TENB Q1 Earnings Call: Exposure Management Drives Large Deals Amid Cautious Outlook

Cybersecurity software maker Tenable (NASDAQ: TENB) reported revenue ahead of Wall Street’s expectations in Q1 CY2025, with sales up 10.7% year on year to $239.1 million. The company expects next quarter’s revenue to be around $242 million, close to analysts’ estimates. Its non-GAAP profit of $0.36 per share was 27.5% above analysts’ consensus estimates.

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StockStory’s Take

Tenable’s first quarter results were shaped by notable momentum in its exposure management platform, Tenable One, which management said was central to landing the highest number of seven-figure deals in company history. Co-CEOs Steve Vintz and Mark Thurmond credited the platform’s ability to unify risk insights across cloud, on-premise, and operational technology environments for expanding deal sizes and driving customer upgrades, particularly in regulated sectors such as finance and the public sector.

Looking ahead, Tenable’s leadership reaffirmed its annual revenue guidance but indicated a more cautious approach due to economic and geopolitical uncertainties, especially in the U.S. public sector. Vintz explained, “There’s just more uncertainty now since our February call than there was early in the year,” citing longer procurement cycles and leadership changes in government agencies as reasons for a more conservative outlook. The company’s strategy for the year centers on continued investment in platform innovation and expanding integrations, balanced with operating discipline.

Key Insights from Management’s Remarks

Tenable’s management pointed to exposure management momentum, a shifting competitive landscape, and evolving customer priorities as the key factors influencing quarterly results and outlook.

• Exposure Management Platform Adoption: Tenable One continued to drive large deal wins, with management attributing heightened customer interest to its ability to integrate vulnerability, cloud, and operational technology risk into a unified solution, leading to broader platform adoption and higher average selling prices.
• Cloud Security and AI Initiatives: The company observed outsized growth in its cloud security offerings, and highlighted the operationalization of AI-aware discovery capabilities. Management cited increased detection of AI-related applications and vulnerabilities, positioning Tenable to address emerging risks tied to artificial intelligence adoption.
• Vulcan Cyber Acquisition Integration: The integration of Vulcan Cyber is broadening Tenable One’s analytics by incorporating third-party security data, which management believes will further differentiate the platform and enable more actionable remediation workflows for customers.
• Competitive Landscape Shifts: Management noted that the acquisition of Wiz by Google has created new opportunities for Tenable, as customers with multi-cloud environments seek alternatives to vendor lock-in. Tenable reported higher win rates against both legacy vulnerability management and endpoint security competitors.
• Public Sector Headwinds: Leadership acknowledged increased uncertainty in the U.S. federal market due to government leadership changes and extended procurement cycles. Despite closing notable public sector deals, Tenable anticipates more cautious spending and delayed purchasing decisions from these customers.

Drivers of Future Performance

Management’s outlook for the coming quarters is shaped primarily by continued demand for exposure management, balanced against macroeconomic and public sector headwinds.

• Platform Expansion and Innovation: Tenable plans to invest in expanding Tenable One’s capabilities, including deeper integrations of third-party data and automated remediation, aiming to strengthen its competitive position and drive higher-value deals.
• Cloud and AI Security Demand: The company expects rising adoption of cloud and AI technologies to create ongoing demand for its solutions, as organizations look to secure increasingly complex and interconnected environments.
• Macroeconomic and Government Uncertainties: Management highlighted risks from geopolitical events, U.S. policy changes, and federal agency leadership turnover, which may lengthen sales cycles and create variability in public sector revenue contributions.

Top Analyst Questions

• Brian Essex (JPMorgan): Asked how increased macro uncertainty, particularly in the public sector, was factored into guidance. Management replied that about two-thirds of the guidance reduction was due to U.S. public sector caution, with the rest from the enterprise segment.
• Saket Kalia (Barclays): Questioned competitive trends, especially with new players like Wiz. Management said win rates against traditional and endpoint security vendors remained high, and recent M&A has led to more RFP invitations.
• Andrew Nowinski (Wells Fargo): Inquired about the interplay between cloud security momentum and exposure management. Management stated that cloud security is integral to the exposure management platform, with customers increasingly seeking unified solutions.
• Matt Calitri (Needham): Wanted quantification of public versus private sector impacts on guidance. Management specified that two-thirds of the outlook revision was attributed to public sector uncertainty, mainly from longer deal cycles.
• Patrick Colville (Scotiabank): Asked about strategic priorities for the co-CEO structure. Management emphasized continued focus on expanding Tenable One, integrating third-party data, and leveraging AI to drive customer value.

Catalysts in Upcoming Quarters

In future quarters, the StockStory team will be watching (1) the pace of Tenable One adoption and customer upgrades across enterprise and public sector accounts, (2) evidence of sales cycle lengthening or stabilization in the U.S. federal business as government leadership roles are filled, and (3) the rollout and market reception of new platform features enabled by the Vulcan Cyber integration. We will also track the impact of emerging AI security risks on customer demand and platform differentiation.

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