TENB - Earnings call transcript Q3 2018

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Operator

Greetings, and welcome to the Tenable Third Quarter Earnings Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded. I'd now like to turn the conference over to your host, Andrea DiMarco, VP, Investor Relations and Strategy.

Andrea DiMarco

thank to for for discuss quarter XXXX. and today's us the operator, of call conference Tenable's you, you joining all on third Thank financial results Chief call Officer. Financial Amit With Vintz, today on and Steve the Yoran, me Tenable's Executive Officer; Chief are financial call, XXXX to third this release our issued we Prior press a announcing quarter results.

find tenable.com. this release the on press can You IR at website

relating and forward-looking in and this the remind which XXXX, control, begin, forward-looking some that business, differ anticipated we adoption and by cause long-term statements expectations are these innovation some let call, solutions, and landscape planned making threat of course statements from me uncertainties, quarter actual you in the our those Tenable's changes results expectations market, statements we and growth and the our profitability, security regarding Tenable’s involve Before growth be during our in services. fourth for of Tenable's guidance for new statements. industry beyond demand to including of products position and and will competitive These materially could risks our in the drivers the which to customer in year full

as a You should rely of upon forward-looking future events. not prediction statements

or We our date. Forward-looking disclaim considered and should any representative only to beliefs not outlook. management's statements subsequent as obligation represent any be of as of assumptions and of statements forward-looking any today our update views

and are Form with that of with reports our file the most those SEC the discussion our XX-Q risks further website contained factors at on affect to on SEC X, we SEC, on actual quarterly September the a For refer sec.gov. could other filed report which XXXX filings recent the please available subsequent material and important results, that in

to in these financial GAAP with of call, superior are we GAAP. performance financial prepared a their number substitute not are financial non-GAAP measures measures related today's measures. accordance to in equivalents. financial In or non-GAAP to, of versus non-GAAP discuss measures use These of and limitations will addition a during addition, for, There the closest

Our reconciliations for now measures. Amit. the press to turn call let release includes GAAP And to over we today that non-GAAP issued these me

Amit Yoran

thank Thank today. on to another XX% you year-over-year strong us million Revenue grew the to that and in million. quarter public $XX.X billings current for call Tenable and Andrea, share I’m as company. $XX.X everyone joining performance pleased our year-over-year second XX% you, calculated a delivered to grew

leadership continue as expand we define Exposure We our market. to position the Cyber

in third for a based raising year. the and of on guidance the for positive the year As we’re Steve moment, our remainder detail full our will quarter results outlook

in SC saw Nessus Tenable Our offerings, in in was IO at strong Enterprise Professional hear the as XXX SecurityCenter demand customers the demand our strong fed seasonally me enterprise of and well third each you’ll operation. end refer continued areas performance continued strength strong third to addition of our volume including the and enterprise wide short. and for platform new across geographic in major strong for verticals a was which with of over Tenable.io The of quarter both result quarter. sector platform as range

by of for as enterprise as new a the Exposure, figure Cyber of Tenable adoption saw also strategic customers. evidenced XX We continued platform addition six the

seven to added our We base quarter. figure customer also during the

still customer story. many Tenable to investors highlights, are new to appreciate on relatively move we the we Before that

Exposure proposition for their in minutes I to business, customers Cyber choose set take and both So strategy. better few and understand roofs accurately would what builds our Exposure a to to reiterate of critical on across do our risk. and Cyber expands of assessing breadth Exposure the two Cyber management depth value cyber Tenable key we the and in a are communicate like The analytics why visibility wider vulnerability of to types asset of which ways: to

market safety drivers growing and by continues organizations microservices, the non-traditional of infrastructure, may rapidly Cyber They as be this on traditional operational for risk. scanning. with to long-term security visibility are vulnerabilities widest shift provide more IoT help moving biggest prioritize and cannot journey. and vulnerability cloud the cloud, are of and their series in containers, for Exposure digital that assets, to their are and Exposure Cyber the they Exposure of and One with well-positioned technologies. regardless IoT methods to as assets since nature new capitalize where be introduce automation such insights. data analytic and their to organizations of agent-based active across business breath of DevOps, issues These capabilities We IT, is into into assessed manage we with critical OT, and Tenable able customers our address spanning web IT technologies help transformation Cyber organizations’ applications, translate such

cloud be or on customers’ platforms the XX,XXX assess for Our of globe. the on-premises our depending either Together platforms deployed in around millions over can assets needs. customers

strong is customers we have cloud-first mentality. a offering. demand IO. as SC The But we robust for our on-prem As SC and see for momentum continue demand many are seeing both noted strong also I upfront, to of IO

of a use Tenable to expanding customer six in wide well-positioned wins cases highlight modern cover these deployments use and a are to a options. is a like that, number include few In new expanding fact growing noteworthy few asset types. figure quarter. their I cases now deployment the would range with With of on-prem customers to

vulnerability in modern became them such This another reporting a their not getting asset customer our told to purchased measure SC and features, customer to company ability to proved immediate and manufacturing legacy of both IO. communicate strategy assessment But first that the support is between This reporting satisfied business XXX able example, over a had as a the The customer assessment limited the the solved and their flexibility SC to Tenable.io they were requirements. AWS cyber customer using containers selected we’re risk the across cloud applications. better example competitor over a with Our increasingly provide IO comprehensive scan holistically them and a time. and was new allows comprehensive capabilities, organization Fortune and web improve solution data, a concerned our goals seamless years competitor. results. multinational path deployed Exposure to types In us solution to our IO from our legacy requirements VM their capabilities also Cyber flexible moving limitations. due VM for migrate challenging addition The integration been as help their initiatives engineering and cloud to the for better IO. to and wide not-for-profit with customers’ on to solution evolve for large Organization reporting the cyber cloud to Tenable’s risk. reporting scale had and company.

sector. expand in the public our to continue also relationship We

Over with the customers. lead to years worked new the fed civilian government, quarter. clear a the US community We with build strong six we closed several with leadership third including public across we’ve to was relationships both deals the competitive a respect and government. renewing and of strengthen our US highlighted significant displacement hard figure existing very intelligence expanding position civilian that DoD, in It agency and a quarter large during agencies by to continued sector within federal

be and Continuous program to predominant We also short. CDM DHS' or Mitigation the for continued solution Diagnostics have under

strategic VM recently they this VM to last first addition, mission-critical include another multiple is global to government. After than as occurred of and In This together regularly. deal great story a hear modern environments, In for XXX% range within this center. solutions one purchased by multiple data cobbling processor. shifting months of encompasses we assets both sold expanded to their from a Less production with sector compute solutions they example year. that and expansion coverage Cyber platforms Exposure XX% eight large to the tactical QX IO like the which security expanded coverage by cover later almost years customer industrial is type IT payment our environment. platform such we’d acquired SC cloud in enterprise a customer federal a we highlight a for our In

Tenable. Xx countries. manufacturer visibility by they cover their assets IO assets. in Pro XX expansion with from their an a US not Nessus is in cover last attempt almost year Pacific an European and extended typical as to their an across European have upsell to for for coverage customer year their We distributed in a also them platform expansion This purchased operations helped more closed holistic This operations. globally deal operating This a Asia

wind power government notable including also and technologies in in focus increased platform sectors EMEA. our We’re global energy the from the in seeing operational of largest one within for federal with industrial security wins producers interest

enterprise for Tenable. do business, with opportunity as initial portion diverse the these verticals represent set strategically a as across deals strong growth platforms new our significant our they’re While of important across very highlight momentum and existing not customer control and system these major a a of of customers examples long-term reflect breadth Overall, well geographies.

wins, customer also like to our some product our to of innovations recognitions. we’d addition In highlight and

others such IO our and and industrial management. our our drive doubled Cyber from IT that innovations competitors of into Exposure core markets innovation believe foundational for that recognizes Cyber Frost Tenable modern the Tenable from differentiation equally Leadership reason Focus market, as management highlighted breadth Excellence in within that our underscores the a honored recently assets has while differentiated the for product They security. Sullivan multiple our our Exposure continued market and We’re in and We Tenable. vulnerability and OT depth Growth & security core and visibility down are innovation to traditional and award received is importantly, and vulnerability leadership strategy. comprehensive into diversified success

strengthened enhanced upgraded During usability Tenable of coverage released with quarter, access we workforce agents. mobile for We updates that at X.X Nessus the features and integration our for privileged and SecurityCenter capabilities third assets. capabilities enhanced integration, scale solutions in management, VM increased the adding

Nessus time vulnerability even assessment It’s thread X with live based a a on feature using teams view, when security as on workloads. the update We group customers most better This several at customers offering. inferences solution has innovative with as will for Nessus provides to X disconnected network. widely results. from the to nearly awareness industry's vulnerabilities other Nessus eliminate assess single also the Tenable that used into a Professional. with its security scanned real help any time features through many cemented benefit grouped incredible applications market position solution released added issues designed focused from credibility competitive twice and the metadata manage to existing highly Nessus also virtually professionals.

increased also We OT significantly devices. our coverage of

many and security stated other leading release industrial thousand, from coverage passive Network extended Schneider, Monitor Honeywell, OT for devices latest several device including our Mitsubishi and Siemens, manufacturers. ICS Our device Rockwell, by

During bidirectional and we enhanced security the with strategic also with ServiceNow alliance IO. both our SC quarter, for new integrations

loop customers remediations. Our with response module to discovering closed the new finding verifying integration to provides with their from machine process remediation vulnerabilities successful to vulnerability orchestrating patching a

Our the the ability workflow new ServiceNow teams teams security across to directly integration also the import our Tenable.io its ensure Tenable.io to assets vulnerability ServiceNow as of directly includes level from enterprise. into data new into remediation. visibility and ITSM CMDB integration IT assets to And the syncing faster bidirectional for customers helping modern with receive same gives

comparison Cyber help development and time ability over of Lumin customers our strategic align designed Lumin IT their and our continue their peers. benchmarking properly provide scoring objectives. is Lumin. to security Exposure that against Cyber and support they to Lastly, We the decision business customers to benchmark our and believe with peer measure advance enhance we book Exposure will to need product

to at our Financial let Chief over and to then back summarize Now, Vintz, end. I'll Steve the me Officer, come turn call the

Steve Vintz

Amit. Thanks,

revenue, into Let that Tenable's results are our I'll me you, we begin financial outlook. XXXX unless non-GAAP, dive results will for quarter by financial stated. all now deeper otherwise business reminding and discuss today third except

billings $XX.X earnings last and million, measures start today. be of quarter the issued mentioned year, As growth end our press XX% Revenue intra-quarter for reconciliations which range. GAAP in high found our as earlier model. it’s in call, Andrea was current also representing this well worth as due of the our the recurring strong same in quarter a is of noting in calculated of of Its quarter guided also than subscription higher flow. expected revenue at the over can XX% financial Revenue release the QX benefit to part above our that was a better was these non-GAAP to

previously. are for prefer can future revenue from renewal. As But in number or is Since I sell service may not subscription generally revenue include you versus and such available an a briefly once The licenses term our of that the from ASC subscription recognized mentioned years license annual our in be our we customers subscription topic software but less, revenue contracts and this we recall, are reminder, over primarily some recurring as as upfront revenue ratably recognition licenses, perpetual contract one perpetual paid a model maintenance amounts basis year XXX, again of on earlier. perpetual multiyear all reminder, on contracts. definition IPs although upfront. a of exclude the we and five value assets of are we revenue a as on under contracts purchased. based Substantially with professional

million percentage the deferred year-over-year billings in meaningfully is growth a and plus the the revenue want value of through to ACV, VM the billings, I Now calculated underlying period, Since Exposure revenue or a in third period, generally to with in that walk recognized we or This broader prepaid is believe defined manage grew scale of better the a as opportunity business. annual how can on contracts which of quarter addressing. current Cyber in XX% calculated XXXX. our billings. as strategic change current growing testament Calculated and the a billings in the current in to multiyear in total for skew $XX.X proxy billings growth you swings are we the that importance of a of we momentum correlates current contract given a higher lower to business is backdrop,

the of QX end in pleased US This is consistent very government's this in the For quarter. over we are federal contributed our which is fiscal of XX% the particular, total market. position year with and that our continued strength billings

third we total sales Now our market, presence in than Amit quarter, the typically sector. but higher while do earlier important annual represents the trend seasonally pleased very billings. our growing success XX% with our short, quarter, highlighted federal less fed fed in the of in this in are

some we In customers new growth relatively discuss the our down other terms value the XXX comes drivers addition this platform customers, to customers. customers, enterprise year. relationships the winning In public for retaining let's and consistent with of In the which quarter, simple is last added sector, growing to quarter. new third with

runway added new expansions we with quarter our in in base is a of long the so. significant logos there to strong a do number had customer and we believe continue we While enterprise to quarter a

market, our of a and Given level larger continuing and natural it land some focus on expand deal basis. is to expect between volumes deals in the sizes variability enterprise to quarter-to-quarter

This recent over our of LTM As an at seeing demand had but better is continued to new on Within in I'll spending resulted the of QX enterprise quarter. experiencing $XXX,XXX also market the period strong to the quarter XX%, here Gross new expense and that customers for in higher number customers which revenue XXX in expected. from end increase up last now and acquisition, quarter, a profitability. the recurring deals, upsell compared renewals. quarters. XX% it third large excess was in business are from and seven we're we in than down in annual we as is category, The figure an ASPs in came same margin takeaway XXX,XXX basis, relates turn to customer in momentum XX% the of this to the added year. for

scaling As connection previously expected. These are public our infrastructure cloud with better than making are investments investments our discussed, we cloud Tenable.io in platform. currently in

margin sales. a more grow of percentage even has to IO contracting been anticipated, than in gross as So gradually continues

high XX% range to to we expect margins time. settle However, range over in to gross XX% low do

year with from focused compared year. million total improvement we levels. operating expenses to but $XX.X represents quarter, for the third last for $XX.X operating quarter marketing expenses an our turning growth. the in QX of were investing over business consistent are in to on we last million the Now, long-term, This improving the leverage XX% for are in revenue near-term QX and QX Sales and

weighted beginning a team in in expense $XX.X the year. produces our the QX QX tend the organization leverage R&D as to of investments year, Our new ramp of sales be in global time over to was million million $XX.X members towards sales building compared which last productivity.

most percent around and analytics total data versus top assets, XX% new and a the paradigm quarter containers. in us year. As especially was of app, of of in coverage last cloud QX a but all remains our recent revenue products, R&D XX% priority OT, web for including science, Innovation across

or quarter $X.X Lumin. million we've approximately $XX.X of the year. QX, million G&A capitalized to was For last to development million expense the year-to-date $X.X related $XXX,XXX also compared for

was As company revenue, QX in a costs. The G&A percent the largely public last XX% in XX% of reflects of year. occurrence total QX increase versus

common per in $X.XX, preferred presented. last compared non-GAAP margin than also shares Our year. $XX.X to better a pro was $X forma loss and share non-GAAP million XX%, year. of quarter same stock the $XX.X and in beginning than $X.XX $X.XX better were was to last of of negative average operations operating before Non-GAAP from to quarter in the assumed periods loss of shares to our $X.XX weighted loss loss year. forma last our the was The million, IPO our compared with guidance at consistent guidance third period outstanding $XX.X Pro of the a quarter loss million loss million of third the converted of a to all

investments having reminder, periods July. for we million purposes. for and guidance closed cash cash forma in short-term $XXX our with a As IPO comparability and quarter We the in finished solely shares are using historical equivalents pro and

to We third of million started which million flow $X.X approximately free in the program the towards burn a August, flow for in $X.X our quarter of burn million in XXXX. cash was quarter. ESPP $X.X cash quarter free compared Our contributed the

The of to we it first impact the the free have in cash -- exit full will XXXX. we flow period. the will short, reflect on issuance XXXX overall under which we of the the stock pleased reduce believe to year efficiency XXXX, be proceeds the second minimal our time the as $X we’re cash new business and program positive and approximately year continue have million flow cash in from $X flow will of offering the million free ESPP will but half till for QX, March by the we flow will cash with target In

Now, guidance. turning to

loss XXXX, be to QX expect to For million million $XX currently of $XX.X operations assuming range be outstanding revenue non-GAAP we million. to weighted of to in the Non-GAAP the million. of loss forma XX.X $XX.X a net be pro $XX.X to range the $XX million. Non-GAAP in of to $X.XX $XX million. the share in range from to range per And $X.XX, average in million of loss shares

For of is currently $XXX the we $XXX to million to revenue guidance our $XXX.X million. $XXX.X expect full up of year XXXX, million which from million, prior

We increasing are current on annual calculated guidance also our billings.

expect in to million the we year comments. loss call of let million XXXX. $XXX to to current operations XX.X for of average loss now to million. net $XX $X.XX compares We $X.XX, of XXXX, $XX.X now, guidance closing loss $XXX the per range million the for the to the expect And non-GAAP turn million. non-GAAP weighted the Amit to And million, from outstanding million in of prior million $XXX.X up forma in be some back the $XXX million million. to calculated to from me shares year range to share $XX.X assuming billings net $XXX pro $XX Non-GAAP of For full of our full be range is which and of

Amit Yoran

Thanks, about be Exposure. Steve. we In to continue pioneering excited summary, Cyber

of in differentiated with for our many look of more and management. for all the strategic to today. events the approach We technology combination believe Tenable seeing and you this We joining in more up partnering you approach strategic market to forward to call journey. coming position during We’re vulnerability in customers November. Thanks our success of the

BTIG one-on-one on New Tech Midwest participating be York Chicago, Conference XXth Xth conference City. the Stifel in November November in will and We in the

We also the likely in expect Boston Francisco end York and to year. before New and of be San the

your questions. Tenable. open-up person. to So many you we We'd any call for in see in appreciate of like the We interest now to hope

Operator

the proceed At be Instructions] time, [Operator this now line your will is JPMorgan. Sterling session. live. question-and-answer Our question. Please of Auty line Sterling, a question conducting first from you’re from your comes

Sterling Auty

billings than should growth Just start and to high into just both slower with little growth anything want want really read I see rates are know but I check was current Steve. there actually reading a to revenue Is that? anything we to growth, the into be bit they if there's that the

Steve Vintz

performance nothing in we the in very with has our pleased are fundamentally No, the quarter, business. changed

top-line significant growth at outgrowing are a We by here. generating strong margin wide scale the very market

So here growth. we our drive reflect results the business market major in in growth outlook scale. of QX and right in to we’re we are attractive is, QX long-term the making takeaway our opportunity And the in a good the of believe, midst investments

Sterling Auty

are Alright, you more actually main the with great. Amit, you just are where into that seeing with is about Are actually finding and capability? traction the of a asking you side. ServiceNow, opportunities? customers new at customer technology you bringing wanting ServiceNow you on And point then the opportunities source integration that are that one talked for

Amit Yoran

example I really -- a think was ServiceNow by driven where great market the is initially demand. it’s Yes, driven partnership

and customers a vice We versa. the of of joint customers, have lot solutions for a looking VM ServiceNow lot

joint ended thoughtful generated the And in accounts. call. and have account marketing lot various a time And activities, sales then so together sales field do more over working one management approach the with finalized a and the with teams top-down up certain out joint customer partnership

partnership forward. fruit going that a confidence seen we we've So and it’s that bear one good -- have it’s that one in

Operator

line Melissa Stanley. the proceed Morgan comes Franchi your with question question. next of Please from Our from

Melissa Franchi

suggests fed it wanted vertical just the was A quarter. a into commentary a healthy to little dig I just there bit very more.

healthy or seen in it -- so government previous investments the if it mostly is to was to have more driving so you that So quarter, by by that? Or different what's was it or years. than in making driven demand? what that driven which meaningfully vertical? I'm are a they is extent And And just wondering by

Amit Yoran

think We profile I a our saw occurring federal high and quarter and had six very quarter, in we seasonally with We it’s a in think good renewals several really strong federal. strong line position and expansions expectations. federal figure our adds. feel about I new

We think that customer more and are seeing the the the management very table. for market for I capabilities we in at looking and demand market increasingly federal need understanding first Cyber bring strong time the vulnerability solutions Exposure for federal have opportunity they seen base that the to have closely we the

in our with confidence expectations line the our in continued I federal market forward. in and position going So, think

Melissa Franchi

I on Security Industrial recently Tenable.io, devices have beyond question you application the Siemens. have Secure extended announced The that follow-up on to technology. OT you that one

to And and that what you extension more in so I'm Security? customers how visibility just about wondering greater by ahead that could driven extends looking the And extent opportunity? opportunity or getting of just Industrial that was Amit if potential it that talk for is just

Amit Yoran

in more is expansion world. a core the think I requirement No control system of probably the

I have any particular an system devices one a and with provider. truth brand partnership, a very number as thousands find control that vendor pretty they closely working have of coverage very in don't these partnership system is large environments that enterprises. strategic The good that exclusive you had of think Siemens with been simultaneously released I think and a we’ve announced control with a global also product

vendors And look Schneider and and so environments, at as so at traffic, system it’s and there they’ve Siemens, of so got you these control look in set you a diverse on GE, Honeywell, forth. the as whether

System with looking these when fit devices that that doesn’t and you’re hey traffic, and we me, of several updated but you're number of the offering that, at XX% it’s profile recent to want TableSafe, to Industrial complex the traffic well the that in release don’t so environments you're of think by call it at Control say And can -- thousand our understand and at expands and looking we unknown customers. if operating I

and of think the infrastructures profile success. If a I of they customer requirements and core you can majority identify vast sort the that’s had for devices

Operator

line from of with proceed Please comes the question. Powell question next your Gray Our Deutsche from Bank.

Gray Powell

may. if a Just couple I

is at give So that market you talk are teens. on or growing that gap then XX% forward? how confidence it your call level and versus low much just maintaining you prefilled guys to they versus replacements closer about in about peers take the XX%, going Can of

Amit Yoran

Yes.

So first about XX% base we’re there’s of efforts that in potential still thinking our VM. in untapped part VM analysis and is about finding the confident the a think the they're question, terms there in-depth in done I their of We’ve of VM significant bit market. fair and that customer out of is approaching how immature

a core of processes. lot sort their maturity for customers as we the part there’s they recognize of So their security increased need of that help can VM go through as needs -- as

wide We third see about solution. a have -- we also are -- not enterprise yet of analysis, done an VM there embraced and some the see that out we’ve enterprises

one have wide enterprise they’ve one embraced solution business requirement So bought, an some unit, infrastructure. portion for there’s their no understanding of risk they’ve what doubt they’ve got But their they as not of requirements, center, data a other like. PCI or overall some deployed regulatory and VM looks cyber VM

VM, So of the confidence that. great we enterprise us in market, growth in the the believe opportunity that for front ultimately potential focused successful we and in build the of very a have on VM got can size

web IoT and system, broader Cyber in the building and the helping the applications environment, a a much includes a of it’s core VM. exposure VM requirement understanding strategy is also our containers Exposure, infrastructure, of this do for deeper analyzing Now vision cloud so DevOps not the data. around superset block control just that and to also job it’s VM,

a a risk from benchmarking. from perspective, prioritization So metrics perspective, from a

in of ability combine period you our deliver an extended to when all confidence have those, So tremendous over time. growth we of

Gray Powell

goes me that should with let once any quickly quickly. And GA Lumin next early you just just sneak it and more on just really in to expect how feedback you year? Can one help ramp-up

Amit Yoran

mode. we confident the we operate feedback Yes it's we type Lumin the strategy. peers important very Cyber feedback of ultimately lots remain of terms of and gotten is Exposure been great across lots get our beta to that and great in can incredibly during I that understanding VM in to provide risk to continue think insights program, extremely and positive continue We've benchmarking of beta it

Our go anticipate we data is in in mentioned will and been has science that to Lumin and XXXX. and team differentiator analytic as our data we science -- the GA contributor Steve space with

Operator

of the Our Gur from question. line next Please Talpaz proceed from comes your question Stifel.

Gur Talpaz

Amit you I that within first VM ICS a important ask Fed want winning and dealing So deals? both about can use traditional talked US the is how in broadly more with non-traditional such having span holistic deal cases your speaking, platform that broadly to and

Amit Yoran

control system other it's it system last buy some that and is lot that business think seen environments only of the infrastructure I a just critical broadly are sort control been think risk. IT obviously now of I interest great and have. that are you world. makes it's world critical These of lot years What we've control of invaded exposed So but processes not highlights world automated purpose will interest, think at the a if question a markets also the over the those couple I have the and digitization found of components. that insights you sees We've general system in it's

those at incomplete systems difficult it would control or would systems rely be control industrial to systems, looking that I upon. the IT when at control networks systems, systems without understanding so, when looking those you're very say on it is you're And at the same look

play believe some it's point isolation. and component only So a versus differentiator which look the at pure OT products in components critical strategic might we a

Gur Talpaz

commentary the would've can in of both are being us walk but talked conjunction. more How that other, I customers about seeing sounds use pick is the Tenable.io both set of in you a in then use are of and you one it you the conjunction. SC case? solutions like of either about And case and you there typical through that, for using Typically, kind that separate thought

Amit Yoran

environment, we frequently help sort them and as see able have have a anticipated, SecurityCenter, They frequency mobile they deployed punch their to experience the operating than would've holes are firewall but environments. cloud-oriented want their their they customers looks that they provider the exposure hybrid what mobile customers external workforce for insight would from want although as with they say customers to where of I sense. need status already originally it for happens does I They actually don’t already which requirements. are and to hindsight to vulnerability their like workforces. probably gain be networks that perspective, their have it's in in the hybrid in a maintain already now outside the of they number is Yes, far the other an and Those confident into growth, make those to from have Tenable assess -- greater

we that leveraging the new the made so you customer is has even there And base seen in in cloud what been the Tenable.io. platform in expansion, adoption technology in will, we have an and available if SecurityCenter

seeing expansion right off hybrid the go are a there we with also customers with to seeing and so which approach back. it we new select are And an

Operator

Our from next of the Jonathan with line Ho question proceed Blair. comes your question. Please from William

Jonathan Ho

kind around these of maybe inning are assets. commentary some wanted thoughts what maybe of us the I terms happen with to where off? you seeing give adoption we maybe where you just relative of of in the some and a rapid are adoption assets to sense start about you're more listed newer we your of that Can

Amit Yoran

a it’s my that but I are nine say period. we XX feel it’s innings. or is not don’t gut three inning inning two would know still an and if are game. first in the early that in inning assume I in inning we Yes, game I

customers So growing more types. direction see landing sort moving adoption, we of see asset we six in this figure transactions these new in now

are customers deployments deployments increasingly We in their about modest asset with well. broad start talking modern as but seeing existing more types

not type asset And and asset types. purchasing expand to so consistent their they modern ability to we the pretty yet, designs modern type coverage even plans they those expand that are become have which even for -- feedback modern the to asset Tenable need customers visibility in and to those are selection hearing a are where making customers,

align consistent as and the strategy to seeing So program with point their aligns view, theme that they of that with want head. we are a security where their programs

early somewhere are well confident I second the that innings, mean are customer are the direction we in but trends third say the and still requirements, between would and we I inning, the So with the aligned the and market.

Jonathan Ho

broadly have about in security that and your some acquisitions overlap cloud the by been and have And traditional can space acquisitions talk maybe VM might some maybe happened? much the have market bit you of not few of how providers. Can competitors contrast to there? bigger how the newer made then the a a particularly relative been compare And offering you vulnerability there have you that

Amit Yoran

really some certainly And it describe XX% the think I if extent perception the I it some significantly taking cloud-based acquisitions you overlap, they world. than to like or other would look and their be think relevant I overlap, I have is in as looks vendors like overlap. XX% will wouldn’t what at it XX% criticism made there how strategy or as is there, describe for future it’s that. the lower company larger, words that a a primarily established they’re some that and in firewall what more looks have their

for of they’ve lot like a the firewall so that I on, is And that a think they’re to functionality the tried embrace features of functionality environments. cloud a lot focused really

capability. acquired assessment have that the they are -- control primarily did those focused but been that have on companies plane think I Now some

future some look likely and cloud like path with the properties I is said development the and there’s capabilities I case, overlap those base for where think think kind use So world acquired will the the in but I specifically. like Tenable’s of mindset, divergent capabilities customer the

you it firewall the to And turn network, environment. control that hey want and a you you are understanding your of cloud understand the the so vendors we on cloud want think you so visibility, want when that’s in I thinking view as to the the us also your exposure for network control the in

So or to I more that there’s strategies, going diverging but not think some one converging conflict likely overlap forward. it’s are

Operator

proceed question with Please Daniel from your next Ives line Securities. question. the Our Wedbush from of comes

Daniel Ives

have anecdotally year maybe changed, become bigger it talk risk a -- months deals, be you could we point, expanding is obviously piece to inflection again maintain in larger the to as what could point anecdotally talk a obviously of think Lumin. may conversations six you your product you and with we -- terms of the the before like ago? exposure, of So were Maybe solution cyber customers how portfolio about just with

Amit Yoran

Yes.

there’s a think One of here. worth couple journey. Tenable I noting things is the

The of maybe market how other is the like the customer and the kind journey third is is evolving.

a company we technology, Tenable results. -- we very emphasis flexibility accuracy the It of was of achieved the better the of this support a think the the notion, the I the on the of There up aspects, as about whole company. go journey grew all enterprise to scan, the management enterprise aspects account market lot wasn’t how technology-oriented is relationship.

on been we’ve last continue make this and years progress. so the great And of journey to over couple

and And Exposure. than understanding our strategic And with historically. the we’ve so to conversations that more customers on of customers this VM Cyber had journey have enables us importance are

compliance years were go their strategic and a vulnerability you program. as didn't If little a where was market, view of into there driver, a many VM two look management back security component but a tired of bit we kind ago, was at enterprises

to customers VM are program we increased And we and have how susceptible that the the of and are the news became prioritization, VM seen to hey to the in program, whether the very NotPetyas exposed you’ve lot strategic view of asking we? that, world, security programs. have a As enterprises, Equifax, managing corporate how breaches the large are their and WannaCrys, sort questions those leadership you the of questions many see point the it's of things costly risk, that high customers profile of

I we of results so And and think become on working and and of Security enable analytics and conversations developed of Chief which is really going enterprise-wide conversations. Lumin too types strategic in of have trends our think forward, I us our I have more Senior Information couple think to tailwinds a that there here Officers those the with some play Executives, are and

Daniel Ives

was such look Like you hearing spending question, mean a is how this I guys and in balance growth being into going next in well have relative profitability then again. R&D of just you at before do year Thanks the And are obviously of strength? and terms for in but right start position of I the Steve. I maybe now field, sort to perspective. extremely doing And well on

Steve Vintz

Steve. we regard is XXXX, aren’t Hey, time. to commenting With specifically at on this Daniel. XXXX This

said, we call about positive And the we Amit good also for at call are business underscored the a We year will feel are upcoming outlook the market and today how That market the February. the very provide the on highlighted dollar of early on that stages given in we executing. our and trends earlier the in momentum opportunity. we multibillion

we’re the We’re good while look our growing we’re when not confident good top-line growth That for doing cost. we come. said, you deliver to at strong scale, on and growth growth growing time can all at

you to today the leverage bottom-line, year-over-year see the we on leading think It's I this this are some indicator continue is that good year. -- be of a basis, that mindful And on but on operating a are margins We call. been burn. the of cash progress here of make can very the even fairly flow demonstrating will modest

notion we’re excited we opportunity lean focus flow only the for flow results time is to to regard is today flow that delivering we exit that that, reinforces earlier profitability. to march on by growth, towards great on And and the expect positive The ahead. we've So be kind about cash while cash positive top-line we the commented cash what XXXX. of the our and in all with

Operator

end question-and-answer session. we gentlemen, And reached does and have the this today's the Ladies conference. conclude of

your Thank your for You this you participation. may lines at time. disconnect

Tenable (TENB) 30 Oct 182018 Q3 Earnings call transcript