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N-able, Inc. (NABL)·Q3 2025 Earnings Summary

Executive Summary

  • N-able delivered a clean beat on Q3 revenue and non-GAAP EPS, raised full-year ARR, revenue, and adjusted EBITDA guidance; narrative centered on accelerating ARR, improving retention, and AI-driven product momentum .
  • Revenue was $131.7M vs S&P Global consensus $127.5M*; non-GAAP EPS was $0.13 vs $0.09 consensus*; management’s adjusted EBITDA of $41.4M exceeded internal guidance while standard EBITDA missed Wall Street’s EBITDA consensus, highlighting definition differences .*
  • FY25 guidance raised: ARR to $530–$531M, revenue to $507.7–$508.7M, adjusted EBITDA to $148.2–$149.2M; Q4 guide calls for revenue $126.5–$127.5M and adj. EBITDA $33.6–$34.6M .
  • Catalysts: ARR acceleration, improved gross/net retention, AI product launches (CATNIP framework; anomaly detection), and channel expansion; Q4 headwinds include FX and lapping Adlumin acquisition, with a planned ~$50M deferred payment .

What Went Well and What Went Wrong

  • What Went Well

    • Beat top-line and non-GAAP EPS; raised FY25 ARR/revenue/EBITDA guidance; adjusted EBITDA $41.4M (31.4% margin) vs above prior guide .
    • ARR grew 14% YoY to $528.1M; gross and net retention improved YoY and sequentially; customers ≥$50k ARR rose ~15% YoY to 2,611 (now 61% of ARR) .
    • AI momentum: launched CATNIP standard and anomaly detection in data protection; management emphasized “AI-driven threats demand AI-driven defense” .
    • Quote: “We’re leaning into this moment with conviction—delivering growth and profitability” — CEO John Pagliuca .

  • What Went Wrong

    • Year-over-year margin compression: non-GAAP gross margin 81.1% vs 83.7% prior-year; adjusted EBITDA margin 31.4% vs 38.5% prior-year .
    • GAAP profitability muted: GAAP net income $1.4M (diluted EPS $0.01), reflecting higher opex and interest/tax costs vs prior-year $0.06 GAAP EPS .
    • Standard EBITDA missed Wall Street consensus (actual ~$24.0M vs ~$36.5M*), despite strong adjusted EBITDA, underscoring metric definition gap for investors .*

Financial Results

MetricQ3 2024Q1 2025Q2 2025Q3 2025
Revenue ($USD Millions)$116.4 $118.2 $131.2 $131.7
GAAP Diluted EPS ($)$0.06 $(0.04) $(0.02) $0.01
Non-GAAP Diluted EPS ($)$0.13 $0.08 $0.11 $0.13
GAAP Gross Margin (%)—76.6% 78.1% 77.5%
Non-GAAP Gross Margin (%)83.7% 80.6% 81.8% 81.1%
Adjusted EBITDA ($USD Millions)$44.8 $31.6 $41.6 $41.4
Adjusted EBITDA Margin (%)38.5% 26.8% 31.7% 31.4%

Subscription vs Other Revenue

MetricQ3 2024Q1 2025Q2 2025Q3 2025
Subscription Revenue ($USD Millions)$115.0 $116.8 $129.9 $130.5
Other Revenue ($USD Millions)$1.44 $1.35 $1.38 $1.19

KPIs (Q3 2025)

KPIQ3 2025
ARR ($USD Millions)$528.1
Dollar-Based Net Revenue Retention (%)~102% (reported and constant currency)
Customers ≥$50k ARR2,611
Share of ARR from ≥$50k customers~61%
Cash & Equivalents ($USD Millions)$101.4
Total Debt (net, $USD Millions)$331.7

Vs Estimates (S&P Global)

MetricConsensus (Q3 2025)Actual (Q3 2025)Surprise
Revenue ($USD Millions)$127.48*$131.71 +$4.23M; +3.3%
Primary EPS (non-GAAP, $)$0.09*$0.13 +$0.04; +44%
EBITDA ($USD Millions, standard)$36.53*$23.97 −$12.56M; −34%

Values marked with * retrieved from S&P Global.

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Total ARR ($USD Millions)FY 2025$525–$530 $530–$531 Raised
Total Revenue ($USD Millions)FY 2025$500–$503 $507.7–$508.7 Raised
Adjusted EBITDA ($USD Millions)FY 2025$141–$144 $148.2–$149.2 Raised
Revenue ($USD Millions)Q4 2025—$126.5–$127.5 New
Adjusted EBITDA ($USD Millions)Q4 2025—$33.6–$34.6 New
Non-GAAP Tax Rate (%)Q4 / FY 2025—~23% (Q4); ~21% (FY) New
CapEx (% of Revenue)FY 2025~6% ~6% Maintained
Unlevered FCF ($USD Millions)FY 2025~$96–$98 ~$96–$98 Maintained
Diluted Shares (Millions)Q4 / FY 2025—~188–189 New
FX AssumptionsQ4 2025—EUR 1.13; GBP 1.29 New
Deferred Cash Payment ($USD Millions)Q4 2025—~50 (planned) New

Earnings Call Themes & Trends

TopicQ1 2025 MentionsQ2 2025 MentionsQ3 2025 CurrentTrend
AI/Technology initiativesLaunched SOC report; expanded M365 breach prevention; announced UEM vulnerability mgmt Surpassed $500M ARR; continued AI infusion; Empower 2025 event CATNIP standard; anomaly detection; AI agents vision; SOC analyzing billions events/month Strengthening
Channel expansion (MSP/VAR)Partner Program additions; 5‑Star CRN award Ecoverse integrations; Berlin Empower event Geo VAR push (UK), deeper reseller ties; large mid‑market wins; 70k device deal Accelerating
Product performance (UEM/Data Protection/XDR/MDR)UEM vulnerability mgmt announced Security suite progress; adj. EBITDA beat UEM ARR win ~$500k; anomaly detection; MDR standardization post incident case study Positive
Retention/NRR——DBNRR ~102%, GRR improving; customers ≥$50k ARR up ~15% YoY Improving
Macro/FX—Constant currency growth disclosed FX weighing Q4; guidance includes EUR/GBP assumptions Neutral to modest headwind
Adlumin acquisition—Integrated; share repurchase start Thesis holding; lapping impacts Q4 ARR growth; cross‑sell driving NRR On plan
Capital allocationShare repurchase authorization $75M Buybacks executed Continued repurchases; ~$50M deferred payment Q4 Ongoing

Management Commentary

  • Strategic stance: “AI‑driven threats are elevating the need for cybersecurity and we are arming organizations with cutting‑edge solutions” — CEO John Pagliuca .
  • Execution focus: “Strong top‑line growth, quality margins, healthy free cash flow, and considerable operational progress” — CFO Tim O’Brien .
  • AI leadership: “AI‑powered technology stack… transforming raw data into actionable insights… democratizing security by delivering advanced AI SOC capabilities at a fraction of the cost” — CEO John Pagliuca .
  • Channel motion: “Active relationships with a sizable number of the top 25 U.K. partners… starting in the U.K. and plan to expand in other regions” — CEO John Pagliuca .

Q&A Highlights

  • ARR acceleration drivers: Execution on Adlumin thesis, broader channel presence via new distributors/resellers; Q3 sequential ARR best YTD; Q4 ARR growth ex‑currency above YTD average, but FX weighs modestly .
  • NRR/GRR trends: Confidence high that NRR bottomed in Q1; improving GRR via ~90% renewal rates on longer-term contracts; DBNRR ~102% .
  • Q4 guidance context: Lapping Adlumin contributes ~4–5% impact to implied sequential decel; ex‑currency Q4 sequential ARR would be ~$10M higher if Q3 rates applied .
  • Product launches: Anomaly detection is both upsell and land enabler; CATNIP standardizes AI vocabulary for cross‑system automation, expected to drive monetization .
  • Investment and margins: Commitment to ~30% adjusted EBITDA margin in FY2026 while investing in AI and lower‑cost sites (e.g., India) to balance growth and profitability .

Estimates Context

  • Strong beats vs S&P Global consensus: Revenue $131.71M vs $127.48M*; non-GAAP EPS $0.13 vs $0.09*, both reflecting ARR momentum and retention gains; highlight definition differences for EBITDA (Street’s standard EBITDA $36.53M* vs actual ~$23.97M; management reports adjusted EBITDA $41.4M) .*
  • Forward look: Q4 revenue guide $126.5–$127.5M aligns closely with Street revenue consensus $127.03M*; EPS consensus $0.10* with margin guide implying ~27% adj. EBITDA; FX and lapping Adlumin are modeled in guidance .*

Values marked with * retrieved from S&P Global.

Key Takeaways for Investors

  • Revenue and non-GAAP EPS beats with raised FY25 ARR/revenue/adj. EBITDA guidance signal durable demand and execution; near-term setup supported by Q4 guide in line with Street .
  • ARR acceleration and improving retention metrics (DBNRR ~102%) indicate strengthening cohort dynamics and effective cross‑sell (Adlumin, UEM, data protection) .
  • AI product momentum (CATNIP, anomaly detection, AI‑powered SOC) provides differentiation and potential monetization levers; expect sustained innovation cadence .
  • Margin trajectory: Sequentially stable adj. EBITDA margin (~31%) but YoY compression vs Q3’24; management targets ~30% in FY2026 while investing behind AI and go‑to‑market .
  • Watch FX and acquisition lap in Q4; ex‑currency growth remains above YTD average; planned ~$50M deferred cash outlay may affect near‑term cash metrics .
  • KPI mix shift: Large‑customer concentration rising (61% of ARR), supporting upsell and pricing power, though concentration risks warrant monitoring .
  • Tactical positioning: Emphasize companies standardizing AI workflows and expanding channel reach—N‑able’s UK VAR motion and large mid‑market wins are validations .

Appendix: Additional Relevant Press Releases (Q3 period)

  • Cyber Warranty Program: $100K per protected entity for Adlumin MDR Advanced via partner Cysurance; augments insurance, accelerates incident response for SMBs/MSPs .
  • Earnings call scheduling notice (Nov 6, 2025) .