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N-able, Inc. (NABL)·Q2 2025 Earnings Summary

Executive Summary

  • Q2 2025 delivered a clean beat: revenue $131.25M (+9.9% YoY; +7.9% CC) and non-GAAP EPS $0.11, with adjusted EBITDA $41.63M (31.7% margin), while total ARR surpassed $500M to $513.7M (+14.5% YoY; +12.0% CC) .
  • Results exceeded top- and bottom-line guidance; management raised full-year 2025 outlook for ARR ($525M–$530M), revenue ($500M–$503M), and adjusted EBITDA ($141M–$144M) .
  • CFO noted ~half of the revenue beat vs guidance was FX (EUR/GBP) with the rest driven by strong operations (record Cove bookings and growing Adlumin adoption), and began executing the share repurchase program; Q2 unlevered FCF was $33.28M .
  • Strategic catalysts: platform traction (Cove, XDR/MDR, UEM), reseller-channel expansion (pipeline doubled QoQ), and appointment of new CMO to accelerate security positioning .

What Went Well and What Went Wrong

What Went Well

  • Cross-category momentum: Cove achieved its highest bookings and net new ARR quarter ever (ex-pricing), Adlumin XDR/MDR showed healthy ARR growth, and UEM added vulnerability management across millions of devices .
  • Metrics strength: total ARR hit $513.7M (+14.5% YoY), adjusted EBITDA of $41.6M (31.7% margin), and non-GAAP gross margin of 81.8%; customers >$50k ARR rose to 2,540 (+16% YoY) .
  • Channel expansion: reseller pipeline nearly doubled QoQ, with high-impact events (RSA, Infosec Europe) and thought leadership (State of the SOC; Threat Report) raising brand awareness; new CMO adds security pedigree .
    • Quote: “AI is turbocharging complexity and risk, and our cyber-resiliency platform is designed to provide the comprehensive protection needed in today’s landscape” — CEO John Pagliuca .

What Went Wrong

  • Margin pressure: non-GAAP gross margin was 81.8% vs 84.7% a year earlier; GAAP gross margin 78.1% reflects higher amortization and cost of revenue, with FX mixed effects .
  • GAAP profitability: GAAP net loss of $4.0M (−$0.02/share), driven by interest expense ($8.09M), tax expense ($5.20M), and transaction-related costs .
  • Device trends: physical devices flattish; growth is concentrated in M365 users and virtual machines—positive for SaaS security/data protection but limits device-based UEM uplift near-term .

Financial Results

MetricQ4 2024Q1 2025Q2 2025
Revenue ($USD Millions)$116.51 $118.20 $131.25
GAAP Diluted EPS ($)$0.02 −$0.04 −$0.02
Non-GAAP Diluted EPS ($)$0.10 $0.08 $0.11
Non-GAAP Gross Margin (%)82.3% 80.6% 81.8%
Adjusted EBITDA ($USD Millions)$38.14 $31.64 $41.63
Adjusted EBITDA Margin (%)32.7% 26.8% 31.7%
SegmentQ4 2024Q1 2025Q2 2025
Subscription Revenue ($USD Millions)$115.03 $116.85 $129.87
Other Revenue ($USD Millions)$1.48 $1.35 $1.38
KPIsQ4 2024Q1 2025Q2 2025
Total ARR ($USD Millions)$482.5 $492.7 $513.7
Dollar-Based NRR (TTM) (%)~103% ~101% ~102%
Customers ≥$50k ARR (count)2,349 2,398 2,540
Revenue Outside North America (%)45% 43% 45%
Unlevered Free Cash Flow ($USD Millions)$28.97 $28.14 $33.28
Cash & Equivalents ($USD Millions)$85.20 $94.09 $93.87
Total Debt, net ($USD Millions)$333.1 $332.6 $332.1

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Total Revenue ($USD Millions)Q3 2025N/A$127–$128 New
Adjusted EBITDA ($USD Millions)Q3 2025N/A$36–$37 (28–29% margin) New
Total ARR ($USD Millions)FY 2025$519–$525 $525–$530 Raised
Total Revenue ($USD Millions)FY 2025$492–$497 $500–$503 Raised
Adjusted EBITDA ($USD Millions)FY 2025$134–$139 $141–$144 Raised
Non-GAAP Tax Rate (%)Q3/FY 2025Q2/FY: 20–21% Q3: 19–20%; FY: 20–21% Tweaked lower for Q3
CapEx (% of revenue)FY 2025~6% ~6% Maintained
Wtd. Avg. Diluted Shares (M)Q3/FY 2025189–190 (Q2/FY) ~188–189 (Q3/FY) Slightly lower
Adj. EBITDA → uFCF Conversion (%)FY 2025~68% ~68% Maintained

Earnings Call Themes & Trends

TopicPrevious Mentions (Q4 2024)Previous Mentions (Q1 2025)Current Period (Q2 2025)Trend
AI/security automationAcquisition of Adlumin; AI-powered SOC highlighted Automated SOC: ~70% remediation; M365 breach prevention launch AI-powered SOC enabling faster detection/response; threat hunting ↑100× Strengthening
XDR/MDR adoptionAdlumin fastest-growing SKU post-acquisition Blue-ocean MSP demand; catalysts include breaches/insurance Significant greenfield; endpoint-agnostic; visibility vs “black box” MDR Expanding
Data Protection (Cove)Champion awards; enhanced restore via AI Faster M365 backup speeds; Canalys recognition Record bookings; protects >3M M365 users Accelerating
UEM & Vulnerability MgmtUEM innovation, APIs/integrations Launch of VM inside UEM; early traction Deployed across millions of devices; single workflow detection→patch Improving
Channel/resellersPlan to expand beyond MSPs internationally Early innings; adding resellers NA/UK/DACH; pipeline building Pipeline nearly doubled QoQ; UK/Germany CIO engagement Rapid build
Macro/FX2025 FX rate assumptions; 606 headwinds explained FX lifted guide; cautious deal scrutiny anecdotes ~Half Q2 revenue beat from FX; guide assumes EUR 1.1 / GBP 1.31 Mixed FX tailwind
Devices vs SaaS assetsN/AN/APhysical devices flattish; growth in M365 users/VMs Mixed

Management Commentary

  • “We surpassed the $500M ARR milestone, beat the high end of our top-and-bottom-line guidance, and began executing on our share repurchase program” — CFO Tim O’Brien .
  • “Our cyber resilience platform is built to win and our model is proving it, balancing durable growth with strong profitability” — CEO John Pagliuca .
  • “Roughly half of our revenue outperformance versus guidance was attributable to the positive impact of higher than forecasted foreign exchange rate. The remaining…was largely attributable to strong operations with Cove delivering record bookings and…Adlumin…meaningful adoption” — CFO Tim O’Brien .

Q&A Highlights

  • Reseller traction: pipeline doubled QoQ; multi-country CIO sessions (Germany) producing real opportunities; bundling experiments underway to reduce vendor sprawl and raise ASPs .
  • MDR/XDR adoption: ~half of MSPs still don’t offer MDR; N-able’s AI-powered SOC and “software-first” visibility advantages vs legacy “black box” MDR highlighted .
  • Renewals and retention: first large renewal cohort in 2025 renewing at ~90%; DNRR (TTM) ~102% this quarter .
  • ARR/inorganic: Adlumin contributes ~1 point to exit-2025 ARR growth; acquisition ARR in low-$20M range at close .
  • Device mix: physical devices flattish; growth in M365 users and VMs aligns with strength in identity and data protection workloads .

Estimates Context

  • Q2 2025 actuals vs S&P Global consensus: revenue $131.25M vs $125.87M*; non-GAAP EPS $0.11 vs $0.088* — clear beat on both. Values retrieved from S&P Global.
  • Q1 2025 actuals vs consensus: revenue $118.20M vs $115.55M*; non-GAAP EPS $0.08 vs $0.058* — beat on both. Values retrieved from S&P Global.
  • FY 2025 consensus: revenue $508.17M* and EPS $0.422* pre-raise; company raised FY revenue to $500–$503M and ARR to $525–$530M . Values retrieved from S&P Global.
MetricQ1 2025 ConsensusQ1 2025 ActualQ2 2025 ConsensusQ2 2025 ActualFY 2025 Consensus
Revenue ($USD Millions)115.55*118.20 125.87*131.25 508.17*
Primary EPS ($)0.058*0.08 0.088*0.11 0.422*

Values retrieved from S&P Global.

Key Takeaways for Investors

  • Quality beat with raised FY guide: execution in Cove and Adlumin plus FX tailwinds delivered beats; FY ARR/revenue/EBITDA raised—supporting estimate upward revisions .
  • Mix shift toward SaaS identity/data protection and MDR/XDR positions the platform for secular demand, even as physical device growth is flattish .
  • Channel expansion is an underappreciated lever: reseller pipeline doubling and early international traction could sustain ARR growth into 2026 .
  • Watch margin trajectory: non-GAAP gross margin compressed YoY; EBITDA margin recovered QoQ, and management targets low-30s margins longer term after 2025 investments .
  • Capital allocation and balance sheet: initiated buyback ($10M in Q2) with net leverage ~1.6x and strong uFCF conversion (~68% FY target) .
  • Near-term trading: beats and guide raise are positive; FX sensitivity and revenue recognition dynamics (ASC 606) remain swing factors intra-year .
  • Medium-term thesis: unified cyber resilience across UEM, security operations, and data protection with AI differentiation and growing channel presence underpins ARR expansion and durable profitability .

Appendix: Additional Relevant Press Releases (Q2 2025)

  • Threat Report 2025: SMB detected threats rose from ~48,749 (Jun 2024) to >13.3M (Jun 2025), underscoring rising SMB risk and platform need .
  • CMO Appointment: Vikram Ramesh (ex-Mandiant/Google/Adlumin) named CMO to accelerate security transformation and brand elevation .
  • UEM Certifications: Free N-central/N-sight certifications to boost operational efficiency and security posture—aids adoption and stickiness .