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Image source: The Motley Fool. Monday, Aug. 10, 2026 at 8:30 a.m. ET Director of Investor Relations - Griffin Gyr President and Chief Executive Officer - John Pagliuca Executive Vice President and Chief Financial Officer - Tim O'Brien Operator: Hello, everyone. Thank you for joining us, and welcome to the N-able Second Quarter 2026 Earnings Call. [Operator Instructions] I will now hand the conference over to Griffin Gyr, Director of Investor Relations. Please go ahead. Griffin Gyr: Thanks, operator, and welcome, everyone, to N-able's Second Quarter 2026 Earnings Call. With me today are John Pagliuca, N-able's President and CEO; and Tim O'Brien, EVP and CFO. Following our prepared remarks, we will open the line for a question-and-answer session. This call is being simultaneously webcast on our Investor Relations website at investors.n-able.com. There, you can also find our earnings press release, which is intended to supplement our prepared remarks during today's call. Certain statements made during this call are forward-looking statements, including those concerning our financial outlook, our market opportunities and the impact of the global economic environment on our business. These statements are based on currently available information and assumptions, and we undertake no duty to update this information, except as required by law. These statements are also subject to a number of risks and uncertainties, including those highlighted in today's earnings release and our filings with the SEC. Additional information concerning these statements and the risks and uncertainties associated with them is highlighted in today's earnings release and in our filings with the SEC. Copies are available from the SEC or on our Investor Relations website. Furthermore, we will discuss various non-GAAP financial measures on today's call. Unless otherwise specified, when we refer to financial measures, we will be referring to non-GAAP financial measures. A reconciliation of certain GAAP to non-GAAP financial measures discussed on today's call is available in our earnings press release on our Investor Relations website. And now I will turn the call over to John. John Pagliuca: Thank you, Griffin, and thank you all for joining us today. At N-able, we believe every business deserves enterprise-grade cybersecurity, and we're working to democratize cyber defense at a moment when the stakes have never been higher. That mission has continued to translate into disciplined growth and profitability. Second quarter ARR was $544 million, growing 6% year-over-year in constant currency, and adjusted EBITDA was $40 million, representing a margin of 29%. Our results this quarter and the promising road ahead are grounded in what we believe is a compelling cybersecurity and AI opportunity. Recent advances in frontier AI models are accelerating both the volume and velocity of cyber risk. Vulnerabilities are being discovered faster, exploit time lines are compressing and customers need to move from threat detection to remediation with far greater urgency. The data underscores this shift. CVE.org shows the number of vulnerabilities more than tripled between the second quarter of 2022 and the second quarter of 2026. And Anthropic's recent research shows how a lone operator can turn a month's worth of patches into working exploits in a single afternoon for only a few thousand dollars and with no specialized expertise. The recent Hugging Face security incident, where an agent broke out of its test environment and autonomously attacked business infrastructure makes this AI risk even more concrete. At the same time, businesses are deploying agents and continue to digitize their operations, expanding the amount of data and IT assets that need to be protected. This creates a compounding challenge. As adversaries' offensive capabilities grow more powerful, the attack surface they can target is growing right alongside them. We believe this backdrop reinforces the strategic relevance of N-able's end-to-end portfolio from patch management and vulnerability remediation and unified endpoint management to threat detection and response and security operations to fast, efficient restore capabilities and data protection. With a base of 500,000 businesses and a platform that spans the full attack life cycle, we believe N-able is well positioned to capture the large and growing opportunity and deliver growth and profitability over the long term. While we remain excited about the opportunity ahead, we are updating our 2026 top line guidance, and I want to address this directly. Our update reflects two primary factors: First, the impact from a transition in go-to-market leadership; and second, shifting dynamics in the evolving UEM and EDR markets. While we believe N-able is performing well and strategically positioned for long-term durable growth and profit, these items are creating near-term financial pressures. Let's assess both. On the go-to-market side, we welcomed Russell Rosa as our new Chief Revenue Officer in July, and his priorities are clear. First, accelerating our full channel strategy to better target partner segments where our platform can deliver value. Second, deepening our upmarket motion, particularly as our portfolio increasingly addresses more complex customer needs across security, data protection, AI and compliance. And third, driving operational excellence across the revenue organization with a focus on durable productivity and long-term efficiency. Russell brings more than 25 years building and scaling channel organizations. Most recently, he was CRO at Sumo Logic, where he helped deliver constant double-digit security growth. And before that, at Cisco and Actifio, where he built global channel and go-to-market programs from the ground up. That combination of channel DNA and enterprise scale is exactly what this next phase of growth for N-able calls for. Given the significance of the leadership transition, we expect some near-term variability in our go-to-market execution, which is reflected in our adjusted 2026 guidance. We are making this change now to build a stronger, more enduring growth engine as we look to 2027 and beyond. Turning to UEM and EDR. Managing and securing endpoints remains foundational to IT management and security. But as AI reshapes the landscape, customers now expect greater capabilities on top of these core outcomes. While we're moving fast to meet these needs, this shift is pressuring near-term growth in both categories, which is also reflected in our updated guidance. As it relates to UEM, we're executing a road map to govern and secure AI agents, deliver more comprehensive exposure management capabilities and drive value from our AI workflow assistant Enzo. And in EDR, our portfolio expansion plans include AI security for emerging AI-driven threats, FedRAMP-certified EDR capabilities to enhance our appeal with regulated customers and cloud-native security as workloads move to the cloud. We are also adding managed EDR. This serves customers who do not want the full breadth of our security operations solution, but still want a higher level of protection than EDR alone provides. This lower entry point helps us cover the full range of customer preferences and can serve as a platform wedge for broader estate expansion over time. As agents get deployed and AI-driven attacks elevate the importance of patching, vulnerability management, compliance and real-time detection and response, we believe the endpoint remains a primary battleground for keeping IT assets and businesses safe. We intend to win this ground while building beyond it. As we execute our mission to protect businesses from cyber threats, we also remain focused on balancing growth and profitability. Aligning investments with our highest priority opportunities, operating a streamlined organization and driving high levels of productivity have always been a part of that focus, and we are acting with discipline on all three. With that in mind, we plan to implement a series of organizational changes in the second half of the year that will reduce our total headcount by about 6%. Let me explain what's driving this. We see a widening opportunity and more pronounced customer demand in data protection, security operations and the full channel. Success requires relentless customer focus and as customers' needs shift, it's imperative that N-able's resource allocation shift too. Our changes aim to realign our resources with these opportunities while preserving the organizational focus and speed that cybersecurity leadership demands. From a productivity perspective, we are driving real gains from incorporating the latest technologies, including AI into the way we work. From AI-enabled SDRs and accelerated content marketing and go-to-market to faster resolutions and customer support to shipping more code in engineering, new tools are helping drive step change progress across the business. We are seeing particular effectiveness in engineering with AI-generated code accounting for 47% of all committed code in the second quarter and some features shipping 10x to 12x faster than prior road map estimates. These results give us confidence to move decisively rather than incrementally. While this is a difficult decision, it reflects our commitment to continuing to strengthen N-able for the long term. We firmly believe our changes will make us better positioned to deliver for our customers, partners and all stakeholders. Let's now look at our progress throughout the company in the second quarter. These updates share a common thread. Customers are getting faster outcomes and stronger protection with less operational burden. Let's walk through each. In data protection, we launched Disaster Recovery as a Service, or DRaaS, earlier this year. With N-able DRaaS, customers can restore full operations in minutes rather than days, and there's no separate infrastructure or hardware needed. This means faster restores, less complexity and execution against our mission to democratize cyber defense. The timing of our launch is notable. DRaaS lets customers avoid CapEx costs, supply delays and maintenance that comes with owning hardware, an increasingly relevant value proposition. DRaaS has already helped a number of businesses avoid costly downtime, a real proof of the value this capability delivers. We also added automated backup ticketing to streamline backup-related workflows for customers. And looking ahead, our plan to extend coverage to Google Workspace later this year remains on track. The industry is taking notice. Omdia, one of the most respected channel-focused research firms, named N-able its backup and Disaster Recovery champion for the third year running. Customers are telling us the same story. Our data protection solution, which is above $200 million in ARR, continues to grow faster than the total company and once again led our net new ARR growth this quarter. Stepping back, we see AI driving a paradigm shift in data protection. As AI agents operate inside businesses, traditional perimeter-oriented defenses such as the endpoint and network no longer suffice to keep organizations protected. When an agent makes a mistake or gets compromised, a strong data protection solution can be the difference between a business extinction event or routine recovery. We named our solution, Cove Data Protection, to invoke the calm, protected waters a cove provides. As AI makes the seas choppier than ever, this commitment to safety has never been more relevant. We're excited to continue investing in this market and extend the capabilities of our fast-scaling solution. In UEM, we made progress on our priority road map items to govern and secure AI agents, deliver more comprehensive exposure management capabilities and drive value from our AI-assisted Enzo. We are seeing indications that our vulnerability management capabilities are resonating as we uncovered billions of vulnerabilities across our customer base. On the commercial front, UEM cross-sell to data protection and security customers was up 27% in the quarter, and our targeted displacement campaign increased migrations against a top competitor by 60%. These data points support our confidence in the strategic importance and competitiveness of our Gartner recognized UEM solution. We also launched Shadow AI Visibility in both UEM and security operations, giving customers insight into where AI tools are being used across their environment. This addresses a blind spot that affects many organizations and addresses a need that we anticipate will only grow over time. This brings us to our AI-powered security operations solution, where we continue to see strong traction for enterprise-grade security delivered in an accessible way. This is driven by several factors. Chief among them is the sheer intensity of the threat environment. Our own research found that the average SOC analyst faces an alert every 30 seconds, a volume no human analyst can realistically absorb. We empower customers to cut through all this noise. By utilizing a vendor-agnostic approach that ingest signals across the endpoint, network, cloud, identity layer and SaaS application, we give customers a view no single point solution can match. And our AI capabilities enable customers to act on risk faster than a fragmented stack could. And for the threats that do escalate beyond automated containment, we are extending management incident response capabilities, giving customers hands-on investigation and response exactly when they need it. Identity, in particular, has emerged as a leading attack vector as attackers increasingly target credentials rather than endpoints directly. In fact, we see half of attacks now bypassing endpoint controls entirely, a clear signal that attackers are finding new ways in and identity has become one of their new favorite paths. We protect over three million identities, helping stem this growing tide. That value is showing up in our results. This quarter featured one of our largest new deals ever, and we believe we are gaining market share in this category. Each of these updates point to what we believe is a broader shift. DRaaS allows customers to walk away from hardware and manual disaster recovery. UEM is moving from simply surfacing vulnerabilities to helping remediate them. And our security operations platform is increasingly handled threat responses automatically. In each case, software is taking on work that has historically required dedicated labor. We see this as a meaningful expansion of our opportunity. And with that, I'll turn it over to Tim before circling back for closing remarks. Tim? Tim OBrien: Thank you, John, and thank you all for joining us today. Before we go into the details of the quarter, let's start with the broader takeaways and how we view the business going forward. Our updated full year top line guidance is below our ambitions for the business. Still, we firmly believe N-able remains strong. The drivers of our business remain intact. The organizational changes John discussed give us confidence in greater speed and better execution. We also remain highly profitable with a full year 2026 adjusted EBITDA margin guide of approximately 30% at the midpoint. And given our continued strong free cash flow generation, we intend to be active with our share repurchase program that has a remaining authorization of $45 million, a direct reflection of our conviction in the value of the business. With that context, let's turn to the numbers. For our second quarter results, total ARR was $544 million, growing at 6% year-over-year on a reported and constant currency basis. Total revenue was $138 million, representing approximately 6% year-over-year growth on a reported basis and 5% on a constant currency basis. Subscription revenue was $137 million, representing approximately 6% year-over-year growth on a reported basis and 5% on a constant currency basis. We ended the quarter with 2,706 customers that contributed $50,000 or more of ARR, which is up approximately 7% year-over-year. Customers with over $50,000 of ARR now represent approximately 63% of our total ARR, up from approximately 60% a year ago. Dollar-based net revenue retention, which is calculated on a trailing 12-month basis, was approximately 106% on a reported basis and 103% on a constant currency basis. Approximately 46% of our revenue was outside of North America in the quarter. Turning to profit and margins. Note that unless otherwise stated, all references to profit measures and expenses are calculated on a non-GAAP basis and exclude the items outlined in the GAAP to non-GAAP reconciliations provided in today's press release. Second quarter gross margin was 80% compared to 82% in the same period in 2025. Second quarter adjusted EBITDA was $40 million, representing approximately 29% adjusted EBITDA margin. Unlevered free cash flow was $23 million in the second quarter. CapEx, inclusive of $3 million of capitalized software development costs was $13 million or 9% of revenue in the second quarter. We ended the quarter with approximately $116 million of cash and an outstanding loan principal balance of approximately $398 million, representing net leverage of approximately 1.8x. During the quarter, we also added a delayed draw term loan facility of up to $75 million on the same terms as our existing facility. This gives us additional flexibility and capacity as we evaluate capital allocation strategies. Non-GAAP earnings per share was $0.10 in the second quarter based on 189 million weighted average diluted shares. Before turning to guidance, I want to give some context on our results in the second quarter. The second quarter has our largest cohort of contract renewals and renewal rates in this cohort, primarily in UEM and EDR came in below expectations. That's the main driver of this quarter's net new ARR performance and updated guidance. We're addressing this head on. In addition to the organizational changes, expanded UEM and EDR capabilities and CRO hire we discussed earlier, we're also taking specific steps to strengthen our renewal motion. This includes more dedicated sales engineers on renewal accounts and improved outreach cadence ahead of renewal dates, facilitating more in-person customer interactions with our top accounts and an up-level support organization to strengthen the customer experience throughout the contract life cycle. Let's now turn to our financial outlook. Our guidance incorporates the following elements. First is the impact of updated FX rates and revised first quarter results. Regarding FX, we are assuming rates of [ $1.13 ] for the euro and [ $1.33 ] for the pound. Relative to our guidance last quarter, the changes in FX rates drive approximately $2.5 million of negative impact to full year revenue and approximately $5 million to full year ARR. We also revised first quarter 2026 revenue per our filings down $1.3 million. This is a revenue-only item. It does not affect ARR, though it does flow through to adjusted EBITDA. Second, we are accounting for recent business trajectory in UEM and EDR, including the lower-than-expected renewal rates we experienced in the second quarter. While we have clear plans in place to address both, we have updated our guidance to reflect these trends. Third is the change in go-to-market leadership. As John mentioned, we're excited about our new CRO and the leadership he brings, but transitions like this typically carry near-term headwinds as new priorities and processes take hold, and we're factoring that into our guide. All that said, several factors give us confidence in our ability to continue driving solid growth. The renewal cohort in the first half of the year is approximately 40% larger than the second half cohort, which limits second half churn exposure and supports our retain and expand motion. We also believe new product launches, in particular, DRaaS, Google Workspace Backup, incident response and FedRAMP EDR are tailwinds. The road map extends well past this year. In 2027, we plan to launch Entra ID coverage and data protection, expand our security operations platform and begin monetizing agents. As it relates to profitability, I want to briefly take a step back and discuss the broader strategic context of our adjusted EBITDA and unlevered free cash flow guidance. The opportunity ahead for N-able is clear. Businesses are navigating a more complex security and IT landscape with cyber threats growing in speed, scale and sophistication. Organizations are looking to N-able to help them respond with greater effectiveness and confidence. For N-able to continue leading in this environment, we have to evolve as well. Given this, as John mentioned, we plan to implement a series of organizational changes, reducing our annualized operating expenses by approximately $11 million to $13 million. In connection with these changes, which include an approximately 6% reduction in the total size of our workforce, we expect to incur approximately $4 million to $6 million of restructuring charges in the second half of the year. These actions are designed to align investments with our highest priority opportunities, streamline our organization and improve productivity. We believe these changes make N-able stronger and better positioned to drive profitable growth over the long term. Moving to the third quarter of 2026. We expect total revenue in the range of $134.5 million to $135.5 million, representing approximately 3% year-over-year growth on a reported basis and 3% to 4% on a constant currency basis. We expect third quarter adjusted EBITDA in the range of $41 million to $42 million, representing an adjusted EBITDA margin of approximately 30% to 31%. For the full year 2026, our total revenue outlook is approximately $539 million to $542 million, representing approximately 6% to 7% year-over-year growth on a reported basis and 5% on a constant currency basis. Our full year ARR outlook is $562 million to $565 million, representing 4% to 5% year-over-year growth on a reported basis and 5% on a constant currency basis. We expect full year adjusted EBITDA of $158 million to $161 million, representing an adjusted EBITDA margin of approximately 29% to 30%. We expect our unlevered free cash flow to be approximately $116 million to $120 million. We expect CapEx, which includes capitalized software development costs to be approximately 6% of total revenue for 2026. We expect cash interest payments of approximately $27 million, assuming interest rates remain in line with current levels. We expect total weighted average diluted shares outstanding of approximately 189 million to 192 million for the third quarter and 188 million to 192 million for the full year. Finally, we expect our non-GAAP tax rate to be approximately 25% to 26% for both the third quarter and the full year. Now I will turn it over to John for closing remarks. John Pagliuca: So bringing it all together, AI is reshaping the security landscape, making our mission to democratize cyber defense more critical than ever. We are taking decisive action across the business to better capture this demand. We welcomed Russell Rosa as our new Chief Revenue Officer. We are making organizational changes to align resources with our highest priority opportunities, and we are sharpening our road maps to bring new products to market faster. Our award-winning platform protects approximately 500,000 businesses across the globe, and our confidence in the road ahead remains strong. And with that, operator, we'll turn it over to questions. Operator: [Operator Instructions] Your first question comes from Mike Cikos with Needham. Michael Cikos: I just wanted to zoom out for a second and just get a better view of the shape of Q2. And where I'm going with this is if I just take a step back and look like 90 days ago, N-able already had a month under its belt from Q2. They had outperformed the Q1 result and opted to maintain the full year guide. And then here we are, and we're talking about the renewal cohorts really for that UEM and EDR market flipping around on us and causing us to downtick here on the guide for the full year. So can you help us think about how much of that renewal cohort is in the final month or final couple of weeks of the quarter? Like when did that renewal dynamic really show up in the quarter? Tim OBrien: Mike, so the renewal cohort in Q2 is by far the biggest that we have in the year just due to the dynamics of how we converted customers into those long-term contracts. So the impact of the renewal rate, what we kind of saw was we were seeing renewal rates in the higher 80s. And as we progress through the quarter, we saw them kind of middling out more in the mid-80s. And the impact of that plus the size of the cohort is what drove kind of the Q2 performance. And as we look at the full year guide, we baked similar renewal rates going forward into the remainder of the year. Michael Cikos: Okay. And for those renewal rates, like if a customer is not renewing with you, where are they going? What are they doing? John Pagliuca: Yes. Mike, this is John. So -- and for you and for everyone, there's a couple of different factors that go into the renewal rate as well. It's also dollars, right? So if we -- we might renew the customer, but if they're coming in at a lower price point or a lower quantity, that's going to impact the renewal rate. And as mentioned, and if we just zoom out, data protection and security operations continue to be green from where we stand. Data protection, the product offering continues to hum. Security operations is actually ahead of plan. What we mentioned in the prepared remarks, especially on the renewal rates was more focused on EDR and UEM. And with EDR, we're seeing some pricing pressure. Now that manifests itself in two ways. One, we might retain the customer but at a lower price point, which is going to affect GRR and the renewal rate. And then in times, we see pricing pressure, and that might manifest itself for them going to get a SentinelOne type of service from a different type of provider. So that's where we're seeing it with EDR. And I'll tell you what we're doing to combat some of this in a second. And then on UEM, similar, right? We might see some pricing pressure from customers that might be coming off of renewal. They might have been a 2-year commitment with us and/or they might have some quantity degradation in their own base from -- at the MSP. Because remember, our model is not just selling to an enterprise, we're selling to an MSP. So if their quantities drop a little bit and/or they're coming back for more competitive pricing, that's going to show up as a headwind in renewal rate. So you can't just take a straight line and say that the customers are leaving. To answer your question a little bit more succinctly, if they're leaving on EDR, they could actually be going to another provider who might be offering or partnering with the SentinelOne or they might be going to some of the other names that we know in the industry. And on UEM, Mike, it's the usual kind of cast of characters that we've been going with. But we don't really see a change or a significant change in UEM from a market share ebb and flow, frankly. A lot of this is some of the pricing sensitivity on both of those areas. And then so from an actions point of view on EDR, just to round the bases on this. On EDR, a couple of things. One, we've entered into or amended our agreement with SentinelOne, which will allow us to do two things. It actually puts a nice good amount of pricing protection for N-able for the foreseeable future, but it also, more importantly, extends our offerings and SKUs. Sometimes we would lose a customer because they might need a certain offering or a SKU like -- and we listed them off in the prepared remarks, you might need like a FedRAMP type of certified endpoint security offering or SKU. Even if it's for an MSP with 10% or 5% of their customer base, if we didn't have that SKU available to us in Q2, we potentially could put that customer in harm's way or have a degradation in the renewal rate. We've now amended that agreement with SentinelOne, opening up the SKUs, and we think that will also provide a strengthening of renewal rates, especially for the EDR part of our customer base. Operator: Your next question comes from Erik Suppiger with B. Riley. Erik Suppiger: First off, can you remind us what your headcount is currently? And I assume that's before you've had any reductions. And then what was the DRaaS contribution in the quarter? And then lastly, on SentinelOne, just to be clear, is -- are they giving better pricing to some of the other channels? Is that an issue? Or is it more access to products like you were talking you extended your offering? John Pagliuca: Erik, I'll start with the DRaaS one, and then I'll -- we'll take them one at a time. So the impact for revenue in Q2 was actually none. So DRaaS went GA in July, and we're really excited about this offering. We've had it in customer hands for a good part of the quarter. It's resonating. It's resonating with the smaller shops. It's resonating with the larger shops. And frankly, the timing is perfect. As we all know, hardware costs are going up. Labor costs continue to rise, and we're actually taking the hardware and labor parts out of the hands of the MSPs and putting an instance in our cloud so that if they need to fail over, they can fail over immediately. We believe this will be a winner, and we're really excited. We did begin starting to sell it in July. And as I sit here in August, I continue to have the same level of excitement for DRaaS. So that's that. On -- on the SentinelOne question, I'm not going to speak -- I can't speak to, frankly, what the other pricing folks have in the market. Our differentiation has always been, one, the integration in our UEM and the strong partnership we have with SentinelOne. We do, I believe, a best-in-class job with the support. And it historically has been and continues to be a really strong relationship. We believe it's not just the economics, but it's also the complete business resilience story where we're actually bringing in our UEM and our XDR offering in conjunction with some of the SentinelOne SKUs that makes it the winning combination. And so we're not out there really looking to just resell EDR as an example. It's really in conjunction with the full attack life cycle with UEM on the before the attack, endpoint security during the attack and a little bit more on the protection side and then XDR. And we do sell the SentinelOne SKU as an add-on to both our UEM and XDR offering. So for us, it's a good winning formula as we go through. On the headcount, I'll defer to Tim, but we're around. Tim OBrien: Yes, it's about -- it's approximately 2,000 employees as of Q2. Erik Suppiger: And just real quick on the DRaaS, what are you projecting as you look into the second half of the year? John Pagliuca: Look, I think it will be one of our faster-growing SKUs to $10 million of ARR. I'm not going to put a time line on it, and we don't really forecast out specific SKUs, but we're pretty bullish on the offering. Data protection continues to be an area that, again, both mid-market enterprises and MSPs of all sizes continue to look to. And then frankly, in this AI-forward world where we're beginning to see agents causing a need, I'll say, for fast restore and recovery. That's not really necessarily cyber related. It's now a new use case that we're seeing. I think the need for data protection and an offering like DRaaS is just -- is even stronger. So we're very bullish on it. The team has done a great job putting the offering together, and it's really been resonating so far. So now it's up to us to continue to drive this pipeline and convert this pipeline as we get into the second half of the year. Operator: Your next question comes from Jason Ader with William Blair. Jason Ader: Just I want to get at the sort of MSP versus VAR dynamics. What's -- I guess the question is what's happening in the MSP market from a macro or competitive standpoint? And wondering if the apparent pivot somewhat over the last few years to the VAR channel is indicative of more headwinds in the MSP market than in the VAR market. John Pagliuca: Thanks, Jason. This is John. So in the prepared remarks, we talked about upmarket. And I just want to clarify or make sure folks understand what that means. That's both related to the MSP market that we serve and the mid-market, right? And so in the MSP land, we continue to see an uptick in M&A. And you can see that. I think it's widely known MSPs continue to consolidate, continue to drive a lot of M&A. There's a lot more private equity driving consolidation. And as a reminder, that doesn't mean our TAM is shrinking. In fact, as MSPs grow, they're getting exposed more and more to larger enterprises because their level of sophistication and their scale grows. So it's usually -- it's definitely a net positive for the industry, but it also requires a little bit of a different selling motion for N-able, and this is why we brought in Russell. Russell has that enterprise experience. Russell himself comes with the Rolodex in connections to a good number of VARs and MSPs across the landscape. And we're seeing more and more 6-figure opportunities than we ever have. It has a different rhythm. It has a different -- it requires a different type of seller and it requires, frankly, just a different cadence into our closing cycle. So that's what we're seeing on MSP. I do -- I will say from an MSP point of view, from a demand point of view, we continue to see the sell-through part of the equation remains strong. So data protection, security operations, security. But on MSP, where it might be a sell to, people are taking a step back and saying, "Hey, how is AI going to affect the tools for my technicians vis-a-vis solutions that we're putting into our end customers. And for example, that's where UEM plays. The good news story here is our -- I believe our AI vision and our AI story is resonating in the market. And we're beginning to deliver that with Enzo. We have AI agents that were slotted to begin to deliver to the back half of the year, and MSPs are taking notice. I believe our AI story is differentiated from the market. And as we continue to deliver more of these AI capabilities, I think it will unlock some of that UEM trepidation when people are trying to figure out how do -- how is my technicians going to be impacted by AI. We're going to help them alleviate some of the burden that a lot of L1 technicians are looking to have this year. I believe more and more of that will really start to surface and be felt in 2027. But the AI story is also a strong one. And I think the more mature MSPs are looking for vendors like N-able to help guide them through that AI fog and giving them technology that they can put on top of their existing SaaS platform. On the mid-market, again, this is where I think Russell's strength will really be shown. Russell understands the channel. He comes from the channel. We began seeing good uptick in the channel. And this is where UEM is not as much of a red ocean. So an MSP land that UEM is very much more of a red ocean. In the mid-market, where CIOs like this all-in-one tool where they can combine things like a take control tool, a monitoring capability, vulnerability management, patching management and reporting all in one tool, wow, they'll get to replace maybe four or five, potentially even six tools in their stack with one tool at a price point that saves them a good amount of money. And so getting that offering into the channel, having the channel understand the power of this tool, we think, is an exciting proposition for mid-market CIOs. And I'm sure Russell and his channel experience will be able to put this value prop into better hands in the channel, and we'll be able to see that uptick as we go through. But you're right, we're seeing the UEM market and the demand in mid-market pulling us in that direction for sure. Jason Ader: Pulling you in the VAR direction? John Pagliuca: Pulling us, yes, more than the -- let's call it -- yes, it's the mid-market. The VAR is the way that we're going to channel that mid-market. Jason Ader: Got you. Okay. And then just sort of zoom out question. I know you guys have been searching for the right growth formula over the last few years. I guess what makes you confident that you found it? John Pagliuca: Well, look, we believe where we are today is not where we want to be, right? And so I would -- the way I would frame it, Jason, is how do we go from where we are to where we want to be. And look, a lot of that is in NPIs, and new product introduction. The second half of this year, we're in a better position from an organic new product introduction, I think, than we've been for many quarters or many years, frankly, with DRaaS in July. We have Google Workspace for our backup offering later this year. We have incident response and Security Operations that we're bringing to market. And then we're also bringing on a host of SKUs, some of which, again, for endpoint security that are ours and our IP and some that are SentinelOne. And so just like any other company, to drive that NRR to a spot that is much more interesting, you need to have that healthy, steady diet of new products that will resonate in the market. You couple that with what we're doing with AI, and we believe that growth formula will really begin to accelerate as we get into 2027. We are a series of long transactions. We have 25,000 customers. And inevitably, that I always refer to it as that snowball. That snowball will take some time to compound. But given the second half lineup card of new product introductions and with our AI tooling, we believe those snowballs will begin in the second half and really start to accelerate and show up in 2027. Operator: Your next question comes from Joe Vandrick with Scotiabank. William Vandrick: John, you mentioned customers are expecting more advanced capabilities in UEM and EDR. Can you maybe elaborate just a little bit more on that point? And then remind us, going forward, I mean, how are you viewing the importance of UEM and EDR to the business? And have you guys quantified how much of the total business these two segments make up? John Pagliuca: On UEM, Joe, I think it's two dimensions. One, UEM is a real anchor from a security -- anchor meaning a good thing from a security point of view. So we're seeing MSPs, both large and small, looking for extended vulnerability management capabilities, exposure management and we're looking to provide that for them. That's on one part. And then one of the key parts in our business, and this has been true for the 20-year existence here, it's all about automation. And today, the way that automation is being felt and the need is really through the artificial intelligence and helping MSPs drive that important metric. For an MSP, for every technician, they want to drive at least -- they want to be able to manage, monitor and secure about 300 endpoints or devices, right? With AI and automation, we hope to drive that number to a much higher ratio so that the MSPs themselves can become more efficient and drive more profitability for our end customers, the MSP. And so what they're looking for is help in understanding how they can leverage AI. We have MCP server capability with both of our OEMs. We're bringing -- we have AI assistance in our offerings right now, and that's just the start. Later this year, we'll be bringing coworkers. And the difference there is the level of autonomy. With our AI assistant, they can use it as an assistant to help them take action. But as we go forward in the future, the AI will not just be an assistant, it will actually take an autonomous type of action to drive a lot more of that efficiency for the MSP. That's what they're looking for. They're building AI capabilities themselves in-house, but they're really looking for vendors to help with that next step and making sure that they can do so at scale and safely. And we're laser-focused there. And again, we believe that our AI vision and our AI strategy will be a differentiator as we begin to deliver that later on this year. William Vandrick: Very helpful. And then one for Tim. Can you help us understand -- what's giving you the confidence that net new ARR can pick up in the back half of the year? And how much of that guide is supported by what you're seeing in the pipeline today? How much of that is supported by pipeline? And I guess, what are you assuming around improved execution? Tim OBrien: Yes. I would say the guide does not really bake in any improved execution. It's really some dynamics of the renewal cohort sizes that are going to drive some of the sequential growth first half versus second half. As an example, like the entire second half renewal that we have is generally the same size that we had in Q2. So there's a positive dynamic there in terms of growth. We've assumed similar renewal rates in the second half that we experienced in Q2. We do have a little bit of impact from new product introduction, but that's like 0.5 point of revenue or so between all the new offerings that are coming out in terms of the outlook. So it's generally immaterial. So it's really that dynamic. And then we also had some FX impact in the quarter just as rates came down a bit for Q2 kind of looking forward. Operator: Your next question comes from Matt Hedberg with RBC. Matthew Hedberg: I wanted to dig into kind of the selling environment a little bit more. I mean we've all seen enterprises sort of think through their AI rollout and strategy, and it's complex enough there. I have to imagine in the SMB market, it's even more complex. I guess I'm wondering how much of the buying behavior is impacted by maybe just these businesses trying to themselves understand their own AI strategy, and it's just causing some pause or questions on their existing spend. And as we work through some of that AI adoption and digestion, things could also improve. Just kind of curious if there's an element of that in there. John Pagliuca: Matt, there's definitely an element to that. And let me bifurcate it. And I mentioned this in an earlier comment. In our business model, we have a sell-to element and a sell-through. And that sell-to element is when the MSP, our customer is consuming the offering to drive their business. And then the sell-through is when they're actually taking those offerings and deploying them at their customers and effectively selling through as the phrase kind of implies. On the sell-through, especially as it relates to data protection and security and security operations, we're not seeing really much trepidation there or slowdown there. So that's, I would say, business as usual. But you're right, MSPs are stepping back. And I would say, I hate to use the word every, but nearly every conversation, folks want to understand whether it be N-able or there other vendors, what is our AI strategy? How are we playing in that equation? And then MSPs are looking whether they want to build some AI capabilities, not to replace just to be clear, not to replace the UEM, but to drive some automation on top. And folks are definitely taking a harder look at vendors and understanding what their AI strategy is and looking at how that -- how they can make themselves more efficient. So we're definitely seeing a pause or a little bit more of a scrutiny as to how a vendor's AI strategy and what they're planning and doing and how that will impact the sell to and the life of the technician. And again, so we have our Chief AI Officer, and she's been speaking to hundreds of MSPs both individually but also at conferences, and we're bringing MSPs here. And I'm confident the large shops, the smaller shops, they're fully supportive of our strategy. Again, we have a multipronged approach. For those that want to access to their data in a much more AI-friendly way, we have the MCP server capabilities that customers can leverage. We have our AI assistant that people can plug in on top of our SaaS offerings. And then as we're rolling out these more autonomous agents, the MSPs will drive a lot more efficiency there. So we believe our multipronged strategy is resonating with all segments, and it's all about delivering that. But Matt, you're right. We're seeing MSPs wanting to understand, again, our AI strategy and how it's going to impact their labor and their workforce. We're seeing MSPs reimagine even their workforce structurally. And they're leveraging the new technology that we're looking to bring on to help them reimagine that workforce, not just for the 2026, but for the foreseeable future. Matthew Hedberg: Got it. And then maybe as a follow-up to an earlier question, on confidence in growth resuming in the second half. It sounds like, Tim, you're not embedding any sort of improvement in your guide. But just kind of thinking through all the changes with the new CRO, the RIF, still maybe some lingering renewal questions, new products that are still early. Like how should we think about the potential for additional disruption from here sort of beyond what you've sort of scoped out? Because it does seem like there's a lot of change going on right now as well. Tim OBrien: Yes. I would say like, Matt, just to double back on kind of comments earlier. In terms of the renewal rates that we experienced in the quarter, we've assumed similar renewal rates the remainder of the year. From demand assumptions, we've assumed kind of similar demand going forward as well. And then a lot of the a lot of the kind of difference in kind of sequential growth in the back half versus the first half is really due to kind of renewal cohort sizes between first half and second half. So we're not assuming any real improvement from a guide standpoint. We're obviously operationalizing change to push better improvements across renewal rates, demand as we kind of move forward and execution on the new product introductions that we're bringing to market here in the second half of the year as well. So that's just kind of the, I would say, overall color in terms of kind of how we built the guidance up for the remainder of the year. Operator: Your next question comes from Keith Bachman with BMO . Keith Bachman: I wanted to go in a little bit different direction in that if we think about the macro, I think most of the security companies that have a broad spectrum of customers have said and will say that, in fact, with [ Mythos ] and other incremental security threats, their pipeline has actually increased, which is probably also driving a revenue cadence increase. And what you're suggesting is there's been a pause. And to Matt's question, the intimation is maybe there's an evaluation period, but that's not what we have heard or will heard, I think, from other security vendors. So I'm trying to tie it together. So either, a, the MSP market or maybe even the lower end, so to speak, of the VAR tier is going through a longer cadence of evaluation? Or is it b, is the incremental competitive threat actually causing vendors to evaluate other products? In other words, what I'm really trying to drill down, is there something -- you're suggesting go-to-market may be a contributing factor, but is there something on the product side which is causing N-able to potentially lose share as security threats increase and incremental threat vectors such as AI become more prominent? And how do you think about -- even in your slide deck, you suggested the market TAM is growing 14%. Obviously, you're under that. With all these changes that you're making, when do you think -- if there are -- if you're making changes that would enable you to be more successful, when do you think you can get back to improved growth? So really two-pronged question. One is competitive nature and two is growth. When do you see growth improving? John Pagliuca: Keith, this is John again. Good thoughtful question, as always. So just to double back on that, though, right? So what I mentioned to Matt, so the -- as it relates to our security offerings that are especially more sell-through in nature, our XDR offering, our data protection and Disaster Recovery offerings, those continue to show strong uptick. And so we're seeing a lot of strong demand, no trepidation there. In UEM, remember, UEM is IT management in some elements, and there's a lot of monitoring and management capabilities there. And it's that sell to tool. The UEM is effectively the operational fabric of the MSP. This is where technicians spend their time and handle tickets. So it's -- that one is more operational in nature, not necessarily, I would say, security in nature. And that's where I think that little bit of that pause is as MSPs are again reimagining what's the workflow of the ticket, how are they addressing and dealing with IT monitoring and IT management. So that's -- maybe that's a little bit of a nuance that I wanted to make sure that you heard. So security elements, SecOps, data protection, that continues to remain strong. But the tooling themselves for which MSPs are running their business, I think that's where they're doing a little bit more of a pause and making sure that the solution that they're picking today is, in fact, going to be the solution for tomorrow with the right AI strategy and AI road map. As it relates to the competitive environment, really nothing new to report. We continue to see the same players in data protection. We believe we're winning security operations. Again, I think that's an area where we continue to win and do well from a market share point of view. UEM, there is one player that is gaining more market share, I'd say, than the other couple. But a lot of that is their focus on the mid-market vis-a-vis MSP. That's at least from what we can -- what we believe from listening to folks in the industry. So which maps to a little bit of what our focus was earlier, making sure that we can actually address the channel with our new CRO, making sure that we're getting a lot more go-to-market traction in the mid-market in addition to MSP. The MSP market continues to be strong. We believe there's a little bit more white space and greenfield opportunity in some of the mid-market areas. And Keith, I forgot your second question. Keith Bachman: When do you think you get back to something that would be reflective of market growth? John Pagliuca: So look, our -- for us, a healthy growth algorithm, it starts with making sure that the retention rates are strong. And we're focused on some operational tasks as early as already in place on the renewal rates that we believe we can control and start upticking as early as the back half of this year. But the real part of our growth engine is that new product introduction to drive expand. We saw this when we introduced data protection many moons ago. We saw this again when we introduced XDR into our base. That's when we see this nice expansion in the NRR because our customers trust N-able. Our customers trust us when we tell them there's a best-in-class offering, they'll consume that best-in-class offering. They'll plug it into their business and begin either selling it or leveraging it immediately to drive efficiency gains. And so we have that trust of our customers and that brand recognition. So when we bring in NPIs, when we bring in those new products, that's when we really start to see the growth algorithm get back to where we want it to be. And as I mentioned, -- we have a strong lineup, in particular, in data protection and security in Q3 and Q4. And then toward the tail end of the year, that's when we start bringing on more of those offerings for UEM. So we do expect to see more of an accelerated growth in 2027. Operator: There are no further questions at this time. I will now turn the call back to CEO, John Pagliuca, for closing remarks. John Pagliuca: Thank you all for joining us today and your continued interest in N-able. We'll talk to you in a quarter. Operator: This concludes today's call. Thank you for attending. You may now disconnect. 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Interested in N-able, Inc.? Here are five stocks we like better. N-able lowered its 2026 outlook after weaker-than-expected renewals in unified endpoint management and endpoint detection and response. Full-year revenue guidance fell to approximately $539 million–$542 million, while ARR guidance was reduced to $562 million–$565 million. Second-quarter results showed ARR and revenue growth of 6% year over year, with adjusted EBITDA of $40 million and a 29% margin. However, renewal rates declined from the high-80% range to the mid-80% range during the quarter, driven by pricing pressure, customer churn and reduced endpoint quantities. The company plans to cut headcount by about 6%, targeting $11 million–$13 million in annualized cost savings, while reallocating resources toward data protection, security operations and channel growth. Management highlighted faster-growing data-protection ARR, new DRaaS and security products, and continued share repurchases. N-able (NYSE:NABL) reported second-quarter 2026 results that included 6% year-over-year annual recurring revenue growth, while lowering its full-year outlook amid weaker-than-expected renewals in its unified endpoint management and endpoint detection and response businesses. The company said second-quarter ARR reached $544 million, up 6% on both a reported and constant-currency basis. Revenue rose about 6% from a year earlier to $138 million, or 5% in constant currency. Adjusted EBITDA was $40 million, representing a 29% margin, while unlevered free cash flow totaled $23 million. → MarketBeat Week in Review – 08/03 - 08/07 Chief Executive Officer John Pagliuca said the company sees a growing cybersecurity opportunity as AI increases both the pace of vulnerability discovery and the capabilities available to attackers. He said N-able's portfolio spans patch management, vulnerability remediation, endpoint security, threat detection and response, and data protection. Chief Financial Officer Tim O'Brien said N-able's largest annual renewal cohort occurs in the second quarter, primarily across UEM and EDR products. Renewal rates for that cohort moved from the higher-80% range earlier in the quarter to the mid-80% range as the quarter progressed, he said. → Quantum Earnings Week: Winners and Losers Are Finally Emerging Pagliuca said renewal pressure in EDR included pricing pressure, with some customers retaining services at lower price points and others selecting offerings from other providers, including SentinelOne-based services. In UEM, he cited pricing sensitivity and potential reductions in endpoint quantities at managed service provider customers. The company lowered its 2026 revenue outlook to approximately $539 million to $542 million, which would represent reported growth of about 6% to 7% and constant-currency growth of about 5%. Its ARR outlook was reduced to $562 million to $565 million, representing reported growth of 4% to 5% and constant-currency growth of 5%. → Take-Two’s Q1 Results Leave GTA 6 Bulls Stuck in the Fog of War O'Brien said the revised outlook also reflects foreign-exchange changes, including an estimated $2.5 million negative impact to full-year revenue and about $5 million to full-year ARR compared with the company's prior guidance. N-able also revised first-quarter revenue downward by $1.3 million, a revenue-only adjustment that affects adjusted EBITDA but not ARR. For the third quarter, N-able forecast revenue of $134.5 million to $135.5 million, representing about 3% reported growth and 3% to 4% constant-currency growth. It projected adjusted EBITDA of $41 million to $42 million, or a margin of about 30% to 31%. N-able appointed Russell Rosa as chief revenue officer in July. Pagliuca said Rosa's priorities include accelerating the company's full-channel strategy, expanding its upmarket motion and improving productivity across the revenue organization. Rosa previously served as CRO at Sumo Logic and held roles at Cisco and Actifio. Management said the leadership transition could create near-term variability in go-to-market execution, which has been incorporated into the updated guidance. O'Brien said the company's full-year outlook does not assume improvement in renewal rates or demand during the remainder of 2026, with second-half growth supported largely by a smaller renewal cohort than in the first half. The company also plans organizational changes during the second half that will reduce total headcount by about 6%. N-able had approximately 2,000 employees as of the second quarter, according to O'Brien. The actions are expected to reduce annualized operating expenses by about $11 million to $13 million, while generating $4 million to $6 million of restructuring charges in the second half. Pagliuca said the company is reallocating resources toward data protection, security operations and channel opportunities. He added that AI tools are contributing to productivity efforts, with AI-generated code accounting for 47% of committed code during the quarter. Some features were being shipped 10 to 12 times faster than prior roadmap estimates, he said. Management highlighted progress in data protection, including the launch of Disaster Recovery as a Service, or DRaaS, in July. Pagliuca said the offering enables customers to restore operations without separate hardware or infrastructure. DRaaS did not contribute revenue in the second quarter because it became generally available after the quarter ended. N-able's data-protection business, which is above $200 million in ARR, continued to grow faster than the overall company and led net new ARR growth in the quarter, Pagliuca said. The company also plans to extend backup coverage to Google Workspace later this year. In security operations, N-able said it protected more than 3 million identities and recorded one of its largest new deals ever during the quarter. Pagliuca said the company is adding managed EDR, expanding incident response capabilities and planning FedRAMP-certified EDR offerings, cloud-native security capabilities and AI security features. The company also introduced Shadow AI Visibility within UEM and security operations products, providing customers with visibility into AI tool use across their environments. In UEM, N-able reported that cross-selling to data-protection and security customers rose 27% in the quarter, while migrations from a targeted competitor increased 60%. N-able maintained a full-year adjusted EBITDA outlook of $158 million to $161 million, representing a margin of about 29% to 30%. It expects unlevered free cash flow of approximately $116 million to $120 million and capital expenditures of about 6% of revenue. The company ended the quarter with approximately $116 million in cash and $398 million in outstanding loan principal, producing net leverage of about 1.8 times. It added a delayed-draw term loan facility of up to $75 million and said it intends to remain active in its share-repurchase program, which had $45 million remaining under its authorization. N-able (NYSE:NABL) is a cloud-based software provider specializing in solutions for managed service providers (MSPs). The company’s platform offers remote monitoring and management (RMM), backup and disaster recovery, endpoint detection and response (EDR), security information and event management (SIEM), and automation tools. By integrating these services into a unified interface, N-able enables MSPs to streamline IT operations, enhance security posture, and deliver proactive maintenance across on-premises, cloud, and hybrid environments. Headquartered in Toronto, Canada, N-able traces its origins to the managed services division of SolarWinds before completing a spin-off and initial public offering in mid-2021. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "N-able Q2 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for August 2026.

Delivers ARR Growth of 6% Year-Over-Year at Constant Currency Appoints Russell Rosa as Chief Revenue Officer Updates Full-Year 2026 ARR Outlook to $562M–$565M BURLINGTON, Mass., August 10, 2026--(BUSINESS WIRE)--N-able, Inc. (NYSE:NABL), a global cybersecurity company delivering business resilience, today reported results for its second quarter ended June 30, 2026. "AI is reshaping the security landscape, making our mission to democratize cyber-defense more critical than ever," said N-able president and CEO John Pagliuca. "We are taking decisive action across the business to better capture this demand. We welcomed Russell Rosa as our new Chief Revenue Officer, we are making organizational changes to align resources with our highest-priority opportunities, and we are sharpening our roadmaps to bring new products to market faster. Our award-winning platform protects approximately 500,000 businesses across the globe and our confidence in the road ahead remains strong." "The business continues to deliver growth and cash flow as we execute against a compelling cybersecurity and AI opportunity," added N-able CFO Tim O’Brien. "We are executing strategic initiatives to strengthen our position in the market while delivering disciplined profitability. We also intend to be active with our share repurchase program, a reflection of our conviction in the long-term value of the business." Second quarter 2026 financial highlights: Total revenue of $138.2 million, representing 5.9% year-over-year growth, or 4.7% year-over-year growth on a constant currency basis. Subscription revenue of $137.1 million, representing 6.1% year-over-year growth, or 5.0% year-over-year growth on a constant currency basis. Total ARR of $544.5 million, representing 6.0% year-over-year growth, or 5.7% year-over-year growth on a constant currency basis. GAAP gross margin of 76.8% and non-GAAP gross margin of 80.2%. GAAP net income of $1.8 million, or $0.01 per diluted share, and non-GAAP net income of $18.7 million, or $0.10 per diluted share. Adjusted EBITDA of $39.9 million, representing an adjusted EBITDA margin of 28.9%. For a reconciliation of our GAAP to non-GAAP results, please see the tables below. Additional recent business highlights: N-able strengthened its go-to-market leadership with the appointment of Russell Rosa as Chief Revenue Officer, supporting its strategy to accelerate partner-led growth, expand further upmarket, strengthen execution across its global partner and channel ecosystem, and drive its next phase of growth. N-able was named a Champion in the 2026 Omdia Global Managed Backup and Disaster Recovery Leadership Matrix for the third consecutive year, recognizing continued innovation in cyber resilience, data protection, cyber recovery, and business continuity capabilities. N-able advanced its AI-powered cybersecurity capabilities with the launch of Shadow AI Visibility, enabling organizations to better understand, govern, and secure AI usage across their environments while addressing growing security, compliance, and AI governance blind spots. N-able announced Empower 2027 and launched its global "Empower on the Move" series to expand customer engagement, peer collaboration, and cybersecurity education worldwide. This builds on the success of its sold-out Empower 2026 conference. N-able expanded its global security and innovation footprint with the official opening of a Global Capability Centre in Bengaluru, India, strengthening access to technical talent, expanding engineering, product management, and security operations capabilities, and accelerating AI-driven innovation across its platform. Balance Sheet As of June 30, 2026, total cash and cash equivalents were $115.8 million and total debt, net of debt issuance costs, was $392.3 million. The financial results included in this press release are preliminary and pending final review by the company and its external auditors. Financial results will not be final until N-able files its quarterly report on Form 10-Q for the period. Information about N-able's use of non-GAAP financial measures is provided below under "Non-GAAP Financial Measures." Financial Outlook As of August 10, 2026, N-able is providing its financial outlook for the third quarter of 2026 and its updated financial outlook for full-year 2026. The financial information below includes forward-looking non-GAAP financial information, including adjusted EBITDA. These non-GAAP financial measures exclude, among other items mentioned below, amortization of acquired intangible assets and developed technology, depreciation expense, income tax expense, interest expense, net, unrealized foreign currency (gains) losses, transaction related costs, spin-off costs, stock-based compensation expense and related employer-paid payroll taxes and restructuring and other costs. We have not reconciled our estimates of these non-GAAP financial measures to their most directly comparable GAAP measure as a result of uncertainty regarding, and the potential variability of, these excluded items in future periods. Accordingly, reconciliation is not available without unreasonable effort, although it is important to note that these excluded items could be material to our results computed in accordance with GAAP in future periods. Our reported results provide reconciliations of non-GAAP financial measures to their nearest GAAP equivalents. The financial outlook provided below reflects N-able's expectations, as of the date of this release, regarding the impact on its business of changing foreign exchange rates and current macroeconomic dynamics. Financial Outlook for the Third Quarter of 2026 N-able management currently expects to achieve the following results for the third quarter of 2026: Total revenue in the range of $134.5 to $135.5 million, representing approximately 3% year-over-year growth on a reported basis and 3% to 4% on a constant currency basis. Adjusted EBITDA in the range of $41.0 to $42.0 million, representing approximately 30% to 31% of total revenue. Financial Outlook for Full-Year 2026 N-able management currently expects to achieve the following results for the full-year 2026: Total ARR in the range of $562 to $565 million, representing approximately 4% to 5% year-over-year growth on a reported basis and 5% on a constant currency basis. Total revenue in the range of $539 to $542 million, representing approximately 6% to 7% year-over-year growth on a reported basis and 5% on a constant currency basis. Adjusted EBITDA in the range of $158 to $161 million, representing approximately 29% to 30% of total revenue. Additional details on the company's outlook will be provided on the conference call. Conference Call and Webcast In conjunction with this announcement, N-able will host a conference call to discuss its financial results, business and business outlook at 8:30 a.m. ET on August 10, 2026. A live webcast of the call will be available on the N-able Investor Relations website at http://investors.n-able.com. A replay of the webcast will be available on a temporary basis shortly after the event on the N-able Investor Relations website. Forward-Looking Statements This press release contains "forward-looking" statements, which are subject to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, including statements regarding our financial outlook for the third quarter and full-year 2026, our product development and market opportunity, and the impact of AI and macroeconomic conditions on our business. These forward-looking statements are based on management's beliefs and assumptions and on information currently available to management. Forward-looking statements include all statements that are not historical facts and may be signified by terms such as "aim," "anticipate," "believe," "continue," "expect," "feel," "intend," "estimate," "seek," "plan," "may," "can," "could," "should," "will," "would" or similar expressions and the negatives of those terms. Forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially and adversely different from any future results, performance or achievements expressed or implied by the forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, the following: (a) the impact of adverse economic conditions; (b) our ability to sell subscriptions to new customers, to sell additional solutions to our existing customers and to increase the usage of our solutions by our existing customers, as well as our ability to generate and maintain customer loyalty; (c) our ability to sell our solutions through distributors and resellers; (d) any decline in our renewal or net retention rates; (e) our ability to successfully incorporate AI-powered features into our solutions, market and sell any AI-powered solutions we develop, garner increased market share projected for AI-powered solutions, and realize efficiencies from the internal use of AI tools, as well as other risks related to our use of AI; (f) the possibility that general economic, political, legal and regulatory conditions and uncertainty may cause information technology spending to be reduced or purchasing decisions to be delayed, including as a result of inflation, actions taken by central banks to counter inflation, rising interest rates, war and political unrest, military conflict (including between Russia and Ukraine and in the Middle East), terrorism, sanctions, trade or other issues in the U.S. and internationally, including increased tariffs or trade wars, or other geopolitical events globally, or that such factors may otherwise harm our business, financial condition or results of operations; (g) recent significant changes to U.S. trade policies and reciprocal trade measures enacted or threatened, which have led and may continue to lead to volatility and uncertainty, including increased market volatility and currency exchange rate fluctuations, which may also cause information technology spending to be reduced or purchasing decisions to be delayed; (h) any inability to generate significant volumes of high-quality sales leads from our digital marketing initiatives and convert such leads into new business at acceptable conversion rates; (i) any inability to successfully identify, complete and integrate acquisitions and manage our growth effectively; (j) any inability to resell third-party software or integrate third-party software into our solutions, or find suitable replacements for such third-party software; (k) risks associated with our international operations; (l) foreign exchange gains and losses related to expenses and sales denominated in currencies other than the functional currency of an associated entity; (m) risks that cyberattacks and other security incidents may result in compromises or breaches of our, our customers’, or their SMB and mid-market customers’ systems, the insertion of malicious code, malware, ransomware or other vulnerabilities into our, our customers’, or their SMB and mid-market customers’ environments, the exploitation of vulnerabilities in our, our customers’, or their SMB and mid-market customers’ security, the theft or misappropriation of our, our customers’, or their SMB and mid-market customers’ proprietary and confidential information, and interference with our, our customers’, or their SMB and mid-market customers’ operations, exposure to legal and other liabilities, higher customer and employee attrition and the loss of key personnel, negative impacts to our sales, renewals and upgrades and reputational harm and other serious negative consequences, any or all of which could materially harm our business; (n) our status as a controlled company; (o) our ability to attract and retain qualified employees and key personnel; (p) the timing and success of new product introductions and product upgrades by us or our competitors; (q) our ability to maintain or grow our brands, including the Adlumin brand; (r) our ability to protect and defend our intellectual property and not infringe upon others’ intellectual property; (s) the possibility that our operating income could fluctuate and may decline as a percentage of revenue as we make further expenditures to expand our operations in order to support growth in our business; (t) our indebtedness, including increased borrowing costs resulting from rising interest rates, potential restrictions on our operations and the impact of events of default; (u) our ability to operate our business internationally and increase sales of our solutions to our customers located outside of the United States; and (v) the risk that any unremediated material weakness could result in a material misstatement in our financial statements, and the increased costs associated with implementing remediation efforts relating to any material weakness, including the material weakness identified in the second quarter 2026; and (w) such other risks and uncertainties described more fully in documents filed with or furnished to the Securities and Exchange Commission, including the risk factors described in N-able’s Annual Report on Form 10-K for the year ended December 31, 2025, that N-able filed with the SEC on February 26, 2026. All information provided in this press release is as of the date hereof and N-able undertakes no duty to update this information except as required by law. Non-GAAP Financial Measures In addition to financial measures prepared in accordance with GAAP, we use certain non-GAAP financial measures to clarify and enhance our understanding, and aid in the period-to-period comparison, of our performance. We believe that these non-GAAP financial measures provide supplemental information that is meaningful when assessing our operating performance because they exclude the impact of certain amounts that our management and board of directors do not consider part of core operating results when assessing our operational performance, allocating resources, preparing annual budgets and determining compensation. Accordingly, these non-GAAP financial measures may provide insight to investors into the motivation and decision-making of management in operating the business. N-able also believes that these non-GAAP financial measures are used by investors and securities analysts to (a) compare and evaluate its performance from period to period and (b) compare its performance to those of its competitors. These non-GAAP measures exclude certain items that can vary substantially from company to company depending upon their financing and accounting methods, the book value of their assets, their capital structures and the method by which their assets were acquired. As a result, these non-GAAP financial measures have limitations and should not be considered in isolation from, or as a substitute for, their most comparable GAAP measures. These non-GAAP financial measures are not prepared in accordance with GAAP, do not reflect a comprehensive system of accounting and may not be completely comparable to similarly titled measures of other companies due to potential differences in the exact method of calculation between companies. Certain items that are excluded from these non-GAAP financial measures can have a material impact on operating and net income. N-able's management and board of directors compensate for these limitations by using these non-GAAP financial measures as supplements to GAAP financial measures and by reviewing the reconciliations of the non-GAAP financial measures to their most comparable GAAP financial measure. Set forth in the tables below are the corresponding GAAP financial measures for each non-GAAP financial measure presented. Investors are encouraged to review the reconciliations of these non-GAAP financial measures to their most comparable GAAP financial measures that are set forth in the tables below. Definitions of Non-GAAP and Other Metrics Annual Recurring Revenue (ARR). We calculate ARR by annualizing the recurring revenue and related usage revenue inclusive of discounts, excluding the impacts of credits and reserves, recognized during the last day of the reporting period from both long-term and month-to-month subscriptions. We believe ARR enhances the understanding of our business performance and the growth of our relationships with our customers. Non-GAAP Gross Margin, Non-GAAP Operating Income and Non-GAAP Operating Margin. We provide non-GAAP total cost of revenue, non-GAAP gross profit, non-GAAP operating expense and non-GAAP operating income and related non-GAAP gross and operating margins excluding such items as stock-based compensation expense and related employer-paid payroll taxes, amortization of acquired intangible assets, transaction related costs, spin-off costs and restructuring costs and other. We define non-GAAP gross and operating margins as non-GAAP gross profit and operating income, respectively, divided by total revenue. Management believes these measures are useful for the following reasons: Stock-Based Compensation Expense and Related Employer-Paid Payroll Taxes. We provide non-GAAP information that excludes expenses related to stock-based compensation and related employer-paid payroll taxes associated with our employees’ participation in N-able's stock-based incentive compensation plans. We believe that the exclusion of stock-based compensation expense provides for a better comparison of our operating results to prior periods and to our peer companies as the calculations of stock-based compensation vary from period to period and company to company due to different valuation methodologies, subjective assumptions and the variety of award types. Employer-paid payroll taxes on stock-based compensation is dependent on our stock price and the timing of the taxable events related to the equity awards, over which our management has little control, and does not necessarily correlate to the core operation of our business. Because of these unique characteristics of stock-based compensation and related employer-paid payroll taxes, management excludes these expenses when analyzing the organization’s business performance. Amortization of Acquired Technologies and Intangible Assets. We provide non-GAAP information that excludes expenses related to purchased technologies and intangible assets associated with our acquisitions. We believe that eliminating this expense from our non-GAAP measures is useful to investors because the amortization of acquired technologies and intangible assets can be inconsistent in amount and frequency and is significantly impacted by the timing and magnitude of our acquisition transactions, which also vary in frequency from period to period. Accordingly, we analyze the performance of our operations in each period without regard to such expenses. Transaction Related Costs. We exclude certain expense items resulting from proposed and completed acquisitions, dispositions and similar transactions, such as legal, accounting and advisory fees, changes in fair value of contingent consideration, costs related to integrating the acquired businesses, deferred compensation, severance and retention expense. We consider these adjustments, to some extent, to be unpredictable and dependent on a significant number of factors that are outside of our control. Furthermore, such proposed and completed transactions result in operating expenses that would not otherwise have been incurred by us in the normal course of our organic business operations. We believe that providing non-GAAP measures that exclude transaction related costs allows investors to better review and understand the historical and current results of our continuing operations and also facilitates comparisons to our historical results and results of peer companies with different transaction related activities, both with and without such adjustments. Spin-off Costs. We exclude certain expense items resulting from the spin-off into a newly created and separately traded public company. These costs include legal, accounting and advisory fees, system implementation costs and other incremental costs incurred by us related to the separation from SolarWinds. The spin-off transaction results in operating expenses that would not otherwise have been incurred by us in the normal course of our organic business operations. We believe that providing non-GAAP measures that exclude these costs facilitates a more meaningful evaluation of our operating performance and comparisons to our past operating performance. Restructuring Costs and Other. We provide non-GAAP information that excludes restructuring costs such as severance, certain employee relocation costs, the estimated costs of exiting and terminating facility lease commitments, and the costs of intra-group transfers of IP rights, as they relate to our corporate restructuring and exit activities. These costs are inconsistent in amount and are significantly impacted by the timing and nature of these events. Therefore, although we may incur these types of expenses in the future, we believe that eliminating these costs for purposes of calculating the non-GAAP financial measures facilitates a more meaningful evaluation of our operating performance and comparisons to our past operating performance. Non-GAAP Net Income and Non-GAAP Net Income Per Diluted Share. We believe that the use of non-GAAP net income and non-GAAP net income per diluted share is helpful to our investors to clarify and enhance their understanding of past performance and future prospects. Non-GAAP net income is calculated as net income excluding the adjustments to non-GAAP gross profit and non-GAAP operating income, interest on deferred consideration, and the income tax effect of the non-GAAP exclusions. We define non-GAAP net income per diluted share as non-GAAP net income divided by the weighted average diluted outstanding common shares. Adjusted EBITDA and Adjusted EBITDA Margin. We regularly monitor adjusted EBITDA and adjusted EBITDA margin, as they are measures we use to assess our operating performance. We define adjusted EBITDA as net income or loss, excluding amortization of acquired intangible assets and developed technology, depreciation expense, income tax expense, interest expense, net, unrealized foreign currency losses (gains), transaction related costs, spin-off costs, stock-based compensation expense and related employer-paid payroll taxes and restructuring and other costs. We define adjusted EBITDA margin as adjusted EBITDA divided by total revenue. Adjusted EBITDA has limitations as an analytical tool, and you should not consider it in isolation or as a substitute for analysis of our results as reported under GAAP. Some of these limitations include: although depreciation and amortization are non-cash charges, the assets being depreciated and amortized may have to be replaced in the future, and adjusted EBITDA does not reflect cash capital expenditure requirements for such replacements or for new capital expenditure requirements; adjusted EBITDA does not reflect changes in, or cash requirements for, our working capital needs; adjusted EBITDA does not reflect the significant interest expense, or the cash requirements necessary to service interest or principal payments, on our related party debt; adjusted EBITDA does not reflect tax payments that may represent a reduction in cash available to us; and other companies, including companies in our industry, may calculate adjusted EBITDA differently, which reduces its usefulness as a comparative measure. Non-GAAP Revenue on a Constant Currency Basis. We provide non-GAAP revenue on a constant currency basis to provide a framework for assessing our performance excluding the effect of foreign currency rate fluctuations. To present this information, current period results for revenue contracts denominated in currencies other than U.S. Dollars are converted into U.S. Dollars at the average exchange rates in effect during the corresponding prior period presented. We believe that providing non-GAAP revenue on a constant currency basis facilitates the comparison of non-GAAP revenue to prior periods. Unlevered Free Cash Flow. Unlevered free cash flow is a measure of our liquidity used by management to evaluate cash flow from operations, after the deduction of capital expenditures and prior to the impact of our capital structure, transaction related costs, restructuring costs, spin-off costs, employer-paid payroll taxes on stock awards and certain one-time items, that can be used by us for strategic opportunities and strengthening our balance sheet. However, given our debt obligations, unlevered free cash flow does not represent residual cash flow available for discretionary expenses. Effective July 1, 2025, we have removed from our computation of unlevered free cash flow non-cash items generally relating to cash paid for transaction related costs, restructuring costs, spin-off costs, employer-paid payroll taxes on stock awards and other one-time items. Unlevered free cash flow for all prior periods presented has been revised to the current period computation. About N-able N-able protects businesses from evolving cyberthreats. Our AI-powered cybersecurity platform delivers business resilience to approximately 500,000 organizations worldwide, leveraging advanced end-to-end capabilities, simplified workflows, market-leading integrations, and flexible deployment options to improve efficiency and drive critical security outcomes. Our partner-first approach pairs our technology with experts, training, and peer-led events that empower customers to be secure, resilient, and successful. n-able.com © 2026 N-able, Inc. All rights reserved. Category: Financial View source version on businesswire.com: https://www.businesswire.com/news/home/20260808529925/en/ Contacts Investors: Griffin [email protected] Media: Kim CecchiniPhone: [email protected]

N-able (NABL) came out with quarterly earnings of $0.1 per share, in line with the Zacks Consensus Estimate . This compares to earnings of $0.11 per share a year ago. These figures are adjusted for non-recurring items. A quarter ago, it was expected that this provider of cloud-based software services would post earnings of $0.09 per share when it actually produced earnings of $0.09, delivering no surprise. Over the last four quarters, the company has surpassed consensus EPS estimates just once. N-able, which belongs to the Zacks Technology Services industry, posted revenues of $138.22 million for the quarter ended June 2026, surpassing the Zacks Consensus Estimate by 0.11%. This compares to year-ago revenues of $131.25 million. The company has topped consensus revenue estimates four times over the last four quarters. The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call. N-able shares have lost about 33.3% since the beginning of the year versus the S&P 500's gain of 13.3%. While N-able has underperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock? There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately. Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions. Ahead of this earnings release, the estimate revisions trend for N-able was mixed. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #3 (Hold) for the stock. So, the shares are expected to perform in line with the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $0.12 on $141.95 million in revenues for the coming quarter and $0.42 on $556.82 million in revenues for the current fiscal year. Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Technology Services is currently in the bottom 35% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1. NextNav Inc. (NN), another stock in the same industry, has yet to report results for the quarter ended June 2026. The results are expected to be released on August 11. This company is expected to post quarterly loss of $0.16 per share in its upcoming report, which represents a year-over-year change of +46.7%. The consensus EPS estimate for the quarter has been revised 12% higher over the last 30 days to the current level. NextNav Inc.'s revenues are expected to be $0.9 million, down 25% from the year-ago quarter. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report N-able, Inc. (NABL) : Free Stock Analysis Report NextNav Inc. (NN) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

This article first appeared on GuruFocus. Total ARR: $544 million, growing 6% year-over-year on a reported and constant currency basis. Total Revenue: $138 million, representing approximately 6% year-over-year growth on a reported basis and 5% on a constant currency basis. Subscription Revenue: $137 million, representing approximately 6% year-over-year growth on a reported basis and 5% on a constant currency basis. Gross Margin: 80% in the second quarter, compared to 82% in the same period in 2025. Adjusted EBITDA: $40 million, representing approximately 29% adjusted EBITDA margin. Unlevered Free Cash Flow: $23 million in the second quarter. CapEx: $13 million or 9% of revenue, inclusive of $3 million of capitalized software development costs. Non-GAAP Earnings Per Share: $0.10 in the second quarter, based on 189 million weighted average diluted shares. Customers with $50,000+ ARR: 2,706 customers, up approximately 7% year-over-year, representing approximately 63% of total ARR. Dollar-Based Net Revenue Retention: Approximately 106% on a reported basis and 103% on a constant currency basis. Data Protection ARR: Above $200 million, growing faster than the total company and leading net new ARR growth in the quarter. UEM Cross-Sell: Up 27% in the quarter to data protection and security customers. Targeted Displacement Campaign: Increased migrations against a top competitor by 60%. AI-Generated Code: Accounted for 47% of all committed code in the second quarter. Full-Year 2026 Revenue Guidance: Approximately $539 to $542 million, representing approximately 6% to 7% year-over-year growth on a reported basis and 5% on a constant currency basis. Full-Year 2026 ARR Guidance: $562 to $565 million, representing 4% to 5% year-over-year growth on a reported basis and 5% on a constant currency basis. Full-Year 2026 Adjusted EBITDA Guidance: $158 million to $161 million, representing an adjusted EBITDA margin of approximately 29% to 30%. Full-Year 2026 Unlevered Free Cash Flow Guidance: Approximately $116 million to $120 million. Third Quarter 2026 Revenue Guidance: $134.5 to $135.5 million, representing approximately 3% year-over-year growth on a reported basis and 3% to 4% on a constant currency basis. Third Quarter 2026 Adjusted EBITDA Guidance: $41 million to $42 million, representing an adjusted EBITDA margin of approximately 30% to 31%. Warning! GuruFocus has detected 1 Warning Sign with NABL. Is NABL fairly valued? Test your thesis with our free DCF calculator. Release Date: August 10, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. N-able Inc (NYSE:NABL) delivered solid Q2 2026 results with ARR reaching $544 million, growing 6% year-over-year in constant currency, and adjusted EBITDA of $40 million, representing a strong 29% margin. The company's Data Protection segment, which exceeds $200 million in ARR, continues to outperform the total company and led net new ARR growth for the quarter, with the new Disaster Recovery as a Service (DRAS) product generating significant customer interest. N-able Inc (NYSE:NABL) is making strategic investments in AI, with AI-generated code accounting for 47% of all committed code in Q2 and some features shipping 10-12 times faster, positioning the company for enhanced productivity and innovation. The company is expanding its product portfolio with new offerings like Google Workspace Backup, Incident Response, and FedRAMP-certified EDR, which are expected to be tailwinds and drive growth in the second half of 2026 and into 2027. N-able Inc (NYSE:NABL) maintains a strong balance sheet with $116 million in cash, net leverage of 1.8 times, and a $45 million share repurchase authorization, demonstrating financial flexibility and confidence in the business. N-able Inc (NYSE:NABL) lowered its full-year 2026 top-line guidance due to lower-than-expected renewal rates in its UEM and EDR segments, particularly within its largest Q2 renewal cohort, which came in below expectations. The company is experiencing pricing pressure in its EDR business, which is impacting renewal rates as customers either negotiate lower prices or defect to competitors offering more favorable terms. N-able Inc (NYSE:NABL) is undergoing a significant go-to-market leadership transition with a new Chief Revenue Officer, which is expected to create near-term variability and headwinds in sales execution. The company announced a 6% reduction in its total workforce, incurring $4-6 million in restructuring charges, reflecting the need to realign resources amid shifting market dynamics and a challenging demand environment. N-able Inc (NYSE:NABL) is seeing a pause in UEM purchasing decisions as MSPs evaluate AI strategies and reimagine their operational workflows, leading to slower growth in this core segment and contributing to the overall guidance reduction. Q: Can you help us think about how much of that renewal cohort is in the final month or final couple of weeks of the quarter? Like when did that renewal dynamic really show up in the quarter?A: Tim O'Brien (CFO): The renewal cohort in Q2 is by far the biggest we have in the year due to the dynamics of how we converted customers into long-term contracts. We were seeing renewal rates in the higher 80s, but as we progressed through the quarter, they middled out more in the mid-80s. The impact of that plus the size of the cohort drove the Q2 performance. For the full-year guide, we've assumed similar renewal rates going forward into the remainder of the year. Q: For those renewal rates, if a customer is not renewing with you, where are they going? What are they doing?A: John Pagliuca (CEO): There are a couple of different factors that go into the renewal rate, including dollarswe might renew the customer but at a lower price point or quantity. Data protection and security operations continue to be green. The renewal rate pressure was more focused on EDR and UEM. With EDR, we're seeing pricing pressure, which might mean retaining the customer at a lower price point or losing them to providers partnering with SentinelOne. On UEM, we don't see a significant change in market share ebb and flow; a lot of this is pricing sensitivity. To combat this, we amended our agreement with SentinelOne to provide pricing protection and extend our offerings and SKUs, such as FedRAMP-certified endpoint security, which should strengthen renewal rates. Q: What's happening in the MSP market from a macro or competitive standpoint? Is the apparent pivot to the VAR channel indicative of more headwinds in the MSP market?A: John Pagliuca (CEO): We continue to see an uptick in M&A in the MSP market, driven by private equity consolidation. This doesn't shrink our TAM; as MSPs grow, they get exposed to larger enterprises, which is a net positive but requires a different selling motion. This is why we brought in Russell Rosa as CRO, who has enterprise experience and channel connections. On the MSP side, sell-through demand remains strong for data protection and security operations, but there's a pause in sell-to areas like UEM as MSPs evaluate how AI will affect their technicians' tools. Our AI vision with Enzo is resonating, and we believe it will unlock some UEM trepidation. In the mid-market, UEM is less of a red ocean, and CIOs like the all-in-one tool that can replace multiple tools in their stack. Q: You mentioned customers are expecting more advanced capabilities in UEM and EDR. Can you elaborate on that and remind us how you view the importance of UEM and EDR to the business?A: John Pagliuca (CEO): On UEM, it's a real anchor from a security point of view. MSPs are looking for extended vulnerability management and exposure management capabilities. The key part is automation, now driven through AI. MSPs want to manage, monitor, and secure about 300 endpoints per technician, and with AI, we hope to drive that number much higher. They're looking for help understanding how to leverage AI. We have MCP server capability and AI assistance in our offerings, and later this year we'll bring coworkers with a higher level of autonomy. MSPs are building AI capabilities themselves but are looking for vendors to help with that next step at scale and safely. Q: What's giving you the confidence that net new ARR can pick up in the back half of the year? How much of that guide is supported by pipeline versus improved execution?A: Tim O'Brien (CFO): The guide does not bake in any improved execution. It's really the dynamics of renewal cohort sizes driving sequential growth. The entire second-half renewal is generally the same size as Q2, which is a positive dynamic. We've assumed similar renewal rates in the second-half that we experienced in Q2. There's a little impact from new product introductions, but that's like half a point of revenue, so generally immaterial. We also had some FX impact in the quarter as rates came down. Q: How much of the buying behavior is impacted by businesses trying to understand their own AI strategy, causing a pause on existing spend?A: John Pagliuca (CEO): There's definitely an element of that. In our business model, we have a sell-to element (MSP consuming the offering) and a sell-through element (MSP deploying offerings at their customers). On the sell-through side, especially for data protection and security operations, we're not seeing much trepidation. But MSPs are stepping back and wanting to understand our AI strategy. They're looking at vendors to see how AI will impact their labor and workforce. We're seeing MSPs reimagine their workforce structurally, leveraging new technology. Our multi-pronged AI strategyMCP server capabilities, AI assistants, and autonomous agentsis resonating with all segments. Q: Is there something on the product side causing Enable to potentially lose share as security threats increase? When do you think you can get back to improved growth?A: John Pagliuca (CEO): Our security offerings that are more sell-through in nature, like XDR and data protection, continue to show strong demand. UEM is more operational in natureit's the fabric of the MSP where technicians handle tickets. That's where we see a pause as MSPs reimagine their workflow. On the competitive environment, nothing new to report. In UEM, one player is gaining more market share, but that's due to their focus on the mid-market versus MSP. For growth, a healthy algorithm starts with strong retention rates. We're focused on operational tasks to uptick renewal rates as early as the back half of this year. The real growth engine is new product introduction to drive expansion. We have a strong lineup in data protection and security in Q3 and Q4, and we expect to see more accelerated growth in 2027. Q: Can you remind us what your headcount is currently, what was the DRAS contribution in the quarter, and on SentinelOne, are they giving better pricing to other channels?A: John Pagliuca (CEO) & Tim O'Brien (CFO): Headcount is approximately 2,000 employees as of Q2. DRAS went GA in July, so there was no revenue contribution in Q2. We're excited about the offering; it's resonating with both small and large shops. On SentinelOne For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Interested in N-able, Inc.? Here are five stocks we like better. N-able beat Q1 guidance, with revenue of $134 million and adjusted EBITDA of $37 million, while ARR rose to $548 million, up 8% year over year on a constant-currency basis. Management also said retention improved and free cash flow remained strong. The company is seeing upmarket traction and channel strength, with customers above $50,000 of ARR up 13% year over year and now making up about 62% of total ARR. N-able said many of its biggest new wins came through VARs, while security operations and data protection continued to grow faster than the company overall. AI and new data protection products are central to the growth story, including the rollout of N-zo, its AI workflow assistant, and upcoming offerings such as DRaaS and Google Workspace backup. N-able expects these products to support second-half momentum, along with full-year 2026 ARR growth of 8% to 9% and higher free cash flow guidance. N-able (NYSE:NABL) reported first-quarter 2026 results that management said reflected continued upmarket traction, improved retention and growing demand for cybersecurity, data protection and unified endpoint management offerings as customers respond to a more complex threat environment. President and CEO John Pagliuca said annual recurring revenue reached $548 million in the quarter, up 8% year over year on a constant-currency basis, while adjusted EBITDA margin was 27%. He said both gross and net revenue dollar retention improved from the prior quarter and year-earlier period, with trailing 12-month net retention at 106% on a reported basis. → Beyond NVIDIA: Picks-and-Shovels AI Plays with Strong Momentum “We delivered another quarter of consistent execution with solid ARR growth, strong margins, and practical AI innovation,” Pagliuca said in closing remarks. N-able said customers with more than $50,000 of ARR grew 13% year over year to 2,710, and that group now represents about 62% of total ARR, up from about 58% a year earlier. Customers with more than $100,000 of ARR represent 41% of annual recurring revenue, Pagliuca said. → MercadoLibre Boldly Invests in Growth: Discount Deepens The company highlighted its selection as Manchester City Football Club’s official cybersecurity partner as an example of its ability to serve larger and more complex organizations. Pagliuca said four of the company’s top five new customer wins in the quarter, including the Manchester City deal, came through value-added resellers. Pagliuca said N-able’s channel strategy is benefiting from both its established managed service provider, or MSP, base and a growing VAR presence. He said the company counts 25% of CRN’s top 150 MSPs as customers. → 3 Ways to Target the Resources Powering AI and Data Centers Management also pointed to the company’s platform breadth as a factor supporting retention. Pagliuca said security operations and data protection continued to grow faster than the company overall as customers prioritize remediation, recovery and consolidation. EVP and CFO Tim O’Brien said first-quarter total revenue was $134 million, $2 million above the high end of guidance. Revenue increased about 13% year over year on a reported basis and 8% on a constant-currency basis. Subscription revenue was $132 million, up about 13% reported and 9% constant currency. First-quarter gross margin was 80%, compared with 81% in the same period in 2025. Adjusted EBITDA was $37 million, representing a 27% margin. Unlevered free cash flow was $22 million, and capital expenditures, including $3 million of capitalized software development costs, were $4 million, or 3% of revenue. N-able ended the quarter with about $118 million of cash and an outstanding loan principal balance of approximately $399 million, representing net leverage of about 1.8 times. Non-GAAP earnings per share were $0.09, based on 189 million weighted average diluted shares. O’Brien said about 46% of quarterly revenue came from outside North America. Pagliuca devoted a significant portion of the call to the role of artificial intelligence in both increasing security threats and expanding the company’s software opportunity. He said advancements in frontier models are “fundamentally rewriting the threat landscape” by compressing response times for defenders and enabling attackers to exploit vulnerabilities faster and at greater scale. He said N-able is working to move its platform “from a system of record to a system of action,” automating tasks that have historically required technicians. Pagliuca cited industry analyst Omdia’s estimate that annual security services spending is about $200 billion, roughly twice the size of security software spending, and said N-able sees an opportunity to automate labor-intensive workflows for MSP customers. In unified endpoint management, Pagliuca highlighted N-zo, the company’s AI workflow assistant, and its custom model context protocol server. He said N-zo can deliver up to 70% faster IT operations for certain tasks by allowing teams to use natural language and agentic workflows. The company’s MCP server connects external AI tools such as Claude, ChatGPT and Microsoft Copilot to live operational data inside N-able’s UEM environment, according to Pagliuca. Six of N-able’s top 10 new customer wins in the quarter came through its UEM solution, Pagliuca said. He also described a quick-service U.K. restaurant brand that deployed N-able’s UEM across 100 locations in late 2025 and later expanded the relationship by signing its U.S. group. N-able said data protection led net new ARR growth in the quarter and has surpassed 3.5 million Microsoft 365 users. Pagliuca discussed the company’s Disaster Recovery as a Service, or DRaaS, offering, which he said is designed to reduce the need for customers to manage backup infrastructure and allow near-instant recovery of critical systems after data loss. During the question-and-answer session, Pagliuca clarified that DRaaS is currently in limited preview and is expected to fully launch later in the back half of the year. He said early customer feedback has been positive and that DRaaS will be directly monetizable. Pagliuca also said the company plans to add Google Workspace backup coverage later this year. He said customers have requested both DRaaS and Google backup capabilities for several years, and he expects those additions to help win rates, cross-selling and gross revenue retention in data protection. However, he said Google Workspace backup is not meaningfully baked into the company’s financial plan because of its later timing. In security operations, Pagliuca said customer count has nearly doubled since the second quarter of 2025. He cited a recent win with a compliance-focused MSP serving regulated industries, where N-able replaced multiple legacy EDR, MDR and SIEM providers and generated nearly $500,000 in ARR. For the second quarter of 2026, N-able expects total revenue of $137.5 million to $138.5 million, representing 5% to 6% year-over-year growth on a reported basis and 4% growth on a constant-currency basis. The company expects adjusted EBITDA of $39.5 million to $40.5 million, or an adjusted EBITDA margin of about 29%. For full-year 2026, N-able forecast total revenue of about $554 million to $559 million, up 8% to 9% reported and 7% to 8% constant currency. The company expects ARR of $581 million to $586 million, representing 8% to 9% growth on both a reported and constant-currency basis. Full-year adjusted EBITDA is expected to be $167 million to $171 million, implying a 30% to 31% margin. N-able raised its unlevered free cash flow outlook to approximately $116 million to $120 million. O’Brien said net new ARR is expected to be more back-half weighted, partly due to new data protection offerings such as DRaaS and Google Workspace backup. He also said the company still expects a modest benefit from pricing and packaging changes in 2026, likely closer to one percentage point. Asked about the macro environment, Pagliuca said N-able is not seeing a slowdown tied to geopolitical issues, including developments related to Iran. He did say that as the company moves upmarket, sales cycles are lengthening somewhat and customers are applying more scrutiny to return on investment, including cases requiring CEO or board-level approval. N-able (NYSE:NABL) is a cloud-based software provider specializing in solutions for managed service providers (MSPs). The company’s platform offers remote monitoring and management (RMM), backup and disaster recovery, endpoint detection and response (EDR), security information and event management (SIEM), and automation tools. By integrating these services into a unified interface, N-able enables MSPs to streamline IT operations, enhance security posture, and deliver proactive maintenance across on-premises, cloud, and hybrid environments. Headquartered in Toronto, Canada, N-able traces its origins to the managed services division of SolarWinds before completing a spin-off and initial public offering in mid-2021. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "N-able Q1 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for May 2026.