The increase in revenue of $49.2 million included $46.6 million from existing customers as of July 1, 2024, and $2.6 million from new customers. U.S. revenue increased $22.6 million, or 10%. International revenue increased $26.6 million, or 13%.
Cost of Revenue, Gross Profit and Gross Margin
| | | | | | | | | | | | | | | | | | | | | | | |
| Six Months Ended June 30, | | Change |
| (dollars in thousands) | 2025 | | 2024 | | ($) | | (%) |
| Cost of revenue | $ | 106,894 | | | $ | 97,730 | | | $ | 9,164 | | | 9 | % |
| Gross profit | 379,538 | | | 339,472 | | | 40,066 | | | 12 | % |
| Gross margin | 78 | % | | 78 | % | | | | |
The increase in cost of revenue of $9.2 million was primarily due to:
•a $3.0 million increase in amortization of intangible assets due to acquired intangible assets;
•a $2.4 million increase in depreciation and amortization expenses;
•a $1.6 million increase in personnel costs, including a $0.5 million increase in stock-based compensation;
•a $1.2 million increase in third-party cloud infrastructure costs;
•a $0.5 million increase in software subscription costs;
•a $0.2 million increase in allocated overhead; and
•a $0.2 million increase in professional fees.
Operating Expenses
Sales and Marketing
| | | | | | | | | | | | | | | | | | | | | | | |
| Six Months Ended June 30, | | Change |
| (dollars in thousands) | 2025 | | 2024 | | ($) | | (%) |
| Sales and marketing | $ | 210,273 | | | $ | 200,954 | | | $ | 9,319 | | | 5 | % |
The increase in sales and marketing expense of $9.3 million was primarily due to:
•a $2.7 million increase in expenses for demand generation programs, including advertising, sponsorships and brand awareness efforts;
•a $2.4 million increase in personnel costs, primarily stock-based compensation;
•a $2.1 million increase in sales commissions;
•a $1.5 million increase in selling expenses; and
•a $1.3 million increase in acquisition-related expenses; partially offset by
•a $0.4 million decrease in depreciation expense; and
•a $0.3 million decrease in allocated overhead.
Research and Development
| | | | | | | | | | | | | | | | | | | | | | | |
| Six Months Ended June 30, | | Change |
| (dollars in thousands) | 2025 | | 2024 | | ($) | | (%) |
| Research and development | $ | 112,459 | | | $ | 88,876 | | | $ | 23,583 | | | 27 | % |
The increase in research and development expense of $23.6 million was primarily due to:
•a $20.4 million increase in personnel costs, largely due to an increase in headcount from recent acquisitions, and including a $5.3 million increase in stock-based compensation;
•a $1.8 million increase in acquisition-related expenses;
•a $1.4 million increase in allocated overhead; and
•a $0.5 million increase in software subscription costs; partially offset by
•a $0.2 million decrease in travel and meeting costs.
General and Administrative
| | | | | | | | | | | | | | | | | | | | | | | |
| Six Months Ended June 30, | | Change |
| (dollars in thousands) | 2025 | | 2024 | | ($) | | (%) |
| General and administrative | $ | 81,965 | | | $ | 61,320 | | | $ | 20,645 | | | 34 | % |
The increase in general and administrative expense of $20.6 million was primarily due to:
•a $15.8 million increase in personnel costs, including $15.5 million in termination benefits including cash compensation and accelerated equity award vesting related to the passing of our Chairman and Chief Executive Officer;
•a $2.7 million increase in acquisition-related expenses;
•a $1.2 million increase in professional fees;
•a $0.4 million increase in travel and meeting costs;
•a $0.1 million increase in indirect taxes such as VAT; and
•a $0.1 million increase in software subscription costs.
Restructuring
| | | | | | | | | | | | | | | | | | | | | | | |
| Six Months Ended June 30, | | Change |
| (dollars in thousands) | 2025 | | 2024 | | ($) | | (%) |
| Restructuring | $ | — | | | $ | 6,070 | | | $ | (6,070) | | | (100) | % |
Restructuring in the prior year included 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 and $1.6 million in non-ordinary course severance and employee related benefits.
Interest Income, Interest Expense and Other Income (Expense), Net
| | | | | | | | | | | | | | | | | | | | | | | |
| Six Months Ended June 30, | | Change |
| (dollars in thousands) | 2025 | | 2024 | | ($) | | (%) |
| Interest income | $ | 9,007 | | | $ | 11,598 | | | $ | (2,591) | | | (22) | % |
| Interest expense | (14,150) | | | (16,185) | | | 2,035 | | | (13) | % |
| Other income (expense), net | 499 | | | (1,217) | | | 1,716 | | | (141) | % |
The $2.6 million decrease in interest income was due to a decrease in short-term investments. Interest expense decreased $2.0 million due to a decrease in the interest rate on our Term Loan. Other income (expense), net increased $1.7 million primarily due to an increase in foreign exchange gains partially offset by a $1.5 million gain on conversion of one of our SAFE investments in the prior year.
Provision for Income Taxes
| | | | | | | | | | | | | | | | | | | | | | | |
| Six Months Ended June 30, | | Change |
| (dollars in thousands) | 2025 | | 2024 | | ($) | | (%) |
| Provision for income taxes | $ | 7,838 | | | $ | 5,406 | | | $ | 2,432 | | | 45 | % |
In the six months ended June 30, 2025, the provision for income taxes included:
•$5.1 million of income taxes in foreign jurisdictions in which we conduct business; and
•$2.7 million of discrete items primarily related to withholding taxes on sales to customers.
In the six months ended June 30, 2024, the provision for income taxes included:
•$2.1 million of income taxes in foreign jurisdictions in which we conduct business;
•$1.7 million related to Base Erosion and Anti-Abuse Tax; and
•$1.6 million of discrete items primarily related to withholding taxes on sales to customers.
Liquidity and Capital Resources
At June 30, 2025, we had $175.0 million of cash and cash equivalents, which consisted of cash deposits and money market funds, and $211.5 million of short-term investments, which consisted of commercial paper, asset backed securities, U.S. Treasury and agency obligations and corporate and Yankee bonds.
Since our inception, we have primarily financed our operations through cash provided by operations, including payments received from customers using our software products and services. Prior to our IPO, we did not raise any
primary institutional capital, and the proceeds of our Series A and Series B redeemable convertible preferred stock financings were used to repurchase shares of capital stock from former stockholders. We have generated significant operating losses as reflected by our accumulated deficit of $899.0 million at June 30, 2025.
We typically invoice our customers annually in advance and, to a lesser extent, multi-years in advance. Therefore, a substantial source of our cash is from such prepayments, which are included in deferred revenue on our consolidated balance sheets. Deferred revenue consists primarily of the unearned portion of billed fees for our subscriptions and perpetual licenses, which is subsequently recognized as revenue in accordance with our revenue recognition policy. At June 30, 2025, we had deferred revenue of $797.8 million, of which $624.5 million was recorded as a current liability and is expected to be recognized as revenue in the next 12 months, provided all other revenue recognition criteria are met.
Our principal uses of cash in recent periods have been funding our operations, expansion of our sales and marketing and research and development activities, investments in infrastructure, acquiring complementary businesses and technology, and repurchasing shares of our common stock. In 2025, we acquired both Vulcan and Apex for a combined $196.2 million in cash. We expect to enter into arrangements to acquire or invest in other complementary businesses, services and technologies, including intellectual property rights, in the future.
We expect to continue incurring operating losses in the near term. Even though we generated positive cash flows from operations and free cash flow in the six months ended June 30, 2025, we may not be able to sustain these cash flows. We believe that our existing cash and cash equivalents and short-term investments will be sufficient to fund our operating and capital needs for at least the next 12 months and for the foreseeable future. Our future capital requirements will depend on many factors, including our revenue growth rate, subscription renewal activity, the timing and extent of spending to support further infrastructure and research and development efforts, the timing and extent of additional capital expenditures to invest in new and existing office spaces, the expansion of sales and marketing and international operating activities, any acquisitions of complementary businesses and technologies, the timing of our introduction of new product capabilities and enhancements of our platform and the continuing market acceptance of our platform. It may be necessary to seek additional equity or debt financing to fund our operating and capital needs. In the event that financing is required from outside sources, we may not be able to raise it on terms acceptable to us or at all. If we are unable to raise additional capital when desired, or if we cannot expand our operations or otherwise capitalize on our business opportunities because we lack sufficient capital, our business, operating results and financial condition would be adversely affected.
Stock Repurchase Plan
In November 2023, our Board of Directors authorized the repurchase of up to $100 million of our common stock. In October 2024, our Board of Directors increased the repurchase authorization by $200 million. In July 2025, our Board of Directors increased the repurchase authorization by $250 million. Since the inception of the repurchase program and through June 30, 2025, we have purchased a total of 6.3 million shares for $239.9 million.
Term Loan and Revolving Credit Facility
In July 2021, we entered into a credit agreement, or the Credit Agreement, which is comprised of a $375.0 million Term Loan and a $50.0 million Revolving Credit Facility, with a $15.0 million letter of credit sublimit. The Term Loan bears interest at a rate of 2.75% per annum over SOFR, subject to a 0.50% floor, plus a credit spread adjustment depending on the interest period.
From January to June 2025, interest rates on our Term Loan were between 7.18% and 7.22%. The Term Loan is being amortized at 1% per annum in equal quarterly installments until the final payment of $350.6 million on the July 7, 2028 maturity date. We may be subject to mandatory Term Loan prepayments related to the excess cash provisions in the Credit Agreement if our first lien net leverage ratio (as defined in the Credit Agreement) exceeds 3.5. At June 30, 2025, our first lien net leverage ratio was 0.88.
The Revolving Credit Facility bears interest at a rate, depending on first lien net leverage, ranging from 2.00% to 2.50% over SOFR and matures on July 7, 2026. We pay a commitment fee during the term ranging from 0.25% to 0.375% per annum of the average daily undrawn portion of our Revolving Credit Facility. At June 30, 2025, we were in compliance with the covenants and had $0.2 million of standby letters of credit outstanding under the Revolving Credit Facility.
Cash Flows
The following table summarizes our cash flows for the periods presented:
| | | | | | | | | | | |
| Six Months Ended June 30, |
| (in thousands) | 2025 | | 2024 |
| Net cash provided by operating activities | $ | 129,870 | | | $ | 81,750 | |
| Net cash used in investing activities | (168,766) | | | (44,485) | |
| Net cash used in financing activities | (116,304) | | | (37,853) | |
| Effect of exchange rate changes on cash and cash equivalents and restricted cash | 1,578 | | | (3,077) | |
| Net decrease in cash and cash equivalents and restricted cash | $ | (153,622) | | | $ | (3,665) | |
Operating Activities
Our largest source of cash provided by operating activities is cash collections from sales of our products and services, as we typically invoice our customers in advance. Our primary uses of cash are employee compensation costs, third-party cloud infrastructure and other software subscription costs, demand generation expenditures and general corporate costs.
Investing Activities
Net cash used in investing activities increased by $124.3 million, primarily due to a $167.0 million increase in cash paid for acquisitions, a $9.7 million net increase in purchases of property and equipment and a $2.6 million net decrease in proceeds from other investments, partially offset by a $51.6 million net decrease in purchases of short-term investments and a $3.4 million decrease in capitalized software development costs in the six months ended June 30, 2025.
Financing Activities
Net cash used in financing activities increased by $78.5 million, primarily due to a $75.0 million increase in repurchases of our common stock under our repurchase program, a $1.9 million decrease in proceeds from the exercise of stock options, a $1.3 million increase in cash paid for taxes related to net share settlement of equity awards and a $0.2 million decrease in proceeds from stock issued in connection with our employee stock purchase program.
Contractual Obligations
We have certain contractual obligations for future payments. Refer to Note 7 to our consolidated financial statements for our required operating lease payments and Note 9 for our required payments to Microsoft and AWS for cloud services.
At June 30, 2025, there were no other material changes in our contractual obligations and commitments from those disclosed in our 10-K.
Critical Accounting Policies and Estimates
Our financial statements are prepared in accordance with GAAP. The preparation of these financial statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue and expenses, as well as related disclosures. We evaluate our estimates and assumptions on an ongoing basis. Our estimates are based on historical experience and various other assumptions that we believe to be reasonable under the circumstances. Our actual results could differ from these estimates.
There have been no material changes to our critical accounting policies and estimates as described in our 10-K.
Item 3. Quantitative and Qualitative Disclosures about Market Risk
We are exposed to market risks in the ordinary course of our business, including interest rate, foreign currency exchange and inflation risks.
Interest Rate Risk
At June 30, 2025, we had $175.0 million of cash and cash equivalents, which consisted of cash deposits and money market funds. We also had $211.5 million of short-term investments, which consisted of commercial paper, asset backed securities, U.S. treasury and agency securities and corporate and Yankee bonds. Our investments are carried at their fair market values with cumulative unrealized gains or losses recorded as a component of accumulated other comprehensive income (loss) within stockholders' equity. The primary objectives of our investment activities are the preservation of capital, the fulfillment of liquidity needs and the fiduciary control of cash and investments. We do not enter into investments for trading or speculative purposes. Interest-earning instruments carry a degree of interest rate risk; however, a hypothetical 10% change in interest rates during any of the periods presented would not have had a material impact on our financial statements.
In July 2021, we entered into the Credit Agreement comprised of a $375.0 million Term Loan and a $50.0 million Revolving Credit Facility. From January to June 2025, interest rates on our Term Loan have been between 7.18% and 7.22%. In July and August 2025, the Term Loan has an interest rate of 7.19% and 7.22%, respectively. A one percentage point increase in the rate would increase 2025 interest expense by $1.2 million.
Foreign Currency Exchange Risk
Substantially all of our sales contracts are denominated in U.S. dollars, with a limited number of contracts denominated in foreign currencies, including foreign denominated leases. A portion of our operating expenses are incurred outside the United States, denominated in foreign currencies and subject to fluctuations due to changes in foreign currency exchange rates, particularly changes in the Euro, British Pound, Australian dollar, Israeli New Shekel, Indian Rupee and Brazilian Real. Strengthening of the U.S. dollar compared to other currencies could result in lower international sales as our products would seem more expensive and could result in lower international operating costs as the U.S. dollar is the functional currency for all of our international subsidiaries. Additionally, fluctuations in foreign currency exchange rates may cause us to recognize remeasurement and transaction gains (losses) in our consolidated statements of operations. As the impact of foreign currency exchange rates has not been material to our historical operating results, we have not entered into derivative or hedging transactions, but we may do so in the future if our exposure to foreign currencies becomes more significant.
Inflation Risk
While we do not believe that inflation has had a material effect on our business, results of operations, or financial condition through June 30, 2025, our costs, specifically employee-related and third-party cloud infrastructure costs, may become subject to significant inflationary pressures, and our inability or failure to fully offset such higher costs could harm our business, results of operations, or financial condition.
Item 4. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
We maintain “disclosure controls and procedures,” as defined in Rule 13a-15(e) and Rule 15d-15(e) under the Exchange Act, that are designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to our management, including our principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure.
Our management, with the participation of our Co-Chief Executive Officers, have evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act), as of the end of the period covered by this Form 10-Q. Based on such evaluation, our Co-Chief Executive Officers have concluded that at June 30, 2025, our disclosure controls and procedures were effective to provide reasonable assurance that the information required to be disclosed by us in this Form 10-Q was (a) reported within the time periods specified by SEC
rules and regulations, and (b) communicated to our management, including our Co-Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding any required disclosure.
Changes in Internal Control Over Financial Reporting
There were no changes in our internal control over financial reporting identified in management’s evaluation pursuant to Rules 13a-15(d) or 15d-15(d) of the Exchange Act during the period covered by this Form 10-Q that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
Inherent Limitations on Effectiveness of Internal Controls
In designing and evaluating the disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable, not absolute, assurance of achieving the desired control objectives. In addition, the design of disclosure controls and procedures must reflect the fact that there are resource constraints and that management is required to apply judgment in evaluating the benefits of possible controls and procedures relative to their costs. Our management, including our Co-Chief Executive Officer and Chief Financial Officer, believes that our disclosure controls and procedures and internal control over financial reporting are designed to provide reasonable assurance of achieving their objectives and are effective at the reasonable assurance level. However, our management does not expect that our disclosure controls and procedures or our internal control over financial reporting will prevent all errors and all fraud.
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
From time to time, we may be subject to legal proceedings and claims in the ordinary course of business. We are not presently a party to any legal proceedings that, if determined adversely to us, would individually or taken together have a material adverse effect on our business, results of operations, financial condition or cash flows. We have received, and may in the future continue to receive, claims from third parties asserting, among other things, infringement of their intellectual property rights. Future litigation may be necessary to defend ourselves, our partners and our customers by determining the scope, enforceability and validity of third-party proprietary rights, or to establish our proprietary rights. The results of any current or future litigation cannot be predicted with certainty, and regardless of the outcome, litigation can have an adverse impact on us because of defense and settlement costs, diversion of management resources and other factors.
Item 1A. Risk Factors
Except for the risk factors disclosed below, there have been no material changes to the risk factors disclosed in Part 1, Item 1A. "Risk Factors" of our Form 10-K for the year ended December 31, 2024 filed with the United States Securities and Exchange Commission ("SEC") on February 24, 2025. Our business is subject to risks and events that, if they occur, could adversely affect our financial condition and results of operations and trading price of our securities. In addition to the other information set forth in this Form 10-Q, you should carefully consider the factors described in Part I, Item 1A. “Risk Factors” of our Form 10-K for the year ended December 31, 2024. We may disclose additional changes to risk factors or disclose additional factors from time to time in our future filings with the SEC. Additional risks and uncertainties not presently known to us or that we currently deem immaterial also may impair our business operations.
We have incorporated and may in the future further incorporate generative and other types of AI processes, algorithms, and technologies into certain of our products and services. This technology is new and developing, and may generate output that is inaccurate or flawed or may not achieve market acceptance, which could result in operational, financial, regulatory, and reputational harm and other adverse consequences to our business.
We have incorporated and may in the future further incorporate AI features in certain of our products and services, including ExposureAI and Tenable AI Assistant. The use of generative AI processes at scale is relatively new, and may lead to challenges, concerns and risks, including various privacy and security risks that are significant or that we may not be able to predict, especially if our use of these technologies in our products and services becomes more important to our operations over time. The technologies underpinning these features are in the early stages of commercial use and exist in an emerging regulatory environment, which presents regulatory, litigation, ethical, reputational, operational and financial risks. AI in our products and services may be difficult to deploy successfully due to operational issues inherent to the nature of such technologies, including the development, maintenance and operation of deep learning datasets.
Additionally, if we do not have adequate rights to utilize the data or other materials and content that our AI technologies depend on, we may face legal consequences for violating applicable laws, third-party intellectual property, privacy or other rights, or contracts to which we are a party.
Uncertainty in the legal regulatory regime relating to AI and emerging ethical issues surrounding the use of AI may require significant resources to modify and maintain business practices to comply with U.S. and non-U.S. laws, the nature of which cannot be determined at this time. Existing laws and regulations may apply to us or our suppliers, vendors, partners and customers in new ways, and new laws and regulations may be instituted. Many U.S. and international governmental bodies and regulators have proposed, enacted or are in the process of developing new regulations related to the use of AI and machine learning technologies. For example, the European Union authorities recently adopted a legal framework on AI regulation, the Artificial Intelligence Act, which applies beyond the European Union’s borders and establishes obligations for AI providers and those deploying AI systems. Other jurisdictions may adopt similar or potentially more restrictive laws, which may render the use of such technologies challenging. The final form of these may impose obligations related to our development, offering and use of AI technologies and expose us to increased risk of regulatory enforcement and litigation.
Any sensitive information (including confidential, competitive, proprietary, or personal data) that we input into a third-party generative AI platform could be leaked or disclosed to others, including if sensitive information is used to train the third party’s AI model. Additionally, where an AI model ingests personal data and makes connections using such data, those technologies may reveal other personal or sensitive information generated by the model.
Our AI technology features may also generate output that is misleading, insecure, inaccurate, harmful or otherwise flawed. Agentic AI solutions may compound those risks by taking or implementing actions or outputs, which themselves may be based on flawed outputs, that further increase the risk of misleading, insecure, inaccurate, harmful or otherwise flawed outcomes. Our customers or others may rely on or use such misleading, insecure, harmful or otherwise flawed content to their detriment, which may harm our brand, reputation, business or customers, cause competitive harm or expose us to legal liability. For example, AI algorithms use machine learning and predictive analytics, which may be insufficient or of poor quality and reflect inherent biases and could lead to flawed, biased, and inaccurate results. Deficient or inaccurate recommendations, forecasts, or analyses that generative AI applications assist in producing could lead to customer rejection or skepticism of our products, affect our reputation or brand, and negatively affect our financial results. Further, unauthorized use or misuse of AI by our employees or others may result in disclosure of confidential company and customer data, reputational harm, privacy law violations and legal liability. Our use of generative AI may also lead to novel and urgent cybersecurity risks, including those related to personal data, which may adversely affect our operations and reputation.
We rely on our third-party channel partner network of distributors and resellers to generate a substantial amount of our revenue.
Our success is dependent in part upon establishing and maintaining relationships with a variety of channel partners that we utilize to extend our geographic reach and market penetration. We typically use a two-tiered channel model whereby we sell our products and services to our distributors, who in turn sell to our resellers, who then sell to our end users, who we call customers. We anticipate that we will continue to rely on this two-tiered sales model in order to help facilitate sales of our offerings as part of larger purchases in the United States and to grow our business internationally. Revenue derived through our channel network comprised 94% of revenue in the three and six months ended June 30, 2025 and 94% and 92% of revenue in the three and six months ended June 30, 2024, respectively, and the percentage of revenue derived from channel partners may continue to increase in future periods. Ingram Micro, one of our distributors, accounted for 32% of revenue in the three and six months ended June 30, 2025 and 34% of revenue, respectively, in the three and six months ended June 30, 2024 and 31% and 29% of accounts receivable at June 30, 2025 and December 31, 2024. Our reliance on these channel partners also means that any significant interruption to their systems could harm our business. For example, a major distributor experiencing a significant operational failure or cybersecurity incident, such as the recent ransomware attack that impacted Ingram Micro, could disrupt their ability to take orders and distribute products. Any such interruption could negatively affect our ability to sell and distribute our products through that partner, which could materially and adversely impact our business, financial position, and results of operations.
Our agreements with our channel partners, including our agreement with Ingram Micro, are non-exclusive and do not prohibit them from working with our competitors or offering competing solutions, and some of our channel partners may have more established relationships with our competitors. Similarly, our channel partners have no obligations to renew their agreements with us on commercially reasonable terms or at all, and certain of the agreements governing these relationships may be terminated by either party at any time, with no or limited notice. For example, our agreement with Ingram Micro allows Ingram Micro to terminate the agreement at their discretion upon 30 days’ written notice to us. If our channel partners choose to place greater emphasis on products of their own or those offered by our competitors or as a result of an acquisition, competitive factors or other reasons do not continue to market and sell our solutions in an effective manner or at all, our ability to grow our business and sell our solutions, particularly in key international markets, may be adversely affected. In addition, our failure to recruit additional channel partners, or any reduction or delay in their sales of our solutions and professional services, including as a result of economic uncertainty, legal or regulatory actions, such as government investigations or law enforcement activities, impacting their business, or conflicts between channel sales and our direct sales and marketing activities may harm our results of operations. Finally, even if we are successful, our relationships with channel partners may not result in greater customer usage of our solutions and professional services or increased revenue.
A portion of our revenue is generated from subscriptions and perpetual licenses sold to domestic governmental entities, foreign governmental entities and other heavily regulated organizations, which are subject to a number of challenges and risks.
A portion of our revenue is generated from subscriptions and perpetual licenses sold to governmental entities in the United States. Additionally, many of our current and prospective customers, such as those in the financial services, energy, insurance and healthcare industries, are highly regulated and may be required to comply with more stringent regulations in connection with subscribing to and implementing our enterprise platform. Selling licenses to these entities can be highly competitive, expensive and time-consuming, often requiring significant upfront time and expense without any assurance that we will successfully complete a sale. Governmental demand and payment for our enterprise platform may also be impacted by public sector budgetary cycles and funding authorizations, the operational stability of federal agencies, and the prioritization of cybersecurity and digital infrastructure initiatives. Funding reductions or delays, removal of agency operating budgets or deprioritization of cybersecurity digital infrastructure related initiatives would adversely affect public sector demand for our enterprise platform. For example, the new U.S. presidential administration’s commitment and actions to reduce government spending, including, but not limited to, those driven by the Department of Government Efficiency (DOGE), may impact the availability of funding for U.S. government customers as a result of the elimination of departments and personnel. These actions may lead to elongated sales cycles and procurement decisions in the second half of 2025 and could result in fewer contract opportunities or reduced funding for existing initiatives, all of which would adversely affect our business and financial performance. In addition, governmental entities have the authority to terminate contracts at any time for the convenience of the government, which creates risk regarding revenue anticipated under our existing government contracts.
Further, governmental and highly regulated entities often require contract terms that differ from our standard customer arrangements, including terms that can lead to those customers obtaining broader rights in our solutions than would be expected under a standard commercial contract and terms that can allow for early termination. The U.S. government will be able to terminate any of its contracts with us either for its convenience or if we default by failing to perform in accordance with the contract schedule and terms. Termination for convenience provisions would generally enable us to recover only our costs incurred or committed, settlement expenses, and profit on the work completed prior to termination. Termination for default provisions do not permit these recoveries and would make us liable for excess costs incurred by the U.S. government in procuring undelivered items from another source. Contracts with governmental and highly regulated entities may also include preferential pricing terms. In the United States, federal government agencies may promulgate regulations, and the President may issue executive orders, requiring federal contractors to adhere to different or additional requirements after a contract is signed. If we do not meet applicable requirements of law or contract, we could be subject to significant liability from our customers or regulators. Even if we do meet these requirements, the additional costs associated with providing our enterprise platform to government and highly regulated customers could harm our operating results. Moreover, changes in the underlying statutory and regulatory conditions that affect these types of customers could harm our ability to efficiently provide them access to our enterprise platform and to grow or maintain our customer base. In addition, engaging in sales activities to foreign governments introduces additional compliance risks, including risks specific to anti-bribery regulations, including the U.S. Foreign Corrupt Practices Act of 1977, as amended, or the FCPA, the U.K. Bribery Act 2010 and other similar statutory requirements prohibiting bribery and corruption in the jurisdictions in which we operate. Further, in some jurisdictions we may be required to obtain government certifications, which may be costly to maintain and, if we lost such certifications in the future or if such certification requirements changed, would restrict our ability to sell to government entities until we have attained such certifications.
Some of our revenue is derived from contracts with U.S. government entities, as well as subcontracts with higher-tier contractors and customers who receive government funding. As a result, we are subject to federal contracting regulations, including the Federal Acquisition Regulation, or the FAR. Under the FAR, certain types of contracts require pricing that is based on estimated direct and indirect costs, which are subject to change.
In connection with our U.S. government contracts, we may be subject to government audits and review of our policies, procedures, and internal controls for compliance with contract terms, procurement regulations, and applicable laws. In certain circumstances, if we do not comply with the terms of a contract or with regulations or statutes, we could be subject to contract termination or downward contract price adjustments or refund obligations, could be assessed civil or criminal penalties, or could be debarred or suspended from obtaining future government contracts for a specified period of time. Any such termination, adjustment, sanction, debarment or suspension could have an adverse effect on our business.
Moreover, as a U.S. government contractor, we maintain plans to ensure compliance with nondiscrimination and regulatory requirements for qualified employees on the basis of gender, race, disability and veteran status. Consequently, we may be subject to executive orders and regulatory changes affecting various aspects of our operations, including compliance with nondiscrimination plans. Any required elimination or modification of such plans in response to new executive orders could pose challenges in hiring or retaining employees and may lead to other adverse operational impacts. Failure to comply with these requirements could expose us to administrative, civil, or criminal liabilities, including fines, penalties, repayments or suspension or debarment from eligibility for future U.S. government contracts. Further, as a U.S. government contractor, we are subject to an increased risk of investigations, criminal prosecution, civil fraud, whistleblower lawsuits and other legal actions and liabilities as compared to solely private sector commercial companies.
In the course of providing our solutions and professional services to governmental entities, our employees and those of our channel partners may be exposed to sensitive government information. Any failure by us or our channel partners to safeguard and maintain the confidentiality of such information could subject us to liability and reputational harm, which could materially and adversely affect our results of operations and financial performance.
Unstable market and economic conditions may have material adverse consequences on our business, financial condition and share price.
The global economy, including credit and financial markets, recently experienced extreme volatility and disruptions, including severely diminished liquidity and credit availability, declines in consumer confidence, declines in economic growth, increases in unemployment rates, inflation, interest rate fluctuations, increased global trade barriers, and uncertainty about economic stability. For example, in recent years the high rates of inflation, high interest rates and concerns about an economic recession in the United States or other major markets resulted in widespread unemployment, economic slowdown and extreme volatility in the capital markets. In 2022 and 2023, the Federal Reserve raised interest rates multiple times in response to concerns about inflation. While the Federal Reserve decreased interest rates in 2024, interest rates remain high and the Federal Reserve is not expected to significantly decrease interest rates in the immediate future. Higher interest rates, coupled with reduced government spending and volatility in financial markets, including with respect to foreign exchange, may increase economic uncertainty and affect consumer spending. For example, during periods with a relatively strong U.S. dollar, our products are more expensive for existing and prospective international customers, which has impacted, and in the future could impact the budgets and purchasing decisions of certain of our existing and prospective international customers.
Increased inflation rates can adversely affect us by increasing our costs, including labor and employee benefit costs. In addition, higher inflation could also increase our customers’ operating costs, which could result in reduced budgets for our customers, longer sales cycles and potentially less demand for our products. Any significant increases in inflation and related increases in interest rates could have a material adverse effect on our business, results of operations and financial condition.
In addition, recent tariff actions and escalating trade tensions have contributed to heightened market uncertainty and increased operating costs for certain customers, which may cause private-sector customers to defer or reprioritize purchasing decisions as they assess potential impacts from ongoing trade negotiations and regulatory developments, which could extend enterprise procurement cycles and would adversely impact our business.
In addition, retaliatory trade policies or anti-U.S. sentiment in certain regions whether driven by trade tensions, political disagreements, or regulatory concerns may make customers more hesitant to adopt solutions offered by U.S.-based providers. This may lead to increased preference for local competitors, changes to government procurement policies, heightened regulatory scrutiny, decreased intellectual property protections, delays in regulatory approvals or other retaliatory regulatory non-tariff policies, the introduction of trade barriers applicable to digital services, which may result in heightened international legal and operational risks and difficulties in attracting and retaining non-U.S. customers, suppliers, employees, partners and investors.
Trade disputes, trade restrictions, tariffs, and other political tensions between the U.S. and other countries may also exacerbate unfavorable macroeconomic conditions including inflationary pressures, foreign exchange volatility, financial market instability, and economic recessions or downturns, which may also negatively impact customer demand for our services, delay renewals or limit expansion opportunities with existing customers, limit our access to capital, or otherwise
negatively impact our business and operations. Ongoing tariff and macroeconomic uncertainty has and may continue to contribute to volatility in the price of our common stock. Furthermore, if the equity and credit markets deteriorate, including as a result of political unrest or war, it may make any necessary debt or equity financing more difficult to obtain in a timely manner or on favorable terms, more costly or more dilutive.
While we continue to monitor trade developments, the ultimate impact of these risks remains uncertain and any prolonged economic downturn, escalation in trade tensions, or deterioration in international perception of U.S.-based companies could materially and adversely affect our business, results of operations, financial condition and prospects. In addition, tariffs and other trade developments have and may continue to heighten the risks related to the other risk factors described elsewhere in this report and in our Form 10-K for the year ended December 31, 2024.
Item 2. Unregistered Sales of Equity Securities and Issuer Purchases of Equity Securities
Unregistered Sales of Equity Securities
None.
Use of Proceeds
None.
Issuer Purchases of Equity Securities
A summary of stock repurchases during the three months ended June 30, 2025 is presented below:
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| (in thousands, except for per share data) | | Shares Purchased | | | Average Price Paid Per Share | | Total Number of Shares Purchased as Part of Publicly Announced Plan(1) | | Approximate Dollar Value of Shares that May Yet Be Purchased Under Plan(1) |
| Shares purchased April 1, 2025 to April 30, 2025 | | 40 | | (2) | | $ | 33.17 | | | — | | | $ | 125,089 | |
| Shares purchased May 1, 2025 to May 31, 2025 | | 1,203 | | | | 32.43 | | | 1,203 | | | 86,090 | |
| Shares purchased June 1, 2025 to June 30, 2025 | | 800 | | | | 32.48 | | | 800 | | | 60,090 | |
| | 2,043 | | | | 32.47 | | | | | |
_______________(1) In November 2023, our Board of Directors authorized the repurchase of up to $100 million of our common stock. In October 2024, our Board of Directors increased the repurchase authorization by $200 million. In July 2025, our Board of Directors increased the repurchase authorization by $250 million. Repurchases under the share repurchase program may be made in the open market, in privately negotiated transactions, or in such other manner as determined by us, including through repurchase plans complying with the rules and regulations of the Securities and Exchange Commission. The authorization has no expiration date.
(2) Includes 40,061 shares withheld to cover taxes paid related to net share settlement of equity awards.
Items 3 and 4 are not applicable and have been omitted.
Item 5.
Amendments to Employment Agreements
Following the appointment of Mr. Vintz and Mr. Thurmond as co-Chief Executive Officers on a permanent basis in April of 2025, the Compensation Committee of our Board of Directors approved on August 5, 2025, and we entered into, amendments to the amended and restated employment agreement (the “Vintz A&R Employment Agreement”) with Mr. Vintz, our Co-Chief Executive Officer (the “Vintz Amendment”), and the employment agreement (the “Thurmond
Employment Agreement” and together with the Vintz A&R Employment Agreement, the “Co-CEO Employment Agreements”) with Mr. Thurmond, our Co-Chief Executive Officer (the “Thurmond Amendment” and, together with the Vintz Amendment, the “Co-CEO Employment Agreement Amendments”).
Pursuant to the Co-CEO Employment Agreement Amendments, upon termination without cause or resignation for good reason (each as defined in the Co-CEO Employment Agreements, as amended by the Co-CEO Employment Agreement Amendments) outside of the three months prior to or 12 months following a change in control of our company, provided that Mr. Vintz or Mr. Thurmond, as applicable, signed and did not revoke a separation agreement that included a release of claims, such executive is eligible to receive 18 months of continued base salary, increased from 12 months under the Co-CEO Employment Agreements prior to the Co-CEO Employment Agreement Amendments, payment by the company of the employer-portion of premiums for continued group health coverage for up to 12 months following termination, a lump sum cash payment equal to such executive’s target annual bonus for the year in which the termination occurred, prorated based on the last day of employment and reduced by the amount of any quarterly bonuses previously paid or due for the year in which the termination occurred, and prorated accelerated vesting of outstanding equity awards.
In addition, the Co-CEO Employment Agreement Amendments revise the definition of, “good reason” in the Co-CEO Employment Agreements to generally include any of the following occurring without the executive's express prior written consent: (i) a material reduction in the executive's base salary (other than a general reduction in base salary that affects all other members of our company’s executive management); (ii) a material reduction in the executive's target bonus opportunity (applicable only in the event of a change in control of our company); (iii) a material relocation in the geographic location at which the executive is required to perform services for us, including any requirement that the executive regularly report to a company office or relocate from their home office location, except as may be reasonably required for travel that is consistent with the executive’s position and responsibilities; (iv) any material breach by our company of any material provision of the executive's employment agreement, or any material provision of any other agreement between the executive and our company concerning the terms and conditions of such executive’s employment; (v) our failure to obtain an agreement from any successor to our company to assume and agree to perform the executive’s employment agreement in the same manner and to the same extent that we would be required to perform if no succession had taken place, except where such assumption occurs by operation of law; and (vi) a material, adverse diminution in the executive's title, authority, duties, responsibilities, or reporting structure, with a clarification that a material diminution is deemed to have occurred if a portion of the role involved responsibilities related to being a public company and we are no longer a public reporting entity.
Except as disclosed in this Item 5 to Periodic Report on Form 10-Q, the terms and conditions of the Co-CEO Employment Agreements remain unchanged.
The foregoing descriptions of the Co-CEO Employment Agreement Amendments are qualified in their entireties to the complete text of the Co-CEO Employment Agreement Amendments, copies of which are filed hereto as Exhibits 10.2 and 10.3.
Item 6. Exhibits
The following is a list of Exhibits filed as part of this Quarterly Report on Form 10-Q:
| | | | | | | | | | | | | | |
| Exhibit Number | | Description | | Location |
| | | | |
| 3.1 | | | | Previously filed as Exhibit 3.1 to the Company's Current Report on Form 8-K (File No. 001-38600) on July 30, 2018 |
| 3.2 | | | | Previously filed as Exhibit 3.1 to the Company's Current Report on Form 8-K (File No. 001-38600) on November 15, 2023 |
| 4.1 | | | | Previously filed as Exhibit 4.1 to the Company's Registration Statement on Form S-1 (File No. 333-226002) on July 16, 2018 |
| 10.1 | | | | Filed herewith |
| 10.2 | | | | Filed herewith |
| 10.3 | | | | Filed herewith |
| 31.1 | | | | Filed herewith |
| 32.1* | | | | Furnished herewith |
| 101.SCH | | Inline XBRL Taxonomy Extension Schema Document | | |
| 101.CAL | | Inline XBRL Taxonomy Extension Calculation Linkbase Document | | |
| 101.DEF | | Inline XBRL Taxonomy Extension Definition Linkbase Document | | |
| 101.LAB | | Inline XBRL Taxonomy Extension Label Linkbase Document | | |
| 101.PRE | | Inline XBRL Taxonomy Extension Presentation Linkbase Document | | |
| 104 | | Cover Page Interactive Data File (formatted as Inline XBRL with applicable taxonomy extension information contained in Exhibits 101.SCH, 101.CAL, 101.DEF, 101.LAB and 101.PRE) | | |
________________
(*) This certification is deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liability of that section, nor shall it be deemed incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended.
(+) Pursuant to Item 601(a)(5) of Regulation S-K, certain schedules and similar attachments have been omitted. The registrant hereby agrees to furnish a copy of any omitted schedule or similar attachment to the SEC upon request; provided, however, that Tenable may request confidential treatment pursuant to Rule 24b-2 of the Exchange Act for any schedule or exhibit so furnished.
(#) Pursuant to Item 601(b)(10)(iv) of Regulation S-K promulgated by the SEC, certain portions of this exhibit have been redacted because the registrant customarily and actually treats such omitted information as private or confidential and because such omitted information is not material.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| | | | | | | | | | | |
| | | |
| | TENABLE HOLDINGS, INC. |
| | |
| Date: | August 8, 2025 | By: | /s/ Stephen A. Vintz |
| | | Stephen A. Vintz |
| | | Co-Chief Executive Officer |
| | | (Principal Executive Officer and Principal Financial Officer) |
| | | |
| Date: | August 8, 2025 | By: | /s/ Mark C. Thurmond |
| | | Mark C. Thurmond |
| | | Co-Chief Executive Officer |
| | | |
| Date: | August 8, 2025 | By: | /s/ J. Barron Anschutz |
| | | J. Barron Anschutz |
| | | Senior Vice President, Finance and Accounting |
| | | (Principal Accounting Officer) |
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