Tenable (TENB) Q3 2024 earnings summary

Executive summary

• Q3 2024 revenue reached $227.1 million, up 13% year-over-year, with recurring revenue at 96% and calculated current billings at $248.4 million, up 11% year-over-year.

• Non-GAAP operating margin improved to 20%, and unlevered free cash flow was a record $60.8 million for the quarter.

• Exposure management and cloud security solutions drove strong new sales, with exposure solutions now over 50% of new sales and non-VM exposure solutions growing nearly 30% year-over-year.

• The company acquired Eureka Security, Inc. to enhance cloud data security and expanded its stock repurchase authorization by $200 million.

• Recognized as a leader in vulnerability management by major industry analysts and serves approximately 44,000 customers globally, including 65% of Fortune 500.

Financial highlights

• Q3 2024 revenue was $227.1 million, up 13% year-over-year, with 96% recurring revenue and non-GAAP gross margin of 81%.

• Calculated current billings for Q3 2024 were $248.4 million, up from $224.7 million in Q3 2023.

• Non-GAAP income from operations was $45.0 million, with non-GAAP EPS of $0.32, up from $0.23 in Q3 2023.

• Cash and short-term investments totaled $548.4 million at quarter end.

• Free cash flow for the nine months ended September 30, 2024, was $128.5 million, up from $105.3 million in the prior year period.

Outlook and guidance

• Q4 2024 revenue expected between $229 million and $233 million; non-GAAP operating income $47–$49 million; non-GAAP EPS $0.33–$0.35.

• FY 2024 revenue guidance is $893.3–$897.3 million; calculated current billings $957.0–$967.0 million; unlevered free cash flow forecasted at $225.0–$235.0 million.

• FY 2024 non-GAAP operating income $171.8–$173.8 million; non-GAAP EPS $1.21–$1.23.

• 2025 growth expected to approach the midpoint of implied Q4 CCB growth (8–9%).

• Long-term target of 35%+ unlevered free cash flow margins.