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Cybersecurity software maker Tenable (NASDAQ:TENB) reported Q1 CY2025 results beating Wall Street’s revenue expectations , with sales up 10.7% year on year to $239.1 million. Guidance for next quarter’s revenue was better than expected at $242 million at the midpoint, 0.6% above analysts’ estimates. Its non-GAAP profit of $0.36 per share was 27.5% above analysts’ consensus estimates.

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Tenable (TENB) Q1 CY2025 Highlights:

• Revenue: $239.1 million vs analyst estimates of $233.6 million (10.7% year-on-year growth, 2.4% beat)

• Adjusted EPS: $0.36 vs analyst estimates of $0.28 (27.5% beat)

• Adjusted Operating Income: $48.68 million vs analyst estimates of $41.81 million (20.4% margin, 16.4% beat)

• Full-year billings guidance of $1.035 billion vs. analyst estimates of $1.071 billion (3.4% miss)

• The company reconfirmed its revenue guidance for the full year of $975 million at the midpoint

• Operating Margin: -7.4%, down from -4.1% in the same quarter last year

• Free Cash Flow Margin: 33.5%, similar to the previous quarter

• Market Capitalization: $3.98 billion

"We had a strong start to the year with better-than-expected results on both the top and bottom line," said Steve Vintz, Co-CEO of Tenable.

Company Overview

Founded in 2002 by three cybersecurity veterans, Tenable (NASDAQ:TENB) provides software as a service that helps companies understand where they are exposed to cyber security risk and how to reduce it.

Sales Growth

Reviewing a company’s long-term sales performance reveals insights into its quality. Even a bad business can shine for one or two quarters, but a top-tier one grows for years. Over the last three years, Tenable grew its sales at a 16.9% annual rate. Although this growth is acceptable on an absolute basis, it fell slightly short of our standards for the software sector, which enjoys a number of secular tailwinds.

This quarter, Tenable reported year-on-year revenue growth of 10.7%, and its $239.1 million of revenue exceeded Wall Street’s estimates by 2.4%. Company management is currently guiding for a 9.4% year-on-year increase in sales next quarter.

Looking further ahead, sell-side analysts expect revenue to grow 8.4% over the next 12 months, a deceleration versus the last three years. This projection doesn't excite us and implies its products and services will face some demand challenges.

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