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Tenable Holdings, Inc. (TENB)·Q3 2025 Earnings Summary

Executive Summary

  • Q3 2025 delivered solid top- and bottom-line beats: revenue $252.4M (+11% YoY) and non-GAAP EPS $0.42, both above consensus; full-year revenue and non-GAAP profitability guidance were raised at midpoints .
  • Strength was driven by Tenable One adoption (~40% of new business), strong renewals, and a better-than-expected professional services contribution; non-GAAP operating margin expanded to 23.3% (+350 bps YoY) .
  • Platform and product momentum continued: 437 new enterprise platform customers, 38 net new six-figure customers, >300 validated integrations, and launch of Tenable AI Exposure; recognized as an IDC MarketScape Leader in Exposure Management .
  • Management sees limited near-term exposure to U.S. Federal uncertainty in Q4 (seasonally smaller Fed quarter) and expects continued execution; guidance embeds prudent assumptions while highlighting visibility into year-end .

What Went Well and What Went Wrong

What Went Well

  • Exposure management platform traction: “We exceeded all guided metrics… Tenable One represented ~40% of new business” .
  • Profitability leverage: non-GAAP operating margin rose to 23.3% (vs. 19.8% in Q3’24) with continued R&D investment; non-GAAP EPS increased to $0.42 (+31% YoY) .
  • Ecosystem and AI innovation: Tenable One surpassed 300 integrations; launched Tenable AI Exposure; enhanced VPR precision powered by generative AI .

What Went Wrong

  • Billings growth lagged revenue growth amid changing upfront billing patterns and longer contract durations (CCB +7.7% YoY vs revenue +11.2% YoY); management expects this divergence to persist in the midterm .
  • GAAP profitability remains modest: GAAP net income $2.3M and GAAP diluted EPS $0.02 (stock-based compensation remains sizable) .
  • Unlevered free cash flow declined slightly YoY in the quarter ($58.5M vs. $60.8M in Q3’24), though YTD remains up 24.7% .

Financial Results

Revenue and EPS vs prior periods and estimates

MetricQ1 2025Q2 2025Q3 2025
Revenue (Actual, $USD Millions)$239.1 $247.3 $252.4
Revenue (Consensus, $USD Millions)*$234.0$242.1$247.5
Diluted EPS (Non-GAAP, Actual, $USD)$0.36 $0.34 $0.42
Diluted EPS (Consensus, $USD)*$0.282$0.303$0.370

Values retrieved from S&P Global.*

Margin profile

MetricQ1 2025Q2 2025Q3 2025
Non-GAAP Gross Margin %82% 82% 81.6%
Non-GAAP Operating Margin %20% 19% 23.3%

Segment Revenue Breakdown

Revenue Component ($USD Millions)Q1 2025Q2 2025Q3 2025
Subscription$220.4 $228.0 $232.2
Perpetual License & Maintenance$11.6 $11.4 $11.1
Professional Services & Other$7.1 $7.9 $9.1
Total Revenue$239.1 $247.3 $252.4
Recurring Revenue %96% 96% 95%

KPIs

KPIQ1 2025Q2 2025Q3 2025
Calculated Current Billings (CCB, $USD Millions)$215.4 $238.6 $267.5
RPO – Short-term ($USD Thousands)$647,647 $641,918 $669,015
RPO – Long-term ($USD Thousands)$234,598 $247,225 $259,849
Total RPO ($USD Thousands)$882,245 $889,143 $928,864
Net Dollar Expansion Rate (%)——106%
Net Cash from Operating Activities ($USD Millions)$87.4 $42.5 $53.9
Unlevered Free Cash Flow ($USD Millions)$86.8 $44.3 $58.5
New Enterprise Platform Customers (Count)361 367 437
Net New Six-Figure Customers (Count)54 76 38
Share Repurchases (Shares / $USD Millions)1.6M / $60.0 2.0M / $65.0 2.0M / $60.0

GAAP vs Non-GAAP Profitability

MetricQ1 2025Q2 2025Q3 2025
GAAP Net Income (Loss, $USD Millions)$(22.9) $(14.7) $2.3
GAAP Diluted EPS ($USD)$(0.19) $(0.12) $0.02
Non-GAAP Net Income ($USD Millions)$44.3 $41.4 $51.4
Non-GAAP Diluted EPS ($USD)$0.36 $0.34 $0.42

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Revenue ($USD Millions)FY 2025$981.0–$987.0 $988.0–$992.0 Raised (midpoint +$6M)
Calculated Current Billings ($USD Billions)FY 2025$1.038–$1.048 $1.040–$1.048 Slight raise (low end +$2M)
Non-GAAP Operating Income ($USD Millions)FY 2025$205.0–$215.0 $211.0–$215.0 Raised (low end +$6M)
Non-GAAP Net Income ($USD Millions)FY 2025$179.0–$189.0 $185.0–$189.0 Raised (low end +$6M)
Non-GAAP Diluted EPS ($USD)FY 2025$1.45–$1.53 $1.51–$1.54 Raised (low end +$0.06)
Unlevered Free Cash Flow ($USD Millions)FY 2025$265.0–$275.0 $265.0–$275.0 Maintained
Revenue ($USD Millions)Q4 2025n/a (initiated)$249.1–$253.1 Initiated
Non-GAAP Operating Income ($USD Millions)Q4 2025n/a (initiated)$55.7–$59.7 Initiated
Non-GAAP Net Income ($USD Millions)Q4 2025n/a (initiated)$47.9–$51.9 Initiated
Non-GAAP Diluted EPS ($USD)Q4 2025n/a (initiated)$0.39–$0.43 Initiated
Diluted Weighted Avg Shares (Millions)Q4 2025n/a (initiated)121.5 Initiated

Earnings Call Themes & Trends

TopicQ1 2025Q2 2025Q3 2025Trend
Tenable One adoption & platform consolidationStrong deals; exposure management momentum cited Continued expansions; 367 new enterprise platform customers ~40% of new business; 437 new platform customers; larger, longer-term commitments Accelerating platform mix and deal size
AI initiatives (APEX, AI Exposure, VPR)Identity 360, Exposure Center launched; cloud AI risk report Completed APEX acquisition Launched Tenable AI Exposure; AI-enhanced VPR precision Expanded AI capabilities and monetization
Ecosystem/integrations—Tenable One connectors; advanced risk dashboards >300 validated integrations; open ecosystem differentiation Growing integration-led moat
U.S. Federal/public sectorFedRAMP authorization achieved —Seasonally high Fed mix; performance in line; limited Q4 exposure Steady; prudent Q4 stance
R&D and innovation spendR&D up; investing for platform Continued investment R&D up >18% YoY in quarter; >20% YTD Sustained investment with margin leverage
Competitive landscape (cloud security, displacements)——Wins vs. leading CNAPP vendor; multi-cloud and consolidation story Evidence of competitive wins
Contract duration/billings patterns——CCB vs CRPO divergence from billing patterns and longer durations Expect divergence to persist

Management Commentary

  • “It’s no longer just about firefighting; it’s about fireproofing, and exposure management is helping customers make that shift” — Steve Vintz, Co-CEO .
  • “We’re building a platform where connectivity drives action, where customers don’t just see risk; they can act on it” — Steve Vintz .
  • “We captured a major new logo… consolidating onto the Tenable One platform… displacing the top cloud security provider and an incumbent VM player” — Mark Thurmond, Co-CEO .
  • “These measures [CCB vs CRPO] are beginning to diverge due to changes in upfront billings patterns and increasing contract durations, which we expect to persist” — Matt Brown, CFO .
  • “We are raising our full-year guidance… revenue to $988–$992M and non-GAAP operating income to $211–$215M” — Matt Brown .

Q&A Highlights

  • U.S. Federal exposure: Q3 Fed performance in line despite uncertainty; Q4 is a seasonally smaller Fed quarter with minimal exposure expected .
  • Guidance philosophy: No major changes; modest raises reflect stronger Q3 and improved visibility into Q4 .
  • Billings guide: Midpoint raised by ~$1M; confidence improving on balance .
  • OT market convergence: Increasing CISO oversight of OT; Tenable enabling ingestion of OT assets into Tenable One; data center buildout tailwind .
  • Install base and Tenable One penetration: ~18k enterprise customers; 3k+ using Tenable One; significant upsell runway .
  • Longer-term contracts and RPO: Growing three-year commitments tied to platform roadmap; many Q3 new logos adopting Tenable One .
  • Competitive dynamics: Displacements of leading cloud security vendor; consolidation to Tenable One as a differentiator .

Estimates Context

MetricQ1 2025Q2 2025Q3 2025Q4 2025 (Forward)
Revenue (Consensus, $USD Millions)*$234.0$242.1$247.5$251.8
Revenue (Actual, $USD Millions)$239.1 $247.3 $252.4 —
Primary EPS (Consensus, $USD)*$0.282$0.303$0.370$0.414
Non-GAAP Diluted EPS (Actual, $USD)$0.36 $0.34 $0.42 —

Values retrieved from S&P Global.*

Implications: Q3 revenue and EPS both exceeded consensus (drivers: renewals, Tenable One adoption, pro services outperformance) . Q4 guidance midpoints (revenue ~$251.1M, EPS ~$0.41) are broadly consistent with consensus ranges, setting up for potential modest upside if platform momentum persists .

Key Takeaways for Investors

  • Tenable executed a clean beat-and-raise quarter: revenue $252.4M and non-GAAP EPS $0.42; FY 2025 guidance raised across revenue, operating income, net income, and EPS .
  • Platform-led consolidation remains the core growth engine: Tenable One is ~40% of new business; >300 integrations deepen strategic relevance and competitive differentiation .
  • Profitability levered while investing in R&D: non-GAAP operating margin 23.3% despite R&D +18% YoY, signaling durable operating leverage .
  • Billings vs CRPO divergence reflects longer contract durations and billing mix; management expects this to continue, so focus on CRPO and revenue for near-term health .
  • Federal exposure contained in Q4 due to seasonality; pipeline and renewals remain strong, reducing macro headline risk .
  • AI exposure and VPR enhancements are strategic catalysts that can drive ASP uplift and platform monetization into 2026 .
  • Capital allocation remains shareholder-friendly with continued buybacks (2.0M shares, $60M in Q3); $250M authorization remaining .