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    NABL
    Earnings call· Jun 2026(Q2 FY26)

    N-able Q2 FY26 earnings call NABL

    Aug 10, 2026 Source

    Executive summary

    N-able Q2 FY26 — Strategic Realignment Amidst Top-Line Headwinds

    N-able is navigating a complex cybersecurity landscape, marked by increasing AI-driven threats and evolving market dynamics in UEM and EDR. The company is undertaking strategic organizational changes, including a new CRO and headcount reduction, to realign resources towards high-priority opportunities like data protection and security operations, aiming for accelerated growth in 2027. Management believes its multi-pronged AI strategy will differentiate its offerings and drive future efficiency for MSPs.

    Highlights

    5

    • Total ARR reached $544 million, growing 6% year-over-year in constant currency.

    • Adjusted EBITDA was $40 million, representing a strong 29% margin.

    • The data protection solution's ARR exceeded $200 million and continues to grow faster than the total company.

    • Customers contributing $50,000 or more in ARR increased by approximately 7% year-over-year to 2,706, now representing 63% of total ARR.

    • AI-generated code accounted for 47% of all committed code in Q2, with some features shipping 10x to 12x faster.

    Concerns

    4

    • The company updated its 2026 top-line guidance downwards due to a go-to-market leadership transition and shifting UEM/EDR market dynamics.

    • Renewal rates for UEM and EDR in Q2 came in below expectations, falling to the mid-80s from prior high-80s levels.

    • N-able plans to implement organizational changes, including a reduction of approximately 6% in total headcount.

    • Restructuring charges of $4 million to $6 million are expected in the second half of 2026.

    Guidance & targets

    14
    CategoryTargetConfidence
    Total Revenue
    $134.5 million to $135.5 million
    high materiality
    High
    Adjusted EBITDA
    $41 million to $42 million
    medium materiality
    High
    Weighted Average Diluted Shares Outstanding
    189 million to 192 million
    low materiality
    High
    Non-GAAP Tax Rate
    25% to 26%
    low materiality
    High
    Total Revenue
    $539 million to $542 million
    high materiality
    Medium
    Total ARR
    $562 million to $565 million
    high materiality
    Medium
    Adjusted EBITDA
    $158 million to $161 million
    high materiality
    High
    Unlevered Free Cash Flow
    $116 million to $120 million
    medium materiality
    High
    CapEx
    approximately 6% of total revenue
    medium materiality
    High
    Cash Interest Payments
    approximately $27 million
    low materiality
    High
    Weighted Average Diluted Shares Outstanding
    188 million to 192 million
    low materiality
    High
    Non-GAAP Tax Rate
    25% to 26%
    low materiality
    High
    Annualized Operating Expenses Reduction
    $11 million to $13 million
    medium materiality
    High
    Restructuring Charges
    $4 million to $6 million
    medium materiality
    High

    Segment performance

    1
    SegmentRevenueYoYQoQMargin
    Data Protection
    The data protection solution continues to grow faster than the total company and once again led net new ARR growth this quarter. Omdia named N-able its backup and Disaster Recovery champion for the third year running.
    ARR: $200M+
    		—faster than total company——

    Operational metrics

    22
    Non-GAAP gross margin
    80%vs 82% in Q2 FY25
    Q2 FY26

    Compared to 82% in the same period in 2025.

    Adjusted EBITDA
    $40 million
    Q2 FY26

    Representing approximately 29% adjusted EBITDA margin.

    Capital expenditure
    $13 million
    Q2 FY26

    Inclusive of $3 million of capitalized software development costs.

    Cash and investments balance
    $116 million
    Q2 FY26

    As of the end of the quarter.

    Loan principal balance
    $398 million
    Q2 FY26

    Outstanding loan principal balance at the end of the quarter.

    Net leverage
    1.8x
    Q2 FY26

    Calculated as net debt to EBITDA.

    Non-GAAP earnings per share
    $0.10
    Q2 FY26

    Based on 189 million weighted average diluted shares.

    Share repurchase authorization
    $45 million
    Q2 FY26

    Remaining authorization for the share repurchase program.

    Annualized operating expenses reduction
    $11 million to $13 million
    Ongoing

    Expected reduction from organizational changes, including a 6% workforce reduction.

    Restructuring charges
    $4 million to $6 million
    H2 FY26

    Expected in the second half of 2026 in connection with organizational changes.

    Total Revenue Growth
    6%YoY
    Q2 FY26

    Year-over-year growth on a reported basis; 5% on a constant currency basis.

    Subscription Revenue Growth
    6%YoY
    Q2 FY26

    Year-over-year growth on a reported basis; 5% on a constant currency basis.

    Customers with $50K+ ARR
    2,706up 7% YoY
    Q2 FY26

    Up approximately 7% year-over-year, representing approximately 63% of total ARR, up from 60% a year ago.

    Revenue outside North America
    46%
    Q2 FY26

    Percentage of total revenue generated outside North America.

    Headcount
    approximately 2,000
    Q2 FY26

    Total employees as of Q2 2026, before planned 6% reduction.

    AI-generated code
    47%
    Q2 FY26

    Percentage of all committed code in the second quarter, leading to significant speed improvements in shipping features.

    Vulnerabilities uncovered
    billions
    Q2 FY26

    Uncovered across N-able's customer base through vulnerability management capabilities.

    UEM cross-sell to data protection and security customers
    27%up
    Q2 FY26

    Increase in cross-sell activity for UEM.

    UEM migrations against top competitor
    60%increased
    Q2 FY26

    Increase in targeted displacement campaigns.

    Identities protected
    over 3 million
    Q2 FY26

    Number of identities protected by N-able's solutions, addressing identity as a leading attack vector.

    Attacks bypassing endpoint controls
    50%
    Q2 FY26

    Percentage of attacks seen bypassing endpoint controls, indicating identity as a new favorite path for attackers.

    SOC analyst alerts
    1 every 30 seconds
    Q2 FY26

    Average frequency of alerts faced by a SOC analyst, highlighting the intensity of the threat environment.

    Industry KPIs

    10
    MetricValueDetails
    Capacity CAPEX$13 millionUSD
    Revenue growth$138 millionUSD
    Arr net new arr$544 millionUSD
    Customer account count2,706customers
    Large deal new logo metricsone of our largest new deals everdeal
    Gross retention renewal ratemid-80s%
    Multi product platform attach27%%
    Operating FCF margin rule of 4029%%
    Ai product adoption monetization47%%
    Net revenue net dollar retention106%%

    Orderbook & backlog

    1
    Total ARR$544 millionQ2 FY26

    6% YoY reported, 6% YoY constant currency

    Product announcements

    8
    ProductTypeDetails
    Disaster Recovery as a Service (DRaaS)launch
    Automated backup ticketingupdate
    Google Workspace coverageexpansion
    Shadow AI Visibilitylaunch
    Managed EDRexpansion
    Entra ID coverageroadmap
    Security operations platform expansionroadmap
    Monetizing agentsroadmap

    Deals & partnerships

    1
    SentinelOneAmended agreement to extend offerings and SKUs, and provide pricing protection.foreseeable future

    The amended agreement allows N-able to offer a wider range of endpoint security SKUs, including FedRAMP-certified EDR capabilities, which were previously unavailable and sometimes led to customer loss. It also provides pricing protection for N-able.

    Risks & headwinds

    5
    Go-to-market leadership transitionNear-term

    Near-term variability in execution

    Mitigation: Appointment of Russell Rosa as new CRO with clear priorities for channel strategy, upmarket motion, and operational excellence.

    Shifting UEM and EDR market dynamicsNear-term

    Pressuring near-term growth; Q2 renewal rates for UEM and EDR in mid-80s (vs. high-80s prior)

    Mitigation: Executing roadmap for AI agent governance, exposure management, AI security, FedRAMP EDR, cloud-native security, and managed EDR. Strengthening renewal motion with dedicated sales engineers, improved outreach, in-person interactions, and up-leveled support.

    Organizational changes and workforce reductionH2 FY26

    Approximately 6% reduction in total headcount; $4 million to $6 million in restructuring charges in H2 2026

    Mitigation: Designed to align investments with high-priority opportunities (data protection, security operations, full channel) and improve productivity for long-term profitable growth.

    Foreign exchange ratesFY26

    $2.5 million negative impact to full-year revenue; $5 million negative impact to full-year ARR

    Mitigation: Guidance incorporates updated FX rates (Euro at $1.13, Pound at $1.33).

    AI-driven cyber riskOngoing

    Number of vulnerabilities more than tripled between Q2 2022 and Q2 2026; exploits can be created in an afternoon for a few thousand dollars.

    Mitigation: N-able's end-to-end portfolio (patch management, vulnerability remediation, UEM, threat detection/response, security operations, data protection) is strategically positioned to capture the growing opportunity.

    What to watch in Q3 FY26

    5

    UEM/EDR Renewal Rates

    next quarter
    Currentmid-80s
    Targetimprovement from mid-80s

    Why it matters

    Renewal rates are a key driver of ARR growth and indicate customer satisfaction and competitive positioning in core segments.

    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.

    Q&A highlights

    5

    The analyst questioned why Q2 guidance was maintained despite a month of Q2 results, only to be lowered now, specifically asking about the timing and impact of UEM/EDR renewal rate declines.

    Tim O'Brien explained that Q2 has the largest renewal cohort, and renewal rates for UEM and EDR, initially in the high-80s, declined to the mid-80s as the quarter progressed. This decline, combined with the cohort size, was the main driver for Q2 performance and the updated full-year guidance, with similar rates assumed for the remainder of the year.

    “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.”

    asked by Michael Cikos · answered by Tim OBrien

    2 min read6 chapters

    Detailed Narrative

    01

    AI-Driven Cyber Risk & Opportunity

    N-able emphasizes its mission to democratize enterprise-grade cybersecurity, noting that recent AI advances have significantly increased the volume and velocity of cyber risk. Vulnerabilities have tripled between Q2 2022 and Q2 2026, and exploits can be created rapidly and cheaply. The company highlights incidents like the Hugging Face security breach as concrete examples of AI risk, reinforcing the strategic relevance of N-able's comprehensive portfolio across the full attack life cycle.

    02

    Strategic Go-to-Market Realignment

    The company is updating its 2026 top-line guidance due to a transition in go-to-market leadership. Russell Rosa has been appointed as the new Chief Revenue Officer, with clear priorities to accelerate the full channel strategy, deepen the upmarket motion for more complex customer needs, and drive operational excellence. This change is expected to create some near-term variability but aims to build a stronger growth engine for 2027 and beyond.

    03

    Evolving UEM & EDR Markets

    Shifting dynamics in the UEM (Unified Endpoint Management) and EDR (Endpoint Detection and Response) markets are also pressuring near-term growth. As AI reshapes the landscape, customers expect greater capabilities beyond core outcomes. N-able's roadmap includes governing and securing AI agents, comprehensive exposure management, AI security for emerging threats, FedRAMP-certified EDR, cloud-native security, and managed EDR to cover a full range of customer preferences and serve as a platform wedge.

    04

    Organizational Changes & Productivity Gains

    N-able plans to implement organizational changes, including a 6% reduction in total headcount, to align investments with high-priority opportunities in data protection, security operations, and the full channel. The company is also driving productivity gains by incorporating AI into its operations, with AI-generated code accounting for 47% of committed code in Q2, leading to some features shipping 10x to 12x faster.

    05

    Data Protection Momentum

    The company launched Disaster Recovery as a Service (DRaaS) in July, which allows customers to restore operations in minutes without needing separate infrastructure. This offering is resonating due to rising hardware and labor costs. N-able also added automated backup ticketing and plans to extend coverage to Google Workspace later this year. Its Cove Data Protection solution, with over $200 million in ARR, continues to grow faster than the total company and led net new ARR growth this quarter.

    06

    Security Operations & Identity Protection

    N-able continues to see strong traction for its AI-powered security operations solution, which provides enterprise-grade security in an accessible way. The platform ingests signals across various layers (endpoint, network, cloud, identity, SaaS) and uses AI to act on risk faster. Identity has emerged as a leading attack vector, with 50% of attacks bypassing endpoint controls. N-able protects over 3 million identities and achieved one of its largest new deals ever in this category, indicating market share gains.

    AI-generated summary of the company’s earnings call. Not investment advice.