Recent Quotes View Full List My Watchlist Create Watchlist Indicators DJI Nasdaq Composite SPX Gold Crude Oil EL&P Market Index Markets Stocks ETFs Tools Overview News Currencies International Treasuries Tenable Announces Third Quarter 2024 Financial Results By: Tenable Holdings, Inc. via GlobeNewswire October 30, 2024 at 16:05 PM EDT Revenue of $227.1 million, up 13% year-over-year.Calculated current billings of $248.4 million, up 11% year-over-year.GAAP operating margin of (1)%; Non-GAAP operating margin of 20%.Net cash provided by operating activities of $54.6 million; Unlevered free cash flow of $60.8 million.$200 million expansion of our stock repurchase program. COLUMBIA, Md., Oct. 30, 2024 (GLOBE NEWSWIRE) -- Tenable Holdings, Inc. ("Tenable") (Nasdaq: TENB), the exposure management company, today announced financial results for the quarter ended September 30, 2024. "We delivered strong results in Q3, surpassing expectations on both the top and bottom line," said Amit Yoran, Chairman and CEO of Tenable. "Cloud Security and Tenable One, our exposure management platform, continue to drive demand as customers increasingly focus on securing critical cloud infrastructure and assessing their overall exposures in a hybrid world." Third Quarter 2024 Financial Highlights Revenue was $227.1 million, a 13% increase year-over-year.Calculated current billings was $248.4 million, an 11% increase year-over-year.GAAP loss from operations was $2.1 million, compared to $7.9 million in the third quarter of 2023.Non-GAAP income from operations was $45.0 million, compared to $36.6 million in the third quarter of 2023.GAAP net loss was $9.2 million, compared to $15.6 million in the third quarter of 2023.GAAP net loss per share was $0.08, compared to $0.13 in the third quarter of 2023.Non-GAAP net income was $39.3 million, compared to $27.7 million in the third quarter of 2023.Non-GAAP diluted earnings per share was $0.32, compared to $0.23 in the third quarter of 2023.Cash and cash equivalents and short-term investments were $548.4 million at September 30, 2024, compared to $474.0 million at December 31, 2023.Net cash provided by operating activities was $54.6 million, compared to $42.4 million in the third quarter of 2023.Unlevered free cash flow was $60.8 million, compared to $48.2 million in the third quarter of 2023. Recent Business Highlights Added 386 new enterprise platform customers and 60 net new six-figure customers.Announced that our Board of Directors recently approved the expansion of our existing stock repurchase program, raising the existing authorization by $200 million.Released AI Aware, advanced detection capabilities designed to rapidly surface artificial intelligence solutions, vulnerabilities and weaknesses.Introduced Vulnerability Intelligence and Exposure Response, two powerful context-driven prioritization and response features that are designed to deliver actionable intelligence across IT and cloud environments.Extended exposure management capabilities to cloud data and AI by adding new data security posture management (DSPM) and artificial intelligence security posture management (AI-SPM) capabilities for Tenable Cloud Security.Launched Tenable Enclave Security, a solution that supports the needs of customers operating in highly secure environments.Recognized as the top performer in cloud security in the 2024 CRN Annual Report Card Awards. Financial Outlook For the fourth quarter of 2024, we currently expect: Revenue in the range of $229.0 million to $233.0 million.Non-GAAP income from operations in the range of $47.0 million to $49.0 million.Non-GAAP net income in the range of $42.0 million to $44.0 million, assuming interest expense of $7.8 million, interest income of $6.0 million and a provision for income taxes of $3.1 million.Non-GAAP diluted earnings per share in the range of $0.33 to $0.35.125.5 million diluted weighted average shares outstanding. For the year ending December 31, 2024, we currently expect: Calculated current billings in the range of $957.0 million to $967.0 million.Revenue in the range of $893.3 million to $897.3 million.Non-GAAP income from operations in the range of $171.8 million to $173.8 million.Non-GAAP net income in the range of $149.9 million to $151.9 million, assuming interest expense of $32.1 million, interest income of $23.5 million and a provision for income taxes of $12.3 million.Non-GAAP diluted earnings per share in the range of $1.21 to $1.23.123.5 million diluted weighted average shares outstanding.Unlevered free cash flow in the range of $225.0 million to $235.0 million. Conference Call Information Tenable will host a conference call on October 30, 2024 at 4:30 p.m. Eastern Time to discuss its financial results. The conference call can be accessed at 877-407-9716 (U.S.) and 201-493-6779 (international). A live webcast of the event will be available on the Tenable Investor Relations website at https://investors.tenable.com. An archived replay of the live broadcast will be available on the Investor Relations page of the website following the call. About Tenable Tenable® is the exposure management company, exposing and closing the cybersecurity gaps that erode business value, reputation and trust. The company’s AI-powered exposure management platform radically unifies security visibility, insight and action across the attack surface, equipping modern organizations to protect against attacks from IT infrastructure to cloud environments to critical infrastructure and everywhere in between. By protecting enterprises from security exposure, Tenable reduces business risk for approximately 44,000 customers around the globe. Learn more at tenable.com. Contact Information Investor Relationsinvestors@tenable.com Media Relationstenablepr@tenable.com Forward-Looking Statements This press release includes forward-looking statements within the meaning of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. All statements contained in this press release other than statements of historical fact, including statements regarding our future results of operations and financial position, our platform's ability to help protect enterprises from security exposure, business strategy and plans and objectives for future operations, are forward-looking statements and represent our views as of the date of this press release. The words “anticipate,” "believe,” “continue,” “estimate,” “expect,” “intend,” “may,” “will” and similar expressions are intended to identify forward-looking statements. We have based these forward-looking statements on our current expectations and projections about future events and financial trends that we believe may affect our financial condition, results of operations, business strategy, short-term and long-term business operations and objectives and financial needs. These forward-looking statements are subject to a number of assumptions and risks and uncertainties, many of which involve factors or circumstances that are beyond our control that could affect our financial results. These risks and uncertainties are detailed in the sections titled "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" in our Annual Report on Form 10-K for the year ended December 31, 2023 as well as other filings that we make from time to time with the SEC, which are available on the SEC's website at sec.gov. Moreover, we operate in a very competitive and rapidly changing environment. New risks emerge from time to time. It is not possible for our management to predict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements we may make. In light of these risks, uncertainties and assumptions, the future events and trends discussed in this press release may not occur and actual results could differ materially and adversely from those anticipated or implied in any forward-looking statements. Except as required by law, we are under no obligation to update these forward-looking statements subsequent to the date of this press release, or to update the reasons if actual results differ materially from those anticipated in the forward-looking statements. Non-GAAP Financial Measures To supplement our consolidated financial statements, which are prepared and presented in accordance with GAAP, we use certain non-GAAP financial measures, as described below, to understand and evaluate our core operating performance. These non-GAAP financial measures, which may be different than similarly titled measures used by other companies, are presented to enhance the overall understanding of our financial performance and should not be considered a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP. We believe that these non-GAAP financial measures provide useful information about our financial performance, enhance the overall understanding of our past performance and future prospects and allow for greater transparency with respect to important metrics used by management for financial and operational decision-making. We include these non-GAAP financial measures to present our financial performance using a management view and because we believe that these measures provide an additional comparison of our core financial performance over multiple periods with other companies in our industry. Reconciliations of non-GAAP financial measures to the most directly comparable GAAP financial measures are included in the financial tables accompanying this press release. Calculated Current Billings: We define calculated current billings, a non-GAAP financial measure, as total revenue recognized in a period plus the change in current deferred revenue in the corresponding period. We believe that calculated current billings is a key metric to measure our periodic performance. Given that most of our customers pay in advance (including multi-year contracts), but we generally recognize the related revenue ratably over time, we use calculated current billings to measure and monitor our ability to provide our business with the working capital generated by upfront payments from our customers. We believe that calculated current billings, which excludes deferred revenue for periods beyond twelve months in a customer’s contractual term, more closely correlates with annual contract value and that the variability in total billings, depending on the timing of large multi-year contracts and the preference for annual billing versus multi-year upfront billing, may distort growth in one period over another. Free Cash Flow and Unlevered Free Cash Flow: We define free cash flow, a non-GAAP financial measure, as net cash provided by operating activities less purchases of property and equipment and capitalized software development costs. We believe free cash flow is an important liquidity measure of the cash that is available (if any), after purchases of property and equipment and capitalized software development costs, for investment in our business and to make acquisitions. We believe that free cash flow is useful as a liquidity measure because it measures our ability to generate cash. We define unlevered free cash flow as free cash flow plus cash paid for interest and other financing costs. We believe unlevered free cash flow is useful as a liquidity measure as it measures the cash that is available to invest in our business and meet our current debt obligations and future financing needs. However, given our debt obligations, non-cancelable commitments and other contractual obligations, unlevered free cash flow does not represent residual cash flow available for discretionary expenses. Non-GAAP Income from Operations and Non-GAAP Operating Margin: We define these non-GAAP financial measures as their respective GAAP measures, excluding the effect of stock-based compensation, acquisition-related expenses, restructuring expenses, costs related to the intra-entity asset transfers resulting from the internal restructuring of legal entities, and amortization of acquired intangible assets. Acquisition-related expenses include transaction and integration expenses, as well as costs related to the intercompany transfer of acquired intellectual property. Restructuring expenses include non-ordinary course severance, employee related benefits, and other charges. We believe that the exclusion of these expenses provides for a useful comparison of our operating results to prior periods and to our peer companies, which commonly exclude restructuring expenses. Non-GAAP Net Income and Non-GAAP Earnings Per Share: We define non-GAAP net income as GAAP net loss, excluding the effect of stock-based compensation, acquisition-related expenses, restructuring expenses and amortization of acquired intangible assets, including the applicable tax impacts. In addition, we exclude the tax impact and related costs of intra-entity asset transfers resulting from the internal restructuring of legal entities as well as deferred income tax benefits recognized in connection with acquisitions. We use non-GAAP net income to calculate non-GAAP earnings per share. Non-GAAP Gross Profit and Non-GAAP Gross Margin: We define non-GAAP gross profit as GAAP gross profit, excluding the effect of stock-based compensation and amortization of acquired intangible assets. Non-GAAP gross margin is defined as non-GAAP gross profit as a percentage of revenue. Non-GAAP Sales and Marketing Expense, Non-GAAP Research and Development Expense and Non-GAAP General and Administrative Expense: We define these non-GAAP measures as their respective GAAP measures, excluding stock-based compensation, acquisition-related expenses and costs related to intra-entity asset transfers resulting from the internal restructuring of legal entities. TENABLE HOLDINGS, INC.CONSOLIDATED STATEMENTS OF OPERATIONS(unaudited) Three Months EndedSeptember 30, Nine Months EndedSeptember 30,(in thousands, except per share data) 2024 2023 2024 2023 Revenue$227,088 $201,529 $664,290 $585,404 Cost of revenue(1) 50,499 45,754 148,229 134,774 Gross profit 176,589 155,775 516,061 450,630 Operating expenses: Sales and marketing(1) 99,083 94,759 300,037 289,750 Research and development(1) 48,020 37,052 136,896 113,080 General and administrative(1) 31,569 31,877 92,889 85,614 Restructuring — — 6,070 — Total operating expenses 178,672 163,688 535,892 488,444 Loss from operations (2,083) (7,913) (19,831) (37,814)Interest income 5,989 7,662 17,587 19,323 Interest expense (8,148) (8,119) (24,333) (23,208)Other income (expense), net 359 (6,502) (858) (7,993)Loss before income taxes (3,883) (14,872) (27,435) (49,692)Provision for income taxes 5,328 693 10,734 6,944 Net loss$(9,211) $(15,565) $(38,169) $(56,636) Net loss per share, basic and diluted$(0.08) $(0.13) $(0.32) $(0.49)Weighted-average shares used to compute net loss per share, basic and diluted 119,169 115,954 118,466 114,967 _______________ (1) Includes stock-based compensation as follows: Three Months EndedSeptember 30, Nine Months EndedSeptember 30, 2024 2023 2024 2023Cost of revenue$3,216 $3,011 $9,486 $8,542Sales and marketing 15,941 15,805 47,517 46,622Research and development 12,435 9,242 35,395 27,871General and administrative 10,092 8,777 30,403 25,777Total stock-based compensation$41,684 $36,835 $122,801 $108,812 TENABLE HOLDINGS, INC.CONSOLIDATED BALANCE SHEETS September 30, 2024 December 31, 2023(in thousands, except per share data)(unaudited) Assets Current assets: Cash and cash equivalents$312,207 $237,132 Short-term investments 236,242 236,840 Accounts receivable (net of allowance for doubtful accounts of $971 and $470 at September 30, 2024 and December 31, 2023, respectively) 192,648 220,060 Deferred commissions 49,858 49,559 Prepaid expenses and other current assets 52,575 61,882 Total current assets 843,530 805,473 Property and equipment, net 39,780 45,436 Deferred commissions (net of current portion) 64,405 72,394 Operating lease right-of-use assets 32,127 34,835 Acquired intangible assets, net 99,474 107,017 Goodwill 541,292 518,539 Other assets 13,811 23,177 Total assets$1,634,419 $1,606,871 Liabilities and Stockholders’ Equity Current liabilities: Accounts payable and accrued expenses$17,833 $16,941 Accrued compensation 43,040 66,492 Deferred revenue 583,940 580,779 Operating lease liabilities 6,099 5,971 Other current liabilities 6,205 5,655 Total current liabilities 657,117 675,838 Deferred revenue (net of current portion) 163,512 169,718 Term loan, net of issuance costs (net of current portion) 357,334 359,281 Operating lease liabilities (net of current portion) 43,706 48,058 Other liabilities 8,195 7,632 Total liabilities 1,229,864 1,260,527 Stockholders’ equity: Common stock (par value: $0.01; 500,000 shares authorized; 121,344 and 117,504 shares issued at September 30, 2024 and December 31, 2023, respectively) 1,213 1,175 Additional paid-in capital 1,330,517 1,185,100 Treasury stock (at cost: 1,471 and 356 shares at September 30, 2024 and December 31, 2023, respectively) (64,925) (14,934)Accumulated other comprehensive income 954 38 Accumulated deficit (863,204) (825,035)Total stockholders’ equity 404,555 346,344 Total liabilities and stockholders’ equity$1,634,419 $1,606,871 TENABLE HOLDINGS, INC.CONSOLIDATED STATEMENTS OF CASH FLOWS(unaudited) Nine Months Ended September 30,(in thousands) 2024 2023 Cash flows from operating activities: Net loss$(38,169) $(56,636)Adjustments to reconcile net loss to net cash provided by operating activities: Depreciation and amortization 24,434 18,900 Stock-based compensation 122,801 108,812 Net accretion of discounts and amortization of premiums on short-term investments (6,141) (5,903)Amortization of debt issuance costs 1,003 941 (Gain) loss on other investments (1,452) 5,000 Restructuring 4,528 — Other 4,128 1,800 Changes in operating assets and liabilities: Accounts receivable 26,911 9,084 Prepaid expenses and other assets 29,868 17,524 Accounts payable, accrued expenses and accrued compensation (22,921) 447 Deferred revenue (3,153) 16,856 Other current and noncurrent liabilities (5,480) (5,475)Net cash provided by operating activities 136,357 111,350 Cash flows from investing activities: Purchases of property and equipment (1,924) (1,299)Capitalized software development costs (5,930) (4,707)Purchases of short-term investments (227,210) (217,239)Sales and maturities of short-term investments 234,865 242,864 Proceeds from other investments 3,512 — Purchases of other investments (1,250) — Business combinations, net of cash acquired (29,162) — Net cash (used in) provided by investing activities (27,099) 19,619 Cash flows from financing activities: Payments on term loan (2,813) (2,813)Proceeds from loan agreement — 424 Proceeds from stock issued in connection with the employee stock purchase plan 16,262 16,224 Proceeds from the exercise of stock options 4,798 2,421 Purchase of treasury stock (49,991) — Other financing activities — (213)Net cash (used in) provided by financing activities (31,744) 16,043 Effect of exchange rate changes on cash and cash equivalents and restricted cash (2,439) (2,562)Net increase in cash and cash equivalents and restricted cash 75,075 144,450 Cash and cash equivalents and restricted cash at beginning of period 237,132 300,866 Cash and cash equivalents and restricted cash at end of period$312,207 $445,316 TENABLE HOLDINGS, INC.REVENUE COMPONENTS AND RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES(unaudited) RevenueThree Months EndedSeptember 30, Nine Months EndedSeptember 30,(in thousands) 2024 2023 2024 2023Subscription revenue$208,554 $183,268 $608,727 $531,133Perpetual license and maintenance revenue 11,769 12,200 35,941 36,535Professional services and other revenue 6,765 6,061 19,622 17,736Revenue(1)$227,088 $201,529 $664,290 $585,404 _______________ (1) Recurring revenue, which includes revenue from subscription arrangements for software (both recognized ratably over the subscription term and upon delivery) and cloud-based solutions and maintenance associated with perpetual licenses, represented 96% of revenue in the three and nine months ended September 30, 2024 and 95% of revenue in the three and nine months ended September 30, 2023. Calculated Current BillingsThree Months EndedSeptember 30, Nine Months EndedSeptember 30,(in thousands) 2024 2023 2024 2023 Revenue$227,088 $201,529 $664,290 $585,404 Deferred revenue (current), end of period 583,940 518,372 583,940 518,372 Deferred revenue (current), beginning of period(1) (562,587) (495,199) (580,887) (502,115)Calculated current billings$248,441 $224,702 $667,343 $601,661 ________________(1) Deferred revenue (current), beginning of period for the nine months ended September 30, 2024 includes $0.1 million related to acquired deferred revenue. Remaining Performance ObligationsSeptember 30,(in thousands) 2024 2023Remaining performance obligations, short-term$592,351 $528,367Remaining performance obligations, long-term 179,210 168,817Remaining performance obligations$771,561 $697,184 Free Cash Flow and Unlevered Free Cash FlowThree Months EndedSeptember 30, Nine Months EndedSeptember 30,(in thousands) 2024 2023 2024 2023 Net cash provided by operating activities$54,607 $42,411 $136,357 $111,350 Purchases of property and equipment (733) (201) (1,924) (1,299)Capitalized software development costs (1,163) (1,894) (5,930) (4,707)Free cash flow(1) 52,711 40,316 128,503 105,344 Cash paid for interest and other financing costs 8,055 7,843 23,505 26,786 Unlevered free cash flow(1)$60,766 $48,159 $152,008 $132,130 ________________ (1) Free cash flow and unlevered free cash flow for the periods presented were impacted by: Three Months EndedSeptember 30, Nine Months EndedSeptember 30,(in thousands) 2024 2023 2024 2023 Employee stock purchase plan activity$(3,653) $(2,236) $(6,283) $(2,507)Acquisition-related expenses (663) (571) (1,326) (830)Restructuring (492) — (5,911) — Non-GAAP Income from Operations and Non-GAAP Operating MarginThree Months EndedSeptember 30, Nine Months EndedSeptember 30,(dollars in thousands) 2024 2023 2024 2023 Loss from operations$(2,083) $(7,913) $(19,831) $(37,814)Stock-based compensation 41,684 36,835 122,801 108,812 Acquisition-related expenses 360 4,598 1,284 4,728 Restructuring — — 6,070 — Amortization of acquired intangible assets 5,014 3,055 14,443 9,208 Non-GAAP income from operations$44,975 $36,575 $124,767 $84,934 Operating margin (1)% `(4)% (3)% (6)%Non-GAAP operating margin 20% 18% 19% 15% Non-GAAP Net Income and Non-GAAP Earnings Per ShareThree Months EndedSeptember 30, Nine Months EndedSeptember 30,(in thousands, except per share data) 2024 2023 2024 2023 Net loss$(9,211) $(15,565) $(38,169) $(56,636)Stock-based compensation 41,684 36,835 122,801 108,812 Tax impact of stock-based compensation(1) 1,528 (1,207) 1,626 1,046 Acquisition-related expenses(2) 360 4,598 1,284 4,728 Restructuring(2) — — 6,070 — Amortization of acquired intangible assets(3) 5,014 3,055 14,443 9,208 Tax impact of acquisitions (52) (48) (130) (161)Non-GAAP net income$39,323 $27,668 $107,925 $66,997 Net loss per share, diluted$(0.08) $(0.13) $(0.32) $(0.49)Stock-based compensation 0.35 0.32 1.04 0.94 Tax impact of stock-based compensation(1) 0.01 (0.01) 0.01 0.01 Acquisition-related expenses(2) 0.01 0.04 0.01 0.04 Restructuring(2) — — 0.05 — Amortization of acquired intangible assets(3) 0.04 0.02 0.12 0.08 Tax impact of acquisitions — — — — Adjustment to diluted earnings per share(4) (0.01) (0.01) (0.03) (0.02)Non-GAAP earnings per share, diluted$0.32 $0.23 $0.88 $0.56 Weighted-average shares used to compute GAAP net loss per share, diluted 119,169 115,954 118,466 114,967 Weighted-average shares used to compute non-GAAP earnings per share, diluted 123,288 121,473 123,206 120,273 ________________ (1) The tax impact of stock-based compensation is based on the tax treatment for the applicable tax jurisdictions.(2) The tax impact of acquisition-related expenses and restructuring are not material.(3) The tax impact of the amortization of acquired intangible assets is included in the tax impact of acquisitions.(4) An adjustment to reconcile GAAP net loss per share, which excludes potentially dilutive shares, to non-GAAP earnings per share, which includes potentially dilutive shares. Non-GAAP Gross Profit and Non-GAAP Gross MarginThree Months EndedSeptember 30, Nine Months EndedSeptember 30,(dollars in thousands) 2024 2023 2024 2023 Gross profit$176,589 $155,775 $516,061 $450,630 Stock-based compensation 3,216 3,011 9,486 8,542 Amortization of acquired intangible assets 5,014 3,055 14,443 9,208 Non-GAAP gross profit$184,819 $161,841 $539,990 $468,380 Gross margin 78% 77% 78% 77%Non-GAAP gross margin 81% 80% 81% 80% Non-GAAP Sales and Marketing ExpenseThree Months EndedSeptember 30, Nine Months EndedSeptember 30,(dollars in thousands) 2024 2023 2024 2023 Sales and marketing expense$99,083 $94,759 $300,037 $289,750 Less: Stock-based compensation 15,941 15,805 47,517 46,622 Less: Acquisition-related expenses 3 — 52 — Non-GAAP sales and marketing expense$83,139 $78,954 $252,468 $243,128 Non-GAAP sales and marketing expense % of revenue 37% 39% 38% 42% Non-GAAP Research and Development ExpenseThree Months EndedSeptember 30, Nine Months EndedSeptember 30,(dollars in thousands) 2024 2023 2024 2023 Research and development expense$48,020 $37,052 $136,896 $113,080 Less: Stock-based compensation 12,435 9,242 35,395 27,871 Less: Acquisition-related expenses — — (20) — Non-GAAP research and development expense$35,585 $27,810 $101,521 $85,209 Non-GAAP research and development expense % of revenue 16% 14% 15% 15% Non-GAAP General and Administrative ExpenseThree Months EndedSeptember 30, Nine Months EndedSeptember 30,(dollars in thousands) 2024 2023 2024 2023 General and administrative expense$31,569 $31,877 $92,889 $85,614 Less: Stock-based compensation 10,092 8,777 30,403 25,777 Less: Acquisition-related expenses 357 4,598 1,252 4,728 Non-GAAP general and administrative expense$21,120 $18,502 $61,234 $55,109 Non-GAAP general and administrative expense % of revenue 9% 9% 9% 9% The following adjustments to reconcile forecasted non-GAAP income from operations, non-GAAP net income, non-GAAP earnings per share, free cash flow and unlevered free cash flow are subject to a number of uncertainties and assumptions, each of which are inherently difficult to forecast. As a result, actual adjustments and GAAP results may differ materially. Forecasted Non-GAAP Income from OperationsThree Months EndingDecember 31, 2024 Year EndingDecember 31, 2024(in millions)Low High Low HighForecasted income (loss) from operations$0.6 $2.6 $(19.2) $(17.2)Forecasted stock-based compensation 41.3 41.3 164.1 164.1 Forecasted acquisition-related expenses — — 1.3 1.3 Forecasted restructuring — — 6.1 6.1 Forecasted amortization of acquired intangible assets 5.1 5.1 19.5 19.5 Forecasted non-GAAP income from operations$47.0 $49.0 $171.8 $173.8 Forecasted Non-GAAP Net Income and Non-GAAP Earnings Per ShareThree Months EndingDecember 31, 2024 Year EndingDecember 31, 2024(in millions, except per share data)Low High Low HighForecasted net loss(1)$(6.2) $(4.2) $(44.4) $(42.4)Forecasted stock-based compensation 41.3 41.3 164.1 164.1 Forecasted tax impact of stock-based compensation 1.9 1.9 3.5 3.5 Forecasted acquisition-related expenses — — 1.3 1.3 Forecasted restructuring — — 6.1 6.1 Forecasted amortization of acquired intangible assets 5.1 5.1 19.5 19.5 Forecasted tax impact of acquisitions (0.1) (0.1) (0.2) (0.2)Forecasted non-GAAP net income$42.0 $44.0 $149.9 $151.9 Forecasted net loss per share, diluted(1)$(0.05) $(0.04) $(0.37) $(0.36)Forecasted stock-based compensation 0.34 0.34 1.38 1.38 Forecasted tax impact of stock-based compensation 0.02 0.02 0.03 0.03 Forecasted acquisition-related expenses — — 0.01 0.01 Forecasted restructuring — — 0.05 0.05 Forecasted amortization of acquired intangible assets 0.04 0.04 0.16 0.16 Forecasted tax impact of acquisitions — — — — Adjustment to diluted earnings per share(2) (0.02) (0.01) (0.05) (0.04)Forecasted non-GAAP earnings per share, diluted$0.33 $0.35 $1.21 $1.23 Forecasted weighted-average shares used to compute GAAP net loss per share, diluted 120.0 120.0 119.0 119.0 Forecasted weighted-average shares used to compute non-GAAP earnings per share, diluted 125.5 125.5 123.5 123.5 ________________(1) The forecasted GAAP net loss assumes income tax expense of $4.9 million and $15.6 million in the three months and year ending December 31, 2024, respectively. (2) Adjustment to reconcile GAAP net loss per share, which excludes potentially dilutive shares, to non-GAAP earnings per share, which includes potentially dilutive shares. Forecasted Free Cash Flow and Unlevered Free Cash FlowYear EndingDecember 31, 2024(in millions)Low HighForecasted net cash provided by operating activities$206.7 $216.7 Forecasted purchases of property and equipment (5.9) (5.9)Forecasted capitalized software development costs (6.7) (6.7)Forecasted free cash flow 194.1 204.1 Forecasted cash paid for interest and other financing costs 30.9 30.9 Forecasted unlevered free cash flow$225.0 $235.0 Data & News supplied by www.cloudquote.io Stock quotes supplied by Barchart Quotes delayed at least 20 minutes. By accessing this page, you agree to the following Privacy Policy and Terms and Conditions.
Tenable Announces Third Quarter 2024 Financial Results By: Tenable Holdings, Inc. via GlobeNewswire October 30, 2024 at 16:05 PM EDT Revenue of $227.1 million, up 13% year-over-year.Calculated current billings of $248.4 million, up 11% year-over-year.GAAP operating margin of (1)%; Non-GAAP operating margin of 20%.Net cash provided by operating activities of $54.6 million; Unlevered free cash flow of $60.8 million.$200 million expansion of our stock repurchase program. COLUMBIA, Md., Oct. 30, 2024 (GLOBE NEWSWIRE) -- Tenable Holdings, Inc. ("Tenable") (Nasdaq: TENB), the exposure management company, today announced financial results for the quarter ended September 30, 2024. "We delivered strong results in Q3, surpassing expectations on both the top and bottom line," said Amit Yoran, Chairman and CEO of Tenable. "Cloud Security and Tenable One, our exposure management platform, continue to drive demand as customers increasingly focus on securing critical cloud infrastructure and assessing their overall exposures in a hybrid world." Third Quarter 2024 Financial Highlights Revenue was $227.1 million, a 13% increase year-over-year.Calculated current billings was $248.4 million, an 11% increase year-over-year.GAAP loss from operations was $2.1 million, compared to $7.9 million in the third quarter of 2023.Non-GAAP income from operations was $45.0 million, compared to $36.6 million in the third quarter of 2023.GAAP net loss was $9.2 million, compared to $15.6 million in the third quarter of 2023.GAAP net loss per share was $0.08, compared to $0.13 in the third quarter of 2023.Non-GAAP net income was $39.3 million, compared to $27.7 million in the third quarter of 2023.Non-GAAP diluted earnings per share was $0.32, compared to $0.23 in the third quarter of 2023.Cash and cash equivalents and short-term investments were $548.4 million at September 30, 2024, compared to $474.0 million at December 31, 2023.Net cash provided by operating activities was $54.6 million, compared to $42.4 million in the third quarter of 2023.Unlevered free cash flow was $60.8 million, compared to $48.2 million in the third quarter of 2023. Recent Business Highlights Added 386 new enterprise platform customers and 60 net new six-figure customers.Announced that our Board of Directors recently approved the expansion of our existing stock repurchase program, raising the existing authorization by $200 million.Released AI Aware, advanced detection capabilities designed to rapidly surface artificial intelligence solutions, vulnerabilities and weaknesses.Introduced Vulnerability Intelligence and Exposure Response, two powerful context-driven prioritization and response features that are designed to deliver actionable intelligence across IT and cloud environments.Extended exposure management capabilities to cloud data and AI by adding new data security posture management (DSPM) and artificial intelligence security posture management (AI-SPM) capabilities for Tenable Cloud Security.Launched Tenable Enclave Security, a solution that supports the needs of customers operating in highly secure environments.Recognized as the top performer in cloud security in the 2024 CRN Annual Report Card Awards. Financial Outlook For the fourth quarter of 2024, we currently expect: Revenue in the range of $229.0 million to $233.0 million.Non-GAAP income from operations in the range of $47.0 million to $49.0 million.Non-GAAP net income in the range of $42.0 million to $44.0 million, assuming interest expense of $7.8 million, interest income of $6.0 million and a provision for income taxes of $3.1 million.Non-GAAP diluted earnings per share in the range of $0.33 to $0.35.125.5 million diluted weighted average shares outstanding. For the year ending December 31, 2024, we currently expect: Calculated current billings in the range of $957.0 million to $967.0 million.Revenue in the range of $893.3 million to $897.3 million.Non-GAAP income from operations in the range of $171.8 million to $173.8 million.Non-GAAP net income in the range of $149.9 million to $151.9 million, assuming interest expense of $32.1 million, interest income of $23.5 million and a provision for income taxes of $12.3 million.Non-GAAP diluted earnings per share in the range of $1.21 to $1.23.123.5 million diluted weighted average shares outstanding.Unlevered free cash flow in the range of $225.0 million to $235.0 million. Conference Call Information Tenable will host a conference call on October 30, 2024 at 4:30 p.m. Eastern Time to discuss its financial results. The conference call can be accessed at 877-407-9716 (U.S.) and 201-493-6779 (international). A live webcast of the event will be available on the Tenable Investor Relations website at https://investors.tenable.com. An archived replay of the live broadcast will be available on the Investor Relations page of the website following the call. About Tenable Tenable® is the exposure management company, exposing and closing the cybersecurity gaps that erode business value, reputation and trust. The company’s AI-powered exposure management platform radically unifies security visibility, insight and action across the attack surface, equipping modern organizations to protect against attacks from IT infrastructure to cloud environments to critical infrastructure and everywhere in between. By protecting enterprises from security exposure, Tenable reduces business risk for approximately 44,000 customers around the globe. Learn more at tenable.com. Contact Information Investor Relationsinvestors@tenable.com Media Relationstenablepr@tenable.com Forward-Looking Statements This press release includes forward-looking statements within the meaning of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. All statements contained in this press release other than statements of historical fact, including statements regarding our future results of operations and financial position, our platform's ability to help protect enterprises from security exposure, business strategy and plans and objectives for future operations, are forward-looking statements and represent our views as of the date of this press release. The words “anticipate,” "believe,” “continue,” “estimate,” “expect,” “intend,” “may,” “will” and similar expressions are intended to identify forward-looking statements. We have based these forward-looking statements on our current expectations and projections about future events and financial trends that we believe may affect our financial condition, results of operations, business strategy, short-term and long-term business operations and objectives and financial needs. These forward-looking statements are subject to a number of assumptions and risks and uncertainties, many of which involve factors or circumstances that are beyond our control that could affect our financial results. These risks and uncertainties are detailed in the sections titled "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" in our Annual Report on Form 10-K for the year ended December 31, 2023 as well as other filings that we make from time to time with the SEC, which are available on the SEC's website at sec.gov. Moreover, we operate in a very competitive and rapidly changing environment. New risks emerge from time to time. It is not possible for our management to predict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements we may make. In light of these risks, uncertainties and assumptions, the future events and trends discussed in this press release may not occur and actual results could differ materially and adversely from those anticipated or implied in any forward-looking statements. Except as required by law, we are under no obligation to update these forward-looking statements subsequent to the date of this press release, or to update the reasons if actual results differ materially from those anticipated in the forward-looking statements. Non-GAAP Financial Measures To supplement our consolidated financial statements, which are prepared and presented in accordance with GAAP, we use certain non-GAAP financial measures, as described below, to understand and evaluate our core operating performance. These non-GAAP financial measures, which may be different than similarly titled measures used by other companies, are presented to enhance the overall understanding of our financial performance and should not be considered a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP. We believe that these non-GAAP financial measures provide useful information about our financial performance, enhance the overall understanding of our past performance and future prospects and allow for greater transparency with respect to important metrics used by management for financial and operational decision-making. We include these non-GAAP financial measures to present our financial performance using a management view and because we believe that these measures provide an additional comparison of our core financial performance over multiple periods with other companies in our industry. Reconciliations of non-GAAP financial measures to the most directly comparable GAAP financial measures are included in the financial tables accompanying this press release. Calculated Current Billings: We define calculated current billings, a non-GAAP financial measure, as total revenue recognized in a period plus the change in current deferred revenue in the corresponding period. We believe that calculated current billings is a key metric to measure our periodic performance. Given that most of our customers pay in advance (including multi-year contracts), but we generally recognize the related revenue ratably over time, we use calculated current billings to measure and monitor our ability to provide our business with the working capital generated by upfront payments from our customers. We believe that calculated current billings, which excludes deferred revenue for periods beyond twelve months in a customer’s contractual term, more closely correlates with annual contract value and that the variability in total billings, depending on the timing of large multi-year contracts and the preference for annual billing versus multi-year upfront billing, may distort growth in one period over another. Free Cash Flow and Unlevered Free Cash Flow: We define free cash flow, a non-GAAP financial measure, as net cash provided by operating activities less purchases of property and equipment and capitalized software development costs. We believe free cash flow is an important liquidity measure of the cash that is available (if any), after purchases of property and equipment and capitalized software development costs, for investment in our business and to make acquisitions. We believe that free cash flow is useful as a liquidity measure because it measures our ability to generate cash. We define unlevered free cash flow as free cash flow plus cash paid for interest and other financing costs. We believe unlevered free cash flow is useful as a liquidity measure as it measures the cash that is available to invest in our business and meet our current debt obligations and future financing needs. However, given our debt obligations, non-cancelable commitments and other contractual obligations, unlevered free cash flow does not represent residual cash flow available for discretionary expenses. Non-GAAP Income from Operations and Non-GAAP Operating Margin: We define these non-GAAP financial measures as their respective GAAP measures, excluding the effect of stock-based compensation, acquisition-related expenses, restructuring expenses, costs related to the intra-entity asset transfers resulting from the internal restructuring of legal entities, and amortization of acquired intangible assets. Acquisition-related expenses include transaction and integration expenses, as well as costs related to the intercompany transfer of acquired intellectual property. Restructuring expenses include non-ordinary course severance, employee related benefits, and other charges. We believe that the exclusion of these expenses provides for a useful comparison of our operating results to prior periods and to our peer companies, which commonly exclude restructuring expenses. Non-GAAP Net Income and Non-GAAP Earnings Per Share: We define non-GAAP net income as GAAP net loss, excluding the effect of stock-based compensation, acquisition-related expenses, restructuring expenses and amortization of acquired intangible assets, including the applicable tax impacts. In addition, we exclude the tax impact and related costs of intra-entity asset transfers resulting from the internal restructuring of legal entities as well as deferred income tax benefits recognized in connection with acquisitions. We use non-GAAP net income to calculate non-GAAP earnings per share. Non-GAAP Gross Profit and Non-GAAP Gross Margin: We define non-GAAP gross profit as GAAP gross profit, excluding the effect of stock-based compensation and amortization of acquired intangible assets. Non-GAAP gross margin is defined as non-GAAP gross profit as a percentage of revenue. Non-GAAP Sales and Marketing Expense, Non-GAAP Research and Development Expense and Non-GAAP General and Administrative Expense: We define these non-GAAP measures as their respective GAAP measures, excluding stock-based compensation, acquisition-related expenses and costs related to intra-entity asset transfers resulting from the internal restructuring of legal entities. TENABLE HOLDINGS, INC.CONSOLIDATED STATEMENTS OF OPERATIONS(unaudited) Three Months EndedSeptember 30, Nine Months EndedSeptember 30,(in thousands, except per share data) 2024 2023 2024 2023 Revenue$227,088 $201,529 $664,290 $585,404 Cost of revenue(1) 50,499 45,754 148,229 134,774 Gross profit 176,589 155,775 516,061 450,630 Operating expenses: Sales and marketing(1) 99,083 94,759 300,037 289,750 Research and development(1) 48,020 37,052 136,896 113,080 General and administrative(1) 31,569 31,877 92,889 85,614 Restructuring — — 6,070 — Total operating expenses 178,672 163,688 535,892 488,444 Loss from operations (2,083) (7,913) (19,831) (37,814)Interest income 5,989 7,662 17,587 19,323 Interest expense (8,148) (8,119) (24,333) (23,208)Other income (expense), net 359 (6,502) (858) (7,993)Loss before income taxes (3,883) (14,872) (27,435) (49,692)Provision for income taxes 5,328 693 10,734 6,944 Net loss$(9,211) $(15,565) $(38,169) $(56,636) Net loss per share, basic and diluted$(0.08) $(0.13) $(0.32) $(0.49)Weighted-average shares used to compute net loss per share, basic and diluted 119,169 115,954 118,466 114,967 _______________ (1) Includes stock-based compensation as follows: Three Months EndedSeptember 30, Nine Months EndedSeptember 30, 2024 2023 2024 2023Cost of revenue$3,216 $3,011 $9,486 $8,542Sales and marketing 15,941 15,805 47,517 46,622Research and development 12,435 9,242 35,395 27,871General and administrative 10,092 8,777 30,403 25,777Total stock-based compensation$41,684 $36,835 $122,801 $108,812 TENABLE HOLDINGS, INC.CONSOLIDATED BALANCE SHEETS September 30, 2024 December 31, 2023(in thousands, except per share data)(unaudited) Assets Current assets: Cash and cash equivalents$312,207 $237,132 Short-term investments 236,242 236,840 Accounts receivable (net of allowance for doubtful accounts of $971 and $470 at September 30, 2024 and December 31, 2023, respectively) 192,648 220,060 Deferred commissions 49,858 49,559 Prepaid expenses and other current assets 52,575 61,882 Total current assets 843,530 805,473 Property and equipment, net 39,780 45,436 Deferred commissions (net of current portion) 64,405 72,394 Operating lease right-of-use assets 32,127 34,835 Acquired intangible assets, net 99,474 107,017 Goodwill 541,292 518,539 Other assets 13,811 23,177 Total assets$1,634,419 $1,606,871 Liabilities and Stockholders’ Equity Current liabilities: Accounts payable and accrued expenses$17,833 $16,941 Accrued compensation 43,040 66,492 Deferred revenue 583,940 580,779 Operating lease liabilities 6,099 5,971 Other current liabilities 6,205 5,655 Total current liabilities 657,117 675,838 Deferred revenue (net of current portion) 163,512 169,718 Term loan, net of issuance costs (net of current portion) 357,334 359,281 Operating lease liabilities (net of current portion) 43,706 48,058 Other liabilities 8,195 7,632 Total liabilities 1,229,864 1,260,527 Stockholders’ equity: Common stock (par value: $0.01; 500,000 shares authorized; 121,344 and 117,504 shares issued at September 30, 2024 and December 31, 2023, respectively) 1,213 1,175 Additional paid-in capital 1,330,517 1,185,100 Treasury stock (at cost: 1,471 and 356 shares at September 30, 2024 and December 31, 2023, respectively) (64,925) (14,934)Accumulated other comprehensive income 954 38 Accumulated deficit (863,204) (825,035)Total stockholders’ equity 404,555 346,344 Total liabilities and stockholders’ equity$1,634,419 $1,606,871 TENABLE HOLDINGS, INC.CONSOLIDATED STATEMENTS OF CASH FLOWS(unaudited) Nine Months Ended September 30,(in thousands) 2024 2023 Cash flows from operating activities: Net loss$(38,169) $(56,636)Adjustments to reconcile net loss to net cash provided by operating activities: Depreciation and amortization 24,434 18,900 Stock-based compensation 122,801 108,812 Net accretion of discounts and amortization of premiums on short-term investments (6,141) (5,903)Amortization of debt issuance costs 1,003 941 (Gain) loss on other investments (1,452) 5,000 Restructuring 4,528 — Other 4,128 1,800 Changes in operating assets and liabilities: Accounts receivable 26,911 9,084 Prepaid expenses and other assets 29,868 17,524 Accounts payable, accrued expenses and accrued compensation (22,921) 447 Deferred revenue (3,153) 16,856 Other current and noncurrent liabilities (5,480) (5,475)Net cash provided by operating activities 136,357 111,350 Cash flows from investing activities: Purchases of property and equipment (1,924) (1,299)Capitalized software development costs (5,930) (4,707)Purchases of short-term investments (227,210) (217,239)Sales and maturities of short-term investments 234,865 242,864 Proceeds from other investments 3,512 — Purchases of other investments (1,250) — Business combinations, net of cash acquired (29,162) — Net cash (used in) provided by investing activities (27,099) 19,619 Cash flows from financing activities: Payments on term loan (2,813) (2,813)Proceeds from loan agreement — 424 Proceeds from stock issued in connection with the employee stock purchase plan 16,262 16,224 Proceeds from the exercise of stock options 4,798 2,421 Purchase of treasury stock (49,991) — Other financing activities — (213)Net cash (used in) provided by financing activities (31,744) 16,043 Effect of exchange rate changes on cash and cash equivalents and restricted cash (2,439) (2,562)Net increase in cash and cash equivalents and restricted cash 75,075 144,450 Cash and cash equivalents and restricted cash at beginning of period 237,132 300,866 Cash and cash equivalents and restricted cash at end of period$312,207 $445,316 TENABLE HOLDINGS, INC.REVENUE COMPONENTS AND RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES(unaudited) RevenueThree Months EndedSeptember 30, Nine Months EndedSeptember 30,(in thousands) 2024 2023 2024 2023Subscription revenue$208,554 $183,268 $608,727 $531,133Perpetual license and maintenance revenue 11,769 12,200 35,941 36,535Professional services and other revenue 6,765 6,061 19,622 17,736Revenue(1)$227,088 $201,529 $664,290 $585,404 _______________ (1) Recurring revenue, which includes revenue from subscription arrangements for software (both recognized ratably over the subscription term and upon delivery) and cloud-based solutions and maintenance associated with perpetual licenses, represented 96% of revenue in the three and nine months ended September 30, 2024 and 95% of revenue in the three and nine months ended September 30, 2023. Calculated Current BillingsThree Months EndedSeptember 30, Nine Months EndedSeptember 30,(in thousands) 2024 2023 2024 2023 Revenue$227,088 $201,529 $664,290 $585,404 Deferred revenue (current), end of period 583,940 518,372 583,940 518,372 Deferred revenue (current), beginning of period(1) (562,587) (495,199) (580,887) (502,115)Calculated current billings$248,441 $224,702 $667,343 $601,661 ________________(1) Deferred revenue (current), beginning of period for the nine months ended September 30, 2024 includes $0.1 million related to acquired deferred revenue. Remaining Performance ObligationsSeptember 30,(in thousands) 2024 2023Remaining performance obligations, short-term$592,351 $528,367Remaining performance obligations, long-term 179,210 168,817Remaining performance obligations$771,561 $697,184 Free Cash Flow and Unlevered Free Cash FlowThree Months EndedSeptember 30, Nine Months EndedSeptember 30,(in thousands) 2024 2023 2024 2023 Net cash provided by operating activities$54,607 $42,411 $136,357 $111,350 Purchases of property and equipment (733) (201) (1,924) (1,299)Capitalized software development costs (1,163) (1,894) (5,930) (4,707)Free cash flow(1) 52,711 40,316 128,503 105,344 Cash paid for interest and other financing costs 8,055 7,843 23,505 26,786 Unlevered free cash flow(1)$60,766 $48,159 $152,008 $132,130 ________________ (1) Free cash flow and unlevered free cash flow for the periods presented were impacted by: Three Months EndedSeptember 30, Nine Months EndedSeptember 30,(in thousands) 2024 2023 2024 2023 Employee stock purchase plan activity$(3,653) $(2,236) $(6,283) $(2,507)Acquisition-related expenses (663) (571) (1,326) (830)Restructuring (492) — (5,911) — Non-GAAP Income from Operations and Non-GAAP Operating MarginThree Months EndedSeptember 30, Nine Months EndedSeptember 30,(dollars in thousands) 2024 2023 2024 2023 Loss from operations$(2,083) $(7,913) $(19,831) $(37,814)Stock-based compensation 41,684 36,835 122,801 108,812 Acquisition-related expenses 360 4,598 1,284 4,728 Restructuring — — 6,070 — Amortization of acquired intangible assets 5,014 3,055 14,443 9,208 Non-GAAP income from operations$44,975 $36,575 $124,767 $84,934 Operating margin (1)% `(4)% (3)% (6)%Non-GAAP operating margin 20% 18% 19% 15% Non-GAAP Net Income and Non-GAAP Earnings Per ShareThree Months EndedSeptember 30, Nine Months EndedSeptember 30,(in thousands, except per share data) 2024 2023 2024 2023 Net loss$(9,211) $(15,565) $(38,169) $(56,636)Stock-based compensation 41,684 36,835 122,801 108,812 Tax impact of stock-based compensation(1) 1,528 (1,207) 1,626 1,046 Acquisition-related expenses(2) 360 4,598 1,284 4,728 Restructuring(2) — — 6,070 — Amortization of acquired intangible assets(3) 5,014 3,055 14,443 9,208 Tax impact of acquisitions (52) (48) (130) (161)Non-GAAP net income$39,323 $27,668 $107,925 $66,997 Net loss per share, diluted$(0.08) $(0.13) $(0.32) $(0.49)Stock-based compensation 0.35 0.32 1.04 0.94 Tax impact of stock-based compensation(1) 0.01 (0.01) 0.01 0.01 Acquisition-related expenses(2) 0.01 0.04 0.01 0.04 Restructuring(2) — — 0.05 — Amortization of acquired intangible assets(3) 0.04 0.02 0.12 0.08 Tax impact of acquisitions — — — — Adjustment to diluted earnings per share(4) (0.01) (0.01) (0.03) (0.02)Non-GAAP earnings per share, diluted$0.32 $0.23 $0.88 $0.56 Weighted-average shares used to compute GAAP net loss per share, diluted 119,169 115,954 118,466 114,967 Weighted-average shares used to compute non-GAAP earnings per share, diluted 123,288 121,473 123,206 120,273 ________________ (1) The tax impact of stock-based compensation is based on the tax treatment for the applicable tax jurisdictions.(2) The tax impact of acquisition-related expenses and restructuring are not material.(3) The tax impact of the amortization of acquired intangible assets is included in the tax impact of acquisitions.(4) An adjustment to reconcile GAAP net loss per share, which excludes potentially dilutive shares, to non-GAAP earnings per share, which includes potentially dilutive shares. Non-GAAP Gross Profit and Non-GAAP Gross MarginThree Months EndedSeptember 30, Nine Months EndedSeptember 30,(dollars in thousands) 2024 2023 2024 2023 Gross profit$176,589 $155,775 $516,061 $450,630 Stock-based compensation 3,216 3,011 9,486 8,542 Amortization of acquired intangible assets 5,014 3,055 14,443 9,208 Non-GAAP gross profit$184,819 $161,841 $539,990 $468,380 Gross margin 78% 77% 78% 77%Non-GAAP gross margin 81% 80% 81% 80% Non-GAAP Sales and Marketing ExpenseThree Months EndedSeptember 30, Nine Months EndedSeptember 30,(dollars in thousands) 2024 2023 2024 2023 Sales and marketing expense$99,083 $94,759 $300,037 $289,750 Less: Stock-based compensation 15,941 15,805 47,517 46,622 Less: Acquisition-related expenses 3 — 52 — Non-GAAP sales and marketing expense$83,139 $78,954 $252,468 $243,128 Non-GAAP sales and marketing expense % of revenue 37% 39% 38% 42% Non-GAAP Research and Development ExpenseThree Months EndedSeptember 30, Nine Months EndedSeptember 30,(dollars in thousands) 2024 2023 2024 2023 Research and development expense$48,020 $37,052 $136,896 $113,080 Less: Stock-based compensation 12,435 9,242 35,395 27,871 Less: Acquisition-related expenses — — (20) — Non-GAAP research and development expense$35,585 $27,810 $101,521 $85,209 Non-GAAP research and development expense % of revenue 16% 14% 15% 15% Non-GAAP General and Administrative ExpenseThree Months EndedSeptember 30, Nine Months EndedSeptember 30,(dollars in thousands) 2024 2023 2024 2023 General and administrative expense$31,569 $31,877 $92,889 $85,614 Less: Stock-based compensation 10,092 8,777 30,403 25,777 Less: Acquisition-related expenses 357 4,598 1,252 4,728 Non-GAAP general and administrative expense$21,120 $18,502 $61,234 $55,109 Non-GAAP general and administrative expense % of revenue 9% 9% 9% 9% The following adjustments to reconcile forecasted non-GAAP income from operations, non-GAAP net income, non-GAAP earnings per share, free cash flow and unlevered free cash flow are subject to a number of uncertainties and assumptions, each of which are inherently difficult to forecast. As a result, actual adjustments and GAAP results may differ materially. Forecasted Non-GAAP Income from OperationsThree Months EndingDecember 31, 2024 Year EndingDecember 31, 2024(in millions)Low High Low HighForecasted income (loss) from operations$0.6 $2.6 $(19.2) $(17.2)Forecasted stock-based compensation 41.3 41.3 164.1 164.1 Forecasted acquisition-related expenses — — 1.3 1.3 Forecasted restructuring — — 6.1 6.1 Forecasted amortization of acquired intangible assets 5.1 5.1 19.5 19.5 Forecasted non-GAAP income from operations$47.0 $49.0 $171.8 $173.8 Forecasted Non-GAAP Net Income and Non-GAAP Earnings Per ShareThree Months EndingDecember 31, 2024 Year EndingDecember 31, 2024(in millions, except per share data)Low High Low HighForecasted net loss(1)$(6.2) $(4.2) $(44.4) $(42.4)Forecasted stock-based compensation 41.3 41.3 164.1 164.1 Forecasted tax impact of stock-based compensation 1.9 1.9 3.5 3.5 Forecasted acquisition-related expenses — — 1.3 1.3 Forecasted restructuring — — 6.1 6.1 Forecasted amortization of acquired intangible assets 5.1 5.1 19.5 19.5 Forecasted tax impact of acquisitions (0.1) (0.1) (0.2) (0.2)Forecasted non-GAAP net income$42.0 $44.0 $149.9 $151.9 Forecasted net loss per share, diluted(1)$(0.05) $(0.04) $(0.37) $(0.36)Forecasted stock-based compensation 0.34 0.34 1.38 1.38 Forecasted tax impact of stock-based compensation 0.02 0.02 0.03 0.03 Forecasted acquisition-related expenses — — 0.01 0.01 Forecasted restructuring — — 0.05 0.05 Forecasted amortization of acquired intangible assets 0.04 0.04 0.16 0.16 Forecasted tax impact of acquisitions — — — — Adjustment to diluted earnings per share(2) (0.02) (0.01) (0.05) (0.04)Forecasted non-GAAP earnings per share, diluted$0.33 $0.35 $1.21 $1.23 Forecasted weighted-average shares used to compute GAAP net loss per share, diluted 120.0 120.0 119.0 119.0 Forecasted weighted-average shares used to compute non-GAAP earnings per share, diluted 125.5 125.5 123.5 123.5 ________________(1) The forecasted GAAP net loss assumes income tax expense of $4.9 million and $15.6 million in the three months and year ending December 31, 2024, respectively. (2) Adjustment to reconcile GAAP net loss per share, which excludes potentially dilutive shares, to non-GAAP earnings per share, which includes potentially dilutive shares. Forecasted Free Cash Flow and Unlevered Free Cash FlowYear EndingDecember 31, 2024(in millions)Low HighForecasted net cash provided by operating activities$206.7 $216.7 Forecasted purchases of property and equipment (5.9) (5.9)Forecasted capitalized software development costs (6.7) (6.7)Forecasted free cash flow 194.1 204.1 Forecasted cash paid for interest and other financing costs 30.9 30.9 Forecasted unlevered free cash flow$225.0 $235.0
Revenue of $227.1 million, up 13% year-over-year.Calculated current billings of $248.4 million, up 11% year-over-year.GAAP operating margin of (1)%; Non-GAAP operating margin of 20%.Net cash provided by operating activities of $54.6 million; Unlevered free cash flow of $60.8 million.$200 million expansion of our stock repurchase program. COLUMBIA, Md., Oct. 30, 2024 (GLOBE NEWSWIRE) -- Tenable Holdings, Inc. ("Tenable") (Nasdaq: TENB), the exposure management company, today announced financial results for the quarter ended September 30, 2024. "We delivered strong results in Q3, surpassing expectations on both the top and bottom line," said Amit Yoran, Chairman and CEO of Tenable. "Cloud Security and Tenable One, our exposure management platform, continue to drive demand as customers increasingly focus on securing critical cloud infrastructure and assessing their overall exposures in a hybrid world." Third Quarter 2024 Financial Highlights Revenue was $227.1 million, a 13% increase year-over-year.Calculated current billings was $248.4 million, an 11% increase year-over-year.GAAP loss from operations was $2.1 million, compared to $7.9 million in the third quarter of 2023.Non-GAAP income from operations was $45.0 million, compared to $36.6 million in the third quarter of 2023.GAAP net loss was $9.2 million, compared to $15.6 million in the third quarter of 2023.GAAP net loss per share was $0.08, compared to $0.13 in the third quarter of 2023.Non-GAAP net income was $39.3 million, compared to $27.7 million in the third quarter of 2023.Non-GAAP diluted earnings per share was $0.32, compared to $0.23 in the third quarter of 2023.Cash and cash equivalents and short-term investments were $548.4 million at September 30, 2024, compared to $474.0 million at December 31, 2023.Net cash provided by operating activities was $54.6 million, compared to $42.4 million in the third quarter of 2023.Unlevered free cash flow was $60.8 million, compared to $48.2 million in the third quarter of 2023. Recent Business Highlights Added 386 new enterprise platform customers and 60 net new six-figure customers.Announced that our Board of Directors recently approved the expansion of our existing stock repurchase program, raising the existing authorization by $200 million.Released AI Aware, advanced detection capabilities designed to rapidly surface artificial intelligence solutions, vulnerabilities and weaknesses.Introduced Vulnerability Intelligence and Exposure Response, two powerful context-driven prioritization and response features that are designed to deliver actionable intelligence across IT and cloud environments.Extended exposure management capabilities to cloud data and AI by adding new data security posture management (DSPM) and artificial intelligence security posture management (AI-SPM) capabilities for Tenable Cloud Security.Launched Tenable Enclave Security, a solution that supports the needs of customers operating in highly secure environments.Recognized as the top performer in cloud security in the 2024 CRN Annual Report Card Awards. Financial Outlook For the fourth quarter of 2024, we currently expect: Revenue in the range of $229.0 million to $233.0 million.Non-GAAP income from operations in the range of $47.0 million to $49.0 million.Non-GAAP net income in the range of $42.0 million to $44.0 million, assuming interest expense of $7.8 million, interest income of $6.0 million and a provision for income taxes of $3.1 million.Non-GAAP diluted earnings per share in the range of $0.33 to $0.35.125.5 million diluted weighted average shares outstanding. For the year ending December 31, 2024, we currently expect: Calculated current billings in the range of $957.0 million to $967.0 million.Revenue in the range of $893.3 million to $897.3 million.Non-GAAP income from operations in the range of $171.8 million to $173.8 million.Non-GAAP net income in the range of $149.9 million to $151.9 million, assuming interest expense of $32.1 million, interest income of $23.5 million and a provision for income taxes of $12.3 million.Non-GAAP diluted earnings per share in the range of $1.21 to $1.23.123.5 million diluted weighted average shares outstanding.Unlevered free cash flow in the range of $225.0 million to $235.0 million. Conference Call Information Tenable will host a conference call on October 30, 2024 at 4:30 p.m. Eastern Time to discuss its financial results. The conference call can be accessed at 877-407-9716 (U.S.) and 201-493-6779 (international). A live webcast of the event will be available on the Tenable Investor Relations website at https://investors.tenable.com. An archived replay of the live broadcast will be available on the Investor Relations page of the website following the call. About Tenable Tenable® is the exposure management company, exposing and closing the cybersecurity gaps that erode business value, reputation and trust. The company’s AI-powered exposure management platform radically unifies security visibility, insight and action across the attack surface, equipping modern organizations to protect against attacks from IT infrastructure to cloud environments to critical infrastructure and everywhere in between. By protecting enterprises from security exposure, Tenable reduces business risk for approximately 44,000 customers around the globe. Learn more at tenable.com. Contact Information Investor Relationsinvestors@tenable.com Media Relationstenablepr@tenable.com Forward-Looking Statements This press release includes forward-looking statements within the meaning of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. All statements contained in this press release other than statements of historical fact, including statements regarding our future results of operations and financial position, our platform's ability to help protect enterprises from security exposure, business strategy and plans and objectives for future operations, are forward-looking statements and represent our views as of the date of this press release. The words “anticipate,” "believe,” “continue,” “estimate,” “expect,” “intend,” “may,” “will” and similar expressions are intended to identify forward-looking statements. We have based these forward-looking statements on our current expectations and projections about future events and financial trends that we believe may affect our financial condition, results of operations, business strategy, short-term and long-term business operations and objectives and financial needs. These forward-looking statements are subject to a number of assumptions and risks and uncertainties, many of which involve factors or circumstances that are beyond our control that could affect our financial results. These risks and uncertainties are detailed in the sections titled "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" in our Annual Report on Form 10-K for the year ended December 31, 2023 as well as other filings that we make from time to time with the SEC, which are available on the SEC's website at sec.gov. Moreover, we operate in a very competitive and rapidly changing environment. New risks emerge from time to time. It is not possible for our management to predict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements we may make. In light of these risks, uncertainties and assumptions, the future events and trends discussed in this press release may not occur and actual results could differ materially and adversely from those anticipated or implied in any forward-looking statements. Except as required by law, we are under no obligation to update these forward-looking statements subsequent to the date of this press release, or to update the reasons if actual results differ materially from those anticipated in the forward-looking statements. Non-GAAP Financial Measures To supplement our consolidated financial statements, which are prepared and presented in accordance with GAAP, we use certain non-GAAP financial measures, as described below, to understand and evaluate our core operating performance. These non-GAAP financial measures, which may be different than similarly titled measures used by other companies, are presented to enhance the overall understanding of our financial performance and should not be considered a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP. We believe that these non-GAAP financial measures provide useful information about our financial performance, enhance the overall understanding of our past performance and future prospects and allow for greater transparency with respect to important metrics used by management for financial and operational decision-making. We include these non-GAAP financial measures to present our financial performance using a management view and because we believe that these measures provide an additional comparison of our core financial performance over multiple periods with other companies in our industry. Reconciliations of non-GAAP financial measures to the most directly comparable GAAP financial measures are included in the financial tables accompanying this press release. Calculated Current Billings: We define calculated current billings, a non-GAAP financial measure, as total revenue recognized in a period plus the change in current deferred revenue in the corresponding period. We believe that calculated current billings is a key metric to measure our periodic performance. Given that most of our customers pay in advance (including multi-year contracts), but we generally recognize the related revenue ratably over time, we use calculated current billings to measure and monitor our ability to provide our business with the working capital generated by upfront payments from our customers. We believe that calculated current billings, which excludes deferred revenue for periods beyond twelve months in a customer’s contractual term, more closely correlates with annual contract value and that the variability in total billings, depending on the timing of large multi-year contracts and the preference for annual billing versus multi-year upfront billing, may distort growth in one period over another. Free Cash Flow and Unlevered Free Cash Flow: We define free cash flow, a non-GAAP financial measure, as net cash provided by operating activities less purchases of property and equipment and capitalized software development costs. We believe free cash flow is an important liquidity measure of the cash that is available (if any), after purchases of property and equipment and capitalized software development costs, for investment in our business and to make acquisitions. We believe that free cash flow is useful as a liquidity measure because it measures our ability to generate cash. We define unlevered free cash flow as free cash flow plus cash paid for interest and other financing costs. We believe unlevered free cash flow is useful as a liquidity measure as it measures the cash that is available to invest in our business and meet our current debt obligations and future financing needs. However, given our debt obligations, non-cancelable commitments and other contractual obligations, unlevered free cash flow does not represent residual cash flow available for discretionary expenses. Non-GAAP Income from Operations and Non-GAAP Operating Margin: We define these non-GAAP financial measures as their respective GAAP measures, excluding the effect of stock-based compensation, acquisition-related expenses, restructuring expenses, costs related to the intra-entity asset transfers resulting from the internal restructuring of legal entities, and amortization of acquired intangible assets. Acquisition-related expenses include transaction and integration expenses, as well as costs related to the intercompany transfer of acquired intellectual property. Restructuring expenses include non-ordinary course severance, employee related benefits, and other charges. We believe that the exclusion of these expenses provides for a useful comparison of our operating results to prior periods and to our peer companies, which commonly exclude restructuring expenses. Non-GAAP Net Income and Non-GAAP Earnings Per Share: We define non-GAAP net income as GAAP net loss, excluding the effect of stock-based compensation, acquisition-related expenses, restructuring expenses and amortization of acquired intangible assets, including the applicable tax impacts. In addition, we exclude the tax impact and related costs of intra-entity asset transfers resulting from the internal restructuring of legal entities as well as deferred income tax benefits recognized in connection with acquisitions. We use non-GAAP net income to calculate non-GAAP earnings per share. Non-GAAP Gross Profit and Non-GAAP Gross Margin: We define non-GAAP gross profit as GAAP gross profit, excluding the effect of stock-based compensation and amortization of acquired intangible assets. Non-GAAP gross margin is defined as non-GAAP gross profit as a percentage of revenue. Non-GAAP Sales and Marketing Expense, Non-GAAP Research and Development Expense and Non-GAAP General and Administrative Expense: We define these non-GAAP measures as their respective GAAP measures, excluding stock-based compensation, acquisition-related expenses and costs related to intra-entity asset transfers resulting from the internal restructuring of legal entities. TENABLE HOLDINGS, INC.CONSOLIDATED STATEMENTS OF OPERATIONS(unaudited) Three Months EndedSeptember 30, Nine Months EndedSeptember 30,(in thousands, except per share data) 2024 2023 2024 2023 Revenue$227,088 $201,529 $664,290 $585,404 Cost of revenue(1) 50,499 45,754 148,229 134,774 Gross profit 176,589 155,775 516,061 450,630 Operating expenses: Sales and marketing(1) 99,083 94,759 300,037 289,750 Research and development(1) 48,020 37,052 136,896 113,080 General and administrative(1) 31,569 31,877 92,889 85,614 Restructuring — — 6,070 — Total operating expenses 178,672 163,688 535,892 488,444 Loss from operations (2,083) (7,913) (19,831) (37,814)Interest income 5,989 7,662 17,587 19,323 Interest expense (8,148) (8,119) (24,333) (23,208)Other income (expense), net 359 (6,502) (858) (7,993)Loss before income taxes (3,883) (14,872) (27,435) (49,692)Provision for income taxes 5,328 693 10,734 6,944 Net loss$(9,211) $(15,565) $(38,169) $(56,636) Net loss per share, basic and diluted$(0.08) $(0.13) $(0.32) $(0.49)Weighted-average shares used to compute net loss per share, basic and diluted 119,169 115,954 118,466 114,967 _______________ (1) Includes stock-based compensation as follows: Three Months EndedSeptember 30, Nine Months EndedSeptember 30, 2024 2023 2024 2023Cost of revenue$3,216 $3,011 $9,486 $8,542Sales and marketing 15,941 15,805 47,517 46,622Research and development 12,435 9,242 35,395 27,871General and administrative 10,092 8,777 30,403 25,777Total stock-based compensation$41,684 $36,835 $122,801 $108,812 TENABLE HOLDINGS, INC.CONSOLIDATED BALANCE SHEETS September 30, 2024 December 31, 2023(in thousands, except per share data)(unaudited) Assets Current assets: Cash and cash equivalents$312,207 $237,132 Short-term investments 236,242 236,840 Accounts receivable (net of allowance for doubtful accounts of $971 and $470 at September 30, 2024 and December 31, 2023, respectively) 192,648 220,060 Deferred commissions 49,858 49,559 Prepaid expenses and other current assets 52,575 61,882 Total current assets 843,530 805,473 Property and equipment, net 39,780 45,436 Deferred commissions (net of current portion) 64,405 72,394 Operating lease right-of-use assets 32,127 34,835 Acquired intangible assets, net 99,474 107,017 Goodwill 541,292 518,539 Other assets 13,811 23,177 Total assets$1,634,419 $1,606,871 Liabilities and Stockholders’ Equity Current liabilities: Accounts payable and accrued expenses$17,833 $16,941 Accrued compensation 43,040 66,492 Deferred revenue 583,940 580,779 Operating lease liabilities 6,099 5,971 Other current liabilities 6,205 5,655 Total current liabilities 657,117 675,838 Deferred revenue (net of current portion) 163,512 169,718 Term loan, net of issuance costs (net of current portion) 357,334 359,281 Operating lease liabilities (net of current portion) 43,706 48,058 Other liabilities 8,195 7,632 Total liabilities 1,229,864 1,260,527 Stockholders’ equity: Common stock (par value: $0.01; 500,000 shares authorized; 121,344 and 117,504 shares issued at September 30, 2024 and December 31, 2023, respectively) 1,213 1,175 Additional paid-in capital 1,330,517 1,185,100 Treasury stock (at cost: 1,471 and 356 shares at September 30, 2024 and December 31, 2023, respectively) (64,925) (14,934)Accumulated other comprehensive income 954 38 Accumulated deficit (863,204) (825,035)Total stockholders’ equity 404,555 346,344 Total liabilities and stockholders’ equity$1,634,419 $1,606,871 TENABLE HOLDINGS, INC.CONSOLIDATED STATEMENTS OF CASH FLOWS(unaudited) Nine Months Ended September 30,(in thousands) 2024 2023 Cash flows from operating activities: Net loss$(38,169) $(56,636)Adjustments to reconcile net loss to net cash provided by operating activities: Depreciation and amortization 24,434 18,900 Stock-based compensation 122,801 108,812 Net accretion of discounts and amortization of premiums on short-term investments (6,141) (5,903)Amortization of debt issuance costs 1,003 941 (Gain) loss on other investments (1,452) 5,000 Restructuring 4,528 — Other 4,128 1,800 Changes in operating assets and liabilities: Accounts receivable 26,911 9,084 Prepaid expenses and other assets 29,868 17,524 Accounts payable, accrued expenses and accrued compensation (22,921) 447 Deferred revenue (3,153) 16,856 Other current and noncurrent liabilities (5,480) (5,475)Net cash provided by operating activities 136,357 111,350 Cash flows from investing activities: Purchases of property and equipment (1,924) (1,299)Capitalized software development costs (5,930) (4,707)Purchases of short-term investments (227,210) (217,239)Sales and maturities of short-term investments 234,865 242,864 Proceeds from other investments 3,512 — Purchases of other investments (1,250) — Business combinations, net of cash acquired (29,162) — Net cash (used in) provided by investing activities (27,099) 19,619 Cash flows from financing activities: Payments on term loan (2,813) (2,813)Proceeds from loan agreement — 424 Proceeds from stock issued in connection with the employee stock purchase plan 16,262 16,224 Proceeds from the exercise of stock options 4,798 2,421 Purchase of treasury stock (49,991) — Other financing activities — (213)Net cash (used in) provided by financing activities (31,744) 16,043 Effect of exchange rate changes on cash and cash equivalents and restricted cash (2,439) (2,562)Net increase in cash and cash equivalents and restricted cash 75,075 144,450 Cash and cash equivalents and restricted cash at beginning of period 237,132 300,866 Cash and cash equivalents and restricted cash at end of period$312,207 $445,316 TENABLE HOLDINGS, INC.REVENUE COMPONENTS AND RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES(unaudited) RevenueThree Months EndedSeptember 30, Nine Months EndedSeptember 30,(in thousands) 2024 2023 2024 2023Subscription revenue$208,554 $183,268 $608,727 $531,133Perpetual license and maintenance revenue 11,769 12,200 35,941 36,535Professional services and other revenue 6,765 6,061 19,622 17,736Revenue(1)$227,088 $201,529 $664,290 $585,404 _______________ (1) Recurring revenue, which includes revenue from subscription arrangements for software (both recognized ratably over the subscription term and upon delivery) and cloud-based solutions and maintenance associated with perpetual licenses, represented 96% of revenue in the three and nine months ended September 30, 2024 and 95% of revenue in the three and nine months ended September 30, 2023. Calculated Current BillingsThree Months EndedSeptember 30, Nine Months EndedSeptember 30,(in thousands) 2024 2023 2024 2023 Revenue$227,088 $201,529 $664,290 $585,404 Deferred revenue (current), end of period 583,940 518,372 583,940 518,372 Deferred revenue (current), beginning of period(1) (562,587) (495,199) (580,887) (502,115)Calculated current billings$248,441 $224,702 $667,343 $601,661 ________________(1) Deferred revenue (current), beginning of period for the nine months ended September 30, 2024 includes $0.1 million related to acquired deferred revenue. Remaining Performance ObligationsSeptember 30,(in thousands) 2024 2023Remaining performance obligations, short-term$592,351 $528,367Remaining performance obligations, long-term 179,210 168,817Remaining performance obligations$771,561 $697,184 Free Cash Flow and Unlevered Free Cash FlowThree Months EndedSeptember 30, Nine Months EndedSeptember 30,(in thousands) 2024 2023 2024 2023 Net cash provided by operating activities$54,607 $42,411 $136,357 $111,350 Purchases of property and equipment (733) (201) (1,924) (1,299)Capitalized software development costs (1,163) (1,894) (5,930) (4,707)Free cash flow(1) 52,711 40,316 128,503 105,344 Cash paid for interest and other financing costs 8,055 7,843 23,505 26,786 Unlevered free cash flow(1)$60,766 $48,159 $152,008 $132,130 ________________ (1) Free cash flow and unlevered free cash flow for the periods presented were impacted by: Three Months EndedSeptember 30, Nine Months EndedSeptember 30,(in thousands) 2024 2023 2024 2023 Employee stock purchase plan activity$(3,653) $(2,236) $(6,283) $(2,507)Acquisition-related expenses (663) (571) (1,326) (830)Restructuring (492) — (5,911) — Non-GAAP Income from Operations and Non-GAAP Operating MarginThree Months EndedSeptember 30, Nine Months EndedSeptember 30,(dollars in thousands) 2024 2023 2024 2023 Loss from operations$(2,083) $(7,913) $(19,831) $(37,814)Stock-based compensation 41,684 36,835 122,801 108,812 Acquisition-related expenses 360 4,598 1,284 4,728 Restructuring — — 6,070 — Amortization of acquired intangible assets 5,014 3,055 14,443 9,208 Non-GAAP income from operations$44,975 $36,575 $124,767 $84,934 Operating margin (1)% `(4)% (3)% (6)%Non-GAAP operating margin 20% 18% 19% 15% Non-GAAP Net Income and Non-GAAP Earnings Per ShareThree Months EndedSeptember 30, Nine Months EndedSeptember 30,(in thousands, except per share data) 2024 2023 2024 2023 Net loss$(9,211) $(15,565) $(38,169) $(56,636)Stock-based compensation 41,684 36,835 122,801 108,812 Tax impact of stock-based compensation(1) 1,528 (1,207) 1,626 1,046 Acquisition-related expenses(2) 360 4,598 1,284 4,728 Restructuring(2) — — 6,070 — Amortization of acquired intangible assets(3) 5,014 3,055 14,443 9,208 Tax impact of acquisitions (52) (48) (130) (161)Non-GAAP net income$39,323 $27,668 $107,925 $66,997 Net loss per share, diluted$(0.08) $(0.13) $(0.32) $(0.49)Stock-based compensation 0.35 0.32 1.04 0.94 Tax impact of stock-based compensation(1) 0.01 (0.01) 0.01 0.01 Acquisition-related expenses(2) 0.01 0.04 0.01 0.04 Restructuring(2) — — 0.05 — Amortization of acquired intangible assets(3) 0.04 0.02 0.12 0.08 Tax impact of acquisitions — — — — Adjustment to diluted earnings per share(4) (0.01) (0.01) (0.03) (0.02)Non-GAAP earnings per share, diluted$0.32 $0.23 $0.88 $0.56 Weighted-average shares used to compute GAAP net loss per share, diluted 119,169 115,954 118,466 114,967 Weighted-average shares used to compute non-GAAP earnings per share, diluted 123,288 121,473 123,206 120,273 ________________ (1) The tax impact of stock-based compensation is based on the tax treatment for the applicable tax jurisdictions.(2) The tax impact of acquisition-related expenses and restructuring are not material.(3) The tax impact of the amortization of acquired intangible assets is included in the tax impact of acquisitions.(4) An adjustment to reconcile GAAP net loss per share, which excludes potentially dilutive shares, to non-GAAP earnings per share, which includes potentially dilutive shares. Non-GAAP Gross Profit and Non-GAAP Gross MarginThree Months EndedSeptember 30, Nine Months EndedSeptember 30,(dollars in thousands) 2024 2023 2024 2023 Gross profit$176,589 $155,775 $516,061 $450,630 Stock-based compensation 3,216 3,011 9,486 8,542 Amortization of acquired intangible assets 5,014 3,055 14,443 9,208 Non-GAAP gross profit$184,819 $161,841 $539,990 $468,380 Gross margin 78% 77% 78% 77%Non-GAAP gross margin 81% 80% 81% 80% Non-GAAP Sales and Marketing ExpenseThree Months EndedSeptember 30, Nine Months EndedSeptember 30,(dollars in thousands) 2024 2023 2024 2023 Sales and marketing expense$99,083 $94,759 $300,037 $289,750 Less: Stock-based compensation 15,941 15,805 47,517 46,622 Less: Acquisition-related expenses 3 — 52 — Non-GAAP sales and marketing expense$83,139 $78,954 $252,468 $243,128 Non-GAAP sales and marketing expense % of revenue 37% 39% 38% 42% Non-GAAP Research and Development ExpenseThree Months EndedSeptember 30, Nine Months EndedSeptember 30,(dollars in thousands) 2024 2023 2024 2023 Research and development expense$48,020 $37,052 $136,896 $113,080 Less: Stock-based compensation 12,435 9,242 35,395 27,871 Less: Acquisition-related expenses — — (20) — Non-GAAP research and development expense$35,585 $27,810 $101,521 $85,209 Non-GAAP research and development expense % of revenue 16% 14% 15% 15% Non-GAAP General and Administrative ExpenseThree Months EndedSeptember 30, Nine Months EndedSeptember 30,(dollars in thousands) 2024 2023 2024 2023 General and administrative expense$31,569 $31,877 $92,889 $85,614 Less: Stock-based compensation 10,092 8,777 30,403 25,777 Less: Acquisition-related expenses 357 4,598 1,252 4,728 Non-GAAP general and administrative expense$21,120 $18,502 $61,234 $55,109 Non-GAAP general and administrative expense % of revenue 9% 9% 9% 9% The following adjustments to reconcile forecasted non-GAAP income from operations, non-GAAP net income, non-GAAP earnings per share, free cash flow and unlevered free cash flow are subject to a number of uncertainties and assumptions, each of which are inherently difficult to forecast. As a result, actual adjustments and GAAP results may differ materially. Forecasted Non-GAAP Income from OperationsThree Months EndingDecember 31, 2024 Year EndingDecember 31, 2024(in millions)Low High Low HighForecasted income (loss) from operations$0.6 $2.6 $(19.2) $(17.2)Forecasted stock-based compensation 41.3 41.3 164.1 164.1 Forecasted acquisition-related expenses — — 1.3 1.3 Forecasted restructuring — — 6.1 6.1 Forecasted amortization of acquired intangible assets 5.1 5.1 19.5 19.5 Forecasted non-GAAP income from operations$47.0 $49.0 $171.8 $173.8 Forecasted Non-GAAP Net Income and Non-GAAP Earnings Per ShareThree Months EndingDecember 31, 2024 Year EndingDecember 31, 2024(in millions, except per share data)Low High Low HighForecasted net loss(1)$(6.2) $(4.2) $(44.4) $(42.4)Forecasted stock-based compensation 41.3 41.3 164.1 164.1 Forecasted tax impact of stock-based compensation 1.9 1.9 3.5 3.5 Forecasted acquisition-related expenses — — 1.3 1.3 Forecasted restructuring — — 6.1 6.1 Forecasted amortization of acquired intangible assets 5.1 5.1 19.5 19.5 Forecasted tax impact of acquisitions (0.1) (0.1) (0.2) (0.2)Forecasted non-GAAP net income$42.0 $44.0 $149.9 $151.9 Forecasted net loss per share, diluted(1)$(0.05) $(0.04) $(0.37) $(0.36)Forecasted stock-based compensation 0.34 0.34 1.38 1.38 Forecasted tax impact of stock-based compensation 0.02 0.02 0.03 0.03 Forecasted acquisition-related expenses — — 0.01 0.01 Forecasted restructuring — — 0.05 0.05 Forecasted amortization of acquired intangible assets 0.04 0.04 0.16 0.16 Forecasted tax impact of acquisitions — — — — Adjustment to diluted earnings per share(2) (0.02) (0.01) (0.05) (0.04)Forecasted non-GAAP earnings per share, diluted$0.33 $0.35 $1.21 $1.23 Forecasted weighted-average shares used to compute GAAP net loss per share, diluted 120.0 120.0 119.0 119.0 Forecasted weighted-average shares used to compute non-GAAP earnings per share, diluted 125.5 125.5 123.5 123.5 ________________(1) The forecasted GAAP net loss assumes income tax expense of $4.9 million and $15.6 million in the three months and year ending December 31, 2024, respectively. (2) Adjustment to reconcile GAAP net loss per share, which excludes potentially dilutive shares, to non-GAAP earnings per share, which includes potentially dilutive shares. Forecasted Free Cash Flow and Unlevered Free Cash FlowYear EndingDecember 31, 2024(in millions)Low HighForecasted net cash provided by operating activities$206.7 $216.7 Forecasted purchases of property and equipment (5.9) (5.9)Forecasted capitalized software development costs (6.7) (6.7)Forecasted free cash flow 194.1 204.1 Forecasted cash paid for interest and other financing costs 30.9 30.9 Forecasted unlevered free cash flow$225.0 $235.0
