N-able Q2 FY2026 Earnings: Revenue Grows 5.9% as ARR Reaches $544.5 Million

N-able (NYSE: NABL) reported Q2 FY2026 revenue of $138.2 million, up 5.9% year over year, while GAAP diluted EPS was $0.01 and non-GAAP diluted EPS was $0.10. For the quarter ended June 30, 2026, ARR increased 6.0% to $544.5 million and adjusted EBITDA reached $39.9 million at a 28.9% margin.

Core financial results

Subscription revenue continued to account for nearly all of N-able’s revenue, rising 6.1% to $137.1 million. Reported growth exceeded constant-currency growth for total revenue, subscription revenue, and ARR, showing that currency movements provided a modest benefit to the reported rates.

Profitability differed materially between GAAP and adjusted measures. GAAP net income was $1.8 million, compared with non-GAAP net income of $18.7 million, while the company reported a 76.8% GAAP gross margin and an 80.2% non-GAAP gross margin.

The company described these results as preliminary and pending final review before filing its quarterly report on Form 10-Q.

Recurring revenue and business execution

Recurring subscriptions remained the central operating driver. Subscription revenue growth of 6.1% slightly exceeded total revenue growth of 5.9%, while period-end ARR grew 6.0% on a reported basis. On a constant-currency basis, the corresponding growth rates were 5.0%, 4.7%, and 5.7%.

N-able continued investing in cybersecurity and AI capabilities, including the launch of Shadow AI Visibility. It also opened a Global Capability Centre in Bengaluru to expand engineering, product management, and security operations capacity. The release did not quantify the revenue or cost contribution from these initiatives.

Profitability and balance sheet

Adjusted EBITDA of $39.9 million represented 28.9% of revenue, indicating that N-able maintained a substantial adjusted operating profit while producing mid-single-digit top-line growth. However, GAAP net income of $1.8 million was considerably lower than non-GAAP net income of $18.7 million. The non-GAAP measures exclude items including stock-based compensation, amortization, transaction-related expenses, and restructuring costs.

At June 30, 2026, N-able held $115.8 million in cash and cash equivalents and reported $392.3 million of debt, net of debt issuance costs. The release did not provide a quarterly operating cash flow or free cash flow figure.

Guidance points to slower Q3 growth and a higher adjusted EBITDA margin

N-able expects approximately 3% reported revenue growth in Q3 FY2026, below the 5.9% rate recorded in Q2. At the same time, its Q3 adjusted EBITDA margin guidance of 30% to 31% is above the second quarter’s 28.9%, indicating an expectation for stronger adjusted profitability despite slower revenue growth.

The company also updated its full-year ARR outlook to $562 million to $565 million. Because the prior ARR guidance range was not included in the supplied release, the direction and size of that update cannot be determined.

The outlook incorporates management’s expectations regarding current foreign-exchange rates and macroeconomic conditions.

Management perspective

CEO John Pagliuca said N-able is reorganizing resources around its highest-priority opportunities, accelerating product roadmaps, and pursuing demand associated with cybersecurity and AI. The company appointed Russell Rosa as chief revenue officer to support partner-led growth, expansion into larger customers, and execution across its global channel ecosystem.

CFO Tim O’Brien emphasized the combination of growth, cash generation, and disciplined profitability. He also said the company intends to be active with its share-repurchase program, although the release did not specify its expected size or timing.

Recent insider transactions

The supplied insider data reports zero purchase transactions and zero sale transactions during the preceding six months, with total insider holdings of 3.89 million shares. The 10 most recent reported transactions were stock awards at $0.00 per share; no award share counts were provided, so the records do not establish the economic size of the grants.

These grants should not be interpreted as open-market purchases or sales, and the supplied data does not support conclusions about insiders’ outlook for the company.

Risks investors need to watch

• Revenue growth moderation: Q3 guidance calls for approximately 3% reported revenue growth, compared with 5.9% in Q2. Full-year ARR guidance also implies reported growth of 4% to 5%, making customer acquisition, renewals, and expansion important indicators.
• GAAP and non-GAAP profitability gap: GAAP net income of $1.8 million was far below non-GAAP net income of $18.7 million. Investors need to track the excluded costs and whether they remain material in future periods.
• Debt and interest obligations: Debt of $392.3 million was substantially higher than cash and cash equivalents of $115.8 million. The company identifies indebtedness, borrowing costs, and related operating restrictions as risks.
• Internal-control weakness: N-able disclosed that a material weakness was identified in Q2 FY2026. If it remains unremediated, it could increase the risk of financial misstatements and add remediation costs.
• Execution during organizational changes: The appointment of a new chief revenue officer, resource realignment, and faster product roadmaps create execution requirements as N-able seeks partner-led growth and greater penetration of larger customers.

Summary

N-able’s second-quarter results combined mid-single-digit revenue and ARR growth with a 28.9% adjusted EBITDA margin, while GAAP profitability remained much lower than its adjusted result. The Q3 outlook points to slower revenue growth but a higher adjusted EBITDA margin, making the balance between sales execution, recurring-revenue expansion, cost discipline, and remediation of the disclosed material weakness the main issues to monitor.