Company: TENB
Filing Date: 2025-02-24
Form Type: 10-K
Source: 0001660280-25-000034
Chunk: 109

Company: Tenable Holdings, Inc.
Filing Date: 2025-02-24
Form: 10-K
Item: Item 7
Chunk 109
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 value of the option awards reflect our best estimates. If any of the assumptions change significantly, stock-based compensation for future awards may differ significantly compared with the awards granted previously.

The assumptions and estimates are as follows:

•Fair Value of Common Stock. See Valuations below.

•Expected Term. We use the actual purchase periods as the expected term in the 2018 ESPP.

•Volatility. This is a measure of the amount by which a financial variable, such as a share price, has fluctuated (historical volatility) or is expected to fluctuate (expected volatility) during a period. We use the volatility of our common stock to calculate expected volatility for the 2018 ESPP.

•Risk-Free Interest Rate. This is the U.S. Treasury rate, having a term that most closely resembles the expected remaining term of each offering of the 2018 ESPP.

•Dividend Yield. We have not and do not expect to pay dividends on our common stock.

Valuations

We use the market price of our common stock at the date of grant as the fair value. 

The fair value of the 2018 ESPP purchase rights were estimated on the offering or modification dates based on the following assumptions:

Year Ended December 31,202420232022Expected term (in years)0.5 — 2.00.5 — 2.00.5 — 2.0Expected volatility31.9% — 51.4%46.9% — 58.1%42.8% — 61.0%Risk-free interest rate3.8% — 5.1% 4.8% — 5.4%0.1% — 3.4%Expected dividend yield———

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 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