Summary
Tenable opened fiscal 2021 with revenue of $123.2 million for the quarter ended March 31, 2021, up 20.0% year over year. Gross profit rose 20.5% to $101.1 million, and gross margin was 82.1%, up 0.3 percentage points from the prior-year quarter. GAAP loss from operations narrowed to $5.8 million, up 73.2% from the prior-year quarter. GAAP net loss narrowed to $7.7 million, up 66.3% year over year. Diluted net loss per share was -$0.07. Operating margin was up 16.4 percentage points to -4.7%.
Cash generation was the standout. Operating cash flow rose 759.9% to $38.6 million, while capital expenditures increased 72.8% to $1.1 million. Free cash flow, a non-GAAP measure, was $37.6 million, compared with $3.9 million in the prior-year quarter. Calculated current billings, also non-GAAP, was $119.5 million, up 20% year over year. Current deferred revenue rose 20.0% to $325.1 million, and remaining performance obligations rose 21.2% to $441.1 million. Those figures point to a healthy backlog even as the company posted a GAAP net loss. Free cash flow for the quarter benefited by approximately $5 million from the accelerated timing of payments for insurance and professional fees in the three months ended December 31, 2020.
On a non-GAAP basis, Tenable reported income from operations of $13.9 million, compared with a loss of $7.7 million a year earlier. Non-GAAP net income was $14.7 million, compared with a loss of $8.8 million. Non-GAAP diluted earnings per share was $0.13, compared with a loss per share of $0.09. The customer base expanded. Tenable added 331 new enterprise platform customers and 29 net new six-figure customers. Recurring revenue represented 94% of revenue in the quarter, compared with 93% a year earlier, a sign that the subscription model is holding up.
Management tied the quarter to product and partnership moves. Tenable launched Tenable.ep, a unified, risk-based exposure platform that combines Tenable.io Vulnerability Management, Tenable.io Web Application Scanning, Tenable.io Container Security and Tenable Lumin. It completed the acquisition of Alsid SAS for $98 million in cash, subject to customary purchase price adjustments, and launched Tenable.ad to secure Active Directory environments. The company also announced a partnership with IBM Security, becoming a preferred partner for fully integrated vulnerability insights native within QRadar SIEM. A separate partnership with HCL BigFix aims to make remediation easier to automate. Tenable says more than 30,000 organizations rely on its products, including more than 50 percent of the Fortune 500 and more than 30 percent of the Global 2000. Nessus Essentials has passed 2.5 million cumulative unique downloads. Those moves broaden the platform, but they also carry integration and execution risk.
Guidance points to continued growth alongside still-negative GAAP profitability. For the second quarter of 2021, Tenable guided to non-GAAP income from operations of $7.0 million to $8.0 million, non-GAAP net income of $5.0 million to $6.0 million, and non-GAAP diluted earnings per share of $0.04 to $0.05, assuming a provision for income taxes of $1.5 million. For the full year ending December 31, 2021, the company guided to calculated current billings of $575.0 million to $585.0 million, non-GAAP income from operations of $34.0 million to $38.0 million, non-GAAP net income of $28.0 million to $32.0 million, and non-GAAP diluted earnings per share of $0.24 to $0.28, assuming a provision for income taxes of $3.5 million. The forecast assumes approximately $28 million of acquired intangible assets from Alsid amortized over seven years, an estimate the company called preliminary. Risks include the COVID-19 pandemic and its uncertain duration, which the company said could reduce billing and revenue growth rates, a highly competitive and rapidly changing market, and customer spending delays. The dollar-based net expansion rate for the three months ended March 31, 2021 exceeded 110% on a last-twelve-months basis but declined from the comparable prior-year period, which the company tied to a more moderate pace of IT asset and IP address expansion.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q1 FY2021 | Q4 FY2020 | QoQ | Q1 FY2020 | YoY |
|---|---|---|---|---|---|
| Revenue | $123.2M | $118.1M | +4.3% | $102.6M | +20.0% |
| Gross profit | $101.1M | $97.8M | +3.4% | $83.9M | +20.5% |
| Gross margin | 82.1% | 82.8% | -0.7 pp | 81.8% | +0.3 pp |
| Research & development | $26.8M | $24.4M | +9.9% | $26.8M | +0.0% |
| Sales & marketing | $58.6M | $55.9M | +4.8% | $59.9M | -2.0% |
| General & administrative | $21.4M | $18.1M | +18.2% | $18.9M | +13.3% |
| Total operating expenses | $106.9M | $98.5M | +8.6% | $105.6M | +1.2% |
| Operating income (loss) | -$5.8M | -$731.0K | -693.7% | -$21.7M | +73.2% |
| Operating margin | -4.7% | -0.6% | -4.1 pp | -21.1% | +16.4 pp |
| Net income (loss) | -$7.7M | -$1.9M | -300.2% | -$23.0M | +66.3% |
| Net margin | -6.3% | -1.6% | -4.7 pp | -22.4% | +16.1 pp |
| Customers | 102,648 | 30,000 | +242.2% | 80,301 | +27.8% |
Risks
The ongoing and evolving COVID-19 pandemic may materially adversely affect business, operations and financial performance. The company noted that substantially all field sales and professional services are being conducted remotely, and existing and potential customers have and may continue to reduce or delay technology spending or renegotiate contracts, with such effects potentially not fully reflected in results until future periods.
The cybersecurity market is fragmented and intensely competitive, with rivals including Qualys, Rapid7, Tanium and CrowdStrike, and the filing specifically notes that in 2019 Microsoft introduced a vulnerability management offering as part of its existing endpoint security platform. Larger competitors can bundle competing products and price lower, increasing pricing pressure and risk of declining average sales price.
The company derived 92% of revenue in the three months ended March 31, 2021 from subscriptions and perpetual licenses sold through channel partners, and Ingram Micro alone accounted for 41% of revenue in the three months ended March 31, 2021 and 41% of accounts receivable as of March 31, 2021. The Ingram Micro agreement is terminable by Ingram Micro at its discretion on 30 days' written notice.
The dollar-based net expansion rate for the three months ended March 31, 2021 exceeded 110% on an LTM basis but declined from the comparable prior year period, impacted by a more moderate pace of IT asset and IP address expansion. The filing also warns the rate may decline further if customers reduce or delay technology spending due to COVID-19, and that the average enterprise sales cycle of approximately four months may lengthen as larger deals are pursued.
Revenue grew 20% from the three months ended March 31, 2020 to the three months ended March 31, 2021, but the company states it may not be able to sustain its revenue growth rate due to a decline in renewal rates, failure to attract new customers or other factors, and cautions that prior results should not be relied on as an indication of future revenue or growth.
Subscriptions are term-based, a majority of contracts are for one year, and customers including certain top customers have the right to terminate for convenience. Retention may decline or fluctuate if customers reduce or delay technology spending in response to economic conditions resulting from the ongoing COVID-19 pandemic.
Privacy and data security regulation creates compliance exposure, including GDPR fines of up to 20 million euros or 4% of global revenue, the CCPA effective January 1, 2020, the CPRA effective January 1, 2023, and the invalidation of the EU-US Privacy Shield, which the company says could increase costs and negatively impact its ability to process European Union personal data.
Tenable.io is hosted on Amazon Web Services, and the AWS agreement allows AWS to terminate with two years' written notice and to temporarily restrict access without prior notice. Because the AWS agreement limits AWS's liability for damages, the company may not recover a material portion of liabilities to customers from AWS in the event of a breach affecting AWS systems.
Success depends on senior management and highly skilled sales, professional services and engineering personnel, who are employed at-will and for whom the company maintains no key person insurance. Competition for well-qualified employees is intense, and the ability to increase the customer base depends significantly on expanding the direct sales force and channel partner network.
SaaS KPIs
All quarters →Non-GAAP Operating Margin
Calculated Current Billings
New Enterprise Platform Customers Added
Free Cash Flow
Net New Six-Figure Customers
Non-GAAP Gross Margin
Dollar-Based Net Expansion Rate (LTM)
Recurring Revenue as % of Revenue
Summary, forecast, risks and KPIs are extracted from Tenable Holdings, Inc.'s SEC filings for Q1 FY2021 (10-Q / 10-K and the 8-K earnings release); GAAP figures in the summary are checked against the reported XBRL data. They can contain errors; the filings are authoritative. Processed Oct 6, 2026.