TENB Q2 Earnings Beat on Tenable One Momentum, Outlook Raised

TENB Benefits From Platform Adoption

Revenue growth was supported by strong expansion within existing accounts and continued strength in renewals. Professional services also contributed ahead of expectations. Recurring revenues remained high at 95% of total revenues compared with 96% in the year-ago period.

Tenable continued expanding its customer base, adding 381 new enterprise platform customers during the quarter, along with 32 net new six-figure customers. The net dollar expansion rate improved to 106% from 105% in the prior quarter, marking the first quarter-over-quarter increase in the metric since the first quarter of 2022.

Tenable Sees AI as a Long-Term Tailwind

The heightened AI-driven threat environment following the Mythos development is accelerating customer demand for exposure management platforms capable of prioritizing and remediating cyber risk at speed. Tenable Hexa AI, the company's agentic engine within Tenable One, saw strong early traction, with more than 80% of users submitting prompts and nearly half using it to take action rather than simply consume information.

The company also expanded its Tenable One AI Exposure offering to include coverage for Gemini alongside existing coverage for Claude, ChatGPT and Copilot. Tenable deepened its partnerships with Anthropic through Project Glasswing and with OpenAI through its Daybreak Cyber Partner Program during the quarter.

TENB Maintains Healthy Profitability

Non-GAAP gross margin was 81.4% compared with 82% in the year-ago period, within the company's typical historical range. Non-GAAP operating income increased 38.8% year over year to $66.2 million. The non-GAAP operating margin expanded 540 basis points to 24.7%.

GAAP income from operations was $12.4 million compared with a loss of $7.4 million in the year-ago quarter, while GAAP operating margin was 4.6% versus negative 3% a year earlier.

Tenable Generates Strong Cash Flow

The company ended the quarter with $298.2 million in cash and short-term investments, down from $360.3 million as of March 31, 2026, primarily reflecting share repurchase activity.

Long-term debt was $353 million, down slightly on a sequential basis from $353.6 million as of March 31, 2026. Unlevered free cash flow was $45.3 million, or 16.9% of revenues compared with $44.3 million in the year-ago quarter. During the quarter, Tenable repurchased 5.2 million shares for $100 million and had $108 million remaining under its existing authorization.

Zacks Rank & Stocks to Consider

Tenable currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the broader Zacks Computer and Technology sector are Analog Devices ADI, Applied Materials AMAT and Cisco Systems CSCO, each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Shares of Analog Devices have rallied 37.1% year to date. The Zacks Consensus Estimate for ADI’s fiscal 2026 earnings is pegged at $12.42 per share, up by 10 cents over the past 30 days, indicating an increase of 59.4% year over year.

Shares of Applied Materials have skyrocketed 101.1% year to date. The Zacks Consensus Estimate for AMAT’s fiscal 2026 earnings is pegged at $12.14 per share, up by 4 cents over the past 30 days, indicating a rise of 28.9% year over year.

Cisco Systems shares have surged 48.7% year to date. The Zacks Consensus Estimate for CSCO’s fiscal 2026 earnings is pegged at $4.28 per share, unchanged over the past 30 days, indicating an increase of 12.3% year over year.

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