N-able, Inc. 10-Q Summary: Q1 2026
Business Context and Reporting Period
This Quarterly Report on Form 10-Q covers the period ended March 31, 2026. N-able, Inc. is a Delaware corporation providing an AI-powered cybersecurity platform to over 500,000 organizations globally. The company operates as a single reporting segment and is a large accelerated filer. As of May 4, 2026, there were 188,378,290 shares of common stock outstanding.
Key Financial Metrics
| Metric | Q1 2026 | Q1 2025 |
|---|---|---|
| Total Revenue | $133.7 million | $118.2 million |
| Operating Income | $12.5 million | $1.8 million |
| Net Loss | $(0.6) million | $(7.2) million |
| Adjusted EBITDA | $36.7 million | $31.6 million |
| Operating Cash Flow | $17.5 million | $19.7 million |
| Cash and Equivalents | $117.8 million | $94.1 million |
| Total Debt (Net) | $393.1 million | $393.9 million |
| Annual Recurring Revenue (ARR) | $548.0 million | $492.7 million |
Material Changes vs. Prior Period
- Revenue Growth: Total revenue increased 13.1% year-over-year, driven primarily by a 13.4% increase in subscription revenue. ARR grew 11.2% to $548.0 million.
- Profitability Improvement: Operating income surged to $12.5 million from $1.8 million, and the net loss narrowed significantly to $0.6 million from $7.2 million.
- Expense Management: General and administrative expenses decreased 15.3% ($3.7 million) due to lower acquisition-related costs. Sales and marketing and R&D expenses increased modestly (5.4% and 9.4%, respectively) due to headcount and salary increases.
- Tax Impact: The effective tax rate was 114.7% compared to (85.4)% in the prior year, primarily due to increased income taxes on foreign income and a decrease in unbenefited U.S. losses.
- Currency Impact: Foreign currency translation adjustments resulted in a comprehensive loss of $13.0 million, compared to a gain of $16.4 million in the prior year.
Outlook, Risks, and Management Commentary
- Stock Price and Goodwill: Management noted a significant decline in stock price during Q1 2026. They are monitoring this trend as a sustained decline could trigger an interim goodwill impairment analysis, which would materially impact results.
- Acquisition Integration: The company continues to integrate Adlumin, Inc., acquired in November 2024. Deferred consideration expenses of $1.7 million were recognized in Q1 2026.
- Capital Allocation: The company has a $75.0 million share repurchase program authorized. No shares were repurchased in Q1 2026; $45.0 million remains available.
- Key Risks: Risks include geopolitical instability affecting IT spending, foreign exchange volatility, cybersecurity threats, and the ability to successfully incorporate AI features into solutions.
- Liquidity: Management believes existing cash, cash equivalents, and operating cash flows are sufficient to fund operations for at least the next 12 months.
Investor Verification Checklist
- Goodwill Impairment Risk: Verify the current stock price trend and management's assessment of potential interim goodwill impairment tests given the recent decline.
- Deferred Consideration: Review the remaining obligations related to the Adlumin acquisition ($62.4 million deferred and $10.3 million contingent as of March 31, 2026).
- Effective Tax Rate: Analyze the drivers of the 114.7% effective tax rate and the sustainability of foreign tax liabilities.
- Debt Covenants: Confirm continued compliance with the Credit Agreement covenants, specifically the maximum first lien net leverage ratio of 7.50 to 1.00.
- Non-GAAP Reconciliations: Review the reconciliation of Adjusted EBITDA and Non-GAAP Operating Income to ensure understanding of excluded items like stock-based compensation and amortization.