Summary
N-able reported second quarter fiscal 2026 revenue of $138.2 million, up 5.9% year over year. GAAP gross profit was $106.2 million, up 4.4%. GAAP operating income reached $16.5 million, up 76.8%. GAAP net income was $1.8 million, or $0.01 per diluted share, compared with a net loss in the prior-year quarter. Operating cash flow was $26.5 million, up 9.6%. Capital expenditures were $9.8 million, up 158.9%. Deferred revenue was $21.8 million, down 6.5%. Remaining performance obligations were $279.8 million, up 14.1%. Gross margin was 76.8%, down 1.1 percentage points. Operating margin was 11.9%, up 4.8 percentage points.
On a non-GAAP basis, gross margin was 80.2%. Non-GAAP operating income was $33.2 million, and non-GAAP operating margin was 24.0%, down from 25.4% in the prior-year quarter. Adjusted EBITDA was $39.9 million, or 28.9% of revenue, compared with 31.4% in the prior-year quarter. Non-GAAP net income was $18.7 million, or $0.10 per diluted share. Total annual recurring revenue was $544.5 million, up 6.0% year over year on a reported basis and 5.7% on a constant currency basis. The company had 2,706 customers with ARR over $50,000, up from 2,540, and those customers represented approximately 63% of total ARR, up from approximately 60%. Annual dollar-based net revenue retention was approximately 106%, compared with approximately 102% in the prior-year period. N-able employed 1,978 people as of June 30, 2026.
Guidance points to slower near-term growth. For the third quarter of 2026, N-able expects total revenue growth of approximately 3% year over year on a reported basis and 3% to 4% on a constant currency basis. Third quarter adjusted EBITDA is guided to $41.0 million to $42.0 million, or approximately 30% to 31% of total revenue. For full-year 2026, the company updated its total ARR outlook to $562 million to $565 million, representing approximately 4% to 5% year-over-year growth on a reported basis and 5% on a constant currency basis. Full-year revenue growth is expected at approximately 6% to 7% on a reported basis and 5% on a constant currency basis. Full-year adjusted EBITDA is guided to $158 million to $161 million, or approximately 29% to 30% of total revenue.
Operationally, N-able appointed Russell Rosa as Chief Revenue Officer. It launched Shadow AI Visibility, announced Empower 2027, and opened a Global Capability Centre in Bengaluru, India. The company was named a Champion in the 2026 Omdia Global Managed Backup and Disaster Recovery Leadership Matrix for the third consecutive year. Management also flagged a material weakness identified in the second quarter of 2026. On goodwill, an interim quantitative impairment test as of June 30, 2026 showed fair value above carrying value, so no impairment was recorded. A decline of approximately 17% in the June 30, 2026 stock price would have reduced estimated fair value to carrying value.
Cash generation remains a focus. Free cash flow was $14.0 million in the quarter, compared with $17.4 million in the prior-year quarter. Unlevered free cash flow was $22.9 million, compared with $25.2 million. Year-to-date operating cash flow was $44.0 million, flat compared with the prior-year period. Year-to-date capital expenditures were $11.5 million, up 62.5%. Year-to-date revenue was $270.6 million, up 8.8%. Year-to-date gross profit was $206.7 million, up 7.6%. Year-to-date operating income was $27.5 million, up 150.8%. Year-to-date gross margin was 76.4%, down 0.9 percentage points. Year-to-date operating margin was 10.2%, up 5.8 percentage points. In June 2026, N-able added a delayed draw term loan facility with $75.0 million of committed borrowing availability and no borrowings as of June 30, 2026. The share repurchase program had $45.0 million remaining as of June 30, 2026.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q2 FY2026 | Q1 FY2026 | QoQ | Q2 FY2025 | YoY |
|---|---|---|---|---|---|
| Revenue | $138.2M | $133.7M | +3.4% | $131.2M | +5.3% |
| Gross profit | $106.2M | $101.9M | +4.2% | $102.6M | +3.6% |
| Gross margin | 76.8% | 76.3% | +0.6 pp | 78.1% | -1.3 pp |
| Research & development | $26.6M | $26.1M | +1.9% | $26.3M | +1.1% |
| Sales & marketing | $42.7M | $42.6M | +0.2% | $42.4M | +0.8% |
| General & administrative | $19.9M | $20.2M | -1.6% | $23.2M | -14.3% |
| Total operating expenses | $89.7M | $89.5M | +0.3% | $92.4M | -2.9% |
| Operating income (loss) | $16.5M | $12.5M | +32.3% | $10.1M | +62.8% |
| Operating margin | 11.9% | 9.3% | +2.6 pp | 7.7% | +4.2 pp |
| Net income (loss) | $1.8M | -$615.0K | +386.2% | -$4.0M | +143.8% |
| Net margin | 1.3% | -0.5% | +1.7 pp | -3.1% | +4.3 pp |
| Diluted EPS | $0.01 | $0.00 | +$0.01 | -$0.02 | +$0.03 |
| Customers | 2,706 | 2,710 | -0.1% | 2,540 | +6.5% |
Risks
The company identified a material weakness in internal control over financial reporting and concluded that disclosure controls and procedures and internal control over financial reporting were not effective as of June 30, 2026. The weakness involved manual revenue recognition for certain subscription arrangements outside the ERP system's automated revenue recognition module, resulting in errors in subscription revenue and related balance sheet accounts that were corrected through revision of previously issued financial statements.
A sustained decline in the company's stock price and market capitalization led management to perform an interim quantitative goodwill impairment test as of June 30, 2026. Fair value exceeded carrying value, but a decline in the June 30, 2026 stock price of approximately 17% would have reduced estimated fair value to carrying value, and further sustained declines could trigger a material non-cash goodwill impairment charge.
Gross margin declined to 76.8% for the quarter ended June 30, 2026 from 78.0% in the prior-year quarter, down 1.1 percentage points, and declined to 76.4% year to date from 77.3%, down 0.9 percentage points. Total cost of revenue increased $3.3 million, or 11.3%, for the quarter, primarily due to higher public cloud infrastructure and hosting fees and royalties.
In June 2026 the company added a $75.0 million delayed draw term loan facility, with no borrowings as of June 30, 2026. Interest expense, net increased 3.1% for the quarter and 5.1% year to date, and outstanding borrowings under the Credit Agreement bear interest at variable rates.
Operating cash flow was flat year to date, up 0.3% to $43.98 million, despite net income swinging to a profit, as cash inflows were offset by changes in non-cash items and operating assets and liabilities. Capital expenditures increased 158.9% for the quarter and 62.5% year to date.
On July 31, 2026, N-able entered into an amendment to an existing software licensing agreement with a technology vendor, establishing a new three-year minimum spend commitment of $56.0 million for the period from August 1, 2026 through July 31, 2029.
SaaS KPIs
All quarters →Adjusted EBITDA Margin
Non-GAAP Operating Margin
Adjusted EBITDA
Non-GAAP Gross Margin
Unlevered Free Cash Flow
Free Cash Flow
Customers with ARR over $50,000
Total ARR
Summary, forecast, risks and KPIs are extracted from N-able, Inc.'s SEC filings for Q2 FY2026 (10-Q / 10-K and the 8-K earnings release); GAAP figures in the summary are checked against the reported XBRL data. They can contain errors; the filings are authoritative. Processed Oct 1, 2026.