Cybersecurity exposure management company Tenable (NASDAQ:TENB) reported Q4 CY2025 results topping the market’s revenue expectations , with sales up 10.5% year on year to $260.5 million. The company expects next quarter’s revenue to be around $258.5 million, coming in 0.8% above analysts’ estimates. Its non-GAAP profit of $0.48 per share was 15.9% above analysts’ consensus estimates.

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Revenue: $260.5 million vs analyst estimates of $251.8 million (10.5% year-on-year growth, 3.5% beat)

Adjusted EPS: $0.48 vs analyst estimates of $0.41 (15.9% beat)

Adjusted Operating Income: $57.31 million vs analyst estimates of $58.25 million (22% margin, 1.6% miss)

Revenue Guidance for Q1 CY2026 is $258.5 million at the midpoint, roughly in line with what analysts were expecting

Adjusted EPS guidance for the upcoming financial year 2026 is $1.86 at the midpoint, beating analyst estimates by 5.2%

Operating Margin: 3.4%, down from 5.5% in the same quarter last year

Free Cash Flow Margin: 31.1%, up from 20.5% in the previous quarter

Billings: $327,800 at quarter end, down 99.9% year on year

Market Capitalization: $2.39 billion

"We are very pleased with the execution in the quarter and the full year as we delivered better-than-expected results across all of our guided metrics," said Steve Vintz, Co-CEO of Tenable.

Starting with the widely-used Nessus vulnerability scanner first released in 1998, Tenable (NASDAQ:TENB) provides exposure management solutions that help organizations identify, assess, and prioritize cybersecurity vulnerabilities across their IT infrastructure and cloud environments.

Reviewing a company’s long-term sales performance reveals insights into its quality. Any business can put up a good quarter or two, but the best consistently grow over the long haul. Over the last five years, Tenable grew its sales at a decent 17.8% compounded annual growth rate. Its growth was slightly above the average software company and shows its offerings resonate with customers.

We at StockStory place the most emphasis on long-term growth, but within software, a half-decade historical view may miss recent innovations or disruptive industry trends. Tenable’s recent performance shows its demand has slowed as its annualized revenue growth of 11.9% over the last two years was below its five-year trend.

This quarter, Tenable reported year-on-year revenue growth of 10.5%, and its $260.5 million of revenue exceeded Wall Street’s estimates by 3.5%. Company management is currently guiding for a 8.1% year-on-year increase in sales next quarter.

Looking further ahead, sell-side analysts expect revenue to grow 6.5% over the next 12 months, a deceleration versus the last two years. This projection is underwhelming and suggests its products and services will see some demand headwinds.

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Billings is a non-GAAP metric that is often called “cash revenue” because it shows how much money the company has collected from customers in a certain period. This is different from revenue, which must be recognized in pieces over the length of a contract.

Tenable’s billings came in at $327,800 in Q4, and it averaged 18.5% year-on-year declines over the last four quarters. This alternate topline metric underperformed its total sales, meaning the company recognizes revenue faster than it collects cash - a headwind for its liquidity that could also signal a slowdown in future revenue growth.

The customer acquisition cost (CAC) payback period measures the months a company needs to recoup the money spent on acquiring a new customer. This metric helps assess how quickly a business can break even on its sales and marketing investments.

It’s relatively expensive for Tenable to acquire new customers as its CAC payback period checked in at 70.8 months this quarter. The company’s slow recovery of its sales and marketing expenses indicates it operates in a highly competitive market and must invest to stand out, even if the return on that investment is low.

We were impressed by Tenable’s optimistic full-year EPS guidance, which blew past analysts’ expectations. We were also glad its EPS guidance for next quarter exceeded Wall Street’s estimates. On the other hand, its full-year revenue guidance fell short of Wall Street’s estimates. Overall, we think this quarter was still solid. The stock traded up 5.8% to $20.87 immediately after reporting.

So should you invest in Tenable right now? When making that decision, it’s important to consider its valuation, business qualities, as well as what has happened in the latest quarter. We cover that in our actionable full research report which you can read here, it’s free.