Tenable Holdings, Inc. Q3 FY2025 earnings call

• Steve Vintz welcomed Matt Brown to the Tenable team, who joined in August and has hit the ground running.
• In Q3, Tenable exceeded guided metrics with 11% Y/Y revenue growth and 23% operating margin. Tenable One represented ~40% of new business, and 437 new enterprise platform customers were added, a 13% increase Y/Y.
• The company believes there's a shift in cybersecurity from reactive to preemptive/ preventative approaches, driven by AI. Tenable One is well-positioned in this shift.
• Key operational highlights include launching Tenable AI Exposure, surpassing 300 validated integrations, and advancing vulnerability priority rating.
• Mark Thurmond discussed industry recognition (e.g., Forrester Wave leader, IDC MarketScape leader), customer wins (e.g., global commercial real estate firm, national electric utility provider), and the journey to exposure management as a mindset shift.
• Matt Brown highlighted strong Q3 results, raised full-year guidance, with CCB up 7.7%, non-GAAP gross margin at 81.8% YTD, and repurchased 2 million shares for $60 million during Q3.

In Q3 2025, Tenable achieved 11% year-over-year revenue growth, reaching $252.4 million. The Tenable One exposure management platform accounted for approximately 40% of new business. The company added 437 new enterprise platform customers, a 13% increase from Q3 2024. Non-GAAP gross margin was 81.6% for the quarter, up from 81.4% in Q3 2024. Non-GAAP income from operations was $58.9 million, or 23.3% of revenue, compared to $45 million or 19.8% in Q3 2024. Recurring revenue remained high at 95% this quarter.

• Raised full-year revenue guidance to a range of $988 million to $992 million, representing a 10.0% Y/Y increase at the midpoint.
• Q4 revenue expected to be in the range of $249.1 million to $253.1 million, a 6.5% Y/Y increase at the midpoint.
• Non-GAAP operating income for full-year 2025 raised to a range of $211 million to $215 million, a 100 basis points Y/Y increase at the midpoint.
• Non-GAAP net income for full-year 2025 raised to a range of $185 million to $189 million, a 17.9% Y/Y increase at the midpoint.

• Uncertainties related to government shutdowns and CISA 2015 expiration, though currently no significant negative impact anticipated.
• General risks associated with forward-looking statements and market uncertainties, as highlighted in the earnings call's forward-looking statement disclosures.

Q: Saket Kalia asked about U.S. federal performance and potential impact of government shutdowns.

A: Steve Vintz responded that public sector and U.S. federal was in line with expectations, noting they've demonstrated ability to execute in such environments.

Q: Brian Essex inquired about Q4 deceleration and upside scenarios.

A: Matthew Brown stated Q3 had steady execution, Q4 has minimal exposure, and the pipeline is strong.

Q: Michael Cikos asked about guidance philosophy and billings.

A: Matthew Brown said no major shifts, feeling more positive about the year due to strong Q3 and visibility into Q4.

Q: Robbie Owens asked about enterprise adds and 100,000 ACV customers.

A: Stephen Vintz responded about strong new business, 437 new enterprise platform customers, and larger deals with exposure management.

Q: Meta Marshall asked about OT market and R&D.

A: Mark Thurmond discussed convergence of OT and IT, and Stephen Vintz talked about R&D focused on unifying visibility, normalizing data, and AI security.

Q: Jonathan Ho asked about Tenable One adoption percentage.

A: Stephen Vintz replied ~3,000+ customers using Tenable One, 40% of new business.

Q: Joseph Gallo asked about budget prioritization for exposure management and billings in 2026.

A: Mark Thurmond said exposure management is gaining budget traction, and focus is on 2025 execution, with 2026 not discussed in detail yet.

Q: Patrick Colville asked about AI innovation roadmap.

A: Stephen Vintz talked about focus on unifying visibility, normalizing data, and AI security, considering both organic and M&A.

Q: Roger Boyd asked about longer deals and Tenable One overlap.

A: Mark Thurmond said customers are making long-term commitments, with a significant portion of new customers on Tenable One.

Q: Joshua Tilton asked about inorganic contribution to billings.

A: Matthew Brown responded it was very insignificant.

Q: Adam Borg asked about demand environment.

A: Stephen Vintz said demand was even across segments, with strong new lands and platform traction.

Q: Jonathan Ruykhaver asked about Google deal and cloud security.

A: Mark Thurmond discussed active conversations, consolidation story with exposure management, and positive outlook on cloud business.

Q: Todd Weller asked about growth equation and VM vs EM.

A: Matthew Brown said focus is on Tenable One, with EM growing faster and VM stable.

Q: Junaid Siddiqui asked about integrations and deal velocity.

A: Stephen Vintz talked about open platform, integrations enabling unified visibility and action.

Q: Shrenik Kothari asked about platform mix unlocks.

A: Mark Thurmond discussed focus on installed base expansion, third-party ingest monetization, and AI strategy.

Q: Gray Powell asked about Apex acquisition and AI traction.

A: Stephen Vintz talked about AI Exposure launched, contextualizing risk, autonomous remediation agents, and continued growth expected.