Tenable Holdings, Inc.TENB
Tenable Holdings, Inc. Income Taxes Disclosure
Income Taxes
U.S. and foreign components of the loss before income taxes were as follows:
| Year Ended December 31, | |||||||||||||||||
| (in thousands) | 2025 | 2024 | 2023 | ||||||||||||||
| U.S. income (loss) | $ | 19,988 | $ | 25,787 | $ | (26,249) | |||||||||||
| Foreign loss | (42,921) | (44,673) | (41,152) | ||||||||||||||
| Total loss before income taxes | $ | (22,933) | $ | (18,886) | $ | (67,401) | |||||||||||
The components of the provision for income taxes were as follows:
| Year Ended December 31, | |||||||||||||||||
(in thousands) | 2025 | 2024 | 2023 | ||||||||||||||
| Current | |||||||||||||||||
| Federal | $ | 5 | $ | 3,278 | $ | 5 | |||||||||||
| State | 300 | 454 | 708 | ||||||||||||||
| Foreign | 11,432 | 13,036 | 9,930 | ||||||||||||||
| Total current tax expense | 11,737 | 16,768 | 10,643 | ||||||||||||||
| Deferred | |||||||||||||||||
| Federal | 1,095 | 580 | 293 | ||||||||||||||
| State | 676 | 227 | 239 | ||||||||||||||
| Foreign | (323) | (160) | (292) | ||||||||||||||
Total deferred tax expense | 1,448 | 647 | 240 | ||||||||||||||
| Total provision for income taxes | $ | 13,185 | $ | 17,415 | $ | 10,883 | |||||||||||
Our provision for income taxes in 2024 included expense of $3.3 million related to Base Erosion and Anti-Abuse Tax, or BEAT, and $1.2 million of expense related to restructuring of our operations in Israel through intercompany
transactions, neither of which were applicable in 2025 or 2023.
The items accounting for the difference between income taxes computed at the federal statutory rate and our effective tax rate after the adoption of ASU 2023-09 were as follows:
| Year Ended December 31, 2025 | |||||||||||
(dollars in thousands) | Amount | Percent | |||||||||
U.S. federal statutory tax rate | $ | (4,816) | 21.0 | % | |||||||
State and local income tax, net of federal (national) income tax effect(1) | 916 | (4.0) | |||||||||
| Foreign tax effects | |||||||||||
| Brazil | |||||||||||
| Foreign withholding taxes | 2,438 | (10.6) | |||||||||
| Colombia | |||||||||||
| Foreign withholding taxes | 1,181 | (5.1) | |||||||||
| Israel | |||||||||||
| Federal statutory tax rate difference | (1,219) | 5.3 | |||||||||
| Currency remeasurement | (4,732) | 20.6 | |||||||||
| Changes in valuation allowances | 16,206 | (70.7) | |||||||||
| Stock compensation | 1,409 | (6.1) | |||||||||
| Other | 858 | (3.7) | |||||||||
| Ireland | |||||||||||
| Currency remeasurement | (5,588) | 24.4 | |||||||||
| Changes in valuation allowances | 4,321 | (18.8) | |||||||||
| Other | (430) | 1.9 | |||||||||
| France | 2,197 | (9.6) | |||||||||
| Other foreign jurisdictions | 3,096 | (13.6) | |||||||||
| Effect of cross border tax laws | |||||||||||
Foreign branch loss | (7,850) | 34.2 | |||||||||
| Legal entity reorganization | (3,032) | 13.2 | |||||||||
| Other | (23) | 0.1 | |||||||||
| Nontaxable or nondeductible items | |||||||||||
| Stock compensation | 2,300 | (10.0) | |||||||||
| Other | 1,502 | (6.5) | |||||||||
| Tax credits | |||||||||||
| Research credits | (3,282) | 14.3 | |||||||||
| Changes in unrecognized tax benefits | 359 | (1.6) | |||||||||
| Changes in valuation allowances | 7,374 | (32.2) | |||||||||
| Total tax expense | $ | 13,185 | (57.5) | % | |||||||
_______________
(1) State and local taxes in California, Texas, Illinois, and New York make up the majority of the tax effect.
The items accounting for the difference between income taxes computed at the federal statutory rate and our effective tax rate were as follows for years prior to our adoption of ASU 2023-09:
| Year Ended December 31, | |||||||||||
| 2024 | 2023 | ||||||||||
| U.S. federal statutory tax rate | 21.0 | % | 21.0 | % | |||||||
| State and local taxes | (0.9) | 1.9 | |||||||||
| Research and development tax credit | 25.5 | 8.4 | |||||||||
| Stock-based compensation | (13.6) | (11.3) | |||||||||
| Foreign tax rate differential | 35.4 | (1.7) | |||||||||
| Change in valuation allowance | (81.7) | (34.0) | |||||||||
| Gain on intercompany sale, net of losses | (2.1) | (1.4) | |||||||||
| Foreign withholding tax | (24.8) | (5.4) | |||||||||
| Foreign deferred FX remeasurement | (20.5) | 9.0 | |||||||||
| GILTI | (1.7) | — | |||||||||
| BEAT | (17.6) | — | |||||||||
| Transaction costs | (3.6) | (1.0) | |||||||||
| Non-deductible expenses | (5.3) | (1.5) | |||||||||
| Other | (2.3) | (0.3) | |||||||||
| Effective tax rate | (92.2) | % | (16.3) | % | |||||||
We maintain a valuation allowance on certain U.S. federal, state and foreign deferred tax assets as the realization of our deferred tax assets is dependent upon future earnings, if any, the timing and amount of which are uncertain. In 2025, our valuation allowance increased by $35.1 million, primarily related to our 2025 loss before income taxes and U.S. R&D tax credits.
The components of the deferred tax assets and liabilities were as follows:
| December 31, | |||||||||||
| (in thousands) | 2025 | 2024 | |||||||||
| Deferred tax assets: | |||||||||||
| Net operating losses | $ | 187,353 | $ | 153,781 | |||||||
| Deferred revenue | 21,706 | 21,949 | |||||||||
| Stock-based compensation | 22,571 | 21,802 | |||||||||
| Tax credits | 31,692 | 28,420 | |||||||||
| Leases | 14,307 | 14,936 | |||||||||
| Accrued compensation | 4,104 | 3,364 | |||||||||
| Interest expense | 969 | 2,171 | |||||||||
| Capitalized research and development | 34,621 | 32,441 | |||||||||
| Other | 3,221 | 3,219 | |||||||||
| Total deferred tax assets | 320,544 | 282,083 | |||||||||
| Valuation allowance | (254,880) | (219,773) | |||||||||
| Net deferred tax assets | 65,664 | 62,310 | |||||||||
| Deferred tax liabilities: | |||||||||||
| Deferred commissions | (24,212) | (23,623) | |||||||||
| Property and equipment | (11,071) | (12,821) | |||||||||
| Intangible assets | (32,827) | (27,302) | |||||||||
| Other | (1,213) | (773) | |||||||||
| Total deferred tax liabilities | (69,323) | (64,519) | |||||||||
| Net deferred tax liabilities | $ | (3,659) | $ | (2,209) | |||||||
At December 31, 2025, we had net operating loss (“NOL”) carryforwards for federal, state and foreign tax purposes of $378.4 million, $218.9 million, and $618.7 million, respectively, which will begin to expire in 2030, as well as $31.7 million of federal, state and foreign research and development tax credits, foreign tax credits, minimum tax credits and miscellaneous state tax credits. The federal research and development and foreign tax credits will begin to expire in 2032 if unutilized.
We are currently subject to the annual limitation under Sections 382 and 383 of the Internal Revenue Code. We will not be precluded from realizing the NOL carryforward and tax credits but may be limited in the amount we could utilize in any given tax year in the event that the federal and state taxable income will exceed the limitation imposed by Section 382. The amount of the annual limitation is determined based on our value immediately prior to the ownership change. Subsequent ownership changes may further affect the limitation in future years.
At December 31, 2025 and 2024, the total amount of gross unrecognized tax benefits was $9.1 million and $8.5 million, respectively, which, if recognized, would impact our effective tax rate by approximately $0.4 million and $0.2 million in 2025 and 2024, respectively. Interest and penalties associated with uncertain tax positions recognized as a component of income tax expense were immaterial in 2025, 2024 and 2023.
The change in gross unrecognized tax benefits, excluding accrued interest, were as follows:
| Year Ended December 31, | |||||||||||||||||
| (in thousands) | 2025 | 2024 | 2023 | ||||||||||||||
| Unrecognized tax benefits at the beginning of the period | $ | 8,538 | $ | 8,297 | $ | 7,820 | |||||||||||
| Additions for tax positions in the current year | 151 | 329 | 417 | ||||||||||||||
| Increase in prior year positions | 385 | — | 60 | ||||||||||||||
| Decrease in prior year positions | (18) | (88) | — | ||||||||||||||
| Acquisitions | — | — | — | ||||||||||||||
| Unrecognized tax benefits at the end of the period | $ | 9,056 | $ | 8,538 | $ | 8,297 | |||||||||||
We file income tax returns in the United States, including various state jurisdictions. Our subsidiaries file income tax returns in various foreign jurisdictions. Tax years after 2014 remain open to examination by the major taxing jurisdictions in which we are subject to tax. At December 31, 2025, we were not under examination for income tax audits by the Internal Revenue Service. We are currently under tax examination in France for tax years 2019 through 2022.
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. It is not practicable for us to determine the amount of unrecognized tax expense on these reinvested foreign earnings.
On July 4, 2025, U.S. legislation commonly known as the One Big Beautiful Bill Act ("OBBBA") was enacted, which includes permanent extensions of expiring and expired federal income tax provisions, including immediate expensing of domestic research and development expenses, as well as certain prospective international tax changes. The application of the OBBBA did not have a material impact on our financial statements for the year ended December 31, 2025.
The amount of cash income taxes paid, net of refunds received were as follows:
| (in thousands) | Year Ended December 31, 2025 | ||||
U.S. federal | $ | (29) | |||
U.S. state and local | 698 | ||||
Foreign | |||||
| Brazil | 3,860 | ||||
| Colombia | 1,708 | ||||
| Israel | (1,249) | ||||
| Singapore | 998 | ||||
| Other | 5,815 | ||||
| Total | $ | 11,801 | |||
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 27, 2026 | Showing above |
| 2024 | Feb 24, 2025 | |
| 2023 | Feb 28, 2024 | |
| 2022 | Feb 24, 2023 | |
| 2021 | Feb 25, 2022 | |
| 2020 | Feb 23, 2021 | |
| 2019 | Feb 28, 2020 | |
| 2018 | Mar 1, 2019 | |
About Income Taxes Disclosures
The income tax disclosure reveals how much a company actually pays in taxes versus what the statutory rate would predict. Analysts focus on the effective tax rate (ETR) reconciliation, which breaks down every item driving the gap between the 21% federal rate and the company's reported ETR — including R&D credits, foreign rate differentials, and state taxes. Deferred tax assets (DTAs) and their valuation allowances signal management's confidence in future profitability: a rising allowance suggests the company doubts it can use accumulated tax benefits. Uncertain tax benefit (UTB) reserves quantify exposure to IRS challenges on aggressive positions.
Key signals to watch: sudden ETR drops without clear operational reasons, large increases in valuation allowances, growing UTB balances, and significant unremitted foreign earnings. Post-TCJA, pay attention to GILTI and BEAT provisions that affect multinational tax structures. Compare the cash taxes paid (from the cash flow statement) against the income tax provision to gauge earnings quality.