N-able Cuts Growth Outlook as ARR Deceleration Widens
N-able slashed its full-year ARR outlook to $562 million-$565 million after growth decelerated to 6.0% year over year in the second quarter from 11.2% in the first.
N-able (NABL) reported a sharp slowdown in its core growth metric for the second quarter of 2026, with annual recurring revenue rising 6.0% year over year, down from 11.2% in the first quarter and 11.9% in the fourth quarter of 2025. The cybersecurity and IT management software provider cut its full-year 2026 ARR outlook to a range of $562 million to $565 million, from a prior range of $581 million to $586 million maintained as recently as the first quarter, a reduction of roughly $17 million to $21 million at the midpoint.
The deceleration was not confined to ARR. Total revenue grew 5.9% year over year in the quarter, compared with 13.1% growth in the first quarter and 11.8% in the fourth quarter of 2025. Subscription revenue, the company's primary sales motion, grew 6.1% year over year, down from 13.4% in the prior quarter. The pace of the slowdown across all three metrics within a single quarter marked a break from the steadier deceleration seen in the two prior periods.
N-able disclosed a material weakness in internal controls for the first time, flagged in the risk factors of the second-quarter release after no mention in the first-quarter or fourth-quarter filings. The company named Russell Rosa as its new Chief Revenue Officer and is realigning organizational resources toward its highest-priority opportunities, changes not referenced in either prior release.
Profitability metrics diverged. GAAP net income turned positive at $1.8 million, or $0.01 a diluted share, compared with a GAAP net loss of $4.6 million a year earlier and a loss of $0.6 million in the first quarter of 2026. GAAP operating margin improved to 11.9% from 7.1% a year earlier. Non-GAAP profitability moved the other way: adjusted EBITDA margin compressed to 28.9% from 31.4% in the year-earlier quarter and from 29.6% in the fourth quarter of 2025, while non-GAAP operating margin fell to 24.0% from 25.4%. Gross margin held up on both bases, with GAAP gross margin ticking up to 76.8% from 76.2% in the first quarter and non-GAAP gross margin rising to 80.2% from 79.7%.
The company's full-year framework has now shifted twice in two quarters. At the fourth-quarter release, N-able guided to constant-currency ARR growth of 8% to 9% for 2026. That was replaced with a dollar-denominated ARR range at the first quarter, which the company then lowered at the second-quarter release.
Cash and debt moved modestly. Cash and cash equivalents fell to $115.8 million at June 30 from $117.8 million at March 31, reversing a build from $111.8 million at the end of 2025. Total debt, net of issuance costs, declined to $392.3 million from $393.1 million over the same period, continuing a gradual paydown.
N-able intends to be active with its share repurchase program going forward, though it repurchased no shares in the second quarter, compared with $10.0 million bought back in the year-earlier period.