NABL

N-able is a subscription cybersecurity/MSP platform where the recurring engine is intact: subscription revenue (99% of the top line) grew 10.3% to $506M, ARR rose 11.9% to $539.7M, and the high-value cohort — customers with >$50K ARR — grew ~14% to 2,671 and now drives 61% of ARR. Gross margin remains a SaaS-grade 77.1%, and operating cash flow actually rose 17.3% to $93.2M against just $18.1M of capex, so free cash flow is roughly $75M. That is the real story, and it is a good one.

The headline scares people: net income swung to -$17.0M from +$31.0M, EPS -$0.09, ROE -2.1%. But the MD&A tells you why, and it is mostly non-cash and non-operational. Total cost of revenue jumped 45.1%, of which $13.4M is amortization of acquired technologies tied to the November 2024 Adlumin acquisition; D&A overall rose 71.3% to $44.1M, and interest expense climbed as long-term debt grew 18.3% to $390M to fund the deal. Operating income was still positive at $36.8M and cash generation improved — this is an accounting loss layered on top of a business that still throws off cash, not a company burning capital.