TENB — Tenable Holdings, Inc.

Summary of Tenable Holdings, Inc. Q4 2025 Earnings Call

1. Key Financial Results and Metrics

• Revenue: $260.5 million for Q4, up 10.5% year-over-year; full-year revenue growth of 11%.
• Operating Margin: 24% for Q4; full-year non-GAAP operating margin increased to 21.9%, up from 20.5% in 2024.
• Recurring Revenue: Maintained high at 96% for the year.
• New Customers: Added 502 new enterprise platform customers in Q4, the best performance in two years.
• Calculated Current Billings (CCB): $327.8 million for Q4, an 8.5% increase year-over-year; full-year CCB at $1.049 billion, growing 8.2%.
• Non-GAAP Earnings Per Share: $0.48 for Q4, up 17.1% year-over-year; full-year EPS of $1.59, a 23.3% increase.
• Free Cash Flow: $87.5 million in Q4, bringing full-year free cash flow to $277 million, up 16.5% year-over-year.

2. Strategic Updates and Business Highlights

• New CTO: Vlad Krasinski appointed to enhance AI strategy and innovation.
• Tenable One: 46% of new business in Q4 came from this AI-powered exposure management platform, indicating strong adoption and demand.
• Market Recognition: Named a leader in multiple industry reports, including Gartner's Magic Quadrant for exposure assessment platforms.
• Customer Wins: Significant expansions with large enterprises and notable first 7-figure deal related to AI exposure management.
• Professional Services Growth: Increased demand for professional services as customers deploy Tenable One across complex environments.

3. Forward Guidance and Outlook

• Q1 2026 Revenue Guidance: Expected to be between $257 million and $260 million, representing an 8.1% year-over-year increase.
• Full-Year 2026 Revenue Guidance: Projected between $1.065 billion and $1.075 billion, marking a 7.1% year-over-year increase.
• Non-GAAP Operating Income Guidance: For Q1, expected between $53 million and $56 million; for full-year 2026, between $245 million and $255 million.
• Net Expansion Rate: Expected to stabilize around 105% in the first half of 2026.

4. Bad News, Challenges, or Points of Concern

• CCB Changes: Management will no longer provide specific guidance for CCB due to changes in billing patterns and contract durations, which may misrepresent business growth.
• Federal Government Dynamics: Uncertainty regarding federal spending and potential impacts from government shutdowns, though no significant effects anticipated for 2026.
• Billings Duration Headwinds: Expected to impact unlevered free cash flow and overall growth metrics, with an estimated $24 million headwind due to changes in billing practices and restructuring costs.

5. Notable Q&A Insights

• Customer Cohort Dynamics: While new business was strong, there was a noted decrease in the addition of $100,000 ACV customers, prompting discussions on the quality and size of new deals.
• AI Integration: AI security is becoming a critical topic in customer discussions, with increasing demand for solutions addressing AI exposure.
• Competitive Landscape: Tenable One is positioned as a strategic platform for customers looking to consolidate fragmented tools, enhancing competitive win rates.
• Pricing Environment: No significant pricing pressure observed; ASPs are reportedly strong, particularly for Tenable One.

This summary encapsulates the key financial metrics, strategic initiatives, forward guidance, and challenges faced by Tenable Holdings, providing a balanced view of the company's current standing and future outlook.