N-able not quite able yet but re-enabling nicely

MSP-focussed data protector N-able reported strong results in its first 2026 quarter, with reduced losses but sees growth slowing as a large deal focus lengthens sales cycles.

Revenues of $133.7 million beat its $132 million high-end outlook and were up 13.1 percent year/year, albeit with a $600K GAAP loss, much better than the year-ago $7.2 million loss. After 15 consecutive profit-making quarters up to the end of 2024, N-able has since made losses in 4 of the 5 successive quarters.

President and CEO John Pagliuca said: “We delivered a strong first quarter, driven by improving retention and continued progress across the business. As AI accelerates both the threat landscape and IT complexity, we believe cybersecurity is reaching an inflection point. Our platform is purpose‑built for this moment - embedded where customers already operate and increasingly automating work historically delivered through services - allowing our partners to scale more efficiently while strengthening their security posture.”

Expanded channel sales momentum was evident. Pagliuca said in the earnings call: “With an established MSP motion that counts 25 percent of CRN's top 150 MSPs as customers and our scaling VAR presence, our broad channel footprint enables us to capture demand across the market.” 

Also: “UEM's (User End-point Management) value proposition is showing clearly in execution. Six of our top 10 new customer lands flowed through our UEM solution.

William Blair analyst Jason Ader noted: “Four of the top five new customer lands in the quarter [were] sourced through the VAR channel (where traction for UEM has been particularly strong given consolidation of endpoint management and security tooling), complementing its established MSP sales motion and supporting larger initial deal sizes.”

He said: “N‑able continues to see tangible progress moving upmarket, with the number of $50,000-plus ARR customers up 312 year-over-year, to 2,710 (representing 62 percent of total ARR), while customers exceeding $100,000 of ARR now account for 41 percent of ARR. Management highlighted ongoing success landing larger, more complex customers, but cautioned that selling into this cohort brings longer sales cycles and heightened ROI scrutiny, which is reflected in the full-year guide.”

The second quarter’s revenue outlook is $138 million +/- $250,000 representing 5.2 percent growth; quite a slowdown from the current quarter’s 13.1 percent growth. According to Ader; “the guidance reflects disciplined assumptions for new product contributions and lengthening sales cycles as the company moves further upmarket into six-figure and multiyear seven-figure deals that increasingly require senior executive or board-level approval.”

The full 2026 revenue outlook remains at $556.5 million +/- $25 million, up 8.8 percent Y/Y.

The claimed acceleration effects of AI and cyber-security on N-able is not that evident at the moment.

Pagliuca says that adding AI assistance to UEM “is really going to take a lot of the high-volume operational work off the load of our technicians. This is our first really or our continuation of turning labor into software. We're excited about that. … We're layering in an agentic technology to take the labor off of our MSPs, making them more efficient, making them more profitable.”

N-able has a DRaaS (Disaster Recovery-as-a-Service) offering in development, with Pagliuca saying: “DRaaS is in limited preview right now. It's in customers' hands. We'll do the full launch a little bit later on in the back half of the year.”

A Google Workspace protection offering should also be launched later this year, “with customers in the queue and doing some limited preview,” and this, with DRaaS, suggests that N-able’s revenue growth rate could accelerate then. Pagliuca noted: “This will help us improve our win rate now that we have these offerings. It will help us with the expansion, of course, because we'll be able to cross-sell.”

Hopefully, we'll then see a return to profitability and double-digit growth rates.