Tenable Holdings’ Earnings Call Highlights Growth and Strategy

Tenable Holdings ((TENB)) has held its Q4 earnings call. Read on for the main highlights of the call.

In Tenable Holdings’ latest earnings call, the overall sentiment was notably positive, driven by strong financial performance and significant growth in key business segments such as Tenable One and Cloud Security. The company also highlighted strategic acquisitions aimed at bolstering its capabilities, although there was some caution regarding U.S. Federal sales due to ongoing administrative transitions. Nonetheless, the highlights considerably outweighed any concerns, underscoring a robust outlook for the company.

Strong Financial Performance

Tenable Holdings showcased an impressive financial performance, achieving an 11% growth in current contract billings (CCB), surpassing expectations by $7.5 million. The operating margin stood at 25%, considerably better than anticipated, and the company generated $86 million in unlevered free cash flow, exceeding predictions. These results underscore Tenable’s strong financial health and operational efficiency.

Growth in Key Business Areas

Tenable One achieved record-breaking success, accounting for 40% of new business sales. Additionally, Cloud Security sales more than doubled, with notable victories in both public and private sectors. This growth highlights Tenable’s strong positioning and competitive edge in these critical business areas.

Strategic Acquisition of Vulcan Cyber

The acquisition of Vulcan Cyber is set to enhance Tenable’s data aggregation and automated remediation capabilities. By integrating data from over 100 third-party security products, this strategic move aims to strengthen Tenable’s offerings and provide enhanced value to customers.

Strong Customer Engagement

Tenable reported the addition of 485 new enterprise platform customers and 135 net new six-figure customers, illustrating robust customer engagement. The net dollar expansion rate reached 108%, reflecting successful customer retention and upselling strategies.

Positive Sales Efficiency

Sales efficiency improved significantly, with sales and marketing expenses decreasing as a percentage of revenue from 42% last year to 37%, marking a 450-basis-point improvement. This efficiency underscores the company’s ability to optimize costs while driving revenue growth.

Caution in U.S. Federal Sales

Despite the overall positive sentiment, Tenable expressed caution regarding U.S. Federal sales, attributing it to the transition of a new administration and the uncertainty surrounding continuing resolutions. This caution reflects the company’s prudence in navigating potential challenges in this sector.

Modest Revenue Growth Outlook

Tenable provided a modest revenue growth outlook for the first quarter, expecting revenue to range between $232 million and $234 million. This guidance reflects a steady yet cautious approach to growth in the coming months.

Forward-Looking Guidance

Looking forward, Tenable has set its sights on revenue between $971 million and $981 million for the full year 2025, with non-GAAP income from operations between $213 million and $223 million, and EPS ranging from $1.52 to $1.60. The company projects calculated current billing between $1.4 billion and $1.5 billion and anticipates unlevered free cash flow of $285 million to $295 million. Notably, these projections do not yet account for the potential impact of the Vulcan Cyber acquisition, which is expected to contribute to CCB and revenue growth.

In summary, Tenable Holdings’ latest earnings call painted a picture of robust financial health and strategic growth, with strong performances in key business areas and prudent guidance for the future. While cautious about certain market segments, the company’s overall positive trajectory and strategic initiatives signal a promising outlook for investors.