Tenable Holdings Inc (TENB, Financial) released its 8-K filing on October 30, 2024, reporting robust financial results for the third quarter of 2024. The cybersecurity company, known for its comprehensive exposure management solutions, exceeded analyst expectations with a revenue of $227.1 million, surpassing the estimated $223.21 million, and reported a non-GAAP diluted earnings per share of $0.32, outperforming the anticipated $0.10.
Company Overview
Founded in 2002, Tenable Holdings Inc (TENB, Financial) is a Maryland-based cybersecurity firm that initially gained recognition for its Nessus vulnerability management software. Since going public in 2018, the company has broadened its offerings to include a wide array of exposure management solutions, such as cloud security, compliance, and advanced vulnerability analytics.
Performance Highlights and Challenges
Tenable Holdings Inc (TENB, Financial) reported a 13% year-over-year increase in revenue, reaching $227.1 million, and an 11% rise in calculated current billings to $248.4 million. The company's GAAP operating margin stood at -1%, while the non-GAAP operating margin was a healthy 20%. Despite a GAAP net loss of $9.2 million, the company achieved a non-GAAP net income of $39.3 million, reflecting its strategic focus on expanding its product offerings and customer base.
We delivered strong results in Q3, surpassing expectations on both the top and bottom line," said Amit Yoran, Chairman and CEO of Tenable. "Cloud Security and Tenable One, our exposure management platform, continue to drive demand as customers increasingly focus on securing critical cloud infrastructure and assessing their overall exposures in a hybrid world."
Financial Achievements and Industry Significance
The company's financial achievements are significant in the software industry, where maintaining a strong cash flow and expanding customer base are crucial for growth. Tenable reported net cash provided by operating activities of $54.6 million and an unlevered free cash flow of $60.8 million, underscoring its robust financial health and operational efficiency. The expansion of its stock repurchase program by $200 million further highlights its commitment to enhancing shareholder value.
Key Financial Metrics
From the income statement, Tenable's GAAP loss from operations improved to $2.1 million from $7.9 million in the previous year. The balance sheet showed cash and cash equivalents and short-term investments totaling $548.4 million as of September 30, 2024, up from $474.0 million at the end of 2023. These metrics are vital as they reflect the company's liquidity and ability to invest in future growth opportunities.
| Metric | Q3 2024 | Q3 2023 |
|---|---|---|
| Revenue | $227.1 million | $201.5 million |
| GAAP Net Loss | $9.2 million | $15.6 million |
| Non-GAAP Net Income | $39.3 million | $27.7 million |
| Non-GAAP EPS | $0.32 | $0.23 |
Analysis and Outlook
Tenable Holdings Inc (TENB, Financial) continues to demonstrate resilience and adaptability in the competitive cybersecurity landscape. The company's strategic initiatives, including the launch of AI Aware and enhancements to its exposure management capabilities, position it well for future growth. The addition of 386 new enterprise platform customers and 60 net new six-figure customers indicates strong market demand for its solutions.
Looking ahead, Tenable's financial outlook for the fourth quarter of 2024 projects revenue between $229.0 million and $233.0 million, with non-GAAP net income expected to range from $42.0 million to $44.0 million. These projections underscore the company's confidence in its growth trajectory and ability to capitalize on emerging opportunities in the cybersecurity sector.
Explore the complete 8-K earnings release (here) from Tenable Holdings Inc for further details.
