Q1 2025 Earnings Summary
- Tenable One drives significant new business growth: The platform contributed over 30% of new business and led to a record number of 7-figure wins, including displacing well‐established legacy vulnerability management providers, which underscores strong market traction and scalability.
- Vulcan acquisition enhances exposure management capabilities: The integration of Vulcan is expanding Tenable’s platform with third-party data and automated remediation features. This complementary addition is expected to boost future revenue growth and further differentiate Tenable’s offering.
- Robust sales pipeline and strong channel performance: Consistent high win rates in both cloud security and traditional enterprise deals, combined with an effective channel strategy, signal resilient demand across public and enterprise sectors despite macro uncertainties.
- U.S. public sector uncertainty: There is considerable risk stemming from budget and personnel disruptions in U.S. public sector agencies, with approximately two-thirds of the guidance cut attributed to this segment, indicating longer sales cycles and decreased revenue visibility.
- Delayed realization of Vulcan benefits: The integration of Vulcan is expected to contribute mainly in the latter half of the year, suggesting near-term risks in achieving the anticipated growth and synergies from the acquisition.
- Macro and geopolitical headwinds: Continuing macroeconomic uncertainties and disruptions—including changes in administration and leadership positions in federal agencies—may dampen deal momentum and compress margins in both public and enterprise segments.
| Metric | Period | Previous Guidance | Current Guidance | Change |
|---|---|---|---|---|
Revenue | Q2 2025 | no prior guidance | $241 million to $243 million | no prior guidance |
Non-GAAP Income from Operations | Q2 2025 | no prior guidance | $43 million to $45 million | no prior guidance |
Non-GAAP Net Income | Q2 2025 | no prior guidance | $36 million to $38 million | no prior guidance |
Non-GAAP Diluted EPS | Q2 2025 | no prior guidance | $0.29 to $0.31 per share | no prior guidance |
Calculated Current Billings (CCB) | FY 2025 | $1.40 billion to $1.55 billion | $1.25 billion to $1.45 billion | lowered |
Revenue | FY 2025 | $971 million to $981 million | $970 million to $980 million | lowered |
Non-GAAP Income from Operations | FY 2025 | $213 million to $223 million | $205 million to $215 million | lowered |
Non-GAAP Net Income | FY 2025 | $189 million to $199 million | $178 million to $188 million | lowered |
Non-GAAP Diluted EPS | FY 2025 | $1.52 to $1.60 per share | $1.44 to $1.52 per share | lowered |
Unlevered Free Cash Flow | FY 2025 | $285 million to $295 million | $265 million to $275 million | lowered |
| Topic | Previous Mentions | Current Period | Trend |
|---|---|---|---|
Tenable One | Emphasized in Q2 ( ), Q3 ( ) and Q4 ( ) earnings calls as the key driver for new business growth and displacement of legacy vulnerability management providers. | In Q1 2025, executives noted Tenable One drove over 30% of new business, secured record 7‐figure deals, and continued to displace legacy solutions ( ). | Consistent leadership with slightly lower new business percentage in Q1 compared to the seasonal peak in Q4. |
Vulcan Cyber integration | Mentioned in Q4 2024 as augmenting data aggregation and enabling automated remediation ( ). Not mentioned in Q2–Q3 earnings calls. | In Q1 2025, discussions reiterated its complementary role to Tenable One with near‑term benefits expected to materialize later (anticipated Q2 2025) ( ). | Emerging emphasis persists from Q4 with a focus on delayed benefits and future expansion. |
Cloud security & unified platform | Highlighted in Q2 ( ), Q3 ( ) and Q4 ( ) calls for driving sizable cloud security sales and delivering cost savings via a unified, integrated exposure management approach. | Q1 2025 emphasized strong cloud security sales growth—including multiple 7‐figure deals—and reiterated the unified platform strategy’s role in vendor consolidation and operational efficiencies ( ). | Stable and expanding focus, with consistent integration and market traction across periods. |
Competitive performance in VM | Consistently noted in Q2 ( ), Q3 ( ) and Q4 ( ) with strong win rates and strategic competitive displacements against legacy VM providers. | In Q1 2025, strong competitive positioning was maintained with record 7‑figure wins and high win rates, despite some caution due to macro uncertainties ( ). | Steady strength maintained, though Q1 shows a note of caution amid external uncertainty. |
Sales pipeline & channel performance | In Q2, the public and enterprise pipelines were robust ( ); Q3 alluded to solid pipeline traction with public sector wins ( ); Q4 emphasized record channel business and strong partner momentum ( ). | Q1 2025 highlighted an exceptionally strong top-of-funnel and solid channel performance with continued partner engagement, despite caution from public sector uncertainties ( ). | Consistent robustness across periods with maintained channel strength and healthy pipeline growth. |
U.S. public sector & federal spending | Q2 ( ) and Q3 ( ) earnings calls acknowledged budget uncertainties and elongated sales cycles while Q4 discussed modeling a lower public sector contribution in guidance ( ). | In Q1 2025, revenue guidance was notably revised due to U.S. public sector uncertainty—attributing about two‑thirds of the guidance cut to this segment ( ). | Persistent challenge across all periods, resulting in sustained caution in revenue forecasts. |
Macroeconomic & geopolitical headwinds | Q2 discussions highlighted longer sales cycles and deferred deals amid macroeconomic pressures ( ). Q3 mentioned tougher new business transactions ( ). | Q1 2025 elaborated on rising macroeconomic and geopolitical risks that are dampening deal momentum and increasing caution in outlook ( ). | Continued and slightly heightened focus in Q1 as uncertainties widen, though the issue remains a consistent theme. |
AI-driven security solutions | Q2 introduced generative AI capabilities and new detection features ( ); Q3 saw the launch of AI Aware and AI Security Posture Management, establishing a competitive edge ( ). Q4 did not specifically mention AI solutions. | In Q1 2025, the emergence of AI-driven solutions was highlighted with impressive metrics (e.g. detection of 22 million AI‑related applications) and underscored as a key competitive differentiator ( ). | An emerging and growing focus from Q2–Q3 to strong reinforcement in Q1, solidifying AI’s role as a competitive advantage. |
Leadership uncertainty | Q4 2024 addressed the unexpected loss of CEO Amit Yoran, with the Board conducting a search and interim co‑CEO leadership announced ( ). Q2 and Q3 earnings calls did not discuss this issue. | Q1 2025 did not mention leadership uncertainty at all, indicating that the topic has receded from the discussion. | No longer highlighted in Q1, suggesting stabilization of leadership concerns. |
Execution challenges in large deals | Q2 and Q3 earnings calls referred to longer sales cycles, additional scrutiny, and some execution challenges in closing large, upmarket deals ( ). Q4 reported strong large deal activity with no major execution issues cited ( ). | Q1 2025 emphasized strong execution with record large‐deal wins and no specific mention of conversion challenges, suggesting improvements in closing upmarket deals ( ). | A shift from earlier execution challenges towards improved closing efficiency and robust performance in Q1. |
Financial guidance and margins | Q2 discussed margin targeting with improved unlevered free cash flow and operational efficiency ( ); Q3 noted progressive improvement in free cash flow and margins ( ); Q4 cited record free cash flow and significant operating margin gains ( ). | In Q1 2025, record unlevered free cash flow of $87 million was reported along with reaffirmed guidance for expanding operating margins and free cash flow targets for the full year ( ). | Consistent improvement across quarters with record cash flow and steady margin expansion, albeit with some cautious adjustments due to economic uncertainty. |
Large deals & upmarket traction | Q2 mentioned significant cloud security wins with Fortune 500 traction ( ); Q3 reported mid-market wins including a 7‑figure mid-market deal ( ); Q4 detailed strong large deal activity in Fortune 500 and global enterprise accounts ( ). | Q1 2025 reported its best quarter ever for 7‑figure deals, demonstrating robust upmarket traction across large enterprise accounts, although it did not specifically name Fortune 500 customers in its comments ( ). | Continued and record-setting growth in large deals, underscoring a healthy upmarket momentum despite a cautious macro environment. |
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Guidance Split
Q: How is revenue guidance cut divided?
A: Management stated that roughly 2/3 of the guidance revision is from the U.S. public sector while the remaining 1/3 is attributed to enterprise business, reflecting caution amid macro uncertainty. -
Free Cash Flow
Q: Does Vulcan affect free cash flow?
A: Management confirmed that the $20 million impact from Vulcan is part of their balanced growth strategy, supporting steady and robust free cash flow. -
Tenable One Growth
Q: How is Tenable One performing?
A: Management noted that Tenable One now accounts for over 30% of new business sales with strong 7-figure deal momentum, driven by cloud security and integration successes. -
Competitive Landscape
Q: How competitive is vulnerability management?
A: Management highlighted historically high win rates and significant displacements of incumbents, underscoring a very strong competitive position in the VM space. -
Vulcan Progress
Q: What’s Vulcan’s 2025 contribution forecast?
A: Management expects Vulcan to contribute about $5 million, especially in the latter part of the year, acting as a catalyst in winning large-scale deals. -
R&D & Sales Priorities
Q: What are the R&D and sales focuses?
A: Management is concentrating on advancing AI capabilities and integrating Vulcan’s data into Tenable One while streamlining core sales efforts to drive innovation and market execution. -
Federal Budget Clarity
Q: How are federal budgets impacting deals?
A: Management explained that uncertainty in the federal space—due to leadership vacancies and longer sales cycles—has led to cautious guidance, even as FedRAMP authorization offers future clarity. -
Public Sector Contract Trends
Q: Are federal contracts being canceled or delayed?
A: Management observed no contract cancellations but noted longer lead times and a dip in renewal dollars from civilian agencies amid current personnel disruptions. -
Cloud Exposure Impact
Q: Do customers combine cloud with exposure management?
A: Management affirmed that customers increasingly bundle cloud capabilities with exposure management, especially following industry shifts like the Wiz acquisition, reinforcing the integrated approach. -
Pricing Strategy
Q: Has pricing strategy changed?
A: Management reassured that there have been no significant changes to their pricing approach, keeping margins consistently stable as before. -
CVE Program Outlook
Q: What about future CVE funding impacts?
A: Management noted that CVE funding has been extended for now and stressed the importance of collaboration to improve vulnerability sharing, ensuring the program remains a vital industry resource.