x` Tenable

Discounted Cash Flow Analysis

($ in Thousands, fiscal year ending December 31) Operating Scenario Err:508
Operating Scenario 1
Mid-Year Convention Y Historical Period CAGR Projection Period CAGR
2021 2022 2023 ('21 - '23) 2024 2025 2026 2027 2028 2029 ('25 - '29)
Sales $541,130 $683,191 $798,710 21.5% $877,596.0 $1,096,995.0 $1,316,394.0 $1,553,344.9 $1,786,346.7 $2,054,298.7 18.5%
% growth NA 26.3% 16.9% 9.9% 25.0% 20.0% 18.0% 15.0% 15.0%
Cost of Goods Sold 106,396.0 154,789.0 183,577.0 197,032.0 241,338.9 231,685.3 273,388.7 314,397.0 361,556.6
Gross Profit $434,734.0 $528,402.0 $615,133.0 19.0% $680,564.0 $855,656.1 $1,084,708.7 $1,279,956.2 $1,471,949.6 $1,692,742.1 20.0%
% margin 80.3% 77.3% 77.0% 77.5% 78.0% 82.4% 82.4% 82.4% 82.4%
Selling, General & Administrative 476,502.0 596,217.0 667,293.0 690,562.0 789,836.4 853,023.3 905,910.8 1,041,797.4 1,198,067.0
EBITDA ($41,768.0) ($67,815.0) ($52,160.0) 11.7% ($9,998.0) $65,819.7 $231,685.3 $374,045.5 $430,152.3 $494,675.1 -318.2%
% margin (7.7%) (9.9%) (6.5%) -1.1% 6.0% 17.6% 24.1% 24.1% 24.1%
Depreciation & Amortization 16,170.0 22,194.0 27,108.0 28,412.0 186,489.2 223,787.0 264,068.6 303,678.9 349,230.8
EBIT ($57,938.0) ($90,009.0) ($79,268.0) 17.0% ($38,410.0) ($120,669.5) $7,898.4 $109,976.8 $126,473.3 $145,444.3 -230.5%
% margin (10.7%) (13.2%) (9.9%) -4.4% -11.0% 0.6% 7.1% 7.1% 7.1%
Taxes (12,167.0) (18,901.9) (16,646.3) (8,066.1) (25,340.6) 1,658.7 23,095.1 26,559.4 30,543.3
EBIAT ($45,771.0) ($71,107.1) ($62,621.7) 17.0% ($30,343.9) ($95,328.9) $6,239.7 $86,881.7 $99,913.9 $114,901.0 -230.5%
Plus: Depreciation & Amortization 16,170.0 22,194.0 27,108.0 28,412.0 186,489.2 223,787.0 264,068.6 303,678.9 349,230.8
Less: Capital Expenditures (6,561.0) (19,148.0) (8,126.0) 1.70% (8,928.6) (18,648.9) (22,378.7) (26,406.9) (30,367.9) (34,923.1)
Less: Inc./(Dec.) in Net Working Capital (46,467.0) (23,616.0) (19,479.1) (51,483.7) (8,183.4) (48,960.0) (48,144.0) (55,365.6)
Unlevered Free Cash Flow $21,027.7 $199,464.6 $275,583.4 $325,080.9 $373,843.1
WACC 10.8%
Discount Period 0.5 1.5 2.5 3.5 4.5
Discount Factor 0.95 0.86 0.77 0.70 0.63
Present Value of Free Cash Flow $19,976.6 $171,023.6 $213,257.2 $227,040.0 $235,646.2

Enterprise Value Implied Equity Value Implied Perpetuity Growth Rate

Cumulative Present Value of FCF $866,943.6 Enterprise Value $7,434,839.7 Terminal Year Free Cash Flow (2029E) $373,843.1
Less: Total Debt (357,334.0) WACC 10.8%
Terminal Value Less: Preferred Stock Terminal Value $10,967,940.1
Terminal Year EBITDA (2029E) $494,675.1 Less: Noncontrolling Interest
Exit Multiple 22.2x Plus: Cash and Cash Equivalents 321,207.0 Implied Perpetuity Growth Rate 7.0%
Terminal Value $10,967,940.1
Discount Factor 0.60 Implied Equity Value $7,398,712.68 Implied EV/EBITDA
Present Value of Terminal Value $6,567,896.0 Enterprise Value $7,434,839.7
% of Enterprise Value 88.3% Diluted shares outstanding 120,135.4 FY2023 EBITDA (52,160.0)
implied share price Value $61.59
Enterprise Value $7,434,839.7 Implied EV/EBITDA (142.5x)

Assumptions 2021 2022 2023 2024 2025 2026 2027 2028 2029
Sales (% growth) NA 26.3% 16.9% 9.9% 25.0% 20.0% 18.0% 15.0% 15.0%
COGS (% sales) 80.3% 77.3% 77.0% 77.5% 22.0% 17.6% 17.6% 17.6% 17.6%
SG&A (% sales) 88.1% 87.3% 83.5% 78.7% 72.0% 64.8% 58.3% 58.3% 58.3%
Depreciation & Amortization (% sales) 3.0% 3.2% 3.4% 3.2% 17.0% 17.0% 17.0% 17.0% 17.0%
Capital Expenditures (% sales) 1.2% 2.8% 1.0% 1.0% 1.7% 1.7% 1.7% 1.7% 1.7%
Tax Rate 21.0% 21.0% 21.0% 21.0% 21.0% 21.0% 21.0% 21.0% 21.0%
Working Capital (% sales) 24.0% 20.7% 20.7% 20.7% 20.7%
Tenable
Working Capital Projections
($ in Thousands, fiscal year ending December 31)

Historical Period Projection Period

2021 2022 2023 2024 2025 2026 2027 2028 2029
Sales $541,130.0 $683,191.0 $798,710.0 $877,596.0 $1,096,995.0 $1,316,394.0 $1,553,344.9 $1,786,346.7 $2,054,298.7
Cost of Goods Sold 106,396.0 154,789.0 183,577.0 197,032.0 241,338.9 231,685.3 273,388.7 314,397.0 361,556.6

Current Assets
Accounts Receivable 136,601.0 187,341.0 220,060.0 241,794.6 296,940.0 305,114.9 360,035.6 414,040.9 476,147.0
Prepaid Expenses and Other 60,234.0 58,121.0 61,882.0 67,993.9 96,535.6 115,842.7 136,694.4 157,198.5 180,778.3
Total Current Assets $196,835.0 $245,462.0 $281,942.0 $309,788.5 $393,475.6 $420,957.6 $496,729.9 $571,239.4 $656,925.3

Current Liabilities
Accounts Payable 16,254.0 18,722.0 16,941.0 18,182.7 27,638.3 26,532.7 31,308.6 36,004.9 41,405.7
Accrued Liabilities 54,051.0 52,620.0 66,492.0 73,059.2 94,341.6 113,209.9 133,587.7 153,625.8 176,669.7
Other Current Liabilities 3,759.0 4,882.0 5,655.0 6,213.5 7,679.0 9,214.8 10,873.4 12,504.4 14,380.1
Total Current Liabilities $74,064.0 $76,224.0 $89,088.0 $97,455.4 $129,658.8 $148,957.4 $175,769.7 $202,135.2 $232,455.4

Net Working Capital $122,771.0 $169,238.0 $192,854.0 $212,333.1 $263,816.8 $272,000.2 $320,960.2 $369,104.2 $424,469.9
% sales 22.7% 24.8% 24.1% 24.2% 24.0% 20.7% 20.7% 20.7% 20.7%

(Increase) / Decrease in NWC ($46,467.0) ($23,616.0) ($19,479.1) ($51,483.7) ($8,183.4) ($48,960.0) ($48,144.0) ($55,365.6)

Assumptions Mean
Current Assets
Days Sales Outstanding 92.1 100.1 100.6 100.6 98.8 84.6 84.6 84.6 84.6 98.3
Prepaids and Other CA (% of sales) 11.1% 8.5% 7.7% 7.7% 8.8% 8.8% 8.8% 8.8% 8.8% 8.8%

Current Liabilities
Days Payable Outstanding 55.8 44.1 33.7 33.7 41.8 41.8 41.8 41.8 41.8 41.8
Accrued Liabilities (% of sales) 10.0% 7.7% 8.3% 8.3% 8.6% 8.6% 8.6% 8.6% 8.6% 8.6%
Other Current Liabilities (% of sales) 0.7% 0.7% 0.7% 0.7% 0.7% 0.7% 0.7% 0.7% 0.7% 0.7%
Tenable
Weighted Average Cost of Capital Analysis
($ in Thousands)

WACC Calculation
Target Capital Structure
Debt-to-Total Capitalization 21.7% Tenable's current debt structure
Equity-to-Total Capitalization 78.3%

Cost of Debt
Cost-of-Debt 4.1% Calculated from Tenable's Recent 10-Q
Tax Rate 21.0% USA marginal tax rate
After-tax Cost of Debt 3.2%

Cost of Equity
Risk-free Rate (1) 4.2% Bloomberg, 5 year USA treasury bond
Market Risk Premium (2) 10.5% 1957 - 2024 S&P 500 annual market retern
Levered Beta 0.83 Yahoo Finance 5 year monthly beta
Size Premium (3)
Cost of Equity 12.9%

WACC 10.8%
Assumptions Page 1 - Income Statement and Cash Flow Statement
Projection Period
Year 1 Year 2 Year 3
2025 2026 2027

Income Statement Assumptions

Sales (% growth) 25.0% 20.0% 18.0%
Base 1 25.0% 20.0% 18.0%

Cost of Goods Sold (% sales) 22.0% 17.6% 17.6%

Base 1 22.0% 17.6% 17.6%

SG&A (% sales) 72.0% 64.8% 58.3%

Base 1 72.0% 64.8% 58.3%

Depreciation & Amortization (% sales) 17.0% 17.0% 17.0%

Base 1 17.0% 17.0% 17.0%

Cash Flow Statement Assumptions

Capital Expenditures (% of sales) 1.7% 1.7% 1.7%
Base 1 1.7% 1.7% 1.7%
ection Period
Year 4 Year 5
2028 2029

15.0% 15.0%
15.0% 15.0%

17.6% 17.6%
17.6% 17.6%

58.3% 58.3%
58.3% 58.3%

17.0% 17.0%
17.0% 17.0%

1.7% 1.7%
1.7% 1.7%
Assumptions Page 2 - Balance Sheet
Projection Period
Year 1 Year 2 Year 3
2025 2026 2027

Current Assets
Days Sales Outstanding (DSO) 98.8 84.6 84.6
Base 1 84.6 84.6 84.6

Prepaid and Other Current Assets (% of sales) 8.8% 8.8% 8.8%

Base 1 8.80% 8.80% 8.80%

Current Liabilities
Days Payable Outstanding (DPO) 41.8 41.8 41.8
Base 1 66.0 66.0 66.0

Accrued Liabilities (% of sales) 8.6% 8.6% 8.6%

Base 1 8.60% 8.60% 8.60%

Other Current Liabilities (% of sales) 0.7% 0.7% 0.7%

Base 1 0.70% 0.70% 0.70%
ection Period
Year 4 Year 5
2028 2029

84.6 84.6
84.6 84.6

8.8% 8.8%
8.80% 8.80%

41.8 41.8
66.0 66.0

8.6% 8.6%
8.60% 8.60%

0.7% 0.7%
0.70% 0.70%