N-able, Inc.

Previous wording

N-able, Inc., a Delaware corporation, together with its subsidiaries (“Company”, “we,” “us” and “our”) is a leading global provider of cloud-based security, data protection, and unified endpoint management software solutions for IT services providers, including managed service providers (“MSPs”). Our powerful technology enables them to support digital transformation and growth for small and medium-sized businesses (“SMBs”) and mid-market businesses, which we define as those businesses having fewer than 2,500 employees. With a flexible technology platform and powerful integrations, N-able makes it easy for our customers to monitor, manage, and protect systems, data, and networks. Our growing portfolio of management, security, automation, and data protection solutions is built for IT services management professionals. In addition, we provide extensive, proactive support—through enriching partner programs, hands-on training, and growth resources—to help our customers deliver exceptional value and achieve success at scale. Through our multi-dimensional land and expand model and global presence, we have been able to drive strong recurring revenue growth and profitability.

Current wording

N-able, Inc., a Delaware corporation, together with its subsidiaries (“Company”, “we,” “us” and “our”) is a leading global provider of cloud-based security, data protection, and unified endpoint management software solutions for IT services providers, including managed service providers (“MSPs”). Our cyber-resilience platform helps protect businesses against evolving cyberthreats while enabling digital transformation and growth for small and medium-sized businesses (“SMBs”) and mid-market businesses, which we define as those businesses having fewer than 2,500 employees. Our growing portfolio of management, security, automation, and data protection solutions is built for IT and Security teams. In addition, we provide extensive, proactive support—through enriching partner programs, hands-on training, and growth resources—to help our customers deliver exceptional value and achieve success at scale. Through our multi-dimensional land and expand model and global presence, we have been able to drive strong recurring revenue growth and profitability.

Previous wording

Total annual recurring revenue (“ARR”) as of June 30, 2025 was $513.7 million, compared to $448.8 million as of June 30, 2024, representing an increase of 14.5%. This increase was primarily due to steady demand for our solutions and the impact of the November 20, 2024 acquisition of Adlumin.

Current wording

Total annual recurring revenue (“ARR”) as of September 30, 2025 was $528.1 million, compared to $462.4 million as of September 30, 2024, representing an increase of 14.2%. This increase was primarily due to steady demand for our solutions and the impact of the November 20, 2024 acquisition of Adlumin.

Previous wording

As of June 30, 2025, we had 2,540 customers with ARR over $50,000 on our platform, up from 2,194 as of June 30, 2024, representing an increase of 15.8%. Over the same period, customers with over $50,000 of ARR on our platform grew from approximately 56% of our total ARR as of June 30, 2024 to approximately 60% of our total ARR as of June 30, 2025.

Current wording

As of September 30, 2025, we had 2,611 customers with ARR over $50,000 on our platform, up from 2,275 as of September 30, 2024, representing an increase of 14.8%. Over the same period, customers with over $50,000 of ARR on our platform grew from approximately 57% of our total ARR as of September 30, 2024 to approximately 61% of our total ARR as of September 30, 2025.

Previous wording

Our operating income for the three months ended June 30, 2025 was $10.1 million, compared to operating income of $22.0 million for the three months ended June 30, 2024. Our net loss for the three months ended June 30, 2025 was $4.0 million compared to net income of $9.5 million for the three months ended June 30, 2024. The decrease in net income for the three months ended June 30, 2024 was primarily due to an increase in sales and marketing expense, an increase in cost of revenue, an increase in research and development expense, an increase in amortization of acquired technologies, an increase in other (expense) income, net, an increase in amortization of acquired intangibles, an increase in interest expense, net, and an increase in general and administrative expense, partially offset by an increase in revenue and a decrease in income tax expense. Our Adjusted EBITDA, calculated as net (loss) income of $(4.0) million and $9.5 million for the three months ended June 30, 2025 and 2024, respectively, excluding amortization of acquired intangibles and developed technology of $6.3 million and $1.9 million, respectively, depreciation expense of $4.6 million and $4.0 million, respectively, income tax expense of $5.2 million and $6.1 million, respectively, interest expense, net of $8.1 million and $7.6 million, respectively, unrealized foreign currency (gains) losses of $2.4 million and $0.4 million, respectively, transaction related costs of $5.6 million and $4.9 million, respectively, stock-based compensation expense and related employer-paid payroll taxes of $13.2 million and $12.2 million, respectively, and restructuring costs and other of $0.4 million and $0.3 million, respectively, was $41.6 million and $46.8 million for the three months ended June 30, 2025 and 2024, respectively. For a description and reconciliation of the non-GAAP measures discussed in this section, see Non-GAAP Financial Measures below.

Current wording

Our operating income for the three months ended September 30, 2025 was $11.6 million, compared to operating income of $23.9 million for the three months ended September 30, 2024. Our net income for the three months ended September 30, 2025 was $1.4 million, compared to net income of $10.8 million for the three months ended September 30, 2024. The decrease in net income for the three months ended September 30, 2024 was primarily due to an increase in sales and marketing expense, an increase in general and administrative expense, an increase in cost of revenue, an increase in amortization of acquired technologies, an increase in research and development expense, an increase in interest expense, net, and an increase in amortization of acquired intangibles, partially offset by an increase in revenue, an increase in other income, net, and a decrease in income tax expense. Our Adjusted EBITDA, calculated as net income of $1.4 million and $10.8 million for the three months ended September 30, 2025 and 2024, respectively, excluding amortization of acquired intangibles and developed technology of $6.4 million and $2.1 million, respectively, depreciation expense of $4.7 million and $4.0 million, respectively, income tax expense of $6.4 million and $7.9 million, respectively, interest expense, net of $8.6 million and $7.5 million, respectively, unrealized foreign currency gains of $(4.2) million and $(0.5) million, respectively, transaction related costs of $5.5 million and $(1.8) million, respectively, stock-based compensation expense and related employer-paid payroll taxes of $12.2 million and $11.8 million, respectively, and restructuring costs and other of $0.4 million and $3.1 million, respectively, was $41.4 million and $44.8 million for the three months ended September 30, 2025 and 2024, respectively. For a description and reconciliation of the non-GAAP measures discussed in this section, see Non-GAAP Financial Measures below.

Previous wording

We have built our business to generate strong cash flow over the long term. For the three months ended June 30, 2025 and 2024, cash flows from operations were $24.2 million and $27.3 million, respectively. Our cash flows from operations were reduced by cash payments for interest of $6.3 million and $7.3 million for the three months ended June 30, 2025 and 2024, respectively, and cash payments for income taxes of $3.7 million and $4.2 million for the three months ended June 30, 2025 and 2024, respectively.

Current wording

We have built our business to generate strong cash flow over the long term. For the three months ended September 30, 2025 and 2024, cash flows from operations were $24.0 million and $22.0 million, respectively. Our cash flows from operations were reduced by cash payments for interest of $6.3 million and $7.2 million for the three months ended September 30, 2025 and 2024, respectively, and cash payments for income taxes of $5.7 million and $2.1 million for the three months ended September 30, 2025 and 2024, respectively.

Previous wording

Operating expenses consist of sales and marketing, research and development and general and administrative expenses as well as amortization of acquired intangibles. Generally, personnel costs are the most significant component of operating expenses and include salaries, bonuses and stock-based compensation and related employer-paid payroll taxes, as well as an allocation of our facilities, depreciation, IT and benefits costs. We had total employees of 1,882, 1,773, and 1,623 as of June 30, 2025, December 31, 2024, and June 30, 2024, respectively. Our stock-based compensation expense increased during the three and six months ended June 30, 2025 as compared to the corresponding period of the prior fiscal year primarily due to the impact of new equity awards that were granted to employees through June 30, 2025, and we expect stock-based compensation expense to continue to increase during the year ending December 31, 2025.

Current wording

Operating expenses consist of sales and marketing, research and development and general and administrative expenses as well as amortization of acquired intangibles. Generally, personnel costs are the most significant component of operating expenses and include salaries, bonuses and stock-based compensation and related employer-paid payroll taxes, as well as an allocation of our facilities, depreciation, IT and benefits costs. We had total employees of 1,878, 1,773, and 1,635 as of September 30, 2025, December 31, 2024, and September 30, 2024, respectively. Our stock-based compensation expense increased during the three and nine months ended September 30, 2025 as compared to the corresponding period of the prior fiscal year primarily due to the impact of new equity awards that were granted to employees through September 30, 2025, and we expect stock-based compensation expense to continue to increase during the remainder of the year ending December 31, 2025.

Previous wording

•Research and Development. Research and development expenses primarily consist of related personnel costs, including our engineering, development operations, user experience and security operations teams, as well as an allocation of our facilities, depreciation, IT and benefits costs. 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.

Current wording

•Research and Development. Research and development expenses primarily consist of related personnel costs, including our engineering, development operations, user experience and internal security operations teams, as well as an allocation of our facilities, depreciation, IT and benefits costs. 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.

Previous wording

Total revenue increased $11.8 million, or 9.9%, for the three months ended June 30, 2025 compared to the three months ended June 30, 2024. We base revenue by geography on the billing address of each customer. Based on customer location, revenue from the United States was approximately 49.2% and 48.0% of total revenue for the three months ended June 30, 2025 and 2024, respectively. Revenue from the United Kingdom was approximately 10.4% and 10.3% of total revenue for the three months ended June 30, 2025 and 2024, respectively. Other than the United States and the United Kingdom, no single country accounted for 10% or more of our total revenue during these periods.

Current wording

Total revenue increased $15.3 million, or 13.1%, for the three months ended September 30, 2025 compared to the three months ended September 30, 2024. We base revenue by geography on the billing address of each customer. Based on customer location, revenue from the United States was approximately 49.3% and 47.6% of total revenue for the three months ended September 30, 2025 and 2024, respectively. Revenue from the United Kingdom was approximately 10.2% and 10.6% of total revenue for the three months ended September 30, 2025 and 2024, respectively. Other than the United States and the United Kingdom, no single country accounted for 10% or more of our total revenue during these periods.

Previous wording

Subscription Revenue. Subscription revenue increased $12.5 million, or 10.6%, for the three months ended June 30, 2025 compared to the three months ended June 30, 2024. The increase in subscription revenue was primarily driven by growth in sales of our data protection, security and unified endpoint management solutions, inclusive of the net positive impact from long-term committed contracts, and includes revenue attributable to the recently acquired Adlumin business. See Second Quarter Financial Highlightsfor further details regarding the impact of long-term committed contracts during the three months ended June 30, 2025. Subscription revenue as a percentage of our total revenue was 99.0% for the three months ended June 30, 2025, compared to 98.3% for the three months ended June 30, 2024.

Current wording

Subscription Revenue. Subscription revenue increased $15.5 million, or 13.5%, for the three months ended September 30, 2025 compared to the three months ended September 30, 2024. The increase in subscription revenue was primarily driven by growth in sales of our data protection, security and unified endpoint management solutions, inclusive of the net positive impact from long-term committed contracts, and includes revenue attributable to the acquired Adlumin business. See Third Quarter Financial Highlightsfor further details regarding the impact of long-term committed contracts during the three months ended September 30, 2025. Subscription revenue as a percentage of our total revenue was 99.1% for the three months ended September 30, 2025, compared to 98.8% for the three months ended September 30, 2024.

Previous wording

Our annual dollar-based net revenue retention rate for our subscription products was approximately 102% and 108% for the trailing twelve-month periods ended June 30, 2025 and 2024, respectively. The 102% dollar-based net revenue retention rate reflects the impact from our pricing and packaging changes, coupled with rationalization related to our Long-Term Contract Initiative, which began materially impacting net revenue retention during the three months ended June 30, 2024. Our calculation includes any expansion revenue and is net of any contraction or cancellation, but excludes credits and revenue attributable to any customer who was not a customer with a paid subscription in the prior period. To calculate our annual dollar-based net revenue retention rate, we first identify the customers with active paid subscriptions in the last month of the prior-year period, or the base customers. We then divide the subscription revenue in the last month of the current-year period attributable to the base customers by the revenue attributable to those base customers in the last month of the prior-year period. Our dollar-based net revenue retention rate for a particular period is then obtained by averaging the rates from that particular period with the results from each of the prior eleven months.

Current wording

Our annual dollar-based net revenue retention rate for our subscription products was approximately 102% and 105% for the trailing twelve-month periods ended September 30, 2025 and 2024, respectively. The 102% dollar-based net revenue retention rate reflects the impact from our pricing and packaging changes, coupled with rationalization related to our Long-Term Contract Initiative, which began materially impacting net revenue retention during the three months ended June 30, 2024. Our calculation includes any expansion revenue and is net of any contraction or cancellation, but excludes credits and revenue attributable to any customer who was not a customer with a paid subscription in the prior period. To calculate our annual dollar-based net revenue retention rate, we first identify the customers with active paid subscriptions in the last month of the prior-year period, or the base customers. We then divide the subscription revenue in the last month of the current-year period attributable to the base customers by the revenue attributable to those base customers in the last month of the prior-year period. Our dollar-based net revenue retention rate for a particular period is then obtained by averaging the rates from that particular period with the results from each of the prior eleven months.

Previous wording

Other Revenue. Other revenue decreased $0.7 million, or 32.4%, for the three months ended June 30, 2025 compared to the three months ended June 30, 2024, primarily due to a decrease in maintenance revenue of $0.8 million, partially offset by an increase in professional services revenue of $0.1 million. Other revenue as a percentage of our total revenue was 1.0% for the three months ended June 30, 2025, compared to 1.7% for the three months ended June 30, 2024.

Current wording

Other Revenue. Other revenue decreased $0.3 million, or 17.4%, for the three months ended September 30, 2025 compared to the three months ended September 30, 2024, primarily due to a decrease in maintenance revenue of $0.5 million, partially offset by an increase in professional services revenue of $0.2 million. Other revenue as a percentage of our total revenue was 0.9% for the three months ended September 30, 2025, compared to 1.2% for the three months ended September 30, 2024.

Previous wording

Total cost of revenue increased $18.9 million, or 50.5%, for the six months ended June 30, 2025 compared to the six months ended June 30, 2024, primarily due to an increase in amortization of acquired technologies of $7.5 million related to the November 20, 2024 acquisition of Adlumin, an increase in public cloud infrastructure and hosting fees and royalties related to our subscription products of $6.7 million, an increase in personnel costs driven by headcount and salary increases of $2.3 million, an increase in depreciation of servers and amortization of capitalized internal-use software costs of $1.5 million, and an increase in contract services costs of $0.8 million.

Current wording

Total cost of revenue increased $9.7 million, or 49.0%, for the three months ended September 30, 2025 compared to the three months ended September 30, 2024, primarily due to an increase in public cloud infrastructure and hosting fees and royalties related to our subscription products of $3.9 million, an increase in amortization of acquired technologies of

Previous wording

Sales and Marketing. Sales and marketing expenses increased $9.5 million, or 29.0%, for the three months ended June 30, 2025 compared to the three months ended June 30, 2024, primarily due to an increase in personnel costs of $5.8 million, which includes an increase in stock-based compensation expense of $0.9 million, an increase in transaction related costs of $1.4 million, an increase in travel and event-related costs of $1.2 million, and an increase in advertising expense of $0.9 million.

Current wording

Sales and Marketing. Sales and marketing expenses increased $8.2 million, or 25.4%, for the three months ended September 30, 2025 compared to the three months ended September 30, 2024, primarily due to an increase in personnel costs driven by headcount and salary increases of $5.9 million, which includes an increase in stock-based compensation expense of $0.5 million, an increase in transaction related costs of $0.8 million, an increase in travel and event-related costs of $0.8 million, and an increase in subscription costs of $0.6 million.

Previous wording

Research and Development. Research and development expenses increased $3.9 million, or 17.6%, for the three months ended June 30, 2025 compared to the three months ended June 30, 2024, primarily due to an increase in personnel costs driven by headcount and salary increases of $3.7 million, which includes an increase in stock-based compensation expense of $0.3 million, an increase in contract services costs of $0.6 million, and an increase in subscription costs of $0.5 million, partially offset by an increase in capitalized internal-use software costs of $1.2 million.

Current wording

Research and Development. Research and development expenses increased $2.2 million, or 9.5%, for the three months ended September 30, 2025 compared to the three months ended September 30, 2024, primarily due to an increase in personnel costs driven by headcount and salary increases of $2.9 million, which includes an increase in stock-based compensation expense of $0.3 million, an increase in contract services costs of $0.6 million, an increase in subscription costs of $0.3 million, and an increase in travel-related costs of $0.2 million, partially offset by an increase in capitalized internal-use software costs of $1.4 million and a decrease in allocated facilities and IT costs of $0.7 million.

Previous wording

General and Administrative. General and administrative expenses increased $0.2 million, or 0.8%, for the three months ended June 30, 2025 compared to the three months ended June 30, 2024, primarily due to an increase in contract services costs of $0.5 million, an increase in restructuring and other costs of $0.4 million, and an increase in personnel costs driven by headcount and salary increases of $0.3 million, partially offset by a net decrease in transaction related costs of $1.0 million.

Current wording

General and Administrative. General and administrative expenses increased $7.0 million, or 40.2%, for the three months ended September 30, 2025 compared to the three months ended September 30, 2024, primarily due to a net increase in transaction related costs of $6.3 million, an increase in bad debt expense of $2.1 million, an increase in allocated facilities and IT costs of $0.5 million, and an increase in contract services costs of $0.3 million, partially offset by a decrease in restructuring and other costs of $3.0 million.

Previous wording

Amortization of Acquired Intangibles. Amortization of acquired intangibles increased $0.5 million from $15 thousand for the three months ended June 30, 2025 compared to the three months ended June 30, 2024, related to the November 20, 2024 acquisition of Adlumin.

Current wording

Amortization of Acquired Intangibles. Amortization of acquired intangibles increased $0.5 million from $15 thousand for the three months ended September 30, 2025 to $0.5 million for the three months ended September 30, 2024, and relates to the November 20, 2024 acquisition of Adlumin.

Previous wording

Interest expense, net increased by $0.5 million, or 6.4%, for the three months ended June 30, 2025 compared to the three months ended June 30, 2024, primarily due to an increase in expense of $1.4 million related to the Adlumin deferred consideration liability, partially offset by a decrease in interest expense of $1.0 million due to the impact of decreased interest rates and lower outstanding borrowings under the Credit Agreement. Outstanding borrowings under the Credit Agreement bear interest at variable rates, and therefore changes in interest rates will have an impact on our financial results and cash flows. See Note 8. Debt in the Notes to Consolidated Financial Statementsfor further details regarding the Credit Agreement and Note 3. Acquisitions, Note 6. Fair Value Measurements, and Note 11. Commitments and Contingencies for further details regarding the acquisition of Adlumin.

Current wording

Interest expense, net increased by $1.1 million, or 14.5%, for the three months ended September 30, 2025 compared to the three months ended September 30, 2024, primarily due to an increase in expense of $1.4 million related to the Adlumin deferred consideration liability and an increase in interest expense on tax liabilities of $0.5 million, partially offset by a decrease in interest expense of $0.9 million due to the impact of decreased interest rates and lower outstanding borrowings under the Credit Agreement. Outstanding borrowings under the Credit Agreement bear interest at variable rates, and therefore changes in interest rates will have an impact on our financial results and cash flows. See Note 8. Debt in the Notes to Consolidated Financial Statementsfor further details regarding the Credit Agreement and Note 3. Acquisitions, Note 6. Fair Value Measurements, and Note 11. Commitments and Contingencies for further details regarding the acquisition of Adlumin.

Previous wording

Other income, net decreased by $0.9 million, or 62.8%, for the six months ended June 30, 2025 compared to the six months ended June 30, 2024, primarily due to a decrease in dividend income from our money market fund financial assets of $1.7 million, partially offset by an increase in the impact of changes in foreign currency exchange rates of $0.9 million related to various accounts for the period.

Current wording

Other income, net increased by $2.5 million, or 111.2%, for the three months ended September 30, 2025 compared to the three months ended September 30, 2024, primarily due to an increase in the impact of exchange rates on foreign currency denominated accounts of $3.5 million, partially offset by a decrease in dividend income from our money market fund financial assets of $1.0 million.

Previous wording

Our income tax expense for the three months ended June 30, 2025 decreased by $0.9 million as compared to the three months ended June 30, 2024. The effective tax rate increased to 441.4% for the same period primarily due to an increase in the amount of the unbenefited loss in the United States, partially offset by a decrease in income taxes on income outside of the United States.

Current wording

Our income tax expense for the three months ended September 30, 2025 decreased by $1.5 million as compared to the three months ended September 30, 2024. The effective tax rate increased to 82.2% for the same period primarily due to an increase in the amount of the unbenefited loss in the United States, partially offset by a decrease in income taxes on income outside of the United States.

Previous wording

On July 4, 2025, the President signed into law H.R. 1, the “One Big Beautiful Bill Act” (“OBBBA”). Key income tax-related provisions of the OBBBA include the repeal of mandatory capitalization of domestic research and development expenditures under Internal Revenue Code (IRC) Section 174, extension of bonus depreciation, the restoration of an EBITDA-based interest limitation deduction, and revisions to international tax regimes. We are evaluating the financial implications of the OBBBA and will begin reflecting its effects in the third quarter of 2025. We do not anticipate the overall impact to be material. For additional discussion about our income taxes, see Note 10. Income Taxesin the Notes to Consolidated Financial Statements.

Current wording

On July 4, 2025, the President signed into law H.R. 1, the “One Big Beautiful Bill Act” (“OBBBA”). Key income tax-related provisions of the OBBBA include the repeal of mandatory capitalization of domestic research and development expenditures under Internal Revenue Code (IRC) Section 174, extension of bonus depreciation, the restoration of an EBITDA-based interest limitation deduction, and revisions to international tax regimes. The overall financial statement impact of the OBBBA is not material. For additional discussion about our income taxes, see Note 10. Income Taxesin the Notes to Consolidated Financial Statements.

Previous wording

Total revenue increased $16.3 million, or 7.0%, for the six months ended June 30, 2025 compared to the six months ended June 30, 2024. We base revenue by geography on the billing address of each customer. Based on customer location, revenue from the United States was approximately 50.1% and 47.9% of total revenue for the six months ended June 30, 2025 and 2024, respectively. Revenue from the United Kingdom was approximately 10.2% and 10.4% of total revenue for the six months ended June 30, 2025 and 2024, respectively. Other than the United States and the United Kingdom, no single country accounted for 10% or more of our total revenue during these periods.

Current wording

Total revenue increased $31.5 million, or 9.0%, for the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024. We base revenue by geography on the billing address of each customer. Based on customer location, revenue from the United States was approximately 49.8% and 47.8% of total revenue for the nine months ended September 30, 2025 and 2024, respectively. Revenue from the United Kingdom was approximately 10.2% and 10.5% of total revenue for the nine months ended September 30, 2025 and 2024, respectively. Other than the United States and the United Kingdom, no single country accounted for 10% or more of our total revenue during these periods.

Previous wording

Subscription Revenue. Subscription revenue increased $17.8 million, or 7.8%, for the six months ended June 30, 2025 compared to the six months ended June 30, 2024. The increase in subscription revenue was primarily driven by growth in sales of our data protection, security and remote monitoring and management solutions, inclusive of the impact from long-term committed contracts. See Second Quarter Financial Highlightsfor further details regarding the impact of long-term committed contracts during the six months ended June 30, 2025. Subscription revenue as a percentage of our total revenue was 98.9% for the six months ended June 30, 2025, compared to 98.2% for the six months ended June 30, 2024.

Current wording

Subscription Revenue. Subscription revenue increased $33.3 million, or 9.7%, for the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024. The increase in subscription revenue was primarily driven by growth in sales of our data protection, security and remote monitoring and management solutions, inclusive of the impact from long-term committed contracts. See Third Quarter Financial Highlightsfor further details regarding the impact of long-term committed contracts during the nine months ended September 30, 2025. Subscription revenue as a percentage of our total revenue was 99.0% for the nine months ended September 30, 2025, compared to 98.4% for the nine months ended September 30, 2024.

Previous wording

Our annual dollar-based net revenue retention rate for our subscription products was approximately 102% and 108% for the trailing twelve-month periods ended June 30, 2025 and 2024, respectively. The 102% dollar-based net revenue retention rate reflects the impact from our pricing and packaging changes, coupled with rationalization related to our Long-Term Contract Initiative, which began materially impacting net revenue retention during the three months ended June 30, 2024.

Current wording

Our annual dollar-based net revenue retention rate for our subscription products was approximately 102% and 105% for the trailing twelve-month periods ended September 30, 2025 and 2024, respectively. The 102% dollar-based net revenue retention rate reflects the impact from our pricing and packaging changes, coupled with rationalization related to our Long-Term Contract Initiative, which began materially impacting net revenue retention during the three months ended June 30, 2024.

Previous wording

Other Revenue. Other revenue decreased $1.5 million, or 36.2%, for the six months ended June 30, 2025 compared to the six months ended June 30, 2024, primarily due to a decrease in maintenance revenue of $1.9 million, partially offset by an increase in professional services revenue of $0.3 million. Other revenue as a percentage of our total revenue was 1.1% for the six months ended June 30, 2025, compared to 1.8% for the six months ended June 30, 2024.

Current wording

Other Revenue. Other revenue decreased $1.8 million, or 31.4%, for the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024, primarily due to a decrease in maintenance revenue of $2.3 million, partially offset by an increase in professional services revenue of $0.5 million. Other revenue as a percentage of our total revenue was 1.0% for the nine months ended September 30, 2025, compared to 1.6% for the nine months ended September 30, 2024.

Previous wording

Total cost of revenue increased $9.5 million, or 49.7%, for the three months ended June 30, 2025 compared to the three months ended June 30, 2024, primarily due to an increase in amortization of acquired technologies of $3.8 million related to the November 20, 2024 acquisition of Adlumin, an increase in public cloud infrastructure and hosting fees and royalties related to our subscription products of $3.2 million, an increase in personnel costs driven by headcount and salary increases of $1.4 million, an increase in depreciation of servers and amortization of capitalized internal-use software costs of $0.8 million, and an increase in contract services costs of $0.2 million.

Current wording

Total cost of revenue increased $28.7 million, or 50.0%, for the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024, primarily due to an increase in amortization of acquired technologies of $11.3 million related to the November 20, 2024 acquisition of Adlumin, an increase in public cloud infrastructure and hosting fees and royalties related to our subscription products of $10.5 million, an increase in personnel costs driven by headcount and salary increases of $3.4 million, an increase in depreciation of servers and amortization of capitalized internal-use software costs of $2.2 million, an increase in contract services costs of $0.9 million, and an increase in transaction related costs of $0.3 million.

Previous wording

General and Administrative. General and administrative expenses increased $7.0 million, or 17.6%, for the six months ended June 30, 2025 compared to the six months ended June 30, 2024, primarily due to a net increase in transaction related costs of $5.5 million, an increase in contract services costs of $1.0 million, an increase in professional fees of $0.9 million, and an increase in personnel costs driven by headcount and salary increases of $0.5 million, partially offset by a decrease in restructuring and other costs of $0.5 million.

Current wording

General and Administrative. General and administrative expenses increased $14.0 million, or 24.4%, for the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024, primarily due to a net increase in transaction related costs of $11.6 million, an increase in bad debt expense of $1.8 million, an increase in contract services costs of $1.3 million, an increase in professional fees of $1.1 million, an increase in allocated facilities and IT costs of $0.7 million, and an increase in personnel costs driven by headcount and salary increases of $0.5 million, partially offset by a decrease in restructuring and other costs of $3.5 million.

Previous wording

Amortization of Acquired Intangibles. Amortization of acquired intangibles increased $1.0 million from $29 thousand for the six months ended June 30, 2025 compared to the six months ended June 30, 2024, related to the November 20, 2024 acquisition of Adlumin.

Current wording

Amortization of Acquired Intangibles. Amortization of acquired intangibles increased $1.5 million from $44 thousand for the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024, related to the November 20, 2024 acquisition of Adlumin.

Previous wording

Interest expense, net decreased by $0.1 million, or 0.4%, for the six months ended June 30, 2025 compared to the six months ended June 30, 2024, primarily due to a decrease in interest expense of $1.9 million due to the impact of decreased interest rates and lower outstanding borrowings under the Credit Agreement and an increase in interest income on recoverable taxes of $1.0 million, partially offset by an increase in expense of $2.8 million related to the Adlumin deferred consideration liability. Outstanding borrowings under the Credit Agreement bear interest at variable rates, and therefore changes in interest rates will have an impact on our financial results and cash flows. See Note 8. Debt in the Notes to Consolidated Financial Statementsfor further details regarding the Credit Agreement.

Current wording

Interest expense, net increased by $1.0 million, or 4.5%, for the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024, primarily due to an increase in expense of $4.3 million related to the Adlumin deferred consideration liability, partially offset by a decrease in interest expense of $2.3 million due to the impact of decreased interest rates and lower outstanding borrowings under the Credit Agreement and a decrease in interest income on recoverable taxes of $0.9 million. Outstanding borrowings under the Credit Agreement bear interest at variable rates, and therefore changes in interest rates will have an impact on our financial results and cash flows. See Note 8. Debt in the Notes to Consolidated Financial Statementsfor further details regarding the Credit Agreement.

Previous wording

Other (expense) income, net decreased by $2.0 million, or 174.8%, for the three months ended June 30, 2025 compared to the three months ended June 30, 2024, primarily due to a decrease in the impact of changes in foreign currency exchange rates of $1.2 million related to various accounts for the period and a decrease in dividend income from our money market fund financial assets of $0.9 million.

Current wording

Other income, net increased by $1.6 million, or 44.0%, for the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024, primarily due to an increase in the impact of exchange rates on foreign currency denominated accounts of $4.2 million, partially offset by a decrease in dividend income from our money market fund financial assets of $2.8 million.

Previous wording

Our income tax expense for the six months ended June 30, 2025 decreased by $(3.3) million as compared to the six months ended June 30, 2024. The effective tax rate increased to (316.7)% for the same period primarily due to an increase in the amount of the unbenefited loss in the United States, partially offset by a decrease in income taxes on income outside of the United States.

Current wording

Our income tax expense for the nine months ended September 30, 2025 decreased by $4.8 million as compared to the nine months ended September 30, 2024. The effective tax rate increased to 293.0% for the same period primarily due to an increase in the amount of the unbenefited loss in the United States, partially offset by a decrease in income taxes on income outside of the United States.

Previous wording

On July 4, 2025, the President signed into law H.R. 1, the “One Big Beautiful Bill Act” (“OBBBA”). Key income tax-related provisions of the OBBBA include the repeal of mandatory capitalization of domestic research and development expenditures under Internal Revenue Code (IRC) Section 174, extension of bonus depreciation, the restoration of an EBITDA-based interest limitation deduction, and revisions to international tax regimes. We are evaluating the financial implications of the OBBBA and will begin reflecting its effects in the third quarter of 2025. We do not anticipate the overall impact to be material. For additional discussion about our income taxes, see Note 10. Income Taxesin the Notes to Consolidated Financial Statements.

Current wording

On July 4, 2025, the President signed into law H.R. 1, the “One Big Beautiful Bill Act” (“OBBBA”). Key income tax-related provisions of the OBBBA include the repeal of mandatory capitalization of domestic research and development expenditures under Internal Revenue Code (IRC) Section 174, extension of bonus depreciation, the restoration of an EBITDA-based interest limitation deduction, and revisions to international tax regimes. The overall financial statement impact of the OBBBA is not material. For additional discussion about our income taxes, see Note 10. Income Taxesin the Notes to Consolidated Financial Statements.

Previous wording

Because of these limitations, you should consider adjusted EBITDA alongside other financial performance measures, including operating income and net (loss) income and our other GAAP results. In evaluating adjusted EBITDA, you should be aware that in the future we may incur expenses that are the same as, or similar to, some of the adjustments in this presentation. Our presentation of adjusted EBITDA should not be construed as an implication that our future results will be unaffected by the types of items excluded from the calculation of adjusted EBITDA. Adjusted EBITDA is not a presentation made in accordance with GAAP and the use of the term varies from others in our industry.

Current wording

Because of these limitations, you should consider adjusted EBITDA alongside other financial performance measures, including operating income and net income (loss) and our other GAAP results. In evaluating adjusted EBITDA, you should be aware that in the future we may incur expenses that are the same as, or similar to, some of the adjustments in this presentation. Our presentation of adjusted EBITDA should not be construed as an implication that our future results will be unaffected by the types of items excluded from the calculation of adjusted EBITDA. Adjusted EBITDA is not a presentation made in accordance with GAAP and the use of the term varies from others in our industry.

Previous wording

Cash and cash equivalents were $93.9 million as of June 30, 2025. As our sales and operating cash flows are primarily generated by international entities in the United Kingdom and Canada, our international subsidiaries held approximately $86.2 million of cash and cash equivalents, of which 68.0%, 19.4% and 2.9% were held in United States Dollars, Euros and British Pound Sterling, respectively. 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. The U.S. Tax Cuts and Jobs Act of 2017 imposed a mandatory transition tax on accumulated foreign earnings and eliminates United States federal income taxes on foreign subsidiary distributions. As a result, our earnings in foreign jurisdictions are generally available for distribution to the United States without significant U.S. tax consequences.

Current wording

Cash and cash equivalents were $101.4 million as of September 30, 2025. As our sales and operating cash flows are primarily generated in the United Kingdom, our international subsidiaries held approximately $96.2 million of cash and cash equivalents, of which 70.3%, 17.8% and 4.5% were held in United States Dollars, Euros and British Pound Sterling, respectively. 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. The U.S. Tax Cuts and Jobs Act of 2017 imposed a mandatory transition tax on accumulated foreign earnings and eliminates United States federal income taxes on foreign subsidiary distributions. As a result, our earnings in foreign jurisdictions are generally available for distribution to the United States without significant U.S. tax consequences.

Previous wording

In connection with the Separation and Distribution, on July 19, 2021, certain subsidiaries of the Company entered into a credit agreement (the “Credit Agreement”) with JPMorgan Chase, Bank, N.A. as administrative agent and collateral agent and the lenders from time to time party thereto. The Credit Agreement provides for $410.0 million of first lien secured credit facilities (the “Credit Facilities”), consisting of a $60.0 million revolving credit facility (the “Revolving Facility”), and a $350.0 million term loan facility (the “Term Loan”). On July 19, 2021, prior to the completion of the Distribution, the Company distributed approximately $16.5 million, representing the proceeds from the Term Loan, net of the repayment of related party debt due to SolarWinds Holdings, Inc., payment of intercompany trade payables, and fees and other transaction related costs, to SolarWinds. The Revolving Facility is primarily available for general corporate purposes. We had total borrowings of $332.1 million and $333.1 million as of June 30, 2025 and December 31, 2024, respectively, net of debt issuance costs of $4.7 million and $5.5 million, respectively. See Note 8. Debtin the Notes to Consolidated Financial Statements for further details regarding the Credit Agreement.

Current wording

In connection with the Separation and Distribution, on July 19, 2021, certain subsidiaries of the Company entered into a credit agreement (the “Credit Agreement”) with JPMorgan Chase, Bank, N.A. as administrative agent and collateral agent and the lenders from time to time party thereto. The Credit Agreement provides for $410.0 million of first lien secured credit facilities (the “Credit Facilities”), consisting of a $60.0 million revolving credit facility (the “Revolving Facility”), and a $350.0 million term loan facility (the “Term Loan”). On July 19, 2021, prior to the completion of the Distribution, the Company distributed approximately $16.5 million, representing the proceeds from the Term Loan, net of the repayment of related party debt due to SolarWinds Holdings, Inc., payment of intercompany trade payables, and fees and other transaction related costs, to SolarWinds. The Revolving Facility is primarily available for general corporate purposes. We had total borrowings of $331.7 million and $333.1 million as of September 30, 2025 and December 31, 2024, respectively, net of debt issuance costs of $4.3 million and $5.5 million, respectively. See Note 8. Debtin the Notes to Consolidated Financial Statements for further details regarding the Credit Agreement.

Previous wording

On March 11, 2025, our board of directors approved a share repurchase program (the “Repurchase Program”) authorizing the repurchase of up to $75.0 million of our common stock, par value $0.001 per share (the “Common Stock”). The timing and total amount of stock repurchases will depend upon business, economic, and market conditions, corporate and regulatory requirements, prevailing stock prices, and other considerations. The Repurchase Program has no expiration date, may be suspended or discontinued at any time without notice, and does not obligate the Company to acquire any specific dollar amount or numbers of shares of Common Stock. During the three months ended June 30, 2025, we repurchased $10.0 million of our common stock under the Repurchase Program. See Part II - Item 2. Unregistered Sales of Equity and Use of Proceedsfor additional information on the Repurchase Program.

Current wording

On March 11, 2025, our board of directors approved a share repurchase program (the “Repurchase Program”) authorizing the repurchase of up to $75.0 million of our common stock, par value $0.001 per share (the “Common Stock”). The timing and total amount of stock repurchases will depend upon business, economic, and market conditions, corporate and regulatory requirements, prevailing stock prices, and other considerations. The Repurchase Program has no expiration date, may be suspended or discontinued at any time without notice, and does not obligate the Company to acquire any specific dollar amount or numbers of shares of Common Stock. During the three and nine months ended September 30, 2025, we repurchased $10.0 million and $20.0 million of our common stock under the Repurchase Program, respectively. See Part II - Item 2. Unregistered Sales of Equity and Use of Proceedsfor additional information on the Repurchase Program.

Previous wording

During the three and six months ended June 30, 2025 and 2024, we did not have any relationships with unconsolidated organizations or financial partnerships, such as structured finance or special purpose entities that would have been established for the purpose of facilitating off-balance sheet arrangements or other contractually narrow or limited purposes.

Current wording

During the three and nine months ended September 30, 2025 and 2024, we did not have any relationships with unconsolidated organizations or financial partnerships, such as structured finance or special purpose entities that would have been established for the purpose of facilitating off-balance sheet arrangements or other contractually narrow or limited purposes.

Previous wording

Cash provided by operating activities increased for the six months ended June 30, 2025 as compared to the six months ended June 30, 2024, primarily due to an increase in non-cash items within net income and a net cash inflow resulting from changes in our operating assets and liabilities, partially offset by a decrease in net income. The net cash inflow resulting from changes in our operating assets and liabilities was primarily due to a decrease in recoverable taxes, a decrease in current contract assets, a decrease in income taxes receivable, a decrease in other long-term assets, and an increase in other long-term liabilities, partially offset by a decrease in income taxes payable, an increase in accounts receivable, a decrease in accrued liabilities and other, a decrease in deferred revenue, an increase in prepaid expenses and other assets, an increase in operating lease right-of-use assets, net, and a decrease in accounts payable. The net cash outflows of $2.7 million and $21.4 million resulting from changes in our operating assets and liabilities for the six months ended June 30, 2025 and 2024, respectively, excluding the changes noted above, was primarily due to the timing of sales, cash payments and receipts.

Current wording

Cash provided by operating activities increased for the nine months ended September 30, 2025 as compared to the nine months ended September 30, 2024, primarily due to an increase in non-cash items within net (loss) income of $33.0 million and a decrease in net cash outflows resulting from changes in our operating assets and liabilities of $18.9 million, partially offset by a decrease in net income of $37.5 million. The decrease in net cash outflows resulting from changes in our operating assets and liabilities of $18.9 million was primarily due to a decrease in recoverable taxes, a decrease in income taxes receivable, a decrease in current contract assets, a decrease in other long-term assets, an increase in accrued liabilities and other, an increase in other long-term liabilities, and an increase in accounts payable, partially offset by a decrease in income taxes payable, a decrease in deferred revenue, an increase in prepaid expenses and other assets, an increase in accounts receivable, and an increase in operating lease right-of-use assets, net.

Previous wording

Net cash used in investing activities increased for the six months ended June 30, 2025 as compared to the six months ended June 30, 2024, primarily due to an increase in capitalized research and development costs related to internal-use software and an increase in capital expenditures to support our domestic and international office locations, partially offset by an increase in the return of deposits in escrow.

Current wording

Net cash used in investing activities increased for the nine months ended September 30, 2025 as compared to the nine months ended September 30, 2024, primarily due to an increase in capitalized research and development costs related to internal-use software and an increase in capital expenditures to support our domestic and international office locations, partially offset by an increase in the return of deposits in escrow.

Previous wording

Net cash used in financing activities increased for the six months ended June 30, 2025 as compared to the six months ended June 30, 2024, primarily due to an increase in repurchases of our common stock, an increase in deferred acquisition payments, and a decrease in proceeds from exercises of stock options, partially offset by a decrease in payments of tax withholding obligations related to restricted stock and an increase in proceeds from the issuance of common stock under the Employee Stock Purchase Plan.

Current wording

Net cash used in financing activities increased for the nine months ended September 30, 2025 as compared to the nine months ended September 30, 2024, primarily due to an increase in repurchases of our common stock, an increase in deferred acquisition payments, a decrease in proceeds from the issuance of common stock under the Employee Stock Purchase Plan, and a decrease in proceeds from exercises of stock options, partially offset by a decrease in payments of tax withholding obligations related to restricted stock.