# Tenable Holdings, Inc. (TENB) Informational only - not investment advice. CIK: 0001660280 SIC: 7372 Services-Prepackaged Software SIC breadcrumb: [Services](/division/I/) > [Business Services](/major-group/73/) > [SIC 7372 Services-Prepackaged Software](/industry/7372/) Latest 10-K filed: 2026-02-27 SEC page: https://www.sec.gov/edgar/browse/?CIK=1660280 Filing source: https://www.sec.gov/Archives/edgar/data/1660280/000166028026000005/tenb-20251231.htm ## Selected Fundamentals | Metric | Value | Unit | FY | Filed | | --- | ---: | --- | ---: | --- | | Revenue | 999405000 | USD | 2025 | 2026-02-27 | | Net income | -36118000 | USD | 2025 | 2026-02-27 | | Assets | 1747667000 | USD | 2025 | 2026-02-27 | ## Financials Annual standardized facts from SEC companyfacts as of latest extracted filing date 2026-02-27. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0001660280.json. Derived margins, ratios, and free cash flow are computed from the extracted annual SEC facts. | Metric | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 | | --- | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | | Revenue | 124,371,000 | 187,727,000 | 267,360,000 | 354,586,000 | 440,221,000 | 541,130,000 | 683,191,000 | 798,710,000 | 900,021,000 | 999,405,000 | | Net income | -37,208,000 | -41,022,000 | -73,521,000 | -99,013,000 | -42,731,000 | -46,677,000 | -92,222,000 | -78,284,000 | -36,301,000 | -36,118,000 | | Operating income | -35,833,000 | -40,760,000 | -72,581,000 | -90,799,000 | -36,433,000 | -41,768,000 | -67,815,000 | -52,160,000 | -6,856,000 | -9,168,000 | | Gross profit | 110,152,000 | 162,139,000 | 224,193,000 | 293,768,000 | 362,667,000 | 434,734,000 | 528,402,000 | 615,133,000 | 700,353,000 | 780,468,000 | | Diluted EPS | | | | -1.03 | -0.42 | -0.44 | -0.83 | -0.68 | -0.31 | -0.30 | | Operating cash flow | -2,785,000 | -6,266,000 | -2,559,000 | -10,744,000 | 64,232,000 | 96,765,000 | 131,151,000 | 149,855,000 | 217,476,000 | 266,750,000 | | Capital expenditures | 5,776,000 | 2,755,000 | 5,733,000 | 20,674,000 | 18,882,000 | 3,887,000 | 9,359,000 | 1,704,000 | 4,247,000 | 12,102,000 | | Share buybacks | 85,000 | 385,000 | 75,000 | 0.00 | 0.00 | 0.00 | 0.00 | 14,934,000 | 99,977,000 | 247,468,000 | | Assets | | 164,337,000 | 460,612,000 | 558,612,000 | 690,589,000 | 1,248,819,000 | 1,439,530,000 | 1,606,871,000 | 1,742,119,000 | 1,747,667,000 | | Liabilities | | 258,267,000 | 338,849,000 | 459,707,000 | 539,924,000 | 1,033,506,000 | 1,168,664,000 | 1,260,527,000 | 1,342,165,000 | 1,421,291,000 | | Stockholders' equity | -301,918,000 | -371,665,000 | 121,763,000 | 98,905,000 | 150,665,000 | 215,313,000 | 270,866,000 | 346,344,000 | 399,954,000 | 326,376,000 | | Cash and cash equivalents | | 27,210,000 | 165,116,000 | 74,363,000 | 178,223,000 | 278,000,000 | 300,866,000 | 237,132,000 | 328,647,000 | 187,762,000 | | Free cash flow | -8,561,000 | -9,021,000 | -8,292,000 | -31,418,000 | 45,350,000 | 92,878,000 | 121,792,000 | 148,151,000 | 213,229,000 | 254,648,000 | ### Ratios ROE and ROA use period-end equity/assets. Liabilities / equity uses total liabilities divided by stockholders' equity. Current ratio uses current assets divided by current liabilities when both are reported. | Metric | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 | | --- | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | | Net margin | -29.92% | -21.85% | -27.50% | -27.92% | -9.71% | -8.63% | -13.50% | -9.80% | -4.03% | -3.61% | | Operating margin | -28.81% | -21.71% | -27.15% | -25.61% | -8.28% | -7.72% | -9.93% | -6.53% | -0.76% | -0.92% | | Return on equity | | | -60.38% | -100.11% | -28.36% | -21.68% | -34.05% | -22.60% | -9.08% | -11.07% | | Return on assets | | -24.96% | -15.96% | -17.72% | -6.19% | -3.74% | -6.41% | -4.87% | -2.08% | -2.07% | | Liabilities / equity | | | 2.78 | 4.65 | 3.58 | 4.80 | 4.31 | 3.64 | 3.36 | 4.35 | | Current ratio | | 0.62 | 1.56 | 1.11 | 1.29 | 1.55 | 1.47 | 1.19 | 1.27 | 0.95 | ## Quarterly Quarterly standardized facts from SEC companyfacts as of latest extracted filing date 2026-05-05. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0001660280.json. Flow metrics use discrete quarter-length periods from 10-Q/10-Q/A filings. Q4 revenue and net income are derived only when annual FY and nine-month YTD facts exist for the same fiscal year; derived Q4 values are labeled. EPS Q4 is not derived. | Quarter | End date | Revenue | Net income | Diluted EPS | Method | | --- | --- | ---: | ---: | ---: | --- | | 2022-Q2 | 2022-06-30 | | | -0.25 | reported discrete quarter | | 2022-Q3 | 2022-09-30 | | | -0.17 | reported discrete quarter | | 2023-Q1 | 2023-03-31 | | | -0.22 | reported discrete quarter | | 2023-Q2 | 2023-06-30 | 195,036,000 | -15,974,000 | -0.14 | reported discrete quarter | | 2023-Q3 | 2023-09-30 | 201,529,000 | -15,565,000 | -0.13 | reported discrete quarter | | 2023-Q4 | 2023-12-31 | 213,306,000 | -21,648,000 | | derived Q4 = FY annual - nine-month YTD | | 2024-Q1 | 2024-03-31 | 215,961,000 | -14,386,000 | -0.12 | reported discrete quarter | | 2024-Q2 | 2024-06-30 | 221,241,000 | -14,572,000 | -0.12 | reported discrete quarter | | 2024-Q3 | 2024-09-30 | 227,088,000 | -9,211,000 | -0.08 | reported discrete quarter | | 2024-Q4 | 2024-12-31 | 235,731,000 | 1,868,000 | | derived Q4 = FY annual - nine-month YTD | | 2025-Q1 | 2025-03-31 | 239,137,000 | -22,935,000 | -0.19 | reported discrete quarter | | 2025-Q2 | 2025-06-30 | 247,295,000 | -14,706,000 | -0.12 | reported discrete quarter | | 2025-Q3 | 2025-09-30 | 252,440,000 | 2,260,000 | 0.02 | reported discrete quarter | | 2025-Q4 | 2025-12-31 | 260,533,000 | -737,000 | | derived Q4 = FY annual - nine-month YTD | | 2026-Q1 | 2026-03-31 | 262,058,000 | 1,414,000 | 0.01 | reported discrete quarter | ## Macro Cross-References - [CPIAUCSL](/indicator/CPIAUCSL/): Consumer Price Index for All Urban Consumers: All Items in U.S. City Average - [UNRATE](/indicator/UNRATE/): Unemployment Rate - [FEDFUNDS](/indicator/FEDFUNDS/): Federal Funds Effective Rate - [CES0500000003](/indicator/CES0500000003/): Average Hourly Earnings of All Employees, Total Private - [DFEDTARU](/indicator/DFEDTARU/): Federal Funds Target Range - Upper Limit - [DFEDTARL](/indicator/DFEDTARL/): Federal Funds Target Range - Lower Limit - [DGS3MO](/indicator/DGS3MO/): Market Yield on U.S. Treasury Securities at 3-Month Constant Maturity - [DGS2](/indicator/DGS2/): Market Yield on U.S. Treasury Securities at 2-Year Constant Maturity - [DGS10](/indicator/DGS10/): Market Yield on U.S. Treasury Securities at 10-Year Constant Maturity - [DGS30](/indicator/DGS30/): Market Yield on U.S. Treasury Securities at 30-Year Constant Maturity - [T10Y2Y](/indicator/T10Y2Y/): 10-Year Treasury Constant Maturity Minus 2-Year Treasury Constant Maturity - [CPILFESL](/indicator/CPILFESL/): Consumer Price Index for All Urban Consumers: All Items Less Food and Energy - [CPIUFDSL](/indicator/CPIUFDSL/): Consumer Price Index for All Urban Consumers: Food - [CPIENGSL](/indicator/CPIENGSL/): Consumer Price Index for All Urban Consumers: Energy - [CUSR0000SAH1](/indicator/CUSR0000SAH1/): Consumer Price Index for All Urban Consumers: Shelter - [PCEPI](/indicator/PCEPI/): Personal Consumption Expenditures: Chain-type Price Index - [PCEPILFE](/indicator/PCEPILFE/): Personal Consumption Expenditures Excluding Food and Energy: Chain-type Price Index - [PPIACO](/indicator/PPIACO/): Producer Price Index by Commodity: All Commodities - [T10YIE](/indicator/T10YIE/): 10-Year Breakeven Inflation Rate - [U6RATE](/indicator/U6RATE/): Total Unemployed, Plus All Marginally Attached Workers Plus Total Employed Part Time for Economic Reasons - [PAYEMS](/indicator/PAYEMS/): All Employees, Total Nonfarm - [CIVPART](/indicator/CIVPART/): Labor Force Participation Rate - [EMRATIO](/indicator/EMRATIO/): Employment-Population Ratio - [UNEMPLOY](/indicator/UNEMPLOY/): Unemployed - [CE16OV](/indicator/CE16OV/): Employment Level - [ICSA](/indicator/ICSA/): Initial Claims - [JTSJOL](/indicator/JTSJOL/): Job Openings: Total Nonfarm - [JTSQUR](/indicator/JTSQUR/): Quits: Total Nonfarm - [GDPC1](/indicator/GDPC1/): Real Gross Domestic Product - [A191RL1Q225SBEA](/indicator/A191RL1Q225SBEA/): Real Gross Domestic Product: Percent Change from Preceding Period - [INDPRO](/indicator/INDPRO/): Industrial Production: Total Index - [TCU](/indicator/TCU/): Capacity Utilization: Total Index - [HOUST](/indicator/HOUST/): New Privately-Owned Housing Units Started: Total Units - [PERMIT](/indicator/PERMIT/): New Privately-Owned Housing Units Authorized in Permit-Issuing Places: Total Units - [RSAFS](/indicator/RSAFS/): Advance Retail Sales: Retail Trade - [PCE](/indicator/PCE/): Personal Consumption Expenditures - [DSPIC96](/indicator/DSPIC96/): Real Disposable Personal Income - [PSAVERT](/indicator/PSAVERT/): Personal Saving Rate - [M2SL](/indicator/M2SL/): M2 - [BOPGSTB](/indicator/BOPGSTB/): U.S. International Trade in Goods and Services: Balance - [MSPUS](/indicator/MSPUS/): Median Sales Price of Houses Sold for the United States - [HSN1F](/indicator/HSN1F/): New One Family Houses Sold: United States - [RHORUSQ156N](/indicator/RHORUSQ156N/): Homeownership Rate in the United States - [TTLCONS](/indicator/TTLCONS/): Total Construction Spending: Total Construction in the United States - [RRVRUSQ156N](/indicator/RRVRUSQ156N/): Rental Vacancy Rate in the United States - [TOTALSL](/indicator/TOTALSL/): Total Consumer Credit Owned and Securitized - [REVOLSL](/indicator/REVOLSL/): Revolving Consumer Credit Owned and Securitized - [DRCCLACBS](/indicator/DRCCLACBS/): Delinquency Rate on Credit Card Loans, All Commercial Banks - [GDP](/indicator/GDP/): Gross Domestic Product - [GPDI](/indicator/GPDI/): Gross Private Domestic Investment - [GCE](/indicator/GCE/): Government Consumption Expenditures and Gross Investment - [PCEC](/indicator/PCEC/): Personal Consumption Expenditures - [NETEXP](/indicator/NETEXP/): Net Exports of Goods and Services - [GFDEBTN](/indicator/GFDEBTN/): Federal Debt: Total Public Debt - [GFDEGDQ188S](/indicator/GFDEGDQ188S/): Federal Debt: Total Public Debt as Percent of Gross Domestic Product - [FYFSD](/indicator/FYFSD/): Federal Surplus or Deficit - [FGRECPT](/indicator/FGRECPT/): Federal Government Current Receipts - [FGEXPND](/indicator/FGEXPND/): Federal Government: Current Expenditures - [MANEMP](/indicator/MANEMP/): All Employees, Manufacturing - [USCONS](/indicator/USCONS/): All Employees, Construction - [USTRADE](/indicator/USTRADE/): All Employees, Retail Trade - [USFIRE](/indicator/USFIRE/): All Employees, Financial Activities - [USGOVT](/indicator/USGOVT/): All Employees, Government - [AWHAETP](/indicator/AWHAETP/): Average Weekly Hours of All Employees, Total Private - [DGORDER](/indicator/DGORDER/): Manufacturers' New Orders: Durable Goods - [NEWORDER](/indicator/NEWORDER/): Manufacturers' New Orders: Nondefense Capital Goods Excluding Aircraft - [BUSINV](/indicator/BUSINV/): Total Business Inventories - [EXPGS](/indicator/EXPGS/): Exports of Goods and Services - [IMPGS](/indicator/IMPGS/): Imports of Goods and Services - [IR](/indicator/IR/): Import Price Index (End Use): All Commodities - [PPIFIS](/indicator/PPIFIS/): Producer Price Index by Commodity: Final Demand ## Latest quarter (10-Q) Latest 10-Q source: https://www.sec.gov/Archives/edgar/data/1660280/000166028026000023/tenb-20260331.htm Extracted structurally from real Item 2 body heading to real Item 3/4 boundary. Confidence: high Filing date: 2026-05-05 Report date: 2026-03-31 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 IA 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. 18 Table of Contents Financial Highlights Below are our key financial results: Three Months Ended March 31, (in thousands, except per share data) 2026 2025 Revenue $ 262,058  $ 239,137  Income (loss) from operations 8,763  (17,711) Net income (loss) 1,414  (22,935) Net earnings (loss) per share, basic and diluted 0.01  (0.19) Net cash provided by operating activities 87,971  87,407  Purchases of property and equipment (2,587) (6,553) Capitalized software development costs (2,745) (624) 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 96% of revenue in the three months ended March 31, 2026 and 2025. 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 March 31, 2026 2025 Change (%) Number of new enterprise platform customers added in period 406 361 12% March 31, 2026 2025 Change (%) Number of customers with $100,000 and greater in annual contract value at end of period 2,204 2,042 8% 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: 19 Table of Contents •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: March 31, 2026 2025 Dollar-based net expansion rate 105  % 108  % 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 in 2026. 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. 20 Table of Contents 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 in connection with our Term Loan, unused commitment fees on our Revolving Credit Facility, and letter of credit fees. Other income (expense), net consists primarily of foreign currency remeasurement and transaction gains and losses and any real [Excerpt truncated for page length; source filing is linked above.] ## Latest 10-K MD&A Extracted from Item 7 to the first post-MD&A boundary after HTML sanitization. Confidence: high Item 7.        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 our consolidated financial statements and related notes included elsewhere in this Annual Report on Form 10-K, or this Form 10-K. This Form 10-K contains forward-looking statements within the meaning of Section 27A of 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 this Form 10-K 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. Tenable unifies 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. Financial Highlights Below are our key financial results: Year Ended December 31, (in thousands, except per share data) 2025 2024 2023 Revenue $ 999,405  $ 900,021  $ 798,710  Loss from operations (9,168) (6,856) (52,160) Net loss (36,118) (36,301) (78,284) Net loss per share, basic and diluted (0.30) (0.31) (0.68) Net cash provided by operating activities 266,750  217,476  149,855  Purchases of property and equipment (12,102) (4,247) (1,704) Capitalized software development costs (4,474) (6,451) (7,052) 51 Table of Contents 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 96% of revenue in 2025 and 2024 and 95% of revenue in 2023. 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. Calculated Current Billings Calculated current billings consists of revenue recognized in a period plus the change in current deferred revenue in the corresponding period. Variability in total billings, depending on the timing of large multi-year contracts and the preference for annual billing versus multi-year upfront billing, may distort growth in one period over another. Calculated current billings may vary from period-to-period for a number of reasons, and therefore has a number of limitations as a quarter-to-quarter or year-over-year comparative measure. Calculated current billings in any one period may be impacted by the timing and amount of new sales transactions, the timing and amount of renewal transactions, including early renewals, the mix of the amount of subscriptions and perpetual licenses and the timing of billing professional services, as well as the timing and amount of multi-year prepaid contracts, all of which could favorably or unfavorably impact quarter-to-quarter and year-over-year comparisons. For example, an increasing number of large sales transactions, for which the timing has and will continue to vary, may occur in quarters subsequent to or in advance of those that we anticipate. Additionally, our calculation of calculated current billings may be different from other companies that report similar financial measures. Because of these and other limitations, you should consider calculated current billings along with revenue and our other GAAP financial results. Historically we have used calculated current billings as a key metric to measure our periodic performance and to measure and monitor our ability to provide our business with the working capital generated by upfront payments from our customers. Recently, however, the shift to annual installment billing for larger multi-year transactions is reducing our overall billing duration. We believe this shift creates a negative distortion in calculated current billings that fails to accurately represent the growth of our business and as such we have transitioned away from relying on calculated current billings to monitor performance of our business. We have included calculated current billings for comparative purposes. The following table presents calculated current billings, including a reconciliation of revenue, the most directly comparable financial measure calculated in accordance with GAAP: Year Ended December 31, (in thousands) 2025 2024 2023 Revenue $ 999,405  $ 900,021  $ 798,710  Deferred revenue (current), end of period 706,866  650,372  580,779  Deferred revenue (current), beginning of period(1) (657,035) (580,887) (506,192) Calculated current billings $ 1,049,236  $ 969,506  $ 873,297  _______________ (1)    Deferred revenue (current), beginning of period for 2025, 2024 and 2023 includes $6.7 million, $0.1 million and $4.1 million, respectively, related to acquired deferred revenue. 52 Table of Contents 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: Year Ended December 31, 2025 2024 2023 Number of new enterprise platform customers added in period(1) 1,667 1,689 1,788 _______________ (1)    The number of new enterprise platform customers added in 2023 includes 104 legacy customers of Ermetic, Ltd. ("Ermetic"). December 31, 2025 2024 2023 Number of customers with $100,000 and greater in annual contract value at end of period 2,161 1,988 1,721 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: •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: December 31, (in thousands) 2025 2024 2023 Dollar-based net expansion rate 106  % 108  % 111  % 53 Table of Contents 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 begin to recognize revenue when control of our software or services is transferred to the customer, which for sales made through our channel network is typically concurrent with the transfer to the end user. Our subscription arrangements generally have annual or multi-year contractual terms to use our software or cloud-based solutions, including ongoing software updates during the contractual period. For software subscriptions that are dependent on ongoing software updates and the ability to identify the latest cybersecurity vulnerabilities, revenue is recognized ratably over the subscription term given the critical utility provided by the ongoing updates that are released through the contract period. When the critical utility of our software does not depend on ongoing updates, we recognize revenue attributable to the license at the time of delivery and the revenue attributable to the maintenance and support ratably over the contract period. Our perpetual licenses are generally sold with one or more years of maintenance that include ongoing software updates to identify the latest cybersecurity vulnerabilities, which provide critical utility to the software. We recognize perpetual license revenue over a five-year estimated economic life of the expected customer contract. Professional services and other revenue is primarily comprised of advisory services and training related to the deployment and optimization of our products. These services do not result in significant customization of our products. Professional services and other revenue is recognized as the services are performed. We have historically experienced, and expect in the future to experience, seasonality in entering into agreements with customers. We typically enter into a significantly higher percentage of agreements with new customers, as well as renewal agreements with existing customers, in the third and fourth quarters of the year. The increase in customer agreements in the third quarter is primarily attributable to U.S. government and related agencies, and the increase in the fourth quarter is primarily attributable to large enterprise account buying patterns typical in the software industry. We anticipate that these historical trends may be impacted by current macroeconomic conditions and U.S. policy decisions related to the funding of government agencies and the imposition of tariffs which may lengthen purchasing and approval phases of our sales cycle in 2026. The ratable nature of our subscription revenue makes this seasonality less apparent in our overall financial results. 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 intend to continue to invest additional resources in our cloud-based platform and customer support team as we grow our business. The level and timing of investment in these areas could affect our cost of revenue in the future. Gross profit, or revenue less cost of revenue, and gross margin, or gross profit as a percentage of revenue, have been and will continue to be affected by various factors, including the timing of our acquisition of new customers and our renewals of and follow-on sales to existing customers, the costs associated with operating our cloud-based platform, the extent to which we expand our customer support team and the extent to which we can increase the efficiency of our technology and infrastructure through technological improvements. We expect our gross profit to increase in absolute dollars but our gross margin may fluctuate from period to period depending on the interplay of all of these factors, particularly as it relates to cloud infrastructure costs, as we expect revenue from our cloud-based subscriptions to increase as a percentage of revenue. 54 Table of Contents 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 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. We capitalize sales commissions, including related fringe benefit costs, and recognize the expense over an estimated period of benefit, which ranges between three and four years for subscription arrangements and five years for perpetual license arrangements. Sales commissions on contract renewals are capitalized and amortized ratably over the contract term, with the exception of contracts with renewal periods that are one year or less, in which case the incremental costs are expensed as incurred. Sales commissions on professional services arrangements are expensed as incurred as the contractual periods of these arrangements are generally less than one year. We intend to continue to make investments in sales and marketing to increase revenue, further penetrate the market and expand our global customer base. We expect our sales and marketing expense to increase in absolute dollars annually and to be our largest operating expense category for the foreseeable future. However, as our revenue increases, we expect our sales and marketing expense to decrease as a percentage of our revenue in 2026 and over the long term. Our sales and marketing expense may fluctuate from period to period due to the timing and extent of these expenses, including sales commissions, which may fluctuate depending on the mix of sales and related expense recognition. Research and Development 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. We expect our research and development expense to continue to increase annually in absolute dollars for the foreseeable future as we continue to invest in research and development efforts to enhance the functionality of our exposure management platform. However, we expect our research and development expense to decrease as a percentage of our revenue over the long term, although our research and development expense may fluctuate from period to period due to the timing and extent of these expenses. General and Administrative 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. We expect our general and administrative expense to continue to increase in absolute dollars and decrease as a percentage of our revenue over the long term, although our general and administrative expense may fluctuate from period to period due to the timing and extent of these expenses. In 2025, our general and administrative expense included $15.5 million of termination benefits, including cash compensation and accelerated equity award vesting, related to the passing of our former Chairman and Chief Executive Officer. Restructuring Restructuring expenses consist of non-ordinary course severance, employee related benefits and other charges to reorganize business operations. In the three months ended December 31, 2025, we recorded $3.1 million of restructuring 55 Table of Contents expense for non-ordinary course severance and employee-related benefits. We expect to record approximately $5.0 million in restructuring expense in the year ended December 31, 2026. 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 in connection with our Term Loan, unused commitment fees on our senior secured revolving credit facility, or Revolving Credit Facility, 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. Provision for Income Taxes Provision for income taxes consists of income taxes in all jurisdictions in which we conduct business and the related withholding taxes on sales with customers. 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. 56 Table of Contents Results of Operations The following tables set forth our consolidated results of operations for the periods presented: Year Ended December 31, (in thousands) 2025 2024 2023 Revenue $ 999,405  $ 900,021  $ 798,710  Cost of revenue(1) 218,937  199,668  183,577  Gross profit 780,468  700,353  615,133  Operating expenses: Sales and marketing(1) 416,949  395,385  393,450  Research and development(1) 223,669  181,624  153,163  General and administrative(1) 145,905  124,130  116,181  Restructuring 3,113  6,070  4,499  Total operating expenses 789,636  707,209  667,293  Loss from operations (9,168) (6,856) (52,160) Interest income 15,992  23,325  24,700  Interest expense (28,419) (31,920) (31,339) Other expense, net (1,338) (3,435) (8,602) Loss before income taxes (22,933) (18,886) (67,401) Provision for income taxes 13,185  17,415  10,883  Net loss $ (36,118) $ (36,301) $ (78,284) _______________ (1)    Includes stock-based compensation expense as follows: Year Ended December 31, (in thousands) 2025 2024 2023 Cost of revenue $ 13,714 $ 12,677 $ 11,247 Sales and marketing 68,801 62,727 61,322 Research and development 56,542 47,656 37,225 General and administrative(2) 52,756 40,455 35,533 Total stock-based compensation expense $ 191,813 $ 163,515 $ 145,327 _______________ (2)    Stock-based compensation expense in 2025 includes $14.6 million of expense related to the accelerated vesting of equity awards for our former Chairman and Chief Executive Officer. 57 Table of Contents Comparison of 2025 and 2024 Revenue Year Ended December 31, Change (dollars in thousands) 2025 2024 ($) (%) Subscription revenue $ 919,573  $ 824,659  $ 94,914  12  % Perpetual license and maintenance revenue 44,661  47,774  (3,113) (7) % Professional services and other revenue 35,171  27,588  7,583  27  % Revenue $ 999,405  $ 900,021  $ 99,384  11  % The increase in revenue of $99.4 million included $95.7 million from existing customers as of January 1, 2025 and $3.7 million from new customers. U.S. revenue increased $40.9 million, or 8%. International revenue increased $58.5 million, or 14%. Cost of Revenue, Gross Profit and Gross Margin Year Ended December 31, Change (dollars in thousands) 2025 2024 ($) (%) Cost of revenue $ 218,937  $ 199,668  $ 19,269  10  % Gross profit 780,468  700,353  80,115  11  % Gross margin 78  % 78  % The increase in cost of revenue of $19.3 million was primarily due to: •a $6.5 million increase in amortization of acquired intangible assets; •a $4.0 million increase in third-party cloud infrastructure costs; •a $3.9 million increase in personnel costs, including a $1.0 million increase in stock-based compensation; and •a $2.4 million increase in depreciation and amortization. Operating Expenses Sales and Marketing Year Ended December 31, Change (dollars in thousands) 2025 2024 ($) (%) Sales and marketing $ 416,949  $ 395,385  $ 21,564  5  % The increase in sales and marketing expense of $21.6 million was primarily due to: •a $10.3 million increase in personnel costs, including a $6.1 million increase in stock-based compensation; •a $4.5 million increase in sales commissions; •a $4.2 million increase in expenses for demand generation programs, including advertising, sponsorships, and brand awareness efforts; and •a $3.1 million increase in selling expenses, including travel and meeting costs and software subscription costs. Research and Development Year Ended December 31, Change (dollars in thousands) 2025 2024 ($) (%) Research and development $ 223,669  $ 181,624  $ 42,045  23  % 58 Table of Contents The increase in research and development expense of $42.0 million was primarily due to: •a $34.9 million increase in personnel costs, largely associated with an increase in headcount, including an $8.9 million increase in stock-based compensation; and •a $3.0 million increase in allocated overhead expenses. General and Administrative Year Ended December 31, Change (dollars in thousands) 2025 2024 ($) (%) General and administrative $ 145,905  $ 124,130  $ 21,775  18  % The increase in general and administrative expense of $21.8 million was primarily due to: •a $17.0 million increase in personnel costs, including $15.5 million in termination benefits including cash compensation and accelerated equity award vesting related to the passing of our former Chairman and Chief Executive Officer; and •a $2.3 million increase in acquisition-related expenses. Restructuring Year Ended December 31, Change (dollars in thousands) 2025 2024 ($) (%) Restructuring $ 3,113  $ 6,070  $ (2,957) (49) % In 2025, restructuring included $3.1 million in non-ordinary course severance and employee-related benefits. In 2024, restructuring included a $4.5 million non-cash impairment of leasehold improvements and furniture and fixtures that was recorded in connection with the sublease of a portion of our headquarters and $1.6 million in non-ordinary course severance and employee-related benefits. Interest Income, Interest Expense and Other Expense, Net Year Ended December 31, Change (dollars in thousands) 2025 2024 ($) (%) Interest income $ 15,992  $ 23,325  $ (7,333) (31) % Interest expense (28,419) (31,920) 3,501  (11) % Other expense, net (1,338) (3,435) 2,097  (61) % The $7.3 million decrease in interest income was primarily due to a decrease in cash and cash equivalents and short-term investments as well as lower interest rates on our cash and cash equivalents and short-term investments. The $3.5 million decrease in interest expense was primarily due to a decrease in the variable rate of our Term Loan. The $2.1 million decrease in other expense, net was primarily due to a $3.4 million decrease in foreign exchange losses partially offset by a $1.5 million gain on the conversion of one of our simple agreements for future equity, or SAFE, investments in the prior year. Provision for Income Taxes Year Ended December 31, Change (dollars in thousands) 2025 2024 ($) (%) Provision for income taxes $ 13,185  $ 17,415  $ (4,230) (24) % 59 Table of Contents In 2025, the provision for income taxes included: •$7.0 million of discrete expenses primarily related to withholding taxes on sales to customers; and •$6.2 million of income taxes in foreign jurisdictions in which we conduct business. In 2024, the provision for income taxes included: •$6.9 million of discrete expenses primarily related to withholding taxes on sales to customers; •$6.2 million of income taxes in foreign jurisdictions in which we conduct business; •$3.3 million related to Base Erosion and Anti-Abuse Tax, or BEAT; and •$1.2 million of additional tax incurred related to the 2021 restructuring of Indegy; partially offset by •$0.2 million of deferred tax benefits related to the Alsid acquisition. Comparison of 2024 and 2023 For a discussion of our consolidated results for 2024 compared to 2023, see our Annual Report on Form 10-K filed with the SEC on February 21, 2025. Liquidity and Capital Resources At December 31, 2025, we had $187.8 million of cash and cash equivalents, which consisted of bank deposits and money market funds, and $214.4 million of short-term investments, which consisted of commercial paper, asset backed securities, U.S. Treasury and agency obligations and corporate and Yankee bonds. We have generated significant operating losses prior to and during 2025 as reflected by our accumulated deficit of $897.5 million at December 31, 2025. 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 December 31, 2025, we had deferred revenue of $899.3 million, of which $706.9 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 paid $196.2 million, $29.2 million and $243.3 million to acquire businesses in 2025, 2024 and 2023, respectively. See Note 6 to our consolidated financial statements for details about recent acquisitions. We expect to enter into arrangements to acquire or invest in other complementary businesses, services and technologies, including intellectual property rights, in the future. We expect to continue incurring operating losses in the near term. Even though we generated positive cash flows from operations and free cash flow in 2025, 2024 and 2023, we may not be able to sustain these cash flows. We believe that our existing cash and cash equivalents and short-term investments will be sufficient to fund our operating and capital needs for at least the next 12 months and for the foreseeable future. Our future capital requirements will depend on many factors, including our revenue growth rate, subscription renewal activity, the timing and extent of spending to support further infrastructure and research and development efforts, the timing and extent of additional capital expenditures to invest in new and existing office spaces, the expansion of sales and marketing and international operating activities, any acquisitions of complementary businesses and technologies, the timing of our introduction of new product capabilities and enhancements of our platform and the continuing market acceptance of our platform. It may be necessary to seek additional equity or debt financing to fund our operating and capital needs. In the event that financing is required from outside sources, we may not be able to raise it on terms acceptable to us or at all. If we are unable to raise additional capital when desired, or if we cannot expand our operations or otherwise capitalize on our business opportunities because we lack sufficient capital, our business, operating results and financial condition would be adversely affected. 60 Table of Contents Share Repurchase Program In November 2023, our Board of Directors authorized the repurchase of up to $100 million of our common stock. In October 2024, July 2025 and January 2026, our Board of Directors increased the repurchase authorization by $200 million, $250 million and $150 million, respectively. Since the inception of the share repurchase program and through December 31, 2025, we have purchased a total of 10.6 million shares for $362.4 million. Term Loan and Revolving Credit Facility In July 2021, we entered into a credit agreement, or the Credit Agreement, which is comprised of a $375.0 million Term Loan and a $50.0 million Revolving Credit Facility, with a $15.0 million letter of credit sublimit. The Term Loan bears interest at a rate of 2.75% per annum over SOFR, subject to a 0.50% floor, plus a credit spread adjustment depending on the interest period. In 2025, interest rates on our Term Loan were between 6.78% and 7.22%. The Term Loan is being amortized at 1% per annum in equal quarterly installments until the final payment of $350.6 million on the July 7, 2028 maturity date. We may be subject to mandatory Term Loan prepayments related to the excess cash provisions in the Credit Agreement if our first lien net leverage ratio (as defined in the Credit Agreement) exceeds 3.5. At December 31, 2025, our first lien net leverage ratio was 0.84. The Revolving Credit Facility bears interest at a rate, depending on first lien net leverage, ranging from 2.00% to 2.50% over SOFR and matures on July 7, 2026. We pay a commitment fee during the term ranging from 0.25% to 0.375% per annum of the average daily undrawn portion of our Revolving Credit Facility. At December 31, 2025, we were in compliance with the covenants and had $0.2 million of standby letters of credit outstanding under the Revolving Credit Facility. Cash Flows The following table summarizes our cash flows for the periods presented: Year Ended December 31, (in thousands) 2025 2024 2023 Net cash provided by operating activities $ 266,750  $ 217,476  $ 149,855  Net cash used in investing activities (174,578) (41,431) (212,615) Net cash (used in) provided by financing activities (234,095) (79,401) 1,251  Effect of exchange rate changes on cash and cash equivalents and restricted cash 1,038  (5,129) (2,225) Net (decrease) increase in cash and cash equivalents and restricted cash $ (140,885) $ 91,515  $ (63,734) 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 From 2024 to 2025, net cash used in investing activities increased by $133.1 million, primarily due to an increase in cash paid for acquisitions of $167.0 million and a $7.9 million increase in purchases of property and equipment, partially offset by a $41.2 million net decrease in purchases of short-term investments. From 2023 to 2024, net cash used in investing activities decreased by $171.2 million, primarily due to a decrease in cash paid for acquisitions of $214.1 million, partially offset by a $43.3 million net decrease in sales of short-term investments. 61 Table of Contents Financing Activities From 2024 to 2025, net cash used in financing activities increased by $154.7 million, primarily due to a $147.5 million increase in the repurchase of common stock under our share repurchase program. From 2023 to 2024, net cash provided by financing activities decreased by $80.7 million, primarily due to an $85.0 million increase in the repurchase of common stock under our share repurchase program, partially offset by a $4.6 million increase in proceeds from the exercise of stock options. Contractual Obligations We have certain contractual obligations for future payments. See Note 7 to our consolidated financial statements for our required operating lease payments and Note 9 to our consolidated financial statements for our required payments to Microsoft and AWS for cloud services. At December 31, 2025, we had other non-cancellable purchase obligations of $25.8 million due in the next twelve months and $7.9 million due thereafter. Critical Accounting Policies and Estimates Our financial statements are prepared in accordance with U.S. 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. The critical accounting estimates, assumptions and judgments that we believe have the most significant impact on our consolidated financial statements are described below. Revenue Recognition We recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which we expect to be entitled to in exchange for those goods or services. In recognizing revenue, we apply the following steps: •Identify the contract with a customer •Identify the performance obligations in the contract •Determine the transaction price •Allocate the transaction price to the performance obligations in the contract •Recognize revenue when or as performance obligations are satisfied In situations where we enter into a contractual arrangement that includes non-standard terms and conditions, such as acceptance provisions and options to purchase additional products and services, as well as contract modifications, we apply judgment in identifying and assessing the impact on revenue recognition. We generate revenue from subscription arrangements for our software and cloud-based solutions, perpetual licenses, maintenance associated with perpetual licenses and professional services and other revenue. Subscription Revenue Our subscription arrangements generally have annual or multi-year contractual terms and allow customers to use our software or cloud solutions. For our software subscriptions that are dependent on ongoing software updates and the ability to identify the latest cybersecurity vulnerabilities, revenue is recognized ratably over the subscription term given the critical utility provided by the ongoing updates that are released throughout the contract period. When the critical utility of our 62 Table of Contents software does not depend on ongoing updates, we recognize revenue attributable to the license at the time of delivery and the revenue attributable to the maintenance and support ratably over the contract period. Perpetual License and Maintenance Revenue Our perpetual licenses are generally sold with one or more years of maintenance that include ongoing software updates to identify the latest cybersecurity vulnerabilities, which provide critical utility to the software. We recognize perpetual license revenue over a five-year estimated economic life of the expected customer contract. We have estimated the five-year economic life of perpetual license contracts based on historical contract attrition, expected renewal periods, the lifecycle of our technology and other factors. While we believe that the estimates we have made are reasonable and appropriate, different assumptions and estimates could impact our financial results. Professional Services and Other Revenue Professional services and other revenue is primarily comprised of advisory services and training related to the deployment and optimization of our products. These services do not result in significant customization of our products. Professional services and other revenue is recognized as the services are performed. Contracts with Multiple Performance Obligations In cases where our contracts with customers contain multiple performance obligations, the contract transaction price is allocated on a relative standalone selling price basis. We typically determine standalone selling price based on observable selling prices of our products and services. Variable Consideration We record revenue from sales at the net sales price, which is the transaction price, including estimates of variable consideration when applicable. Certain of our customers may be entitled to receive credits and in certain circumstances, refunds, if service level commitments are not met. We have not historically experienced significant incidents affecting the ability to meet these service level commitments and any estimated refunds related to these agreements have not been material. Sales through our channel partner network of distributors and resellers are generally discounted as compared to the price that we would sell to an end user. Revenue for sales through our channel network, which is fixed, is recorded net of any distributor or reseller margin. Deferred Commissions Sales commissions, including related incremental fringe benefit costs, are considered to be incremental costs of obtaining a contract, and therefore are deferred over an estimated period of benefit, which ranges between three and four years for subscription arrangements and five years for perpetual license arrangements. We have estimated the period of benefit based on the expected contract term including renewal periods, the lifecycle of our technology and other factors. Sales commissions on contract renewals are capitalized and amortized ratably over the contract term, with the exception of contracts with renewal periods that are one year or less, in which case the incremental costs are expensed as incurred. While we believe that the estimates we have made are reasonable and appropriate, different assumptions and estimates could materially impact our reported financial results. Business Combinations We account for business combinations by recognizing the fair value of acquired assets and liabilities. The excess purchase consideration over the fair value of acquired assets and liabilities is recorded as goodwill. When determining the fair value of assets acquired and liabilities assumed, a non-recurring Level 3 fair value measurement, we make estimates and assumptions, especially with respect to intangible assets such as identified acquired technology and trade names. We generally determine the fair value of acquired technology using the multi-period excess earnings method, a form of the 63 Table of Contents income approach. However, in certain situations we may use the cost approach. Estimates in valuing identifiable intangible assets include, but are not limited to, projected revenue growth rates, obsolescence projections and an appropriate discount rate. Our estimate of fair value is based upon assumptions we believe to be reasonable, but which are inherently uncertain and, as a result, actual results may differ from estimates. During the measurement period, we may make adjustments to the fair value of assets acquired and liabilities assumed, with offsetting adjustments to goodwill. Any adjustments made after the measurement period will be reflected in the consolidated statements of operations. Acquisition-related costs are expensed as incurred. Goodwill The excess purchase consideration over the fair value of acquired assets and liabilities is recorded as goodwill. We perform our annual impairment assessment on October 1, or more frequently, when events or circumstances indicate impairment may have occurred. We operate as one reporting unit and have elected to first assess qualitative factors to determine whether it is more likely than not that the fair value of the Company as a whole is less than its carrying amount, including goodwill. The qualitative assessment includes an evaluation of relevant events and circumstances, including macroeconomic, industry and market conditions, our overall financial performance, and trends in the value of our common stock. During the periods presented, there were no indications of impairment and it was not more likely than not that goodwill was impaired. Income Taxes We are subject to federal, state and local taxes in the United States as well as numerous international jurisdictions. These foreign jurisdictions have different statutory tax rates than the United States. Earnings generated by our international entities are related to transfer pricing requirements as applicable under local jurisdiction tax laws. We record a provision for income taxes under the asset and liability method, which requires recognition of deferred tax assets and liabilities for the expected future tax consequences of temporary differences between the financial statement carrying amounts and the tax basis of existing assets and liabilities, net operating loss carryforwards and tax credit carryforwards. We have elected to treat taxes related to Global Intangible Low Taxed Income, or GILTI, as a period cost. Deferred tax assets and liabilities are measured using the tax rates that are expected to apply to taxable income for the years in which those tax assets and liabilities are expected to be realized or settled. A valuation allowance is provided if it is more likely than not that some or all of the deferred tax assets will not be realized. We have valuation allowances in all jurisdictions against deferred tax assets net of deferred tax liabilities that will provide a source of taxable income when reversed. Our evaluation of valuation allowances could change in the future and the impact could have a material impact on our financial statements. We recognize tax benefits from an uncertain tax position if it is more likely than not to be sustained upon audit by the relevant taxing authority. Interest and penalties associated with such uncertain tax positions are classified as a component of income tax expense. Depending on the jurisdiction, distributions of earnings could be subject to withholding taxes at rates applicable to the distributing jurisdiction. As we intend to continue to reinvest the earnings of foreign subsidiaries indefinitely, we have not provided for a U.S. income tax liability and foreign withholding taxes on undistributed foreign earnings of foreign subsidiaries. Recently Issued Accounting Pronouncements See Note 1 to our consolidated financial statements for more information regarding recently issued accounting pronouncements.