Tenable Q2 Earnings Call Highlights
Key Points
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- Tenable exceeded Q2 guidance and raised its full-year outlook. Revenue rose 8.6% year over year to $268.5 million, while non-GAAP EPS increased 50% to $0.51; full-year revenue is now forecast at $1.075 billion to $1.081 billion.
- Tenable One adoption accelerated significantly. The platform represented 50% of new business, up from 41% in the prior quarter, while larger deals and improving customer expansion lifted net dollar expansion to 106%.
- AI security and platform consolidation are driving demand. Customers are using Tenable’s Hexa AI engine for security remediation, while FedRAMP High authorization for Tenable One Cloud Exposure expands its federal-market opportunity; the company also repurchased $100 million of shares in Q2.
Tenable (NASDAQ:TENB) reported second-quarter results above its guidance ranges and raised its full-year outlook, citing record adoption of its Tenable One exposure management platform, larger deal sizes and improving expansion trends.
Revenue for the quarter totaled $268.5 million, up 8.6% year over year. Non-GAAP income from operations rose 38.8% to $66.2 million, representing 24.7% of revenue, while non-GAAP earnings per share increased 50% to $0.51. The company generated $45.3 million in unlevered free cash flow during the quarter.
Co-Chief Executive Officer Steve Vintz said the company exceeded all of its guided metrics and raised its outlook as customers increasingly adopt its broader platform amid a changing AI-related cybersecurity landscape.
Tenable One Reaches Record Share of New Business
Tenable One accounted for 50% of new business in the quarter, up from 41% in the prior quarter and 40% a year earlier. The company said its recently introduced pricing and packaging structure, which includes Tenable One Foundation and Tenable One Advanced, helped simplify customer adoption and expansion.
Vintz said adoption of the higher-priced Advanced offering exceeded expectations, helping lift average deal sizes. Chief Financial Officer Matt Brown said Advanced outpaced Foundation by roughly a 2-to-1 ratio during the quarter.
“Larger lands and expansion deals with Tenable One helped drive average deal sizes higher this quarter,” Vintz said, adding that the company’s net dollar expansion rate increased to 106% from 105% in the first quarter. Brown noted this was the first quarter-over-quarter increase in the metric since the first quarter of 2022.
The company added 381 new enterprise customers and 32 net new six-figure accounts. Vintz also said the number of net new seven-figure customer additions was more than double the company’s typical level and represented one of its strongest quarters for such additions in nearly two years.
AI Security and Remediation Efforts Drive Customer Conversations
Management said customer interest in exposure management has increased as AI accelerates vulnerability discovery and expands the potential attack surface. Vintz said non-CVE risks, including misconfigurations and compromised identities, represent more than 60% of potential breach entry points, according to the company.
Tenable is positioning its Hexa agentic AI engine as a way for customers to prioritize and remediate security issues. The company said Hexa operates within a “harness” designed to provide context, human oversight and an audit trail as AI agents execute security-related tasks.
Mark Thurmond, Tenable’s other co-CEO, said more than 80% of customers who open Hexa submit a prompt, while nearly half use it to take action rather than only consume information. Hexa users engage with an average of six Tenable One tools, he said.
Thurmond said one customer used Hexa to connect data across systems, workflows and geographies, identifying one patch that could neutralize 53 potential attack paths. The company also created a SKU for incremental Hexa tokens after some customers exceeded their allotted usage, according to management.
Beyond Hexa, Tenable said its AI Exposure capabilities are expanding coverage to Gemini, alongside Claude, ChatGPT and Copilot, as well as major MCP deployments and AI-native development tools. The offering is intended to help organizations discover AI usage, assess associated risks and monitor prompts against security policies.
The company also highlighted its relationships with Anthropic through Project Glasswing and OpenAI through the Daybreak program. Vintz said research conducted through Glasswing showed frontier AI models could substantially increase the speed and scale of vulnerability discovery, while also underscoring the need to validate whether exposures are reachable, exploitable and mitigated by existing controls.
Customer Wins, Federal Authorization and Competitive Activity
Management pointed to several customer deals during the quarter, including a six-figure Tenable One Advanced sale to a global manufacturing services company that replaced a legacy vulnerability management provider. A financial services customer expanded into a three-year, seven-figure Tenable One commitment that included services.
Tenable also said it displaced a major competitor at a large European postal service, supported by the region’s largest cybersecurity service provider. Thurmond characterized the quarter as one of the company’s strongest for competitive displacements.
During the quarter, Tenable One Cloud Exposure received FedRAMP High authorization, a designation that the company said expands its opportunity in the U.S. federal market. Management also cited strong demand for operational technology and cloud security coverage as customers seek broader visibility across asset types.
Thurmond said customers are not necessarily increasing cybersecurity budgets dramatically, but are consolidating tools and moving more quickly toward platforms that can cover more of their environment with fewer vendors.
Outlook Raised; Share Repurchases Continue
For the third quarter, Tenable forecast revenue of $270 million to $273 million, representing 7.6% year-over-year growth at the midpoint. The company expects non-GAAP operating income of $66 million to $69 million and non-GAAP earnings per share of $0.49 to $0.52.
For full-year 2026, Tenable raised its revenue outlook to $1.075 billion to $1.081 billion, or 7.9% growth at the midpoint. It increased projected non-GAAP operating income to $258 million to $264 million, non-GAAP net income to $228 million to $234 million, and non-GAAP earnings per share to $1.95 to $2.00.
- Full-year unlevered free cash flow outlook: $289 million to $295 million
- Cash and short-term investments at quarter-end: $298.2 million
- Second-quarter share repurchases: 5.2 million shares for $100 million
- Year-to-date share repurchases: 11.4 million shares for about $230 million
- Remaining repurchase authorization: $108 million
Brown said the company expects its net dollar expansion rate to remain at 106% through the remainder of the year. He also said expectations for current calculated billings had improved by $8 million to $10 million from the company’s outlook at the beginning of the year, with most of that improvement expected in the second half.
Vintz said Tenable plans to add more sales capacity in the second half than it has over the prior two years, citing elevated sales productivity and confidence in the opportunity for exposure management.
About Tenable (NASDAQ:TENB)
Tenable Holdings, Inc is a global cybersecurity company specializing in vulnerability management and continuous threat exposure assessment. Headquartered in Columbia, Maryland, Tenable was founded in 2002 by Ron Gula and Jack Huffard to address the growing need for proactive network security solutions. Over the years, the company has evolved from a pioneer in open-source vulnerability scanning to a leading provider of comprehensive security platforms that help organizations identify, investigate and prioritize cyber risks across on-premises, cloud and operational technology environments.
At the core of Tenable's product suite is Nessus, one of the industry's most widely adopted vulnerability scanners.
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