10-K: N-able Reports 2025 Revenue Growth, Net Loss Amid Adlumin Integration

N-able, Inc. reported a 9.7% revenue increase to $511.4 million in 2025, alongside a net loss of $17.0 million, driven by strategic acquisitions and increased operating expenses.

Summary

• Total revenue increased by 9.7% to $511.4 million for the year ended December 31, 2025, compared to $466.1 million in 2024.
• The company reported a net loss of $(17.0) million for 2025, a decrease from net income of $31.0 million in 2024.
• Adjusted EBITDA decreased to $153.2 million in 2025 from $169.4 million in 2024, with the Adjusted EBITDA margin declining to 30.0% from 36.3%.
• Total Annual Recurring Revenue (ARR) grew by 11.9% to $539.7 million as of December 31, 2025, up from $482.5 million in 2024.
• Customers with ARR over $50,000 increased by 13.7% to 2,671 as of December 31, 2025, representing approximately 61% of total ARR.
• The dollar-based net revenue retention rate was 103% for the years ended December 31, 2025 and 2024, a decline from 110% in 2023.
• The acquisition of Adlumin, Inc. in November 2024 for $98.7 million in cash and up to 1,570,762 shares, plus deferred and contingent payments, significantly impacted financial results.
• Total indebtedness, net of debt issuance costs, was $393.9 million as of December 31, 2025.
• Cash and cash equivalents stood at $111.8 million as of December 31, 2025.
• The Board authorized a $75.0 million share repurchase program on March 11, 2025, with $45.0 million remaining as of December 31, 2025, after repurchasing 1,288,976 shares at an average price of $7.74 per share in October 2025.
• The effective tax rate increased to 812.3% in 2025, primarily due to an unbenefited loss in the United States.

Sentiment

Score: 4

Explanation: StockSavvy.ai views this as a mixed report with significant concerns. While revenue and ARR growth are positive, the shift to a net loss and decline in Adjusted EBITDA and retention rates, coupled with increased expenses and substantial debt, indicate operational challenges and potential profitability pressures.

Positives

• Total revenue increased by 9.7% to $511.4 million in 2025, demonstrating continued top-line growth.
• Subscription revenue grew by 10.3% in 2025, indicating strong demand for core SaaS offerings.
• Total Annual Recurring Revenue (ARR) increased by 11.9% to $539.7 million as of December 31, 2025.
• The number of high-value customers (ARR over $50,000) grew by 13.7% to 2,671, and now accounts for 61% of total ARR, showing success in attracting and expanding with larger clients.
• Cash flows from operating activities remained strong at $93.2 million for the year ended December 31, 2025.
• The strategic acquisition of Adlumin, Inc. in November 2024 enhances the company's Extended Detection and Response (XDR) and Managed Detection and Response (MDR) capabilities.
• The company maintains a significant global presence, with 50.4% of revenue generated outside the United States in 2025.
• A $75.0 million share repurchase program was authorized, signaling confidence in the company's valuation and commitment to shareholder returns.

Negatives

• The company reported a net loss of $(17.0) million in 2025, a significant decline from net income of $31.0 million in 2024.
• Adjusted EBITDA decreased by 9.5% to $153.2 million in 2025 from $169.4 million in 2024.
• Adjusted EBITDA margin declined from 36.3% in 2024 to 30.0% in 2025, indicating reduced profitability.
• The dollar-based net revenue retention rate remained at 103% in 2025, a decrease from 110% in 2023, attributed to pricing and packaging changes and long-term contract rationalization.
• Total cost of revenue increased substantially by 45.1% in 2025, primarily due to higher public cloud infrastructure, hosting fees, royalties, and amortization from the Adlumin acquisition.
• Operating expenses increased by 20.3% in 2025, driven by higher personnel costs, transaction-related costs, and increased sales and marketing investments.
• Interest expense, net, increased by 19.9% in 2025, partly due to the Adlumin deferred consideration liability and fees from the Credit Agreement amendment.
• The effective tax rate surged to 812.3% in 2025, mainly due to an unbenefited loss in the United States.
• The company carries substantial indebtedness of $393.9 million as of December 31, 2025.

Risks

• Quarterly revenue and operating results may fluctuate, making future results difficult to predict or causing them to fall below expectations.
• Inability to sell subscriptions to new customers, sell additional solutions to existing customers, or increase usage by existing customers could adversely affect revenue growth and operating results.
• Business depends on customers renewing their subscription agreements; declines in renewal or net retention rates could negatively impact results.
• Operates in highly competitive markets, which could make it difficult to acquire and retain customers at historic rates.
• Success depends on the ability to adapt to the rapidly changing needs of customers and their end-customers.
• Failure to integrate solutions with a variety of operating systems, software applications, platforms, and hardware developed by others or internally could make solutions less competitive or obsolete.
• Acquisitions, such as Adlumin, present risks including integration difficulties, diversion of management attention, inability to maintain key business relationships, and potential liabilities.
• Goodwill or intangible assets becoming impaired could require a significant non-cash charge to earnings.
• Inability to achieve or sustain the same level of cash flows in the future.
• International operations are susceptible to risks including currency fluctuations, regulatory complexities, and geopolitical instability (e.g., Belarus, Russia-Ukraine conflict).
• Reliance on reselling and integrating third-party software, which may be difficult to replace or cause errors or failures.
• Material defects, errors, or vulnerabilities in solutions, failure to block malware, or product liability claims could harm reputation and sales.
• Substantial indebtedness could adversely affect financial health and ability to obtain financing in the future.
• Ability to incur substantially more indebtedness could further exacerbate risks.
• Success depends on the ability to obtain, maintain, protect, and enforce intellectual property rights.
• Cyberattacks and other security incidents may compromise systems, lead to data theft, legal liabilities, and reputational harm, with AI use potentially increasing these risks.
• Use of AI could adversely affect business, reputation, or financial results due to flaws, bias, intellectual property risks, and evolving regulations.
• Subject to various global data privacy and security regulations, which could result in additional costs and liabilities.
• Subject to governmental export controls and economic sanctions laws.
• Failure to maintain proper and effective internal controls could have a material adverse effect on business.
• Potential changes in tax laws or regulations could negatively impact business and financial performance.
• Sponsors (Silver Lake and Thoma Bravo) have a controlling influence over matters requiring stockholder approval.
• Certain directors have relationships with the Sponsors, which may cause conflicts of interest.
• Sponsors and their affiliated funds may pursue corporate opportunities independent of the company.
• Issuance of additional capital stock in connection with financings, acquisitions, or incentive plans will dilute other stockholders.
• No current intention to pay dividends; return on investment depends on appreciation in stock price.
• Restated charter and bylaws contain anti-takeover provisions that could delay or discourage takeover attempts.
• Controlled company status allows reliance on exemptions from certain NYSE corporate governance requirements.

Future Outlook

The company expects continued investment in product development, sales and marketing, and research and development, particularly internationally. It anticipates stock-based compensation expense to increase during 2026. The long-term growth strategy includes expanding customer footprint, facilitating MSP-enabled growth, widening service area, driving innovation, broadening co-managed IT footprint, and global delivery. The global market opportunity for its solutions is estimated to reach $50 billion in 2026 and $65 billion by 2028.

Management Comments

• We believe that our existing cash and cash equivalents and our cash flows from operating activities will be sufficient to fund our operations and meet our commitments for capital expenditures for at least the next twelve months.
• We intend either to invest our foreign earnings permanently into foreign operations or to remit these earnings to our United States entities in a tax-efficient manner.
• We expect stock-based compensation expense to continue to increase during the year ended December 31, 2026.
• We expect to continue to grow our sales and marketing organization over time to drive new customer adds, retain and expand with existing customers and pursue initiatives designed to help our customers succeed and grow.
• We expect to continue to grow our research and development organization over time and also to incur additional expenses associated with bringing new product offerings to market and our enhancements of security, monitoring and authentication of our solutions.
• We expect to continue to grow our general and administrative organization over time to support continued growth of our business.

Industry Context

StockSavvy.ai notes that N-able operates in a rapidly expanding cybersecurity and IT management market, driven by digital transformation, increasing cyberthreats, and the growing reliance on Managed Service Providers (MSPs). The company's focus on organizations up to 2,500 employees positions it to address a significant market gap for enterprise-grade security solutions. The estimated global market opportunity of $50 billion in 2026, growing to $65 billion by 2028, indicates strong tailwinds for N-able's channel-led model, despite intense competition from both pure-play MSP vendors and category-specific enterprise providers.

Comparison to Industry Standards

• N-able's dollar-based net revenue retention rate of 103% for 2025 and 2024 is lower than the 110% reported in 2023, which could indicate increased churn or reduced expansion compared to prior periods, potentially lagging behind top-tier SaaS companies that often report retention rates above 120%.
• The decline in Adjusted EBITDA margin from 36.3% in 2024 to 30.0% in 2025, alongside a net loss, suggests a significant increase in operational costs relative to revenue growth, which may be below the profitability benchmarks of more mature or efficient cybersecurity software providers like Palo Alto Networks or CrowdStrike, which often demonstrate stronger operating leverage.
• The acquisition of Adlumin, Inc. for $98.7 million cash plus deferred and contingent payments, aims to enhance XDR/MDR capabilities, aligning with industry trends seen in acquisitions by larger players like Fortinet acquiring Lacework or Cisco acquiring Splunk to broaden their security portfolios.
• The substantial increase in amortization of acquired technologies ($16.9 million in 2025 vs. $3.5 million in 2024) and acquired intangibles ($2.0 million in 2025 vs. $0.3 million in 2024) due to the Adlumin acquisition, reflects a common challenge in integrating acquired assets, potentially impacting short-term profitability metrics more significantly than some industry peers who may have more mature integration processes or less frequent large acquisitions.

Corporate Governance

Legal Proceedings

• No material legal proceedings are currently a party to or subject of.
• Currently under examination by the IRS for tax years 2013 through February 2016.
• Currently under audit by the Massachusetts Department of Revenue for 2015 through February 2016 tax years.
• Currently under audit by the Texas Comptroller for 2015 through 2018 tax years.
• Currently under audit by the Canada Revenue Agency (CRA) for tax years 2021 and 2022.

Related Party Transactions

• Software OEM Agreements with SolarWinds: N-able earned $2.1 million in revenue and incurred $0.2 million in costs during 2025.
• Sublease Agreement with SolarWinds for office space in Austin, Texas: N-able incurred $0.6 million in operating lease costs during 2025.
• Consulting engagement with the brother-in-law of the Chief Executive Officer for AI strategy advising services: N-able incurred $0.2 million in costs during 2025.

Stakeholder Impact

• Shareholders: Potential for dilution from future equity financings, adverse impact on stock price due to volatile results, limited influence due to controlling Sponsors, and anti-takeover provisions.
• Employees: Continued investment in attracting, training, and retaining top talent, with a focus on engagement, belonging, wellness, and learning/development programs.
• Customers (IT services providers/MSPs): Enhanced platform capabilities through the Adlumin acquisition, ongoing partner success strategies, flexible pricing, and global support aimed at fostering their business growth and service delivery.
• Creditors: Substantial indebtedness and covenants under the Credit Agreement could affect the company's financial health and ability to meet its obligations.
• Suppliers: Potential for disruptions due to climate change or geopolitical instability affecting the supply chain.

Next Steps

• Continue to invest in product development and platform enhancements.
• Expand sales and marketing capabilities to attract new customers and deepen existing relationships.
• Grow research and development organization, particularly internationally.
• Pursue targeted acquisitions to expand market presence or functionality.
• Monitor and adapt to evolving cybersecurity threats and AI technologies.
• Manage and integrate acquired businesses, such as Adlumin.
• Address potential impacts of foreign currency exchange rate fluctuations.
• Comply with evolving global data privacy and security regulations.
• Continue to evaluate and strengthen internal controls over financial reporting.

Key Dates

Recommendation

N-able demonstrates solid revenue and ARR growth, indicating continued market demand for its cybersecurity and IT management solutions, bolstered by the Adlumin acquisition. However, the shift to a net loss and a decline in Adjusted EBITDA and net revenue retention rate in 2025 raise concerns about profitability and operational efficiency. The substantial debt and competitive market pressures warrant a cautious approach. A 'hold' recommendation allows investors to monitor the company's ability to integrate Adlumin, improve profitability, and stabilize retention rates amidst ongoing investments and macroeconomic uncertainties.

Keywords

cybersecurity, IT management, MSP, SaaS, endpoint management, data protection, security operations, Adlumin, 10-K, N-able, software, cloud, AI, financial results, annual report, NABL, stock repurchase, debt, intellectual property, risk management