TENB Q2 2025: Tenable One drives 40% of new sales, guidance up $8M
- Strong Tenable One Adoption: The Q&A highlighted that Tenable One drives 40% of new sales and 30% of total sales, underscoring its growing role in revenue generation and customer consolidations, which bodes well for long-term growth.
- Improved Federal Renewal and Pipeline Visibility: Executives pointed out enhanced visibility into federal renewals—with sizable 6- and 7–figure expansion opportunities—and a robust pipeline from federal and strategic deals, providing reassurance to investors on recurring business strength.
- Differentiation Through AI and Exposure Management: The integration of APEX and advancements in AI capabilities were noted to differentiate the platform from traditional VM providers, enhancing the value proposition and addressing emerging cybersecurity challenges, thereby positioning the company for future market leadership.
- Federal market uncertainties: The transcript highlights that U.S. Federal deals are taking longer to close due to increased scrutiny and spending constraints, which may delay revenue recognition and hamper growth.
- Unsustainable revenue mix: Q2's outperformance partly resulted from a favorable upfront revenue mix that the company does not expect to continue in the second half, suggesting potential future revenue softening.
- Moderate expansion and net retention risks: Although new logo growth was strong, the net dollar expansion rate dropped to 107% and constrained spending in federal may pressure net retention rates, indicating challenges in sustaining overall revenue expansion.
| Metric | Period | Previous Guidance | Current Guidance | Change |
|---|---|---|---|---|
Revenue | Q3 2025 | $241 million to $243 million | $246 million to $248 million | raised |
Non-GAAP Income from Operations | Q3 2025 | $43 million to $45 million | $52 million to $54 million | raised |
Non-GAAP Net Income | Q3 2025 | $36 million to $38 million | $44 million to $46 million | raised |
Non-GAAP Diluted EPS | Q3 2025 | $0.29 to $0.31 per share | $0.36 to $0.37 per share | raised |
Calculated Current Billings (CCB) | FY 2025 | $1.25 billion to $1.45 billion | $1,038 million to $1,048 million | lowered |
Revenue | FY 2025 | $970 million to $980 million | $981 million to $987 million | raised |
Non-GAAP Income from Operations | FY 2025 | $205 million to $215 million | $205 million to $215 million | no change |
Non-GAAP Net Income | FY 2025 | $178 million to $188 million | $179 million to $189 million | raised |
Non-GAAP Diluted EPS | FY 2025 | $1.44 to $1.52 per share | $1.45 to $1.53 per share | raised |
Unlevered Free Cash Flow | FY 2025 | $265 million to $275 million | $265 million to $275 million | no change |
Interest Expense | FY 2025 | no prior guidance | $28.5 million | no prior guidance |
Interest Income | FY 2025 | no prior guidance | $15.6 million | no prior guidance |
Provision for Income Taxes | FY 2025 | no prior guidance | $12.8 million | no prior guidance |
| Topic | Previous Mentions | Current Period | Trend |
|---|---|---|---|
Tenable One Adoption & New Business Growth | In Q1 2025, Tenable One was credited with over 30% contribution to new business sales and record 7‐figure deals. Q4 2024 highlighted its record 40% of new business sales with significant multi-year deals and customer consolidation. Q3 2024 noted approximately 30% of new sales and higher ASPs. | In Q2 2025, Tenable One drove 40% of total new sales with strong customer consolidation into larger six- and seven-figure deals and long-term commitments. | Improved adoption and consolidation. The platform’s role remains consistent with further expansion in deal sizes and customer commitments. |
Federal Business Outlook | Q1 2025 discussed mixed federal outcomes with strong renewals but lower renewal dollars from certain agencies due to administration and personnel disruptions. Q4 2024 mentioned a “gray area” with cautious optimism amid administration transitions. Q3 2024 reiterated a healthy pipeline despite spending uncertainties. | Q2 2025 emphasized increased renewal visibility and a strong federal pipeline, though noted constrained spending and longer approval cycles due to federal scrutiny. | Persistent caution amid opportunities. While pipeline and renewal visibility are positive, constrained spending and longer transaction timelines persist. |
Exposure Management & AI Integration | Q1 2025 described Tenable One’s evolution into a “system of action” with strong AI-enabled automation and Vulcan-driven data integration. Q3 2024 highlighted exposure solutions comprising over 50% of new sales and introduced AI-driven features like “AI Aware”. Q4 2024 stressed enhanced analytics and Vulcan’s role for automated remediation. | Q2 2025 reinforced a unified exposure management approach powered by AI to provide enhanced visibility, smarter decisions, and competitive differentiation, with strong market validation from analysts. | Consistently positive with enhanced integration. The focus on AI and exposure management remains central, with incremental improvements in analytics and automation. |
Vulcan Acquisition Integration | Q1 2025 mentioned ongoing integration of Vulcan into Tenable One, with an expected delayed revenue contribution ($5M) and early impact in large deals. Q4 2024 discussed integration priorities, delayed benefits (0.5 point CCB growth), and near-term expense impacts. Q3 2024 did not include this topic. | Q2 2025 earnings call did not include any mention of the Vulcan acquisition integration or its delayed benefits [N/A]. | Reduced emphasis in current period. Previously a key discussion point, Vulcan integration is not highlighted in Q2 2025, perhaps indicating a shift in focus or completion of integration milestones. [N/A] |
Macro & Geopolitical Headwinds | Q1 2025 flagged macro uncertainty affecting public sector visibility and noted geopolitical factors such as tariffs; Q3 2024 noted tougher macro conditions with modest improvements and some federal caution in Q4 2024 due to administration changes. | In Q2 2025, the focus is primarily on constrained federal spending and longer approval cycles, with less explicit discussion of broader macro or geopolitical issues. | Less emphasis on broader factors in Q2 2025. While federal spending constraints persist, wider macro and geopolitical headwinds are mentioned less directly than in previous periods. |
Leadership Transition & Uncertainty | Q1 2025 discussed disruptions from unfilled leadership roles in federal agencies, while Q4 2024 addressed the Board’s CEO search and interim leadership confidence. Q3 2024 did not address this topic. | Q2 2025 contains no discussion on leadership transition or related uncertainties [N/A]. | Diminished focus. Previously highlighted in Q1 and Q4, leadership transition is not a current period focus, suggesting a period of operational continuity. [N/A] |
Revenue Mix Sustainability & Net Retention | Q1 2025 mentioned 96% recurring revenue and strong gross margins alongside consistent net expansion, while Q3 2024 reported a 108% net dollar expansion rate, and Q4 2024 noted a cautious stance amid federal challenges and integration impacts. | Q2 2025 highlighted a favorable product mix with upfront revenue contributions (not expected to continue) and a moderated net dollar expansion rate of 107%, primarily due to constrained U.S. Federal spending. | Stable yet cautious. The recurring revenue remains strong, though there is a modest moderation in expansion rates driven by federal constraints. |
Cloud Security & Vendor Consolidation | Q1 2025 noted significant cloud security wins across multi-cloud environments and strategic federal consolidations. Q3 2024 and Q4 2024 emphasized rapid cloud security growth, with high ASPs and improvements in CNAPP and hybrid environment integration, and strong vendor consolidation moves driven by unified platform solutions. | Q2 2025 reported strong cloud security performance with increased inbound inquiries (post–Google acquisition of Wizz), integrated CNAPP sales via Tenable One, and active channel-led consolidation strategies. | Robust and growing. Cloud security and vendor consolidation continue to be major growth drivers, with consistent strong performance and strategic wins across periods. |
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Overall Momentum
Q: How does Q2 compare to 90 days ago?
A: Management noted improved clarity in US Federal renewals and raised guidance—with the midpoint increased by $8M and the high end by $3M—reflecting stronger new sales and a more favorable revenue mix from Tenable One. -
Product Performance
Q: Which products and verticals outperformed?
A: Leaders highlighted that the outperformance was driven by a better-than-expected mix from upfront revenue recognitions in Tenable One and strong OT contributions, while core VM delivered exactly as forecasted. -
Tenable One Growth
Q: How significant is Tenable One penetration?
A: Management emphasized that Tenable One now represents roughly 40% of new sales and 30% of total sales, suggesting that even modest gains could spur double-digit growth in billings. -
Federal Expansion
Q: What about renewal and expansion in US Federal?
A: They explained that improved visibility in federal renewals is uncovering large 6-7 figure expansion opportunities, although prolonged review cycles mean conversion remains cautious. -
Generative AI Strategy
Q: How will you secure generative AI use?
A: Management detailed that the acquisition of Apex enhances their AI offerings—combining AI Aware with AI SPM—and that these capabilities will be integrated into the platform rather than sold separately, targeting safer AI use. -
OT and Hybrid Growth
Q: Where are OT opportunities emerging?
A: Management noted robust OT performance across sectors such as data centers, manufacturing, and hospitality, with continued strong momentum expected into Q3. -
Channel Sales Motion
Q: What drives new platform customer wins?
A: They explained that stable channel partnerships and consistent sales efforts—without any structural compensation changes—have yielded 360 enterprise and 76 six-figure new platform wins. -
Cloud Strategy (CNAP)
Q: How is the cloud security strategy evolving?
A: Management reported a strong pipeline of cloud security opportunities, with growing CNAP inquiries and enhanced differentiation through integration with Tenable One, setting an optimistic tone for upcoming quarters. -
July Performance Trends
Q: Is July trending above seasonality?
A: They indicated that July’s performance flowed in line with expectations, contributing to an $8M increase at the guidance midpoint and buoyed by solid federal pipelines. -
aiWARE Monetization
Q: How is aiWARE being monetized?
A: Management clarified that aiWARE is now embedded as an asset within Tenable One, with over 6,000 customers using its features, reinforcing an integrated, platform-based monetization strategy.
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