8-K: Tenable Announces Strong Q4 and Full Year 2024 Results, Driven by Cloud and Tenable One Adoption

Tenable reports an 11% year-over-year increase in both Q4 revenue and calculated current billings, alongside significant improvements in profitability and cash flow for both the quarter and full year 2024.

Summary

• Tenable Holdings, Inc. announced its financial results for the fourth quarter and full year ended December 31, 2024.
• Q4 revenue reached $235.7 million, an 11% increase year-over-year.
• Full year revenue was $900.0 million, up 13% year-over-year.
• Calculated current billings (CCB) for Q4 were $302.2 million, also an 11% increase year-over-year.
• Full year CCB totaled $969.5 million, reflecting an 11% year-over-year growth.
• GAAP income from operations for Q4 was $13.0 million, a significant improvement from the $14.3 million loss in Q4 2023.
• Non-GAAP income from operations for Q4 was $59.4 million, compared to $36.1 million in Q4 2023.
• GAAP net income for Q4 was $1.9 million, a turnaround from the $21.6 million loss in Q4 2023.
• GAAP diluted earnings per share (EPS) for Q4 was $0.02, compared to a loss per share of $0.19 in Q4 2023.
• Non-GAAP net income for Q4 was $50.7 million, up from $30.2 million in Q4 2023.
• Non-GAAP diluted EPS for Q4 was $0.41, compared to $0.25 in Q4 2023.
• Net cash provided by operating activities for Q4 was $81.1 million, compared to $38.5 million in Q4 2023.
• Unlevered free cash flow for Q4 was $85.7 million, compared to $43.3 million in Q4 2023.
• For the full year, GAAP loss from operations was $6.9 million, a significant improvement from the $52.2 million loss in 2023.
• Non-GAAP income from operations for the full year was $184.1 million, compared to $121.0 million in 2023.
• GAAP net loss for the full year was $36.3 million, compared to $78.3 million in 2023.
• GAAP net loss per share for the full year was $0.31, compared to $0.68 in 2023.
• Non-GAAP net income for the full year was $158.6 million, compared to $97.2 million in 2023.
• Non-GAAP diluted EPS for the full year was $1.29, compared to $0.80 in 2023.
• Net cash provided by operating activities for the full year was $217.5 million, compared to $149.9 million in 2023.
• Unlevered free cash flow for the full year was $237.8 million, compared to $175.4 million in 2023.
• Tenable repurchased 1.2 million shares of its common stock for $50.0 million in Q4 and 2.3 million shares for $100.0 million for the full year.
• The company added 485 new enterprise platform customers and 135 net new six-figure customers.
• Tenable announced its intent to acquire Vulcan Cyber Ltd.
• Tenable launched Tenable Patch Management.
• Tenable integrated Tenable Vulnerability Intelligence into Tenable Security Center.
• The company published the 2024 Tenable Cloud Risk Report.
• For Q1 2025, Tenable expects revenue in the range of $232.0 million to $234.0 million and non-GAAP diluted earnings per share in the range of $0.28 to $0.30.
• For the year ending December 31, 2025, Tenable expects revenue in the range of $971.0 million to $981.0 million and non-GAAP diluted earnings per share in the range of $1.52 to $1.60.

Sentiment

Score: 8

Explanation: The document presents a positive outlook with strong financial results, strategic acquisitions, and optimistic future guidance. The company's performance is improving, and management expresses confidence in its growth strategy.

Positives

• Strong revenue growth in both Q4 and full year 2024.
• Significant improvement in GAAP and non-GAAP profitability.
• Increased cash flow from operations and unlevered free cash flow.
• Addition of new enterprise platform and six-figure customers.
• Strategic acquisition of Vulcan Cyber Ltd. to enhance exposure management platform.
• Launch of Tenable Patch Management to address vulnerability exposures.
• Integration of Tenable Vulnerability Intelligence to improve vulnerability analysis.
• Share repurchase program demonstrating confidence in the company's value.
• Better-than-expected CCB, revenue, operating income, EPS and unlevered free cash flow.

Negatives

• GAAP net loss for the full year 2024, although significantly reduced compared to 2023.
• The financial outlook excludes the impact of the potential acquisition of Vulcan Cyber.

Risks

• The forward-looking statements are subject to risks and uncertainties detailed in the company's SEC filings.
• The company operates in a competitive and rapidly changing environment.
• The financial outlook excludes the impact of the potential acquisition of Vulcan Cyber, which could affect future results.

Future Outlook

Tenable anticipates revenue between $232.0 million and $234.0 million for Q1 2025, with non-GAAP diluted earnings per share between $0.28 and $0.30. For the full year 2025, the company projects revenue between $971.0 million and $981.0 million, and non-GAAP diluted earnings per share between $1.52 and $1.60. Unlevered free cash flow is expected to be in the range of $285.0 million to $295.0 million.

Management Comments

• 'We are very pleased with the results for the quarter as we delivered better-than-expected CCB, revenue, operating income, EPS and unlevered free cash flow,' said Steve Vintz, Co-CEO and CFO of Tenable.
• 'Our outperformance was driven by strong traction in cloud and Tenable One as customers look to secure cloud and get a holistic view of their environment,' said Steve Vintz, Co-CEO and CFO of Tenable.
• 'We continue to drive incredible value for our customers resulting in a strong quarter for six-figure additions, many of which were Tenable One deals,' said Mark Thurmond, Co-CEO and COO of Tenable.
• 'We are winning marquee, large deals with our exposure management products and are laser focused on continuing to deliver on our customer-driven roadmap,' said Mark Thurmond, Co-CEO and COO of Tenable.

Industry Context

Tenable's focus on exposure management and cloud security aligns with the growing demand for comprehensive cybersecurity solutions in the face of increasing cyber threats and the complexity of modern IT environments. The acquisition of Vulcan Cyber further strengthens Tenable's position in the market by adding enhanced visibility and risk prioritization capabilities.

Comparison to Industry Standards

• Comparing Tenable's growth to competitors like Rapid7 (RPD) and Qualys (QLYS) shows a similar trend of increasing demand for vulnerability management and cybersecurity solutions.
• Tenable's revenue growth of 13% year-over-year is competitive with the growth rates of other players in the cybersecurity space.
• The shift towards cloud-based solutions and subscription models is a common theme across the industry, with companies like CrowdStrike (CRWD) and Zscaler (ZS) leading the way.
• Tenable's focus on exposure management aligns with the industry's move towards a more proactive and risk-based approach to cybersecurity.
• The acquisition of Vulcan Cyber is similar to other strategic acquisitions in the industry aimed at expanding product offerings and market reach.

Stakeholder Impact

• Shareholders will likely react positively to the strong financial results and optimistic outlook.
• Employees may experience increased job security and growth opportunities due to the company's success.
• Customers will benefit from the enhanced exposure management platform and improved vulnerability analysis capabilities.
• Suppliers may see increased demand for their products and services as Tenable continues to grow.
• Creditors may view Tenable as a more creditworthy borrower due to its improved financial performance.

Next Steps

• Complete the acquisition of Vulcan Cyber Ltd.
• Continue to integrate Tenable Vulnerability Intelligence into Tenable Security Center.
• Focus on delivering on the customer-driven roadmap.
• Execute on the financial outlook for Q1 2025 and full year 2025.

Key Dates