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  4. [10-Q] Tenable Holdings, Inc. Quarterly Earnings Report

Tenable Q3 earnings: net income rises to $11.3M

Proceeds from the $800 million note issue covered term-loan repayment, capped calls and repurchases, with $186.1 million added to cash.

Available on EDGAR Accepted by SEC EDGAR
Filing Impact
(Moderate)
Filing Sentiment

Sentiment and the balance of points

Rhea-AI Sentiment reads the wording of the document, how positive or negative its language is on a 1 to 5 scale. The balance of points shown with the takes weighs what the document actually discloses, so the two can disagree, for example when a trial that missed its main goal is described in upbeat language.

How Sentiment worksHow the balance works

Form Type
10-Q

Rhea-AI Filing Summary

Tenable Holdings, Inc. reported third-quarter 2026 revenue of $276.4 million, up 9% from $252.4 million a year earlier, and net income of $11.3 million, versus $2.3 million. Operating income was $16.7 million, compared with $7.1 million.

For the nine months ended September 30, 2026, revenue was $807.0 million versus $738.9 million, net income was $16.5 million versus a $35.4 million loss, and operating cash flow was $205.2 million versus $183.7 million. Recurring revenue represented 95% of third-quarter revenue.

On September 15, 2026, Tenable completed a private offering of $800.0 million aggregate principal amount of 0.25% convertible senior notes due September 15, 2031. Net proceeds were $778.8 million: $358.1 million repaid the Term Loan, $64.1 million funded capped calls, $170.5 million repurchased 5.3 million shares, and $186.1 million was added to cash. On October 13, 2026, Tenable entered a $400.0 million senior secured revolving credit facility maturing October 13, 2031; at November 3, 2026, there were no borrowings and $0.2 million of outstanding letters of credit.

2 points · 0 major

How this balance works

Rhea-AI gives every point it takes from this document a weight. Minor counts 1, Moderate 3 and Major 9, so one Major point outweighs several Minor ones. The bar adds up the weights on each side, and when neither side holds more than 65% of the total the balance reads Mixed.

It reads the document as published, with the same rules for every company, and it does not look at what the market expected or at how the stock traded, so a point can be objectively good on a day the stock falls.

Rhea-AI Sentiment measures something else, the tone of the wording.

How the balance worksHow Sentiment works

0 major · 0 points

How the balance works

Positive

  • Moderate pointThird-quarter revenue rose 9% to $276.4 million.
  • Moderate pointNine-month net income was $16.5 million, versus a $35.4 million loss in 2025.

Negative

  • None.

Filing Explained

Conversion may create up to 24,976,560 shares, while principal is settled in cash and capped calls are expected to reduce potential dilution.

Tenable reports that its already-issued notes may, if converted, result in up to 24,976,560 shares, subject to adjustment, creating potential dilution; principal is payable in cash, while any excess may be settled in cash, shares, or both at Tenable's choice.

Before June 15, 2031, holders may require conversion only if a specified share-price, note-trading, redemption, or corporate-event condition is met; from that date, conversion is freely available until the second scheduled trading day before maturity.

The capped calls have an initial cap price of $64.06 per share and are generally expected to reduce potential dilution upon conversion.

Revenue $276.4 million Three months ended September 30, 2026; $252.4 million in 2025
Net income $11.3 million Three months ended September 30, 2026; $2.3 million in 2025
Net cash provided by operating activities $205.2 million Nine months ended September 30, 2026; $183.7 million in 2025
Convertible senior notes principal $800.0 million Private offering completed September 15, 2026
Interest rate 0.25% per annum Convertible senior notes due September 15, 2031
Initial conversion price Approximately $44.84 per share Convertible senior notes
Revolving credit facility $400.0 million Entered October 13, 2026; matures October 13, 2031
Remaining performance obligations financial
"Remaining performance obligations, short-term"
Remaining performance obligations are the work a company still needs to complete for its customers, like finishing a service or delivering a product. It’s important because it shows how much future income the company has coming in from current agreements, giving a clearer picture of its ongoing business.
dollar-based net expansion rate financial
"Our dollar-based net expansion rate reflects both our customer retention"
Dollar-based net expansion rate measures how much recurring revenue from an existing group of customers has grown or shrunk over a set period, after accounting for upsells, downgrades and lost customers. Think of it like tracking the income from a garden you already planted — if each plant produces more fruit over time the garden’s value rises; for investors, a rate above 100% signals healthy organic growth and lower risk, while a rate below 100% warns of customer erosion.
Capped Calls financial
"Capped Calls are generally expected to reduce the potential dilution"
A capped call is a type of option tied to a company’s convertible securities that gives the holder the right to buy shares up to a set price, but with a fixed ceiling on the payout. Companies commonly use capped calls to reduce the number of new shares that would dilute existing shareholders if convertibles turn into stock; for investors this matters because capped calls can limit dilution, affect share supply, and alter the potential upside and risk of owning the stock.
Total Leverage Ratio financial
"a margin based upon our Total Leverage Ratio"

FAQ

AI-generated questions and answers. How Rhea-AI works. Not financial advice.

What were TENB's third-quarter 2026 revenue and net income?
Tenable reported third-quarter revenue of $276.4 million and net income of $11.3 million for the three months ended September 30, 2026. Revenue was $252.4 million and net income was $2.3 million in the 2025 quarter.

What are the terms of TENB's 2031 convertible notes?
Tenable issued $800.0 million aggregate principal amount of convertible senior notes bearing interest at 0.25% per annum and maturing September 15, 2031. The initial conversion rate is 22.3005 shares per $1,000 principal, equivalent to an initial conversion price of approximately $44.84 per share.

How much borrowing capacity does TENB's revolving credit facility provide?
The 2026 Revolving Credit Facility is $400.0 million, including a $40.0 million sublimit for letters of credit, and matures October 13, 2031. It may be used for working capital and general corporate purposes; at November 3, 2026, there were no borrowings and $0.2 million of outstanding letters of credit.

AI-generated analysis. How Rhea-AI works. Not financial advice.

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
__________________
FORM 10-Q
__________________
☒Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
For the Quarterly Period Ended September 30, 2026
or
☐Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
For the transition period from _____ to _____
Commission file number 001-38600
__________________
TENABLE HOLDINGS, INC.
(Exact name of registrant as specified in its charter)
__________________
Delaware47-5580846
(State or other jurisdiction of incorporation or organization)(I.R.S. Employer Identification Number)
6100 Merriweather Drive, Columbia, Maryland 21044
(Address of principal executive offices, including zip code)
(410) 872-0555
(Registrant’s telephone number, including area code)
__________________
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Stock, par value $0.01 per shareTENBThe Nasdaq Stock Market LLC
Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes   ☒      No      ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes   ☒     No  ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and "emerging growth company" in Rule 12b-2 of the Exchange Act.
Large accelerated filer☒Accelerated filer☐
Non-accelerated filer☐
Emerging growth company☐Smaller reporting company☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes    ☐      No    ☒
The number of shares of the Registrant's common stock outstanding as of October 30, 2026 was 104,507,623.


TENABLE HOLDINGS, INC.
TABLE OF CONTENTS
Page
PART I – FINANCIAL INFORMATION
Item 1.
Financial Statements
3
Consolidated Balance Sheets
4
Consolidated Statements of Operations
5
Consolidated Statements of Comprehensive Income (Loss)
6
Consolidated Statements of Stockholders' Equity (Deficit)
7
Consolidated Statements of Cash Flows
8
Notes to Consolidated Financial Statements
9
1. Summary of Significant Accounting Policies
9
2. Revenue
10
3. Cash Equivalents, Short-Term Investments and Other Investments
11
4. Property and Equipment, Net
13
5. Goodwill and Intangible Assets
13
6. Leases
14
7. Debt
15
8. Commitments and Contingencies
17
9. Stock-Based Compensation
17
10. Income Taxes
19
11. Net Earnings (Loss) Per Share
19
Item 2.
Management’s Discussion and Analysis of Financial Condition and Results of Operations
21
Item 3.
Quantitative and Qualitative Disclosures About Market Risk
32
Item 4.
Controls and Procedures
33
PART II – OTHER INFORMATION
Item 1.
Legal Proceedings
34
Item 1A.
Risk Factors
34
Item 2.
Unregistered Sales of Equity Securities and Issuer Purchases of Equity Securities
48
Item 5.
Other Information
49
Item 6.
Exhibits
50
Signatures
51

Where You Can Find More Information
Investors and others should note that we may announce material business and financial information to our investors using our investor relations website (https://investors.tenable.com), our filings with the Securities and Exchange Commission (SEC), our website, webcasts, press releases, and conference calls. We use these mediums, including our website, to communicate with investors and the general public about our company, our products, and other issues, and for complying with our disclosure obligations under Regulation FD. It is possible that the information that we make available on our website may be deemed to be material information. We therefore encourage investors and others interested in our company to review the information that we make available on our website, in addition to following our SEC filings, our webcasts, press releases, and conference calls. The information we post through these channels is not a part of this Quarterly Report on Form 10-Q. These channels may be updated from time to time on our investor relations website.
2
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PART I. FINANCIAL INFORMATION
Item 1.        Financial Statements
3
Table of Contents
TENABLE HOLDINGS, INC.
CONSOLIDATED BALANCE SHEETS
September 30, 2026December 31, 2025
(in thousands, except per share data)(unaudited)
Assets
Current assets:
Cash and cash equivalents$317,401 $187,762 
Short-term investments177,860 214,419 
Accounts receivable (net of allowance for doubtful accounts of $386 and $656 at September 30, 2026 and December 31, 2025, respectively)
211,019 279,150 
Deferred commissions50,559 52,914 
Prepaid expenses and other current assets55,343 39,339 
Total current assets812,182 773,584 
Property and equipment, net50,488 40,062 
Deferred commissions (net of current portion)64,589 71,715 
Operating lease right-of-use assets39,967 35,558 
Acquired intangible assets, net94,949 115,296 
Goodwill697,886 697,886 
Other assets12,951 13,566 
Total assets$1,773,012 $1,747,667 
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable and accrued expenses$26,585 $21,889 
Accrued compensation55,621 69,166 
Deferred revenue685,375 706,866 
Operating lease liabilities9,302 9,596 
Other current liabilities2,033 5,432 
Total current liabilities778,916 812,949 
Deferred revenue (net of current portion)178,048 192,410 
Convertible senior notes, net779,016 — 
Term loan, net of issuance costs (net of current portion)— 354,209 
Operating lease liabilities (net of current portion)52,774 50,877 
Other liabilities10,730 10,846 
Total liabilities1,799,484 1,421,291 
Stockholders’ (deficit) equity:
Common stock (par value: $0.01; 500,000 shares authorized; 133,597 and 129,046 shares issued at September 30, 2026 and December 31, 2025, respectively)
1,336 1,290 
Additional paid-in capital1,682,036 1,586,727 
Treasury stock (at cost: 28,737 and 10,596 shares at September 30, 2026 and December 31, 2025, respectively)
(828,270)(364,574)
Accumulated other comprehensive (loss) income(638)387 
Accumulated deficit(880,936)(897,454)
Total stockholders’ (deficit) equity(26,472)326,376 
Total liabilities and stockholders’ (deficit) equity$1,773,012 $1,747,667 
The accompanying notes are an integral part of these consolidated financial statements.
4
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TENABLE HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
Three Months Ended September 30,Nine Months Ended September 30,
(in thousands, except per share data)2026202520262025
Revenue$276,387 $252,440 $806,953 $738,872 
Cost of revenue61,332 56,753 178,334 163,647 
Gross profit215,055 195,687 628,619 575,225 
Operating expenses:
Sales and marketing102,913 99,949 315,771 310,222 
Research and development62,145 56,265 174,905 168,724 
General and administrative33,141 32,337 96,874 114,302 
Restructuring147 — 3,229 — 
Total operating expenses198,346 188,551 590,779 593,248 
Income (loss) from operations16,709 7,136 37,840 (18,023)
Interest income2,573 3,590 7,925 12,597 
Interest expense(8,270)(7,213)(21,118)(21,363)
Other expense, net(248)(703)(1,860)(204)
Income (loss) before income taxes10,764 2,810 22,787 (26,993)
(Benefit) provision for income taxes(535)550 6,269 8,388 
Net income (loss)$11,299 $2,260 $16,518 $(35,381)
Net earnings (loss) per share:
Basic$0.10 $0.02 $0.15 $(0.29)
Diluted0.10 0.02 0.14 (0.29)
Weighted-average shares used to compute net earnings (loss) per share:
Basic108,974 120,483 111,846 120,516 
Diluted115,970 121,953 115,785 120,516 
The accompanying notes are an integral part of these consolidated financial statements.
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TENABLE HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(Unaudited)
Three Months Ended September 30,Nine Months Ended September 30,
(in thousands)2026202520262025
Net income (loss)$11,299 $2,260 $16,518 $(35,381)
Other comprehensive (loss) income, net of tax:
Unrealized (losses) gains on available-for-sale securities, net(374)145 (1,025)89 
Other comprehensive (loss) income(374)145 (1,025)89 
Comprehensive income (loss)$10,925 $2,405 $15,493 $(35,292)
The accompanying notes are an integral part of these consolidated financial statements.

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TENABLE HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)
(Unaudited)
Additional
Paid-in
Capital		Accumulated
Other
Comprehensive Income (Loss)		Total
Stockholders’
Equity (Deficit)
Common StockTreasury StockAccumulated Deficit
(in thousands)SharesAmountSharesAmount
Balance at June 30, 2026
132,356 $1,324 $1,687,284 21,914 $(597,710)$(264)$(892,235)$198,399 
Exercise of stock options218 3 1,608 — — — — 1,611 
Vesting of restricted stock units751 7 (359)— — — — (352)
Vesting of performance stock units12 — — — — — — — 
Issuance of common stock under employee stock purchase plan260 2 4,344 — — — — 4,346 
Purchase of treasury stock— — — 6,836 (225,617)— — (225,617)
Shares issued from Treasury— — — (13)350 — — 350 
Taxes paid related to net share settlement of equity awards— — — — (5,293)— — (5,293)
Purchase of capped calls, net of tax— — (62,952)— — — — (62,952)
Stock-based compensation— — 52,111 — — — — 52,111 
Other comprehensive loss— — — — — (374)— (374)
Net income— — — — — — 11,299 11,299 
Balance at September 30, 2026
133,597 $1,336 $1,682,036 28,737 $(828,270)$(638)$(880,936)$(26,472)
Balance at December 31, 2025
129,046 $1,290 $1,586,727 10,596 $(364,574)$387 $(897,454)$326,376 
Exercise of stock options465 5 3,498 — — — — 3,503 
Vesting of restricted stock units3,227 32 (2,029)— — — — (1,997)
Vesting of performance stock units64 1 (1)— — — — — 
Issuance of common stock under employee stock purchase plan795 8 13,076 — — — — 13,084 
Purchase of treasury stock— — — 18,207 (457,227)— — (457,227)
Shares issued from Treasury— — — (66)1,996 — — 1,996 
Taxes paid related to net share settlement of equity awards— — — — (8,465)— — (8,465)
Purchase of capped calls, net of tax— — (62,952)— — — — (62,952)
Stock-based compensation— — 143,717 — — — — 143,717 
Other comprehensive loss— — — — — (1,025)— (1,025)
Net income— — — — — — 16,518 16,518 
Balance at September 30, 2026
133,597 $1,336 $1,682,036 28,737 $(828,270)$(638)$(880,936)$(26,472)
Balance at June 30, 2025
127,352 $1,274 $1,489,379 6,365 $(241,239)$262 $(898,977)$350,699 
Exercise of stock options17 — 233 — — — — 233 
Vesting of restricted stock units792 8 (8)— — — — — 
Vesting of performance stock units17 — — — — — — — 
Issuance of common stock under employee stock purchase plan220 2 5,768 — — — — 5,770 
Forfeiture of restricted stock awards(50)(1)1 — — — — — 
Purchase of treasury stock— — — 1,949 (59,969)— — (59,969)
Stock-based compensation— — 45,238 — — — — 45,238 
Other comprehensive income— — — — — 145 — 145 
Net income— — — — — — 2,260 2,260 
Balance at September 30, 2025
128,348 $1,283 $1,540,611 8,314 $(301,208)$407 $(896,717)$344,376 
Balance at December 31, 2024
122,371 $1,224 $1,374,659 2,673 $(114,911)$318 $(861,336)$399,954 
Exercise of stock options2,034 20 2,400 — — — — 2,420 
Vesting of restricted stock units3,089 31 (31)— — — — — 
Vesting of performance stock units198 2 (2)— — — — — 
Issuance of common stock under employee stock purchase plan519 5 15,477 — — — — 15,482 
Issuance of restricted stock awards, net137 1 (1)— — — — — 
Purchase of treasury stock— — — 5,601 (184,968)— — (184,968)
Taxes paid related to net share settlement of equity awards— — — 40 (1,329)— — (1,329)
Fair value of replacement equity attributable to pre-acquisition service— — 146 — — — — 146 
Stock-based compensation— — 147,963 — — — — 147,963 
Other comprehensive income— — — — — 89 — 89 
Net loss— — — — — — (35,381)(35,381)
Balance at September 30, 2025
128,348 $1,283 $1,540,611 8,314 $(301,208)$407 $(896,717)$344,376 
The accompanying notes are an integral part of these consolidated financial statements.
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TENABLE HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Nine Months Ended September 30,
(in thousands)20262025
Cash flows from operating activities:
Net income (loss)$16,518 $(35,381)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization31,090 31,817 
Stock-based compensation141,420 147,311 
Net accretion of discounts and amortization of premiums on short-term investments(1,182)(2,568)
Loss on extinguishment of debt2,415 — 
Other4,283 3,880 
Changes in operating assets and liabilities:
Accounts receivable68,401 59,733 
Prepaid expenses and other assets(7,392)16,877 
Accounts payable, accrued expenses and accrued compensation(12,058)(9,795)
Deferred revenue(35,853)(30,413)
Other current and noncurrent liabilities(2,439)2,259 
Net cash provided by operating activities205,203 183,720 
Cash flows from investing activities:
Purchases of property and equipment(7,464)(11,768)
Capitalized software development costs(11,712)(2,676)
Purchases of short-term investments(127,746)(116,687)
Sales and maturities of short-term investments164,461 156,171 
Proceeds from other investments— 852 
Purchases of other investments(300)— 
Business combinations, net of cash acquired— (196,182)
Net cash provided by (used in) investing activities17,239 (170,290)
Cash flows from financing activities:
Proceeds from issuance of convertible senior notes800,000 — 
Payment of issuance costs of convertible senior notes(21,154)— 
Purchase of capped calls(64,080)— 
Payments on term loan(360,000)(2,813)
Proceeds from stock issued in connection with the employee stock purchase plan13,084 15,482 
Proceeds from the exercise of stock options3,527 2,420 
Payments for taxes related to net share settlement of equity awards(8,465)(1,329)
Purchase of treasury stock(454,038)(184,968)
Net cash used in financing activities(91,126)(171,208)
Effect of exchange rate changes on cash and cash equivalents and restricted cash(1,677)983 
Net increase (decrease) in cash and cash equivalents and restricted cash129,639 (156,795)
Cash and cash equivalents and restricted cash at beginning of period187,762 328,647 
Cash and cash equivalents and restricted cash at end of period$317,401 $171,852 
Supplemental disclosure of cash flow information:
Cash paid for interest$17,292 $20,287 
Cash paid for income taxes, net of refunds11,314 9,132 
Supplemental cash flow information related to leases:
Cash payments for operating leases
$11,309 $7,348 
The accompanying notes are an integral part of these consolidated financial statements.
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TENABLE HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
1. Summary of Significant Accounting Policies
Basis of Presentation and Preparation
The accompanying consolidated financial statements include the accounts of Tenable Holdings, Inc. (the "Company," "we," "us," or "our") and our wholly owned subsidiaries and have been prepared in conformity with United States generally accepted accounting principles (“GAAP”) for interim financial information. All intercompany accounts and transactions have been eliminated in consolidation.
The consolidated statements are unaudited and should be read in conjunction with the consolidated financial statements and related notes included in our 2025 Annual Report on Form 10-K ("10-K") filed with the Securities and Exchange Commission on February 27, 2026. The consolidated financial statements have been prepared on a basis consistent with the audited annual consolidated financial statements included in the 10-K and, in the opinion of management, include all adjustments of a normal recurring nature necessary to fairly state our financial position, our results of operations, and cash flows.
The results for the three and nine months ended September 30, 2026 are not necessarily indicative of the operating results expected for the year ending December 31, 2026 or any other future period.
The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results could differ significantly from these estimates.
We operate as one operating segment. Our chief operating decision makers ("CODMs") are our Co-Chief Executive Officers. Our CODMs review financial information on a consolidated basis for purposes of making operating decisions, allocating resources and evaluating financial performance. Our CODMs review cost of revenue, sales and marketing expense, research and development expense and general and administrative expense to assess our significant segment expenses, and review income (loss) from operations and net income (loss) to assess our operating performance. Our CODMs also review total assets, as reported on our consolidated balance sheets. See our consolidated statement of operations for our significant segment expenses, income (loss) from operations and net income (loss) in the periods presented.
Our significant accounting policies are described in our 10-K. During the nine months ended September 30, 2026, there were no material changes to our significant accounting policies from those described in our 10-K.
Recently Adopted Accounting Pronouncements
In July 2025, the FASB issued ASU 2025-05 - Measurement of Credit Loss for Accounts Receivable and Contract Assets, which provides a practical expedient for the calculation of current expected credit losses for accounts receivable and contract assets, allowing entities to assume that current conditions as of the balance sheet date will persist through the forecast period. The adoption of ASU 2025-05 as of January 1, 2026 on a prospective basis had an immaterial impact on our consolidated financial statements.
Recently Issued Accounting Pronouncements
In December 2025, the FASB issued ASU 2025-10 - Government Grants (Topic 832): Accounting for Government Grants Received by Business Entities, establishing guidance on the recognition, measurement and presentation of government grants. The guidance is effective beginning January 1, 2029 on a modified prospective, modified retrospective or retrospective basis, with early adoption permitted. We are currently evaluating the impact of adopting this standard on our consolidated financial statements and disclosures.
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2. Revenue
Disaggregation of Revenue
The following table presents a summary of revenue:
Three Months Ended September 30,Nine Months Ended September 30,
(in thousands)2026202520262025
Subscription revenue$254,600 $232,211 $746,014 $680,685 
Perpetual license and maintenance revenue9,713 11,088 29,737 34,051 
Professional services and other revenue12,074 9,141 31,202 24,136 
Revenue$276,387 $252,440 $806,953 $738,872 
Revenue by region, based on the address of the end user as specified in our subscription, license or service agreements, was as follows:
Three Months Ended September 30,Nine Months Ended September 30,
(in thousands)2026202520262025
The Americas$166,077 $154,918 $487,372 $454,865 
Europe, Middle East and Africa77,593 68,261 225,121 199,289 
Asia Pacific32,717 29,261 94,460 84,718 
Revenue$276,387 $252,440 $806,953 $738,872 
Customers located in the United States accounted for 52% of revenue in the three and nine months ended September 30, 2026 and 53% of revenue in the three and nine months ended September 30, 2025. No other country accounted for 10% or more of revenue in the periods presented.
Concentrations
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 products and services to our distributors, which in turn sell to resellers, which then sell to end users. Revenue derived through our channel network comprised 95% of revenue in the three and nine months ended September 30, 2026 and 94% of revenue in the three and nine months ended September 30, 2025. One of our distributors accounted for 29% and 30% of revenue in the three and nine months ended September 30, 2026, respectively, and 32% of revenue in the three and nine months ended September 30, 2025. That same distributor accounted for 23% and 27% of accounts receivable at September 30, 2026 and December 31, 2025, respectively.
Contract Balances
We generally bill our customers in advance and accounts receivable are recorded when we have the right to invoice the customer. Contract liabilities consist of deferred revenue and include customer billings and payments received in advance of performance under the contract. In the three months ended September 30, 2026 and 2025 and the nine months ended September 30, 2026 and 2025, we recognized revenue of $253.1 million, $235.8 million, $608.7 million and $556.4 million, respectively, that was included in the deferred revenue balance at the beginning of each respective period.
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Remaining Performance Obligations
The following summarizes the future estimated revenue related to unsatisfied performance obligations:
September 30,
(in thousands)20262025
Remaining performance obligations, short-term$747,222 $669,015 
Remaining performance obligations, long-term315,822 259,849 
Remaining performance obligations$1,063,044 $928,864 
Deferred Commissions
The following summarizes the activity of deferred incremental costs of obtaining a contract:
Three Months Ended September 30,Nine Months Ended September 30,
(in thousands)2026202520262025
Beginning balance$115,296 $115,059 $124,629 $119,705 
Capitalization of contract acquisition costs14,282 14,556 34,056 38,294 
Amortization of deferred contract acquisition costs(14,430)(14,515)(43,537)(42,899)
Ending balance$115,148 $115,100 $115,148 $115,100 
3. Cash Equivalents, Short-Term Investments and Other Investments
Cash Equivalents and Short-Term Investments
We review the fair value of our financial assets based on quoted prices for identical assets or prices for similar assets in active markets. The following tables summarize our assets that are measured at fair value on a recurring basis:

September 30, 2026
(in thousands)Fair Value HierarchyAmortized CostUnrealized GainUnrealized LossEstimated Fair Value
Cash equivalents
Money market fundsLevel 1$174,685 $— $— $174,685 
Total cash equivalents$174,685 $— $— $174,685 
Short-term investments
Commercial paperLevel 2$29,536 $— $(72)$29,464 
Corporate bondsLevel 266,362 — (203)66,159 
Asset backed securitiesLevel 29,724 — (11)9,713 
U.S. Treasury and agency obligationsLevel 272,876 2 (354)72,524 
Total short-term investments$178,498 $2 $(640)$177,860 
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December 31, 2025
(in thousands)Fair Value HierarchyAmortized CostUnrealized GainUnrealized LossEstimated Fair Value
Cash equivalents
Money market fundsLevel 1$59,760 $— $— $59,760 
Total cash equivalents$59,760 $— $— $59,760 
Short-term investments
Commercial paperLevel 2$5,063 $3 $— $5,066 
Corporate bondsLevel 294,729 167 (2)94,894 
Asset backed securitiesLevel 217,331 33 — 17,364 
Yankee bondsLevel 213,280 14 (1)13,293 
U.S. Treasury and agency obligationsLevel 283,629 173 — 83,802 
Total short-term investments$214,032 $390 $(3)$214,419 
We considered the extent to which any unrealized losses on our short-term investments were driven by credit risk and other factors, including market risk, and whether it is more-likely-than-not that we would have to sell the security before the recovery of the amortized cost basis. At September 30, 2026 and December 31, 2025, our unrealized losses were due to changes in market interest rates compared to when the investments were initiated. We do not believe any unrealized losses represent credit losses, and it is unlikely we would sell the investments before we would recover their amortized cost basis.
The contractual maturities of our short-term investments are as follows:
September 30, 2026December 31, 2025
(in thousands)Amortized CostEstimated Fair ValueAmortized CostEstimated Fair Value
Due within one year$150,097 $149,628 $178,677 $178,995 
Due between one and two years28,401 28,232 35,355 35,424 
Total short-term investments$178,498 $177,860 $214,032 $214,419 
At September 30, 2026 and December 31, 2025, cash and cash equivalents included $8.8 million and $8.7 million, respectively, of restricted cash related to collateral for outstanding letters of credit and an operating lease.
Other Investments
Our investments in privately held, nonmarketable securities are measured at cost, less any impairment, plus or minus observable price changes for similar investments of the same issuer, and were as follows:
(in thousands)Fair Value HierarchySeptember 30, 2026December 31, 2025
Equity securitiesLevel 3$7,002 $6,702 
Debt and other securitiesLevel 31,000 1,000 
Total other investments$8,002 $7,702 
We did not have any liabilities measured and recorded at fair value on a recurring basis at September 30, 2026 and December 31, 2025.
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4. Property and Equipment, Net
Property and equipment, net consisted of the following:
(in thousands)
September 30, 2026December 31, 2025
Computer software and equipment
$23,955$21,676
Internally developed software58,38844,403
Furniture and fixtures
6,2295,833
Leasehold improvements
36,05933,049
Total
124,631104,961
Less: accumulated depreciation and amortization
(74,143)(64,899)
Property and equipment, net
$50,488$40,062
Our property and equipment, net by geographic area is as follows:
(in thousands)September 30, 2026December 31, 2025
United States$34,051 $26,494 
International16,437 13,568 
Property and equipment, net$50,488 $40,062 
Depreciation and amortization related to property and equipment was $3.7 million, $4.3 million, $10.7 million and $12.6 million in the three months ended September 30, 2026 and 2025 and the nine months ended September 30, 2026 and 2025, respectively.
5. Goodwill and Intangible Assets
At September 30, 2026 and December 31, 2025, our goodwill balance was $697.9 million.
Acquired intangible assets subject to amortization are as follows:
September 30, 2026December 31, 2025
(in thousands)Gross Carrying AmountAccumulated AmortizationNet Carrying AmountGross Carrying AmountAccumulated AmortizationNet Carrying Amount
Acquired technology$196,237 $(101,288)$94,949 $196,237 $(80,941)$115,296 
Trade name490 (490)— 490 (490)— 
$196,727 $(101,778)$94,949 $196,727 $(81,431)$115,296 
Amortization of acquired intangible assets was $6.8 million, $6.8 million, $20.3 million and $19.2 million in the three months ended September 30, 2026 and 2025, and the nine months ended September 30, 2026 and 2025, respectively. At September 30, 2026, our acquired intangible assets are expected to be amortized over an estimated remaining weighted average period of 4.3 years.
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At September 30, 2026, estimated future amortization of acquired intangible assets is as follows:
(in thousands)
Year ending December 31,
2026
$6,598 
202724,915 
202821,872 
202918,252 
203014,522 
Thereafter
8,790 
Total
$94,949 
6. Leases
The components of lease expense were as follows:
Three Months Ended September 30,Nine Months Ended September 30,
(in thousands)
2026202520262025
Operating lease cost(1)
$2,702 $2,231 $8,376 $7,464 
_______________
(1)    Excludes sublease income.
Sublease income, which is recorded as a reduction of rent expense, was $0.4 million in the three months ended September 30, 2026 and 2025 and $1.2 million in the nine months ended September 30, 2026 and 2025.
Rent expense for short-term leases in the three and nine months ended September 30, 2026 and 2025 was not material.
Supplemental information related to leases was as follows:
September 30, 2026December 31, 2025
Operating leases
Weighted average remaining lease term
5.7 years5.7 years
Weighted average discount rate
6.2%6.2%
Three Months Ended September 30,Nine Months Ended September 30,
(in thousands)
2026202520262025
ROU assets obtained in exchange for lease obligations
Operating leases
$— $— $9,879 $359 
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Maturities of operating lease liabilities at September 30, 2026 were as follows:
(in thousands)
Year ending December 31,
2026
$2,307 
202713,723 
202813,136 
202913,081 
203013,005 
Thereafter
18,420 
Total lease payments
73,672 
Less: Imputed interest
(11,596)
Total
$62,076 
Operating lease payments in the table above do not include $0.4 million, $1.8 million, $1.9 million, $1.9 million, $2.0 million and $2.5 million of sublease payments we expect to receive in 2026, 2027, 2028, 2029, 2030 and thereafter, respectively.
7. Debt
Convertible Senior Notes
On September 15, 2026, we completed a private offering of $800.0 million aggregate principal amount of 0.25% convertible senior notes due 2031 (the "Convertible Senior Notes"). Net proceeds were $778.8 million after deducting the initial purchasers' discount and other issuance costs of $21.2 million. We used $358.1 million of the net proceeds to repay our senior secured term loan facility under our 2021 Credit Agreement, $64.1 million to fund the capped call transactions and $170.5 million to repurchase 5.3 million shares of our common stock, and added $186.1 million of cash and cash equivalents.
The Convertible Senior Notes are senior, unsecured obligations that bear interest at 0.25% per annum, payable semi-annually in arrears on March 15 and September 15 of each year, beginning March 15, 2027. The Convertible Senior Notes mature September 15, 2031, unless earlier converted, redeemed, or repurchased.
The initial conversion rate is 22.3005 shares of common stock per $1,000 principal, equivalent to an initial conversion price of approximately $44.84 per share, which is a 40% premium over our closing stock price of $32.03 on September 10, 2026. Upon conversion, we will settle up to the principal amount in cash and may settle any excess obligations in cash, shares of common stock, or a combination, at our election.
Prior to June 15, 2031, holders may require us to convert all or any portion of the Convertible Senior Notes if one of the following conditions is met:
•Share price condition: the last reported sale price of the common stock equals or exceeds 150% of the conversion price for at least 20 of the 30 consecutive trading days ending on the last trading day of the preceding calendar quarter, beginning in 2027.
•Trading price condition: during the five business days after any ten consecutive trading day period in which the trading price of the Convertible Senior Notes was less than 98% of the product of the common stock price and the conversion rate.
•Redemption trigger: we call the Convertible Senior Notes for redemption.
•Corporate events trigger: upon the occurrence of specified corporate events, as provided in the indenture governing the Convertible Senior Notes.
The Convertible Senior Notes are freely convertible from June 15, 2031 until the second scheduled trading day before maturity. The maximum shares issuable upon conversion is 24,976,560 shares, subject to adjustment.
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If we undergo a fundamental change, holders may require us to repurchase in cash all or a portion of their Convertible Senior Notes at a price equal to 100% of the principal amount, plus accrued and unpaid interest.
On or after September 20, 2029, we may redeem all or any portion of the Convertible Senior Notes if the last reported sale price of our common stock exceeds 130% of the then-current conversion price for at least 20 of the 30 consecutive trading days ending on the day before our redemption notice, at a redemption price of 100% of principal plus accrued interest. We may also redeem all remaining Convertible Senior Notes if the outstanding principal falls below $80.0 million.
The Convertible Senior Notes are accounted for as a liability at amortized cost, net of unamortized debt issuance costs. No portion of the proceeds is attributable to the conversion feature, as the embedded conversion option is indexed to and classified in our equity and does not require separate accounting as an embedded derivative.
The table below summarizes the carrying value of the Convertible Senior Notes:
(in thousands)September 30, 2026
Convertible senior notes$800,000 
Less: Unamortized debt discount and issuance costs(20,984)
Convertible senior notes, net$779,016 
At September 30, 2026, the fair value of our Convertible Senior Notes was approximately $826.7 million. In the fair value hierarchy, our Convertible Senior Notes are classified as Level 2 as they are traded in less active markets.
Debt issuance costs are amortized to interest expense using the effective interest rate method. The effective interest rate on the Convertible Senior Notes was 0.8%. Interest expense related to the Convertible Senior Notes was $0.3 million for the three and nine months ended September 30, 2026, which includes nominal interest expense and the amortization of the debt issuance costs.
Capped Calls
In connection with the pricing of the Convertible Senior Notes, we entered into privately negotiated capped call transactions (the "Capped Calls") with certain financial institutions for aggregate consideration of $64.1 million. The Capped Calls are generally expected to reduce the potential dilution to our common stock upon any conversion of the Convertible Senior Notes and offset any cash payments we are required to make in excess of the principal amount upon conversion. The cap price of the Capped Calls will initially be $64.06 per share of common stock, which represents a premium of 100% over the last reported sale price of the common stock on September 10, 2026, and is subject to certain customary adjustments under the terms of the Capped Calls. Capped Calls are equity-classified, are not remeasured each reporting period, and are recorded as a reduction to additional paid-in capital in the consolidated balance sheet.
Credit Agreements
Our 2021 Credit Agreement consisted of a $375.0 million senior secured term loan facility ("Term Loan") and a $50.0 million senior secured revolving credit facility ("2021 Revolving Credit Facility").
On September 15, 2026, we used a portion of the net proceeds from the issuance of our Convertible Senior Notes to repay the outstanding balance of our Term Loan of $358.1 million, plus accrued and unpaid interest, and recognized additional interest expense related to the remaining $2.6 million unamortized debt issuance costs and fees.
Our 2021 Revolving Credit Facility expired on July 7, 2026. On October 13, 2026, we entered into a $400.0 million senior secured revolving credit facility ("2026 Revolving Credit Facility"), including a $40.0 million sublimit for the issuance of letters of credit, that matures on October 13, 2031. The 2026 Revolving Credit Facility may be used for working capital and general corporate purposes. At November 3, 2026, we have no borrowings and $0.2 million of outstanding letters of credit.
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Borrowings bear interest at a base rate, a term Secured Overnight Financing Rate (“SOFR”) or an alternative currency rate, plus a margin based upon our Total Leverage Ratio. Additionally, we pay a commitment fee of 0.175% to 0.35% of unused availability based on our Total Leverage Ratio.
8. Commitments and Contingencies
Commitments
In December 2023, we entered into a contract with Microsoft for cloud services from February 2024 through January 2027. Under the terms of the contract we committed to spend €28.5 million. As of September 30, 2026, we have spent €23.5 million of our commitment.
In July 2024, we entered into a contract with AWS for cloud services, in which we committed to spend $59.7 million, $77.6 million and $93.0 million in contract years one, two and three, respectively, for a total commitment of $230.3 million from August 2024 to July 2027. As of September 30, 2026, we have met our first and second year commitments and we have spent $19.7 million of our third year commitment.
Letters of Credit
At September 30, 2026, we had $5.7 million of standby letters of credit related to our grant agreements with the State of Maryland and our operating leases. Collateral for $5.5 million of our letters of credit was classified as restricted cash in cash and cash equivalents.
9. Stock-Based Compensation
Stock-based compensation expense included in the consolidated statements of operations was as follows:
Three Months Ended September 30,Nine Months Ended September 30,
(in thousands)2026202520262025
Cost of revenue$3,378$3,495$10,218$10,270
Sales and marketing17,93517,05153,27651,499
Research and development18,83714,17445,85242,441
General and administrative(1)
11,06710,16232,07443,101
Total stock-based compensation expense$51,217$44,882$141,420$147,311
_______________
(1)    Stock-based compensation in the nine months ended September 30, 2025 includes $14.6 million of expense related to the accelerated vesting of equity awards for our former Chairman and Chief Executive Officer.
A summary of the unrecognized stock-based compensation expense related to unvested awards at September 30, 2026 is presented below:
Unrecognized Stock-Based Compensation Expense
(in thousands)		Estimated Weighted Average Period
(in years)
Restricted stock units ("RSUs")$328,966 2.7
Performance stock units ("PSUs")12,878 3.2
2018 Employee Stock Purchase Plan ("2018 ESPP")13,927 0.8
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Restricted Stock, RSUs and PSUs
A summary of our restricted stock, RSU and PSU activity is presented below:
Restricted StockRSUsPSUs
(in thousands, except for per share data)
Number of SharesWeighted
Average
Grant Date Fair Value		Number of SharesWeighted
Average
Grant Date Fair Value		Number of SharesWeighted
Average
Grant Date Fair Value
Unvested balance at December 31, 2025185$34.83 8,994$38.72 279$40.37 
Granted— — 10,292 20.07 826 19.38 
Performance adjustment(1)
— — — — (6)38.37 
Vested(185)34.83 (3,396)39.35 (110)40.61 
Forfeited— — (1,454)32.94 (4)43.24 
Unvested balance at September 30, 2026——14,43625.86 98522.76 
_______________
(1)    Represents adjustments due to actual performance measured against predefined financial performance targets.
In January 2026, under the evergreen provision in our 2018 Equity Incentive Plan, we reserved an additional 5.9 million shares of our common stock. At September 30, 2026, there were 20.8 million shares available for grant under the plan.
Stock Options
A summary of our stock option activity is presented below:
(in thousands, except for exercise prices and years)
Number
of Shares		Weighted
Average
Exercise Price		Weighted-Average Remaining Contractual Term (in years)
Aggregate Intrinsic Value
Outstanding at December 31, 20251,403$12.70 2.0$15,210
Exercised(826)13.06 15,053
Forfeited/canceled(1)9.66 
Outstanding and exercisable at September 30, 202657612.18 1.313,935
2018 Employee Stock Purchase Plan
In the nine months ended September 30, 2026, employees purchased 0.8 million shares of our common stock at a weighted average price of $16.46 per share, resulting in $13.1 million of cash proceeds. At September 30, 2026, there were $6.2 million of employee contributions to the 2018 ESPP included in accrued compensation.
The fair value of the 2018 ESPP purchase rights was estimated on the offering or modification dates using the following assumptions:
Nine Months Ended September 30,
20262025
Expected term (in years)
0.5 — 2.0
0.5 — 2.0
Expected volatility
34.5% — 65.8%
32.8% — 35.7%
Risk-free interest rate
3.4% — 4.3%
3.6% — 3.9%
Expected dividend yield——
Under the evergreen provision in our 2018 ESPP, in January 2026 we reserved an additional 1.8 million shares of our common stock. At September 30, 2026, there were 12.2 million shares reserved for issuance under the 2018 ESPP.
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10. Income Taxes
In the three months ended September 30, 2026, the benefit for income taxes included a $3.3 million discrete tax benefit associated with amending our 2024 federal return regarding a Base Erosion and Anti-Abuse Tax (BEAT) refund partially offset by $1.4 million of income taxes in foreign jurisdictions in which we conduct business and $1.4 million of discrete items primarily related to withholding taxes on sales to customers.
In the nine months ended September 30, 2026, the provision for income taxes included $4.2 million of income taxes in foreign jurisdictions in which we conduct business and $5.4 million of discrete items primarily related to withholding taxes on sales to customers partially offset by the $3.3 million discrete tax benefit associated with amending our 2024 federal return.
In connection with the pricing of the Convertible Senior Notes, the exercise of the overallotment option and the capped call transactions, we made a tax election to integrate the Convertible Senior Notes and the Capped Calls. This tax election makes the Capped Calls deductible for tax purposes over the term of the Convertible Senior Notes as original issue discount, resulting in a $19.4 million deferred tax asset, or a $1.1 million net deferred tax asset after valuation allowance, recognized through equity.
In the three months ended September 30, 2025, the provision for income taxes included $1.6 million of net tax benefits in foreign jurisdictions in which we conduct business and $2.2 million of discrete items primarily related to withholding taxes on sales to customers.
In the nine months ended September 30, 2025, the provision for income taxes included $3.5 million of income taxes in foreign jurisdictions in which we conduct business and $4.9 million of discrete items primarily related to withholding taxes on sales to customers.
Income tax in the three and nine months ended September 30, 2025 related to foreign jurisdictions was reduced by a $3.2 million interim intraperiod allocation, which was reversed in the three months ended December 31, 2025.
11. Net Earnings (Loss) Per Share
The following table sets forth the computation of basic and diluted net earnings (loss) per share:
Three Months Ended September 30,Nine Months Ended September 30,
(in thousands, except per share data)2026202520262025
Net income (loss)$11,299 $2,260 $16,518 $(35,381)
Weighted-average shares used to compute net earnings (loss) per share:
Basic108,974 120,483 111,846 120,516 
Dilutive impact of outstanding equity awards6,996 1,470 3,939 — 
Diluted115,970 121,953 115,785 120,516 
Net earnings (loss) per share
Basic$0.10 $0.02 $0.15 $(0.29)
Diluted$0.10 $0.02 $0.14 $(0.29)
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We use the if-converted method to calculate the dilutive effect of our Convertible Senior Notes in periods when the average price of our common stock exceeds the conversion price. We also entered into Capped Calls to reduce the potential dilution to our common stock upon conversion. The Capped Calls are excluded from diluted earnings per share.
The following potentially dilutive securities have been excluded from the diluted per share calculations because they would have been antidilutive:
Three Months Ended September 30,Nine Months Ended September 30,
(in thousands)2026202520262025
RSUs3,493 7,864 4,567 9,215 
Stock options— — — 1,530 
Shares to be issued under the 2018 ESPP— 60 4 60 
PSUs160 — 160 96 
Restricted stock— 215 — 215 
Total3,653 8,139 4,731 11,116 
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Item 2.        Management's Discussion and Analysis of Financial Condition and Results of Operations
The following discussion and analysis of our financial condition and results of operations should be read in conjunction with (1) our consolidated financial statements and related notes included elsewhere in this Quarterly Report on Form 10-Q, or this Form 10-Q, and (2) our consolidated financial statements, related notes and management's discussion and analysis of financial condition and results of operations in our Annual Report on Form 10-K for the year ended December 31, 2025, or the 10-K, filed with the Securities and Exchange Commission, or the SEC, on February 27, 2026. This Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, or the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act. These statements are often identified by the use of words such as “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “project,” “will,” “would” or the negative or plural of these words or similar expressions or variations. Such forward-looking statements are subject to a number of risks, uncertainties, assumptions and other factors that could cause actual results and the timing of certain events to differ materially from future results expressed or implied by the forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those identified herein, and those discussed in the section titled “Risk Factors,” set forth in Part I, Item 1A of the 10-K, in Part II, Item 1A of this Form 10-Q and in our other filings with the SEC. You should not rely upon forward-looking statements as predictions of future events. Furthermore, such forward-looking statements speak only as of the date of this report. Except as required by law, we undertake no obligation to update any forward-looking statements to reflect events or circumstances after the date of such statements.
Overview
We are the leading provider of exposure management solutions. Exposure management is an increasingly critical category that extends foundational vulnerability management capabilities to advance risk assessment and prioritization across the entire attack surface – from IT infrastructure and cloud environments to critical infrastructure and AI. We unify security visibility, insight and action across this attack surface, equipping modern organizations to quickly identify and close the cybersecurity gaps that erode business value, reputation and trust.
Tenable One, our AI-powered exposure management platform, gives enterprises a single, unified view of risk across all types of assets and attack pathways. The platform combines broad, industry-leading vulnerability coverage, spanning IT assets, cloud resources, containers, web apps, identity systems, third-party connectors and AI-related assets and workloads.
Our solutions are primarily sold on a subscription basis with a one-year term, but are increasingly being sold with longer contractual durations. Our subscription terms are generally not longer than three years. These subscriptions are typically invoiced in advance at the beginning of the term, however multi-year subscriptions are increasingly being invoiced annually in installments.
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.
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Financial Highlights
Below are our key financial results:
Three Months Ended September 30,Nine Months Ended September 30,
(in thousands, except per share data)2026202520262025
Revenue$276,387 $252,440 $806,953 $738,872 
Income (loss) from operations16,709 7,136 37,840 (18,023)
Net income (loss)11,299 2,260 16,518 (35,381)
Net earnings (loss) per share, basic0.10 0.02 0.15 (0.29)
Net earnings (loss) per share, diluted0.10 0.02 0.14 (0.29)
Net cash provided by operating activities72,516 53,850 205,203 183,720 
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 95% of revenue in the three and nine months ended September 30, 2026 and 95% and 96% of revenue in the three and nine months ended September 30, 2025, respectively.
Operating and Financial Metrics
To supplement our consolidated financial statements, which are prepared and presented in accordance with GAAP, we use and monitor the following operating and financial metrics, which include non-GAAP financial measures, to understand and evaluate our core operating and financial performance.
Customer Metrics
We believe that our customer base provides a significant opportunity to expand sales of our enterprise platform offerings. We define an enterprise platform customer as a customer that has licensed Tenable One, Tenable Vulnerability Management, Tenable Cloud Security, Tenable Identity Exposure, Tenable OT Security or Tenable Security Center for an annual amount of $5,000 or greater. New enterprise platform customers represent new customer logos during the periods presented and do not include customer conversions from Tenable Nessus Expert to enterprise platforms. The following tables summarize key components of our customer base:
Three Months Ended September 30,
20262025Change (%)
Number of new enterprise platform customers added in period413437(5)%
September 30,
20262025Change (%)
Number of customers with $100,000 and greater in annual contract value at end of period
2,2752,1566%
Dollar-Based Net Expansion Rate
Our dollar-based net expansion rate reflects both our customer retention and ability to drive additional sales to our existing customers. Our dollar-based net expansion rate has historically fluctuated and is expected to continue to fluctuate on a quarterly basis as a result of a number of factors, including existing customers' satisfaction with our solutions, existing customer retention, the pricing of our solutions, the availability of competing solutions and the pricing thereof, and the timing of customer renewals. In addition, our sales pipeline opportunities vary from quarter to quarter between new customers and expansion from existing customers, and we do not prioritize one over the other to maximize the dollar-based net expansion rate.
Our dollar-based net expansion rate is evaluated on a last twelve months, or LTM, basis, and is calculated as follows:
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•Denominator: To calculate our dollar-based net expansion rate as of the end of a reporting period, we first determine the annual recurring revenue, or ARR, from all active subscriptions (both revenue recognized ratably over the subscription term and upon delivery) and maintenance from perpetual licenses as of the last day of the same reporting period in the prior year. This represents recurring payments that we expect to receive in the next 12-month period from the cohort of customers that existed on the last day of the same reporting period in the prior year.
•Numerator: We measure the ARR for that same cohort of customers representing all subscriptions and maintenance from perpetual licenses based on customer orders as of the end of the reporting period.
We calculate dollar-based net expansion rate by dividing the numerator by the denominator.
The following table presents our dollar-based net expansion rate:
September 30,
20262025
Dollar-based net expansion rate107 %106 %
Components of Our Results of Operations
Revenue
We generate revenue from subscription arrangements for our software and cloud-based solutions, perpetual licenses, maintenance associated with perpetual licenses and professional services.
We typically experience seasonality in customer agreement volumes, entering into a significantly higher percentage of new and renewal agreements in the third and fourth quarters of the year. The increase in the third quarter is primarily driven by U.S. government and related agencies, and the increase in the fourth quarter reflects typical large enterprise buying patterns in the software industry. Although the ratable nature of our subscription revenue lessens the financial impact, these historical trends may be impacted by macroeconomic conditions and U.S. policy decisions, which may lengthen purchasing and approval phases of our sales cycle.
Cost of Revenue, Gross Profit and Gross Margin
Cost of revenue includes personnel costs related to our technical support group that provides assistance to customers, including salaries, benefits, bonuses, payroll taxes, stock-based compensation and any ordinary course severance. Cost of revenue also includes cloud infrastructure costs, the costs related to professional services and training, depreciation, amortization of acquired and developed technology, hardware costs and allocated overhead costs, which consist of information technology, facilities and insurance.
We expect our gross profit, or revenue less cost of revenue, to increase in absolute dollars but our gross margin, or gross profit as a percentage of revenue, may fluctuate from period to period, particularly as it relates to cloud infrastructure costs, as we expect revenue from our cloud-based subscriptions to increase as a percentage of revenue.
Operating Expenses
Our operating expenses consist of sales and marketing, research and development, general and administrative and restructuring expenses. Personnel costs are the most significant component of operating expenses and consist of salaries, benefits, bonuses, payroll taxes, stock-based compensation and ordinary course severance. Operating expenses also include depreciation and amortization, allocated overhead costs, including IT and facilities costs, as well as acquisition-related expenses.
Sales and marketing expense consists of personnel costs, sales commissions, marketing programs, travel and entertainment, expenses for conferences, meetings and events, allocated overhead costs and acquisition-related expenses.
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Research and development expense consists of personnel costs, software used to develop our products, travel and entertainment, consulting and professional fees for third-party development resources, allocated overhead and acquisition-related expenses. Our research and development expense supports our efforts to continue to add capabilities to our existing products and enable the continued detection of new network vulnerabilities.
General and administrative expense consists of personnel costs for our executive, finance, legal, human resources and administrative departments. Additional expenses include travel and entertainment, professional fees, insurance, allocated overhead and acquisition-related expenses.
Restructuring expenses consist of non-ordinary course severance, employee related benefits and other charges to reorganize business operations.
We expect our operating expenses to increase in absolute dollars and decrease as a percentage of revenue, although our actual expense may fluctuate from period to period due to the timing and extent of expenses.
Interest Income, Interest Expense and Other Income (Expense), Net
Interest income consists of income earned on cash and cash equivalents and short-term investments. Interest expense consists primarily of interest expense and the amortization of debt issuance costs related to debt, unused commitment fees and letter of credit fees. Other income (expense), net consists primarily of foreign currency remeasurement and transaction gains and losses and any realized and unrealized gains and losses, including impairment losses and gains related to our investments in privately held securities.
(Benefit) Provision for Income Taxes
(Benefit) provision for income taxes consists of income taxes in all jurisdictions in which we conduct business and the related withholding taxes on sales to customers as well as a discrete tax benefit associated with amending our 2024 U.S. federal income tax return to claim a refund of Base Erosion and Anti-Abuse Tax ("BEAT") previously paid. We have recorded deferred tax assets for which a valuation allowance has been provided, including net operating loss carryforwards and tax credits. We expect to maintain this valuation allowance for the foreseeable future as it is more likely than not that some or all of those deferred tax assets may not be realized based on our history of losses. The valuation allowance is subject to change based on our ability to generate future taxable income. We will continue to evaluate the realization of deferred tax assets to determine changes to valuation allowance in future periods.
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Results of Operations
The following tables set forth our consolidated results of operations for the periods presented:
Three Months Ended September 30,Nine Months Ended September 30,
(in thousands)2026202520262025
Revenue$276,387 $252,440 $806,953 $738,872 
Cost of revenue(1)
61,332 56,753 178,334 163,647 
Gross profit215,055 195,687 628,619 575,225 
Operating expenses:
Sales and marketing(1)
102,913 99,949 315,771 310,222 
Research and development(1)
62,145 56,265 174,905 168,724 
General and administrative(1)
33,141 32,337 96,874 114,302 
Restructuring147 — 3,229 — 
Total operating expenses198,346 188,551 590,779 593,248 
Income (loss) from operations16,709 7,136 37,840 (18,023)
Interest income2,573 3,590 7,925 12,597 
Interest expense(8,270)(7,213)(21,118)(21,363)
Other expense, net(248)(703)(1,860)(204)
Income (loss) before income taxes10,764 2,810 22,787 (26,993)
(Benefit) provision for income taxes(535)550 6,269 8,388 
Net income (loss)$11,299 $2,260 $16,518 $(35,381)
_______________
(1)    Includes stock-based compensation expense as follows:
Three Months Ended September 30,Nine Months Ended September 30,
(in thousands)2026202520262025
Cost of revenue$3,378$3,495$10,218$10,270
Sales and marketing17,93517,05153,27651,499
Research and development18,83714,17445,85242,441
General and administrative(2)
11,06710,16232,07443,101
Total stock-based compensation expense$51,217$44,882$141,420$147,311
_______________
(2)    Stock-based compensation in the nine months ended September 30, 2025 includes $14.6 million of expense related to the accelerated vesting of equity awards for our former Chairman and Chief Executive Officer.
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Comparison of the Three Months Ended September 30, 2026 and 2025
Revenue
The following table presents the increase in revenue:
Three Months Ended September 30,Change
(dollars in thousands)20262025($)(%)
Subscription revenue$254,600 $232,211 $22,389 10 %
Perpetual license and maintenance revenue9,713 11,088 (1,375)(12)%
Professional services and other revenue12,074 9,141 2,933 32 %
Revenue$276,387 $252,440 $23,947 9 %
The increase in revenue included an increase of $25.6 million from existing customers as of October 1, 2025, partially offset by a decrease of $1.7 million in revenue from new customers. U.S. revenue increased $9.1 million, or 7%. International revenue increased $14.8 million, or 12%.
Cost of Revenue, Gross Profit and Gross Margin
Three Months Ended September 30,Change
(dollars in thousands)20262025($)(%)
Cost of revenue$61,332 $56,753 $4,579 8 %
Gross profit215,055 195,687 19,368 10 %
Gross margin78 %78 %
The increase in cost of revenue was primarily due to:
•a $3.3 million increase in third-party cloud infrastructure costs; and
•a $1.1 million increase in professional services.
Operating Expenses
Sales and Marketing
Three Months Ended September 30,Change
(dollars in thousands)20262025($)(%)
Sales and marketing$102,913 $99,949 $2,964 3 %
The increase in sales and marketing expense was primarily due to:
•a $1.1 million increase in selling expenses, including travel and meeting costs and software subscription costs;
•a $0.9 million increase in sales commissions; and
•a $0.7 million increase in personnel costs, primarily related to increased stock-based compensation.
Research and Development
Three Months Ended September 30,Change
(dollars in thousands)20262025($)(%)
Research and development$62,145 $56,265 $5,880 10 %
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The increase in research and development expense was primarily due to:
•a $2.9 million increase in personnel costs;
•a $1.8 million increase in third-party cloud infrastructure costs; and
•a $0.5 million increase in allocated overhead.
General and Administrative
Three Months Ended September 30,Change
(dollars in thousands)20262025($)(%)
General and administrative$33,141 $32,337 $804 2 %
The increase in general and administrative expense was primarily due to:
•a $1.6 million increase in personnel costs; partially offset by
•a $0.8 million decrease in professional services.
Interest Income, Interest Expense and Other Expense, Net
Three Months Ended September 30,Change
(dollars in thousands)20262025($)(%)
Interest income$2,573 $3,590 $(1,017)(28)%
Interest expense(8,270)(7,213)1,057 15 %
Other expense, net(248)(703)(455)(65)%
The $1.0 million decrease in interest income was due to a decrease in short-term investments and reduced rates of return. Interest expense increased $1.1 million primarily due to $2.6 million of remaining unamortized debt issuance costs and fees related to our Term Loan, partially offset by lower interest expense on our Term Loan. The $0.5 million decrease in other expense, net was primarily due to decreased foreign exchange losses.
(Benefit) Provision for Income Taxes
Three Months Ended September 30,Change
(dollars in thousands)20262025($)(%)
(Benefit) provision for income taxes$(535)$550 $(1,085)(197)%
In the three months ended September 30, 2026, the benefit for income taxes included:
•a $3.3 million discrete tax benefit associated with amending our 2024 federal return regarding a BEAT refund; partially offset by
•$1.4 million of discrete items primarily related to withholding taxes on sales to customers; and
•$1.4 million of income taxes in foreign jurisdictions in which we conduct business.
In the three months ended September 30, 2025, the provision for income taxes included:
•$2.2 million of discrete items primarily related to withholding taxes on sales to customers; partially offset by
•$1.6 million of net tax benefits in foreign jurisdictions in which we conduct business. Income tax expense related to foreign jurisdictions was reduced by a $3.2 million interim intraperiod allocation, which was reversed in the three months ended December 31, 2025.
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Comparison of the Nine Months Ended September 30, 2026 and 2025
Revenue
The following table presents the increase in revenue:
Nine Months Ended September 30,Change
(dollars in thousands)20262025($)(%)
Subscription revenue$746,014 $680,685 $65,329 10 %
Perpetual license and maintenance revenue29,737 34,051 (4,314)(13)%
Professional services and other revenue31,202 24,136 7,066 29 %
Revenue$806,953 $738,872 $68,081 9 %
The increase in revenue included an increase of $73.5 million from existing customers as of October 1, 2025, partially offset by a decrease of $5.4 million in revenue from new customers. U.S. revenue increased $26.0 million, or 7%. International revenue increased $42.1 million, or 12%.
Cost of Revenue, Gross Profit and Gross Margin
Nine Months Ended September 30,Change
(dollars in thousands)20262025($)(%)
Cost of revenue$178,334 $163,647 $14,687 9 %
Gross profit628,619 575,225 53,394 9 %
Gross margin78 %78 %
The increase in cost of revenue was primarily due to:
•a $7.4 million increase in third-party cloud infrastructure costs;
•a $3.4 million increase in personnel costs;
•a $2.9 million increase in professional services;
•a $1.2 million increase in amortization of acquired intangible assets; and
•a $1.0 million increase in the cost of goods; partially offset by
•a $1.9 million decrease in depreciation and amortization expense.
Operating Expenses
Sales and Marketing
Nine Months Ended September 30,Change
(dollars in thousands)20262025($)(%)
Sales and marketing$315,771 $310,222 $5,549 2 %
The increase in sales and marketing expense was primarily due to:
•a $3.3 million increase in sales commissions;
•a $3.1 million increase in personnel costs, including a $1.8 million increase in stock-based compensation and an unfavorable foreign currency impact of $1.6 million; and
•a $1.6 million increase in selling expenses; partially offset by
•a $1.5 million decrease in expenses for demand generation programs, including advertising, sponsorships, and brand awareness efforts; and
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•a $1.3 million decrease in acquisition-related expenses.
Research and Development
Nine Months Ended September 30,Change
(dollars in thousands)20262025($)(%)
Research and development$174,905 $168,724 $6,181 4 %
The increase in research and development expense was primarily due to:
•a $4.6 million increase in personnel costs;
•a $2.5 million increase in third-party cloud infrastructure costs;
•a $2.1 million increase in allocated overhead;
•a $0.6 million increase in software subscription costs; and
•a $0.5 million increase in depreciation and amortization expense; partially offset by
•a $2.1 million increase in refundable R&D tax credits; and
•a $1.8 million decrease in acquisition-related expenses.
General and Administrative
Nine Months Ended September 30,Change
(dollars in thousands)20262025($)(%)
General and administrative$96,874 $114,302 $(17,428)(15)%
The decrease in general and administrative expense was primarily due to:
•a $11.2 million decrease in personnel costs primarily related to the accelerated vesting of equity awards for our former Chairman and Chief Executive Officer in the nine months ended September 30, 2025;
•a $3.6 million decrease in acquisition-related expenses; and
•a $2.6 million decrease in professional services.
Restructuring
Nine Months Ended September 30,Change
(dollars in thousands)20262025($)(%)
Restructuring$3,229 $— $3,229 100 %
Restructuring in the nine months ended September 30, 2026 included non-ordinary course severance and employee related benefits.
Interest Income, Interest Expense and Other Expense, Net
Nine Months Ended September 30,Change
(dollars in thousands)20262025($)(%)
Interest income$7,925 $12,597 $(4,672)(37)%
Interest expense(21,118)(21,363)(245)(1)%
Other expense, net(1,860)(204)1,656 812 %
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The $4.7 million decrease in interest income was due to a decrease in short-term investments and reduced rates of return. Interest expense decreased $0.2 million primarily due to a decrease in interest expense for our Term Loan, partially offset by $2.6 million of remaining unamortized debt issuance costs and fees related to our Term Loan. Other expense, net increased $1.7 million primarily due to an increase in foreign exchange losses.
Nine Months Ended September 30,Change
(dollars in thousands)20262025($)(%)
Provision for income taxes$6,269 $8,388 $(2,119)(25)%
In the nine months ended September 30, 2026, the provision for income taxes included:
•$5.4 million of discrete items primarily related to withholding taxes on sales to customers; and
•$4.2 million of income taxes in foreign jurisdictions in which we conduct business; partially offset by
•a $3.3 million discrete tax benefit associated with amending our 2024 federal return.
In the nine months ended September 30, 2025, the provision for income taxes included:
•$4.9 million of discrete items primarily related to withholding taxes on sales to customers; and
•$3.5 million of income taxes in foreign jurisdictions in which we conduct business. Income tax expense related to foreign jurisdictions was reduced by a $3.2 million interim intraperiod allocation, which was reversed in the three months ended December 31, 2025.
Liquidity and Capital Resources
At September 30, 2026, we had $317.4 million of cash and cash equivalents, which consisted of bank deposits and money market funds, and $177.9 million of short-term investments, which consisted of commercial paper, asset backed securities, U.S. Treasury and agency obligations and corporate bonds.
We have historically generated significant operating losses, as reflected by our accumulated deficit of $880.9 million at September 30, 2026.
We typically invoice our customers in advance, however multi-year subscriptions are increasingly being invoiced annually in installments. 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 September 30, 2026, we had deferred revenue of $863.4 million, of which $685.4 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. 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 believe that our existing cash and cash equivalents, short-term investments and borrowing capacity under our 2026 Revolving Credit Facility 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
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operations or otherwise capitalize on our business opportunities because we lack sufficient capital, our business, operating results and financial condition would be adversely affected.
Share Repurchases
Our Board of Directors has authorized the repurchase of up to $700 million of our common stock. At September 30, 2026, we have $54.3 million remaining under our share repurchase authorization.
In addition, in connection with the issuance of our Convertible Senior Notes, our Board of Directors authorized the repurchase of $170.5 million, and we purchased 5.3 million shares from the net proceeds.
During the three and nine months ended September 30, 2026, we repurchased 6.8 million shares for $223.8 million and 18.2 million shares for $453.8 million, respectively. Since we began repurchasing our common stock in 2023 and through September 30, 2026, we have purchased a total of 28.8 million shares for $816.2 million.
Convertible Senior Notes
On September 15, 2026, we completed a private offering of $800.0 million aggregate principal amount of Convertible Senior Notes. After repaying the outstanding balance of our Term Loan of $358.1 million, repurchasing $170.5 million of common stock, paying $64.1 million for our Capped Calls and paying debt issuance costs of $21.2 million, net proceeds from our Convertible Senior Notes were $186.1 million.
The Convertible Senior Notes are senior, unsecured obligations that bear interest at 0.25% per annum, payable semi-annually in arrears on March 15 and September 15 of each year, beginning March 15, 2027. The Convertible Senior Notes mature September 15, 2031, unless earlier converted, redeemed, or repurchased. There are no required principal repayments on the Convertible Senior Notes prior to the maturity date. Refer to Note 7 to our consolidated financial statements for additional information about our Convertible Senior Notes.
2026 Revolving Credit Facility
On October 13, 2026, we entered into a $400.0 million senior secured revolving credit facility, including a $40.0 million sublimit for the issuance of letters of credit, that matures on October 13, 2031. The 2026 Revolving Credit Facility may be used for working capital and general corporate purposes.
Borrowings bear interest at a base rate, a term Secured Overnight Financing Rate (“SOFR”) rate or an alternative currency rate, plus a margin based upon our Total Leverage Ratio. Additionally, we pay a commitment fee of 0.175% to 0.35% of unused availability based on our Total Leverage Ratio.
Cash Flows
The following table summarizes our cash flows for the periods presented:
Nine Months Ended September 30,
(in thousands)20262025
Net cash provided by operating activities$205,203 $183,720 
Net cash provided by (used in) investing activities17,239 (170,290)
Net cash used in financing activities(91,126)(171,208)
Effect of exchange rate changes on cash and cash equivalents and restricted cash(1,677)983 
Net increase (decrease) in cash and cash equivalents and restricted cash$129,639 $(156,795)
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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 provided by investing activities increased by $187.5 million, primarily due to a $196.2 million decrease in cash paid for acquisitions.
Financing Activities
Net cash used in financing activities decreased by $80.1 million, primarily due to $186.1 million net proceeds from our Convertible Senior Notes, partially offset by a $98.6 million increase in repurchases of our common stock under our repurchase program and a $7.1 million increase in cash paid for taxes related to net share settlement of equity awards.
Contractual Obligations
We have certain contractual obligations for future payments. See Notes 6, 7 and 8 to our consolidated financial statements for our required operating lease payments, debt and required payments to Microsoft and AWS for cloud services.
At September 30, 2026, 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 and foreign currency exchange risks.
Interest Rate Risk
At September 30, 2026, we had $317.4 million of cash and cash equivalents, which consisted of bank deposits and money market funds, and $177.9 million of short-term investments, which consisted of commercial paper, asset backed securities, U.S. Treasury and agency obligations and corporate bonds. 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.
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Foreign Currency Exchange Risk
Our foreign currency exchange rate risk is described in Part II, Item 7A, "Quantitative and Qualitative Disclosures About Market Risk" in our Annual Report on Form 10-K for the year ended December 31, 2025. At September 30, 2026, there have been no material changes to our foreign currency exchange rate risk as described in our 10-K.
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 Officer, Stephen Vintz, and our Chief Financial Officer, Matthew Brown, has 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 Officer and Chief Financial Officer have concluded that at September 30, 2026, 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.
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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 I, Item 1A. "Risk Factors" of our Form 10-K for the year ended December 31, 2025 filed with the United States Securities and Exchange Commission ("SEC") on February 27, 2026. 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, 2025. 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 face intense competition. If we do not continue to innovate and offer solutions that address the dynamic cybersecurity landscape, we may not remain competitive.
The market for cybersecurity solutions is fragmented, intensely competitive and constantly evolving. We compete with a range of established and emerging cybersecurity software and services vendors, as well as homegrown solutions. With the introduction of new technologies and market entrants, we expect the competitive environment to remain intense going forward. Our competitors include: vulnerability management and assessment vendors, including Qualys and Rapid7; diversified security software and services vendors; endpoint security vendors with nascent vulnerability assessment capabilities, including CrowdStrike; public cloud vendors and companies, such as Palo Alto Networks and Wiz (now a subsidiary of Google), that offer solutions for cloud security (private, public and hybrid cloud); and providers of point solutions that compete with some of the features present in our solutions. We also compete against internally-developed efforts that often use open source solutions.
Some of our actual and potential competitors have significant advantages over us, such as longer operating histories, significantly greater financial, technical, marketing or other resources, stronger brand and business user recognition, larger intellectual property portfolios, government certifications and broader global distribution and presence. In addition, our industry is evolving rapidly and is becoming increasingly competitive. Companies that are larger and more established than us are focusing on cybersecurity and could directly compete with us. For example, Microsoft has a vulnerability management offering and has continued to acquire security solutions for its cybersecurity platform. Smaller companies could also launch new products and services that we do not offer and that could gain market acceptance quickly. Advances in artificial intelligence may also lower the technical and resource barriers historically associated with developing cybersecurity solutions, which could make it easier for new and existing competitors to develop and bring competing offerings to market more quickly, and could also enable some customers to develop in-house tools to perform functions currently addressed by our solutions.
In addition, some of our larger competitors have substantially broader product offerings and can bundle competing products and services with other software offerings which customers may choose even if individual products have more limited functionality than our solutions. These competitors may also offer their products at a lower price, which could increase pricing pressure on our offerings and cause the average sales price for our offerings to decline. These larger competitors are also often better positioned to withstand any significant reduction in capital spending, and will therefore
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not be as susceptible to economic downturns. One component of our enterprise platform involves assessing Cyber Exposure in a public cloud environment. We are dependent upon the providers to allow our solutions to access their cloud offerings. If one or more cloud providers elected to offer exclusively their own cloud security product or otherwise eliminate the ability of our solutions to access their cloud on behalf of our customers, our business and financial results could be harmed.
Additionally, the cybersecurity market is characterized by very rapid technological advances, changes in customer requirements, frequent new product introductions and enhancements and evolving industry standards. Our success depends on continued innovation to provide features that make our solutions responsive to the cybersecurity landscape, including the shift to employees working from home or in hybrid environments and the increasing adoption by organizations of cloud or hybrid cloud architectures.
Developing new solutions and product enhancements is uncertain, expensive and time-consuming, and there is no assurance that such activities will result in significant cost savings, revenue or other expected benefits. If we spend significant time and effort on research and development and are unable to generate an adequate return on our investment, our business and results of operations may be materially and adversely affected. Further, we may not be able to successfully anticipate or adapt to changing technology or customer requirements or the dynamic threat landscape on a timely basis, or at all, which would impair our ability to execute on our business strategy. Our competitors may be able to respond more quickly and effectively than we can to new or changing opportunities, technologies, standards or customer requirements or new or evolving attacks by, or indicators of compromise that identify cyber bad actors.
Furthermore, our current and potential competitors may establish cooperative relationships among themselves or with third parties that may further enhance their resources and products and services offerings in the markets we address. In addition, current or potential competitors may be acquired by third parties with greater available resources, which may enable them to adapt more quickly to new technologies and customer needs, devote greater resources to the promotion or sale of their products and services, initiate or withstand substantial price competition, take advantage of other opportunities more readily or develop and expand their product and service offerings more quickly than we do. For all of these reasons, we may not be able to compete successfully against our current or future competitors.
Our brand, reputation and ability to attract, retain and serve our customers are dependent in part upon the reliability and accuracy of our data, solutions, infrastructure and those of third parties upon which we rely. If our information technology systems or data, or those of third parties upon which we rely, are or were compromised or disrupted, or if our solutions fail to detect vulnerabilities or incorrectly detect vulnerabilities, or if they contain undetected errors or defects, we could experience adverse consequences.
In the ordinary course of our business, we collect, store, use, transmit, disclose or otherwise process proprietary, confidential, and sensitive information, including personal data, intellectual property, and trade secrets.
We sell cybersecurity products and, as a result, may be at increased risk of being a target of cyberattacks designed to penetrate our platform or internal systems, to compromise our data, alter or modify our source code, or to otherwise impede the performance of our products. Threats to information systems and data come from a variety of sources. In addition to computer “hackers,” threat actors, personnel (such as through theft or misuse, or other insider threat listed below), "hacktivists," organized criminal threat actors, sophisticated nation-states and nation-state-supported actors now engage and are expected to continue to engage in cyber-attacks. Nation-state actors and nation-state-supported actors may engage in such attacks for geopolitical reasons and in conjunction with military conflicts and defense activities, around the world. During times of war and other major conflicts, we, third parties upon which we may rely, and our customers may be vulnerable to a heightened risk of these threats, including retaliatory cyber-attacks that could materially disrupt our systems and operations, supply chain, and ability to produce, sell and distribute our goods and services. We, our customers, and the third parties upon which we rely are subject to a variety of evolving threats, which are prevalent, continue to rise, and are increasingly difficult to detect. These threats include but are not limited to: social-engineering attacks (including through deep fakes, which may be increasingly more difficult to identify as fake, and phishing attacks); credential harvesting; malicious code (such as viruses, worms, and, increasingly, code injection in open source software); malware (including as a result of advanced persistent threat intrusions); denial-of-service attacks, credential stuffing; insider threats (including due to personnel misconduct, error or malicious activity); ransomware attacks; supply-chain attacks; software bugs; server malfunctions; software or hardware failures; loss of data or other information technology
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assets; adware; telecommunications failures; attacks enhanced or facilitated by artificial intelligence and other similar threats. Advances in artificial intelligence, including models capable of rapidly identifying and exploiting software vulnerabilities, may further increase the speed and effectiveness of cyberattacks. As a result, vulnerabilities or flaws in our products, systems or those of third parties upon which we rely may be discovered more quickly, reducing the time available for detection and remediation and increasing the likelihood or severity of security incidents. Ransomware attacks, including those from organized criminal threat actors, nation-states and nation-state supported actors, are becoming increasingly prevalent and severe and can lead to significant interruptions, delays, or outages in our operations, loss of data, loss of income, significant extra expenses to restore data or systems, reputational loss and the diversion of funds. To alleviate the financial, operational and reputational impact of a ransomware attack, it may be prudent to make extortion payments, but we may be unable to do so if, for example, applicable laws prohibit such payments.
Additionally, we are incorporated into the supply chain of a large number of companies worldwide and, as a result, if our solutions are compromised, a significant number or, in some instances, all of our customers and their data could be simultaneously affected. The potential liability and associated consequences we could suffer as a result of such a large-scale event could be catastrophic and result in irreparable harm.
Remote work and use of remote devices have increased risks to our information technology systems and data, as more of our personnel utilize network connections, computers and devices outside of our premises or network, including working at home, while in transit and in public locations. Future or past business transactions, such as acquisitions or integrations, could expose us to additional cybersecurity risks and vulnerabilities, as our systems could be negatively affected by vulnerabilities present in acquired or integrated entities' systems and technologies. Furthermore, we may discover security issues that were not identified during due diligence of such acquired or integrated entities, and it may be difficult to integrate other companies into our information technology environment and security program.
We rely on third-party service providers and technologies to operate critical business systems, including processing confidential and sensitive information, including, without limitation, cloud-based infrastructure, data center facilities, encryption and authentication technology, employee email and other functions. We also rely on third-party service providers to provide other products, services, or otherwise, to operate our business and elements of our infrastructure, including endpoints. Our ability to monitor these third parties' information security practices is limited, and these third parties may not have adequate information security measures in place. Additionally, software errors or vulnerabilities in these third-party technologies could result in significant disruptions to our information technology systems, leading to downtime, data loss, or compromised data integrity. Our use of generative AI technologies may increase our cybersecurity risks, including the likelihood that our products or systems are specifically targeted with cyberattacks aimed at exploiting, exfiltrating, or replicating the capabilities of restricted frontier AI models, such as Mythos or other frontier models that are not generally available, as well as risks associated with open source software and other third-party components, including where such technologies retrieve or recommend malicious or vulnerable code from public repositories or other third-party sources that may be used without appropriate review.
If our third-party service providers or partners experience a security incident or other interruption or cause an extended outage or disruption to our systems, we could experience adverse consequences. It is possible that our customers and potential customers would hold us accountable for any security incident affecting our third-party service providers’ or partners' infrastructure or other interruption caused by our third-party service providers or partners that impacts our infrastructure. We may incur significant liability from those customers and from other third parties with respect to any such incident. Because our agreements with certain third-party service providers, such as AWS and Snowflake, limit their liability for damages, we may not be able to recover a material portion of our liabilities to our customers and third parties arising from issues with such third-party service providers, such as AWS and Snowflake, in the event of an incident affecting the third parties’ systems. Moreover, while we may be entitled to damages from third-party service providers if they fail to satisfy their privacy or security-related obligations to us or if they cause a disruption in our infrastructure, any award may be insufficient to cover our damages, or we may be unable to recover such award. In addition, supply-chain attacks have increased in frequency and severity and there have been high-profile incidents of third-party service providers causing widespread disruptions in their customers' infrastructures due to errors in their SaaS offerings. We cannot guarantee that third parties’ infrastructure in our supply chain or our third-party partners’ supply chains have not been compromised or that errors by our third-party service providers will not cause disruptions in our infrastructure.
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We have experienced, and may in the future experience, disruptions, outages, other performance problems and security threats due to a variety of factors, including infrastructure changes, deliberate or unintentional human actions (including by third parties), software defects and configuration errors, capacity constraints, fraud or security incidents. We take steps designed to detect, mitigate and remediate vulnerabilities and defects and configuration errors in our information technology systems (such as our hardware and software, including that of third parties upon which we rely) and in our software applications, products and services. We may not, however, be able to detect and remediate all such vulnerabilities, defects or configuration errors on a timely basis. For example, we have identified certain vulnerabilities in our information systems and software applications, and we take steps designed to mitigate the risks associated with known vulnerabilities. Despite our efforts, there can be no assurance that these vulnerability, defect and configuration error mitigation measures will be completely effective. Further, we may experience delays in developing and deploying remedial measures and patches designed to address any such identified vulnerabilities, defects or configuration errors. Additionally, as part of our business operations, employees and authorized personnel, or insiders, access our systems, applications, and data, including through the use of mobile devices, including personally-owned devices. Our business may be adversely affected if insiders cause cybersecurity incidents such as data breaches, intellectual property theft, ransom demands, or operational disruptions. We take steps designed to detect and mitigate insider threats, however, despite our efforts, there can be no assurance that these efforts will be completely effective and we have expended significant resources to prevent, detect and investigate such threats. Additionally, our ability to implement and enforce security measures on employee-owned mobile devices is more limited, which increases the risk of cybersecurity threats.
Any of these or similar threats could cause a security incident or other interruption that can result in unauthorized, unlawful, or accidental acquisition, modification, destruction, loss, alteration, encryption, disclosure of, or access to our proprietary, confidential, and sensitive information or our information technology systems, or those of the third parties upon whom we rely. For example, we have been the target of unsuccessful phishing attempts in the past and we expect such attempts will continue in the future. A security incident or other interruption could disrupt our ability (and that of third parties upon whom we rely) to provide our solutions. In some instances, we or our third-party service providers may not be able to identify the cause or causes of these security incidents or performance problems within an acceptable period of time. If our solutions are unavailable or if our customers are unable to access features of our solutions within a reasonable amount of time or at all, our business could be adversely affected. In addition, if we or any of the third-party providers we use were to experience or cause a significant or prolonged outage or security incident, our business could be adversely affected. We may expend significant resources or modify our business activities to try to protect against or recover from security incidents. Certain data privacy and security obligations may require us to implement and maintain specific security measures, industry-standard or reasonable security measures to protect our information technology systems and proprietary, confidential, and sensitive information, including personal data.
Data protection requirements may also require us or we may voluntarily choose to notify relevant stakeholders of security incidents, including affected individuals, partners, collaborators, customers, regulators, law enforcement agencies and others, or take other actions, such as providing credit monitoring and identity theft protection services. Such disclosures and related actions can be costly, and the disclosures or failure to comply with such applicable requirements could lead to adverse consequences.
Additionally, even if we have issued or otherwise made patches or information for vulnerabilities in our software applications, products or services, our customers may be unwilling or unable to deploy such patches and use such information effectively and in a timely manner. Vulnerabilities could be exploited and result in a security incident.
If we, our customers, or a third party upon which we rely, experience or cause a security incident or other interruption, or are perceived to have experienced or caused a security incident or other interruption, we may experience material adverse consequences, such as government enforcement actions (for example, investigations, fines, penalties, audits, and inspections); additional reporting obligations and/or oversight; restrictions on processing information (including personal data); litigation (including class claims); indemnification obligations; negative publicity; reputational harm; monetary fund diversions; interruptions of our operations (including availability of data); financial loss (including by issuing credits to our customers); diversion of management attention; and other similar harm. Security incidents or other disruptions and attendant material consequences may cause customers to stop using our solutions (including by not renewing their purchases of our solutions), deter new customers from using our solutions, and negatively impact our ability to grow and operate our business.
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There can be no assurance that any limitations or exclusions of liabilities in our contracts would be enforceable or adequate or would otherwise protect us from liabilities or damages if we fail to comply with data protection requirements related to information security or security incidents. We cannot be sure that our insurance coverage will be adequate or otherwise protect us from or adequately mitigate liabilities or damages with respect to claims, costs, expenses, litigation, fines, penalties, business loss, data loss, regulatory actions or other impacts arising out of security incidents.
In addition, we face unique risks as a SaaS company that sells products and services that involve protecting the information systems of our customers. If our solutions fail to detect vulnerabilities in our customers’ cybersecurity infrastructure, including for remote devices, or if our solutions fail to identify new and increasingly complex methods of cyberattacks, our business may suffer and our customers' businesses may be damaged, including by interrupting their networking traffic or operational technology environments. Furthermore, a security incident could heighten the impact of these material adverse consequences because of the nature of our business and expectations of our customers. There is no guarantee that our solutions will detect all vulnerabilities or threats in our customers' systems, especially in light of the rapidly changing security landscape to which we must respond. As cyber threats increasingly leverage artificial intelligence and other advanced techniques, customer expectations for rapid identification, prioritization and remediation of vulnerabilities continue to increase. If our solutions fail to keep pace with these evolving threats or do not effectively help customers address them, our reputation, competitive position and customer relationships could be adversely affected. Additionally, our solutions may falsely detect vulnerabilities or threats that do not actually exist. For example, our solutions rely on information provided by an active community of users who contribute information about new exploits, attacks and vulnerabilities. If the information from these third parties is inaccurate, the potential for false indications of vulnerabilities or threats increases. These false positives, while typical in the industry, may impair the perceived reliability of our offerings. Additionally, our business depends upon the appropriate and successful implementation of our product by our customers. If our customers fail to use our solutions according to our specifications, our customers may suffer a security incident on their own systems or other adverse consequences. Even if such an incident is unrelated to our security practices, it could result in our incurring significant economic and operational costs in investigating, remediating, and implementing additional measures to further protect our customers from their own vulnerabilities.
The reliability and continuous availability of our solutions is critical to our success. We have experienced errors or defects in the past in connection with the release of new solutions and product upgrades, and we expect that these errors or defects will be found from time to time in the future in new or enhanced solutions after commercial release. For example, on December 31, 2024, we identified Nessus agents versions 10.8.0 and 10.8.1 going offline under certain conditions which impacted the availability of our Vulnerability Management and Security Center solutions for certain customers. Upon discovery of the incident, we developed and released version 10.8.2 of our Nessus agent on January 2, 2025, which enabled affected customers to resolve the issue. Although the financial impacts of this incident have not been significant, similar incidents in the future could result in costs associated with service-level credits and loss of customer trust, which could have a material adverse effect on our business and financial performance. In addition, we use third parties to assist in the development of our products and these third parties could be a source of errors or defects. Some defects may cause our solutions to be vulnerable to attacks, cause them to fail to detect vulnerabilities, or temporarily interrupt customers’ networking traffic or operational technology environments, any of which may damage our customers’ business and could hurt our reputation.
As a result of any of the risks associated with our SaaS business, we may experience material adverse consequences. We may also be subject to liability claims for damages related to errors or defects in our solutions.
We have incorporated and expect to continue to incorporate and further expand our use of AI technologies, including generative AI, into certain of our products and services. These technologies are subject to new and developing regulatory frameworks and may create operational, financial, regulatory, and reputational risks based on development practices or reliance on AI outputs that are inaccurate or flawed. These technologies may not achieve market acceptance and may pose other adverse consequences to our business, some of which we may not know or be able to quantify at this time.
We have incorporated and expect to continue to incorporate and further expand our use of AI features in certain of our products and services, including ExposureAI, Tenable AI Assistant and Hexa AI within Tenable One. The use of AI technologies, including 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 or control,
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especially if our or our customers' 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 with heightened regulatory scrutiny, which presents regulatory, litigation, ethical, safety, reputational, operational and financial risks. AI in our products and services may be complex to deploy successfully due to operational issues inherent to the nature of such technologies, including model misalignment or the availability, development, maintenance and operation of deep learning datasets and third-party dependencies.
Datasets used in AI training, development, and operations may be insufficient, of poor quality, not fit for purpose, contain sensitive information, or reflect unwanted bias. 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. The use of certain types or sources of data for AI training or development may require consent from data subjects, customers, or other data owners or custodians. We may not have insight into, or control over, the provenance of certain data that our AI technologies ingest. As laws evolve, we may be obligated to obtain certain consents for AI development that we had not previously sought and seeking any type of consent may be costly, impractical, and hinder competitive development or deployment of AI technologies. Customers are increasingly concerned about how their data may interact with AI technologies and may require us to make stronger assurances or contractual commitments to refrain or limit the use of customer data with AI technologies. This may adversely impact our ability to develop or improve AI technologies, which rely on a large volume of diverse and relevant data, including customer data, to produce more accurate, reliable, and predictable outputs.
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, including the EU AI Act, Colorado AI Act, California Bot Disclosure Law, and Utah AI Policy Act, as well as regulations on certain high-risk automated decisions, such as those in the employment context. For example, the EU AI Act, which applies beyond the European Union’s borders and establishes obligations for AI providers and those deploying AI systems, sets out a risk-based framework that subjects certain AI technologies to numerous compliance obligations, such as transparency, conformity and risk assessment, monitoring and human oversight requirements. Under the EU AI Act, non-compliant companies may be subject to administrative fines of up to 35 million Euros or 7% of a company's total worldwide annual turnover for the preceding financial year, whichever is higher. Certain of our activities subject us to the EU AI Act and other U.S. and non-U.S. laws governing AI or data processed in connection with AI. We expect 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 (including import and export thereof) and use of AI technologies and expose us to increased risk of regulatory enforcement and litigation. We may have to amend our business practices, contractual arrangements, products and/or services to comply with such obligations. In addition to formal legislation, governmental authorities may take enforcement or administrative actions that restrict the use of specific AI technologies. For example, federal agencies have designated Anthropic as a supply chain risk, a designation Anthropic has challenged in ongoing federal litigation and whose ultimate scope and enforceability remains uncertain. This or similar enforcement or administrative actions or changes in export controls, trade sanctions or other regulatory restrictions impacting AI technologies and frontier models could result in prohibitions on the use of Anthropic's and/or other frontier AI models in our solutions. Such actions could force us to decouple or replace integrated technologies on short notice, resulting in significant engineering costs, service disruptions, and the loss of critical product functionality.
Our customers deploy AI technologies in their environments where the AI technologies may encounter sensitive information (including confidential, competitive, proprietary, or personal data) or our customers may input sensitive information into our AI-powered offerings, regardless of any prohibitions in our terms of service. Any sensitive information that our AI technologies ingest could be leaked or disclosed to others. Additionally, many of our AI technologies are powered by third-party AI providers, which may heighten the risk of inadvertent or unwanted disclosure of sensitive information, 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. This could create legal or contractual liability for us in light of the model's ability to output sensitive information.
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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. This risk extends to our enterprise operations, as employee use of third-party agentic AI solutions, such as browser plug-ins or other automated applications, could result in actions being taken without adequate human review or monitoring. Such unauthorized automated actions could, for example, lead to the inadvertent disclosure or modification of corporate data or other sensitive information, flawed communications to customers or partners, or the creation of unintended legal or financial obligations on behalf of the company. 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, although we maintain internal AI governance frameworks, policies, and oversight protocols designed to regulate employee adoption and use of AI tools across our business, including in product development, testing, and customer support, we cannot guarantee that employees will strictly adhere to these controls. Ineffective governance, policy non-compliance, or gaps in employee oversight could result in software defects or security vulnerabilities within our code base, deficient or unreliable customer support guidance, or the unauthorized use or misuse of AI resulting 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, and these risks likely are compounded by our use of agentic AI.
In addition, we maintain and promote an open-source community exchange, CyberAgents Exchange, which aggregates, indexes, and links to third-party AI agents, skills, Model Context Protocol (MCP) servers, and playbooks hosted on external repositories, such as GitHub. We do not control, fully audit, or maintain these third-party tools and cannot guarantee that they are secure, reliable, or non-infringing. Our indexing and promotion of these third-party tools could expose us to legal claims, including intellectual property infringement, data privacy, or product liability, and to reputational harm if an indexed component contains vulnerabilities, malicious code, or causes system compromise. Furthermore, our community terms may not provide enforceable indemnification from open-source developers, and associated risks may increase as the component listings expand.
While AI features are presently increasing in popularity, we have no assurance that our AI technologies or associated services and offerings will continue to be accepted and sought by customers. The development of generative and agentic AI technologies is complex, and there are technical challenges associated with achieving the desired level of accuracy, efficiency, and reliability. The algorithms and models utilized in generative or agentic AI systems may have limitations, including biases, errors, or inability to handle certain data types or scenarios. Furthermore, there is a risk of system failures, disruptions, or vulnerabilities that could compromise the integrity, security or privacy of the generated content. These limitations or failures could result in reputational damage, legal liabilities, or loss of customer confidence, which, in turn, could result in lower than anticipated demand from customers to adopt our AI features. We have, and will continue, to dedicate significant resources to developing and deploying generative, agentic, or other AI features in our products and services, without assurances that we will, or will continue to, see customer demand and market conditions to support those investments.
We rely, and likely will continue to rely, on third parties to support our use of AI in our products and services. Our ability to offer AI-powered products and services may be adversely impacted if any of our third-party AI providers, or other AI-related third-party vendors, develops or deploys AI tools that are unlawful, unreliable, unsecure, unavailable, limited to certain jurisdictions, subject to national security restrictions, or are the subject of successful cybersecurity attacks. If we cannot use third-party AI, that use is restricted, or our competitors and/or customers use AI technologies more effectively than we do, our business may be less efficient or we may be at a competitive disadvantage, which could adversely affect our business, financial condition, customer loyalty, and reputation.
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We rely on third parties to maintain and operate certain elements of our network infrastructure.
We utilize data centers located in North America, Europe and Asia to operate and maintain certain elements of our own network infrastructure. Some elements of this complex system are operated by third parties that we do not control and that could require significant time to replace. We expect this dependence on third parties to continue. For example, Tenable One is hosted on AWS, which provides us with computing and storage capacity. Interruptions in our systems or the third-party systems on which we rely, particularly AWS, whether due to system failures, computer viruses or cyber threats, physical or electronic break-ins or other factors, could affect the security or availability of our solutions, network infrastructure and website. In addition, outages or operational failures at major cloud infrastructure providers, including data center failures, regional service disruptions, service degradation, or provider configuration errors, or disruptions caused by geopolitical instability, military conflict or other regional hostilities, such as escalating tensions involving Iran or across the broader Middle East, could materially impair the availability and performance of our solutions, particularly where we rely on limited regional infrastructure or do not have localized backup or failover capacity. For example, recent disruptions affecting AWS data centers in the UAE and Bahrain in connection with escalating regional hostilities involving Iran highlighted the risk that disruptions affecting a single facility could compromise business continuity for customers in that region and result in downtime, delayed customer access, reputational harm and financial loss.
Our existing data center facilities and third-party hosting providers 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 with notice or access to hosting services may be restricted by the provider at any time, with no or limited notice. For example, our agreement with AWS allows AWS to terminate the agreement with two years' written notice and allows AWS, under certain circumstances, to temporarily restrict access to hosting services provided by AWS without prior notice. Although we expect that we could receive similar services from other third parties, if any of our arrangements with third parties, including AWS, are terminated, we could experience interruptions on our platform and in our ability to make our platform available to customers, as well as downtime, delays and additional expenses in arranging alternative cloud infrastructure services.
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, funding authorizations and budget shortfalls, the operational stability of government agencies, and the prioritization of cybersecurity and digital infrastructure initiatives. Funding reductions or delays, including those resulting from a U.S. government shutdown, reductions or eliminations of agency operating budgets or deprioritization of cybersecurity digital infrastructure related initiatives, would adversely affect public sector demand for our enterprise platform. For example, shifts in the U.S. government's spending priorities and any future actions to reduce government spending 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 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.
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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. Furthermore, our ability to maintain or expand our business with government customers depends on our continued ability to comply with rapidly evolving restrictions on the use of and rights to certain artificial intelligence models, features, or output, such as those which may evolve from draft acquisition regulations and supplements clauses, such as Proposed GSAR Clause 552.239-700; proposed updates to NIST frameworks; and/or supply chain security designations, such as recent federal actions identifying specific third-party AI providers and models as supply chain risks. Any future adverse regulatory designation against our third-party AI providers could require us to rapidly re-engineer our solutions at significant cost, disrupt existing government contracts, or disqualify us from future solicitations. Future changes to acquisition regulations and NIST frameworks could require us to alter what rights we grant in the use of our products, what intellectual property rights we grant customers, how we track code generation, and how humans are in the loop for code review and approval.
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 applicable legal and contractual requirements related to nondiscrimination. Consequently, we may be subject to executive orders and regulatory changes affecting various aspects of our operations. Any required elimination or modification of such plans in response to new or changes to existing executive orders or legal or contractual requirements 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 claims, 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.
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If we do not generate sufficient cash flows, we may be unable to service all of our indebtedness.
To service our indebtedness, including the Convertible Senior Notes, we will require a significant amount of cash. Our ability to generate cash, make scheduled payments or refinance our debt obligations, including the Convertible Senior Notes, and to pay any cash amounts due upon conversion, repurchase or maturity of the Convertible Senior Notes, depends on our successful financial and operating performance, which may be affected by a range of economic, competitive and business factors, many of which are outside of our control and some of which are described elsewhere in the “Risk Factors” section of this report.
If our cash flows and capital resources are insufficient to fund our debt service obligations, or to repay any amounts outstanding under our Credit Agreement when it matures, or to pay the principal amount of and interest on our Convertible Senior Notes, including upon conversion, required repurchase or at maturity, we may have to undertake alternative financing plans, such as refinancing or restructuring our debt, selling assets or operations, reducing or delaying capital investments, or seeking to raise additional capital. We may not be able to refinance our debt, or any refinancing of our debt could be at higher interest rates and may require us to comply with more restrictive covenants that could further restrict our business operations. Our ability to implement successfully any such alternative financing plans will depend on a range of factors, including general economic conditions, the level of activity in capital markets generally, and the terms of our various debt instruments then in effect.
Covenants under our Credit Agreement may restrict our business and operations in many ways, and if we do not effectively manage our covenants, our financial condition and results of operations could be adversely affected.
Our Credit Agreement imposes various covenants that limit our ability and/or our restricted subsidiaries’ ability to, among other things:
• pay dividends or distributions, repurchase equity, prepay, redeem or repurchase certain debt, and make certain investments;
• incur additional debt and issue certain preferred stock;
• provide guarantees in respect of obligations of other persons;
• incur liens on assets;
• merge, consolidate with, or sell all or substantially all our assets to another person;
• enter into transactions with affiliates;
• designate subsidiaries as unrestricted subsidiaries; and
• prohibit certain restrictions on the ability of restricted subsidiaries to pay dividends or make other payments to us.
These covenants may:
• limit our ability to borrow additional funds for working capital, capital expenditures, acquisitions, or other general business purposes;
• limit our ability to use our cash flow or obtain additional financing for future working capital, capital expenditures, acquisitions, or other general business purposes;
• require us to use a substantial portion of our cash flow from operations to make debt service payments;
• limit our flexibility to plan for, or react to, changes in our business and industry;
• place us at a competitive disadvantage compared to less leveraged competitors; and
• increase our vulnerability to the impact of adverse economic and industry conditions.
If we are unable to successfully manage the limitations and decreased flexibility on our business due to our significant debt obligations, we may not be able to capitalize on strategic opportunities or grow our business to the extent we would be able to without these limitations.
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Our failure to comply with any of the covenants could result in a default under the Credit Agreement, which could permit the administrative agent or the lenders to cause the administrative agent to declare the obligations outstanding under our Credit Agreement to be immediately due and payable or to exercise any remedies provided to the administrative agent, including proceeding against the collateral granted to secure our obligations under the Credit Agreement. An event of default under the Credit Agreement could also lead to a default under the terms of certain of our other agreements. Any such event of default or any exercise of rights and remedies by our creditors could seriously harm our business.
Our variable rate debt subjects us to interest rate risk that could cause our debt service obligations to increase significantly.
The indebtedness under our Credit Agreement is at variable rates of interest, which exposes us to interest rate risk. If interest rates increase, the debt service obligations on such indebtedness would increase even if the amount borrowed remains the same, and our net income and cash flows, including cash available for servicing our indebtedness, would correspondingly decrease. Certain of the variable rate indebtedness extended to us, including obligations under our Credit Agreement, uses the Secured Overnight Financing Rate, or SOFR, as a benchmark for establishing the interest rate. While we will continue to use SOFR, other factors may impact SOFR including factors causing SOFR to cease to exist, new methods of calculating SOFR to be established, or the use of an alternative reference rate(s). These consequences are not entirely predictable and could have an adverse impact on our financing costs, returns on investments, valuation of derivative contracts and our financial results.
Any failure to protect our proprietary technology and intellectual property rights could substantially harm our business and operating results.
Our success and ability to compete depend in part on our ability to protect our proprietary technology and intellectual property. To safeguard these rights, we rely on a combination of patent, trademark, copyright and trade secret laws and contractual protections in the United States and other jurisdictions, all of which provide only limited protection and may not now or in the future provide us with a competitive advantage.
At September 30, 2026, we had 55 issued patents and 22 patent applications pending in the United States relating to our technology. We cannot assure you that any patents will issue from any patent applications, that patents that issue from such applications will give us the protection that we seek or that any such patents will not be challenged, invalidated or circumvented. Any patents that may issue in the future from our pending or future patent applications may not provide sufficiently broad protection and may not be enforceable in actions against alleged infringers. Obtaining and enforcing software patents in the United States is becoming increasingly challenging. Any patents we have obtained or may obtain in the future may be found to be invalid or unenforceable in light of recent and future changes in the law. We have registered the “Tenable” and “Nessus,” and our Tenable logo in the United States and certain other countries. We have registrations and/or pending applications for additional trademarks; however, we cannot assure you that any future trademark registrations will be issued for pending or future applications or that any registered trademarks will be enforceable or provide adequate protection of our proprietary rights. While we have copyrights in our software, we do not typically register such copyrights with the Copyright Office. This failure to register the copyrights in our software may preclude us from obtaining statutory damages for infringement under certain circumstances. We also license software from third parties for integration into our software, including open source software and other software available on commercially reasonable terms. We cannot assure you that such third parties will maintain such software or continue to make it available.
In order to protect our unpatented proprietary technologies and processes, we rely on trade secret laws and confidentiality and invention assignment agreements with our employees, consultants, strategic partners, vendors and others. Despite our efforts to protect our proprietary technology and trade secrets, unauthorized parties may attempt to misappropriate, copy, reverse engineer or otherwise obtain and use them. In addition, others may independently discover our trade secrets, in which case we would not be able to assert trade secret rights, or develop similar technologies and processes. Further, several agreements may give customers limited rights to access portions of our proprietary source code, and the contractual provisions that we enter into may not prevent unauthorized use or disclosure of our proprietary technology or intellectual property and may not provide an adequate remedy in the event of unauthorized use or disclosure of our proprietary technology or intellectual property rights. Moreover, policing unauthorized use of our technologies, trade secrets and intellectual property is difficult, expensive and time-consuming, particularly in foreign
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countries where the laws may not be as protective of intellectual property rights as those in the United States and where mechanisms for enforcement of intellectual property rights may be weak. To the extent that we expand our activities outside of the United States, our exposure to unauthorized copying and use of our solutions and proprietary information may increase. We may be unable to determine the extent of any unauthorized use or infringement of our solutions, technologies or intellectual property rights.
There can be no assurance that the steps that we take will be adequate to protect our proprietary technology and intellectual property, that others will not develop or patent similar or superior technologies, solutions or services, or that our trademarks, patents, and other intellectual property will not be challenged, invalidated or circumvented by others. Furthermore, effective trademark, patent, copyright, and trade secret protection may not be available in every country in which our software is available or where we have employees or independent contractors. In addition, the legal standards relating to the validity, enforceability, and scope of protection of intellectual property rights in internet and software-related industries are uncertain and still evolving.
In addition, our employees use generative AI tools in certain circumstances to perform portions of their work. Although we maintain internal governance controls designed to regulate employee use of generative AI tools, these controls or employee adherence to them may fail to prevent the inadvertent, improper, or unauthorized input of information that is proprietary, confidential or sensitive, including trade secrets, into AI systems in a manner that results in unauthorized disclosure or loss of confidentiality. Many generative AI tools are provided by third-party vendors, and we may have limited ability to control or verify how information submitted by employees is processed, stored, retained, or used by such providers, including whether such information may be incorporated into model training or otherwise accessed or disclosed. Any failure to adequately prevent the disclosure or misuse of our proprietary or confidential information, whether due to employee error, inadequate controls, evolving AI system functionality, or third-party practices, could result in the loss of trade secret protection and the disclosure of confidential information related to our inventions and product candidates, which could preclude us from obtaining patents covering disclosed inventions and product candidates, all of which could adversely affect our business.
In order to protect our intellectual property rights, we may be required to spend significant resources to monitor and protect these rights. Litigation brought to protect and enforce our intellectual property rights could be costly, time-consuming and distracting to management and could result in the impairment or loss of portions of our intellectual property. Furthermore, our efforts to enforce our intellectual property rights may be met with defenses, counterclaims and countersuits attacking the validity and enforceability of our intellectual property rights. Our failure to secure, protect and enforce our intellectual property rights could seriously adversely affect our brand and adversely impact our business.
Future sales of substantial amounts of our common stock in the public markets by us or our stockholders, or the perception that such sales might occur, could reduce the price that our common stock might otherwise attain.
Sales of a substantial number of shares of our common stock in the public market by us or our stockholders, or the perception that these sales might occur, could depress the market price of our common stock, impair our ability to raise capital through the sale of additional equity securities and make it more difficult for you to sell your common stock at a time and price that you deem appropriate. Further, the number of new shares of our common stock issued by us in connection with raising additional capital in connection with a financing, acquisition, investment or otherwise could result in substantial dilution to our existing stockholders. The conversion of some or all of the Convertible Senior Notes may also dilute the ownership interests of our stockholders. Upon conversion of the Convertible Senior Notes, we will pay cash up to the aggregate principal amount of the notes to be converted, but we have the option to pay or deliver, as the case may be, cash, shares of our common stock, or a combination of cash and shares of our common stock in respect of the remainder, if any, of our conversion obligation in excess of the aggregate principal amount of the Convertible Senior Notes being converted. If we elect to settle the remainder, if any, of our conversion obligation in excess of the aggregate principal amount of the Convertible Senior Notes being converted in shares of our common stock or a combination of cash and shares of our common stock, any sales in the public market of our common stock issuable upon such conversion could adversely affect prevailing market prices of our common stock. In addition, the existence of the Convertible Senior Notes may encourage short selling by market participants because the conversion of the Convertible Senior Notes could be used to satisfy short positions, or anticipated conversion of the Convertible Senior Notes into shares of our common stock could depress the price of our common stock.
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In addition, we have filed registration statements on Form S-8 under the Securities Act registering the issuance of shares of common stock subject to options and other equity awards issued or reserved for future issuance under our equity incentive plans. Shares registered under these registration statements, and under additional registration statements on Form S-8 that we may file to register additional shares of common stock pursuant to provisions of our equity incentive plans that provide for an automatic increase in the number of shares reserved and available for issuance each year, are available for sale in the public market subject to vesting arrangements and exercise of options and the restrictions of Rule 144 under the Securities Act in the case of our affiliates.
Risks Related to our Convertible Senior Notes
We may not have the ability to raise the funds necessary to settle conversions of the notes in cash, to repay the notes at maturity or to repurchase the notes upon a fundamental change, and our future debt may contain limitations on our ability to pay cash upon conversion or repurchase of the notes.
Holders of the Convertible Senior Notes have the right, subject to certain conditions, to require us to repurchase all or any portion of their Convertible Senior Notes upon the occurrence of a fundamental change at a fundamental change repurchase price equal to 100% of the principal amount of the Convertible Senior Notes to be repurchased, plus accrued and unpaid interest to, but excluding, the fundamental change repurchase date. Upon maturity of the Convertible Senior Notes, we must pay the principal amount of the Convertible Senior Notes plus accrued and unpaid interest in cash, unless the Convertible Senior Notes have been previously repurchased, redeemed or converted. In addition, upon conversion of the Convertible Senior Notes, we will be required to make cash payments for each $1,000 in principal amount of Convertible Senior Notes converted of at least the lesser of $1,000 and the sum of the daily conversion values. However, we may not have enough available cash or be able to obtain financing at the time we are required to make repurchases of Convertible Senior Notes surrendered therefor or pay cash with respect to Convertible Senior Notes being converted. In addition, our future debt may prohibit us from making any cash payments upon the conversion of the Convertible Senior Notes or upon repurchase of the Convertible Senior Notes in connection with a fundamental change. Our ability to repurchase the Convertible Senior Notes or to pay cash upon conversions or at maturity of the Convertible Senior Notes may also be limited by law or by regulatory authority. Our failure to repurchase Convertible Senior Notes at a time when the repurchase is required by the indenture governing the Convertible Senior Notes or to pay any cash payable on future conversions or at maturity of the Convertible Senior Notes as required by the indenture governing the Convertible Senior Notes would constitute a default under such indenture. A default under the indenture governing the Convertible Senior Notes or the fundamental change itself could also lead to a default under agreements governing our existing or future indebtedness. If the repayment of the related indebtedness were to be accelerated after any applicable notice or grace periods, we may not have sufficient funds to repay the indebtedness and repurchase the Convertible Senior Notes or make cash payments upon conversions thereof.
The conditional conversion feature of the Convertible Senior Notes, if triggered, may adversely affect our financial condition and operating results.
In the event the conditional conversion feature of the Convertible Senior Notes is triggered, holders of the Convertible Senior Notes will be entitled to convert their Convertible Senior Notes at any time during specified periods at their option. If one or more holders elect to convert their Convertible Senior Notes, we would be required to settle any converted principal amount of such Convertible Senior Notes (or, if less, the conversion value) through the payment of cash, which could adversely affect our liquidity. In addition, even if holders do not elect to convert their Convertible Senior Notes, we would be required under applicable accounting rules to reclassify all or any portion of the outstanding principal of the Convertible Senior Notes as a current rather than long-term liability, which would result in a material reduction of our net working capital.
Certain provisions in the indenture governing the Convertible Senior Notes may delay or prevent an otherwise beneficial takeover attempt of us.
Certain provisions in the indenture governing the Convertible Senior Notes may make it more difficult or expensive for a third party to acquire us. For example, the indenture governing the Convertible Senior Notes will require us, except as described in the indenture, to repurchase the notes for cash upon the occurrence of a fundamental change and, in certain circumstances, to increase the conversion rate for a holder that converts its Convertible Senior Notes in connection with a
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make-whole fundamental change. A takeover of us may trigger the requirement that we repurchase the Convertible Senior Notes and/or increase the conversion rate, which could make it costlier for a potential acquirer to engage in such takeover. Such additional costs may have the effect of delaying or preventing a takeover of us that would otherwise be beneficial to investors.
The Capped Calls may affect the value of the Convertible Senior Notes and the market price of our common stock.
In connection with the sale of the Convertible Senior Notes, we entered into Capped Calls with the Option Counterparties. The Capped Calls cover, subject to customary adjustments, the number of shares of our common stock initially underlying the Convertible Senior Notes. The Capped Calls are expected generally to reduce the potential dilution to our common stock upon any conversion of the Convertible Senior Notes and/or offset any cash payments we are required to make in excess of the principal amount of converted Convertible Senior Notes, as the case may be, with such reduction and/or offset subject to a cap.
In connection with establishing their initial hedges of the Capped Calls, the Option Counterparties or their respective affiliates purchased shares of our common stock and/or entered into various derivative transactions with respect to our common stock concurrently with or shortly after the pricing of the Convertible Senior Notes. The Option Counterparties or their respective affiliates may modify their hedge positions by entering into or unwinding various derivatives with respect to our common stock and/or purchasing or selling our common stock or other securities of ours in secondary market transactions following the pricing of the Convertible Senior Notes and prior to the maturity of the Convertible Senior Notes (and are likely to do so during any observation period related to a conversion of the Convertible Senior Notes, following any redemption of the Convertible Senior Notes or any repurchase of the Convertible Senior Notes upon a fundamental change, or, to the extent we exercise the relevant election under the Capped Calls, following any other repurchase of the Convertible Senior Notes). This activity could also cause or avoid an increase or a decrease in the market price of our common stock or the Convertible Senior Notes, which could affect the ability of the holders of the Convertible Senior Notes to convert their Convertible Senior Notes and, to the extent the activity occurs during any observation period related to a conversion of the Convertible Senior Notes, it could affect the number of shares, if any, and value of the consideration that the holders of the Convertible Senior Notes will receive upon conversion of the Convertible Senior Notes.
The potential effect, if any, of these transactions and activities on the market price of our common stock or the Convertible Senior Notes will depend in part on market conditions and cannot be ascertained at this time. Any of these activities could adversely affect the value of our common stock and the value of the Convertible Senior Notes (and as a result, the number of shares, if any, and value of the consideration that the holders of the Convertible Senior Notes would receive upon the conversion of any of their Convertible Senior Notes) and, under certain circumstances, the holders of the Convertible Senior Notes' ability to convert their Convertible Senior Notes.
We cannot predict the direction or magnitude of any potential effect that the transactions described above may have on the price of the Convertible Senior Notes or our common stock. In addition, we do not make any representation that the Option Counterparties or their respective affiliates will engage in these transactions or that these transactions, once commenced, will not be discontinued without notice.
We are subject to counterparty risk with respect to the Capped Calls.
The Option Counterparties are financial institutions, and we will be subject to the risk that one or more of the Option Counterparties may default or otherwise fail to perform, or may exercise certain rights to terminate, their obligations under the Capped Calls. Our exposure to the credit risk of the Option Counterparties will not be secured by any collateral.
Global economic conditions have from time to time resulted in the actual or perceived failure or financial difficulties of many financial institutions and could adversely affect the Option Counterparties’ performance under the Capped Calls. If an Option Counterparty becomes subject to insolvency proceedings, we will become an unsecured creditor in those proceedings with a claim equal to our exposure at that time under the Capped Call Transaction with such Option Counterparty. Our exposure will depend on many factors but, generally, an increase in our exposure will be correlated to an increase in the market price and in the volatility of our common stock. In addition, upon a default, other failure to perform, or termination of obligations by an Option Counterparty, we may suffer adverse tax consequences or more
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dilution than we currently anticipate with respect to our common stock. We can provide no assurances as to the financial stability or viability of the Option Counterparties.
In addition, the terms of the Capped Calls may be subject to adjustment, modification or, in some cases, renegotiation in the event of certain corporate and other transactions. The Capped Calls may not operate as we intend in the event that we are required to adjust the terms of such instruments as a result of transactions in the future or in the event of other unanticipated developments that may adversely affect the functioning of the Capped Calls.
We may from time to time seek to repurchase the Convertible Senior Notes, which could affect the trading liquidity of the Convertible Senior Notes that remain outstanding and could involve material amounts.
The indenture governing the Convertible Senior Notes permits us, to the extent permitted by applicable law, to repurchase Convertible Senior Notes directly or indirectly, whether by us or our subsidiaries, in the open market or otherwise, including through privately negotiated transactions, public tender or exchange offers, or through counterparties to private agreements, in each case without the consent of or notice to the holders of the Convertible Senior Notes. We may from time to time determine to repurchase Convertible Senior Notes using any of these methods, depending on prevailing market conditions, our liquidity position and requirements, contractual restrictions, and other factors. The amounts involved in any such repurchases, individually or in the aggregate, may be material. Any such repurchases that reduce the outstanding principal amount of the Convertible Senior Notes could reduce the trading liquidity of the Convertible Senior Notes that remain outstanding following any such transaction.
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 September 30, 2026 is presented below:
(in thousands, except for per share data)
Shares Purchased(2)
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 July 1, 2026 to July 31, 2026390 $34.23 390 $94,283 
Shares purchased August 1, 2026 to August 31, 2026584 35.94 584 73,296 
Shares purchased September 1, 2026 to September 30, 20265,862 32.32 539 54,302 
6,836 32.74 
_______________
(1)    Our Board of Directors authorized the repurchase of up to $100 million of our common stock in November 2023 and subsequently increased the authorization by $200 million in October 2024, $250 million in July 2025 and $150 million in January 2026, bringing the total authorized amount to $700 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)    Shares purchased in September 2026 include 5.3 million shares repurchased for $170.5 million in connection with the issuance of our Convertible Senior Notes.
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Items 3 and 4 are not applicable and have been omitted.
Item 5.        Other Information
Rule 10b5-1 Plan Elections
Mark Thurmond, our Co-Chief Executive Officer, entered into a prearranged stock trading plan on August 3, 2026. Mr. Thurmond's plan includes the potential sale of 172,357 shares of our common stock between November 13, 2026 and August 5, 2027. Of the shares of common stock that may be sold pursuant to Mr. Thurmond's plan, 108,591 are shares to be issued upon the vesting of restricted stock units or the vesting and attainment of performance stock units and include shares that will be automatically sold to cover mandatory tax withholding obligations.
Stephen Vintz, our Co-Chief Executive Officer, entered into a prearranged stock trading plan on August 6, 2026. Mr. Vintz's plan includes the potential sale of 250,000 shares of our common stock between November 13, 2026 and May 13, 2027.
Art Coviello, a member of our Board of Directors, entered into a prearranged stock trading plan on August 5, 2026. Mr. Coviello's plan includes the potential sale of 12,000 shares of our common stock between November 13, 2026 and February 28, 2027. Additionally, pursuant to Mr. Coviello's plan, 12,572 shares of our common stock will be gifted.
All of the trading plans above were entered into during an open insider trading window and are intended to satisfy the affirmative defense of Rule 10b5-1(c) under the Exchange Act and our policies regarding insider transactions.
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Item 6.        Exhibits
The following is a list of Exhibits filed as part of this Quarterly Report on Form 10-Q:
Exhibit NumberDescriptionLocation
3.1
Amended and Restated Certificate of Incorporation of Tenable Holdings, Inc.
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
Second Amended and Restated Bylaws of Tenable Holdings, Inc.
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
Common Stock Certificate of Tenable Holdings, Inc.
Previously filed as Exhibit 4.1 to the Company's Registration Statement on Form S-1 (File No. 333-226002) on July 16, 2018
4.2
Indenture, dated as of September 15, 2026, by and between Tenable Holdings, Inc. and U.S. Bank Trust Company, National Association, as Trustee
Previously filed as Exhibit 4.1 to the Company's Current Report on Form 8-K (File No. 001-38600) on September 15, 2026
4.3
Form of Global Note, representing Tenable Holdings, Inc.’s 0.25% Convertible Senior Notes due 2031
Previously filed as Exhibit 4.2 to the Company's Current Report on Form 8-K (File No. 001-38600) on September 15, 2026
10.1
Form of Confirmation for Capped Call Transactions
Previously filed as Exhibit 10.1 to the Company's Current Report on Form 8-K (File No. 001-38600) on September 15, 2026
10.2
Credit Agreement, dated as of October 13, 2026, among Tenable Holdings, Inc., as borrower, JPMorgan Chase Bank, N.A., as administrative agent, collateral agent and L/C issuer, and the lenders party thereto
Previously filed as Exhibit 10.1 to the Company's Current Report on Form 8-K (File No. 001-38600) on October 13, 2026
31.1
Certification of the Principal Executive Officer pursuant to Rules 13a-14(a) and 15d-14(a) under the Exchange Act, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
Filed herewith
31.2
Certification of the Principal Financial Officer pursuant to Rules 13a-14(a) and 15d-14(a) under the Exchange Act, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
Filed herewith
32.1*
Certification of the Principal Executive Officer and the Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
Furnished herewith
101.SCHInline XBRL Taxonomy Extension Schema Document
101.CALInline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEFInline XBRL Taxonomy Extension Definition Linkbase Document
101.LABInline XBRL Taxonomy Extension Label Linkbase Document
101.PREInline XBRL Taxonomy Extension Presentation Linkbase Document
104Cover 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.
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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:November 3, 2026By:/s/ Matthew Brown
Matthew Brown
Chief Financial Officer
(Principal Financial Officer)

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Source: View Original Filing on SEC EDGAR

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