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.
Renewals Weigh on Outlook
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.
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%.
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%.
Leadership Change and Workforce Reduction
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.
Data Protection and Security Products
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%.
Profitability and Capital Allocation
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.
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.
