John Palyuka: in some state, in an autonomous state, that if not governed the right way, have the same ability to go delete data. And so I think there's a realization that this will happen. This could happen across small organizations or large organizations. And the ability to get back up and running is top of mind. Frankly, that's why we pitch business resilience, not cyber resilience. That's what we know when we're talking to our MSPs and we're talking to mid-market companies and small medium enterprises, what they're really worried about is avoiding disruption. And if there is disruption, how quick can we get back up and running? That's why we're really excited about DRAST. DRAST provides an immediate failover or near immediate failover. So if something happens via a threat actor, or friendly fire, or because an agent goes rogue on you, you have the ability to fail over and keep your business going. And so all of these things are creating a bunch more of demand. And there is, I'd say, a realization across the industry that this is more and more of a real thing as agents continue to proliferate across the IT environment.
Adam: Awesome. Thanks so much.
Operator: Your next question comes from the line of Jason Ader with William Blair. Your line is open. Please go ahead.
Jason Ader: Yeah, thank you. Good morning. A couple of things. First, on the macro environment, John, can you talk about any impact? Has it changed given the situation in the Middle East, the supply chain tightness going on out there? In Q1, did you see any changes kind of variance from what you've seen throughout 2025 on the macro front?
John Palyuka: Hey, Jason, thanks for the question. You know, as it relates to some of the geopolitical issues, no, we're not seeing, we're not seeing any, any slowdown from any geopolitical issues. We are, we are very international. A good amount of our businesses in the UK, a good amount of our businesses in Western Europe. But no, we're not, we're not really seeing any impact from what's going on, you know, related to what's going on in Iran.
Jason Ader: Okay. All right. And then, Tim, for you, just can you talk about the, I guess you've had a two-point NDR improvement over the last several quarters. Can you just talk through what is driving that improvement?
Tim: Yeah. So, on the NRR, Jason? Yes. Yeah. So, on the operational front, A lot of it's on the heels of the execution we've had with cross-selling MDR into the customer base. That's continued to be very successful and demand remains very healthy from that perspective. We also have some benefit from FX on the NRR rate as well. So the combination of those two things are the key drivers of the NRR improvement.
Jason Ader: Gotcha. Okay. And then
John Palyuka: um last last i guess last thing for you john you know what's the number one thing you want people to take away from the sprint yeah look i think the number one thing is that we're really well positioned in in this uh in this agentic era and that's not a a future state that's a now state we have uh we've introduced enzo which is an ai assistant in our uem offering which is really going to take a lot of the high volume operational work off the load of our technicians. And this is our first really, or our continuation of turning labor into software. And we're excited about that and we plan to do it and we are doing it across all three fronts. We pride ourselves on being the platform of choice for MSPs for before the attack, during the attack and after the attack, and we're layering in you know, an agentic technology to take the labor off of our MSPs, making them more efficient, making them more profitable. And in turn, we expect better GRR, better NRR, and being more of a critical piece of the MSP in the internal IT departments go forward. And the best way of doing that, frankly, is to make sure that AI is helping them run their business and driving the efficiency. And we believe we're well positioned there.
Jason Ader: Thank you.
Operator: Thank you for your question so far. We will now go to the next in queue. Your next question comes from the line of Joe Vandrick with Scotiabank. Your line is open. Please go ahead.
Joe Vandrick: Thanks for the question. John, can you talk about if you're seeing frontier AI cyber developments like Mythos and GPT 5.5 Cyber changing customer urgency around Enable's core products? I'm thinking especially around the automated patching and maybe endpoint, but backup and recovery as well. Are you seeing that show up in pipeline or maybe even just in customer conversations?
John Palyuka: Hey, Joe. Definitely in customer conversations, I wouldn't say it's necessarily showing up in pipeline. Look, patching and vulnerability management is a fundamental layer in cyber resilience and in overall business resilience. And so we've been preaching that for a while. I think it just makes it more top of mind, and folks need to make sure that they have a level of autonomous patching and vulnerability management, regardless of the environment. And as it relates to backup, I think I brought this up earlier with the previous call from Mike and his team. You know, it just it just provides another tailwind as to the use case, why you need to be able to back things up and more importantly, recover and recover in a near time way. So I think it's really just driving a lot more conversation and awareness across the industry. But by and large, you know, my MSPs that are in the upper quartile, They've been practicing this layered security approach. We've been helping them with that layered security approach. Again, this is why we think our best of breed platform approach is the right one for our customers. And because it helps tie in together and drive a lot more efficiency before the attack, during the attack, and after the attack, whether it's agentic or not. So it's definitely making some of these conversations that might have been out of vogue more in vogue. But, you know, and that's overall good for the community, good for the industry, and good for enables.
Joe Vandrick: Yep. Great. Makes sense. Um, and maybe one tactical one for Tim, um, how should we think about net new ARR for the remainder of the year? Um, is there any commentary that you can provide that can help us understand the trajectory throughout 2026?
Tim: Yeah, we, we touched on it slightly last quarter, um, that it was going to be more, more back half led than, than front half led, um, more so due to some of the, uh, the new offerings that we're bringing to market throughout the course of 2026. And that's specifically more so on the data protection side with Drafts and Google Backup that John touched on.
Joe Vandrick: Okay, great. Thanks, guys.
Operator: Your next question comes from the line of Eric Seppager with B. Riley Securities. Your line is open. Please go ahead.
Eric Seppager: Yeah, thanks for taking the question. And I apologize if this was asked. I'm balancing a couple of calls. But just curious, has the developments with Anthropic and Mythos highlighting new or highlighting zero-day attacks, Has that changed your customer behavior in terms of the way they're using Mable to do patch management and trying to move forward on more of an accelerated path to implementing patches in response to kind of a threat landscape that's getting more visible?
John Palyuka: We talked about this a little bit before. What it's really done is just, I think, making patching and vulnerability management, which is a fundamental layer in cyber resilience, more top of mind overall for the industry. But look, an internal IT department or an MSP, who is established, that is growing their business, that practices the right proper layered security, that is driving more of a compliance forward type of business, is executing on these areas already. And so it really just puts our solution more to the center of what it needs. And that's why, again, we believe the way that we're positioned for before the attack, and we talk about before the attack, that is patching, that is vulnerability management, that is monitoring and managing and during the attack with our threat hunting and our XDR, which is AI infused. And then of course, recovery, if you need to get things back up and going, we believe that's the right formula for internal IT departments and MSPs. And so tying these all together and adding an agentic layer that takes away from some of the high volume operational work from a technician, that's the right formula. Because at the end of the day, what AI will also do for the bad guys is accelerate their speed and their volume for the threats. And so we need to be able to give our customers the ability to fight fire with fire and provide them AI infused or AI led technology so they can keep up with the speed. Often the human is the bottleneck and it's our job here at Enable to give them the software. So it's not a labor burden, but it's on technology to one, keep their customers safe and also drive their efficiency. We mentioned in the prepared remarks an average MSP has an EBITDA of 10%. And a lot of that's because of the labor and on the high volume mundane tasks. And as we usher in the AI technology, our hope is to really break that linearity in the model, number one, to help them improve their EBITDA, but also be able to make sure that they're thwarting off any threats as a result of some of the AI in the wrong hands that And so all of this, frankly, is pointing, I think, to an area where cybersecurity will see a tailwind and it's making it more top of mind.
Eric Seppager: Very good. Thank you.
Operator: As a reminder, if you would like to ask a question, press star one to raise your hand. Our next question comes from the line of Keith Bachman with BMO. Your line is open. Please go ahead.
Adam: Hi, guys. This is Adam on for Keith. Thanks for the question. I wanted to circle back to the new products and ask that, you know, now that disaster recovery and ENZO are formally launched, what are adoption trends and uptake there relative to your prior expectations? And then inclusive of those as well as the Google Workspace launch expected later this year, are you guys embedding any expectations into the guide for revenue or ARR. Thank you.
John Palyuka: Hey, Adam. Thanks for the question. And it's good. That way I want to clarify. So DRAS is in limited preview right now. It's in customers' hands. We'll do the full launch a little bit later on in the back half of the year. To Tim's point, that's why we have the ARR building more to the back half of the year. It's early days. I'm happy to report that so far so good. We're building the pipeline. We have customers in preview. The experience so far, again, it's early days, has been really positive. And so we're excited there. On Enzo, it's also promising. Now, in Enzo, we're not going to directly monetize this in this first phase. But what we're seeing is MSPs coming back saying, hey, that saved me hours. You know, you're improving. certain tasks that I'm doing by 70%. And the feedback has been good. That being said, the use cases are limited right now. So our plan is to continue to expand those use cases. So we continue to get some of those reviews and savings from the labor. But so DRAST, just to be clear, that one will be directly monetizable. Enzo, in its initial phase, it's really going to be about helping the customer experience, driving our GRR, and helping them improve their profits as well. And then we'll layer in coworkers and other monetization paths as we continue on the agentic lane. As it relates to Google, that's more to the back half of the year. And we actually have customers in the queue and doing some limited preview there. But because of where that sits in the year, we're not necessarily baking that in into our financial plan just yet, just because that sits a little bit closer to the back half of the year. But good question. And look, this is also DRAS and backup for Google are the top two areas that people were requesting for backup and data protection for the last couple of years. And just as a reminder, as it relates to data protection, this will help us improve our win rate. Now that we have these offerings, it will help us with the expand, of course, because we'll be able to cross sell and it should help us with the GRR as well, because now we have that one complete offering that an MSP is looking for. So we're cautiously optimistic. Cove continues to be You know, fantastic offering, and our data protection area is our largest ARR area, and so we expect this to just accelerate the data protection story.
Adam: Got it. Thank you. And just to follow up, if I may, I just wanted to ask about packaging and pricing changes. I believe you previously mentioned there's going to be a one to two point net benefit for FY26. Is that still the expectation?
Tim: Yeah, I would say it's probably closer to the one, but yeah, we're still expecting a slight benefit from pricing and packaging overall on the year. Okay, got it. Great. Thank you.
Operator: There are no further questions at this time. I will now turn the call back to CEO John Palyuka for closing remarks.
John Palyuka: Thank you everyone for joining Enable's quarterly results. We'll see you next time. Thank you.
Operator: This concludes today's call. Thank you for attending. You may now disconnect.
