Audit Information [Abstract]  
Auditor Firm ID 238
Auditor Name PricewaterhouseCoopers LLP
Auditor Location Austin, Texas
v3.22.0.1
Consolidated Balance Sheets - USD ($)
$ in Thousands
Dec. 31, 2021
Dec. 31, 2020
Current assets:    
Cash and cash equivalents $ 66,736 $ 99,790
Accounts receivable, net of allowances of $1,653 and $751 as of December 31, 2021 and 2020, respectively 33,041 29,086
Income tax receivable 7,250 1,262
Prepaid and other current assets 13,962 5,584
Total current assets 120,989 135,722
Property and equipment, net 38,748 19,590
Operating lease right-of-use assets 36,206 13,697
Deferred taxes 1,681 2,982
Goodwill 840,923 874,083
Intangible assets, net 8,066 27,374
Other assets, net 9,086 6,287
Total assets 1,055,699 1,079,735
Current liabilities:    
Accounts payable 5,865 5,542
Due to affiliates 464 8,023
Accrued liabilities and other 30,944 21,976
Current operating lease liabilities 4,830 2,860
Accrued related party interest payable 0 2,477
Income taxes payable 4,600 4,447
Current portion of deferred revenue 10,675 9,502
Current debt obligation 3,500 0
Total current liabilities 60,878 54,827
Long-term liabilities:    
Due to affiliates 0 372,650
Deferred revenue, net of current portion 223 168
Non-current deferred taxes 2,632 5,846
Non-current operating lease liabilities 37,822 14,641
Long-term debt, net of current portion 335,379 0
Other long-term liabilities 410 406
Total liabilities 437,344 448,538
Commitments and contingencies (Note 13)
Stockholders’ equity:    
Common stock, $0.001 par value: 550,000,000 shares authorized and 179,049,429 and no shares issued and outstanding as of December 31, 2021 and December 31, 2020, respectively 179 0
Preferred stock, $0.001 par value: 50,000,000 shares authorized and no shares issued and outstanding as of December 31, 2021 and December 31, 2020, respectively 0 0
Parent company net investment 0 582,206
Additional paid-in capital 602,996 0
Accumulated other comprehensive income 15,053 48,991
Retained earnings 127 0
Total stockholders' equity 618,355 631,197
Total liabilities and stockholders' equity $ 1,055,699 $ 1,079,735
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Consolidated Balance Sheets (Parentheticals) - USD ($)
$ in Thousands
Dec. 31, 2021
Dec. 31, 2020
Current assets:    
Allowance for doubtful accounts receivable $ 1,653 $ 751
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) 179,049,429 0
Common stock, outstanding (in shares) 179,049,429 0
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) 0 0
Preferred stock, outstanding (in shares) 0 0
v3.22.0.1
Consolidated Statements of Operations - USD ($)
shares in Thousands, $ in Thousands
 12 Months Ended
Dec. 31, 2021
Dec. 31, 2020
Dec. 31, 2019
Revenue:      
Subscription and other revenue $ 346,456 $ 302,871 $ 263,518
Cost of revenue:      
Cost of revenue 46,677 38,916 33,253
Amortization of acquired technologies 5,755 24,257 24,067
Total cost of revenue 52,432 63,173 57,320
Gross profit 294,024 239,698 206,198
Operating expenses:      
Sales and marketing 112,678 82,034 70,254
Research and development 53,959 42,719 37,172
General and administrative 80,575 57,331 38,971
Amortization of acquired intangibles 13,482 23,848 23,189
Total operating expenses 260,694 205,932 169,586
Operating income 33,330 33,766 36,612
Other expense:      
Interest expense, net (20,472) (28,137) (33,805)
Other (expense) income, net (1,266) (773) 386
Total other expense (21,738) (28,910) (33,419)
Income before income taxes 11,592 4,856 3,193
Income tax expense 11,479 12,014 5,705
Net income (loss) $ 113 $ (7,158) $ (2,512)
Net income (loss) per share:      
Basic earnings per share (in dollars per share) $ 0.00 $ (0.05) $ (0.02)
Diluted earnings per share (in dollars per share) $ 0.00 $ (0.05) $ (0.02)
Weighted-average shares used to compute net income (loss) per share:      
Shares used in computation of basic earnings per share (in shares) 167,460 158,124 158,124
Shares used in computation of diluted earnings per share (in shares) 168,667 158,124 158,124
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Consolidated Statements of Comprehensive (Loss) Income - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2021
Dec. 31, 2020
Dec. 31, 2019
Statement of Comprehensive Income [Abstract]      
Net income (loss) $ 113 $ (7,158) $ (2,512)
Other comprehensive (loss) income:      
Foreign currency translation adjustment (33,938) 42,414 (7,890)
Other comprehensive (loss) income (33,938) 42,414 (7,890)
Comprehensive (loss) income $ (33,825) $ 35,256 $ (10,402)
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Consolidated Statements of Stockholders' Equity - USD ($)
$ in Thousands
Total
Cumulative Effect, Period of Adoption, Adjustment
Common Stock
Parent Company Net Investment
Parent Company Net Investment
Cumulative Effect, Period of Adoption, Adjustment
Additional Paid-in Capital
Accumulated Other Comprehensive Income (Loss)
Retained Earnings
Balance at beginning of period (in shares) at Dec. 31, 2018     0          
Balance at beginning of period at Dec. 31, 2018 $ 551,747 $ 900 $ 0 $ 537,280 $ 900 $ 0 $ 14,467 $ 0
Increase (Decrease) in Stockholders' Equity [Roll Forward]                
Foreign currency translation adjustment (7,890)           (7,890)  
Net income (loss) (2,512)     (2,512)        
Net transfers from Parent 12,789     12,789        
Stock-based compensation 8,662     8,662        
Balance at end of period (in shares) at Dec. 31, 2019     0          
Balance at end 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   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   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              
Exercise of stock options (in shares) 39,480              
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          
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
v3.22.0.1
Consolidated Statements of Cash Flows - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2021
Dec. 31, 2020
Dec. 31, 2019
Cash flows from operating activities      
Net income (loss) $ 113 $ (7,158) $ (2,512)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:      
Depreciation and amortization 33,771 56,450 54,139
Provision for doubtful accounts 2,153 1,483 1,840
Stock-based compensation expense 29,430 21,053 8,662
Amortization of debt issuance costs 732 0 0
Loss on lease modification 271 0 0
Deferred taxes (1,913) (4,051) (4,733)
Operating lease right-of-use assets, net (741) 0 0
Loss (gain) on foreign currency exchange rates 1,433 1,707 (601)
Other non-cash expenses 0 0 (100)
Changes in operating assets and liabilities, net of assets acquired and liabilities assumed in business combinations:      
Accounts receivable (5,567) (3,458) (5,015)
Income taxes receivable (5,999) (233) (271)
Prepaid expenses and other assets (10,673) (581) (1,025)
Accounts payable (455) 3,273 (236)
Due to and from affiliates (8,302) 6,155 (3,753)
Accrued liabilities and other 11,923 7,970 (2,562)
Accrued related party interest payable (2,477) 1,540 (18,550)
Income taxes payable 158 389 752
Deferred revenue 1,253 1,126 (495)
Other long-term assets 231 0 0
Other long-term liabilities 0 0 0
Net cash provided by operating activities 45,341 85,665 25,540
Cash flows from investing activities      
Purchases of property and equipment (30,664) (11,919) (5,793)
Purchases of intangible assets (4,169) (4,221) (2,422)
Acquisitions, net of cash acquired 0 0 (14,823)
Net cash used in investing activities (34,833) (16,140) (23,038)
Cash flows from financing activities      
Proceeds from Private Placement, net of $9,000 of issuance costs 216,000 0 0
Distribution of net proceeds from Private Placement to Parent (216,000) 0 0
Payments of tax withholding obligations related to restricted stock (2,230) 0 0
Exercise of stock options 23 0 0
Proceeds from credit agreement 350,000 0 0
Repayments of borrowings due to affiliates (372,650) (21,750) (55,600)
Repayments of borrowings from Credit Agreement (875) 0 0
Net transfers (to) from Parent (6,515) 11,192 12,789
Payment of debt issuance costs (10,075) 0 0
Net cash used in financing activities (42,322) (10,558) (42,811)
Effect of exchange rate changes on cash and cash equivalents (1,240) 1,475 1,790
Net (decrease) increase in cash and cash equivalents (33,054) 60,442 (38,519)
Cash and cash equivalents      
Beginning of period 99,790 39,348 77,867
End of period 66,736 99,790 39,348
Supplemental disclosure of cash flow information      
Cash paid for interest 20,387 26,602 52,681
Cash paid for income taxes 19,029 14,205 8,941
Supplemental disclosure of non-cash activities:      
Change in purchases of property, equipment and leasehold improvements included in accounts payable and accrued expenses 1,138 2,653 624
Right-of-use assets obtained in exchange for operating lease liabilities $ 31,079 $ 5,765 $ 2,278
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Consolidated Statements of Cash Flows (Parenthetical)
$ in Thousands
 12 Months Ended
Dec. 31, 2021
USD ($)
Statement of Cash Flows [Abstract]  
Stock issuance costs $ 9,000
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Organization and Nature of Operations
 12 Months Ended
Dec. 31, 2021
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”).
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Summary of Significant Accounting Policies
 12 Months Ended
Dec. 31, 2021
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 11. 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 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).
The Consolidated Financial Statements include all assets and liabilities that resided in N-able legal entities. Assets and liabilities in shared entities as of December 31, 2020 were included in the stand-alone financial statements to the extent the asset or liability is primarily used by N-able. If N-able was not the primary user of the asset or liability, it was excluded entirely from the Consolidated Financial Statements. SolarWinds used a legal entity approach to cash management and financing its operations. Accordingly, cash and cash equivalents, related party debt and related interest expense have been attributed to N‑able in the Consolidated Financial Statements only to the extent such items had been historically legally entitled within N-able legal entities. Any such items which existed in other entities, whether shared or otherwise, were outside of the control of the N-able business and have been excluded from the Consolidated Financial Statements.
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 11. 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 and in the Consolidated Balance Sheets as Parent company net investment. Other transactions between N-able legal entities and other SolarWinds legal entities, to the extent such transactions have not been settled in cash as of the period-end date, are reflected in the Consolidated Balance Sheets as due to affiliates, and due from affiliates which is included within accounts receivable. See Note 11. Relationship with Parent and Related Entities for further details regarding the balances in due to and due from affiliates as of December 31, 2021 and 2020.
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 financial position, 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 continue to be provided by SolarWinds under a Transition Services Agreement. Additionally, we provide some services to SolarWinds under such Transition Services Agreement. See Note 11. Relationship with Parent and Related Entities for further details regarding allocated shared costs with SolarWinds.
Following the Separation from SolarWinds
Our financial statements for the period from July 20, 2021 through December 31, 2021 are Consolidated Financial Statements based on our reported results as a standalone company. We prepared our Consolidated Financial Statements in conformity with United States of America generally accepted accounting principles ("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, 2021 and 2020 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 (losses) and gains were $(1.8) million, $(0.8) million, and $0.5 million for the years ended December 31, 2021, 2020 and 2019, respectively.
Cash and cash equivalents
All cash and cash equivalents included in the Consolidated Financial Statements are legally owned by N-able legal entities and, for periods prior to the Separation and Distribution, were not subject to a pooling arrangement with SolarWinds. We consider highly liquid investments with a maturity of three months or less when purchased to be cash equivalents.
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 presented in N-able’s Consolidated Balance Sheets represents the historical goodwill balances in the N‑able legal entities. 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 balance is primarily attributed to the take private transaction of SolarWinds and the acquisition of LOGICnow in 2016. Prior to the Separation and Distribution, the N-able legal entities were managed as a reporting unit of SolarWinds. 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 2021, 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, 2021, 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 the acquisition of LOGICnow in 2016. 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, 2021 and 2020, 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 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. We held no financial instruments as of December 31, 2021 and 2020. As of December 31, 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 7. Debt for additional information regarding our debt. Our related party debt with SolarWinds Holdings, Inc. prior to the Separation and Distribution was not carried at fair value. See Note 11. Relationship with Parent and Related Entities for further details regarding our related party 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 $1.7 million, $0.8 million and $1.2 million for the years ended December 31, 2021, 2020 and 2019, 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.
We had $5.1 million, $4.9 million and $3.1 million of internal-use software costs, net capitalized for the years ended December 31, 2021, 2020 and 2019, respectively. Amortization expense of internal-use software costs was $2.2 million, $1.8 million and $1.1 million for the years ended December 31, 2021, 2020 and 2019, 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 $0.7 million for the year ended December 31, 2021. See Note 7. 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 13. 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,
202120202019
(in thousands)
Subscription revenue$336,845 $292,027 $251,695 
Other revenue9,611 10,844 11,823 
Total subscription and other revenue$346,456 $302,871 $263,518 
•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, 2021, 2020 and 2019, respectively, we recognized the following revenue from subscription and other services at a point in time and over time:
Year Ended December 31,
202120202019
(in thousands)
Revenue recognized at a point in time$62,204 $57,943 $49,510 
Revenue recognized over time284,252 244,928 214,008 
Total revenue recognized$346,456 $302,871 $263,518 
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, 2019$8,172 
Deferred revenue recognized(13,619)
Additional amounts deferred15,117 
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 

We expect to recognize revenue related to these remaining performance obligations as of December 31, 2021 as follows:
Revenue Recognition Expected by Period
TotalLess than 1
year		1-3 yearsMore than
3 years
(in thousands)
Expected recognition of deferred revenue$10,898 $10,675 $223 $— 

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 $5.8 million, $24.3 million and $24.1 million for the years ended December 31, 2021, 2020 and 2019, 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, 2021, 2020, and 2019:
Year Ended December 31,
202120202019
(in thousands)
Advertising expense$18,534 $13,903 $12,774 

Leases
We lease facilities worldwide and certain equipment under non-cancellable lease agreements. During 2019, we adopted the new lease accounting guidance, FASB Accounting Standard 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, 2021 and 2020, respectively. See Note 5. 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 12. 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, 2021, 2020 and 2019, no distributor, reseller or direct customer represented a significant concentration of our revenue.
At December 31, 2021 and 2020, 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, 2019$6,577 $6,577 
Other comprehensive gain before reclassification42,414 42,414 
Net current period other comprehensive income42,414 42,414 
Balance as of December 31, 202048,991 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, 2021$15,053 $15,053 
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. See Note 8. Stock-Based Compensation and Note 11. 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.
We estimated the fair value for stock options 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

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 based 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 granted 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 8. Stock-Based Compensation for additional information.
The impact to our income (loss) before income taxes due to stock-based compensation expense and the related income tax benefits were as follows:
Year Ended December 31,
202120202019
(in thousands)
Impact to income (loss) before income taxes due to stock-based compensation$29,430 $21,053 $8,662 
Income tax benefit related to stock-based compensation310 241 161 
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 Adopted Accounting Pronouncements 
Goodwill Impairment Testing
On January 1, 2020 we adopted the Financial Accounting Standards Board, or FASB, Accounting Standards Codification ("ASC") No. 2017-04 "Intangibles-Goodwill and Other," or ASC 350, which simplifies the accounting for goodwill impairment. The new guidance removes step two of the two-step quantitative goodwill impairment test, which required a hypothetical purchase price allocation. The standard did not have a material impact on our Consolidated Financial Statements for the year ended December 31, 2020.
Revenue
On January 1, 2019 we adopted the FASB Accounting Standards Codification, or ASC, No. 2014-09 “Revenue from Contracts with Customers” ("ASC 606"), which replaced all existing revenue guidance under ASC 605 “Revenue Recognition,” including prescriptive industry-specific guidance ("ASC 605"). This standard’s core principle is that an entity will recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to
which the entity expects to be entitled in exchange for those goods or services. We adopted ASC 606 using the modified-retrospective method. Results for reporting periods beginning after January 1, 2019 are presented in compliance with the new revenue recognition standard ASC 606. Historical financial results for reporting periods prior to 2019 are presented in conformity with amounts previously disclosed under the prior revenue recognition standard, ASC 605.
The cumulative effect of the changes made to our Consolidated Balance Sheets as of January 1, 2019 for the adoption of ASC 606 was approximately $0.9 million and was recorded as an adjustment to Parent company net investment as of the adoption date. This adjustment includes a $1.2 million decrease in historical deferred revenue, primarily from arrangements involving subscription-based term licenses that will never be recognized as revenue, offset by a $0.3 million increase in deferred income tax liabilities. The adoption of ASC 606 did not impact our total operating cash flows.
The impact of the adoption of ASC 606 on our Consolidated Statements of Operations for the year ended December 31, 2019 was immaterial.
Leases
As SolarWinds no longer qualified to be an emerging growth company as of December 31, 2019, we retroactively adopted the FASB ASC No. 2016-02 “Leases” ("ASC 842") as of January 1, 2019 using the optional transition method in which an entity can apply the new standard at the adoption date without adjusting comparative prior periods.
The new lease accounting standard replaces existing lease accounting standards and expands disclosure requirements. The adoption of the new standard resulted in leases currently designated as operating leases being reported on our Consolidated Balance Sheets at their net present value. We elected the package of practical expedients permitted under the transition guidance within the new standard, which, among other things, allowed us to carry forward our historical lease classification and not reassess whether any expired or existing contracts are or contain leases. Additionally, we elected to not separate lease and non-lease components for certain classes of assets and we excluded all the leases with original terms of one year or less.
As of January 1, 2019, we recorded $10.1 million in operating lease right-of-use assets, $2.3 million in current operating lease liabilities and $11.5 million in non-current operating lease liabilities due to the adoption of ASC 842. The standard did not have a material impact to our Consolidated Statements of Operations or Consolidated Statements of Cash Flows. See Note 5. Leases for additional information.
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Goodwill and Intangible Assets
 12 Months Ended
Dec. 31, 2021
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, 2021 and 2020:
(in thousands)
Balance as of December 31, 2019$836,643 
Foreign currency translation37,440 
Balance as of December 31, 2020874,083 
Foreign currency translation(33,160)
Balance as of December 31, 2021$840,923 
Intangible Assets
Intangible assets consisted of the following as of December 31, 2021 and 2020:
December 31, 2021December 31, 2020
Gross
Carrying
Amount		Accumulated
Amortization		NetGross
Carrying
Amount		Accumulated
Amortization		Net
(in thousands)
Developed product technologies$35,210 $(33,542)$1,668 $127,057 $(119,392)$7,665 
Customer relationships95,010 (88,612)6,398 131,045 (111,336)19,709 
Trademarks1,136 (1,136)— 1,162 (1,162)— 
Total intangible assets$131,356 $(123,290)$8,066 $259,264 $(231,890)$27,374 
Intangible asset amortization expense was as follows:
Year Ended December 31,
202120202019
(in thousands)
Intangible asset amortization expense$19,065 $48,105 $47,289 
As of December 31, 2021, we estimate aggregate intangible asset amortization expense to be as follows:
Estimated Amortization
(in thousands)
2022$7,512 
2023554 
Total amortization expense$8,066 
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.
v3.22.0.1
Property and Equipment
 12 Months Ended
Dec. 31, 2021
Property, Plant and Equipment [Abstract]  
Property and Equipment Property and Equipment
Property and equipment, net, including software, consisted of the following:
December 31,
20212020
(in thousands)
Servers, equipment and computers$32,524 $29,025 
Furniture and fixtures6,409 3,474 
Software602 1,022 
Leasehold improvements21,408 8,740 
$60,943 $42,261 
Less: Accumulated depreciation and amortization(22,195)(22,671)
Property and equipment, net$38,748 $19,590 
Depreciation and amortization expense on property and equipment was as follows for the years ended December 31, 2021, 2020, and 2019:
Year Ended December 31,
202120202019
(in thousands)
Depreciation and amortization$12,226 $6,581 $5,783 
v3.22.0.1
Leases
 12 Months Ended
Dec. 31, 2021
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; and Vienna, Austria. In addition, we lease certain information technology, office and other equipment. Our leases are all classified as operating and generally have remaining terms of less than one year to 10.4 years.
The components of operating lease costs for the years ended December 31, 2021 and 2020 were as follows:
Year Ended December 31,
20212020
(in thousands)
Operating lease costs$5,444 $4,370 
Variable lease costs(1)
1,046 976 
Short-term lease costs476 39 
Total lease costs$6,966 $5,385 
____________
(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, 2021 were as follows:
December 31, 2021
(in thousands)
2022$7,773 
20238,623 
20248,274 
20256,844 
20266,887 
Thereafter22,455 
Total minimum lease payments60,856 
Less: imputed interest(18,204)
Present value of operating lease liabilities$42,652 
As of December 31, 2021, the weighted-average remaining lease term of our operating leases was 8.4 years and the weighted-average discount rate used in the calculation of our lease liabilities was 4.1%.
v3.22.0.1
Accrued Liabilities and Other
 12 Months Ended
Dec. 31, 2021
Payables and Accruals [Abstract]  
Accrued Liabilities and Other Accrued Liabilities and Other
Accrued liabilities and other current liabilities were as follows:
December 31,
20212020
(in thousands)
Payroll-related accruals$16,657 $14,305 
Value-added and other tax1,805 1,553 
Purchasing accruals3,593 3,183 
Accrued royalties1,938 1,130 
Accrued other liabilities6,951 1,805 
Total accrued liabilities and other$30,944 $21,976 
v3.22.0.1
Debt
 12 Months Ended
Dec. 31, 2021
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, 2021:
As of December 31,
2021
Amount OutstandingEffective Rate
(in thousands, except interest rates)
Term loan facility$349,125 3.50 %
Revolving credit facility— — %
Total principal amount349,125 
Unamortized discount and debt issuance costs(10,246)
Total debt, net338,879 
Less: Current debt obligation(3,500)
Long-term debt, net of current portion$335,379 

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, 2021, 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, 2021:
(in thousands)
2022$3,500 
20233,500 
20243,500 
20253,500 
20263,500 
Thereafter331,625 
Total minimum principal payments$349,125 
v3.22.0.1
Stock-Based Compensation
 12 Months Ended
Dec. 31, 2021
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.
A total of 18,000,000 shares of our common stock has been initially authorized and reserved for issuance under the 2021 Plan, plus a number of shares of our common stock sufficient to cover any awards relating to SolarWinds common stock that were converted into awards relating to our common stock upon the completion of the distribution. This reserve will automatically increase on January 1, 2022, and each subsequent anniversary through and including January 1, 2031, by an amount equal to the smaller of (a) 5% of the number of shares of our common stock issued and outstanding on the immediately preceding December 31 and (b) an amount determined by our board of directors.
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, 2021, common stock-based incentive awards of 5,999,110 shares were outstanding under the 2021 Plan, consisting of 169,168 stock options, 75,815 shares of restricted common stock, 4,764,213 shares of restricted stock units, and 989,914 shares of performance stock units. For the year ended December 31, 2021, we repurchased 17,562 shares of vested and unvested restricted common stock upon employee terminations. As of December 31, 2021, 11,594,899 shares were reserved for future grants under the 2021 Plan.
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 11. 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, 2021, 2020 and 2019 was $29.4 million, $21.1 million and $8.7 million, respectively, as summarized below:
Year Ended December 31,
202120202019
(in thousands)
Cost of revenue$1,010 $670 $499 
Sales and marketing8,761 4,409 3,543 
Research and development4,659 3,189 2,275 
General and administrative15,000 12,785 2,345 
Total stock-based compensation expense$29,430 $21,053 $8,662 
Stock Option Awards
Stock option grant activity under the 2021 Plan was as follows during the year ended December 31, 2021:
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, 2020
— $— 
Options granted through the Conversion224,638 1.20 
Options exercised(39,480)0.58 
Options forfeited(15,990)1.46 
Options expired — — 
Outstanding balances as of December 31, 2021
169,168 $1.32 
Options exercisable as of December 31, 2021
138,436 $0.97 $1,402 5.4
Options vested and expected to vest as of December 31, 2021
169,168 $1.32 $1,655 5.5
Additional information regarding stock option grant activity during the year ended December 31, 2021 is as follows:
Year Ended December 31,
2021
(in thousands, except per share amounts)
Weighted-average grant date fair value per share of options granted during the period$1.62 
Aggregate intrinsic value of options exercised during the period413 
Aggregate fair value of options vested during the period157 
The unrecognized stock-based compensation expense related to unvested stock options and subject to recognition in future periods was approximately $0.1 million as of December 31, 2021. We expect to recognize this expense over weighted average periods of approximately 0.8 years as of December 31, 2021.
Restricted Stock
The following table summarizes information about restricted stock activity subject to vesting under the 2021 Plan during the year ended December 31, 2021:
Number of
Shares
Outstanding
Unvested balances as of December 31, 2020
— 
Restricted stock granted and issued through the Conversion91,477 
Restricted stock vested (11,300)
Restricted stock repurchased - unvested shares (4,362)
Unvested balances as of December 31, 2021
75,815 
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 $1.01 per share. The aggregate intrinsic value of restricted stock vested during the year ended December 31, 2021 was $0.1 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, 2021 and 2020, respectively.
Restricted Stock Units
The following table summarizes information about restricted stock unit activity under the 2021 Plan during the year ended December 31, 2021:
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, 2020
— $— 
Restricted stock units granted through the Conversion3,540,676 12.54 
Restricted stock units granted2,207,824 13.95 
Restricted stock units vested (525,806)13.46 
Restricted stock units forfeited (458,481)13.11 
Unvested balances as of December 31, 2021
4,764,213 $13.03 $52,883 1.3
The total fair value of restricted stock units vested during the year ended December 31, 2021 was $6.8 million. The total unrecognized stock-based compensation expense related to unvested restricted stock units and subject to recognition in future
periods is $49.9 million as of December 31, 2021 and we expect to recognize this expense over a weighted-average period of 2.7 years.
Performance Stock Units
The following table summarizes information about performance stock unit activity under the 2021 Plan during the year ended December 31, 2021:
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, 2020
— $— 
Performance stock units granted1,044,908 12.50 
Performance stock units vested — — 
Performance stock units forfeited(54,994)12.50 
Unvested balances as of December 31, 2021
989,914 $12.50 $10,988 1.1
The total unrecognized stock-based compensation expense related to unvested performance stock units and subject to recognition in future periods is $7.3 million as of December 31, 2021 and we expect to recognize this expense over a weighted-average period of 1.1 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.
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 $0.1 million for the year ended December 31, 2021.
v3.22.0.1
Earnings Per Share
 12 Months Ended
Dec. 31, 2021
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,
202120202019
(in thousands)
Basic earnings (loss) per share:
Numerator:
Net income (loss)$113 $(7,158)$(2,512)
Net income (loss) available to common stockholders$113 $(7,158)$(2,512)
Denominator:
Weighted-average common shares outstanding used in computing basic earnings (loss) per share167,460 158,124 158,124 
Basic earnings (loss) per share$0.00 $(0.05)$(0.02)
Diluted earnings (loss) per share:
Numerator:
Net income (loss) available to common stockholders$113 $(7,158)$(2,512)
Denominator:
Weighted-average shares used in computing basic earnings (loss) per share167,460 158,124 158,124 
Add dilutive impact of employee equity plans1,207 — — 
Weighted-average shares used in computing diluted earnings (loss) per share168,667 158,124 158,124 
Diluted earnings (loss) per share$0.00 $(0.05)$(0.02)
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,
202120202019
(in thousands)
Restricted stock units203 — — 
Total anti-dilutive shares203 — — 
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.
v3.22.0.1
Employee Benefit Plans
 12 Months Ended
Dec. 31, 2021
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,
202120202019
(in thousands)
Employee benefit plan expense$1,440 $1,203 $1,117 
v3.22.0.1
Relationship with Parent and Related Entities
 12 Months Ended
Dec. 31, 2021
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, 2020, and 2019:
Year Ended December 31,
202120202019
(in thousands)
General and administrative$20,357 $31,357 $17,394 
Research and development253 1,672 1,224 
Sales and marketing297 1,969 1,128 
Cost of revenue140 149 99 
Total$21,047 $35,147 $19,845 

Due to and from Affiliates
Due to affiliates within long-term liabilities in the Consolidated Balance Sheets represents N-able's related party debt due to SolarWinds Holdings, Inc. of $372.7 million as of December 31, 2020. In connection with the Separation and Distribution, we repaid this related party debt and we had no remaining related party debt due to SolarWinds Holdings, Inc. as of December 31, 2021.
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 London Interbank Offered Rate ("LIBOR") for a three-month interest period plus 9.8%. Prepayments of borrowings under the loan are permitted. As of December 31, 2020, $228.5 million in borrowings were outstanding. In connection with the Separation and Distribution, we repaid this debt and no borrowings were outstanding as of December 31, 2021.
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. As of December 31, 2020, $144.2 million in borrowings were outstanding. In connection with the Separation and Distribution, we repaid this debt and no borrowings were outstanding as of December 31, 2021.
Interest expense related to the loan agreements with SolarWinds Holdings, Inc. was $13.8 million, $28.1 million and $34.1 million for the years ended December 31, 2021, 2020 and 2019, 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 and $8.0 million of intercompany trade payables as of December 31, 2020. Due from affiliates within accounts receivable comprises $0.1 million of receivables due from SolarWinds as of December 31, 2021 and $0.3 million of intercompany trade receivables as of December 31, 2020.
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, $20.6 million and $8.4 million for the years ended December 31, 2021, 2020 and 2019, respectively. 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. The modification of these outstanding 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 outstanding awards and over the remaining vesting term for all unvested awards. For the year ended December 31, 2021, we recognized $2.7 million 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.
Employee Stock Purchase Plan
Prior to the Separation and Distribution, our eligible employees participated in Parent’s 2018 Employee Stock Purchase Plan (the "ESPP"). The ESPP permitted eligible participants to purchase SolarWinds' shares at a discount through regular payroll deductions of up to 20% of their eligible compensation during the offering period. The ESPP was typically implemented through consecutive six-month offering periods. The purchase price of the shares was 85% of the lesser of the fair market value of the closing price per share on the first day of the offering period and the fair market value of the closing price per share on the last day of the offering period. No participant could purchase more than $25,000 worth of common stock per calendar year.
Costs charged to us related to our employees’ participation in Parent’s ESPP were immaterial for the years ended December 31, 2021, 2020 and 2019, respectively.
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, have provided 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 will terminate on the expiration of the term of the last service provided under it, which N-able anticipates to be on or around December 31, 2022. We incurred $1.7 million of costs under the Transition Services Agreement during the year ended December 31, 2021.
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 year ended December 31, 2021.
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 $0.5 million of revenue and incurred $0.1 million of costs, respectively, under the Software OEM Agreements during the year ended December 31, 2021.
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 year ended December 31, 2021.
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 year ended December 31, 2021.
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 year ended December 31, 2021.
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 of revenue and incurred $0.7 million of costs, respectively, under the Software Cross License Agreement during the year ended December 31, 2021.
v3.22.0.1
Income Taxes
 12 Months Ended
Dec. 31, 2021
Income Tax Disclosure [Abstract]  
Income Taxes Income Taxes
U.S. and international components of income before income taxes were as follows:
Year Ended December 31,
202120202019
(in thousands)
U.S.$(37,028)$(46,444)$(23,463)
International48,620 51,300 26,656 
Income before income taxes$11,592 $4,856 $3,193 
Income tax expense was composed of the following:
Year Ended December 31,
202120202019
(in thousands)
Current:
Federal$— $— $— 
State2 — — 
International13,324 16,065 10,438 
13,326 16,065 10,438 
Deferred:
Federal— 86 (64)
State— 5 (133)
International(1,847)(4,142)(4,536)
(1,847)(4,051)(4,733)
Income tax expense$11,479 $12,014 $5,705 
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,
202120202019
(in thousands)
Expense (benefit) derived by applying the federal statutory income tax rate to income before income taxes$2,434 $1,020 $670 
State taxes, net of federal benefit(105)(185)(93)
Permanent items— — 1 
Research and experimentation tax credits— (786)(422)
Withholding tax— (44)112 
Transaction costs1,999 — — 
Pre-Separation and Distribution net operating losses and other deferred tax assets
21,130 — — 
Valuation allowance for deferred tax assets(15,383)11,680 5,638 
Stock-based compensation1,258 (333)(636)
Meals and entertainment75 15 130 
Acquisition costs— 35 297 
Effect of foreign operations(88)612 8 
Other$159 $— $— 
$11,479 $12,014 $5,705 
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 valuation allowance recognized on the deferred tax assets in the U.S., non-deductible stock based compensation and costs associated with the Separation and Distribution.
The effective tax rate for the year ended December 31, 2020 increased from the year ended December 31, 2019 primarily due to the valuation allowance recognized on the deferred tax assets in the U.S., reduced benefit of stock-based compensation and effect of foreign operations, partially offset by research and experimentation tax credits.
The components of the net deferred tax amounts recognized in the accompanying Consolidated Balance Sheets were:
December 31,
20212020
(in thousands)
Deferred tax assets:
Allowance for doubtful accounts$465 $262 
Accrued expenses99 209 
Net operating loss1,573 17,935 
Research and experimentation credits— 1,349 
Stock-based compensation2,967 2,446 
Interest1,195 1,072 
Deferred revenue62 91 
Unrealized exchange gain— 1 
Leases726 1,560 
Other credits14 51 
Total deferred tax assets7,101 24,976 
Valuation allowance(2,873)(18,256)
Deferred tax assets, net of valuation allowance4,228 6,720 
Deferred tax liabilities:
Property and equipment1,787 846 
Prepaid expenses646 574 
Leases894 1,686 
Intangibles1,852 6,478 
Total deferred tax liabilities5,179 9,584 
Net deferred tax asset (liability)$(951)$(2,864)
As of December 31, 2021, we had net operating loss carry forwards for U.S. federal income tax purposes of approximately $5.8 million. 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, 2021 and 2020, we had net operating loss carry forwards for certain state income tax purposes of approximately $3.9 million and $3.5 million, respectively. 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, 2020, we had foreign net operating loss carry forwards of approximately $14.8 million, which were available to offset future foreign taxable income and begin 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, 2021 and 2020, we have recorded a valuation allowance of $2.9 million and $18.3 million, respectively, in the U.S. The valuation allowance is primarily related to the net operating loss.
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, 2021, 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, 2021, 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,
202120202019
(in thousands)
Balance, beginning of year$87 $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 $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 year 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.
v3.22.0.1
Commitments and Contingencies
 12 Months Ended
Dec. 31, 2021
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.
v3.22.0.1
Operating Segments and Geographic Information
 12 Months Ended
Dec. 31, 2021
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,
202120202019
(in thousands)
Revenue
United States, country of domicile$160,833 $144,776 $125,682 
United Kingdom38,526 31,649 28,422 
All other international147,097 126,446 109,414 
Total revenue$346,456 $302,871 $263,518 
December 31,
20212020
(in thousands)
Long-lived assets, net
United States, country of domicile$20,130 $4,774 
Switzerland11,293 10,202 
Canada895 1,126 
All other international6,430 3,488 
Total long-lived assets, net$38,748 $19,590 
v3.22.0.1
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS
 12 Months Ended
Dec. 31, 2021
SEC Schedule, 12-09, Valuation and Qualifying Accounts [Abstract]  
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS
Beginning BalanceAdditions
(Charge to Expense)		Deductions
(Write-offs, net of Recoveries)		Ending Balance
(in thousands)
Allowance for doubtful accounts, customers and other:
Year ended December 31, 2019
$1,163 $1,840 $(1,853)$1,150 
Year ended December 31, 2020
1,150 1,483 (1,882)751 
Year ended December 31, 2021
751 3,260 (2,358)1,653 
Tax valuation allowances:
Year ended December 31, 2019
$938 $5,638 $— $6,576 
Year ended December 31, 2020
6,576 11,680 — 18,256 
Year ended December 31, 2021
18,256 — (15,383)2,873 
v3.22.0.1
Summary of Significant Accounting Policies (Policies)
 12 Months Ended
Dec. 31, 2021
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 11. 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 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).
The Consolidated Financial Statements include all assets and liabilities that resided in N-able legal entities. Assets and liabilities in shared entities as of December 31, 2020 were included in the stand-alone financial statements to the extent the asset or liability is primarily used by N-able. If N-able was not the primary user of the asset or liability, it was excluded entirely from the Consolidated Financial Statements. SolarWinds used a legal entity approach to cash management and financing its operations. Accordingly, cash and cash equivalents, related party debt and related interest expense have been attributed to N‑able in the Consolidated Financial Statements only to the extent such items had been historically legally entitled within N-able legal entities. Any such items which existed in other entities, whether shared or otherwise, were outside of the control of the N-able business and have been excluded from the Consolidated Financial Statements.
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 11. 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 and in the Consolidated Balance Sheets as Parent company net investment. Other transactions between N-able legal entities and other SolarWinds legal entities, to the extent such transactions have not been settled in cash as of the period-end date, are reflected in the Consolidated Balance Sheets as due to affiliates, and due from affiliates which is included within accounts receivable. See Note 11. Relationship with Parent and Related Entities for further details regarding the balances in due to and due from affiliates as of December 31, 2021 and 2020.
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 financial position, 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 continue to be provided by SolarWinds under a Transition Services Agreement. Additionally, we provide some services to SolarWinds under such Transition Services Agreement. See Note 11. Relationship with Parent and Related Entities for further details regarding allocated shared costs with SolarWinds.
Following the Separation from SolarWinds
Our financial statements for the period from July 20, 2021 through December 31, 2021 are Consolidated Financial Statements based on our reported results as a standalone company. We prepared our Consolidated Financial Statements in conformity with United States of America generally accepted accounting principles ("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.
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, 2021 and 2020 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 (losses) and gains were $(1.8) million, $(0.8) million, and $0.5 million for the years ended December 31, 2021, 2020 and 2019, respectively.
Cash and cash equivalents All cash and cash equivalents included in the Consolidated Financial Statements are legally owned by N-able legal entities and, for periods prior to the Separation and Distribution, were not subject to a pooling arrangement with SolarWinds. We consider highly liquid investments with a maturity of three months or less when purchased to be cash equivalents.
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 presented in N-able’s Consolidated Balance Sheets represents the historical goodwill balances in the N‑able legal entities. 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 balance is primarily attributed to the take private transaction of SolarWinds and the acquisition of LOGICnow in 2016. Prior to the Separation and Distribution, the N-able legal entities were managed as a reporting unit of SolarWinds. 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 2021, 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, 2021, 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 the acquisition of LOGICnow in 2016. 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, 2021 and 2020, 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 the acquisition of LOGICnow in 2016. 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, 2021 and 2020, 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 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. We held no financial instruments as of December 31, 2021 and 2020. As of December 31, 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 7. Debt for additional information regarding our debt. Our related party debt with SolarWinds Holdings, Inc. prior to the Separation and Distribution was not carried at fair value. See Note 11. Relationship with Parent and Related Entities for further details regarding our related party 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 $1.7 million, $0.8 million and $1.2 million for the years ended December 31, 2021, 2020 and 2019, respectively.
Property and Equipment 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.
We had $5.1 million, $4.9 million and $3.1 million of internal-use software costs, net capitalized for the years ended December 31, 2021, 2020 and 2019, respectively. Amortization expense of internal-use software costs was $2.2 million, $1.8 million and $1.1 million for the years ended December 31, 2021, 2020 and 2019, 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 $0.7 million for the year ended December 31, 2021. See Note 7. 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 13. 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 $5.8 million, $24.3 million and $24.1 million for the years ended December 31, 2021, 2020 and 2019, 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 Standard 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, 2021 and 2020, respectively. See Note 5. 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 12. 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, 2021, 2020 and 2019, no distributor, reseller or direct customer represented a significant concentration of our revenue.
At December 31, 2021 and 2020, 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.
Share-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. See Note 8. Stock-Based Compensation and Note 11. 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.
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 based 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 granted 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 Adopted Accounting Pronouncements
Goodwill Impairment Testing
On January 1, 2020 we adopted the Financial Accounting Standards Board, or FASB, Accounting Standards Codification ("ASC") No. 2017-04 "Intangibles-Goodwill and Other," or ASC 350, which simplifies the accounting for goodwill impairment. The new guidance removes step two of the two-step quantitative goodwill impairment test, which required a hypothetical purchase price allocation. The standard did not have a material impact on our Consolidated Financial Statements for the year ended December 31, 2020.
Revenue
On January 1, 2019 we adopted the FASB Accounting Standards Codification, or ASC, No. 2014-09 “Revenue from Contracts with Customers” ("ASC 606"), which replaced all existing revenue guidance under ASC 605 “Revenue Recognition,” including prescriptive industry-specific guidance ("ASC 605"). This standard’s core principle is that an entity will recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to
which the entity expects to be entitled in exchange for those goods or services. We adopted ASC 606 using the modified-retrospective method. Results for reporting periods beginning after January 1, 2019 are presented in compliance with the new revenue recognition standard ASC 606. Historical financial results for reporting periods prior to 2019 are presented in conformity with amounts previously disclosed under the prior revenue recognition standard, ASC 605.
The cumulative effect of the changes made to our Consolidated Balance Sheets as of January 1, 2019 for the adoption of ASC 606 was approximately $0.9 million and was recorded as an adjustment to Parent company net investment as of the adoption date. This adjustment includes a $1.2 million decrease in historical deferred revenue, primarily from arrangements involving subscription-based term licenses that will never be recognized as revenue, offset by a $0.3 million increase in deferred income tax liabilities. The adoption of ASC 606 did not impact our total operating cash flows.
The impact of the adoption of ASC 606 on our Consolidated Statements of Operations for the year ended December 31, 2019 was immaterial.
Leases
As SolarWinds no longer qualified to be an emerging growth company as of December 31, 2019, we retroactively adopted the FASB ASC No. 2016-02 “Leases” ("ASC 842") as of January 1, 2019 using the optional transition method in which an entity can apply the new standard at the adoption date without adjusting comparative prior periods.
The new lease accounting standard replaces existing lease accounting standards and expands disclosure requirements. The adoption of the new standard resulted in leases currently designated as operating leases being reported on our Consolidated Balance Sheets at their net present value. We elected the package of practical expedients permitted under the transition guidance within the new standard, which, among other things, allowed us to carry forward our historical lease classification and not reassess whether any expired or existing contracts are or contain leases. Additionally, we elected to not separate lease and non-lease components for certain classes of assets and we excluded all the leases with original terms of one year or less.
As of January 1, 2019, we recorded $10.1 million in operating lease right-of-use assets, $2.3 million in current operating lease liabilities and $11.5 million in non-current operating lease liabilities due to the adoption of ASC 842. The standard did not have a material impact to our Consolidated Statements of Operations or Consolidated Statements of Cash Flows. See Note 5. Leases for additional information.
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Summary of Significant Accounting Policies (Tables)
 12 Months Ended
Dec. 31, 2021
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,
20212020
(in thousands)
Servers, equipment and computers$32,524 $29,025 
Furniture and fixtures6,409 3,474 
Software602 1,022 
Leasehold improvements21,408 8,740 
$60,943 $42,261 
Less: Accumulated depreciation and amortization(22,195)(22,671)
Property and equipment, net$38,748 $19,590 
Depreciation and amortization expense on property and equipment was as follows for the years ended December 31, 2021, 2020, and 2019:
Year Ended December 31,
202120202019
(in thousands)
Depreciation and amortization$12,226 $6,581 $5,783 
Disaggregation of Revenue
Our revenue consists of the following:
Year Ended December 31,
202120202019
(in thousands)
Subscription revenue$336,845 $292,027 $251,695 
Other revenue9,611 10,844 11,823 
Total subscription and other revenue$346,456 $302,871 $263,518 
During the years ended December 31, 2021, 2020 and 2019, respectively, we recognized the following revenue from subscription and other services at a point in time and over time:
Year Ended December 31,
202120202019
(in thousands)
Revenue recognized at a point in time$62,204 $57,943 $49,510 
Revenue recognized over time284,252 244,928 214,008 
Total revenue recognized$346,456 $302,871 $263,518 
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, 2019$8,172 
Deferred revenue recognized(13,619)
Additional amounts deferred15,117 
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 
Remaining Performance Obligations for Revenue Recognition
We expect to recognize revenue related to these remaining performance obligations as of December 31, 2021 as follows:
Revenue Recognition Expected by Period
TotalLess than 1
year		1-3 yearsMore than
3 years
(in thousands)
Expected recognition of deferred revenue$10,898 $10,675 $223 $— 
Schedule of Advertising Expense
Advertising expense was as follows for the years ended December 31, 2021, 2020, and 2019:
Year Ended December 31,
202120202019
(in thousands)
Advertising expense$18,534 $13,903 $12,774 
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, 2019$6,577 $6,577 
Other comprehensive gain before reclassification42,414 42,414 
Net current period other comprehensive income42,414 42,414 
Balance as of December 31, 202048,991 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, 2021$15,053 $15,053 
Schedule of Stock Option Valuation Assumptions
We estimated the fair value for stock options 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
Schedule of Stock-Based Compensation Expense
The impact to our income (loss) before income taxes due to stock-based compensation expense and the related income tax benefits were as follows:
Year Ended December 31,
202120202019
(in thousands)
Impact to income (loss) before income taxes due to stock-based compensation$29,430 $21,053 $8,662 
Income tax benefit related to stock-based compensation310 241 161 
Stock-based compensation expense for the years ended December 31, 2021, 2020 and 2019 was $29.4 million, $21.1 million and $8.7 million, respectively, as summarized below:
Year Ended December 31,
202120202019
(in thousands)
Cost of revenue$1,010 $670 $499 
Sales and marketing8,761 4,409 3,543 
Research and development4,659 3,189 2,275 
General and administrative15,000 12,785 2,345 
Total stock-based compensation expense$29,430 $21,053 $8,662 
v3.22.0.1
Goodwill and Intangible Assets (Tables)
 12 Months Ended
Dec. 31, 2021
Goodwill and Intangible Assets Disclosure [Abstract]  
Changes in Goodwill
The following table reflects the changes in goodwill for the years ended December 31, 2021 and 2020:
(in thousands)
Balance as of December 31, 2019$836,643 
Foreign currency translation37,440 
Balance as of December 31, 2020874,083 
Foreign currency translation(33,160)
Balance as of December 31, 2021$840,923 
Intangible Assets
Intangible assets consisted of the following as of December 31, 2021 and 2020:
December 31, 2021December 31, 2020
Gross
Carrying
Amount		Accumulated
Amortization		NetGross
Carrying
Amount		Accumulated
Amortization		Net
(in thousands)
Developed product technologies$35,210 $(33,542)$1,668 $127,057 $(119,392)$7,665 
Customer relationships95,010 (88,612)6,398 131,045 (111,336)19,709 
Trademarks1,136 (1,136)— 1,162 (1,162)— 
Total intangible assets$131,356 $(123,290)$8,066 $259,264 $(231,890)$27,374 
Intangible Asset Amortization Expense
Intangible asset amortization expense was as follows:
Year Ended December 31,
202120202019
(in thousands)
Intangible asset amortization expense$19,065 $48,105 $47,289 
Estimated Intangible Asset Amortization Expense
As of December 31, 2021, we estimate aggregate intangible asset amortization expense to be as follows:
Estimated Amortization
(in thousands)
2022$7,512 
2023554 
Total amortization expense$8,066 
v3.22.0.1
Property and Equipment (Tables)
 12 Months Ended
Dec. 31, 2021
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,
20212020
(in thousands)
Servers, equipment and computers$32,524 $29,025 
Furniture and fixtures6,409 3,474 
Software602 1,022 
Leasehold improvements21,408 8,740 
$60,943 $42,261 
Less: Accumulated depreciation and amortization(22,195)(22,671)
Property and equipment, net$38,748 $19,590 
Depreciation and amortization expense on property and equipment was as follows for the years ended December 31, 2021, 2020, and 2019:
Year Ended December 31,
202120202019
(in thousands)
Depreciation and amortization$12,226 $6,581 $5,783 
v3.22.0.1
Leases (Tables)
 12 Months Ended
Dec. 31, 2021
Leases [Abstract]  
Operating Lease Costs
The components of operating lease costs for the years ended December 31, 2021 and 2020 were as follows:
Year Ended December 31,
20212020
(in thousands)
Operating lease costs$5,444 $4,370 
Variable lease costs(1)
1,046 976 
Short-term lease costs476 39 
Total lease costs$6,966 $5,385 
____________
(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, 2021 were as follows:
December 31, 2021
(in thousands)
2022$7,773 
20238,623 
20248,274 
20256,844 
20266,887 
Thereafter22,455 
Total minimum lease payments60,856 
Less: imputed interest(18,204)
Present value of operating lease liabilities$42,652 
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Accrued Liabilities and Other (Tables)
 12 Months Ended
Dec. 31, 2021
Payables and Accruals [Abstract]  
Schedule of Accrued Liabilities and Other Current Liabilities
Accrued liabilities and other current liabilities were as follows:
December 31,
20212020
(in thousands)
Payroll-related accruals$16,657 $14,305 
Value-added and other tax1,805 1,553 
Purchasing accruals3,593 3,183 
Accrued royalties1,938 1,130 
Accrued other liabilities6,951 1,805 
Total accrued liabilities and other$30,944 $21,976 
v3.22.0.1
Debt (Tables)
 12 Months Ended
Dec. 31, 2021
Debt Disclosure [Abstract]  
Summary of Debt
The following table summarizes information relating to our outstanding debt as of December 31, 2021:
As of December 31,
2021
Amount OutstandingEffective Rate
(in thousands, except interest rates)
Term loan facility$349,125 3.50 %
Revolving credit facility— — %
Total principal amount349,125 
Unamortized discount and debt issuance costs(10,246)
Total debt, net338,879 
Less: Current debt obligation(3,500)
Long-term debt, net of current portion$335,379 
Summary of Future Minimum Principal Payments of Debt
The following table summarizes the future minimum principal payments under Credit Agreement as of December 31, 2021:
(in thousands)
2022$3,500 
20233,500 
20243,500 
20253,500 
20263,500 
Thereafter331,625 
Total minimum principal payments$349,125 
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Stock-Based Compensation (Tables)
 12 Months Ended
Dec. 31, 2021
Share-based Payment Arrangement [Abstract]  
Schedule of Stock-Based Compensation Expense
The impact to our income (loss) before income taxes due to stock-based compensation expense and the related income tax benefits were as follows:
Year Ended December 31,
202120202019
(in thousands)
Impact to income (loss) before income taxes due to stock-based compensation$29,430 $21,053 $8,662 
Income tax benefit related to stock-based compensation310 241 161 
Stock-based compensation expense for the years ended December 31, 2021, 2020 and 2019 was $29.4 million, $21.1 million and $8.7 million, respectively, as summarized below:
Year Ended December 31,
202120202019
(in thousands)
Cost of revenue$1,010 $670 $499 
Sales and marketing8,761 4,409 3,543 
Research and development4,659 3,189 2,275 
General and administrative15,000 12,785 2,345 
Total stock-based compensation expense$29,430 $21,053 $8,662 
Option Grant Activity
Stock option grant activity under the 2021 Plan was as follows during the year ended December 31, 2021:
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, 2020
— $— 
Options granted through the Conversion224,638 1.20 
Options exercised(39,480)0.58 
Options forfeited(15,990)1.46 
Options expired — — 
Outstanding balances as of December 31, 2021
169,168 $1.32 
Options exercisable as of December 31, 2021
138,436 $0.97 $1,402 5.4
Options vested and expected to vest as of December 31, 2021
169,168 $1.32 $1,655 5.5
Additional Information Regarding Options
Additional information regarding stock option grant activity during the year ended December 31, 2021 is as follows:
Year Ended December 31,
2021
(in thousands, except per share amounts)
Weighted-average grant date fair value per share of options granted during the period$1.62 
Aggregate intrinsic value of options exercised during the period413 
Aggregate fair value of options vested during the period157 
Schedule of Grant Date Fair Value
Additional information regarding stock option grant activity during the year ended December 31, 2021 is as follows:
Year Ended December 31,
2021
(in thousands, except per share amounts)
Weighted-average grant date fair value per share of options granted during the period$1.62 
Aggregate intrinsic value of options exercised during the period413 
Aggregate fair value of options vested during the period157 
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, 2021:
Number of
Shares
Outstanding
Unvested balances as of December 31, 2020
— 
Restricted stock granted and issued through the Conversion91,477 
Restricted stock vested (11,300)
Restricted stock repurchased - unvested shares (4,362)
Unvested balances as of December 31, 2021
75,815 
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, 2021:
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, 2020
— $— 
Restricted stock units granted through the Conversion3,540,676 12.54 
Restricted stock units granted2,207,824 13.95 
Restricted stock units vested (525,806)13.46 
Restricted stock units forfeited (458,481)13.11 
Unvested balances as of December 31, 2021
4,764,213 $13.03 $52,883 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, 2021:
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, 2020
— $— 
Performance stock units granted1,044,908 12.50 
Performance stock units vested — — 
Performance stock units forfeited(54,994)12.50 
Unvested balances as of December 31, 2021
989,914 $12.50 $10,988 1.1
v3.22.0.1
Earnings Per Share (Tables)
 12 Months Ended
Dec. 31, 2021
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,
202120202019
(in thousands)
Basic earnings (loss) per share:
Numerator:
Net income (loss)$113 $(7,158)$(2,512)
Net income (loss) available to common stockholders$113 $(7,158)$(2,512)
Denominator:
Weighted-average common shares outstanding used in computing basic earnings (loss) per share167,460 158,124 158,124 
Basic earnings (loss) per share$0.00 $(0.05)$(0.02)
Diluted earnings (loss) per share:
Numerator:
Net income (loss) available to common stockholders$113 $(7,158)$(2,512)
Denominator:
Weighted-average shares used in computing basic earnings (loss) per share167,460 158,124 158,124 
Add dilutive impact of employee equity plans1,207 — — 
Weighted-average shares used in computing diluted earnings (loss) per share168,667 158,124 158,124 
Diluted earnings (loss) per share$0.00 $(0.05)$(0.02)
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,
202120202019
(in thousands)
Restricted stock units203 — — 
Total anti-dilutive shares203 — — 
v3.22.0.1
Employee Benefit Plans (Tables)
 12 Months Ended
Dec. 31, 2021
Retirement Benefits [Abstract]  
Schedule of Costs of Retirement Plans Our expense related to the plan was as follows:
Year Ended December 31,
202120202019
(in thousands)
Employee benefit plan expense$1,440 $1,203 $1,117 
v3.22.0.1
Relationship with Parent and Related Entities (Tables)
 12 Months Ended
Dec. 31, 2021
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, 2020, and 2019:
Year Ended December 31,
202120202019
(in thousands)
General and administrative$20,357 $31,357 $17,394 
Research and development253 1,672 1,224 
Sales and marketing297 1,969 1,128 
Cost of revenue140 149 99 
Total$21,047 $35,147 $19,845 
v3.22.0.1
Income Taxes (Tables)
 12 Months Ended
Dec. 31, 2021
Income Tax Disclosure [Abstract]  
Schedule of Components of Income Before Income Taxes
U.S. and international components of income before income taxes were as follows:
Year Ended December 31,
202120202019
(in thousands)
U.S.$(37,028)$(46,444)$(23,463)
International48,620 51,300 26,656 
Income before income taxes$11,592 $4,856 $3,193 
Schedule of Income Tax Expense (Benefit)
Income tax expense was composed of the following:
Year Ended December 31,
202120202019
(in thousands)
Current:
Federal$— $— $— 
State2 — — 
International13,324 16,065 10,438 
13,326 16,065 10,438 
Deferred:
Federal— 86 (64)
State— 5 (133)
International(1,847)(4,142)(4,536)
(1,847)(4,051)(4,733)
Income tax expense$11,479 $12,014 $5,705 
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,
202120202019
(in thousands)
Expense (benefit) derived by applying the federal statutory income tax rate to income before income taxes$2,434 $1,020 $670 
State taxes, net of federal benefit(105)(185)(93)
Permanent items— — 1 
Research and experimentation tax credits— (786)(422)
Withholding tax— (44)112 
Transaction costs1,999 — — 
Pre-Separation and Distribution net operating losses and other deferred tax assets
21,130 — — 
Valuation allowance for deferred tax assets(15,383)11,680 5,638 
Stock-based compensation1,258 (333)(636)
Meals and entertainment75 15 130 
Acquisition costs— 35 297 
Effect of foreign operations(88)612 8 
Other$159 $— $— 
$11,479 $12,014 $5,705 
Components of Net Deferred Tax Amounts
The components of the net deferred tax amounts recognized in the accompanying Consolidated Balance Sheets were:
December 31,
20212020
(in thousands)
Deferred tax assets:
Allowance for doubtful accounts$465 $262 
Accrued expenses99 209 
Net operating loss1,573 17,935 
Research and experimentation credits— 1,349 
Stock-based compensation2,967 2,446 
Interest1,195 1,072 
Deferred revenue62 91 
Unrealized exchange gain— 1 
Leases726 1,560 
Other credits14 51 
Total deferred tax assets7,101 24,976 
Valuation allowance(2,873)(18,256)
Deferred tax assets, net of valuation allowance4,228 6,720 
Deferred tax liabilities:
Property and equipment1,787 846 
Prepaid expenses646 574 
Leases894 1,686 
Intangibles1,852 6,478 
Total deferred tax liabilities5,179 9,584 
Net deferred tax asset (liability)$(951)$(2,864)
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,
202120202019
(in thousands)
Balance, beginning of year$87 $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 $87 
v3.22.0.1
Operating Segments and Geographic Information (Tables)
 12 Months Ended
Dec. 31, 2021
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,
202120202019
(in thousands)
Revenue
United States, country of domicile$160,833 $144,776 $125,682 
United Kingdom38,526 31,649 28,422 
All other international147,097 126,446 109,414 
Total revenue$346,456 $302,871 $263,518 
Schedule of Long-lived Assets by Geographic Area
December 31,
20212020
(in thousands)
Long-lived assets, net
United States, country of domicile$20,130 $4,774 
Switzerland11,293 10,202 
Canada895 1,126 
All other international6,430 3,488 
Total long-lived assets, net$38,748 $19,590 
v3.22.0.1
Organization and Nature of Operations (Details)
 12 Months Ended
Jul. 19, 2021
$ / shares
shares
Dec. 31, 2021
employee
$ / shares
Dec. 31, 2020
$ / 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    
v3.22.0.1
Summary of Significant Accounting Policies - Other Narrative (Details)
$ in Thousands
 12 Months Ended
Dec. 31, 2021
USD ($)
segment
shares
Dec. 31, 2020
USD ($)
Dec. 31, 2019
USD ($)
Accounting Policies [Abstract]      
Number of reportable segments | segment 1    
Unrealized net transaction gains (losses) related to remeasurement | $ $ (1,800) $ (800) $ 500
Provision for doubtful accounts | $ 1,700 800 1,200
Amortization of debt issuance costs | $ $ 732 $ 0 $ 0
Stock options to purchase common stock      
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]      
Stock units granted (in shares) 224,638    
Restricted Stock      
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]      
Stock units granted (in shares) 91,477    
Restricted Stock Units (RSUs)      
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]      
Stock units granted (in shares) 2,207,824    
Restricted Stock Units (RSUs) | 2021 Equity Incentive Plan      
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]      
Stock units granted (in shares) 2,207,824    
v3.22.0.1
Summary of Significant Accounting Policies - Acquisitions (Details)
 12 Months Ended
Dec. 31, 2021
Minimum  
Finite-Lived Intangible Assets [Line Items]  
Estimated useful life 2 years
Maximum  
Finite-Lived Intangible Assets [Line Items]  
Estimated useful life 7 years
v3.22.0.1
Summary of Significant Accounting Policies - Property and Equipment (Details)
 12 Months Ended
Dec. 31, 2021
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
v3.22.0.1
Summary of Significant Accounting Policies - Internal-Use Software Costs (Details) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2021
Dec. 31, 2020
Dec. 31, 2019
Accounting Policies [Abstract]      
Internal-use software useful life 3 years    
Impairments to internal-use software $ 0    
Capitalized internal-use software, net 5,100 $ 4,900 $ 3,100
Capitalized internal-use software and website development costs $ 2,200 $ 1,800 $ 1,100
v3.22.0.1
Summary of Significant Accounting Policies - Revenue Disaggregation (Details) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2021
Dec. 31, 2020
Dec. 31, 2019
Disaggregation of Revenue [Line Items]      
Subscription and other revenue $ 346,456 $ 302,871 $ 263,518
Revenue recognized at a point in time      
Disaggregation of Revenue [Line Items]      
Subscription and other revenue 62,204 57,943 49,510
Revenue recognized over time      
Disaggregation of Revenue [Line Items]      
Subscription and other revenue 284,252 244,928 214,008
Subscription Revenue      
Disaggregation of Revenue [Line Items]      
Subscription and other revenue 336,845 292,027 251,695
Other Revenue      
Disaggregation of Revenue [Line Items]      
Subscription and other revenue $ 9,611 $ 10,844 $ 11,823
v3.22.0.1
Summary of Significant Accounting Policies - Deferred Revenue (Details) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2021
Dec. 31, 2020
Accounting Policies [Abstract]    
Revenue, advance billing period 12 months  
Change In Contract With Customer, Liability [Roll Forward]    
Beginning balance $ 9,670 $ 8,172
Deferred revenue recognized (17,517) (13,619)
Additional amounts deferred 18,745 15,117
Ending balance $ 10,898 $ 9,670
v3.22.0.1
Summary of Significant Accounting Policies - Expected Recognition of Deferred Revenue (Details)
$ in Thousands
Dec. 31, 2021
USD ($)
Accounting Policies [Abstract]  
Expected recognition of deferred revenue $ 10,898
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]  
Expected recognition of deferred revenue 10,898
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-01-01  
Accounting Policies [Abstract]  
Expected recognition of deferred revenue 10,675
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]  
Expected recognition of deferred revenue $ 10,675
Deferred revenue, remaining performance obligation, period 1 year
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-01-01  
Accounting Policies [Abstract]  
Expected recognition of deferred revenue $ 223
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]  
Expected recognition of deferred revenue $ 223
Deferred revenue, remaining performance obligation, period 2 years
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2025-01-01  
Accounting Policies [Abstract]  
Expected recognition of deferred revenue $ 0
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]  
Expected recognition of deferred revenue $ 0
Deferred revenue, remaining performance obligation, period
v3.22.0.1
Summary of Significant Accounting Policies - Cost of Revenue (Details) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2021
Dec. 31, 2020
Dec. 31, 2019
Accounting Policies [Abstract]      
Amortization of acquired technologies $ 5,755 $ 24,257 $ 24,067
v3.22.0.1
Summary of Significant Accounting Policies - Advertising Costs Incurred (Details) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2021
Dec. 31, 2020
Dec. 31, 2019
Accounting Policies [Abstract]      
Advertising expense $ 18,534 $ 13,903 $ 12,774
v3.22.0.1
Summary of Significant Accounting Policies - Changes in Accumulated Other Comprehensive Income (Loss) (Details) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2021
Dec. 31, 2020
Dec. 31, 2019
AOCI Attributable to Parent, Net of Tax [Roll Forward]      
Balance at beginning of period $ 631,197 $ 563,696 $ 551,747
Other comprehensive loss before reclassification (33,938) 42,414  
Other comprehensive (loss) income (33,938) 42,414 (7,890)
Balance at end of period 618,355 631,197 563,696
Foreign Currency Translation Adjustments      
AOCI Attributable to Parent, Net of Tax [Roll Forward]      
Balance at beginning of period 48,991 6,577  
Other comprehensive loss before reclassification (33,938) 42,414  
Other comprehensive (loss) income (33,938) 42,414  
Balance at end of period 15,053 48,991 6,577
Accumulated Other Comprehensive Income (Loss)      
AOCI Attributable to Parent, Net of Tax [Roll Forward]      
Balance at beginning of period 48,991 6,577 14,467
Balance at end of period $ 15,053 $ 48,991 $ 6,577
v3.22.0.1
Summary of Significant Accounting Policies - Estimated the Fair Value for Stock Options (Details) - Stock Options
 12 Months Ended
Dec. 31, 2021
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]  
Expected dividend yield 0.00%
Volatility 45.50%
Risk-free rate of return 0.50%
Expected life 3 years 5 months 19 days
v3.22.0.1
Summary of Significant Accounting Policies - Share-Based Compensation (Details) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2021
Dec. 31, 2020
Dec. 31, 2019
Accounting Policies [Abstract]      
Stock-based compensation expense $ 29,430 $ 21,053 $ 8,662
Income tax benefit related to stock-based compensation $ 310 $ 241 $ 161
v3.22.0.1
Summary of Significant Accounting Policies - Recently Adopted Accounting Pronouncements (Details) - USD ($)
$ in Thousands
Dec. 31, 2021
Dec. 31, 2020
Dec. 31, 2018
New Accounting Pronouncements or Change in Accounting Principle [Line Items]      
Deferred income tax liabilities $ 2,632 $ 5,846  
Operating lease right-of-use assets 36,206 13,697  
Current operating lease liabilities 4,830 2,860  
Non-current operating lease liabilities $ 37,822 $ 14,641  
Adoption of new accounting pronouncement | Accounting Standards Update 2014-09      
New Accounting Pronouncements or Change in Accounting Principle [Line Items]      
Parent company net investment     $ 900
Deferred revenue     1,200
Deferred income tax liabilities     300
Adoption of new accounting pronouncement | Accounting Standards Update 2016-02      
New Accounting Pronouncements or Change in Accounting Principle [Line Items]      
Operating lease right-of-use assets     10,100
Current operating lease liabilities     2,300
Non-current operating lease liabilities     $ 11,500
v3.22.0.1
Goodwill and Intangible Assets - Changes in Goodwill (Details) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2021
Dec. 31, 2020
Goodwill [Roll Forward]    
Balance at beginning of period $ 874,083 $ 836,643
Foreign currency translation (33,160) 37,440
Balance at end of period $ 840,923 $ 874,083
v3.22.0.1
Goodwill and Intangible Assets - Intangible Assets (Details) - USD ($)
$ in Thousands
Dec. 31, 2021
Dec. 31, 2020
Finite-Lived Intangible Assets [Line Items]    
Gross Carrying Amount $ 131,356 $ 259,264
Accumulated Amortization (123,290) (231,890)
Net 8,066 27,374
Developed product technologies    
Finite-Lived Intangible Assets [Line Items]    
Gross Carrying Amount 35,210 127,057
Accumulated Amortization (33,542) (119,392)
Net 1,668 7,665
Customer relationships    
Finite-Lived Intangible Assets [Line Items]    
Gross Carrying Amount 95,010 131,045
Accumulated Amortization (88,612) (111,336)
Net 6,398 19,709
Trademarks    
Finite-Lived Intangible Assets [Line Items]    
Gross Carrying Amount 1,136 1,162
Accumulated Amortization (1,136) (1,162)
Net $ 0 $ 0
v3.22.0.1
Goodwill and Intangible Assets - Intangible Assets Amortization Expense (Details) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2021
Dec. 31, 2020
Dec. 31, 2019
Goodwill and Intangible Assets Disclosure [Abstract]      
Intangible asset amortization expense $ 19,065 $ 48,105 $ 47,289
v3.22.0.1
Goodwill and Intangible Assets - Estimated Intangible Asset Amortization Expense (Details) - USD ($)
$ in Thousands
Dec. 31, 2021
Dec. 31, 2020
Estimated Amortization    
2022 $ 7,512  
2023 554  
Net $ 8,066 $ 27,374
v3.22.0.1
Property and Equipment - Schedule of Property and Equipment (Details) - USD ($)
$ in Thousands
Dec. 31, 2021
Dec. 31, 2020
Property, Plant and Equipment [Line Items]    
Property and equipment, gross $ 60,943 $ 42,261
Less: Accumulated depreciation and amortization (22,195) (22,671)
Property and equipment, net 38,748 19,590
Servers, equipment and computers    
Property, Plant and Equipment [Line Items]    
Property and equipment, gross 32,524 29,025
Furniture and fixtures    
Property, Plant and Equipment [Line Items]    
Property and equipment, gross 6,409 3,474
Software    
Property, Plant and Equipment [Line Items]    
Property and equipment, gross 602 1,022
Leasehold improvements    
Property, Plant and Equipment [Line Items]    
Property and equipment, gross $ 21,408 $ 8,740
v3.22.0.1
Property and Equipment - Schedule of Depreciation and Amortization (Details) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2021
Dec. 31, 2020
Dec. 31, 2019
Property, Plant and Equipment [Abstract]      
Depreciation and amortization $ 12,226 $ 6,581 $ 5,783
v3.22.0.1
Leases - Additional Information (Details)
Dec. 31, 2021
Property, Plant and Equipment [Line Items]  
Remaining lease term (in years) 8 years 4 months 24 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) 10 years 4 months 24 days
v3.22.0.1
Leases - Operating Lease Costs (Details) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2021
Dec. 31, 2020
Leases [Abstract]    
Operating lease costs $ 5,444 $ 4,370
Variable lease costs 1,046 976
Short-term lease costs 476 39
Total lease costs $ 6,966 $ 5,385
v3.22.0.1
Leases - Lease Liabilities (Details)
$ in Thousands
Dec. 31, 2021
USD ($)
Leases [Abstract]  
2022 $ 7,773
2023 8,623
2024 8,274
2025 6,844
2026 6,887
Thereafter 22,455
Total minimum lease payments 60,856
Less: imputed interest (18,204)
Present value of operating lease liabilities $ 42,652
v3.22.0.1
Accrued Liabilities and Other - Schedule of Accrued Liabilities and Other Current Liabilities (Details) - USD ($)
$ in Thousands
Dec. 31, 2021
Dec. 31, 2020
Payables and Accruals [Abstract]    
Payroll-related accruals $ 16,657 $ 14,305
Value-added and other tax 1,805 1,553
Purchasing accruals 3,593 3,183
Accrued royalties 1,938 1,130
Accrued other liabilities 6,951 1,805
Total accrued liabilities and other $ 30,944 $ 21,976
v3.22.0.1
Debt - Summary of Debt (Details) - USD ($)
$ in Thousands
Dec. 31, 2021
Dec. 31, 2020
Debt Instruments [Abstract]    
Total principal amount $ 349,125  
Unamortized discount and debt issuance costs (10,246)  
Total minimum principal payments 338,879  
Less: Current debt obligation (3,500) $ 0
Long-term debt, net of current portion 335,379 $ 0
Credit Agreement    
Debt Instruments [Abstract]    
Total minimum principal payments 349,125  
Credit Agreement | Secured Debt    
Debt Instruments [Abstract]    
Total principal amount $ 349,125  
Effective Rate 3.50%  
Credit Agreement | Line of Credit | Revolving Credit Facility    
Debt Instruments [Abstract]    
Total principal amount $ 0  
Effective Rate 0.00%  
v3.22.0.1
Debt - Additional Information (Details) - Credit Agreement - USD ($)
 12 Months Ended
Jul. 19, 2021
Dec. 31, 2021
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  
Basis spread on variable rate   3.00%
LIBOR floor   0.50%
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]    
Basis spread on variable rate   3.00%
LIBOR floor   0.00%
Revolving Credit Facility | Line of Credit | US Dollars    
Debt Instrument [Line Items]    
LIBOR floor   0.00%
v3.22.0.1
Debt - Summary of Future Minimum Principal Payments of Debt (Details)
$ in Thousands
Dec. 31, 2021
USD ($)
Long-term Debt, Fiscal Year Maturity [Abstract]  
Total minimum principal payments $ 338,879
Credit Agreement  
Long-term Debt, Fiscal Year Maturity [Abstract]  
2022 3,500
2023 3,500
2024 3,500
2025 3,500
2026 3,500
Thereafter 331,625
Total minimum principal payments $ 349,125
v3.22.0.1
Stock-Based Compensation - Additional Information (Details) - USD ($)
 1 Months Ended 12 Months Ended
Aug. 31, 2021
Aug. 31, 2021
Dec. 31, 2021
Dec. 31, 2020
Dec. 31, 2019
Jul. 19, 2021
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)     $ 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)     $ 0.001 $ 0.001    
Stock-based compensation expense subject to future recognition     $ 100,000      
Stock-based compensation expense     $ 29,430,000 $ 21,053,000 $ 8,662,000  
Stock Options            
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]            
Stock units granted (in shares)     224,638      
Recognition period of stock-based compensation expense     9 months 18 days      
Restricted Stock            
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]            
Awards outstanding (in shares)     75,815 0    
Stock units granted (in shares)     91,477      
Stock units granted (in dollars per share)     $ 1.01      
Intrinsic value of shares vested     $ 100,000      
Restricted Stock Units (RSUs)            
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]            
Awards outstanding (in shares)     4,764,213 0    
Stock units granted (in shares)     2,207,824      
Recognition period of stock-based compensation expense     2 years 8 months 12 days      
Stock units granted (in dollars per share)     $ 13.95      
Fair value of restricted stock units vested     $ 6,800,000      
Compensation expense not yet recognized     $ 49,900,000      
Performance Stock Units            
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]            
Awards outstanding (in shares)     989,914 0    
Stock units granted (in shares)     1,044,908      
Recognition period of stock-based compensation expense     1 year 1 month 6 days      
Stock units granted (in dollars per share)     $ 12.50      
Compensation expense not yet recognized     $ 7,300,000      
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        
Maximum stock purchase, percentage of compensation 20.00% 20.00% 20.00%      
Offering period length 6 months   6 months      
Purchase price of common stock, percent of market value 85.00%   85.00%      
Maximum value of common stock purchase, per year $ 25,000   $ 25,000      
Stock-based compensation expense     $ 100,000      
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) 18,000,000 18,000,000 11,594,899      
Percentage of outstanding stock   5.00%        
Expiration period   10 years        
Awards outstanding (in shares)     5,999,110      
Repurchase of stock (in shares)     17,562      
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        
v3.22.0.1
Stock-Based Compensation - Schedule of Stock-Based Compensation Expense (Details) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2021
Dec. 31, 2020
Dec. 31, 2019
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]      
Stock-based compensation expense $ 29,430 $ 21,053 $ 8,662
Cost of revenue      
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]      
Stock-based compensation expense 1,010 670 499
Sales and marketing      
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]      
Stock-based compensation expense 8,761 4,409 3,543
Research and development      
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]      
Stock-based compensation expense 4,659 3,189 2,275
General and administrative      
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]      
Stock-based compensation expense 15,000 12,785 2,345
Operating Expense      
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]      
Stock-based compensation expense $ 29,430 $ 21,053 $ 8,662
v3.22.0.1
Stock-Based Compensation - Schedule of Stock Option Awards (Details) - USD ($)
$ / shares in Units, $ in Thousands
 12 Months Ended
Dec. 31, 2021
Number of Shares Outstanding  
Outstanding balances at beginning of period (in shares) 0
Options granted (in shares) 224,638
Options exercised (in shares) (39,480)
Options forfeited (in shares) (15,990)
Options expired (in shares) 0
Outstanding balances at end of period (in shares) 169,168
Options exercisable at end of period (in shares) 138,436
Options vested and expected to vest at end of period (in shares) 169,168
Weighted- Average Exercise Price  
Outstanding balances at beginning of period (in dollars per share) $ 0
Options granted (in dollars per share) 1.20
Options exercised (in dollars per share) 0.58
Options forfeited (in dollars per share) 1.46
Options expired (in dollars per share) 0
Outstanding balances at the end of period (in dollars per share) 1.32
Options exercisable at end of period (in dollars per share) 0.97
Options vested and expected to vest at end of period (in dollars per share) $ 1.32
Options exercisable as of December 31, 2021 $ 1,402
Options exercisable as of December 31, 2021 5 years 4 months 24 days
Options vested and expected to vest as of December 31, 2021 $ 1,655
Options vested and expected to vest as of December 31, 2021 5 years 6 months
v3.22.0.1
Stock-Based Compensation - Additional information regarding stock option grant activity (Details)
$ / shares in Units, $ in Thousands
 12 Months Ended
Dec. 31, 2021
USD ($)
$ / shares
Share-based Payment Arrangement [Abstract]  
Weighted-average grant date fair value per share of options granted during the period (in dollars per share) | $ / shares $ 1.62
Aggregate intrinsic value of options exercised during the period $ 413
Aggregate fair value of options vested during the period $ 157
v3.22.0.1
Stock-Based Compensation - Restricted Stock Activity Subject to vesting (Details) - Restricted Stock
 12 Months Ended
Dec. 31, 2021
shares
Number of Shares Outstanding  
Unvested balances at beginning of period (in shares) 0
Restricted stock granted and issued (in shares) 91,477
Restricted stock vested (in shares) (11,300)
Restricted stock repurchased - unvested shares (in shares) (4,362)
Unvested balances at end of period (in shares) 75,815
v3.22.0.1
Stock-Based Compensation - Schedule of Restricted Stock Unit Activity (Details) - Restricted Stock Units (RSUs)
$ / shares in Units, $ in Thousands
 12 Months Ended
Dec. 31, 2021
USD ($)
$ / shares
shares
Number of Shares Outstanding  
Unvested balances at beginning of period (in shares) | shares 0
Stock units granted through the conversion (in shares) | shares 3,540,676
Stock units granted (in shares) | shares 2,207,824
Restricted stock vested (in shares) | shares (525,806)
Stock units forfeited (in shares) | shares (458,481)
Unvested balances at end of period (in shares) | shares 4,764,213
Weighted-Average Grant Date Fair Value Per Share  
Unvested balances at beginning of period (in dollars per share) | $ / shares $ 0
Stock units granted through the conversion (in dollars per share) | $ / shares 12.54
Stock units granted (in dollars per share) | $ / shares 13.95
Stock units vested (in dollars per share) | $ / shares 13.46
Stock units forfeited (in dollars per share) | $ / shares 13.11
Unvested balances at end of period (in dollars per share) | $ / shares $ 13.03
Aggregate Intrinsic Value  
Unvested balances at end of period | $ $ 52,883
Weighted-Average Remaining Contractual Term (in years)  
Unvested balances at end of period 1 year 3 months 18 days
v3.22.0.1
Stock-Based Compensation - Schedule of Performance Stock Unit Activity (Details) - Performance Stock Units
$ / shares in Units, $ in Thousands
 12 Months Ended
Dec. 31, 2021
USD ($)
$ / shares
shares
Number of Shares Outstanding  
Unvested balances at beginning of period (in shares) | shares 0
Stock units granted (in shares) | shares 1,044,908
Stock units vested (in shares) | shares 0
Stock units forfeited (in shares) | shares (54,994)
Unvested balances at end of period (in shares) | shares 989,914
Weighted-Average Grant Date Fair Value Per Share  
Unvested balances at beginning of period (in dollars per share) | $ / shares $ 0
Stock units granted (in dollars per share) | $ / shares 12.50
Stock units vested (in dollars per share) | $ / shares 0
Stock units forfeited (in dollars per share) | $ / shares 12.50
Unvested balances at end of period (in dollars per share) | $ / shares $ 12.50
Aggregate Intrinsic Value  
Unvested balances at end of period | $ $ 10,988
Weighted-Average Remaining Contractual Term (in years)  
Unvested balances at end of period 1 year 1 month 6 days
v3.22.0.1
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, 2021
Dec. 31, 2020
Dec. 31, 2019
Numerator:          
Net income (loss) $ 127 $ (14) $ 113 $ (7,158) $ (2,512)
Net income (loss) available to common stockholders     113 (7,158) (2,512)
Net income (loss) available to common stockholders     $ 113 $ (7,158) $ (2,512)
Denominator:          
Weighted-average common shares outstanding used in computing basic net earnings per share (in shares)     167,460 158,124 158,124
Basic earnings per share (in dollars per share)     $ 0.00 $ (0.05) $ (0.02)
Add stock-based incentive stock awards (in shares)     1,207 0 0
Weighted-average shares used in computing diluted net earnings per share (in shares)     168,667 158,124 158,124
Diluted earnings per share (in dollars per share)     $ 0.00 $ (0.05) $ (0.02)
v3.22.0.1
Earnings Per Share - Weighted Average Outstanding Shares of Common Stock Equivalents Excluded (Details) - shares
shares in Thousands
 12 Months Ended
Dec. 31, 2021
Dec. 31, 2020
Dec. 31, 2019
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]      
Total anti-dilutive shares (in shares) 203 0 0
Restricted stock units      
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]      
Total anti-dilutive shares (in shares) 203 0 0
v3.22.0.1
Employee Benefit Plans - Schedule of Costs of Retirement Plans (Details) (10-K) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2021
Dec. 31, 2020
Dec. 31, 2019
Retirement Benefits [Abstract]      
Employee benefit plan expense $ 1,440 $ 1,203 $ 1,117
v3.22.0.1
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
Dec. 31, 2019
Related Party Transaction [Line Items]      
Expenses from transactions with related party $ 21,047 $ 35,147 $ 19,845
General and administrative      
Related Party Transaction [Line Items]      
Expenses from transactions with related party 20,357 31,357 17,394
Research and development      
Related Party Transaction [Line Items]      
Expenses from transactions with related party 253 1,672 1,224
Sales and marketing      
Related Party Transaction [Line Items]      
Expenses from transactions with related party 297 1,969 1,128
Cost of revenue      
Related Party Transaction [Line Items]      
Expenses from transactions with related party $ 140 $ 149 $ 99
v3.22.0.1
Relationship with Parent and Related Entities - Additional Information (Details) - USD ($)
 12 Months Ended
Aug. 31, 2021
May 27, 2016
Feb. 25, 2016
Dec. 31, 2021
Dec. 31, 2020
Dec. 31, 2019
Related Party Transaction [Line Items]            
Due to affiliates       $ 0 $ 372,650,000  
ESPP            
Related Party Transaction [Line Items]            
Maximum stock purchase, percentage of compensation 20.00%     20.00%    
Offering period length 6 months     6 months    
Purchase price of common stock, percent of market value 85.00%     85.00%    
Maximum value of common stock purchase, per year $ 25,000     $ 25,000    
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]            
Due to affiliates       $ 0 228,500,000  
Interest expense, related party       13,800,000 28,100,000 $ 34,100,000
Accounts payable, related parties       500,000 8,000,000  
Accounts receivable, related parties       100,000 300,000  
Expenses (credits) from transactions with related party       21,047,000 35,147,000 19,845,000
Affiliated Entity | SolarWinds Holdings, Inc. | Transition Services Agreement            
Related Party Transaction [Line Items]            
Expenses (credits) from transactions with related party       1,700,000    
Affiliated Entity | SolarWinds Holdings, Inc. | Software OEM Agreements            
Related Party Transaction [Line Items]            
Expenses (credits) from transactions with related party       100,000    
Revenue from related parties       500,000    
Affiliated Entity | SolarWinds Holdings, Inc. | Software Cross License Agreement            
Related Party Transaction [Line Items]            
Expenses (credits) from transactions with related party       700,000    
Revenue from related parties       100,000    
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 $ 8,400,000
Conversion incremental compensation expense       2,700,000    
Affiliated Entity | SolarWinds Holdings, Inc. | Loan Agreement With SolarWinds Holdings, Inc.            
Related Party Transaction [Line Items]            
Loans payable         144,200,000  
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 $ 372,700,000  
v3.22.0.1
Income Taxes - Schedule of Components of Loss Before Income Taxes (Details) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2021
Dec. 31, 2020
Dec. 31, 2019
Income Tax Disclosure [Abstract]      
U.S. $ (37,028) $ (46,444) $ (23,463)
International 48,620 51,300 26,656
Income before income taxes $ 11,592 $ 4,856 $ 3,193
v3.22.0.1
Income Taxes - Schedule of Income Tax Expense (Benefit) (Details) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2021
Dec. 31, 2020
Dec. 31, 2019
Current:      
Federal $ 0 $ 0 $ 0
State 2 0 0
International 13,324 16,065 10,438
Total current income tax expense (benefit) 13,326 16,065 10,438
Deferred:      
Federal 0 86 (64)
State 0 5 (133)
International (1,847) (4,142) (4,536)
Total deferred income tax expense (benefit) (1,847) (4,051) (4,733)
Total income tax expense (benefit) $ 11,479 $ 12,014 $ 5,705
v3.22.0.1
Income Taxes - Schedule of Effective Income Tax Rate Reconciliation (Details) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2021
Dec. 31, 2020
Dec. 31, 2019
Income Tax Disclosure [Abstract]      
Expense (benefit) derived by applying the federal statutory income tax rate to income before income taxes $ 2,434 $ 1,020 $ 670
State taxes, net of federal benefit (105) (185) (93)
Permanent items 0 0 1
Research and experimentation tax credits 0 (786) (422)
Withholding tax 0 (44) 112
Transaction costs 1,999 0 0
Pre-Separation and Distribution net operating losses and other deferred tax assets 21,130 0 0
Valuation allowance for deferred tax assets (15,383) 11,680 5,638
Stock-based compensation 1,258 (333) (636)
Meals and entertainment 75 15 130
Acquisition costs 0 35 297
Effect of foreign operations (88) 612 8
Other 159 0 0
Total income tax expense (benefit) $ 11,479 $ 12,014 $ 5,705
v3.22.0.1
Income Taxes - Additional Information (Details) - USD ($)
$ in Thousands
Dec. 31, 2021
Dec. 31, 2020
Tax Credit Carryforward [Line Items]    
Valuation allowance $ 2,873 $ 18,256
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  
State and Local Jurisdiction    
Operating Loss Carryforwards [Line Items]    
Operating loss carryforwards $ 3,900 3,500
Foreign Tax Authority    
Operating Loss Carryforwards [Line Items]    
Operating loss carryforwards   $ 14,800
v3.22.0.1
Income Taxes - Components of Net Deferred Tax Amounts (Details) - USD ($)
$ in Thousands
Dec. 31, 2021
Dec. 31, 2020
Deferred tax assets:    
Allowance for doubtful accounts $ 465 $ 262
Accrued expenses 99 209
Net operating loss 1,573 17,935
Research and experimentation credits 0 1,349
Stock-based compensation 2,967 2,446
Interest 1,195 1,072
Deferred revenue 62 91
Unrealized exchange gain 0 1
Leases 726 1,560
Other credits 14 51
Total deferred tax assets 7,101 24,976
Valuation allowance (2,873) (18,256)
Deferred tax assets, net of valuation allowance 4,228 6,720
Deferred tax liabilities:    
Property and equipment 1,787 846
Prepaid expenses 646 574
Leases 894 1,686
Intangibles 1,852 6,478
Total deferred tax liabilities 5,179 9,584
Net deferred tax liability $ (951) $ (2,864)
v3.22.0.1
Income Taxes - Schedule of Unrecognized Tax Benefits, Rollforward (Details) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2021
Dec. 31, 2020
Dec. 31, 2019
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward]      
Balance, beginning of year $ 87 $ 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 (87) 0 0
Settlement with taxing authorities 0 0 0
Reductions due to lapsed statute of limitations 0 0 0
Balance, end of year $ 0 $ 87 $ 87
v3.22.0.1
Operating Segments and Geographic Information - Additional Information (Details)
 12 Months Ended
Dec. 31, 2021
segment
Segment Reporting [Abstract]  
Number of operating segments 1
v3.22.0.1
Operating Segments and Geographic Information - Schedule of Revenue by Geographic Area (Details) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2021
Dec. 31, 2020
Dec. 31, 2019
Revenues from External Customers and Long-Lived Assets [Line Items]      
Revenue $ 346,456 $ 302,871 $ 263,518
United States, country of domicile      
Revenues from External Customers and Long-Lived Assets [Line Items]      
Revenue 160,833 144,776 125,682
United Kingdom      
Revenues from External Customers and Long-Lived Assets [Line Items]      
Revenue 38,526 31,649 28,422
All other international      
Revenues from External Customers and Long-Lived Assets [Line Items]      
Revenue $ 147,097 $ 126,446 $ 109,414
v3.22.0.1
Operating Segments and Geographic Information - Schedule of Long-lived Assets by Geographic Area (Details) - USD ($)
$ in Thousands
Dec. 31, 2021
Dec. 31, 2020
Revenues from External Customers and Long-Lived Assets [Line Items]    
Total long-lived assets, net $ 38,748 $ 19,590
United States, country of domicile    
Revenues from External Customers and Long-Lived Assets [Line Items]    
Total long-lived assets, net 20,130 4,774
Switzerland    
Revenues from External Customers and Long-Lived Assets [Line Items]    
Total long-lived assets, net 11,293 10,202
Canada    
Revenues from External Customers and Long-Lived Assets [Line Items]    
Total long-lived assets, net 895 1,126
All other international    
Revenues from External Customers and Long-Lived Assets [Line Items]    
Total long-lived assets, net $ 6,430 $ 3,488
v3.22.0.1
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS (Details) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2021
Dec. 31, 2020
Dec. 31, 2019
Allowance for doubtful accounts, customers and other      
SEC Schedule, 12-09, Movement in Valuation Allowances and Reserves [Roll Forward]      
Beginning Balance $ 751 $ 1,150 $ 1,163
Additions (Charge to Expense) 3,260 1,483 1,840
Deductions (Write-offs, net of Recoveries) (2,358) (1,882) (1,853)
Ending Balance 1,653 751 1,150
Tax valuation allowances      
SEC Schedule, 12-09, Movement in Valuation Allowances and Reserves [Roll Forward]      
Beginning Balance 18,256 6,576 938
Additions (Charge to Expense) 0 11,680 5,638
Deductions (Write-offs, net of Recoveries) (15,383) 0 0
Ending Balance $ 2,873 $ 18,256 $ 6,576
v3.22.0.1
Label Element Value
Accounting Standards Update [Extensible Enumeration] us-gaap_AccountingStandardsUpdateExtensibleList Accounting Standards Update 2014-09 [Member]