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Date

Feb. 19, 2026, 8:30 a.m. ET

Call participants

  • President and Chief Executive Officer — John Pagliuca
  • Executive Vice President and Chief Financial Officer — Timothy James O’Brien
  • Chief Communications Officer — Griffin Gyr

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Takeaways

  • Revenue -- $130 million for the quarter, representing 12% growth on a reported basis and nine percent growth on a constant currency basis.
  • Full-year revenue -- $511 million, up 10% on a reported basis and nine percent on a constant currency basis.
  • Subscription revenue -- $129 million for the quarter, up 12% reported and nine percent constant currency; $506 million for the year, up 10% reported and nine percent constant currency.
  • Annual recurring revenue (ARR) -- $540 million at quarter-end, up 12% reported and eight percent constant currency.
  • Non-GAAP adjusted EBITDA -- $39 million for the quarter (30% margin); $153 million for the year (30% margin).
  • Gross margin -- 80% for the quarter (down from 82% prior year); 81% for the year (down from 84% prior year).
  • Net leverage -- 1.9x with $112 million in cash and $400 million outstanding loan principal.
  • Dollar-based net revenue retention -- 103% reported, 102% constant currency (trailing twelve months).
  • Larger customer penetration -- 2,671 customers with over $50,000 ARR, up 14%; this cohort now represents 61% of total ARR.
  • Non-GAAP EPS -- $0.06 for the quarter (188 million shares); $0.39 for the year (189 million shares); both reflect a $0.02 negative impact from new debt facility fees.
  • CapEx -- $7 million (five percent of quarterly revenue); $29 million (six percent of annual revenue) including capitalized development costs.
  • Unlevered free cash flow -- $28 million for the quarter; $101 million for the year.
  • Share repurchases -- $30 million executed in the year.
  • Revenue outlook -- First-quarter 2026 projected at $131 million-$132 million (11%-12% reported, six percent-seven percent constant currency growth); full-year 2026 outlook $554 million-$559 million (eight percent-nine percent reported, seven percent-eight percent constant currency growth).
  • ARR guidance -- Full-year 2026 expected at $581 million-$586 million (eight percent-nine percent growth, both reported and constant currency).
  • Adjusted EBITDA guidance -- $167 million-$171 million for full year 2026 (30%-31% margin).
  • Unlevered free cash flow outlook -- $114 million-$118 million for 2026 (up to 17% increase at high end).
  • AI integration -- AI now automates 90% of identified threats in security operations (up from 70% prior year); Enzo AI workflow assistant currently in limited customer preview.
  • Channel expansion -- New focus on VAR channel; recent $300,000 ARR customer replaced five incumbents via unified endpoint, security operations, and data protection solutions.
  • Product pipeline -- Disaster recovery as a service (DRaaS) and Google Workspace protection launching, targeting new billable offerings for 14,000 data protection customers.
  • AdLumen acquisition -- Integration labeled "successful", with cross-sell to MSPs performing ahead of plan and high greenfield adoption rates (70%-75%).
  • Gartner recognition -- Positioned in 2026 Magic Quadrant for endpoint management tools.

Summary

N-able (NABL 1.25%) delivered double-digit revenue growth, margin stability, and ongoing ARR momentum, with larger customers now comprising a majority of recurring revenue. Strategic expansion into the VAR channel, together with new AI-powered product launches and enhancements across security and data protection, underpins the company’s outlook for accelerated net new ARR and free cash flow growth in 2026. The management team emphasized their confidence in sustaining growth through broad-based demand, robust upmarket penetration, continued success with AdLumen cross-sell, and a multi-pronged AI monetization strategy encompassing agentic in-product assistants and new SKUs.

  • Enzo, the proprietary AI workflow assistant, is live in limited preview, with leadership indicating rapid conversion of AI-driven insights to customer actions as a differentiator for managed service providers.
  • Management stated, "AI does not erode our moat. It widens it," signaling alignment between AI adoption and future platform value.
  • A new disaster recovery as a service offering and Google Workspace coverage are intended to drive TAM expansion and address heightened demand for rapid data restoration.
  • The credit facility was refinanced and expanded to $400 million, providing capital allocation flexibility for potential buybacks and further M&A activities.
  • Greenfield adoption accounts for 70%-75% of new security operations deals, supporting management’s assertion of a sizable untapped market opportunity.

Industry glossary

  • ARR (annual recurring revenue): Contracted annualized revenue from subscriptions at the end of a reporting period.
  • VAR (value-added reseller): A partner that resells software products with integrated services or features that add value for customers.
  • UEM (unified endpoint management): Solutions for managing and securing various endpoints (e.g., PCs, servers, mobile devices) within an organization from a single platform.
  • DRaaS (disaster recovery as a service): Cloud-based solutions that enable rapid restoration of data and applications following downtime or disasters.
  • XDR (extended detection and response): An integrated platform for detecting and responding to threats across endpoints, networks, and cloud environments.
  • GRR (gross revenue retention): The percentage of recurring revenue retained from existing customers, excluding expansion or contraction.
  • NRR (net revenue retention): The percentage of recurring revenue retained including upsell and cross-sell from existing customers, net of churn and contraction.
  • Magic Quadrant: A Gartner research methodology providing a graphical representation and ranking of technology providers within specific markets.
  • AI SOC (artificial intelligence security operations center): A security platform leveraging artificial intelligence for automated threat detection and response.
  • ASP (average selling price): Average price at which a product or service is sold, often used to track margin and pricing power.
  • OEM (original equipment manufacturer): A business arrangement where products or software are rebranded and integrated into another vendor's offerings.

Full Conference Call Transcript

John Pagliuca, N-able, Inc.'s President and CEO, and Tim O’Brien, EVP and CFO. Following our prepared remarks, we will open the line for a question and answer session. This call is being simultaneously webcast on our Investor Relations website at investors.n-able.com. There you can also find our earnings press release, which is intended to supplement our prepared remarks during today's call. Certain statements made during this call are forward-looking statements, including those concerning our financial outlook, our market opportunities, and the impact of the global economic environment on our business. These statements are based on currently available information and assumptions, and we undertake no duty to update this information except as required by law.

These statements are also subject to a number of risks and uncertainties, including those highlighted in today's earnings release and our filings with the SEC. Additional information concerning these statements and the risks and uncertainties associated with them is highlighted in today's earnings release and in our filings with the SEC. Copies are available from the SEC or on our Investor Relations website. Furthermore, we will discuss various non-GAAP financial measures on today's call. Unless otherwise specified, when we refer to financial measures, we will be referring to non-GAAP financial measures. A reconciliation of certain GAAP to non-GAAP financial measures discussed on today's call is available on our earnings press release on our Investor Relations website.

And now I will turn the call over to John. Thanks, Griffin. We entered 2026 with momentum, following another year of profitable growth,

John Pagliuca: and with confidence that we can drive continued strong performance

Griffin Gyr: Cybersecurity is a matter of survival, and our AI-powered cybersecurity platform

Tim O’Brien: delivers the business resilience customers need. Our fourth quarter and full year results reflect the strength, with strong results across our key operating metrics. Both fourth quarter and full year 2025 revenue grew 9% year over year in constant currency. We exited 2025 with ARR of $540,000,000, growing 8% at constant currency. Our adjusted EBITDA in the fourth quarter was $39,000,000, reflecting a 30% margin, and $153,000,000 for the full year, also reflecting a 30% margin. Beyond the financial results, we made exceptional progress across the business in 2025.

We solidified our presence in the AI SOC market with the successful integration of our AdLumen acquisition, crossed $200,000,000 of ARR in data protection, and expanded into the VAR channel to broaden our sales reach. We also opened up a new R&D center in India to deepen our engineering capacity, elevated our cybersecurity brand, and accelerated innovation across the platform with AI-driven capabilities. Our teams executed exceptionally well, and the business is meaningfully stronger as a result. Building on this progress, let's now discuss our strategy and approach moving forward.

In particular, there is a lot of debate about the impact of AI on software, and I want to share how N-able, Inc. is approaching AI and the tailwinds we see. First and foremost, we continue to think long term. N-able, Inc. was founded over 25 years ago on the belief that small and midsized organizations would keep digitally evolving and would rely on technology experts to help guide that journey. This enduring belief anchors our business. AI accelerates digital evolution, which we believe is the fundamental driver of our business and fuels even greater opportunity. Durable truths guide this evolution. Businesses need to be secure, and they want to achieve this efficiently. N-able, Inc. helps them accomplish both.

AI enhances our ability to deliver these outcomes by automating routine tasks, strengthening threat detection, and helping customers scale. For N-able, Inc., we believe AI is a fundamental tailwind, and we are not only embracing but actively capitalizing on it.

Griffin Gyr: Second,

Tim O’Brien: our foundation is rock solid. With telemetry from 11,000,000 IT assets, more than 500,000 businesses, and decades of trust and cybersecurity expertise, we have the structural attributes to succeed in the AI era. We want to be clear about our stance on the AI-related debates unfolding in the industry. One narrative is that businesses will look to replace existing software tools with low-code and no-code solutions. We see our position in cybersecurity as fundamentally different. Building cybersecurity solutions is not a part-time, easy job. The difficulty and stakes are too high. One mistake, and your business can become extinct. Our cybersecurity software solutions are a foundational part of complex business infrastructure.

Sitting at the cybersecurity table requires deep domain expertise, meeting stringent compliance standards, mastering a long tail of edge cases, and an innovation engine capable of quickly responding to new and emerging threats. Businesses are not looking for component parts to assemble. They want complete products and dependable cybersecurity outcomes. Coding is a component. N-able, Inc. delivers the full product and the outcomes that actually matter. In fact, the democratization of coding is contributing to an increase in the scale, speed, and sophistication of attacks. This has created a more dangerous AI-empowered adversary and makes our innovation, domain expertise, and ability to deliver trusted outcomes more critical than ever.

Operator: Another discussion

Tim O’Brien: is that new AI solutions replace existing software workflows. We believe this view overlooks a key insight: probabilistic AI does not replace deterministic workflows; it complements them. We are combining our SaaS system of record and context with an AI system of action. This unlocks step-function value that we believe takes us to a billion dollars of ARR and beyond. Let me be clear. The way we see it, AI does not erode our moat. It widens it. Third, and perhaps most importantly, we are delivering value with AI now. AI is embedded across our cybersecurity platform, reducing risk and improving customer efficiency. Each solution has exciting progress and use cases. I will detail some product specifics in a moment.

Underpinning our opportunity is a threat landscape that is constantly growing more difficult for businesses to manage. Attack surfaces are widening, data volumes are growing, and IT complexity is increasing. These challenges are further compounded as bad actors are utilizing AI to drive more advanced and widespread attacks. Businesses' need for cybersecurity has never been more critical and will only continue to grow. We believe N-able, Inc. is well positioned to capture this growing demand. From a go-to-market perspective, our channel-led approach unlocks efficient global scale. And from a solution standpoint, our purpose-built platform, which spans security operations, data protection, and unified endpoint management, drives compelling value.

We enable customers to identify and stop threats, protect and recover data, and efficiently manage complex IT environments to realize true business resilience. This balanced platform breadth is our strategic advantage. By maintaining focused product development, we can continue to deliver technical excellence in each category where we compete. And by offering a wide breadth of solutions, we can also deliver platform-level value including economic and technical benefits. Our approach improves technician visibility and enables solution consolidation for our customers, helping them reduce risk and improve profitability. A near $300,000 ARR fourth quarter customer win demonstrates this value proposition in action. The customer consolidated the unified endpoint management, security operations, and data protection onto N-able, Inc., displacing five separate competitors.

We addressed three critical pain points that included automation gaps, alert fatigue, and high data protection overhead costs. A deal of this magnitude from a customer with only approximately 50 employees speaks directly to the power of our strategy to deliver enterprise-grade security to every business. The combination of our best-of-breed capabilities and efficiency of our platform approach drove compelling value. Bringing it all together, our positioning is sound, our opportunity is significant. AI is a positive demand driver, a technology we are integrating across our platform.

More broadly, as we seek to be a business that compounds value over the long term, our fundamental objective remains the same: focus on solving ever-evolving customer problems, deliver security and efficiency, and unrivaled business resilience. With that said, let's now turn to key tenets of our 2026 plan. Our priorities span product innovation, strengthening our trusted brand, and continued improvements in go-to-market operations. On the product side, we plan to continue to develop AI as a core differentiator. For our UEM solution, we are excited to debut Enzo, our powerful AI workflow assistant that users will be able to command to complete tasks and better run their IT and security operations. We believe this is a game changer.

With a single query, customers will be able to derive insights and complete actions in seconds that previously took hours. As it evolves, our AI workflow assistant is intended to diagnose issues, recommend next steps, write and execute scripts, summarize device health, and turn raw data from millions of endpoints into safe, reliable, and efficient actions. Adding this orchestration layer is a force multiplier on top of our already powerful autonomous management capabilities. The industry faces a well-documented IT and security skills gap. Our customers operate labor-intensive businesses in a market with tight employment. AI can change that equation. We are empowering customers to automate more tickets, streamline workflows, and amplify the capabilities of every technician.

Closing the skills gap with technology rather than headcount unlocks a new frontier of scalable, profitable growth. Additionally, we have received industry recognition, positioned in the 2026 Gartner Magic Quadrant for endpoint management tools. Our roadmap also includes furthering our investment in AI within our security operations solution. AI unlocks security scalability that manual approaches simply cannot match. Within our security operations solution, AI now handles 90% of identified threats automatically, up from 70% a year ago, freeing customers to focus on higher value strategic tasks. In addition to our AI advantage, we bring multiple proven differentiators, including interoperability across the spectrum of EDR providers and shared visibility into our data system.

On the back of our product strength, we were excited to recently introduce a new cyber warranty program. We believe this warranty will help de-risk adoption and bolster customer confidence. Our solution is scaling quickly, driving strong net new ARR dollar growth. A recent customer incident illustrates the real-world difference we make when it matters most. At 5:00 a.m. Christmas morning, attackers identified a transportation company as an easy target for a holiday heist. Fortunately, our security operations solution was standing guard and spotted the targeted server attack and moved quickly to lock down the compromised asset. Leveraging our AI-powered SOC, time to containment was mere minutes. No data was taken. No dwell time occurred.

And what could have been a major business disruption was completely avoided. Threat actors do not take the holidays off, and neither do our AI agents. Each of our three solution pillars is AI-infused, and in data protection, our AI-enabled recovery testing saves customers hours of time and eliminates the guesswork involved in ensuring their backups are safe and secure. We aim to extend our advantage in data this year by adding disaster recovery as a service, or DRaaS, and Google Workspace workload coverage. These are two highly requested billable capabilities across our 14,000 data protection customers, and both represent meaningful TAM expansion. DRaaS solves multiple pain points. Customers are challenged to manage backup infrastructure themselves.

They face large upfront hardware costs, expensive and time-consuming setup, ongoing maintenance, and potential liability associated with storing data. At the same time, expectations are rising, and businesses are seeking shorter return-to-operation timelines. These dynamics are particularly acute among upmarket customers. Our disaster recovery as a service will allow customers to quickly launch virtual servers in our secure cloud environment. This delivers real-time restore capabilities, seamless business continuity, and eliminates the need for them to have to manage backup ecosystems themselves, significantly reducing costs, time, risk, and headache. Google Workspace coverage addresses another important customer need. Google Workspace has a large and growing footprint, particularly in the education sector and among cloud-first organizations.

And customers want to ensure this data is protected and recoverable. Adding coverage will expand our strike zone significantly and unlock opportunity for N-able, Inc. with both existing and new customers. Our high confidence and expectations from both DRaaS and Google Workspace are supported by a robust demand environment and our market trajectory. As customers manage rapidly growing data estates and ransomware attacks escalate, our data protection solution delivers the simplicity and robust performance customers value and continues to grow meaningfully faster than our total ARR. From a marketing perspective, 2026 is about capitalizing on our brand strength. We protect over 500,000 businesses and bring 25 years of service excellence.

The N-able, Inc. name carries weight, underscored by Omnia recently naming N-able, Inc. as a cybersecurity titan. That recognition validates the three-pillar strategy we have been executing across unified endpoint management, security operations, and data protection. The positioning is resonating. Partners and end customers alike are responding to the N-able, Inc. brand, and we are seeing that translate into both deeper retention and new logo growth. From a sales and customer success perspective, our priority is accelerating portfolio adoption and deepening engagement across our full channel, from both MSPs to VARs. Security operations is a standout growth lever and key to both objectives.

Penetration of our AI-powered security operations solution remains in the early stages, and more broadly, a large portion of MSPs still operate without a security operations solution. In fact, over 75% of our new lands are entering the category for the first time. We believe we are tapping into a sizable greenfield market with considerable upside. Pertaining to full channel development, we continue to expand our VAR outbound motion. This includes investments in field reps and channel account managers, which establishes critical end market boots on the ground. From a product perspective, we are also seeing particularly strong traction with UEM in the VAR channel.

Our all-in-one, highly autonomous IT management and security value prop is resonating with enterprises struggling with vendor sprawl and tool complexity. With our UEM platform, we are replacing multiple point solutions with a single converged offering that spans patching, vulnerability management, remote access, endpoint management, and endpoint security. This not only delivers cost savings and operational efficiency for our customers but positions N-able, Inc. to capture a larger share of endpoint spend as organizations consolidate their security and IT management stacks. We plan to double down on this momentum with increased field events, up-leveled account teams, and continued investment in prospect pipeline generation. The success of our strategy and execution is reflected in our financials.

We are sustaining a strong top-line trajectory. N-able, Inc. is not slowing down. Constant currency ARR growth in fiscal year 2025 was 8%, and the midpoint of our fiscal year 2026 guide calls for the same. We are excited but not content.

Operator: Our go-to-market and product strategy are aligned with customer demand.

Tim O’Brien: The foundation in place is to reach greater heights over time. Key to achieving this acceleration is the success of our channel expansion, new product introductions, and monetization opportunities created by AI. We are executing today, building for tomorrow. We have never been more energized and appreciate your being part of the N-able, Inc. journey. With that, I will turn it over to Tim and then circle back for closing remarks. Tim?

Operator: Thank you, John.

Tim O’Brien: Thank you all for joining us today.

Operator: N-able, Inc. continues to execute with focus and purpose.

Timothy James O’Brien: We exited 2025 with $540,000,000 in ARR,

Timothy James O’Brien: growing 12% year over year while delivering 30% adjusted EBITDA margin.

Timothy James O’Brien: Operationally,

Timothy James O’Brien: we deepened our presence in data protection and security operations, expanded our channel reach, and accelerated AI innovation, all while maintaining a healthy balance of growth and profit. The acquisition of AdLumen was successful, with cross-sell to our existing MSP customers performing well and ahead of our acquisition plan. I will now walk through our fourth quarter and full year results, provide additional detail on the drivers of our performance, and discuss our 2026 outlook. First, let's discuss our results for the fourth quarter and full year. For our fourth quarter results, total ARR was $540,000,000, growing at 12% year over year on a reported basis and 8% on a constant currency basis.

Total revenue was $130,000,000, $3,000,000 above the high end of our guidance, representing approximately 12% year over year growth on a reported basis and 9% on a constant currency basis. Subscription revenue was $129,000,000, representing approximately 12% year over year growth on a reported basis and 9% on a constant currency basis. As a reminder, we purchased AdLumen on 11/20/2024. As such, we only recognized approximately half a quarter of revenue in that period, while the 2025 reflects a full quarter of AdLumen revenue contribution. This dynamic bolsters our fourth quarter 2025 revenue growth rate relative to our guidance for Q1 2026 revenue growth.

We ended the quarter with 2,671 customers that contributed $50,000 or more of ARR, which is up approximately 14% year over year. Customers with over $50,000 of ARR now represent approximately 61% of our total ARR, up from approximately 57% a year ago. Our momentum upmarket has been consistent and pronounced. This customer cohort has grown from 46% of total ARR at the time of our 2021 spin-off and has historically retained at rates roughly 2% to 3% above the total company average, supporting our continued upmarket and cross-sell focus. Dollar-based net revenue retention, which is calculated on a trailing twelve-month basis, was approximately 103% on a reported basis and 102% on a constant currency basis.

For the full year, we finished 2025 ahead of our outlook with total revenue of $511,000,000, representing year over year growth of 10% on a reported basis and 9% on a constant currency basis. Subscription revenue was $506,000,000, growing approximately 10% year over year on a reported basis and 9% on a constant currency basis. Approximately 45% of our revenue was outside of North America in the quarter and the full year. Turning to profit and margins, note that unless otherwise stated, all references to profit measures and expenses are calculated on a non-GAAP basis and exclude the items outlined in the GAAP to non-GAAP reconciliations provided in today's press release.

Fourth quarter gross margin was 80% compared to 82% in the same period in 2024. Full year 2025 gross margin was 81% compared to 84% in 2024. Fourth quarter adjusted EBITDA was $39,000,000, $4,000,000 above the high end of our guidance, representing approximately 30% adjusted EBITDA margin. Full year 2025 adjusted EBITDA was $153,000,000, representing an adjusted EBITDA margin of 30%. Unlevered free cash flow was $28,000,000 in the fourth quarter and $101,000,000 for the full year,

Operator: CapEx

Timothy James O’Brien: inclusive of $2,000,000 of capitalized software development costs, was $7,000,000, or 5% of revenue in the fourth quarter. CapEx was $29,000,000, inclusive of $11,000,000 of capitalized software development costs, or 6% of revenue for the full year. We ended the year with approximately $112,000,000 of cash and an outstanding loan principal balance of approximately $400,000,000, representing net leverage of approximately 1.9 times. We refinanced our credit facility in the fourth quarter, increasing our commitment from approximately $336,000,000 to $400,000,000. This new facility enhances our flexibility and supports our broader capital allocation strategy, including evaluating potential share buybacks and M&A.

Non-GAAP earnings per share was $0.06 in the fourth quarter based on 188,000,000 weighted average diluted shares, and $0.39 for the full year based on 189,000,000 weighted average diluted shares. Note that both the fourth quarter and full year non-GAAP earnings per share experienced approximately a $0.02 negative impact from one-time fees related to the new debt facility. We executed $30,000,000 of share repurchases in the year, reflecting our belief in the business and our commitment to disciplined share count management. Turning to our financial outlook, our guidance incorporates the following elements. First, our guidance assumes FX rates of 1.17 for the euro and 1.34 for the pound.

More broadly, our outlook reflects our expectations for steady demand trends, stable retention, and continued execution across our platform and sales channels. Key initiatives spanning our growth algorithm give us confidence in this view. In gross retention, we see our contract initiative and ongoing shift upmarket driving sustained strong performance. In net retention, we see cross-sell traction in security operations and data protection powering continued success. And on the new business side, our channel expansion, enhanced marketing engine, and broader portfolio position us well to deliver consistent new logo growth. From an investment standpoint, in 2026 we intend to continue to make disciplined investments in AI and product innovation, as well as go-to-market expansion.

We are excited to make these growth-oriented investments while materially improving our unlevered free cash flow on a year-over-year basis as we realize synergies from our AdLumen integration and begin to see benefits from our India development site investment.

Unknown Analyst: With that in mind,

Timothy James O’Brien: for the first quarter of 2026, we expect total revenue in the range of $131,000,000 to $132,000,000, representing approximately 11% to 12% year over year growth on a reported basis and 6% to 7% on a constant currency basis. We expect first quarter adjusted EBITDA in the range of $35,500,000 to $36,500,000, representing an adjusted EBITDA margin of 27% to 28%. For the full year 2026, our total revenue outlook is approximately $554,000,000 to $559,000,000, representing approximately 8% to 9% year over year growth on a reported basis and 7% to 8% on a constant currency basis.

Our full year ARR outlook is $581,000,000 to $586,000,000, representing 8% to 9% year over year growth on a reported and constant currency basis.

Operator: To be clear,

Timothy James O’Brien: the high end of our full year 2026 ARR guidance calls for approximately 20% more net new ARR dollars on a constant currency basis than in 2025.

Unknown Analyst: We expect

Timothy James O’Brien: full year adjusted EBITDA of $167,000,000 to $171,000,000, representing an adjusted EBITDA margin of 30% to 31%. We expect CapEx, inclusive of capitalized software development costs, to be approximately 5% of total revenue in 2026. We also expect our unlevered free cash flow to be approximately $114,000,000 to $118,000,000. We expect cash interest payments of approximately $27,000,000, assuming interest rates remain in line with current levels. This cash flow outlook equates to a 17% increase in unlevered free cash flow dollars at the high end. Our model is built for profitable growth, and our outlook reflects the strength.

We expect total weighted average diluted shares outstanding of approximately 188,000,000 to 189,000,000 for the first quarter and 188,000,000 to 191,000,000 for the full year. Finally, we expect our non-GAAP tax rate to be approximately 24% to 27% for both the first quarter and the full year. We are delivering strong financial results while positioning the company for long-term success. Our 2026 guide calls for meaningful growth in constant currency net new ARR dollars and unlevered free cash flow dollars. Our growth algorithm remains healthy across gross retention, net retention, and new customer acquisition.

Unknown Analyst: We are executing well.

Timothy James O’Brien: And our AI-powered cybersecurity platform is resonating. Importantly, we are achieving these results while continuing to invest for the long term, with an exciting AI roadmap and clear path to further build our global go-to-market engine. Now I will turn it over to John for closing remarks.

Tim O’Brien: Thanks, Tim. We move forward with a strong financial profile, a durable position in cybersecurity, and a focused strategy. AI is amplifying what we do, and we are delivering AI capabilities today. 2026 is a year of execution for N-able, Inc. And on behalf of nearly 2,000 N-able, Inc. employees across the globe, I am excited for what we will deliver. And with that, operator, we will open the line for questions.

Operator: We will now begin the question and answer session. If you would like to ask a question, please press star 1 to raise your hand. To withdraw your question, press star 1 again. Please stand by while we compile the Q&A roster. Your first question comes from the line of William Joseph Vandrick with Scotiabank. Your line is open. Please go ahead.

Unknown Analyst: Thank you.

Operator: John and Tim, so ARR grew about

Jason Noah Ader: 8% on a constant currency basis in 4Q. Can you talk a little bit more about what you are seeing today that gives you confidence to guide to that slightly higher constant currency ARR growth in 2026? Sure. Yeah. Hey, Joe. Thanks. This

Tim O’Brien: is John. So, you know, I think the, really, it is the guidance is underwritten, I would say, with a lot of confidence in that. It is steady. There is a lot of steady assumptions in there. You know, we are expecting steady to slightly improved gross retention. We are seeing that

Timothy James O’Brien: in the business. We have a list of

Tim O’Brien: new SKUs that some are in the market already that are gaining nice traction, like our AI-powered XDR, but also in data protection, disaster recovery as a service, Google Workspace that we mentioned in the prepared remarks. So it comes with a couple of combinations from the growth algorithm. One, the GRR improving. Two, is better expand on some of these new SKUs. And three, continued acceleration in our reach with the VAR community as well. So

Timothy James O’Brien: we have a multi-pronged approach, and I would say the guidance is baking in a moderate level of those things performing.

Jason Noah Ader: Makes sense. And then if I could just sneak in one more on the product side. Sure. You talked a lot about AI innovations that you have in the and one that you called out, I think it was called Enzo, which seemed really interesting. Just wanted to clarify, is this a product that you expect to be released in the coming year? And can you just talk a little bit more about what value this is going to create for customers?

Unknown Analyst: Sure. So it is Enzo, and it is N-Z-O. Make sure we get the spelling right in the script. And so, yeah, it is in actually customers’ hands right now in limited preview.

Timothy James O’Brien: We are learning from it and getting the behavior. So far, the reviews have been fantastic. It is an in-product AI agent, an in-product AI workflow assistant. So

Tim O’Brien: embedded today in our UEM, but the plan is to really embed these AI assistants or these AI agents in all or most of our offerings. So what it will allow MSPs to do today right out of the gate allows them to really get a better assessment as to what their environments may look like with simple natural language. If an MSP wants to know if they have any devices that might be vulnerable, if there is a process that needs to get done, and that is today. And then in the go forward, it will actually be a source of action.

So they will be able to put in a request to understand what is going on in their customer environments, but then actually take a proactive action and remedy what might be a vulnerability or some type of operation. So what might have taken hours to do, like a script, some level of automation, now what we are seeing with the customers, they are able to go through their environments, assess their environments, and take action in, honestly, minutes using natural language. So that is the play. And if I think about AI in general, I would say there is a three-pronged strategy to how we are approaching this. Number one, we have AI infused in our products today.

And so both machine learning and agentic AI, as an example, our AI SOC, our XDR, has AI in it today. What is that doing? That is making our customers and their customers more secure. That is providing a better experience. That is also giving us a competitive advantage over other solutions out there because I believe we are ahead as it relates to AI in our XDR. So today, not just in XDR but across our offerings, we have AI in our products today. That should make our GRR better. That should make our expansion better. Because the solutions are better, there is a better experience.

And then we talked about the second prong, and that prong is more of the in-product AI agents. Again, that should have a better experience, improve our GRR, also give us an opportunity to even charge for a premium type of experience. And then the third prong are AI-specific SKUs and AI-specific agents that we can go charge for that have their own line item. So it is a three-pronged strategy. I would say we have already executed the first prong with the in-product, and we will continue, and Enzo is the first example of that in-product AI agent helping the MSPs and their internal IT departments with their workflows.

Jason Noah Ader: Sounds exciting. Thank you.

Operator: Thank you. Your next question comes from the line of Mike Cikos with Needham. Your line is open. Please go ahead.

Mike Cikos: Hey, team. Thanks for taking the questions here, and congrats on the strong finish to calendar 2025. I wanted to cycle back first question to the prepared remarks

Mike Cikos: and I believe it was Tim’s commentary regarding AdLumen. It sounds like the cross-sell to the existing customer base is coming in ahead of what you guys had originally mapped out at the time of the acquisition. Could you just help us think through what is driving that earlier-than-expected success? It is great to hear, but just any other guardrails you could put around that? And then I have a follow-up. Thank you.

Tim O’Brien: Sure. Look. We knew we had a winner with the AI solution, AdLumen. And just as a reminder, this was the top one or two need that we saw in the MSP community. They needed help with the threats, and not just assessing the threats but taking action on threats. And if you recall, Mike, this started off as an OEM arrangement. So we did our own extensive research, looked at all the solutions that are out there, bigger shops, other types of shops. We chose AdLumen because of the technology stack, the level of AI that was in it, number one. Number two, the fact that it was agnostic. And so what does that mean?

That means regardless of an MSP or their end customers’ environments, if they are using different firewalls, if they are using different EDR, different endpoint security, different manners to get their logs, you can ingest all of it. And I believe it is a combination of the AI-infused technology, the fact that we can actually assess but take action in minutes where competitive solutions might take hours or days, it is resonating, number one. Number two, we separate the software and the service so that we can allow the technicians’ eyes on glass as well. So what does that mean? A lot of offerings it is more like a black-box service.

MSPs can see the same things that our AI SOC analysts are looking at, and that is resonating. There is a big push out there right now. Compliance is driving a lot of this need. And I think our original estimates, I do not think we fully grokked the breadth of the demand. We knew that for our bigger MSPs, this was top of mind. The nice thing here is we are seeing our large MSPs picking this up, but even our very small shops. And compliance is driving a lot of that. The ongoing cyber threats, AI as new is driving that. MSPs are now baking this into effectively their standard stack.

And so I believe a solution like this will be a table-stakes part of every MSP’s service going forward. And I think the fact that it is a broader swath of the MSP base is what is driving some of that upside.

Timothy James O’Brien: Mike, I will probably just add, and John hit on it in his prepared remarks, is the mix of greenfield opportunities versus incumbents as well. We are seeing about, you know, 70% to 75% of the opportunities coming in from a greenfield perspective. So I think that is also been a catalyst in the equation as we have executed through 2025.

Mike Cikos: That is great. That is very encouraging. And then a quick follow-up. Again, just to drill into the guidance assumptions. If I look at what is the constant currency growth we are looking for in Q1 versus the full year, it implies some stronger growth maybe as we get into 2Q and then the second half of the year. And I am just trying to get a better sense there: anything we should be thinking about from a seasonality standpoint? Or maybe those data points you have on the slightly improved or the stable GRR translates to an improved NRR in the back half of the year? Is it new products incubating?

Again, can you just give us some more to underwrite this guide from where we stand today?

Timothy James O’Brien: Yeah. Hey, Mike. Looking back at 2025, we saw some seasonality. Q1 we actually kind of built ARR up from a growth standpoint more so in the second half than the first half from a 2025 perspective. I think as we look at 2026, I expect some similar seasonality, probably more akin to what you touched on, which was the impact of some of the newer product initiatives. We will have heavier weight in the second half of calendar 2026 versus the first half.

We have got a few things in customer preview that we plan to flip GA in the first half, which I would expect to have more impact on the net new ARR in the second half of the year. So I would expect a similar kind of flow on a constant currency basis. 2025 blended a bunch of choppiness from an FX perspective, but from a sequential standpoint, I would expect a little more seasonality in Q1 versus the rest of the year, with better performance in the second half.

Mike Cikos: That is great to hear. Thank you, guys.

Timothy James O’Brien: Thanks, Mike.

Operator: Thank you. A reminder, if you would like to ask a question, please press star 1 to raise your hand. To withdraw your question, press star 1 again. Your next question comes from the line of Matthew Hedberg with RBC. Your line is open. Please go ahead.

Matthew Hedberg: Great. Thanks for taking my questions. John, I appreciate your comments at the start of the call around all of the market confusion around AI, and certainly feel like, especially within your core customer base, you guys could serve as a bit of a catalyst for even customer AI adoption. When you look at your three pillars of N-able, Inc. today, do you think that they all could benefit from customers’ increased focus on agentic AI? Or do you think—I am just sort of curious how you think especially when we do, like, disaster recovery as a service. But just any thoughts on what elements of your business might actually see maybe even stronger uplift with customer AI adoption?

Griffin Gyr: Sure. Look. The key tenets of our business

Tim O’Brien: and this is part of the durable truths, Matt, it is really about security and efficiency. And that plays into all three. So we have our data protection suite, which we mentioned is over $200,000,000, growing nicely. You mentioned disaster recovery as a service. That is coming in the middle of the year. The way that we are going to make sure that we are driving that experience for our MSPs, their clients, and even some of the mid-market folks is by leveraging a good amount of AI. There is definitely an ability to make sure that the backups themselves are active, ready to go, and continuing to collapse that RTO and RPO kind of metrics. Of XDR, of course.

So XDR, minutes matter in this world. You want to be able to contain a compromised asset. The example that we put in the script is a good example of that. So being able to drive more efficient but also just taking action leveraging AI is a big thing. And with our UEM, look, that is where we are driving a lot more of the efficiency, but also adding SKUs and AI SKUs in the future to help MSPs with compliance matters, help MSPs with posture management. The best way to do that efficiently is by leveraging AI. So helping MSPs with their posture management across the cloud, across their complex environments.

Going forward, Matt, one of the things I always say is that the verbs in our business have been the same for 25 years, and they will continue to be the same for the next 25 years. We monitor. We manage. We secure. We protect. We recover. And the nouns continue to stack. In our future, new nouns that will be coming are LLMs and agents. And how does an MSP help make sure that data is protected, that data is secure, that data can be recovered?

So these new nouns will stack on the old nouns, and it will provide a tailwind for the MSPs, it will provide a tailwind for cybersecurity vendors and those that are servicing the MSPs. And then the last point I will make, Matt, is it is also a big unlock. When I speak to MSPs, and I speak to hundreds, if not thousands, of MSPs annually, a top three issue for them is labor. And the fact that we can unlock the labor, allow these MSPs to go out and grow and service more SMEs in a scalable, more profitable way. And so our tools allow them to do that securely. Our tools allow them to do that efficiently.

And really, our tools with AI will provide an unlock for the labor bottleneck for the MSP community. And that is why I agree with you. I believe our job is to be a catalyst for this MSP market so that they can scale and service more and more—not just of the SMB, but also of the Fortune 1000. More and more MSPs, some of our studies suggest more than three quarters of our MSPs are also going into a co-managed approach, where they are walking into a CIO or a CSO’s and saying, let me help with part of your security. Let me help with your disaster recovery.

And we are there to help make sure those MSPs can get into those bigger accounts, driving bigger TAM and a bigger SAM for the MSP market itself.

Matthew Hedberg: That is super helpful. And then I think one of the things you guys do really well is you balance stable top-line growth with, obviously, EBITDA margin expansion. When we think to 2026, and obviously, we are anniversarying AdLumen and

Matthew Hedberg: rolling out new organic products that you talked about in your script, how do we think about capital allocation? When we look to 2026, should we expect a little bit of M&A? Obviously more organic investments—you mentioned VARs—but just a little bit more on capital allocation, sort of that growth and profitability?

Tim O’Brien: Sure. Look, Tim and the team did a great job with the structure of the new debt that we have. That gives us some flexibility. We take a look and we look at all different aspects. And I think you said it best, Matt, it is a balanced approach. We have the ability to buy back some shares as we did last year. So that is one option. But yes, I do expect us to continue to look at solutions that both MSPs and VARs and the mid-market look at that complement these three best-in-class offerings.

And we will continue to see if we want to build, which would potentially involve some R&D, or OEM like what we did successfully with AdLumen, and we have done successfully in other places, or acquire. And it is really driven off of that north star. And that north star is what do the small and medium enterprise need to make sure that they are secure, that they are compliant, that they are staying one step ahead of the adversary? And so we have the flexibility to meet that need using a couple of different tactics, and we will continue to look at and evaluate all different avenues.

And I think our strong balance sheet and strong financial health give us a leg up on a bunch of other folks. And therefore, that pliability or optionality should allow us to meet the need of our customers.

Matt Hedberg: Thanks, guys.

Unknown Analyst: Thank you.

Operator: As a final reminder, if you would like to ask a question, please press star 1 to raise your hand. Your next question comes from the line of Keith Bachman with BMO. Your line is open. Please go ahead.

Matthew Ryan Calitri: Hi, guys. This is Adam on for Keith. Thank you for the question. I wanted to follow up on the last AI question. So good to see the different prongs and growth levers there, but I was wondering if you could quantify the monetization opportunity there. And I know it is early, but in the past, you guys talked about the $3 per device per month opportunity, and I was wondering if AI adds meaningfully to that opportunity. And then second, on the other side, I know device headwinds have come up in the past primarily from the macro.

I was just wondering, is it possible in the future that AI use among MSPs and SMBs can create a headwind there? And if so, how do you defend against that? Thank you.

Tim O’Brien: Thanks, Adam. So look, a couple of things. What we monitor, what we manage, what we protect, what we recover, is more than just the endpoint. It is servers. It is virtual machines. It is SaaS applications. It is data and data growth. So that is number one. A good chunk of our revenue is on those kind of metrics or those kind of volume metrics. Number two, look. The SME—you guys have our power numbers, and you can do the math. We talk about 25,000 customers and over 500,000 or so small and medium organizations. I always say averages are for dummies, but the average there is 20. And I believe the SME is a little bit better insulated

Timothy James O’Brien: on potentially some of this, like, headline that people think about in

Tim O’Brien: Fortune 1000. In other words, if you think about the end markets that the MSPs are servicing, it is healthcare. It is your doctor’s office, your dentist’s office. It is the financial adviser. It is education. And so I feel that is really well insulated. And then on the third part, we do continue to look to increase the ASP per MSP and per user by offering more SKUs. And a lot of those SKUs will be AI-infused or AI-powered. So I believe it is going to increase our economic stack. It will expand our TAM, expand the TAM and the reach of our MSPs.

And as we look to bring on AI-specific SKUs in the future, that will just add to that $30 economic stack as we go forward. So we are optimistic, and it is all about making sure that we are delivering that need for the customer. But overall, our multi-pronged approach leaves us optimistic that we can expand and get more revenue per MSP because they should be able to get more from their customer, and they should have a better reach as they go forward.

Matthew Ryan Calitri: Got it. Thank you.

Operator: There are no further questions at this time. I will now turn the call back to CEO John Pagliuca for closing remarks.

Tim O’Brien: Thank you, operator, and thank you everyone for joining us today and your ongoing interest in N-able, Inc. See you next time.

Operator: This concludes today's call. Thank you for attending. You may now disconnect.