N-able, Inc.
For the period ended Mar 31, 2026. Filed May 7, 2026.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Mar 31, 2026 · Filed May 7, 2026
NABL$4.84-1.6%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-09-30; filed 2025-11-06.
0001834488-25-000172
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-03-31; filed 2026-05-07.
0001834488-26-000025
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 116 previous paragraphs and 101 current paragraphs.
60 unchanged; 29 reworded; 12 added; 22 removed; 5 previous and 0 current paragraphs rearranged.
Tables are not compared: 15 previous and 9 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (12)
Current report
N-able, Inc., a Delaware corporation, together with its subsidiaries (“Company”, “we,” “us” and “our”), protects businesses from evolving cyberthreats. Our AI powered cybersecurity platform delivers business resilience to more than 500,000 organizations worldwide, leveraging advanced end-to-end capabilities, simplified workflows, market-leading integrations, and flexible deployment options to improve efficiency and drive critical security outcomes. Our partner-first approach pairs our technology with experts, training, and peer-led events that empower customers to be secure, resilient, and successful.
Current report
First Quarter Financial Highlights
Current report
Operating Expenses
Current report
Income Tax Expense
Current report
Operating Expenses
Current report
Sales and Marketing. Sales and marketing expenses increased $2.2 million, or 5.4%, for the three months ended March 31, 2026 compared to the three months ended March 31, 2025, primarily due to increases in personnel costs driven by headcount and salary increases of $1.2 million, advertising and other marketing spend of $1.1 million, and trade show and events spend of $0.5 million, partially offset by a decrease in acquisition-related costs of $1.0 million.
Current report
Research and Development. Research and development expenses increased $2.3 million, or 9.4%, for the three months ended March 31, 2026 compared to the three months ended March 31, 2025, primarily driven by increases in personnel costs driven by headcount and salary increases of $1.1 million, allocated facilities and IT costs of $0.6 million, and contract services costs of $0.5 million.
Current report
General and Administrative. General and administrative expenses decreased $3.7 million, or 15.3%, for the three months ended March 31, 2026 compared to the three months ended March 31, 2025, primarily due to decreases in acquisition-related costs of $4.8 million and rent and allocated facilities and IT costs of $0.8 million, partially offset by increases in bad debt expense of $0.9 million and restructuring costs of $0.5 million.
Current report
Other (Expense) Income, Net
Current report
Income Tax Expense
Current report
Goodwill
Current report
During the three months ended March 31, 2026, we experienced a significant decline in our stock price. A continued and sustained decline in our stock price, when considered in conjunction with other relevant qualitative factors, could indicate a reduction in fair value below the carrying value of our reporting unit and require an interim goodwill impairment analysis. Any resulting goodwill impairment charge could have a material adverse impact on our results of operations. Throughout the remainder of fiscal 2026, the Company will monitor changes to its stock price, in addition to other qualitative factors, to determine if an interim impairment test is required.
Removed paragraphs (22)
Previous report
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 report
On August 6, 2020, SolarWinds Corporation (“SolarWinds” or “Parent”) announced that its board of directors had authorized management to explore a potential spin-off of its MSP business into our company, a newly created and separately traded public company, and separate into two distinct, publicly traded companies (the “Separation”). On July 19, 2021, SolarWinds completed the Separation through a pro-rata distribution (the “Distribution”) of all the outstanding shares of our common stock it held to the stockholders of record of SolarWinds as of the close of business on July 12, 2021. As a result of the Distribution, we became an independent public company and our common stock is listed under the symbol “NABL” on the New York Stock Exchange.
Previous report
Third Quarter Financial Highlights
Previous report
Our total revenue was $131.7 million and $116.4 million for the three months ended September 30, 2025 and 2024, respectively.
Previous report
$3.7 million related to the November 20, 2024 acquisition of Adlumin, an increase in personnel costs driven by headcount and salary increases of $1.1 million, and an increase in depreciation of servers and amortization of capitalized internal-use software costs of $0.7 million.
Previous report
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 report
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 report
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 report
Other Income, Net
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Comparison of the Nine Months Ended September 30, 2025 and 2024
Previous report
Revenue
Previous report
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 report
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 report
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 report
Sales and Marketing. Sales and marketing expenses increased $22.3 million, or 22.1%, for the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024, primarily due to an increase in personnel costs driven by headcount and salary increases of $15.6 million, which includes an increase in stock-based compensation expense of
Previous report
$1.7 million, an increase in transaction related costs of $3.1 million, an increase in travel and event-related costs of $2.2 million, an increase in subscription costs of $1.4 million, and an increase in administrative fees of $0.6 million, partially offset by a decrease in contract services costs of $0.5 million, a decrease in advertising expense of $0.5 million, and an increase in capitalized commissions of $0.2 million.
Previous report
Research and Development. Research and development expenses increased $7.9 million, or 11.8%, for the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024, primarily due to an increase in personnel costs driven by headcount and salary increases of $10.2 million, which includes an increase in stock-based compensation expense of $0.9 million, an increase in subscription costs of $1.3 million, an increase in contract services costs of $1.3 million, and an increase in travel-related costs of $0.4 million, partially offset by a net increase in capitalized internal-use software costs of $4.5 million and a decrease in allocated facilities and IT costs of $0.8 million.
Previous report
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 report
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 report
Interest Expense, Net
Previous report
Other Income, Net
Previous report
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.
Reworded paragraphs (29)
Previous wording
The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our Consolidated Financial Statements and related notes thereto included elsewhere in this Quarterly Report on Form 10-Q. In addition to historical consolidated financial information, the following discussion contains forward-looking statements that reflect our plans, estimates and beliefs. Our actual results could differ materially and adversely from those anticipated in the forward-looking statements. Please see the section entitled “Safe Harbor Cautionary Statement” above and the risk factors described in “Item 1A. Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2024, for a discussion of the uncertainties, risks and assumptions associated with these statements. The following discussion and analysis also includes a discussion of certain non-GAAP financial measures. For a description and reconciliation of the non-GAAP measures discussed in this section, see “Non-GAAP Financial Measures” below.
Current wording
The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our Consolidated Financial Statements and related notes thereto included elsewhere in this report. In addition to historical consolidated financial information, the following discussion contains forward-looking statements that reflect our plans, estimates and beliefs. Our actual results could differ materially and adversely from those anticipated in the forward-looking statements. Please see the section entitled “Safe Harbor Cautionary Statement” and “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2025, for a discussion of the uncertainties, risks and assumptions associated with these statements. The following discussion and analysis also includes a discussion of certain non-GAAP financial measures. For a description and reconciliation of the non-GAAP measures discussed in this section, see “Non-GAAP Financial Measures” below.
Previous wording
During theyear ended December 31, 2024, we began increasing the proportion of our subscriptions that are long-term committed contracts, as compared to month-to-month contracts (the “Long-Term Contract Initiative”). Under Accounting Standards Update No. 2014-09, “Revenue from Contracts with Customers (“Topic 606”),” we recognize revenue for long-term subscriptions when the distinct license is made available to the customer, and support revenue is recognized ratably over the contract term. Revenue from the license performance obligation of our self-managed solutions is recognized at a point in time upon delivery of the access to the licenses and revenue from the performance obligation related to the technical support and unspecified software upgrades of our subscription-based license arrangements is recognized ratably over the agreement period. The Long-Term Contract Initiative results in an increase in point in time subscription revenue, primarily due to the impact of revenue recognition for long-term committed contracts under Topic 606, net of any volume and pricing rationalization when committing to long-term subscriptions and any fluctuations in month-to-month contracts. See Note 2. Summary of Significant Accounting Policies in the Notes to Cons olidated Financial Statementsfor further details regarding revenue recognized from subscription and other services at a point in time and over time.
Current wording
Our total revenue was $133.7 million and $118.2 million for the three months ended March 31, 2026 and 2025, respectively. See Note 2. Summary of Significant Accounting Policies in the Notes to Cons olidated Financial Statementsfor further details regarding revenue recognized from subscription and other services.
Previous 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.
Current wording
Total annual recurring revenue (“ARR”) as of March 31, 2026 was $548.0 million, compared to $492.7 million as of March 31, 2025, representing an increase of 11.2%. This increase was primarily due to steady demand for our solutions.
Previous 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.
Current wording
As of March 31, 2026, we had 2,710 customers with ARR over $50,000 on our platform, up from 2,398 as of March 31, 2025, representing an increase of 13.0%. Over the same period, customers with over $50,000 of ARR on our platform grew from approximately 58% of our total ARR as of March 31, 2025 to approximately 62% of our total ARR as of March 31, 2026.
Previous 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.
Current wording
Our operating income for the three months ended March 31, 2026 was $12.5 million, compared to operating income of $1.8 million for the three months ended March 31, 2025. Our net loss for the three months ended March 31, 2026 was $0.6 million, compared to net loss of $7.2 million for the three months ended March 31, 2025. The decrease in net loss for the three months ended March 31, 2026 was primarily due to an increase in revenue and a decrease in general and administrative expense, offset in part by increases in cost of revenue, other expense, net, research and development expense, sales and marketing expense, income tax expense, and amortization of developed technologies. Our Adjusted EBITDA, calculated as net loss of $0.6 million and $7.2 million for the three months ended March 31, 2026 and 2025, respectively, excluding amortization of acquired intangibles and developed technology of $6.6 million and $6.2 million, respectively, depreciation expense of $4.8 million and $4.2 million, respectively, income tax expense of $4.8 million and $3.3 million, respectively, interest expense, net of $7.6 million and $7.1 million, respectively, unrealized foreign currency losses (gains) of $1.1 million and $(0.8) million, respectively, transaction related costs of $0.2 million and $6.3 million, respectively, stock-based compensation expense and related employer-paid payroll taxes of $11.8 million and $12.7 million, respectively, and restructuring costs and other of $0.5 million and $(0.1) million, respectively, was $36.7 million and $31.6 million for the three months ended March 31, 2026 and 2025, 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 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.
Current wording
We have built our business to generate strong cash flow over the long term. For the three months ended March 31, 2026 and 2025, cash flows from operations were $17.5 million and $19.7 million, respectively. Our cash flows from operations were reduced by cash payments for interest of $6.9 million and $6.4 million for the three months ended March 31, 2026 and 2025, respectively, and cash payments for income taxes of $5.6 million and $2.2 million for the three months ended March 31, 2026 and 2025, respectively.
Previous wording
•Other Revenue. Other revenue consists primarily of revenue from the sale of our maintenance services associated with the historical sales of perpetual licenses and revenue from professional services. MSP customers with maintenance agreements are entitled to receive technical support and unspecified upgrades or enhancements to new versions of their solutions on a when-and-if-available basis for the specified agreement period.
Current wording
•Other Revenue. Other revenue consists primarily of revenue from the sale of our maintenance services associated with the historical sales of perpetual licenses and revenue from professional services. Customers with maintenance agreements are entitled to receive technical support and unspecified upgrades or enhancements to new versions of their solutions on a when-and-if-available basis for the specified agreement period.
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 1,878, 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.
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 1,863, 1,852, and 1,800 as of March 31, 2026, December 31, 2025, and March 31, 2025, respectively. Our stock-based compensation expense decreased during the three months ended March 31, 2026 as compared to the corresponding period of the prior fiscal year primarily due a decrease in the fair value of equity awards granted to employees as a result of a decline in our stock price during the three months ended March 31, 2026. We expect stock-based compensation expense to continue to decrease during the remainder of the year ending December 31, 2026.
Previous wording
•Amortization of Acquired Intangibles. We amortize to operating expenses capitalized costs of intangible assets primarily acquired in connection with the July 1, 2022 acquisition of Spinpanel and the November 20, 2024 acquisition of Adlumin.
Current wording
•Amortization of Acquired Intangibles. We amortize to operating expenses capitalized costs of intangible assets primarily acquired in connection with the take private transaction of SolarWinds in early 2016 and subsequent business combinations, including the late July 1, 2022 acquisition of Spinpanel and the November 20, 2024 acquisition of Adlumin. Amortization related to the take private transaction of SolarWinds concluded during the three months ended March 31, 2023.
Previous wording
Other expense, net primarily consists of interest expense related to the Credit Agreement and the Adlumin deferred consideration liability and losses resulting from changes in exchange rates on foreign currency denominated accounts, partially offset by gains resulting from changes in exchange rates on foreign currency denominated accounts, dividend income from our money market fund financial assets and interest income on recoverable taxes. See Item 3. Quantitative and Qualitative Disclosures About Market Risk for additional information on how interest rates impact our financial results.
Current wording
Other expense, net primarily consists of interest expense related to the Credit Agreement and losses resulting from changes in exchange rates on foreign currency denominated accounts, partially offset by gains resulting from changes in exchange rates on foreign currency denominated accounts and dividend income from our money market fund financial assets. See Item 3. Quantitative and Qualitative Disclosures About Market Risk for additional information on how interest rates impact our financial results.
Previous 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.
Current wording
Total revenue increased $15.5 million, or 13.1%, for the three months ended March 31, 2026 compared to the three months ended March 31, 2025. We base revenue by geography on the billing address of each customer. Based on customer location, revenue from the United States was approximately 48.5% and 51.2% of total revenue for the three months ended March 31, 2026 and 2025, respectively. Revenue from the United Kingdom was approximately 10.4% and 10.0% of total revenue for the three months ended March 31, 2026 and 2025, 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 $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.
Current wording
Subscription Revenue. Subscription revenue increased $15.6 million, or 13.4%, for the three months ended March 31, 2026 compared to the three months ended March 31, 2025. The increase in subscription revenue was primarily driven by increased traction across our cybersecurity platform. Subscription revenue as a percentage of our total revenue was 99.1% for the three months ended March 31, 2026, compared to 98.9% for the three months ended March 31, 2025.
Previous 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.
Current wording
Our annual dollar-based net revenue retention rate for our subscription products was approximately 106% and 101% for the trailing twelve-month periods ended March 31, 2026 and 2025, respectively. The 106% dollar-based net revenue retention rate reflects the impact from our pricing and packaging changes. 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 $0.3 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.
Current wording
Other Revenue. Other revenue decreased $0.1 million, or 9.8%, for the three months ended March 31, 2026 compared to the three months ended March 31, 2025, primarily due to decreases in maintenance revenue and professional services revenue. Other revenue as a percentage of our total revenue was 0.9% for the three months ended March 31, 2026, compared to 1.1% for the three months ended March 31, 2025.
Previous 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
Current wording
Total cost of revenue increased $4.1 million, or 14.7%, for the three months ended March 31, 2026 compared to the three months ended March 31, 2025, primarily due to increases in public cloud infrastructure and hosting fees and royalties related to our subscription products of $3.5 million and depreciation of servers and amortization of capitalized internal-use software costs of $0.8 million.
Previous 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.
Current wording
Amortization of Acquired Intangibles. Amortization of acquired intangibles remains relatively unchanged for the three months ended March 31, 2026 compared to the three months ended March 31, 2025, and relates to the November 20, 2024 acquisition of Adlumin.
Previous 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.
Current wording
Interest expense, net decreased by $0.5 million, or 7.3%, for the three months ended March 31, 2026 compared to the three months ended March 31, 2025, primarily due to a decrease in tax-related interest income of $1.0 million related to prior year CRA refunds in Canada, partially offset by a decrease in expense of $0.6 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 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 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.
Current wording
Other (expense) income, net decreased by $2.1 million, or 149.3%, for the three months ended March 31, 2026 compared to the three months ended March 31, 2025, primarily due to increased losses due to the impact of exchange rates on foreign currency denominated accounts of $2.2 million
Previous 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.
Current wording
Our income tax expense for the three months ended March 31, 2026 increased by $1.5 million as compared to the three months ended March 31, 2025. The effective tax rate increased to 114.7% for the same period primarily due to an increase in income taxes on income outside of the United States, partially offset by a decrease in the amount of the unbenefited loss in the United States.
Previous wording
We regularly monitor adjusted EBITDA and adjusted EBITDA margin, as they are measures we use to assess our operating performance. We define adjusted EBITDA as net income or loss, excluding amortization of acquired intangibles and developed technology, depreciation expense, income tax expense (benefit), interest expense, net, unrealized foreign currency losses (gains), transaction related costs, spin-off costs, stock-based compensation expense and related employer-paid payroll taxes and restructuring and other costs. We define adjusted EBITDA margin as adjusted EBITDA divided by total revenue. Adjusted EBITDA has limitations as an analytical tool, and you should not consider it in isolation or as a substitute for analysis of our results as reported under GAAP. Some of these limitations include:
Current wording
We regularly monitor adjusted EBITDA and adjusted EBITDA margin, as they are measures we use to assess our operating performance. We define adjusted EBITDA as net income or loss, excluding amortization of acquired intangibles and developed technology, depreciation expense, income tax expense, interest expense, net, unrealized foreign currency losses (gains), transaction related costs, spin-off costs, stock-based compensation expense and related employer-paid payroll taxes and restructuring and other costs. We define adjusted EBITDA margin as adjusted EBITDA divided by total revenue. Adjusted EBITDA has limitations as an analytical tool, and you should not consider it in isolation or as a substitute for analysis of our results as reported under GAAP. Some of these limitations include:
Previous 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.
Current wording
Because of these limitations, you should consider adjusted EBITDA alongside other financial performance measures, including operating income and net 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 $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.
Current wording
Cash and cash equivalents were $117.8 million as of March 31, 2026. As our sales and operating cash flows are primarily generated in the United Kingdom and Canada, our international subsidiaries held approximately $105.4 million of cash and cash equivalents, of which 68.3%, 19.0%, 3.8% and 3.6% were held in United States Dollars, Euros, Canadian Dollars 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 $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.
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 $393.1 million and $393.9 million as of March 31, 2026 and December 31, 2025, respectively, net of debt issuance costs of $(5.9) million and $6.1 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 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.
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. Under the Repurchase Program, we repurchased 3,776,155 shares for $30.0 million during the year ended December 31, 2025. As of March 31, 2026, we are authorized to repurchase a remaining $45.0 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.
Previous 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.
Current wording
During the three months ended March 31, 2026 and 2025, 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 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.
Current wording
Cash provided by operating activities decreased for the three months ended March 31, 2026 as compared to the three months ended March 31, 2025, primarily due to an increase in net cash outflows resulting from changes in our operating assets and liabilities of $7.9 million and a decrease in non-cash items within net loss of $0.9 million, offset in part by a decrease in net loss of $6.5 million. The increase in net cash outflows resulting from changes in our operating assets and liabilities of $7.9 million was primarily due to a decrease in accrued liabilities and other, an increase in recoverable taxes, and decreases in deferred revenue and income taxes payable, offset in part by a decrease in prepaid expenses and other current assets, an increase in accounts payable, and decreases in accounts receivable, current contract assets, and other long-term assets.
Previous 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.
Current wording
Net cash used in investing activities decreased for the three months ended March 31, 2026 as compared to the three months ended March 31, 2025, primarily due to decreases in capital expenditures to support our domestic and international office locations and capitalized research and development costs related to internal-use software.
Previous 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.
Current wording
Net cash used in financing activities decreased for the three months ended March 31, 2026 as compared to the three months ended March 31, 2025, primarily due to a decrease in payments of tax withholding obligations related to restricted stock, offset in part by an increase in repayments of borrowing related to the Credit Agreement and a decrease in proceeds from the issuance of common stock under the Employee Stock Purchase Plan.
Previous wording
A full description of our critical accounting policies that involve significant management judgment appears in our 2024 Annual Report. There have been no material changes to our critical accounting policies and estimates since that time.
Current wording
A full description of our critical accounting policies that involve significant management judgment appears in our 2025 Annual Report. There have been no material changes to our critical accounting policies and estimates as compared to those disclosed in our 2025 Annual Report, except as described below.
Rearranged previous paragraphs (5)
Previous report — wording carried elsewhere
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 report — wording carried elsewhere
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 report — wording carried elsewhere
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 report — wording carried elsewhere
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 report — wording carried elsewhere
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.