Business Context and Reporting Period
Company: N-able, Inc. (NABL)
Filing Type: Form 10-K (Annual Report)
Reporting Period: Fiscal year ended December 31, 2025
Business Overview: N-able is a global cybersecurity provider offering a unified platform for Unified Endpoint Management (UEM), Security Operations, and Data Protection. The company serves IT services providers (MSPs) and businesses with up to 2,500 employees through a channel-led model. In November 2024, the company acquired Adlumin, Inc. to enhance its extended detection and response (XDR) and managed detection and response (MDR) capabilities.
Key Financial Metrics (Year Ended Dec 31, 2025)
| Metric | 2025 | 2024 | Change |
|---|---|---|---|
| Total Revenue | $511.4 million | $466.1 million | +9.7% |
| Net (Loss) Income | $(17.0) million | $31.0 million | Turned to Loss |
| Adjusted EBITDA | $153.2 million | $169.4 million | -9.6% |
| Operating Cash Flow | $93.2 million | $79.4 million | +17.4% |
| Annual Recurring Revenue (ARR) | $539.7 million | $482.5 million | +11.9% |
| Total Debt (Net) | $393.9 million | $333.1 million | +18.3% |
| Cash & Equivalents | $111.8 million | $85.2 million | +31.2% |
Note: Adjusted EBITDA is a non-GAAP measure. Net loss in 2025 was driven by increased interest expense, amortization of acquired technologies, and transaction costs related to the Adlumin acquisition.
Material Changes vs. Prior Period
- Profitability Decline: The company reported a net loss of $17.0 million in 2025 compared to net income of $31.0 million in 2024. This shift was primarily due to a $6.0 million increase in interest expense (partially due to Adlumin deferred consideration and credit agreement amendments) and a significant increase in amortization of acquired technologies ($13.4 million increase) following the Adlumin acquisition.
- Revenue Growth: Total revenue grew 9.7% year-over-year, driven by a 10.3% increase in subscription revenue. The company noted a shift toward long-term committed contracts, which impacts revenue recognition timing under ASC 606.
- Cost Structure: Total cost of revenue increased 45.1% to $117.1 million, largely due to higher cloud infrastructure fees and amortization. Operating expenses rose 18.0% to $357.6 million, with Sales and Marketing expenses increasing 20.3% due to headcount growth and transaction costs.
- Debt Expansion: Total borrowings increased to $400.0 million principal (net of issuance costs $393.9 million) following Amendment No. 2 to the Credit Agreement in November 2025, which increased the Term Loan facility from $336.0 million to $400.0 million.
Guidance, Outlook, and Risks
Management Commentary & Outlook: Management expects stock-based compensation to continue increasing in 2026. The company is focused on expanding its customer footprint, facilitating MSP-enabled growth, and widening its surface area through internal development and partnerships. The dollar-based net revenue retention rate was 103% for the year ended December 31, 2025.
Key Risks & Contingencies:
- Indebtedness: Substantial indebtedness ($393.9 million net) exposes the company to interest rate fluctuations and covenants, including a maximum first lien net leverage ratio of 7.50 to 1.00.
- Cybersecurity: As a cybersecurity provider, the company faces risks of security breaches affecting its own infrastructure or its customers, which could lead to reputational harm and liability.
- Acquisition Integration: Risks associated with integrating Adlumin, including potential goodwill impairment and the ability to realize expected synergies.
- Geopolitical & FX: Approximately 50.4% of revenue is generated outside the U.S. The company faces exposure to foreign currency fluctuations and geopolitical instability, particularly regarding operations in Belarus and Ukraine.
- Concentration of Ownership: Sponsors (Silver Lake and Thoma Bravo) collectively own approximately 59.8% of voting power, exerting significant control over corporate matters.
Investor Verification Checklist
- Debt Covenants: Verify compliance with the 7.50:1.00 first lien net leverage ratio covenant under the Credit Agreement, especially given the increased debt load.
- Adlumin Integration: Monitor the realization of synergies and the impact of deferred consideration payments ($120 million total) on future cash flows and interest expense.
- Revenue Recognition: Review the impact of the "Long-Term Contract Initiative" on the mix of point-in-time vs. over-time revenue recognition and its effect on future quarters.
- Valuation Allowance: Assess the $6.3 million increase in valuation allowance for deferred tax assets in 2025 and its implication for future effective tax rates.
- Stock Repurchases: Note the $75.0 million repurchase program authorized in March 2025; verify remaining capacity and execution pace ($45.0 million remaining as of Dec 31, 2025).