Summary
Tenable opened fiscal 2026 with revenue of $262.1 million for the quarter ended March 31, 2026, up 9.6% from $239.1 million a year earlier. Gross profit rose 10.0% to $205.4 million, and gross margin was 78.4%, up 0.3 percentage points from 78.1%. The company swung to a GAAP operating profit of $8.8 million from a GAAP operating loss of $17.7 million, and operating margin improved to 3.3% from negative 7.4%. GAAP net income was $1.4 million, or $0.01 per diluted share, against a net loss of $22.9 million, or $0.19 per share, in the prior-year quarter.
Cash generation held steady, and the non-GAAP picture is far more profitable than the GAAP one. Net cash provided by operating activities was $88.0 million, up 0.6% from $87.4 million. Unlevered free cash flow, a non-GAAP measure that adds back cash paid for interest, was $88.6 million compared with $86.8 million. Capital expenditures were $2.6 million, down 60.5% from $6.6 million, which flattered the cash line. Non-GAAP income from operations was $61.9 million against $48.7 million, and non-GAAP operating margin was 23.6%, a 320 basis point improvement from 20.4%. Non-GAAP net income was $55.6 million and non-GAAP diluted earnings per share was $0.47, compared with $0.36. The spread between the two earnings measures comes mainly from stock-based compensation, amortization of acquired intangible assets and restructuring charges, so the 3.3% GAAP operating margin is not a clean read on the underlying cost structure. Below the operating line, interest expense on the term loan still exceeds interest income.
Backlog keeps growing faster than reported revenue. Remaining performance obligations were $1.01 billion, up 14.8% from $882.2 million. Current deferred revenue was $680.0 million, up 7.4%. Subscription revenue grew 10% while perpetual license and maintenance revenue fell 12%, and recurring revenue was 96% of total revenue in both quarters. U.S. revenue increased 7% and international revenue increased 12%. Tenable added 406 new enterprise platform customers and ended the quarter with 2,204 customers spending at least $100,000 in annual contract value, up 8%. The dollar-based net expansion rate eased to 105% from 108%, which points to softer expansion inside the installed base even as new logo additions look healthy.
Management kept buying back stock, repurchasing 6.1 million shares for $130.0 million in the quarter. Product news centered on Tenable Hexa AI, an agentic engine that automates security workflows, plus two Gartner recognitions in early 2026. The company scheduled an investor day for May 21, 2026, where it plans to lay out its AI strategy and long-term financial targets.
Guidance for the second quarter of 2026 puts non-GAAP income from operations at $61.0 million to $64.0 million, non-GAAP net income at $53.0 million to $56.0 million and non-GAAP diluted earnings per share at $0.46 to $0.48. The quarterly revenue outlook is stated as a range just above the top line reported for the first quarter. For the full year 2026, the company guides revenue of $1.068 billion to $1.078 billion, non-GAAP income from operations of $252.0 million to $262.0 million, non-GAAP net income of $222.0 million to $232.0 million, non-GAAP diluted earnings per share of $1.90 to $1.98 and unlevered free cash flow of $285.0 million to $295.0 million. The full-year plan assumes 117.0 million diluted weighted average shares.
Costs are not all moving in the same direction. Sales and marketing expense grew 4% and research and development expense grew 5%, while general and administrative expense fell 34%, mostly because the prior-year quarter carried the accelerated vesting of equity awards for the former chairman and chief executive officer. That comparison flatters the current GAAP profit, so the operating leverage shown this quarter is partly optical. Restructuring charges tied to severance also landed in the period.
The bigger risks sit in demand and mix. Dollar-based net expansion slipped to 105%, perpetual license revenue is shrinking, and management warns that macroeconomic conditions and U.S. policy decisions could lengthen the purchasing and approval phases of the sales cycle in 2026. Cloud infrastructure costs may pressure gross margin as cloud subscriptions grow as a share of revenue. Competition in exposure management is intense and changing quickly, and the company still carries a valuation allowance against its deferred tax assets because of its history of losses. Tenable also carries a term loan and continues to look for acquisitions.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q1 FY2026 | Q4 FY2025 | QoQ | Q1 FY2025 | YoY |
|---|---|---|---|---|---|
| Revenue | $262.1M | $260.5M | +0.6% | $239.1M | +9.6% |
| Gross profit | $205.4M | $205.2M | +0.1% | $186.7M | +10.0% |
| Gross margin | 78.4% | 78.8% | -0.4 pp | 78.1% | +0.3 pp |
| Research & development | $55.8M | $54.9M | +1.5% | $53.2M | +4.8% |
| Sales & marketing | $107.0M | $106.7M | +0.2% | $103.2M | +3.7% |
| General & administrative | $31.4M | $31.6M | -0.5% | $48.0M | -34.5% |
| Total operating expenses | $196.6M | $196.4M | +0.1% | $204.4M | -3.8% |
| Operating income (loss) | $8.8M | $8.9M | -1.0% | -$17.7M | +149.5% |
| Operating margin | 3.3% | 3.4% | -0.1 pp | -7.4% | +10.8 pp |
| Net income (loss) | $1.4M | -$737.0K | +291.9% | -$22.9M | +106.2% |
| Net margin | 0.5% | -0.3% | +0.8 pp | -9.6% | +10.1 pp |
| Diluted EPS | $0.01 | -$0.01 | +$0.02 | -$0.19 | +$0.20 |
| Customers | 239,137 | 40,000 | +497.8% | 215,961 | +10.7% |
Risks
The company has incorporated AI features such as ExposureAI, Tenable AI Assistant and Tenable One into its products, but new AI rules create compliance and continuity risk. The filing cites EU AI Act fines of up to 35 million Euros or 7% of worldwide annual turnover and notes federal agencies designated Anthropic as a supply chain risk, which could force rapid decoupling or replacement of integrated AI models.
As a cybersecurity vendor, Tenable may be at increased risk of being targeted, and AI advances may let attackers identify and exploit vulnerabilities faster. The filing cites a December 31, 2024 incident in which Nessus agents versions 10.8.0 and 10.8.1 went offline under certain conditions, and warns that a supply-chain compromise could simultaneously affect many or all customers.
Tenable One is hosted on AWS, and the company also relies on third parties such as Snowflake; AWS can terminate its agreement with two years' written notice and under certain circumstances temporarily restrict access without prior notice. The filing points to recent AWS data center disruptions in the UAE and Bahrain tied to regional hostilities involving Iran as a concrete business continuity risk.
A portion of revenue comes from U.S. government and highly regulated customers, where funding reductions or delays, including from a U.S. government shutdown or reduced agency budgets, could lower demand and elongate sales cycles. The filing specifically cites spending-reduction actions including those previously driven by the Department of Government Efficiency and notes contracts can be terminated for convenience.
Cyber threats increasingly leverage artificial intelligence, raising customer expectations for rapid identification, prioritization and remediation of vulnerabilities. If Tenable's solutions fail to keep pace with these evolving threats, or if its AI features do not achieve market acceptance despite significant investment, its reputation, competitive position and customer relationships could be adversely affected.
MD&A reports the dollar-based net expansion rate decreased to 105% at March 31, 2026 from 108% at March 31, 2025, and revenue growth included a $1.9 million decrease from new customers. Management also says macroeconomic conditions and U.S. policy decisions may lengthen purchasing and approval phases of the sales cycle in 2026.
SaaS KPIs
All quarters →Non-GAAP Operating Margin
New Enterprise Platform Customers Added
Unlevered Free Cash Flow
Free Cash Flow
Net New Six-Figure Customers
Non-GAAP Gross Margin
Dollar-Based Net Expansion Rate
Summary, forecast, risks and KPIs are extracted from Tenable Holdings, Inc.'s SEC filings for Q1 FY2026 (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.