Tenable (TENB) Q2 2024 earnings summary

Executive summary

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

• Non-GAAP operating margin reached 19%, with non-GAAP income from operations at $42.8 million, up from $30.2 million a year ago.

• Exposure management and cloud security solutions, especially Tenable One and CNAPP, showed strong momentum and increasing customer adoption, with Tenable One representing 30% of new business.

• Acquired Eureka Security to enhance cloud data security and DSPM capabilities, and formed a strategic alliance with Deloitte.

• Serves approximately 44,000 customers, including 65% of Fortune 500 and 50% of Global 2000.

Financial highlights

• Q2 revenue was $221.2 million, up 13% year-over-year, with 96% recurring revenue.

• Calculated current billings rose 10% year-over-year to $221.1 million, but fell short of internal expectations.

• Non-GAAP gross margin was 82%, up from 81% in Q2 2023.

• Non-GAAP net income was $38.2 million ($0.31 per diluted share), $0.08 above guidance midpoint.

• 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.

• Introduced 2025 unlevered free cash flow target of $280M–$290M, representing 24% year-over-year growth at midpoint and a long-term margin target of 35%+.

• Guidance reflects a more cautious approach due to elongated sales cycles and macro uncertainty, especially for large deals.