Executive Summary

Q1 2025 delivered clean beats on revenue and non-GAAP EPS, driven by Tenable One platform expansions and a record quarter for seven-figure wins; revenue grew 11% YoY to $239.1M vs. S&P Global consensus $234.0M*, and non-GAAP EPS was $0.36 vs. $0.28* .
Margins remained strong: non-GAAP gross margin 82% and non-GAAP operating margin 20%; operating leverage and seasonality also supported a record $86.8M in unlevered FCF .
FY25 guidance was reset lower (notably billings, EPS, and UFFCF) primarily on incremental U.S. public sector uncertainty and broader macro-policy visibility; Q2 guide is essentially in line with Street on revenue and EPS .
Potential stock reaction catalysts: ongoing Tenable One momentum (larger deal sizes, upsell/consolidation), expanding AI/third-party data ingest via Vulcan, and FedRAMP authorization vs. near-term overhang from cautious pub-sec outlook and billings guide reset .

What Went Well and What Went Wrong

What Went Well
- Record large deals and Tenable One as the growth engine: “best quarter ever for 7‑figure wins,” with momentum from cloud security and platform consolidation .
- Strong profitability and cash generation: non-GAAP op margin 20%; unlevered FCF $86.8M (36% margin), aided by collections seasonality and operating leverage .
- Product/market progress: FedRAMP Moderate for Tenable One and Cloud Security; identity risk capabilities (Identity 360) and Exposure Center launched; narrative strengthening around AI and third‑party data ingestion (Vulcan) .
What Went Wrong
- FY25 outlook reduced: management extended cautious stance on U.S. public sector given leadership disruptions and procurement uncertainty; also applied some caution to enterprise amid policy/geopolitical risks .
- GAAP results impacted by higher G&A, including $14.6M accelerated vesting expense tied to the late CEO; GAAP operating margin −7% and GAAP net loss per share $(0.19) .
- Call transcript discrepancy on FY25 billings (“$1.25–$1.45B” spoken) vs. 8‑K guidance ($1.025–$1.045B); investors should anchor to 8‑K figures .

Financial Results

Quarterly progression (oldest → newest) and Q1 2025 consensus comparison:

Metric	Q3 2024	Q4 2024	Q1 2025 (Actual)	Q1 2025 (Consensus*)
Revenue ($M)	$227.1	$235.7	$239.1	$234.0*
GAAP EPS ($)	$(0.08)	$0.02	$(0.19)	N/A
Non-GAAP EPS ($)	$0.32	$0.41	$0.36	$0.28*
GAAP Operating Margin (%)	(1)	6	(7)	N/A
Non-GAAP Operating Margin (%)	20	25	20	N/A
Gross Margin (%)	78	78	78	N/A
Non-GAAP Gross Margin (%)	81	82	82	N/A

Q1 2025 revenue and EPS beat S&P Global consensus by ~$5.1M and ~$0.08, respectively .

Revenue components and mix:

Revenue Components ($M)	Q1 2024	Q1 2025
Subscription	$197.6	$220.4
Perpetual license & maintenance	$12.2	$11.6
Professional services & other	$6.2	$7.1
Total Revenue	$216.0	$239.1
Recurring revenue (% of total)	96%	96%

Key KPIs and cash metrics:

KPI	Q1 2024	Q1 2025
Calculated Current Billings ($M)	$197.8	$215.4
RPO – Short-term ($M)	$572.9	$647.6
RPO – Long-term ($M)	$169.6	$234.6
RPO – Total ($M)	$742.4	$882.2
Net Cash from Operations ($M)	$50.3	$87.4
Unlevered Free Cash Flow ($M)	$54.7	$86.8
New enterprise platform customers (adds)	N/A	361
Net new six‑figure customers (adds)	N/A	54

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Revenue ($M)	Q2 2025	N/A	$241–$243	New
Non-GAAP Op Income ($M)	Q2 2025	N/A	$43–$45	New
Non-GAAP Net Income ($M)	Q2 2025	N/A	$36–$38	New
Non-GAAP Diluted EPS ($)	Q2 2025	N/A	$0.29–$0.31	New
Diluted Shares (M)	Q2 2025	N/A	123.0	New
Calculated Current Billings ($B)	FY 2025	$1.040–$1.055	$1.025–$1.045	Lowered
Revenue ($M)	FY 2025	$971–$981	$970–$980	Lowered (narrowly)
Non-GAAP Op Income ($M)	FY 2025	$213–$223	$205–$215	Lowered
Non-GAAP Net Income ($M)	FY 2025	$189–$199	$178–$188	Lowered
Non-GAAP Diluted EPS ($)	FY 2025	$1.52–$1.60	$1.44–$1.52	Lowered
Diluted Shares (M)	FY 2025	124.5	123.5	Lower
Unlevered Free Cash Flow ($M)	FY 2025	$285–$295	$265–$275	Lowered

Management attributes the more cautious FY outlook largely to extended uncertainty and procurement timing in U.S. public sector and some macro/policy/geopolitical visibility, while maintaining emphasis on profitable growth and reiterating UFFCF range on the Q1 call; note the 8-K contains the authoritative ranges .

Earnings Call Themes & Trends

Topic	Previous Mentions (Q3 2024, Q4 2024)	Current Period (Q1 2025)	Trend
Tenable One / Exposure Management	Tenable One and Cloud Security driving demand; strong six‑figure adds	“Best quarter ever” for seven‑figure deals; Tenable One catalyst for upsell and consolidation	Accelerating
Cloud Security	Extended CSPM/CNAPP and AI‑SPM; cloud a key driver	Large multi‑cloud wins; cloud central to EM strategy and deal wins	Strengthening
AI & Data Advantage	Launched AI Aware; emphasized platform analytics	Unique advantage from decades of exposure data; building AI‑powered EM; detected 22M AI‑related apps in Q1	Expanding
Public Sector / FedRAMP	No FedRAMP yet; Q3 noted federal wins	FedRAMP Moderate for Tenable One & Cloud Security; cautious pub‑sec outlook on leadership disruptions and procurement	Mixed: product tailwind but demand visibility softer
M&A (Vulcan)	Intent announced (Q4) to augment EM with third‑party ingest/remediation	Closed; integrating third‑party data ingest and remediation into Tenable One; back‑half rev contribution	Integration underway

Management Commentary

Strategic focus: “Our outperformance…reflects the continued momentum of our exposure management platform…best quarter ever for 7‑figure wins, and Tenable One was certainly the catalyst” .
AI/data moat: “No vendor…can match the depth and breadth of our exposure [data]…This gives us a real competitive moat with a uniquely comprehensive view of risk” .
Platform evolution: “Tenable One is evolving from a system of record to a system of action…not just identifying risks, but also helping customers act in real time” .
Cloud and consolidation: Examples include federal modernization managing >1M assets and multi‑cloud displacement wins; customers consolidating onto Tenable One .
Fiscal discipline: “We’re very pleased with our ability to drive continued leverage…Operating margin…20%…EPS…$0.36” and record unlevered FCF .
Caution on outlook: Extending cautious stance in U.S. public sector and acknowledging policy/geopolitical uncertainty, while maintaining profit focus .

Q&A Highlights

Guidance conservatism: About two‑thirds of the FY25 CCB guide reduction tied to U.S. public sector; remaining third to enterprise caution; visibility challenges from leadership changes and procurement cycles .
Competitive landscape: Historically high win rates vs. Qualys/Rapid7; limited encounters with endpoint incumbents (CrowdStrike/Microsoft); several seven‑figure rip‑and‑replace wins .
Wiz/Google impact: Viewed as a net positive—customers reopening evaluations to avoid lock‑in; benefits multi‑cloud positioning and Tenable One’s holistic view .
Vulcan integration: ~~0.5pt growth (~~$5M) in FY25 weighted to 2H; third‑party ingest and remediation already a differentiator in a seven‑figure VM displacement .
Pricing: No significant pricing shifts or aggressive discounting observed; margins stable .

Estimates Context

Q1 2025 beats: Revenue $239.1M vs. $234.0M*; non‑GAAP EPS $0.36 vs. $0.28* .
Q2 2025 guide vs. Street: Revenue guide $241–$243M vs. $242.1M* consensus; EPS guide $0.29–$0.31 vs. $0.303*—essentially in-line .
Implications: Street models for FY25 likely move lower on billings, EPS, and UFFCF following guidance reset; near-term revisions may center on public sector timing and enterprise macro sensitivity .

Values marked with * retrieved from S&P Global.

Period	Revenue (Actual vs. Consensus*)	EPS (Actual vs. Consensus*)
Q1 2025	$239.1M vs. $234.0M*	$0.36 vs. $0.282*
Q2 2025 (Guide Mid vs. Consensus*)	~$242.0M vs. $242.1M*	~$0.30 vs. $0.303*

Key Takeaways for Investors

Tenable One is driving larger deals and consolidation, delivering durable growth and mix benefits; sustained high win rates support share gains in VM/EM and cloud .
Profitability remains a core pillar: 20% non‑GAAP op margin and robust unlevered FCF provide downside protection amid macro and public sector uncertainty .
FY25 guidance reset de‑risks execution, particularly around U.S. public sector timing; watch for order timing improvements as leadership positions fill and FedRAMP tailwinds materialize .
AI/data moat + Vulcan integration should enhance third‑party ingest and remediation automation—key to evolving from “record” to “action” and sustaining platform ARPU uplift .
Near-term trading: Results beat/inline guide could be overshadowed by FY billings/FCF reset; pullbacks may be opportunities if Tenable One momentum and cloud wins persist .
Medium-term thesis: Exposure management leadership, multi‑cloud strength, AI‑enabled analytics, and consolidation narrative position TENB for steady high-teens non‑GAAP margin with consistent FCF conversion .
Monitor: Public sector bookings cadence, cloud/Tenable One deal velocity, progress on Vulcan-enabled capabilities, and any changes in competitive intensity or pricing .

Tenable Holdings, Inc. (TENB)·Q1 2025 Earnings Summary