Tenable Holdings, Inc. (TENB) Q4 2025 Earnings Call Transcript
Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
Overview
The earnings call summary and Q&A indicate strong financial performance, with increased revenue, EPS, and gross margins. The company's strategic focus on AI-driven innovations and preemptive security approaches shows promise, as evidenced by new customer additions and a significant 7-figure deal in AI exposure management. Despite some concerns about growth deceleration, the raised guidance and share repurchase plan are positive signals. The overall sentiment is positive, with a likelihood of stock price increase in the short term.
Key Financial Performance
Revenue Revenue for the quarter was $260.5 million, representing growth of 10.5% year-over-year. Full year revenue was $1.049 billion, growing 11.0% year-over-year. The growth was driven by a solid foundation of renewal business and an increase in new and expansion growth rates due to Tenable One adoption.
Recurring Revenue The percentage of recurring revenue remained high at 96% for the year.
Operating Margin Non-GAAP income from operations for the quarter was $63.7 million or 24.4% of revenue. On a full year basis, it grew to $219.0 million or 21.9% of revenue compared to 20.5% in the prior year. This represents a year-over-year increase of 140 basis points, driven by disciplined cost management and increased efficiency.
Gross Margin Non-GAAP gross margin was 82.7% for the quarter, an increase from 81.7% in Q4 2024. Full year non-GAAP gross margin was 82.1% compared to 81.4% in the prior year, reflecting steady improvements in operational efficiency.
Earnings Per Share (EPS) Non-GAAP earnings per share for the quarter was $0.48 compared to $0.41 in Q4 2024, an increase of 17.1%. Full year EPS was $1.59 compared to $1.29 in 2024, an increase of 23.3%. The increase reflects higher profitability and a decrease in diluted shares outstanding.
Unlevered Free Cash Flow Unlevered free cash flow for the quarter was $87.5 million compared to $85.7 million in Q4 2024. Full year unlevered free cash flow was $277.0 million, a year-over-year increase of 16.5%, now representing 27.7% of revenue. The increase was driven by strong cash flow generation and operational efficiency.
Customer Growth 502 new customers were added in the quarter, many of which adopted Tenable One. This was the best quarter in 2 years for new enterprise platform customer additions.
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Operating Highlights
Tenable One adoption: Tenable One, the AI-powered exposure management platform, accounted for 46% of new business in Q4, marking a record. The platform continuously discovers AI across organizations, providing a risk-aware view and enabling governance controls to reduce risk.
AI-driven innovation: Tenable is investing in Agentic AI security and advanced remediation capabilities, aiming to automate risk reduction and improve operational efficiency.
Customer expansion: Over 500 new enterprise platform customers were added in Q4, the best quarter in 2 years. A large global enterprise expanded its Tenable One deployment, consolidating multiple VM technologies and reducing operational overhead.
Public sector momentum: A large higher education consortium selected Tenable for a statewide cybersecurity modernization effort, consolidating on Tenable One and eliminating competitive solutions.
Revenue growth: Q4 revenue was $260.5 million, a 10.5% year-over-year increase. Full-year revenue grew 11% to $1.049 billion.
Operating margin: Q4 operating margin was 24.4%, and full-year operating margin increased to 21.9%, up 140 basis points from 2024.
Platform consolidation: Tenable One is becoming a strategic platform for customers, replacing fragmented point solutions and addressing multiple exposure-related use cases.
AI exposure management: Tenable is positioning itself as a leader in AI exposure management, with a major telecommunications provider closing a 7-figure deal for AI visibility and risk reduction.
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Risk or Challenges
AI-driven attack surface: Organizations are struggling to manage the complexity of the modern attack surface, especially with the rapid adoption of AI. Many cannot see where AI is running, what it touches, who can access it, or how it connects to the environment, creating an invisible attack surface that increases risk.
Fragmented security tools: Many organizations rely on AI-specific point products that only address narrow slices of the problem, leaving gaps across applications, identities, cloud workloads, and data. This fragmentation increases operational complexity and risk.
Operational complexity: Security leaders face challenges in reducing operational complexity due to the lack of unified visibility and action across their attack surface, which slows down risk reduction efforts.
AI exposure risks: Organizations lack unified ways to understand AI deployment, data sharing, and activity, leading to blind spots and potential exposure paths.
Public sector cybersecurity challenges: Public sector institutions, such as higher education consortia, face systemic risks due to varied levels of cybersecurity maturity and the need for consistent visibility, prioritization, and remediation practices.
Shift to annual installment billings: The shift from upfront multiyear payments to annual installment billings is causing distortions in financial metrics like CCB, which may not accurately represent business growth and could impact financial planning.
Restructuring expenses: The company is incurring restructuring expenses to realign departments and reinvest in innovation, which could temporarily impact financial performance.
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Guidance & Outlook
Revenue Expectations: For Q1 2026, revenue is expected to be in the range of $257 million to $260 million, representing a year-over-year increase of 8.1% at the midpoint. For full year 2026, revenue is expected to be in the range of $1.065 billion to $1.075 billion, representing a year-over-year increase of 7.1% at the midpoint.
Non-GAAP Operating Income: For Q1 2026, non-GAAP income from operations is expected to be in the range of $53 million to $56 million, or 21.1% of revenue at the midpoint. For full year 2026, non-GAAP operating income is expected to be in the range of $245 million to $255 million, or 23.4% of revenue at the midpoint, representing a year-over-year increase of 150 basis points.
Non-GAAP Net Income: For Q1 2026, non-GAAP net income is expected to be in the range of $46 million to $49 million, representing a year-over-year increase of 7.2% at the midpoint. For full year 2026, non-GAAP net income is expected to be in the range of $214 million to $224 million, representing a year-over-year increase of 12.7% at the midpoint.
Non-GAAP Earnings Per Share: For Q1 2026, non-GAAP earnings per share is expected to be in the range of $0.39 to $0.42, representing a year-over-year increase of 12.5% at the midpoint. For full year 2026, non-GAAP earnings per share is expected to be in the range of $1.81 to $1.90, representing a year-over-year increase of 16.7% at the midpoint.
Unlevered Free Cash Flow: For full year 2026, unlevered free cash flow is expected to be in the range of $285 million to $295 million, or 27.1% of revenue at the midpoint. This forecast is impacted by an estimated $24 million or approximately 220 basis points of margin due to the reduction in upfront multiyear billings and cash restructuring charges.
Platform and AI Investments: The company plans to reinvest into innovation in the Tenable One platform and AI security, with a focus on expanding capabilities in preemptive security, Agentic AI security, and advanced remediation. These investments are expected to drive stronger platform adoption and deeper customer engagement, contributing to growth throughout 2026.
Customer and Market Trends: Tenable expects continued strong demand for its AI-powered exposure management platform, Tenable One, driven by the shift to preemptive security and the adoption of AI. The company anticipates further customer consolidation on its platform and growth in strategic multiyear transactions.
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Shareholder Return Plan
Share Repurchase Program: During the fourth quarter, Tenable repurchased 2.3 million shares for $62.5 million. Through the end of 2025, the company has repurchased a total of 10.6 million shares for $362.4 million since November 2023. Additionally, the Board approved a $150 million increase to the share repurchase authorization, increasing the total authorization to $338 million as of year-end. The company believes its current share price trades at a discount relative to its true value and views share repurchases as an effective use of capital.
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Key Q&A
Q:Can you explain the lower net additions of $100,000 ACV customers despite the success with Tenable One?
A:Stephen Vintz explained that new business was strong with 500 new customers added, and the value of these lands is more sizable than in the past. Expansion was also strong, particularly among large customers who adopted and expanded Tenable One.
Q:What is the current customer interest in AI exposure management, and how is Tenable positioned?
A:Stephen Vintz stated that AI exposure management is a prevalent topic in every conversation with CISOs. Tenable closed its first 7-figure deal in this area and sees opportunities in discovering AI across enterprises, addressing shadow AI, protecting AI workloads, and governance issues. Pipeline build and customer interest are strong.
Q:What additional modules within Tenable One are customers adopting most, and how is it impacting competitive win rates?
A:Stephen Vintz highlighted that 46% of new sales came from the platform. Customers value visibility, insights, and action. Most customers use the platform for traditional VM, web app, and cloud security, with growing interest in securing the AI attack surface. The focus is on selling the platform cohesively to drive higher utilization and selling prices.
Q:How does the shift to annual installment billings impact CCB and other metrics?
A:Matthew Brown explained that while billings duration dynamics create headwinds for CCB, the company is confident in its revenue and free cash flow guidance. The focus is shifting to metrics like net expansion rate and revenue to better reflect business health.
Q:What differentiates Tenable's data and approach in the exposure management space?
A:Stephen Vintz emphasized the breadth and depth of data collected over two decades, which is unparalleled. Tenable applies AI to leverage this data for insights, actionability, and orchestrated remediation, making exposure management critical for customers.
Q:What is driving the strength in professional services, and how should it be viewed in the context of guidance?
A:Stephen Vintz attributed the strength to larger platform deployments requiring professional services for exposure management journeys. This trend is expected to continue as customers aim to maximize utilization of their licenses.
Q:Why is there a deceleration in growth guidance despite strong performance?
A:Matthew Brown explained that while Tenable One is growing significantly, it represents about one-third of the business. As its share grows, overall growth rates are expected to stabilize and then inflect higher.
Q:What is the pricing uplift for customers moving to Tenable One?
A:Matthew Brown stated that customers moving to Tenable One can see up to an 80% uplift. The platform offers increased capabilities and coverage, making it a net positive for customers and Tenable.
Q:How does Tenable address governance in AI and cloud security?
A:Stephen Vintz explained that governance is critical across domains. Tenable's CNAPP offering covers cloud risk, and the platform helps enforce AI security policies and broader governance to ensure proper use and deployment of technology.
Q:What are the federal assumptions for the upcoming year?
A:Matthew Brown stated that federal performance is expected to align with overall company growth, with no significant headwinds or outsized growth anticipated.
Q:Review of Unclear Management Responses
A:Management avoided directly addressing the gap between short-term RPO growth of 13.3% and the 7% revenue growth guidance for 2026, citing distortions from contract durations and not guiding to CRPO. Additionally, they did not provide specific details on when Tenable One's growth would materially offset the deceleration in overall growth.
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Earnings Word Cloud
The most frequently occurring keywords in this quarter's earning call
AI Vendor
AI activity
AI apps
AI environment
AI exposure
AI figure
AI model
AI platform
AI point
AI premise
AI security
Agentic AI
Application Protection
Assessment platform
Gartner
Officer
Tenable platform
analyst firm
campus
category
complexity attack
context
evolution
firm leader
gap
industry analyst
insight action
institution
leader exposure
phase
platform approach
platform exposure
platform visibility
risk reduction
surface team
tool Tenable
use case
view AI
visibility AI
TENB Transcript
Tenable Holdings, Inc. (TENB) Q4 2025 Earnings Call Transcript
Positive2-4
The earnings call summary and Q&A indicate strong financial performance, with increased revenue, EPS, and gross margins. The company's strategic focus on AI-driven innovations and preemptive security approaches shows promise, as evidenced by new customer additions and a significant 7-figure deal in AI exposure management. Despite some concerns about growth deceleration, the raised guidance and share repurchase plan are positive signals. The overall sentiment is positive, with a likelihood of stock price increase in the short term.
Tenable Holdings, Inc. (TENB) Presents at Barclays 23rd Annual Global Technology Conference Transcript
Neutral12-10
Tenable Holdings, Inc. (TENB) Presents at UBS Global Technology and AI Conference 2025 Transcript
Neutral12-2
Tenable Holdings, Inc. (TENB) Q3 2025 Earnings Call Transcript
Positive10-30
The earnings call reveals strong performance in the U.S. federal vertical, optimistic revenue guidance, and robust enterprise customer growth. The integration of Apex and focus on AI security are strategic positives. Management's confidence in sustaining billings levels and the positive sentiment in the Q&A further support a positive outlook. Despite some lack of clarity on long-term billings, the overall sentiment is positive, suggesting a stock price increase in the short term.
TENB Report
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