N-able Q1 Earnings Call Highlights

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.

“We delivered another quarter of consistent execution with solid ARR growth, strong margins, and practical AI innovation,” Pagliuca said in closing remarks.

Upmarket momentum and channel sales drive performance

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.

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.

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.

Revenue tops guidance; margins remain in focus

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.

Company emphasizes AI as part of cybersecurity strategy

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.

Data protection and security operations remain growth areas

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.

Guidance calls for ARR growth and higher free cash flow

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.

About N-able (NYSE:NABL)

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.

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