N-able Q2 2026 Earnings Call Summary

1Key Financial Results and Metrics

Annual Recurring Revenue (ARR): $544 million, up 6% year-over-year in constant currency.

Total Revenue: $138 million, reflecting 6% growth year-over-year (5% in constant currency).

Subscription Revenue: $137 million, also up 6% year-over-year (5% in constant currency).

Adjusted EBITDA: $40 million, representing a margin of 29%.

Customer Base: 2,706 customers contributing $50,000 or more of ARR, a 7% increase year-over-year.

Dollar-Based Net Revenue Retention: 106% reported, 103% in constant currency.

Gross Margin: 80%, down from 82% in Q2 2025.

Unlevered Free Cash Flow: $23 million.

Cash Position: Approximately $116 million with a net leverage ratio of 1.8x.

2Strategic Updates and Business Highlights

N-able is focused on democratizing enterprise-grade cybersecurity, emphasizing the growing need for advanced cyber defense due to increasing vulnerabilities and AI-driven threats.

Recent product launches include Disaster Recovery as a Service (DRaaS), which aims to streamline recovery processes and reduce costs for customers.

The company is enhancing its Unified Endpoint Management (UEM) and Endpoint Detection and Response (EDR) offerings to meet evolving customer expectations, particularly in AI and security.

A new Chief Revenue Officer, Russell Rosa, has been appointed to drive channel strategy and operational excellence.

Organizational changes are being implemented, including a 6% workforce reduction to align resources with strategic priorities.

3Forward Guidance and Outlook

Q3 2026 Revenue Guidance: Expected between $134.5 million and $135.5 million, representing 3% year-over-year growth.

Full Year 2026 Revenue Guidance: Projected between $539 million and $542 million, reflecting 6% to 7% growth.

Full Year ARR Guidance: Expected between $562 million and $565 million, indicating 4% to 5% growth.

Adjusted EBITDA Margin: Expected to be approximately 29% to 30% for the full year.

The company anticipates that new product introductions and a larger renewal cohort will support growth in the second half of 2026.

4Bad News, Challenges, or Points of Concern

The company is experiencing near-term financial pressures due to a transition in go-to-market leadership and lower-than-expected renewal rates in UEM and EDR segments.

Renewal rates for the largest cohort in Q2 were lower than anticipated, impacting net new ARR and overall guidance.

Pricing pressures in EDR are leading to lower renewal rates and customer retention challenges.

The organizational restructuring, while aimed at long-term growth, may introduce short-term execution variability and operational disruptions.

5Notable Q&A Insights

Management acknowledged that the renewal cohort's performance deteriorated during Q2, with rates dropping from the high 80s to mid-80s, impacting overall performance.

Customers are increasingly scrutinizing vendors' AI strategies, which is causing some hesitation in purchasing decisions.

The company is optimistic about the potential for growth in the second half of 2026, driven by new product launches and a larger renewal cohort.

There is a noted shift in the market dynamics, with MSPs consolidating and seeking more sophisticated solutions, which N-able aims to address with its enhanced offerings. Overall, while N-able is facing some immediate challenges, particularly regarding customer renewals and market dynamics, the company remains focused on strategic growth initiatives and product enhancements to drive long-term success.