N-able — Second Quarter 2026 Earnings Summary

Financial Performance

• Total revenue was $138.2 million, representing 5.9% year-over-year growth (4.7% on a constant currency basis).
• Subscription revenue was $137.1 million, representing 6.1% year-over-year growth (5.0% on a constant currency basis).
• Total Annual Recurring Revenue (ARR) was $544.5 million, representing 6.0% year-over-year growth (5.7% on a constant currency basis).
• GAAP gross margin was 76.8%; non-GAAP gross margin was 80.2%.
• GAAP net income was $1.8 million ($0.01 per diluted share); non-GAAP net income was $18.7 million ($0.10 per diluted share).
• Adjusted EBITDA was $39.9 million, representing a 28.9% margin.
• Total cash and cash equivalents were $115.8 million as of June 30, 2026.
• Total debt, net of debt issuance costs, was $392.3 million as of June 30, 2026.
• Net cash provided by operating activities for the three months ended June 30, 2026, was $26.5 million.
• Unlevered free cash flow for the three months ended June 30, 2026, was $22.9 million.

Guidance and Future Outlook

• Full-year 2026 Total ARR outlook updated to $562 million–$565 million, representing approximately 4%–5% year-over-year growth on a reported basis (5% on a constant currency basis).
• Full-year 2026 Total revenue outlook is $539 million–$542 million, representing approximately 6%–7% year-over-year growth on a reported basis (5% on a constant currency basis).
• Full-year 2026 Adjusted EBITDA outlook is $158 million–$161 million, representing approximately 29%–30% of total revenue.
• Third quarter 2026 Total revenue outlook is $134.5 million–$135.5 million, representing approximately 3% year-over-year growth on a reported basis (3%–4% on a constant currency basis).
• Third quarter 2026 Adjusted EBITDA outlook is $41.0 million–$42.0 million, representing approximately 30%–31% of total revenue.

Business Segments and Product Lines

• Launched "Shadow AI Visibility" to enable organizations to understand, govern, and secure AI usage across environments.
• Announced "Empower 2027" and launched the "Empower on the Move" series to expand customer engagement and cybersecurity education.
• Opened a Global Capability Centre in Bengaluru, India, to strengthen technical talent, engineering, product management, and security operations capabilities.
• Named a Champion in the 2026 Omdia Global Managed Backup and Disaster Recovery Leadership Matrix for the third consecutive year.
• Platform currently protects approximately 500,000 businesses globally.

Market and Competitive Landscape

• Management states AI is reshaping the security landscape, creating demand for democratized cyber-defense.
• Company strategy focuses on accelerating partner-led growth, expanding upmarket, and strengthening the global partner and channel ecosystem.
• Recognized for continued innovation in cyber resilience, data protection, cyber recovery, and business continuity capabilities.

Risks and Challenges

• Risks include adverse economic conditions, potential reductions in IT spending, and purchasing decision delays due to inflation, interest rates, or geopolitical events.
• Risks related to AI include the ability to successfully incorporate AI features, market AI-powered solutions, and realize internal efficiencies.
• Risks include the possibility of cyberattacks, security incidents, or breaches compromising systems or data.
• Risks include foreign exchange gains/losses, trade policy changes, and volatility in currency exchange rates.
• Risks include the potential for operating income to fluctuate as a percentage of revenue due to expenditures to support growth.
• Risks include indebtedness, rising borrowing costs, and potential restrictions on operations.
• A material weakness identified in the second quarter 2026 could result in material misstatements in financial statements.

Management Commentary and Tone

• CEO John Pagliuca expressed strong confidence in the road ahead, citing decisive actions to capture AI-driven demand, including organizational changes and sharpened product roadmaps.
• CFO Tim O'Brien highlighted the business's delivery of growth and cash flow, strategic initiatives to strengthen market position, and disciplined profitability.
• Management indicated an intention to be active with the share repurchase program, reflecting conviction in the long-term value of the business.

Other Key Points

• Appointed Russell Rosa as Chief Revenue Officer to support strategy to accelerate partner-led growth and drive the next phase of growth.
• The financial results included in the press release are preliminary and pending final review by the company and its external auditors.
• The company intends to host a conference call on August 10, 2026, at 8:30 a.m. ET to discuss results and outlook.
• Non-GAAP financial measures exclude amortization of acquired intangible assets, depreciation, stock-based compensation, transaction-related costs, spin-off costs, and restructuring costs.