Tenable Reports Strong Q3 Growth, Boosts Share Buyback Program

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Tenable Reports Strong Q3 Growth, Boosts Share Buyback Program

Tenable Holdings, Inc. (NASDAQ: TENB), a cybersecurity company, reported strong financial performance in Q3 2024. Revenue reached $227.1 million, representing a 13% increase compared to the previous year. The company's earnings per share (EPS) was $0.32, and a $200 million increase in the share buyback program was announced.

Tenable's growth was driven by demand for Tenable One and Cloud Security products, as well as achievements in the public sector and the mid-market. The company also added 386 new enterprise customers and experienced 100% annual growth in Tenable Cloud Security.

Key Highlights

  • Tenable's Q3 2024 revenue was $227.1 million, indicating a 13% year-over-year increase.
  • The company reported $0.32 EPS and announced a $200 million increase in its share buyback program.
  • Tenable One and Cloud Security were key growth factors, with Tenable One accounting for 30% of new sales.
  • Calculated billings increased by 11%, reaching $248.4 million.
  • Operating income reached $45 million, up from last year's 10% to a 20% operating margin.
  • The company expects Q4 revenue to be between $229 million and $233 million, with full-year revenue anticipated to be between $893.3 million and $897.3 million.
  • Non-GAAP diluted EPS for Q4 is projected to be between $0.33 and $0.35.
  • Tenable targets unlevered free cash flow of $280 million to $290 million for 2025, with further details to be provided in February.

Negative Aspects

  • The gross margin slightly decreased compared to the previous quarter due to investments in cloud infrastructure.
  • The net dollar expansion rate fell to 108%, impacted by the timing of large deals and budgeting factors.

Positive Aspects

  • Tenable One and Cloud Security generated significant demand, with Tenable One accounting for 30% of new sales.
  • The company witnessed approximately 100% year-on-year growth in Tenable Cloud Security.
  • Strong performance in Exposure Solutions is expected to continue, representing 20% of the business with 30% growth.

Shortcomings

  • Despite increased buyback authorization, no share repurchases were made during this quarter.

Q&A Highlights

  • Executives discussed new product offerings such as AI Aware and AI Security Posture Management.
  • Pricing for Enclave Security remains consistent, with a healthy sales pipeline for both Exposure Solutions and VM.
  • The company is poised for margin expansion and targets free cash flow margins above 35% in the long term.

Tenable Holdings, Inc. has demonstrated resilience and growth amid macroeconomic challenges, focusing on expanding its exposure management solutions and cloud security offerings. The increase in the share buyback program reflects confidence in the company’s financial health and future outlook. As Tenable continues to innovate and address market demands, investors and customers will closely monitor how the company’s strategic initiatives develop in the upcoming quarters.

InvestingPro Forecasts Tenable Holdings, Inc. (NASDAQ: TENB) continues to show promising growth potential based on its recent financial performance and forecasts provided by InvestingPro. With Q3 2024 revenue reaching $227.1 million, representing a 13% year-over-year increase, this aligns with InvestingPro data, which reported revenue of $852.04 million and a 14.62% growth rate for the last twelve months as of Q2 2024.

One of the notable InvestingPro Insights highlights that Tenable has impressive gross profit margins, confirmed by InvestingPro data showing a gross profit margin of 77.43% for the last twelve months as of Q2 2024. This high margin reflects Tenable's efficiency in converting revenue into profit and supports its strong financial performance and investments in growth areas like cloud infrastructure.

Another relevant InvestingPro Insight indicates that 12 analysts have revised their earnings estimates upward for the upcoming period. This positive sentiment among analysts aligns with Tenable's optimistic outlook for Q4 and full-year 2024, along with ambitious targets for 2025. The projected non-GAAP diluted EPS for Q4 between $0.33 and $0.35 showcases confidence in its near-term profitability.

It’s important to note based on InvestingPro Insights that Tenable has not been profitable in the last twelve months, but analysts forecast the company will be profitable this year. This expectation is bolstered by Tenable's robust Q3 performance and ongoing growth guidance.

For investors seeking more comprehensive forecasts, InvestingPro provides additional insights and data points that can offer a deeper understanding of Tenable's financial condition and market performance. A total of 10 insights for Tenable are available on InvestingPro, allowing subscribers to gain valuable forecasts to inform their investment decisions.