Tenable (TENB) Q2 2024 earnings summary

Executive summary

• Q2 2024 revenue grew 13% year-over-year to $221.2 million, driven by strong subscription growth, international expansion, and outperformance in revenue and earnings.

• Non-GAAP operating margin reached 19%, with non-GAAP income from operations at $42.8 million, and non-GAAP net income of $38.2 million ($0.31 per diluted share).

• Exposure management, especially Tenable One and cloud security, saw strong demand and momentum, with Tenable One representing 30% of new business and exposure solutions over 50% of new sales.

• Acquired Eureka Security in June 2024 for $29.2 million to enhance cloud data security and formed a strategic alliance with Deloitte.

• Serves approximately 44,000 customers, including 65% of Fortune 500 and 50% of Global 2000, and is recognized as a leader in vulnerability management.

Financial highlights

• Revenue was $221.2 million, up 13% year-over-year, with 96% recurring revenue and gross margin of 82%.

• Calculated current billings grew 10% year-over-year to $221.1 million.

• Non-GAAP operating margin was 19%; non-GAAP net income was $38.2 million ($0.31 per diluted share).

• Free cash flow for Q2 was $28.7 million, unlevered free cash flow was $36.5 million.

• Cash and short-term investments totaled $487.0 million at June 30, 2024.

Outlook and guidance

• Q3 2024 revenue expected between $222M–$224M; non-GAAP operating income $42M–$44M; EPS $0.28–$0.30.

• FY 2024 revenue guidance is $889M–$895M; calculated current billings $957M–$967M; non-GAAP operating income $167M–$171M; non-GAAP net income $143M–$147M; EPS $1.16–$1.19.

• FY 2024 unlevered free cash flow projected at $225M–$235M.

• Guidance reflects a more cautious approach due to longer sales cycles and increased deal scrutiny, especially for large VM deals.

• Management expects continued investment in sales, marketing, and R&D to drive long-term growth.