Tenable Holdings Inc
For the period ended Sep 30, 2024. Filed Nov 5, 2024.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 30, 2024 · Filed Nov 5, 2024
TENB$42.13-4.6%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-06-30; filed 2024-08-06.
0001660280-24-000127
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-09-30; filed 2024-11-05.
0001660280-24-000153
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 171 previous paragraphs and 177 current paragraphs.
91 unchanged; 49 reworded; 28 added; 19 removed; 12 previous and 9 current paragraphs rearranged.
Tables are not compared: 28 previous and 27 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (28)
Current report
Restructuring
Current report
•a $1.1 million increase in personnel costs; and
Current report
•a $0.6 million increase in allocated overhead; partially offset by
Current report
•a $0.3 million decrease in selling expenses.
Current report
•a $9.3 million increase in personnel costs, largely associated with an increase in headcount and a $3.2 million increase in stock-based compensation;
Current report
•a $0.3 million increase in software subscription costs; and
Current report
•a $4.2 million decrease in acquisition-related expenses; and
Current report
•a $2.1 million increase in personnel costs, including a $1.3 million increase in stock-based compensation.
Current report
The $1.7 million decrease in interest income was due to a decrease in short-term investments and lower interest rates in the three months ended September 30, 2024. Interest expense was flat quarter-over-quarter. The $6.9 million increase in other income (expense), net was primarily due to a $5.0 million impairment loss on one of our SAFE investments in the prior year and a $1.8 million increase in gains due to foreign exchange rates.
Current report
•$3.5 million of income taxes in foreign jurisdictions in which we conduct business;
Current report
•$1.0 million of discrete items primarily related to withholding taxes on sales to customers; and
Current report
•$0.6 million of discrete items primarily related to withholding taxes on sales to customers; and
Current report
•$0.1 million of income taxes in foreign jurisdictions in which we conduct business.
Current report
•a $0.4 million increase in subscription costs; and
Current report
•a $0.4 million increase in depreciation expense.
Current report
•a $3.4 million increase in sales commissions;
Current report
•a $16.8 million increase in personnel costs, including a $7.5 million increase in stock-based compensation;
Current report
•a $7.7 million increase in personnel costs, including a $4.6 million increase in stock-based compensation;
Current report
•a $4.1 million increase in professional fees;
Current report
•a $0.8 million increase in software subscription costs; and
Current report
•a $3.5 million decrease in acquisition-related expenses; and
Current report
Restructuring
Current report
In the nine months ended September 30, 2024, the provision for income taxes included:
Current report
•$5.6 million of income taxes in foreign jurisdictions in which we conduct business;
Current report
•$2.6 million of discrete items primarily related to withholding taxes on sales to customers; and
Current report
In the nine months ended September 30, 2023, the provision for income taxes included:
Current report
•$2.8 million of discrete items primarily related to withholding taxes on sales to customers; partially offset by
Current report
•$0.2 million of deferred tax benefits related to our acquisition of Alsid SAS.
Removed paragraphs (19)
Previous report
•a $5.1 million increase in personnel costs, including $2.0 million in stock-based compensation;
Previous report
•a $0.8 million increase in third-party cloud infrastructure costs; and
Previous report
•a $0.3 million increase in software subscriptions; partially offset by
Previous report
•a $0.7 million decrease in allocated overhead; and
Previous report
•$1.7 million of income taxes in foreign jurisdictions in which we conduct business;
Previous report
•$0.8 million of discrete items primarily related to withholding taxes on sales to customers.
Previous report
•$2.2 million of income taxes in foreign jurisdictions in which we conduct business; and
Previous report
•$0.9 million of discrete items primarily related to withholding taxes on sales to customers.
Previous report
•a $3.1 million increase in third-party cloud infrastructure costs;
Previous report
•a $7.6 million increase in personnel costs, including a $4.3 million increase in stock-based compensation;
Previous report
•a $1.4 million increase in allocated overhead;
Previous report
•a $0.4 million increase in travel and meeting costs; and
Previous report
•a $0.8 increase in acquisition-related expenses; and
Previous report
•a $1.0 million decrease in allocated overhead.
Previous report
In the six months ended June 30, 2024, the provision for income taxes included:
Previous report
•$2.1 million of income taxes in foreign jurisdictions in which we conduct business;
Previous report
•$1.6 million of discrete items primarily related to withholding taxes on sales to customers.
Previous report
In the six months ended June 30, 2023, the provision for income taxes included:
Previous report
•$2.2 million of discrete items primarily related to withholding taxes on sales to customers.
Reworded paragraphs (49)
Previous wording
We sell and market our products and services through our field sales force that works closely with our channel partners, which includes a network of distributors and resellers, in developing sales opportunities. We use a two-tiered channel model whereby we sell our enterprise platform offerings to our distributors, which in turn sell to our resellers, which then sell to end users, which we call customers.
Current wording
We sell and market our products and services through our field sales force that works closely with our channel network of distributors, resellers and managed security service providers (MSSPs), in developing sales opportunities. We typically use a two-tiered channel model whereby we sell our enterprise platform offerings to our distributors, who in turn sell to our resellers, who then sell to end users, who we call customers.
Previous wording
Recurring revenue, which includes revenue from subscription arrangements for software (both recognized ratably over the subscription term and upon delivery) and cloud-based solutions and maintenance associated with perpetual licenses, represented 96% of revenue in the three and six months ended June 30, 2024 and 95% of revenue in the three and six months ended June 30, 2023.
Current wording
Recurring revenue, which includes revenue from subscription arrangements for software (both recognized ratably over the subscription term and upon delivery) and cloud-based solutions and maintenance associated with perpetual licenses, represented 96% of revenue in the three and nine months ended September 30, 2024 and 95% of revenue in the three and nine months ended September 30, 2023.
Previous wording
(1) Deferred revenue (current), beginning of period for the three and six months ended June 30, 2024 includes $0.1 million related to acquired deferred revenue.
Current wording
(1) Deferred revenue (current), beginning of period for the nine months ended September 30, 2024 includes $0.1 million related to acquired deferred revenue.
Previous wording
We use the non-GAAP measure of free cash flow, which we define as GAAP net cash flows from operating activities reduced by purchases of property and equipment and capitalized software development costs. We believe free cash flow is an important liquidity measure of the cash (if any) that is available, after purchases of property and equipment and capitalized software development costs, for investment in our business and to make acquisitions. We believe that free cash flow is useful as a liquidity measure because it measures our ability to generate or use cash.
Current wording
We use the non-GAAP measure of free cash flow, which we define as GAAP net cash flows from operating activities reduced by purchases of property and equipment and capitalized software development costs. We believe free cash flow is an important liquidity measure of the cash (if any) that is available, after purchases of property and equipment and capitalized software development costs, for investment in our business and to make acquisitions. We believe that free cash flow is useful as a liquidity measure because it measures our ability to generate cash.
Previous wording
We use non-GAAP income from operations along with non-GAAP operating margin as key indicators of our financial performance. We define these non-GAAP financial measures as their respective GAAP measures, excluding the effects of stock-based compensation, acquisition-related expenses, restructuring expenses, costs related to the intra-entity asset transfers resulting from the internal restructuring of legal entities and amortization of acquired intangible assets.
Current wording
We use non-GAAP income from operations along with non-GAAP operating margin as key indicators of our financial performance. We define these non-GAAP financial measures as their respective GAAP measures, excluding the effects of stock-based compensation, acquisition-related expenses, restructuring expenses, costs related to the intra-entity asset transfers resulting from the internal restructuring of legal entities and amortization of acquired intangible assets. Acquisition-related expenses include transaction and integration expenses, as well as costs related to the intercompany transfer of acquired intellectual property. Restructuring expenses include non-ordinary course severance, employee related benefits and other charges.
Previous wording
We generate revenue from subscription arrangements for our software and cloud-based solutions, perpetual licenses, maintenance associated with perpetual licenses and professional services.
Current wording
We generate revenue from subscription arrangements for our software and cloud-based solutions, perpetual licenses, maintenance associated with perpetual licenses and professional services. We begin to recognize revenue when control of our software or services is transferred to the customer, which for sales made through our channel network is typically concurrent with the transfer to the end user.
Previous wording
The increase in revenue of $26.2 million included $27.1 million from existing customers at July 1, 2023, net of a decrease from new customers of $0.9 million. U.S. revenue increased $11.3 million, or 10%. International revenue increased $14.9 million, or 17%.
Current wording
The increase in revenue of $25.6 million included $25.5 million from existing customers at October 1, 2023, and an increase from new customers of $0.1 million. U.S. revenue increased $11.2 million, or 10%. International revenue increased $14.4 million, or 16%.
Previous wording
The increase in cost of revenue of $5.3 million was primarily due to:
Current wording
The increase in cost of revenue of $4.7 million was primarily due to:
Previous wording
•a $1.7 million increase in amortization of acquired intangibles;
Current wording
•a $2.0 million increase in amortization of acquired intangibles;
Previous wording
•a $0.9 million increase in professional fees; and
Current wording
•a $0.9 million increase in third-party cloud infrastructure costs;
Previous wording
•a $0.7 million increase in acquisition-related expenses; and
Current wording
•a $0.7 million increase in professional fees;
Previous wording
•a $0.5 million increase in allocated overhead.
Current wording
•a $0.5 million increase in depreciation and amortization expense;
Previous wording
•a $0.3 million increase in software subscription costs.
Current wording
•a $0.3 million increase in subscription costs; and
Previous wording
•a $0.2 million decrease in corporate taxes.
Current wording
•a $0.2 million increase in allocated overhead.
Previous wording
The increase in sales and marketing expense of $3.3 million was primarily due to:
Current wording
The increase in sales and marketing expense of $4.3 million was primarily due to:
Previous wording
•a $3.5 million increase in expenses for demand generation programs, including advertising, sponsorships and brand awareness efforts;
Current wording
•a $1.6 million increase in expenses for demand generation programs, including advertising, sponsorships and brand awareness efforts;
Previous wording
•a $1.2 million increase in sales commissions;
Current wording
•a $1.5 million increase in sales commissions;
Previous wording
The increase in research and development expense of $7.3 million was primarily due to:
Current wording
The increase in research and development expense of $11.0 million was primarily due to:
Previous wording
The increase in general and administrative expense of $7.6 million was primarily due to:
Current wording
The decrease in general and administrative expense of $0.3 million was primarily due to:
Previous wording
•a $1.2 million increase in professional fees;
Current wording
•a $1.2 million decrease in allocated overhead; partially offset by
Previous wording
•$1.2 million related to Base Erosion and Anti-Abuse Tax; and
Current wording
•$0.8 million related to Base Erosion and Anti-Abuse Tax.
Previous wording
Comparison of the Six Months Ended June 30, 2024 and 2023
Current wording
Comparison of the Nine Months Ended September 30, 2024 and 2023
Previous wording
The increase in revenue of $53.3 million included $55.4 million from existing customers at July 1, 2023, net of a decrease from new customers of $2.1 million. U.S. revenue increased $23.3 million, or 11%. International revenue increased $30.0 million, or 18%.
Current wording
The increase in revenue of $78.9 million included $76.7 million from existing customers at October 1, 2023, and an increase from new customers of $2.2 million. U.S. revenue increased $34.6 million, or 11%. International revenue increased $44.3 million, or 17%.
Previous wording
The increase in cost of revenue of $8.7 million was primarily due to:
Current wording
The increase in cost of revenue of $13.5 million was primarily due to:
Previous wording
•a $3.3 million increase in amortization of intangible assets due to acquired intangible assets;
Current wording
•a $5.2 million increase in amortization of intangible assets due to acquired intangible assets;
Previous wording
•a $1.9 million increase in sales commissions; and
Current wording
•a $1.9 million increase in professional fees;
Previous wording
•a $0.4 million increase in personnel costs, primarily in stock-based compensation.
Current wording
•a $0.9 million increase in personnel costs, primarily in stock-based compensation;
Previous wording
The increase in sales and marketing expense of $6.0 million was primarily due to:
Current wording
The increase in sales and marketing expense of $10.3 million was primarily due to:
Previous wording
•a $4.0 million increase in expenses for demand generation programs, including advertising, sponsorships and brand awareness efforts;
Current wording
•a $5.6 million increase in expenses for demand generation programs, including advertising, sponsorships and brand awareness efforts;
Previous wording
•a $0.6 million increase in selling expenses; partially offset by
Current wording
•a $0.7 million increase in selling expenses; partially offset by
Previous wording
•a $2.8 million decrease in personnel costs, largely associated with a decrease in headcount.
Current wording
•a $1.8 million decrease in personnel costs, largely associated with a decrease in headcount.
Previous wording
The increase in research and development expense of $12.8 million was primarily due to:
Current wording
The increase in research and development expense of $23.8 million was primarily due to:
Previous wording
•a $2.3 million increase in personnel costs, including $1.3 million in stock-based compensation;
Current wording
•a $2.3 million increase in allocated overhead;
Previous wording
•a $0.8 million decrease in tax credits;
Current wording
•a $0.6 million decrease in tax credits; and
Previous wording
The increase in general and administrative expense of $3.7 million was primarily due to:
Current wording
The increase in general and administrative expense of $7.3 million was primarily due to:
Previous wording
•a $0.5 million increase in software subscription costs; partially offset by
Current wording
•a $0.6 million increase in travel and meeting costs; partially offset by
Previous wording
•a $2.2 million increase in third-party cloud infrastructure costs;
Current wording
•a $2.2 million decrease in allocated overhead.
Previous wording
The $0.6 million decrease in interest income was due to a decrease in short-term investments. The $0.3 million increase in interest expense was primarily related to an increase in the variable rate of our Term Loan. The $1.0 million increase in other income (expense), net was primarily due to a $1.5 million gain on conversion of our SAFE investment, partially offset by a $0.4 million increase in foreign exchange losses.
Current wording
The $1.7 million decrease in interest income was due to a decrease in short-term investments. Interest expense increased $1.1 million due to an increase in the interest rate on our Term Loan. Other expense, net decreased $7.1 million primarily due to a $5.0 million impairment loss on one of our SAFE investments in the prior year, a $1.5 million gain on conversion of our SAFE investment in the current year and a $0.6 million decrease in foreign exchange losses.
Previous wording
•$1.7 million related to Base Erosion and Anti-Abuse Tax; and
Current wording
•$2.5 million related to Base Erosion and Anti-Abuse Tax.
Previous wording
•$4.1 million income taxes in foreign jurisdictions in which we conduct business; and
Current wording
•$4.3 million income taxes in foreign jurisdictions in which we conduct business; and
Showing the first 40 of 49 pairs. Open the source sections for the rest.
Rearranged current paragraphs (9)
Current report — wording carried from elsewhere
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
Current report — wording carried from elsewhere
•a $0.2 million increase in travel and meeting costs.
Current report — wording carried from elsewhere
•a $2.6 million increase in professional fees; and
Current report — wording carried from elsewhere
•a $4.0 million increase in third-party cloud infrastructure costs;
Current report — wording carried from elsewhere
•a $0.6 million increase in allocated overhead;
Current report — wording carried from elsewhere
•a $2.6 million increase in allocated overhead; and
Current report — wording carried from elsewhere
•a $1.7 million increase in third-party cloud infrastructure costs;
Current report — wording carried from elsewhere
•a $0.6 million increase in travel and meeting costs;
Current report — wording carried from elsewhere
•a $0.6 million increase in software subscription costs.
Rearranged previous paragraphs (12)
Previous report — wording carried elsewhere
Acquisition-related expenses include transaction and integration expenses, as well as costs related to the intercompany transfer of acquired intellectual property. Restructuring expenses include non-ordinary course severance, employee related benefits and other charges.
Previous report — wording carried elsewhere
•a $0.9 million increase in allocated overhead; and
Previous report — wording carried elsewhere
•a $0.8 million increase in professional fees;
Previous report — wording carried elsewhere
Restructuring includes a $4.5 million non-cash impairment of leasehold improvements and furniture and fixtures that was recorded in connection with the sublease of a portion of our headquarters.
Previous report — wording carried elsewhere
•a $0.8 million increase in personnel costs, primarily in stock-based compensation; and
Previous report — wording carried elsewhere
•a $2.0 million increase in allocated overhead;
Previous report — wording carried elsewhere
•a $1.0 million increase in selling expenses; partially offset by
Previous report — wording carried elsewhere
•a $2.9 million decrease in personnel costs, largely associated with a decrease in headcount.
Previous report — wording carried elsewhere
•a $1.6 million increase in third-party cloud infrastructure costs;
Previous report — wording carried elsewhere
•a $5.6 million increase in personnel costs including a $3.3 million increase in stock-based compensation;
Previous report — wording carried elsewhere
•a $1.5 million increase in professional fees;
Previous report — wording carried elsewhere
Interest expense increased $1.1 million due to an increase in the interest rate on our Term Loan. Other expense, net decreased $0.3 million primarily due to a $1.5 million gain on conversion of our SAFE investment, partially offset by a $1.2 million increase in foreign exchange losses.