Summary
Tenable opened fiscal 2022 with solid top-line growth and wider GAAP losses. Revenue for the first quarter ended March 31, 2022 was $159.4 million, up 29% from the prior-year quarter. Gross profit rose to $124.4 million, up 23.1%, while gross margin slipped to 78.1% from 82.1%. The GAAP operating loss was $17.5 million, compared with a loss of $5.8 million in the first quarter of 2021. GAAP net loss was $24.5 million, or $0.22 per diluted share, compared with a net loss of $7.7 million, or $0.07 per diluted share. Operating margin was -11.0%, down from -4.7%. Cost of revenue grew on higher cloud infrastructure spending and amortization.
Non-GAAP profitability also came in lower year over year. Non-GAAP income from operations was $12.5 million, compared with $13.9 million in the first quarter of 2021. Non-GAAP net income was $7.0 million, compared with $14.7 million, and non-GAAP diluted earnings per share was $0.06, compared with $0.13. Calculated current billings, a non-GAAP measure, was $156.5 million, up 31% from the prior-year quarter. Net cash provided by operating activities was $32.9 million, down from $38.6 million. Capital expenditures were $4.8 million, up from $1.1 million. Free cash flow was $28.1 million, and unlevered free cash flow was $32.1 million, down from $37.6 million.
Deferred revenue on the balance sheet, current portion only, rose 24.5% to $404.8 million. Remaining performance obligations rose 26.0% to $555.7 million. Those balances point to a healthy book of contracted work even as margins compress.
Tenable added 459 new enterprise platform customers in the quarter and 17 net new six-figure customers. At March 31, 2022, 1,112 customers had annual contract value of $100,000 or greater. The dollar-based net expansion rate exceeded 110% on a last-twelve-months basis, and recurring revenue represented 95% of revenue, up from 94%. Product work included new capabilities for Tenable.cs, the integration of Tenable.ad and Tenable.cs into Tenable.ep, and the publication of The Threat Landscape Retrospective report. In February 2022, Tenable paid $23.0 million in cash for Cymptom; in April 2022, it agreed to acquire Bit Discovery for $44.5 million in cash.
Guidance covers both the next quarter and the full fiscal year. For the second quarter of 2022, Tenable guided non-GAAP income from operations of $6.0 million to $7.0 million, non-GAAP net income of $1.0 million to $2.0 million, and non-GAAP diluted earnings per share of $0.01 to $0.02, assuming 119.5 million diluted weighted average shares outstanding. For the full year 2022, the company guided calculated current billings of $764.0 million to $772.0 million, non-GAAP income from operations of $44.0 million to $48.0 million, non-GAAP net income of $19.5 million to $23.5 million, and non-GAAP diluted earnings per share of $0.16 to $0.20, again on 119.5 million shares.
The Bit Discovery deal is not expected to have a significant impact on the second-quarter outlook. For the second half of 2022, Bit Discovery is expected to add $2 million to $3 million of calculated current billings and $2 million to $3 million of non-GAAP net loss, and that impact sits outside the full-year outlook. Management flags several risks. Tenable competes in a fast-changing market, plans to keep spending on sales and research ahead of the payoff, and expects operating losses in the near term. Gross margin should decline over time as cloud subscriptions grow as a share of revenue, and agreements skew toward the third and fourth quarters. Early termination of customer contracts in Russia and Belarus added $1.4 million of revenue in the quarter that largely would have been recognized in future quarters of 2022. The term loan carries a variable rate of 3.27% through July 29, 2022, and a one percentage point increase would add $1.6 million to 2022 interest expense.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q1 FY2022 | Q4 FY2021 | QoQ | Q1 FY2021 | YoY |
|---|---|---|---|---|---|
| Revenue | $159.4M | $149.0M | +6.9% | $123.2M | +29.4% |
| Gross profit | $124.4M | $118.2M | +5.3% | $101.1M | +23.1% |
| Gross margin | 78.1% | 79.3% | -1.2 pp | 82.1% | -4.0 pp |
| Research & development | $34.3M | $30.7M | +11.6% | $26.8M | +27.8% |
| Sales & marketing | $81.6M | $77.5M | +5.3% | $58.6M | +39.1% |
| General & administrative | $26.1M | $22.8M | +14.4% | $21.4M | +21.8% |
| Total operating expenses | $142.0M | $131.0M | +8.3% | $106.9M | +32.8% |
| Operating income (loss) | -$17.5M | -$12.9M | -36.4% | -$5.8M | -202.4% |
| Operating margin | -11.0% | -8.6% | -2.4 pp | -4.7% | -6.3 pp |
| Net income (loss) | -$24.5M | -$11.0M | -121.9% | -$7.7M | -216.3% |
| Net margin | -15.4% | -7.4% | -8.0 pp | -6.3% | -9.1 pp |
| Diluted EPS | -$0.22 | -$0.10 | -$0.12 | — | — |
| Customers | 123,189 | 40,000 | +208.0% | 102,648 | +20.0% |
Risks
History of losses and potential failure to achieve profitability; net loss widened to $24.5 million in FY2022 Q1 from $7.7 million in FY2021 Q1, and accumulated deficit was $679.0 million at March 31, 2022, while costs are expected to increase.
Intense competition from Qualys, Rapid7, CrowdStrike, Palo Alto Networks and Microsoft's vulnerability management offering. Larger competitors can bundle products and may pressure pricing, potentially reducing average sales prices.
Substantial dependence on customer renewals and expansion. Majority of subscription contracts are one-year, and customers including certain top customers can terminate for convenience; failure to renew or expand use would harm business and results.
Reliance on third-party channel partners: 92% of revenue in FY2022 Q1 was from subscriptions and perpetual licenses sold through channel partners, and Ingram Micro accounted for 37% of revenue in FY2022 Q1 and 34% of accounts receivable at March 31, 2022. The Ingram Micro agreement can be terminated on 30 days' written notice.
As a cybersecurity vendor, may be at increased risk of being targeted by cyberattacks. Solutions may fail to detect vulnerabilities or falsely detect them, leading to liability, reputational harm, lost customers and reduced revenue.
Gross margin decreased to 78.1% in FY2022 Q1 from 82.1% in FY2021 Q1. The company expects gross margin to decrease over time as revenue from cloud-based subscriptions increases as a percentage of revenue and cloud infrastructure costs rise.
Long and unpredictable sales cycle, with average enterprise sales cycle of approximately four months and likely increase for larger deals. COVID-19 and economic uncertainty have added customer controls and approvals over expenditures.
International operations generated 44% of revenue in FY2022 Q1 and expansion involves foreign exchange, inflation, data privacy, sanctions and export controls; early termination of customer contracts in Russia and Belarus added $1.4 million of revenue in FY2022 Q1 that largely would have been recognized in future quarters.
Depends on highly skilled personnel, including engineering, sales and technology professionals. Remote and hybrid work increases competition for employees, and elevated turnover and labor market inflationary pressures have increased recruiting, training and retention costs.
Inflation and economic uncertainty could reduce customer spending and lengthen sales cycles. Retention may decline if customers reduce or delay technology spending in response to economic conditions, including inflation.
Term Loan entered in July 2021 has a variable interest rate. A one percentage point rate increase would increase 2022 interest expense by $1.6 million; interest expense, net rose to $3.3 million in FY2022 Q1 from $28 thousand in FY2021 Q1.
Acquired Cymptom for $23.0 million in February 2022 and agreed to acquire Bit Discovery for $44.5 million in April 2022. Integration and future acquisitions could increase net losses, dilute stockholders and divert management attention.
Summary, forecast, risks and KPIs are extracted from Tenable Holdings, Inc.'s SEC filings for Q1 FY2022 (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.