NABL earnings analysis
What we found in NABL's 10-Q: the parts that mattered, the offsets in the same document, and what the company said about what comes next.
Our reading of the filing · Free to read, no account needed
N-able delivered solid second-quarter growth, with revenue up 5.9% year over year to $138.223 million, ARR up 6.0% to $544.5 million, and GAAP operating margin improving to 11.9% from 7.1%. The company returned to profitability with $1.760 million of net income, although gross margin declined to approximately 76.8% as cloud infrastructure and royalty costs increased by $4.0 million. Operating cash flow remained strong at $43.985 million for the first six months, but the unremediated revenue-control material weakness, $392.3 million of borrowings, variable-rate exposure, and 17% goodwill impairment sensitivity remain significant overhangs.
The parts that mattered.
Pulled out of the filing itself, with the figures the company reported.
- Revenue growth accelerated
- Second-quarter revenue increased to $138.223 million from $130.521 million, up $7.702 million or 5.9% year over year, and was approximately 3.1% above the prior quarter's $134 million.
- Recurring revenue remains strong
- Subscription revenue grew 6.1% year over year to $137.071 million and represented 99.2% of total revenue; annual dollar-based net revenue retention improved to 106% from 102%.
- Gross margin compressed
- Gross margin was approximately 76.8%, versus 78.0% implied by the prior-year period's $28.771 million of total cost of revenue on $130.521 million of revenue, as total cost of revenue rose 11.3% to $32.021 million.
- Profitability materially improved
- GAAP operating income increased to $16.476 million from $9.320 million, lifting operating margin to 11.9% from 7.1%; net income was $1.760 million versus a $4.631 million loss in the prior-year quarter.
- ARR and larger customers expanded
- ARR increased 6.0% to $544.5 million from $513.7 million, while customers with ARR above $50,000 rose 6.5% to 2,706 from 2,540.
- Cash generation and debt improved
- Six-month operating cash flow increased to $43.985 million from $43.864 million; quarter-end cash was $115.8 million, while borrowings declined to $392.3 million from $393.9 million at December 31, 2025.
And the other side of it.
The offsets in the same document — the things a summary that only listed the good news would have left out.
- Unremediated revenue-control weakness
- Disclosure controls and internal control over financial reporting were not effective as of June 30, 2026. The material weakness involved manual subscription revenue processes outside the ERP and resulted in revisions to periods including the three months ended March 31, 2026 and quarterly periods in 2024 and 2025.
- Leverage and variable-rate exposure
- Total borrowings were $392.3 million at June 30, 2026, and the company added a delayed-draw facility with $75.0 million of committed availability. A hypothetical 100-basis-point increase in rates would increase annual interest expense by approximately $4.0 million.
- Goodwill impairment sensitivity
- Management identified goodwill impairment indicators from a sustained decline in stock price and market capitalization. A further decline of approximately 17% from the June 30, 2026 stock price would reduce estimated reporting-unit fair value to carrying value, creating potential for a material non-cash impairment charge.
What they reported.
What the company itself reported, taken out of the document.
- Gross margin
- 76.8%
- Operating margin
- 11.9%
- Segment
- Subscription revenue: $137.071 million, up 6.1% year over year and 99.2% of total revenue.
- Segment
- Other revenue: $1.152 million, down 16.2% year over year and 0.8% of total revenue.
What they said about what is next.
No quantitative revenue or EPS guidance was provided in the 10-Q; the filing states that cash and operating cash flows are expected to fund operations and capital expenditure commitments for at least the next twelve months. Management expects stock-based compensation expense to continue decreasing during the remainder of 2026 and expects to continue growing sales and marketing and research and development organizations.
The filing reads about the same as the one before it.
What came before.
- 10-K · August 10, 2026
- N-able continued to grow recurring revenue and ARR in FY2025, supported by its AI-powered, partner-first cybersecurity platform and expansion in both U.S. and international markets. However, higher cloud, personnel,…
- 10-Q · May 7, 2026
- N-able, Inc. reported a strong Q1 2026, with revenues of $133.7 million, surpassing expectations and showing a 13.1% increase year-over-year. Adjusted EPS reached $0.09, improving from a net loss in the prior year,…
- 10-K · February 26, 2026
- N-able, Inc. reported $511.4 million in revenue for the year ended December 31, 2025, representing a 9.7% increase from $466.1 million in the prior year, driven by a significant rise in subscription revenue. However,…
- 10-Q · November 6, 2025
- N-able, Inc. reported total revenue of $131.7 million for Q3 2025, up 13.1% year-over-year from $116.4 million. EPS came in at $0.13, exceeding the consensus estimate of $0.07, although overall operating income…
This is our reading of a public filing, not the filing. Read the original on SEC.gov · Educational only. Nothing here is investment advice.
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