Summary
Tenable closed fiscal 2023 with fourth-quarter revenue of $213.3 million, up 15.5% from the prior-year quarter. Full-year revenue reached $798.7 million, up 16.9%. Gross profit for the quarter was $164.5 million, up 18.0%, and gross margin improved to 77.1%, up 1.6 percentage points from the prior-year quarter. The top line still grew at a double-digit pace, but the GAAP bottom line remained under pressure. GAAP operating loss for the quarter was $14.35 million, compared with a loss of $14.09 million, and GAAP net loss was $21.65 million, compared with $21.49 million. Both quarterly losses widened slightly. On a full-year basis, GAAP operating loss narrowed to $52.16 million from $67.82 million, and GAAP net loss narrowed to $78.28 million from $92.22 million. Full-year GAAP diluted EPS was -$0.68, compared with -$0.83, as the loss narrowed.
Non-GAAP results moved ahead faster. Fourth-quarter non-GAAP income from operations was $36.1 million, compared with $19.9 million, and non-GAAP net income was $30.2 million, compared with $14.2 million. Non-GAAP diluted EPS was $0.25, compared with $0.12. Full-year non-GAAP income from operations was $121.0 million, compared with $67.7 million, and full-year non-GAAP diluted EPS was $0.80, compared with $0.38. The gap between GAAP and non-GAAP results reflects large stock-based compensation, restructuring, acquisition-related expenses and amortization of acquired intangibles, items that management excludes from its core operating view.
Cash generation remained a bright spot. Fourth-quarter operating cash flow was $38.50 million, up 20.6% from the prior-year quarter, and full-year operating cash flow was $149.86 million, up 14.3%. Capital expenditures were $0.40 million in the quarter, down 90.4%, and $1.70 million for the full year, down 81.8%. Unlevered free cash flow, a non-GAAP measure, was $43.3 million in the quarter, compared with $32.1 million, and $175.4 million for the full year, compared with $128.1 million. Calculated current billings, also non-GAAP, was $271.6 million in the quarter, up 14%, and $873.3 million for the full year, up 12%. Deferred revenue, current portion, was $580.78 million at December 31, 2023, up 15.7% from a year earlier. Remaining performance obligations were $775.0 million, up 13.9%.
Operating metrics showed a mix of expansion and caution. Tenable added 597 new enterprise platform customers and 156 net new six-figure customers in the fourth quarter, including 104 enterprise platform customers and 15 six-figure customers from the Ermetic acquisition. Full-year new enterprise platform customers were 1,788, down from 2,078 in 2022. Customers with $100,000 or more in annual contract value rose to 1,721 at year-end from 1,420 a year earlier. The dollar-based net expansion rate slipped to 111% from 117%. Management pointed to strength in Tenable One, especially cloud and identity adoption, and continued traction in OT. The company achieved FedRAMP Ready designation for Tenable Cloud Security via Ermetic, expanded its Siemens Energy partnership, and was named a leader in an IDC risk-based vulnerability management report.
Guidance points to continued non-GAAP profitability. For the first quarter of 2024, management guided to non-GAAP income from operations of $27.0 million to $29.0 million, non-GAAP net income of $20.0 million to $22.0 million, and non-GAAP diluted EPS of $0.16 to $0.18. For full-year 2024, the company guided to calculated current billings of $982.0 million to $992.0 million, non-GAAP income from operations of $152.0 million to $160.0 million, non-GAAP net income of $129.0 million to $137.0 million, non-GAAP diluted EPS of $1.03 to $1.10, and unlevered free cash flow of $220.0 million to $230.0 million.
Risks remain visible. Tenable said it saw longer sales cycle times in the purchasing and approval phases in 2023 and expects that trend to continue in 2024. The company also completed a restructuring tied to a 5% workforce reduction and is negotiating a sublease of real estate. Competition in exposure management remains intense, and the company depends on channel partners and large enterprise deals that can shift between quarters. The fourth quarter showed solid revenue growth, rising operating cash flow and a stronger non-GAAP profit picture, but GAAP losses persist and both the dollar-based net expansion rate and full-year new customer additions softened.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q4 FY2023 | Q3 FY2023 | QoQ | Q4 FY2022 | YoY |
|---|---|---|---|---|---|
| Revenue | $213.3M | $201.5M | +5.8% | $184.6M | +15.5% |
| Gross profit | $164.5M | $155.8M | +5.6% | $139.4M | +18.0% |
| Gross margin | 77.1% | 77.3% | -0.2 pp | 75.5% | +1.6 pp |
| Research & development | $40.1M | $37.1M | +8.2% | $36.9M | +8.6% |
| Sales & marketing | $103.7M | $94.8M | +9.4% | $91.3M | +13.6% |
| General & administrative | $30.6M | $31.9M | -4.1% | $25.3M | +21.0% |
| Total operating expenses | $178.8M | $163.7M | +9.3% | $153.5M | +16.5% |
| Operating income (loss) | -$14.3M | -$7.9M | -81.3% | -$14.1M | -1.8% |
| Operating margin | -6.7% | -3.9% | -2.8 pp | -7.6% | +0.9 pp |
| Net income (loss) | -$21.6M | -$15.6M | -39.1% | -$21.5M | -0.7% |
| Net margin | -10.2% | -7.7% | -2.4 pp | -11.6% | +1.5 pp |
| Diluted EPS | -$0.19 | -$0.13 | -$0.06 | -$0.19 | ±$0.00 |
| Customers | 44,000 | 498,560 | -91.2% | 43,000 | +2.3% |
Risks
The cybersecurity market is fragmented and intensely competitive, with named competitors including Qualys, Rapid7, CrowdStrike, Palo Alto Networks, Wiz and Microsoft. Larger competitors can bundle competing products or price lower, which may increase pricing pressure and cause average sales prices to decline.
Tenable's sales cycle is long and unpredictable, with an average enterprise sales cycle of approximately four months. MD&A states that in 2023 Tenable experienced longer sales cycle times in the purchasing and approval phases and expects this trend to continue in 2024, which could delay revenue recognition.
MD&A shows dollar-based net expansion rate declined to 111% at December 31, 2023 from 117% at December 31, 2022, and new enterprise platform customers added fell to 1,788 in 2023 from 2,078 in 2022. Tenable may not sustain its revenue growth rate if renewals, expansion or new customer additions weaken.
In 2023, 93% of revenue was derived from channel partners, and Ingram Micro accounted for 36% of revenue in 2023 and 32% of accounts receivable at December 31, 2023. The Ingram Micro agreement allows termination at its discretion upon 30 days' written notice, creating significant concentration risk.
As a cybersecurity vendor, Tenable may be an increased target of cyberattacks, and its solutions could fail to detect or falsely detect vulnerabilities. Threat sources include attacks enhanced by artificial intelligence and deep fakes, and a compromise or large-scale supply-chain event could lead to regulatory investigations, litigation, fines, reputational harm and loss of customers.
Tenable is subject to stringent and changing data privacy and security laws, including GDPR and CCPA/CPRA, with potential fines up to 20 million euros or 4% of annual global revenue under GDPR. Cross-border data transfer restrictions could interrupt operations or require costly localization changes.
Macroeconomic uncertainty, including foreign exchange rates, inflation, interest rates, bank failures and recession concerns, has impacted customer budgets and purchasing decisions and could further lengthen sales cycles or reduce renewal and expansion activity.
Tenable recorded $4.5 million of restructuring expenses in 2023 and reduced its workforce by 5% to optimize go-to-market efforts. It expects an additional $2 million to $3 million of restructuring charges in the three months ended March 31, 2024 and a possible $6 million to $7 million non-cash real estate impairment charge in 2024.
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 (LTM)
Remaining Performance Obligations
Recurring Revenue as % of Revenue
Organizations relying on Tenable
Summary, forecast, risks and KPIs are extracted from Tenable Holdings, Inc.'s SEC filings for Q4 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.