John Pagliuca: Sure. Yes. And the economics of the business, it really goes to the root of the business model, Matt. So I appreciate the question. And so — you’re right. So the remote monitoring piece, depending on the size and some of the scale of the MSP, it can range from $1 to $3 per month per device. When you stack all of our offerings up, that number gets closer to about a $15, $16 per device per month, SAM, so to speak, if you will, within our existing customer base, right? And so that, by the way, is a pretty impressive number. If we were to cross-sell and get 100% adoption across every device, that’s well over $1 billion of additional opportunity inside our existing base with our existing solutions today. And that’s before, Matt, we added managed EDR and before we — as we continue to add new offerings.
So EDR is a good example, we’ll increase our endpoint security. Historically, endpoint security on an antivirus bit was potentially as low as $1 per month per device with EDR, that’s a couple of dollars as we continue to add more goodness in helping MSPs become more efficient and more secure with endpoint security, that revenue, that ASP per device stacks to as high as potentially $7 per device. So there’s a tremendous amount of white space there in endpoint security. MSPs do a great job packaging that up and selling that to the SME. We have compliance and cyber insurance companies mandating services like EDR for companies that want to get underwritten. And so we see that as a tremendous white space opportunity, both for N-able and for our MSP partners.
And that’s the name of the game here. We continue to add MSPs, they add small, medium enterprises. They keep adding to well over 0.5 million SMEs and the well over 7 million devices that we have. And then we add new services for them to cross-sell and to their customers and grow that cross-sell number for N-able. And so there’s a good amount of, I’d call it, very much early innings as far as our ability to keep continuing to cross-sell into our base.
Matt Hedberg: Got it. Yes. No thanks a lot for that. Yes, it certainly seems like that per device opportunity continues to go up, which is great. And then Tim, maybe on the capital allocation side, you talked a little bit about the RIF. As you approach €˜23, how do you think about capital allocation between maybe — continue to delever? Or are you at the level that you need to be, M&A, just sort of just general capital allocation philosophy entering there?
Tim O’Brien: Yes, Matt. How are you doing? The way we think about it is looking at the capital markets today, I would say we have favorability compared to the current rate environment. So based on that, based on kind of our leverage rate, we feel comfortable with where we’re at as well as being able to look at anything strategic as we go through 2023 as well. So our plan as of now is we’re kind of comfortable with where we’re at, happy with where we’re at, continue to evaluate it as markets change. But for 2023, based on kind of where we’re at and where the markets are at, I would say, we plan to kind of stay the course.
Matt Hedberg: Got it. Thanks, guys. Congrats on the strong year-end.
Tim O’Brien: Thanks, Matt.
Operator: We now turn to Jason Ader from William Blair. Your line is open.
Jason Ader: Yes, thanks. Hey, guys. I want to ask you first about the — just the macro environment. How is this period different than what we saw kind of post — kind of early days of COVID in terms of demand? And then maybe just some comments on U.S. versus Europe.
