Financial

Tenable Announces Fourth Quarter and Full Year 2021 Financial Results

  • Added 562 new enterprise platform customers and 100 net new six-figure enterprise platform customers in the fourth quarter.
  • Fourth quarter revenue of $149.0 million, up 26% year-over-year; Full year revenue of $541.1 million, up 23% year-over-year.
  • Fourth quarter calculated current billings of $194.0 million, up 29% year-over year; Full year calculated current billings of $617.2 million, up 25% year-over-year.
  • Full year net cash provided by operating activities of $96.8 million; Unlevered free cash flow of $95.2 million.

COLUMBIA, Md., Feb. 01, 2022 (GLOBE NEWSWIRE) — Tenable Holdings, Inc. (“Tenable”) (Nasdaq: TENB), the Cyber Exposure company, today announced financial results for the quarter and year ended December 31, 2021.

“Q4 capped a tremendous year for Tenable, and included accelerated year-over-year CCB growth of 29%,” said Amit Yoran, chairman and chief executive officer of Tenable. “In 2021, we dramatically expanded the types of connected assets that we assess to enable our customers to more fully measure and manage cyber risk, leveraging our unified platform, in the midst of escalating threats and cloud transformation.”

Fourth Quarter 2021 Financial Highlights

  • Revenue was $149.0 million, a 26% increase year-over-year.
  • Calculated current billings was $194.0 million, a 29% increase year-over-year.
  • GAAP loss from operations was $12.9 million, compared to a loss of $0.7 million in the fourth quarter of 2020.
  • Non-GAAP income from operations was $11.9 million, compared to $15.4 million in the fourth quarter of 2020.
  • GAAP net loss was $11.0 million, compared to a loss of $1.9 million in the fourth quarter of 2020.
  • GAAP net loss per share was $0.10, compared to a loss per share of $0.02 in the fourth quarter of 2020.
  • Non-GAAP net income was $5.9 million, compared to $14.4 million in the fourth quarter of 2020.
  • Non-GAAP diluted earnings per share was $0.05, compared to $0.13 in the fourth quarter of 2020.
  • Net cash provided by operating activities was $22.0 million, compared to $17.9 million in the fourth quarter of 2020.
  • Unlevered free cash flow was $22.4 million, compared to $16.8 million in the fourth quarter of 2020.

Full Year 2021 Financial Highlights

  • Revenue was $541.1 million, a 23% increase year-over-year.
  • Calculated current billings was $617.2 million, a 25% increase year-over-year.
  • GAAP loss from operations was $41.8 million, compared to a loss of $36.4 million in 2020.
  • Non-GAAP income from operations was $51.0 million, compared to $25.8 million in 2020.
  • GAAP net loss was $46.7 million, compared to a loss of $42.7 million in 2020.
  • GAAP net loss per share was $0.44, compared to a loss per share of $0.42 in 2020.
  • Non-GAAP net income was $38.9 million, compared to $20.8 million in 2020.
  • Non-GAAP diluted earnings per share was $0.34, compared to $0.19 in 2020.
  • Cash and cash equivalents and short-term investments were $512.3 million at December 31, 2021, which included $365.7 million of net proceeds from our credit facility, compared to $291.8 million at December 31, 2020.
  • Net cash provided by operating activities was $96.8 million, compared to $64.2 million in 2020.
  • Unlevered free cash flow was $95.2 million, compared to $44.3 million in 2020.

Fourth Quarter 2021 and Recent Business Highlights

  • Added 562 new enterprise platform customers and 100 net new six-figure customers.
  • Agreed to acquire Cymptom, a platform that proactively measures, maps and prioritizes all probable attack paths, enabling security teams to preemptively focus response ahead of and during breaches. The acquisition is expected to close in the first quarter of 2022.
  • Launched Tenable.cs to help organizations protect the full cloud-native stack and are expanding that to include Container Security, Frictionless and Nessus Assessment for cloud workloads, Infrastructure as Code, Kubernetes Security, and Cloud Security Posture Management.
  • Added Tenable.ot™ to the Continuous Diagnostics and Mitigation (CDM) Program Approved Product List, allowing federal agencies and departments to purchase Tenable.ot through the CDM Program.
  • Named a Leader in Forrester’s report, “The Forrester Wave™: Industrial Control Systems (ICS) Security Solutions, Q4, 2021.” As one of only three leaders, Tenable received the highest possible scores (5.0) in seven criteria, including ICS Protocol Support, Vulnerability Risk Management for Operational Technology, Execution Roadmap, Innovation Roadmap, Planned Enhancements, Commercial Model and Product Security.

Financial Outlook

For the first quarter of 2022, we currently expect:

  • Revenue in the range of $152.0 million to $154.0 million.
  • Non-GAAP income from operations in the range of $10.0 million to $11.0 million.
  • Non-GAAP net income in the range of $5.2 million to $6.2 million, assuming interest expense of $3.5 million and a provision for income taxes of $1.3 million.
  • Non-GAAP diluted earnings per share in the range of $0.04 to $0.05.
  • 117.5 million diluted weighted average shares outstanding.

For the year ending December 31, 2022, we currently expect:

  • Calculated current billings in the range of $750.0 million to $760.0 million.
  • Revenue in the range of $662.0 million to $670.0 million.
  • Non-GAAP income from operations in the range of $40.0 million to $45.0 million.
  • Non-GAAP net income in the range of $18.2 million to $23.2 million, assuming interest expense of $14.0 million and a provision for income taxes of $8.0 million.
  • Non-GAAP diluted earnings per share in the range of $0.15 to $0.19.
  • 119.5 million diluted weighted average shares outstanding.

Conference Call Information

Tenable will host a conference call today, February 1, 2022, at 4:30 p.m. Eastern Time to discuss its financial results. The conference call can be accessed at 877-407-9716 (U.S.) and 201-493-6779 (international). A live webcast of the event will be available on the Tenable Investor Relations website at https://investors.tenable.com. An archived replay of the live broadcast will be available on the Investor Relations page of the website following the call.

About Tenable

Tenable® is the Cyber Exposure company. Approximately 40,000 organizations around the globe rely on Tenable to understand and reduce cyber risk. As the creator of Nessus®, Tenable extended its expertise in vulnerabilities to deliver the world’s first platform to see and secure any digital asset on any computing platform. Tenable customers include approximately 60 percent of the Fortune 500, approximately 40 percent of the Global 2000, and large government agencies. Learn more at tenable.com.

Contact Information

Investor Relations
investors@tenable.com

Media Relations
tenablepr@tenable.com

Forward-Looking Statements

This press release includes forward-looking statements within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995. All statements contained in this press release other than statements of historical fact, including statements regarding our future results of operations and financial position, business strategy and plans and objectives for future operations, are forward-looking statements and represent our views as of the date of this press release. The words “anticipate,” “believe,” “continue,” “estimate,” “expect,” “intend,” “may,” “will” and similar expressions are intended to identify forward-looking statements. We have based these forward-looking statements on our current expectations and projections about future events and financial trends that we believe may affect our financial condition, results of operations, business strategy, short-term and long-term business operations and objectives and financial needs. These forward-looking statements are subject to a number of assumptions and risks and uncertainties, many of which involve factors or circumstances that are beyond our control that could affect our financial results. These risks and uncertainties are detailed in the sections titled “Risk Factors” 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, 2020, our Quarterly Report on Form 10-Q for the quarter ended September 30, 2021 and other filings that we make from time to time with the SEC, which are available on the SEC’s website at sec.gov. Such risks and uncertainties may be amplified by the COVID-19 pandemic and its potential impact on our business and the global economy. Moreover, we operate in a very competitive and rapidly changing environment. New risks emerge from time to time. It is not possible for our management to predict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements we may make. In light of these risks, uncertainties and assumptions, the future events and trends discussed in this press release may not occur and actual results could differ materially and adversely from those anticipated or implied in any forward-looking statements. Except as required by law, we are under no obligation to update these forward-looking statements subsequent to the date of this press release, or to update the reasons if actual results differ materially from those anticipated in the forward-looking statements.

Non-GAAP Financial Measures and Other Key Metrics

To supplement our consolidated financial statements, which are prepared and presented in accordance with GAAP, we use certain non-GAAP financial measures, as described below, to understand and evaluate our core operating performance. These non-GAAP financial measures, which may be different than similarly titled measures used by other companies, are presented to enhance the overall understanding of our financial performance and should not be considered a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP.

We believe that these non-GAAP financial measures provide useful information about our financial performance, enhance the overall understanding of our past performance and future prospects and allow for greater transparency with respect to important metrics used by management for financial and operational decision-making. We include these non-GAAP financial measures to present our financial performance using a management view and because we believe that these measures provide an additional comparison of our core financial performance over multiple periods with other companies in our industry.

Reconciliations of non-GAAP financial measures to the most directly comparable GAAP financial measures are included in the financial tables accompanying this press release.

Calculated Current Billings: We define calculated current billings, a non-GAAP financial measure, as total revenue recognized in a period plus the change in current deferred revenue in the corresponding period. We believe that calculated current billings is a key metric to measure our periodic performance. Given that most of our customers pay in advance (including multi-year contracts), but we generally recognize the related revenue ratably over time, we use calculated current billings to measure and monitor our ability to provide our business with the working capital generated by upfront payments from our customers. We believe that calculated current billings, which excludes deferred revenue for periods beyond twelve months in a customer’s contractual term, more closely correlates with annual contract value and that the 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.

Free Cash Flow and Unlevered Free Cash Flow: We define free cash flow, a non-GAAP financial measure, as net cash provided by operating activities less purchases of property and equipment. We believe free cash flow is an important liquidity measure of the cash (if any) that is available, after purchases of property and equipment, for investment in our business and to make acquisitions. We believe that free cash flow is useful as a liquidity measure because it measures our ability to generate or use cash. We define unlevered free cash flow as free cash flow plus cash paid for interest and other financing costs. We believe unlevered free cash flow is useful as a liquidity measure as it measures the cash that is available to invest in our business and meet our current and future financing needs.

Non-GAAP Income from Operations and Non-GAAP Operating Margin: We define these non-GAAP financial measures as their respective GAAP measures, excluding the effect of stock-based compensation, acquisition-related expenses and amortization of acquired intangible assets. Acquisition-related expenses include transaction expenses and costs related to the intercompany transfer of acquired intellectual property.

Non-GAAP Net Income and Non-GAAP Earnings Per Share: We define non-GAAP net income as GAAP net loss, excluding the effect of stock-based compensation, acquisition-related expenses and amortization of acquired intangible assets, including the applicable tax impacts. In addition, we exclude the tax impact of intra-entity asset transfers resulting from the internal restructuring of legal entities as well as deferred income tax benefits recognized in connection with acquisitions. We use non-GAAP net income to calculate non-GAAP earnings per share.

Non-GAAP Gross Profit and Non-GAAP Gross Margin: We define non-GAAP gross profit as GAAP gross profit, excluding the effect of stock-based compensation and amortization of acquired intangible assets. Non-GAAP gross margin is defined as non-GAAP gross profit as a percentage of revenue.

Non-GAAP Sales and Marketing Expense, Non-GAAP Research and Development Expense and Non-GAAP General and Administrative Expense: We define these non-GAAP measures as their respective GAAP measures, excluding stock-based compensation and acquisition-related expenses.

TENABLE HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)

Three Months Ended
December 31,
Year Ended
December 31,
(in thousands, except per share data) 2021 2020 2021 2020
Revenue $ 149,018 $ 118,082 $ 541,130 $ 440,221
Cost of revenue(1) 30,836 20,317 106,396 77,554
Gross profit 118,182 97,765 434,734 362,667
Operating expenses:
Sales and marketing(1) 77,485 55,934 270,158 224,277
Research and development(1) 30,718 24,418 116,432 101,687
General and administrative(1) 22,846 18,144 89,912 73,136
Total operating expenses 131,049 98,496 476,502 399,100
Loss from operations (12,867 ) (731 ) (41,768 ) (36,433 )
Interest (expense) income, net (3,347 ) 67 (6,896 ) 1,244
Other expense, net (605 ) (66 ) (1,965 ) (1,885 )
Loss before income taxes (16,819 ) (730 ) (50,629 ) (37,074 )
(Benefit) provision for income taxes (5,774 ) 1,206 (3,952 ) 5,657
Net loss $ (11,045 ) $ (1,936 ) $ (46,677 ) $ (42,731 )
Net loss per share, basic and diluted $ (0.10 ) $ (0.02 ) $ (0.44 ) $ (0.42 )
Weighted-average shares used to compute net loss per share, basic and diluted 108,235 103,203 106,387 101,009

_______________
(1) Includes stock-based compensation as follows:

Three Months Ended
December 31,
Year Ended
December 31,
2021 2020 2021 2020
Cost of revenue $ 1,110 $ 755 $ 4,446 $ 3,158
Sales and marketing 7,908 5,165 29,410 19,842
Research and development 5,674 4,000 20,593 14,794
General and administrative 6,380 5,652 24,956 21,779
Total stock-based compensation $ 21,072 $ 15,572 $ 79,405 $ 59,573

TENABLE HOLDINGS, INC.
CONSOLIDATED BALANCE SHEETS
(unaudited)

December 31,
(in thousands, except per share data) 2021 2020
Assets
Current assets:
Cash and cash equivalents $ 278,000 $ 178,223
Short-term investments 234,292 113,623
Accounts receivable (net of allowance for doubtful accounts of $524 and $261 at December 31, 2021 and 2020, respectively) 136,601 115,342
Deferred commissions 40,311 32,143
Prepaid expenses and other current assets 60,234 44,462
Total current assets 749,438 483,793
Property and equipment, net 36,833 38,920
Deferred commissions (net of current portion) 59,638 46,733
Operating lease right-of-use assets 38,530 39,426
Acquired intangible assets, net 71,536 13,193
Goodwill 261,614 54,414
Other assets 31,230 14,110
Total assets $ 1,248,819 $ 690,589
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable and accrued expenses $ 16,254 $ 5,731
Accrued compensation 54,051 35,509
Deferred revenue 407,498 328,819
Operating lease liabilities 2,320 3,815
Other current liabilities 3,759 1,028
Total current liabilities 483,882 374,902
Deferred revenue (net of current portion) 123,387 105,691
Term loan, net of issuance costs (net of current portion) 364,728
Operating lease liabilities (net of current portion) 55,046 54,529
Other liabilities 6,463 4,802
Total liabilities 1,033,506 539,924
Stockholders’ equity:
Common stock (par value: $0.01; 500,000 shares authorized, 108,929 and 103,715 shares issued and outstanding at December 31, 2021 and 2020, respectively) 1,089 1,037
Additional paid-in capital 869,059 757,470
Accumulated other comprehensive (loss) income (306 ) 10
Accumulated deficit (654,529 ) (607,852 )
Total stockholders’ equity 215,313 150,665
Total liabilities and stockholders’ equity $ 1,248,819 $ 690,589

TENABLE HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)

Year Ended December 31,
(in thousands) 2021 2020
Cash flows from operating activities:
Net loss $ (46,677 ) $ (42,731 )
Adjustments to reconcile net loss to net cash provided by operating activities:
Deferred income taxes (10,468 ) 161
Depreciation and amortization 16,170 10,633
Stock-based compensation 79,405 59,573
Other 3,915 1,071
Changes in operating assets and liabilities:
Accounts receivable (17,228 ) (20,012 )
Prepaid expenses and other assets (46,207 ) (19,372 )
Accounts payable, accrued expenses and accrued compensation 24,330 (5,282 )
Deferred revenue 92,486 71,383
Other current and noncurrent liabilities 1,039 8,808
Net cash provided by operating activities 96,765 64,232
Cash flows from investing activities:
Purchases of property and equipment (6,561 ) (20,277 )
Purchases of short-term investments (282,438 ) (184,516 )
Sales and maturities of short-term investments 160,874 209,148
Purchase of other investments (5,000 )
Business combinations, net of cash acquired (258,465 ) (276 )
Net cash (used in) provided by investing activities (391,590 ) 4,079
Cash flows from financing activities:
Proceeds from term loan 375,000
Credit facility issuance costs (9,348 ) (333 )
Proceeds from loan agreement 2,000
Proceeds from stock issued in connection with the employee stock purchase plan 13,736 13,040
Proceeds from the exercise of stock options 18,268 21,709
Other financing activities (10 ) (13 )
Net cash provided by financing activities 397,646 36,403
Effect of exchange rate changes on cash and cash equivalents and restricted cash (3,013 ) (916 )
Net increase in cash and cash equivalents and restricted cash 99,808 103,798
Cash and cash equivalents and restricted cash at beginning of year 178,463 74,665
Cash and cash equivalents and restricted cash at end of year $ 278,271 $ 178,463

TENABLE HOLDINGS, INC.
REVENUE COMPONENTS AND RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES
(unaudited)

Revenue Three Months Ended
December 31,
Year Ended
December 31,
(in thousands) 2021 2020 2021 2020
Subscription revenue $ 132,298 $ 102,162 $ 476,023 $ 377,354
Perpetual license and maintenance revenue 12,612 12,548 50,333 50,594
Professional services and other revenue 4,108 3,372 14,774 12,273
Revenue(1) $ 149,018 $ 118,082 $ 541,130 $ 440,221

_______________
(1) Recurring revenue, which includes revenue from subscription arrangements for software and cloud-based solutions and maintenance associated with perpetual licenses, represented 95% of revenue in the three months and year ended December 31, 2021 and 94% of revenue in the three months and year ended December 31, 2020.

Calculated Current Billings Three Months Ended
December 31,
Year Ended
December 31,
(in thousands) 2021 2020 2021 2020
Revenue $ 149,018 $ 118,082 $ 541,130 $ 440,221
Deferred revenue (current), end of period 407,498 328,819 407,498 328,819
Deferred revenue (current), beginning of period(1) (362,496 ) (296,360 ) (331,462 ) (274,348 )
Calculated current billings $ 194,020 $ 150,541 $ 617,166 $ 494,692

_______________
(1) Deferred revenue (current), beginning of period for the three months and year ended December 31, 2021 includes $0.2 million and $2.6 million, respectively, related to acquired deferred revenue at the acquisition date, which is not included in deferred revenue (current) at September 30, 2021 and December 31, 2020, respectively.

Free Cash Flow and Unlevered Free Cash Flow Three Months Ended
December 31,
Year Ended
December 31,
(in thousands) 2021 2020 2021 2020
Net cash provided by operating activities $ 21,972 $ 17,934 $ 96,765 $ 64,232
Purchases of property and equipment (2,792 ) (1,204 ) (6,561 ) (20,277 )
Free cash flow(1) 19,180 16,730 90,204 43,955
Cash paid for interest and other financing costs 3,214 81 4,978 335
Unlevered free cash flow(1) $ 22,394 $ 16,811 $ 95,182 $ 44,290

________________
(1) Free cash flow and unlevered free cash flow for the periods presented were impacted by:

Three Months Ended
December 31,
Year Ended
December 31,
(in millions) 2021 2020 2021 2020
Employee stock purchase plan activity $ 4.4 $ 3.6 $ (0.3 ) $ 0.9
Acquisition-related expenses (2.9 ) (6.5 ) (0.7 )
Tax payment on intra-entity asset transfer 2.8
Proceeds from lease incentives 14.2
Capital expenditures related to new headquarters (0.6 ) (0.9 ) (17.2 )

Free cash flow and unlevered free cash flow for the three months and year ended December 31, 2021 were reduced by approximately $8 million due to prepayments of software subscription costs, insurance and rent, and were offset by the benefit of approximately $4 million and $15 million, respectively, from prepayments of similar items made in 2020. The 2020 prepayments reduced free cash flow and unlevered free cash flow by approximately $17 million for the three months and year ended December 31, 2020.

Non-GAAP Income from Operations and Non-GAAP Operating Margin Three Months Ended
December 31,
Year Ended
December 31,
(dollars in thousands) 2021 2020 2021 2020
Loss from operations $ (12,867 ) $ (731 ) $ (41,768 ) $ (36,433 )
Stock-based compensation 21,072 15,572 79,405 59,573
Acquisition-related expenses 931 6,901 339
Amortization of acquired intangible assets 2,743 578 6,447 2,314
Non-GAAP income from operations $ 11,879 $ 15,419 $ 50,985 $ 25,793
Operating margin (9 )% (1 )% (8 )% (8 )%
Non-GAAP operating margin 8 % 13 % 9 % 6 %
Non-GAAP Net Income and Non-GAAP Earnings Per Share Three Months Ended
December 31,
Year Ended
December 31,
(in thousands, except per share data) 2021 2020 2021 2020
Net loss $ (11,045 ) $ (1,936 ) $ (46,677 ) $ (42,731 )
Stock-based compensation 21,072 15,572 79,405 59,573
Tax impact of stock-based compensation(1) 1,116 167 617 1,299
Acquisition-related expenses(2) 931 6,901 339
Amortization of acquired intangible assets(3) 2,743 578 6,447 2,314
Tax impact of acquisitions(4) (8,877 ) (10,560 )
Tax impact of intra-entity asset transfer(5) 2,808
Non-GAAP net income $ 5,940 $ 14,381 $ 38,941 $ 20,794
Net loss per share, diluted $ (0.10 ) $ (0.02 ) $ (0.44 ) $ (0.42 )
Stock-based compensation 0.19 0.15 0.75 0.59
Tax impact of stock-based compensation(1) 0.01 0.01 0.01
Acquisition-related expenses(2) 0.01 0.06
Amortization of acquired intangible assets(3) 0.02 0.01 0.06 0.02
Tax impact of acquisitions(4) (0.08 ) (0.10 )
Tax impact of intra-entity asset transfer(5) 0.03
Adjustment to diluted earnings per share(6) (0.01 ) (0.03 ) (0.01 )
Non-GAAP earnings per share, diluted $ 0.05 $ 0.13 $ 0.34 $ 0.19
Weighted-average shares used to compute GAAP net loss per share, diluted 108,235 103,203 106,387 101,009
Weighted-average shares used to compute non-GAAP earnings per share, diluted 116,466 112,691 114,825 109,962

________________
(1) The tax impact of stock-based compensation is based on the tax treatment for applicable tax jurisdictions.
(2) The tax impact of acquisition-related expenses is not material.
(3) The tax impact of the amortization of acquired intangible assets is included in the tax impact of acquisitions.
(4) The tax impact of acquisitions includes a reversal of the $7.9 million income tax benefit recognized for GAAP purposes in the three months and year ended December 31, 2021 related to the partial release of Tenable’s valuation allowance associated with the Accurics acquisition on October 1, 2021. In addition, the tax impact of acquisitions includes the reversal of $0.9 million and $2.6 million of deferred tax benefits in the three months and year ended December 31, 2021, respectively, related to the Alsid acquisition.
(5) The tax impact of the intra-entity transfer is related to the internal restructuring of Indegy, resulting in a current tax payment based on the applicable Israeli tax rate.
(6) An adjustment may be necessary to reconcile GAAP net loss per share, which excludes potentially dilutive shares, to non-GAAP earnings per share, which includes potentially dilutive shares.

Non-GAAP Gross Profit and Non-GAAP Gross Margin Three Months Ended
December 31,
Year Ended
December 31,
(dollars in thousands) 2021 2020 2021 2020
Gross profit $ 118,182 $ 97,765 $ 434,734 $ 362,667
Stock-based compensation 1,110 755 4,446 3,158
Amortization of acquired intangible assets 2,743 578 6,447 2,314
Non-GAAP gross profit $ 122,035 $ 99,098 $ 445,627 $ 368,139
Gross margin 79 % 83 % 80 % 82 %
Non-GAAP gross margin 82 % 84 % 82 % 84 %
Non-GAAP Sales and Marketing Expense Three Months Ended
December 31,
Year Ended
December 31,
(dollars in thousands) 2021 2020 2021 2020
Sales and marketing expense $ 77,485 $ 55,934 $ 270,158 $ 224,277
Less: Stock-based compensation 7,908 5,165 29,410 19,842
Less: Acquisition-related expenses 119 119
Non-GAAP sales and marketing expense $ 69,458 $ 50,769 $ 240,629 $ 204,435
Non-GAAP sales and marketing expense % of revenue 47 % 43 % 44 % 46 %
Non-GAAP Research and Development Expense Three Months Ended
December 31,
Year Ended
December 31,
(dollars in thousands) 2021 2020 2021 2020
Research and development expense $ 30,718 $ 24,418 $ 116,432 $ 101,687
Less: Stock-based compensation 5,674 4,000 20,593 14,794
Less: Acquisition-related expenses 139 139
Non-GAAP research and development expense $ 24,905 $ 20,418 $ 95,700 $ 86,893
Non-GAAP research and development expense % of revenue 17 % 17 % 18 % 20 %
Non-GAAP General and Administrative Expense Three Months Ended
December 31,
Year Ended
December 31,
(dollars in thousands) 2021 2020 2021 2020
General and administrative expense $ 22,846 $ 18,144 $ 89,912 $ 73,136
Less: Stock-based compensation 6,380 5,652 24,956 21,779
Less: Acquisition-related expenses 673 6,643 339
Non-GAAP general and administrative expense $ 15,793 $ 12,492 $ 58,313 $ 51,018
Non-GAAP general and administrative expense % of revenue 11 % 11 % 11 % 12 %

The following adjustments to reconcile forecasted non-GAAP income from operations, non-GAAP net income and non-GAAP earnings per share are subject to a number of uncertainties and assumptions, each of which are inherently difficult to forecast. As a result, actual adjustments and GAAP results may differ materially.

Forecasted Non-GAAP Income from Operations Three Months Ended
March 31, 2022
Year Ended
December 31, 2022
(in millions) Low High Low High
Forecasted loss from operations $ (21.3 ) $ (20.3 ) $ (98.5 ) $ (93.5 )
Forecasted stock-based compensation 27.0 27.0 126.0 126.0
Forecasted acquisition-related expenses 1.9 1.9 2.1 2.1
Forecasted amortization of acquired intangible assets(1) 2.4 2.4 10.4 10.4
Forecasted non-GAAP income from operations $ 10.0 $ 11.0 $ 40.0 $ 45.0

________________
(1) The forecasted amortization of acquired intangible assets assumes $4 million of acquired intangible assets from Cymptom that is estimated to be amortized over seven years. These assumptions are preliminary, as the purchase accounting for Cymptom is not complete. Any changes to the valuation of intangible assets would impact the forecasted amortization of acquired intangible assets.

Forecasted Non-GAAP Net Income and Non-GAAP Earnings Per Share Three Months Ended
March 31, 2022
Year Ended
December 31, 2022
(in millions, except per share data) Low High Low High
Forecasted net loss(1) $ (27.7 ) $ (26.7 ) $ (124.8 ) $ (119.8 )
Forecasted stock-based compensation 27.0 27.0 126.0 126.0
Forecasted tax impact of stock-based compensation 1.2 1.2 3.0 3.0
Forecasted acquisition-related expenses 1.9 1.9 2.1 2.1
Forecasted tax impact of acquisitions 0.4 0.4 1.5 1.5
Forecasted amortization of acquired intangible assets(2) 2.4 2.4 10.4 10.4
Forecasted non-GAAP net income $ 5.2 $ 6.2 $ 18.2 $ 23.2
Forecasted net loss per share, diluted(1) $ (0.25 ) $ (0.24 ) $ (1.12 ) $ (1.07 )
Forecasted stock-based compensation 0.25 0.25 1.13 1.13
Forecasted tax impact of stock-based compensation 0.01 0.01 0.03 0.03
Forecasted acquisition-related expenses 0.02 0.02 0.02 0.02
Forecasted tax impact of acquisitions 0.01 0.01
Forecasted amortization of acquired intangible assets(2) 0.02 0.02 0.09 0.09
Adjustment to diluted earnings per share(3) (0.01 ) (0.01 ) (0.01 ) (0.02 )
Forecasted non-GAAP earnings per share, diluted $ 0.04 $ 0.05 $ 0.15 $ 0.19
Forecasted weighted-average shares used to compute GAAP net loss per share, diluted 110.0 110.0 111.5 111.5
Forecasted weighted-average shares used to compute non-GAAP earnings per share, diluted 117.5 117.5 119.5 119.5

________________
(1) The forecasted GAAP net loss assumes a provision for income taxes of $2.9 million and $12.5 million in the three months ending March 31, 2022 and year ending December 31, 2022, respectively.
(2) The forecasted amortization of acquired intangible assets assumes $4 million of acquired intangible assets from Cymptom that is estimated to be amortized over seven years. These assumptions are preliminary, as the purchase accounting for Cymptom is not complete. Any changes to the valuation of intangible assets would impact the forecasted amortization of acquired intangible assets and the tax impact of acquisitions.
(3) Adjustment to reconcile GAAP net loss per share, which excludes potentially dilutive shares, to non-GAAP earnings per share, which includes potentially dilutive shares.

Fourth Quarter 2021 Financial Highlights

Source: https://investors.tenable.com/news-releases/news-release-details/tenable-announces-fourth-quarter-and-full-year-2021-financial

Donovan Larsen

Donovan is a columnist and associate editor at the Dark News. He has written on everything from the politics to diversity issues in the workplace.

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