- Revenue Growth: 12% year-over-year growth, reaching $247.3 million, exceeding the guided midpoint by $5.3 million.
- Profitability: Operating margin of 19%, with EPS of $0.34, $0.04 above the midpoint guidance.
- Customer Acquisition: Added 76 net new six-figure customers and 367 new enterprise platform customers, with a 107% net dollar expansion rate.
- Platform Adoption: Tenable One accounted for 40% of total new sales, with strong win rates and high renewal rates.
- Revenue Outlook: Q3 revenue guidance of $245-$248 million, with full-year 2025 growth expected at 12%-13%.
Revenue and Customer Growth
The company added 76 net new six-figure customers and 367 new enterprise platform customers, with a net dollar expansion rate of 107%. Tenable One, their exposure management platform, accounted for 40% of total new sales in the quarter. Revenue performance was driven by a favorable mix and upfront revenue recognition, with Cloud Customer Base (CCB) at 40% of new sales and 30% of total sales. Vulnerability Management (VM) was strong, meeting expectations, while OT and hybrid IT/OT environments saw significant growth.
AI Strategy and Acquisition
The acquisition of Apex Security, which closed during the quarter, expanded Tenable's AI capabilities. The company expects to offer a holistic approach to understanding AI risk, providing visibility into AI usage, detecting AI-related vulnerabilities, and securing AI resources and data configurations. As the company's management noted, "Apex extends our capabilities with AI by monitoring prompts and interactions for misuse and providing governance and enforcement."
Guidance and Valuation
For the third quarter, Tenable expects revenue to be in the range of $245 million to $248 million, and for the full year 2025, they expect revenue growth of 12% to 13%. The company also announced a $250 million increase to their share repurchase program, demonstrating their commitment to effectively deploying and returning capital to shareholders. With a P/S Ratio of 4.03 and a Free Cash Flow Yield of 6.55%, the company's valuation seems reasonable given its growth prospects. Analysts estimate next year's revenue growth at 7.9%, and the actual EPS came out at $0.34, relative to estimates at $0.3.
Cloud Security and Federal Business
The company has a strong cloud security pipeline, with increased inquiries following Google's acquisition of Wiz. However, there's no evidence of customers ripping and replacing Wiz, but rather exploring a dual-vendor strategy. Tenable's CNAPP solution, often sold as part of Tenable One, helps drive cloud security growth. The company has improved visibility into federal renewals, with potential expansion opportunities across VM, cloud, OT, and the platform itself. With FedRAMP authorization for Tenable One and cloud security, the company is optimistic about growth in the federal sector.