Tenable Announces First Quarter 2025 Financial Results

Revenue of $239.1 million, up 11% year-over-year.Calculated current billings of $215.4 million, up 9% year-over-year.GAAP operating margin of (7)%; Non-GAAP operating margin of 20%.Net cash provided by operating activities of $87.4 million; Unlevered free cash flow of $86.8 million. COLUMBIA, Md., April 29, 2025 (GLOBE NEWSWIRE) -- Tenable Holdings, Inc. ("Tenable") (Nasdaq: TENB), the exposure management company, today announced financial results for the quarter ended March 31, 2025. "We had a strong start to the year with better-than-expected results on both the top and bottom line," said Steve Vintz, Co-CEO of Tenable. "With our ongoing investments in areas like AI and integrations with third-party tools and data sources we are helping our customers reduce risk with greater efficiency." "We had some incredible six- and seven-figure deals this quarter driving upside to our expectations and representing significant ongoing opportunities," said Mark Thurmond, Co-CEO of Tenable. "Our outperformance was driven by continued momentum with Tenable One as we build strategic partnerships resulting in larger deal sizes, broader platform adoption, and greater asset coverage." First Quarter 2025 Financial Highlights Revenue was $239.1 million, an 11% increase year-over-year.Calculated current billings was $215.4 million, a 9% increase year-over-year.GAAP loss from operations was $17.7 million, compared to $8.9 million in the first quarter of 2024.Non-GAAP income from operations was $48.7 million, compared to $37.0 million in the first quarter of 2024.GAAP net loss was $22.9 million, compared to $14.4 million in the first quarter of 2024.GAAP net loss per share was $0.19, compared to $0.12 in the first quarter of 2024.Non-GAAP net income was $44.3 million, compared to $30.4 million in the first quarter of 2024.Non-GAAP diluted earnings per share was $0.36, compared to $0.25 in the first quarter of 2024.Cash and cash equivalents and short-term investments were $460.3 million at March 31, 2025, compared to $577.2 million at December 31, 2024.Net cash provided by operating activities was $87.4 million, compared to $50.3 million in the first quarter of 2024.Unlevered free cash flow was $86.8 million, compared to $54.7 million in the first quarter of 2024.Repurchased 1.6 million shares of our common stock for $60.0 million Recent Business Highlights Added 361 new enterprise platform customers and 54 net new six-figure customers.Completed the acquisition of Vulcan Cyber Ltd., which is expected to enhance our industry-leading exposure management platform, delivering comprehensive visibility, prioritization and remediation across the entire attack surface.Released Identity 360 and Exposure Center, two capabilities designed to help organizations pinpoint identity risks and take swift, targeted action to prevent identity-based attacks.Achieved FedRAMP moderate authorization of Tenable One and Tenable Cloud Security, underscoring our commitment to strengthening government infrastructure and reducing cybersecurity risk to support national security.Published the 2025 Cloud AI Risk Report, examining the current state of security risks in cloud AI development tools and frameworks and in AI services offered by the three major cloud providers. Financial Outlook For the second quarter of 2025, we currently expect: Revenue in the range of $241.0 million to $243.0 million.Non-GAAP income from operations in the range of $43.0 million to $45.0 million.Non-GAAP net income in the range of $36.0 million to $38.0 million, assuming interest expense of $7.1 million, interest income of $4.0 million and a provision for income taxes of $3.2 million.Non-GAAP diluted earnings per share in the range of $0.29 to $0.31.123.0 million diluted weighted average shares outstanding. For the year ending December 31, 2025, we currently expect: Calculated current billings in the range of $1.025 billion to $1.045 billion.Revenue in the range of $970.0 million to $980.0 million.Non-GAAP income from operations in the range of $205.0 million to $215.0 million.Non-GAAP net income in the range of $178.0 million to $188.0 million, assuming interest expense of $28.4 million, interest income of $16.8 million and a provision for income taxes of $13.1 million.Non-GAAP diluted earnings per share in the range of $1.44 to $1.52.123.5 million diluted weighted average shares outstanding.Unlevered free cash flow in the range of $265.0 million to $275.0 million. Conference Call Information Tenable will host a conference call on April 29, 2025 at 4:30 p.m. Eastern Time to discuss its financial results. The conference call can be accessed at 877-407-9716 (U.S.) and 201-493-6779 (international). A live webcast of the event will be available on the Tenable Investor Relations website at https://investors.tenable.com. An archived replay of the live broadcast will be available on the Investor Relations page of the website following the call. About Tenable Tenable® is the exposure management company, exposing and closing the cybersecurity gaps that erode business value, reputation and trust. The company’s AI-powered exposure management platform radically unifies security visibility, insight and action across the attack surface, equipping modern organizations to protect against attacks from IT infrastructure to cloud environments to critical infrastructure and everywhere in between. By protecting enterprises from security exposure, Tenable reduces business risk for approximately 44,000 customers around the globe. Learn more at tenable.com. Contact Information Investor Relationsinvestors@tenable.com Media Relationstenablepr@tenable.com Forward-Looking Statements This press release includes forward-looking statements within the meaning of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. All statements contained in this press release other than statements of historical fact, including statements regarding our future results of operations and financial position, our platform's ability to help protect enterprises from security exposure and streamline vulnerability analysis and response, business strategy and plans and objectives for future operations, are forward-looking statements and represent our views as of the date of this press release. The words “anticipate,” "believe,” “continue,” “estimate,” “expect,” “intend,” “may,” “will” and similar expressions are intended to identify forward-looking statements. We have based these forward-looking statements on our current expectations and projections about future events and financial trends that we believe may affect our financial condition, results of operations, business strategy, short-term and long-term business operations and objectives and financial needs. These forward-looking statements are subject to a number of assumptions and risks and uncertainties, many of which involve factors or circumstances that are beyond our control that could affect our financial results. These risks and uncertainties are detailed in the sections titled "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" in our Annual Report on Form 10-K for the year ended December 31, 2024 and other filings that we make from time to time with the SEC, which are available on the SEC's website at sec.gov. Moreover, we operate in a very competitive and rapidly changing environment. New risks emerge from time to time. It is not possible for our management to predict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements we may make. In light of these risks, uncertainties and assumptions, the future events and trends discussed in this press release may not occur and actual results could differ materially and adversely from those anticipated or implied in any forward-looking statements. Except as required by law, we are under no obligation to update these forward-looking statements subsequent to the date of this press release, or to update the reasons if actual results differ materially from those anticipated in the forward-looking statements. Non-GAAP Financial Measures To supplement our consolidated financial statements, which are prepared and presented in accordance with GAAP, we use certain non-GAAP financial measures, as described below, to understand and evaluate our core operating performance. These non-GAAP financial measures, which may be different than similarly titled measures used by other companies, are presented to enhance the overall understanding of our financial performance and should not be considered a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP. We believe that these non-GAAP financial measures provide useful information about our financial performance, enhance the overall understanding of our past performance and future prospects and allow for greater transparency with respect to important metrics used by management for financial and operational decision-making. We include these non-GAAP financial measures to present our financial performance using a management view and because we believe that these measures provide an additional comparison of our core financial performance over multiple periods with other companies in our industry. Reconciliations of non-GAAP financial measures to the most directly comparable GAAP financial measures are included in the financial tables accompanying this press release. Calculated Current Billings: We define calculated current billings, a non-GAAP financial measure, as total revenue recognized in a period plus the change in current deferred revenue in the corresponding period. We believe that calculated current billings is a key metric to measure our periodic performance. Given that most of our customers pay in advance (including multi-year contracts), but we generally recognize the related revenue ratably over time, we use calculated current billings to measure and monitor our ability to provide our business with the working capital generated by upfront payments from our customers. We believe that calculated current billings, which excludes deferred revenue for periods beyond twelve months in a customer’s contractual term, more closely correlates with annual contract value and that the variability in total billings, depending on the timing of large multi-year contracts and the preference for annual billing versus multi-year upfront billing, may distort growth in one period over another. Free Cash Flow and Unlevered Free Cash Flow: We define free cash flow, a non-GAAP financial measure, as net cash provided by operating activities less purchases of property and equipment and capitalized software development costs. We believe free cash flow is an important liquidity measure of the cash that is available (if any), after purchases of property and equipment and capitalized software development costs, for investment in our business and to make acquisitions. We believe that free cash flow is useful as a liquidity measure because it measures our ability to generate cash. We define unlevered free cash flow as free cash flow plus cash paid for interest and other financing costs. We believe unlevered free cash flow is useful as a liquidity measure as it measures the cash that is available to invest in our business and meet our current debt obligations and future financing needs. However, given our debt obligations, non-cancelable commitments and other contractual obligations, unlevered free cash flow does not represent residual cash flow available for discretionary expenses. Non-GAAP Income from Operations and Non-GAAP Operating Margin: We define these non-GAAP financial measures as their respective GAAP measures, excluding the effect of stock-based compensation, acquisition-related expenses, restructuring expenses, costs related to the intra-entity asset transfers resulting from the internal restructuring of legal entities, and amortization of acquired intangible assets. Acquisition-related expenses include transaction and integration expenses, as well as costs related to the intercompany transfer of acquired intellectual property. Restructuring expenses include non-ordinary course severance, employee related benefits, and other charges to reorganize business operations. We believe that the exclusion of these expenses provides for a useful comparison of our operating results to prior periods and to our peer companies, which commonly exclude restructuring expenses. Non-GAAP Net Income and Non-GAAP Earnings Per Share: We define non-GAAP net income as GAAP net loss, excluding the effect of stock-based compensation, acquisition-related expenses, restructuring expenses and amortization of acquired intangible assets, including the applicable tax impacts. In addition, we exclude the tax impact and related costs of intra-entity asset transfers resulting from the internal restructuring of legal entities as well as deferred income tax benefits recognized in connection with acquisitions. We use non-GAAP net income to calculate non-GAAP earnings per share. Non-GAAP Gross Profit and Non-GAAP Gross Margin: We define non-GAAP gross profit as GAAP gross profit, excluding the effect of stock-based compensation and amortization of acquired intangible assets. Non-GAAP gross margin is defined as non-GAAP gross profit as a percentage of revenue. Non-GAAP Sales and Marketing Expense, Non-GAAP Research and Development Expense and Non-GAAP General and Administrative Expense: We define these non-GAAP measures as their respective GAAP measures, excluding stock-based compensation, acquisition-related expenses and costs related to intra-entity asset transfers resulting from the internal restructuring of legal entities. TENABLE HOLDINGS, INC.CONSOLIDATED STATEMENTS OF OPERATIONS(unaudited) Three Months Ended March 31,(in thousands, except per share data)2025 2024Revenue$239,137 $215,961 Cost of revenue(1) 52,460 48,932 Gross profit 186,677 167,029 Operating expenses: Sales and marketing(1) 103,182 99,825 Research and development(1) 53,223 43,727 General and administrative(1) 47,983 31,018 Restructuring — 1,389 Total operating expenses 204,388 175,959 Loss from operations (17,711) (8,930)Interest income 4,927 5,624 Interest expense (7,011) (8,112)Other income (expense), net 474 (1,310)Loss before income taxes (19,321) (12,728)Provision for income taxes 3,614 1,658 Net loss$(22,935) $(14,386) Net loss per share, basic and diluted$(0.19) $(0.12)Weighted-average shares used to compute net loss per share, basic and diluted 120,083 117,542 _______________ (1) Includes stock-based compensation as follows: Three Months Ended March 31, 2025 2024Cost of revenue$3,315 $2,982 Sales and marketing 16,630 15,300 Research and development 12,967 11,161 General and administrative(2) 22,991 10,276 Total stock-based compensation$55,903 $39,719 _______________ (2) Stock-based compensation in the three months ended March 31, 2025 includes $14.6 million of expense related to the accelerated vesting of equity awards for our late CEO. TENABLE HOLDINGS, INC.CONSOLIDATED BALANCE SHEETS March 31, 2025 December 31, 2024(in thousands, except per share data)(unaudited) Assets Current assets: Cash and cash equivalents$233,441 $328,647 Short-term investments 226,836 248,547 Accounts receivable (net of allowance for doubtful accounts of $748 and $525 at March 31, 2025 and December 31, 2024, respectively) 167,793 258,734 Deferred commissions 51,247 51,791 Prepaid expenses and other current assets 67,106 53,026 Total current assets 746,423 940,745 Property and equipment, net 41,343 39,265 Deferred commissions (net of current portion) 65,582 67,914 Operating lease right-of-use assets 40,951 45,139 Acquired intangible assets, net 128,597 94,461 Goodwill 656,481 541,292 Other assets 14,200 13,303 Total assets$1,693,577 $1,742,119 Liabilities and Stockholders’ Equity Current liabilities: Accounts payable and accrued expenses$17,684 $19,981 Accrued compensation 51,432 55,784 Deferred revenue 633,224 650,372 Operating lease liabilities 6,305 6,801 Other current liabilities 6,346 5,154 Total current liabilities 714,991 738,092 Deferred revenue (net of current portion) 175,151 182,815 Term loan, net of issuance costs (net of current portion) 356,068 356,705 Operating lease liabilities (net of current portion) 54,621 56,224 Other liabilities 9,585 8,329 Total liabilities 1,310,416 1,342,165 Stockholders’ equity: Common stock (par value: $0.01; 500,000 shares authorized; 124,484 and 122,371 shares issued at March 31, 2025 and December 31, 2024, respectively) 1,245 1,224 Additional paid-in capital 1,440,770 1,374,659 Treasury stock (at cost: 4,282 and 2,673 shares at March 31, 2025 and December 31, 2024, respectively) (174,911) (114,911)Accumulated other comprehensive income 328 318 Accumulated deficit (884,271) (861,336)Total stockholders’ equity 383,161 399,954 Total liabilities and stockholders’ equity$1,693,577 $1,742,119 TENABLE HOLDINGS, INC.CONSOLIDATED STATEMENTS OF CASH FLOWS(unaudited) Three Months Ended March 31,(in thousands)2025 2024Cash flows from operating activities: Net loss$(22,935) $(14,386)Adjustments to reconcile net loss to net cash provided by operating activities: Depreciation and amortization 9,854 8,232 Stock-based compensation 55,903 39,719 Net accretion of discounts and amortization of premiums on short-term investments (1,180) (2,284)Amortization of debt issuance costs 349 329 Other 979 1,611 Changes in operating assets and liabilities: Accounts receivable 92,968 63,437 Prepaid expenses and other assets (9,875) 5,216 Accounts payable, accrued expenses and accrued compensation (8,491) (22,017)Deferred revenue (32,507) (27,789)Other current and noncurrent liabilities 2,342 (1,742)Net cash provided by operating activities 87,407 50,326 Cash flows from investing activities: Purchases of property and equipment (6,553) (665)Capitalized software development costs (624) (2,532)Purchases of short-term investments (38,445) (77,465)Sales and maturities of short-term investments 61,345 65,570 Proceeds from other investments 664 3,512 Business combinations, net of cash acquired (148,510) — Net cash used in investing activities (132,123) (11,580) Cash flows from financing activities: Payments on term loan (938) (938)Proceeds from stock issued in connection with the employee stock purchase plan 9,701 9,884 Proceeds from the exercise of stock options 347 1,874 Purchase of treasury stock (60,000) (24,991)Net cash used in financing activities (50,890) (14,171)Effect of exchange rate changes on cash and cash equivalents and restricted cash 400 (1,730)Net (decrease) increase in cash and cash equivalents and restricted cash (95,206) 22,845 Cash and cash equivalents and restricted cash at beginning of period 328,647 237,132 Cash and cash equivalents and restricted cash at end of period$233,441 $259,977 TENABLE HOLDINGS, INC.REVENUE COMPONENTS AND RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES(unaudited)RevenueThree Months Ended March 31,(in thousands)2025 2024Subscription revenue$220,443 $197,635 Perpetual license and maintenance revenue 11,552 12,156 Professional services and other revenue 7,142 6,170 Revenue(1)$239,137 $215,961 _______________ (1) Recurring revenue, which includes revenue from subscription arrangements for software (both recognized ratably over the subscription term and upon delivery) and cloud-based solutions and maintenance associated with perpetual licenses, represented 96% of revenue in the three months ended March 31, 2025 and 2024. Calculated Current BillingsThree Months Ended March 31,(in thousands)2025 2024Revenue$239,137 $215,961 Deferred revenue (current), end of period 633,224 562,575 Deferred revenue (current), beginning of period(1) (657,001) (580,779)Calculated current billings$215,360 $197,757 ________________(1) Deferred revenue (current), beginning of period for the three months ended March 31, 2025 includes $6.6 million related to acquired deferred revenue. Remaining Performance ObligationsMarch 31,(in thousands)2025 2024Remaining performance obligations, short-term$647,647 $572,851 Remaining performance obligations, long-term 234,598 169,560 Remaining performance obligations$882,245 $742,411 Free Cash Flow and Unlevered Free Cash FlowThree Months Ended March 31,(in thousands)2025 2024Net cash provided by operating activities$87,407 $50,326 Purchases of property and equipment (6,553) (665)Capitalized software development costs (624) (2,532)Free cash flow 80,230 47,129 Cash paid for interest and other financing costs 6,574 7,611 Unlevered free cash flow$86,804 $54,740 Free cash flow and unlevered free cash flow for the periods presented were impacted by: Three Months Ended March 31,(in thousands)2025 2024Employee stock purchase plan activity$(5,413) $(6,332)Acquisition-related expenses (3,189) (466)Restructuring — (3,822) Non-GAAP Income from Operations and Non-GAAP Operating MarginThree Months Ended March 31,(dollars in thousands)2025 2024Loss from operations$(17,711) $(8,930)Stock-based compensation 55,903 39,719 Acquisition-related expenses 4,621 161 Restructuring — 1,389 Amortization of acquired intangible assets 5,864 4,669 Non-GAAP income from operations$48,677 $37,008 Operating margin(7)% (4)%Non-GAAP operating margin 20 % 17 % Non-GAAP Net Income and Non-GAAP Earnings Per ShareThree Months Ended March 31,(in thousands, except per share data)2025 2024Net loss$(22,935) $(14,386)Stock-based compensation 55,903 39,719 Tax impact of stock-based compensation(1) 855 (1,077)Acquisition-related expenses(2) 4,621 161 Restructuring(2) — 1,389 Amortization of acquired intangible assets(2) 5,864 4,669 Tax impact of acquisitions (58) (35)Non-GAAP net income$44,250 $30,440 Net loss per share, diluted$(0.19) $(0.12)Stock-based compensation 0.46 0.34 Tax impact of stock-based compensation(1) 0.01 (0.01)Acquisition-related expenses(2) 0.04 — Restructuring(2) — 0.01 Amortization of acquired intangible assets(2) 0.05 0.04 Tax impact of acquisitions — — Adjustment to diluted earnings per share(3) (0.01) (0.01)Non-GAAP earnings per share, diluted$0.36 $0.25 Weighted-average shares used to compute GAAP net loss per share, diluted 120,083 117,542 Weighted-average shares used to compute non-GAAP earnings per share, diluted 124,152 123,266 ________________ (1) The tax impact of stock-based compensation is based on the tax treatment for the applicable tax jurisdictions.(2) The tax impact of acquisition-related expenses, restructuring and the amortization of acquired intangible assets are not material.(3) An adjustment to reconcile GAAP net loss per share, which excludes potentially dilutive shares, to non-GAAP earnings per share, which includes potentially dilutive shares. Non-GAAP Gross Profit and Non-GAAP Gross MarginThree Months Ended March 31,(dollars in thousands)2025 2024Gross profit$186,677 $167,029 Stock-based compensation 3,315 2,982 Amortization of acquired intangible assets 5,864 4,669 Non-GAAP gross profit$195,856 $174,680 Gross margin 78% 77%Non-GAAP gross margin 82% 81% Non-GAAP Sales and Marketing ExpenseThree Months Ended March 31,(dollars in thousands)2025 2024Sales and marketing expense$103,182 $99,825 Less: Stock-based compensation 16,630 15,300 Less: Acquisition-related expenses 1,054 — Non-GAAP sales and marketing expense$85,498 $84,525 Non-GAAP sales and marketing expense % of revenue 36% 39% Non-GAAP Research and Development ExpenseThree Months Ended March 31,(dollars in thousands)2025 2024Research and development expense$53,223 $43,727 Less: Stock-based compensation 12,967 11,161 Less: Acquisition-related expenses 1,239 (20)Non-GAAP research and development expense$39,017 $32,586 Non-GAAP research and development expense % of revenue 16% 15% Non-GAAP General and Administrative ExpenseThree Months Ended March 31,(dollars in thousands)2025 2024General and administrative expense$47,983 $31,018 Less: Stock-based compensation 22,991 10,276 Less: Acquisition-related expenses 2,328 181 Non-GAAP general and administrative expense$22,664 $20,561 Non-GAAP general and administrative expense % of revenue 9% 10% The following adjustments to reconcile forecasted non-GAAP income from operations, non-GAAP net income, non-GAAP earnings per share, free cash flow and unlevered free cash flow are subject to a number of uncertainties and assumptions, each of which are inherently difficult to forecast. As a result, actual adjustments and GAAP results may differ materially. Forecasted Non-GAAP Income from OperationsThree Months EndingJune 30, 2025 Year Ending December 31, 2025(in millions)Low High Low HighForecasted loss from operations$(12.0) $(10.0) $(22.0) $(12.0)Forecasted stock-based compensation 47.0 47.0 196.0 196.0 Forecasted acquisition-related expenses 1.5 1.5 6.0 6.0 Forecasted amortization of acquired intangible assets 6.5 6.5 25.0 25.0 Forecasted non-GAAP income from operations$43.0 $45.0 $205.0 $215.0 Forecasted Non-GAAP Net Income and Non-GAAP Earnings Per ShareThree Months EndingJune 30, 2025 Year Ending December 31, 2025(in millions, except per share data)Low High Low HighForecasted net loss(1)$(20.0) $(18.0) $(53.0) $(43.0)Forecasted stock-based compensation 47.0 47.0 196.0 196.0 Forecasted tax impact of stock-based compensation 1.0 1.0 4.0 4.0 Forecasted acquisition-related expenses 1.5 1.5 6.0 6.0 Forecasted amortization of acquired intangible assets 6.5 6.5 25.0 25.0 Forecasted non-GAAP net income$36.0 $38.0 $178.0 $188.0 Forecasted net loss per share, diluted(1)$(0.16) $(0.15) $(0.44) $(0.36)Forecasted stock-based compensation 0.39 0.39 1.62 1.62 Forecasted tax impact of stock-based compensation 0.01 0.01 0.03 0.03 Forecasted acquisition-related expenses 0.01 0.01 0.05 0.05 Forecasted amortization of acquired intangible assets 0.05 0.05 0.21 0.21 Adjustment to diluted earnings per share(2) (0.01) — (0.03) (0.03)Forecasted non-GAAP earnings per share, diluted$0.29 $0.31 $1.44 $1.52 Forecasted weighted-average shares used to compute GAAP net loss per share, diluted 121.5 121.5 121.0 121.0 Forecasted weighted-average shares used to compute non-GAAP earnings per share, diluted 123.0 123.0 123.5 123.5 ________________(1) The forecasted GAAP net loss assumes income tax expense of $4.1 million and $16.8 million in the three months ending June 30, 2025 and year ending December 31, 2025, respectively.(2) Adjustment to reconcile GAAP net loss per share, which excludes potentially dilutive shares, to non-GAAP earnings per share, which includes potentially dilutive shares. Forecasted Free Cash Flow and Unlevered Free Cash FlowYear Ending December 31, 2025(in millions)Low HighForecasted net cash provided by operating activities$256.0 $266.0 Forecasted purchases of property and equipment (15.0) (15.0)Forecasted capitalized software development costs (3.0) (3.0)Forecasted free cash flow 238.0 248.0 Forecasted cash paid for interest and other financing costs 27.0 27.0 Forecasted unlevered free cash flow$265.0 $275.0

Tenable Announces First Quarter 2025 Financial Results

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