N-able Inc

15. Commitments and Contingencies

From time to time, we have been and may be involved in various legal proceedings arising in our ordinary course of business.

We are party to a stockholders’ agreement dated as of July 19, 2021, by and among N-able, Inc. and the stockholders named therein, as amended December 13, 2021 (the “Stockholders’ Agreement”). On March 16, 2023, a stockholder who is not party to the agreement filed a Complaint for Declaratory Relief in the Court of Chancery of the State of Delaware against us seeking, among other relief, class action certification and a declaratory judgment that certain provisions in the Stockholders’

Agreement are unenforceable. On July 25, 2024, the court issued an opinion (i) granting the stockholder plaintiff’s motion for summary judgment and declaring certain provisions of the Stockholders’ Agreement facially invalid and unenforceable as a matter of Delaware law, including, among others, provisions relating to the election and removal of directors, the composition of committees, and, so long as ownership thresholds were met, approval rights of the stockholders party to the Stockholders’ Agreement over entering into or effecting a change of control of the Company, acquisitions in excess of $150 million, sales and dispositions of assets or securities in excess of $300 million, the incurrence of indebtedness in excess of $300 million, and the hiring or firing of the CEO and (ii) granting our motion for summary judgment as to the facial validity of provisions related to the nomination of directors and our use of reasonable best efforts to secure the election of certain nominees. On December 2, 2024, the court awarded the plaintiff attorneys a fee of $2.3 million and on December 13, 2024, the court entered an order implementing an agreement between the Company and the plaintiff for a discounted fee award of $1.75 million in exchange for the Company’s agreement to waive its right to appeal any of the rulings of the court in this action. The discounted fee award is reflected as a restructuring and other cost within general and administrative expenses during the year ended December 31, 2024.

In the opinion of management, the 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. However, the outcome of disputes is inherently uncertain. Therefore, although management considers the likelihood of such an outcome to be remote, an unfavorable resolution of one or more matters could materially affect our future results of operations or cash flows, or both, in a particular period.

Commitments as a Result of Acquisitions

As part of the consideration payable for our November 20, 2024 acquisition of Adlumin, the former shareholders of Adlumin have the right to receive $120.0 million in cash in installments of $52.5 million and $67.5 million on the first and second anniversaries of the closing date, respectively, and up to an aggregate of $30.0 million in potential cash earn-out payments payable in 2025 and 2026 based upon the achievement of certain performance metrics against defined targets for the 2024 and 2025 fiscal years. The deferred and contingent consideration liabilities will be re-evaluated periodically, but at least quarterly, with the resulting gains or additional expense recognized within general and administrative expense in our Consolidated Statements of Operations. At the date of acquisition, the fair value of the deferred consideration was $96.3 million. As of December 31, 2024, the fair value of the deferred consideration is $98.1 million, resulting in the recognition of expense of $1.8 million for the year ended December 31, 2024. The current portion of the deferred consideration of $44.5 million is included in “current deferred consideration” and the non-current portion of $53.7 million is included in “non-current deferred consideration” in our Consolidated Balance Sheets as of December 31, 2024. At the date of acquisition, the fair value of the contingent consideration was $16.6 million. As of December 31, 2024, the fair value of the contingent consideration is $14.1 million, resulting in the recognition of a gain of $2.6 million for the year ended December 31, 2024. The current portion of the contingent consideration of $5.5 million is included in “accrued liabilities and other” and the non-current portion of $8.6 million is included in “other long-term liabilities” in our Consolidated Balance Sheets as of December 31, 2024.

On July 1, 2022, we completed the acquisition of all the outstanding equity of Spinpanel B.V. (“Spinpanel”) for a total consideration of up to approximately $20.0 million, including up to $10.0 million payable upon the achievement of certain revenue metrics through July 1, 2025. The contingent consideration liability is re-evaluated at least quarterly, with the resulting gains and losses recognized within general and administrative expense in our Consolidated Statements of Operations. The fair value of this contingent consideration was $5.2 million at the date of acquisition, $5.1 million as of December 31, 2022, and $3.7 million as of December 31, 2023. As of December 31, 2024, there isno remaining contingent consideration liability. During the years ended December 31, 2024, 2023 and 2022, we recognized a gain of $3.7 million, $1.4 million and $0.1 million, respectively, on the contingent consideration liability. The contingent consideration liability of $3.7 million as of December 31, 2023 is included in “other long-term liabilities” in our Consolidated Balance Sheets. See Note 3. Acquisitions, Note 7. Fair Value Measurements, and Note 8. Accrued Liabilities and Other for additional information regarding the contingent consideration liabilities for Adlumin and Spinpanel.

On December 14, 2022, we completed the acquisition of certain assets, primarily in the form of intellectual property, from a third party for a total consideration of up to $6.5 million, including $3.1 million of cash paid on the acquisition date, $1.0 million of product delivery fees, and up to $2.5 million payable upon the achievement of certain software engineering and knowledge transfer milestones as of September 1, 2023, and December 1, 2023. The total consideration of $6.5 million has been capitalized as costs to obtain internal-use computer software from third parties and will be amortized over an estimated useful life ofthree years, beginning when the related technology is deemed ready for its intended use, in accordance with our policy for the capitalization of internal-use software costs. The $2.5 million of contingent consideration is deemed to be the total value of technology not ready for its intended use as of the acquisition date. During the year ended December 31, 2023, $1.5 million of cash was paid due to the achievement oftwo of the software engineering and knowledge transfer milestones, with the related technology deemed ready for its intended use. During the year ended December 31, 2024, $1.0 million of cash was paid due to the achievement of the final software engineering and knowledge transfer milestones, with the related technology deemed ready for its intended use. There isno remaining contingent consideration related to this acquisition as of December 31, 2024, andno gains or losses on the contingent consideration were recognized during the years ended December 31, 2024, 2023 and 2022, respectively. See Note 2. Summary of Significant Accounting Policies and Note 8. Accrued Liabilities and Other for additional information regarding the contingent consideration liabilities.