N-able (NABL) Q2 2026 Earnings Report

The call highlights solid underlying fundamentals: recurring ARR growth (6% YoY), strong profitability (29% adjusted EBITDA margin), robust cash generation, accelerating data protection momentum (DRaaS launch and >$200M ARR), meaningful AI-driven productivity gains, and clear product and go-to-market initiatives (new CRO, FedRAMP EDR, Google Workspace backup). However, near-term headwinds are material: weaker-than-expected renewal rates in a large Q2 cohort (primarily UEM and EDR), pricing pressure and competitive displacement in EDR, FX and a small Q1 revenue revision, and an organizational transition that will cause short-term execution variability and a ~6% workforce reduction with restructuring costs. Management has concrete remediation plans (renewal motion improvements, SentinelOne SKU agreement, product launches and cost realignment) and expects improvement into 2027, but the company explicitly revised guidance to reflect these near-term pressures.

N‑able updated 2026 guidance and near‑term outlook with specific targets: Q3 revenue of $134.5–135.5M (≈3% y/y reported, 3–4% constant‑currency) and Q3 adjusted EBITDA of $41–42M (≈30–31% margin); full‑year revenue $539–542M (≈6–7% y/y reported, 5% constant), ARR $562–565M (4–5% y/y reported, 5% constant), full‑year adjusted EBITDA $158–161M (≈29–30% margin) and unlevered free cash flow $116–120M, with CapEx expected at ~6% of revenue for 2026. The company reported Q2 ARR $544M (+6% y/y), Q2 revenue $138M (+6% reported, +5% constant), Q2 adjusted EBITDA $40M (29% margin), Q2 unlevered FCF $23M and Q2 CapEx $13M (9% of revenue, including $3M capitalized software). Balance sheet and other assumptions: cash ≈$116M, outstanding loan principal ≈$398M (net leverage ≈1.8x), added delayed‑draw term loan up to $75M, remaining share repurchase authorization $45M, expected cash interest ≈$27M, weighted average diluted shares Q3 189–192M (FY 188–192M), non‑GAAP tax rate 25–26%, and Q2 non‑GAAP EPS $0.10 on 189M shares. Guidance reflects FX assumptions (€1.13, £1.33) (driving ~ $2.5M revenue and ~$5M ARR headwinds versus prior guide), a $1.3M revision to Q1 revenue, an approximate 6% headcount reduction to save ~$11–13M of annualized operating expense (with estimated $4–6M of H2 restructuring charges), and continued focus on UEM/EDR renewal dynamics and new product tails (DRaaS, Google Workspace backup, incident response, FedRAMP EDR).