Tenable (TENB) Q3 2025: Tenable One Drives 40% of New Business as Exposure Management Accelerates
Tenable’s Q3 marked a decisive shift as its exposure management platform, Tenable One, accounted for 40% of new business, signaling accelerating adoption and a broader pivot towards preemptive security. Platform traction, expanding R&D, and a robust recurring revenue base underpin management’s raised full-year outlook. Investors should watch for continued upsell into the large installed base and the monetization of AI-driven security features as key levers for sustained growth.
Summary
- Exposure Management Adoption Surges: Tenable One now drives nearly half of new business, reflecting a market-wide shift to preemptive security.
- Platform-Led Expansion: Strong new logo wins and upsell momentum signal effective consolidation and integration strategy.
- Raised Outlook Anchored in Recurring Revenue: High visibility from subscription model supports increased guidance and ongoing capital return.
Performance Analysis
Tenable delivered 11% year-over-year revenue growth, exceeding guidance on every key metric, propelled by robust demand for its Tenable One exposure management platform. The platform represented approximately 40% of new business, with 437 new enterprise platform customers added—a 13% YoY increase—demonstrating growing appetite for unified security solutions. Notably, recurring revenue held steady at 95%, underscoring the business’s durability and high customer retention.
Profitability trends remained positive, with non-GAAP operating margin expanding to 23.3% and operating income up sharply year-over-year. R&D investment grew more than 18%, focused on platform innovation and AI capabilities. Calculated current billings increased 7.7%, while short-term remaining performance obligations (CRPO) climbed 12.9%, reflecting both longer contract durations and strong renewal activity. Cash flow remained robust, supporting active share repurchases and a healthy balance sheet.
- Platform Mix Shift: Larger, multi-year deals are becoming the norm, with Tenable One driving higher average deal sizes and deeper customer integration.
- Margin Expansion: Steady improvement in gross and operating margins despite increased R&D spend signals disciplined cost management.
- Resilient Public Sector Performance: Federal and public sector segments met expectations even amid government funding uncertainties, highlighting Tenable’s entrenched position.
Overall, Tenable’s financial results validate its strategic pivot toward exposure management, with platform adoption and recurring revenue providing high visibility into future growth and profitability.
Executive Commentary
"We continue to see strong growth from Tenable One, our exposure management platform, which represented approximately 40% of new business during the quarter. We believe our strong new platform traction reflects a fundamental shift in cybersecurity away from detection and response technologies and more toward a more preventative and preemptive approach."
Steve Vince, Co-Chief Executive Officer
"Although we continue to make targeted investments during the quarter, including growth of more than 18% in research and development related expenses year over year, we were able to drive continued leverage in the business as a whole. Our investment in innovation is a result of our focus on delivering the most comprehensive exposure management platform to our customers."
Matt Brown, Chief Financial Officer
Strategic Positioning
1. Exposure Management as the New Security Standard
Tenable is capitalizing on a market inflection point, as enterprises shift from reactive security to preemptive, exposure-based defense. The company’s roots in vulnerability management, paired with its expanding AI-driven capabilities, position Tenable One as a foundational platform for this transition. Management cited analyst recognition (Forrester, IDC) and customer wins as evidence of category leadership and accelerating adoption.
2. Platform Consolidation and Ecosystem Integration
The strategy centers on unifying visibility, context, and action across IT, OT (operational technology), cloud, and identity assets. Tenable One now boasts over 300 validated integrations, enabling ingestion of third-party data and orchestration of risk remediation. This open ecosystem is a key differentiator, allowing customers to consolidate vendors, reduce operational complexity, and address emerging risks such as AI-enabled threats and hybrid environments.
3. R&D and AI-Driven Innovation
Substantial R&D investment (up over 20% year-to-date) is fueling rapid innovation, particularly in AI-powered exposure management and risk prioritization. The launch of Tenable AI Exposure, leveraging Apex technology, extends platform capabilities to discover, assess, and control AI usage risks. This positions Tenable to address the expanding attack surface created by generative AI and support autonomous remediation initiatives—a critical evolution as threat actors increasingly weaponize AI.
4. Upsell and Expansion Opportunity Within Installed Base
With more than 40,000 customers and 18,000 enterprise users, Tenable’s installed base provides a substantial runway for upsell to Tenable One and cross-sell of advanced modules. Management highlighted that only around 3,000 enterprise customers have adopted Tenable One, leaving significant headroom for expansion. Larger, multi-year contracts and rising average deal sizes further validate the platform’s value proposition.
5. Capital Allocation and Durable Business Model
High recurring revenue, robust cash flow, and ongoing share repurchases ($60 million in Q3) reflect a resilient, capital-efficient business model. Management’s willingness to return capital while increasing R&D spend signals confidence in both market opportunity and operational leverage.
Key Considerations
Tenable’s Q3 results reinforce its positioning at the forefront of the exposure management shift, but investors should weigh execution, competitive, and platform adoption dynamics as the category matures.
Key Considerations:
- Installed Base Upsell Potential: Only a fraction of enterprise customers have migrated to Tenable One, leaving a sizable opportunity for platform expansion and higher-value deals.
- AI Security as Differentiator: Early traction with AI Exposure and Apex integration could drive future deal wins as organizations grapple with AI-related risk.
- Public Sector Resilience: Strong performance in U.S. Federal despite funding uncertainty demonstrates Tenable’s embedded role, though seasonal swings persist.
- Open Platform Strategy: Over 300 integrations and a focus on third-party data ingestion position Tenable as a consolidator, but sustaining technical leadership will require ongoing innovation.
- Margin and Cash Flow Discipline: Continued operating leverage and capital return are possible as recurring revenue and scale increase, but R&D intensity must be balanced against profitability targets.
Risks
Competitive intensity in cloud security and exposure management is rising, with both legacy and cloud-native players investing heavily in platform capabilities and AI. While Tenable’s open integration strategy is a strength, rapid innovation cycles and customer consolidation trends could pressure deal velocity or pricing. Macro risks, such as government shutdowns or budget delays, remain a factor for the public sector business, though management views Q4 exposure as limited. Sustaining above-market growth will require continued upsell success and differentiation in a fast-evolving landscape.
Forward Outlook
For Q4, Tenable guided to:
- Revenue of $249.1 to $253.1 million
- Non-GAAP operating income of $55.7 to $59.7 million
- Non-GAAP EPS of $0.39 to $0.43
For full-year 2025, management raised guidance:
- Revenue of $988 to $992 million
- Non-GAAP operating income of $211 to $215 million
- Non-GAAP EPS of $1.51 to $1.54
Management cited increased visibility into Q4 and year-end, strong renewal momentum, and a robust pipeline as drivers of the improved outlook. They anticipate continued platform mix shift and disciplined investment in innovation and go-to-market to support sustainable growth.
- Greater emphasis on upsell and platform expansion
- Ongoing share repurchases as a capital allocation priority
Takeaways
Tenable’s Q3 demonstrates the company’s firm grip on the exposure management opportunity, with platform adoption, recurring revenue, and innovation momentum driving raised guidance and capital return.
- Platform-Led Growth: Tenable One’s 40% mix of new business and rising deal sizes validate the pivot to unified exposure management as a secular growth driver.
- Profitability and Scale: Margin expansion and robust free cash flow support both reinvestment and shareholder returns, balancing growth with capital discipline.
- Upsell and Innovation Watch: The key to sustained outperformance lies in accelerating Tenable One migration within the installed base and monetizing AI-driven security features.
Conclusion
Tenable’s Q3 results and raised outlook reflect successful execution on its exposure management strategy, with Tenable One adoption and platform innovation driving both growth and profitability. The company’s large installed base, open ecosystem, and focus on AI risk management position it to capitalize on evolving security priorities, though competition and execution risks remain in focus.
Industry Read-Through
Tenable’s results signal a broader cybersecurity industry pivot from reactive, post-breach defense to proactive, platform-based exposure management, with AI and integration capabilities emerging as core differentiators. The company’s traction with large enterprises and public sector clients highlights growing demand for unified solutions that span IT, OT, cloud, and identity domains. As organizations consolidate vendors and seek to address AI-driven threats, exposure management platforms with open ecosystems and strong analytics will likely gain share. Competitors, both legacy and cloud-native, must accelerate their own platform and AI strategies to keep pace, while investors should monitor the balance between innovation, upsell velocity, and margin discipline across the sector.