Summary
Tenable reported revenue of $195.0 million for the second quarter of fiscal 2023, up 18.7% from $164.3 million in the prior-year quarter. Year-to-date revenue was $383.9 million, up 18.6% from $323.7 million. Subscription revenue rose 20% year over year, while perpetual license and maintenance revenue fell 4%. Gross profit rose to $151.5 million from $128.3 million, and gross margin slipped to 77.7% from 78.1%. The company remained unprofitable, but the losses narrowed. Operating loss was $10.7 million against a loss of $23.2 million a year earlier. Operating margin improved to -5.5% from -14.1%. Net loss was $16.0 million, or $0.14 per diluted share, versus a loss of $27.5 million, or $0.25 per share. Six-month net loss narrowed to $41.1 million from $52.0 million.
Cash generation held roughly steady. Net cash provided by operating activities was $30.2 million in the quarter, down from $30.5 million a year earlier, and rose to $68.9 million from $63.4 million on a year-to-date basis. Capital expenditures were $0.7 million in the quarter, down from $1.2 million. Calculated current billings, a non-GAAP measure, reached $200.2 million, up 15% year over year. Remaining performance obligations were $662.7 million, up 16.7% from $567.7 million, and current deferred revenue rose 19.2% to $495.2 million. Unlevered free cash flow was $39.8 million, up from $29.1 million.
Customer additions were mixed. The company added 426 new enterprise platform customers and 63 net new six-figure customers. Customers with annual contract value of $100,000 or more reached 1,507, up 27% from 1,191. The dollar-based net expansion rate was 111%, and recurring revenue represented 95% of revenue. Non-GAAP income from operations was $30.2 million, compared with $12.2 million a year earlier, and non-GAAP net income was $26.3 million versus $6.0 million. On the product side, Tenable launched new AI-driven identity security into its Exposure Management Platform, integrated Tenable Security Center into Tenable One, and announced a strategic partnership with Splunk.
Operating expenses explain part of the margin improvement. Sales and marketing expense rose 11% in the quarter on higher personnel costs, including stock-based compensation, and on demand generation spending. Research and development expense rose 4%, and general and administrative expense slipped 1%. Stock-based compensation remains a significant recurring cost. Interest expense climbed 116% as the variable rate on the term loan rose. Management flagged longer sales cycle times in the purchasing and approval phases that began at the end of the first quarter of 2023 and said the trend may continue. Cash, cash equivalents and short-term investments totaled $645.5 million at June 30, 2023, compared with $567.4 million at December 31, 2022. The accumulated deficit stood at $787.8 million, and the term loan carries a final payment due July 7, 2028.
For the third quarter of 2023, management guided to a revenue range of $197.0 million to $199.0 million and non-GAAP income from operations of $26.0 million to $27.0 million. Third quarter non-GAAP net income guidance is $22.0 million to $23.0 million, with non-GAAP diluted earnings per share of $0.18 to $0.19 on 122.5 million diluted weighted average shares. For the full year ending December 31, 2023, the company guided to a revenue range of $783.0 million to $791.0 million and calculated current billings of $879.0 million to $887.0 million. Full-year non-GAAP income from operations is expected at $96.0 million to $100.0 million, and non-GAAP net income at $79.0 million to $83.0 million, with non-GAAP diluted earnings per share of $0.65 to $0.69. Unlevered free cash flow for the full year is guided to $180.0 million to $185.0 million.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q2 FY2023 | Q1 FY2023 | QoQ | Q2 FY2022 | YoY |
|---|---|---|---|---|---|
| Revenue | $195.0M | $188.8M | +3.3% | $164.3M | +18.7% |
| Gross profit | $151.5M | $143.3M | +5.7% | $128.3M | +18.1% |
| Gross margin | 77.7% | 75.9% | +1.8 pp | 78.1% | -0.4 pp |
| Research & development | $37.8M | $38.2M | -0.9% | $36.2M | +4.5% |
| Sales & marketing | $97.8M | $97.2M | +0.6% | $88.4M | +10.6% |
| General & administrative | $26.6M | $27.1M | -1.8% | $26.9M | -0.9% |
| Total operating expenses | $162.3M | $162.5M | -0.1% | $151.5M | +7.1% |
| Operating income (loss) | -$10.7M | -$19.2M | +43.9% | -$23.2M | +53.7% |
| Operating margin | -5.5% | -10.1% | +4.6 pp | -14.1% | +8.6 pp |
| Net income (loss) | -$16.0M | -$25.1M | +36.4% | -$27.5M | +41.9% |
| Net margin | -8.2% | -13.3% | +5.1 pp | -16.7% | +8.5 pp |
| Diluted EPS | -$0.14 | -$0.22 | +$0.08 | -$0.25 | +$0.11 |
| Customers | 323,709 | 159,368 | +103.1% | 253,448 | +27.7% |
Risks
MD&A states that at the end of Q1 2023 the company experienced longer sales cycle times in the purchasing and approval phases, and this trend may continue in 2023. New enterprise platform customers added in the quarter were 426 versus 540, a change of (21)%.
Revenue growth in the three months ended June 30, 2023 relied on existing customers: the $30.7 million increase included $32.3 million from existing customers at July 1, 2022, net of a decrease from new customers of $1.6 million.
In July 2023 the SEC adopted rules requiring disclosure of a material cybersecurity incident on Form 8-K within four business days of determining materiality, plus disclosures on cybersecurity risk processes, management's role, and board oversight.
The filing newly discloses that complex accounting rules and public reporting/governance requirements, and estimates such as the estimated economic life of perpetual licenses and deferred commission benefit periods, could cause unexpected financial reporting fluctuations or increased compliance costs.
Interest expense increased $4.2 million, or 116%, in the quarter ended June 30, 2023 primarily due to an increase in the variable rate on the Term Loan; rates were 7.16% to 7.90% from January to June 2023 and rose to 7.97% in July 2023 and 8.18% in August 2023.
Gross margin declined to 77.7% in the quarter ended June 30, 2023 from 78.1% in the prior-year quarter, down 0.4 pp, as cost of revenue increased 21% primarily from third-party cloud infrastructure costs.
SaaS KPIs
All quarters →Non-GAAP Operating Margin
Calculated Current Billings
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
Non-GAAP Income from Operations
Recurring Revenue as % of Revenue
Summary, forecast, risks and KPIs are extracted from Tenable Holdings, Inc.'s SEC filings for Q2 FY2023 (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.