TENB - Earnings call transcript Q1 2024

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Greetings, and welcome to Tenable's Q1 2024 Earnings Conference Call. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Ms. Erin Karney, Vice President, Investor Relations. Thank you, Ms. Karney.

You may begin.

Erin Karney

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

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

financial actual recent and our The long-term cost optimizing efforts potential in adoption go-to-market We forward-looking products including business, the quarter our expectations growth Ermetic, for beyond make and our profitability for savings involve growth associated guidance customer statements control, will cash the demand and our of which the These of and uncertainties, of acquisition impact which benefits planned during expectations from are anticipated in differ our to free and statements. of market; landscape second this flow. changes statements security in could some industry position and threat the call, and and in the risks materially our and and statements regarding our forward-looking including XXXX of the cause with services. and those results new our innovation drivers regarding course full these year relating to our in and Tenable by solutions; One, and competitive our expectations

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

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

recent with SEC. that our could For a in we most file XX-K reports factors our results, material refer to other the further and actual those report and affect subsequent annual on that please of the important risks Form contained discussion

all non-GAAP non-GAAP addition, a discuss in the of use today versus or are addition revenue. In we of a measures for the substitute non-GAAP superior These to not to results with financial in with will measures of financial of financial are the to number performance financial exception GAAP. closest are these limitations of accordance GAAP equivalent. related measures financial There their measures prepared and

Our press call will now non-GAAP over measures. I for Amit. includes release GAAP to turn these the to reconciliations

Amit Yoran

revenue, in Thank all very expected. CCB, with operating our flow, the Erin. We're you, and better results came pleased cash in quarter. than income

in One. off Our leadership X year. and momentum Tenable start strong we're to In a this short, for exposure the clear good management in resulted are takeaways quarter. There

And and assets. platform market a the with truly we attack Tenable the onto identities, these in the years exposure management, categories second, category the risk, including pioneered across recognized practice believe understand identify ago security as these security vendor and One. we only reduce teams. and to providing operational single to are that efficient is most mitigate a we risks Tenable over is and applications of way technology, is X the crucial positioned capabilities uniquely First, increasingly convergence cloud, the IT for service,

vendors. me is and practitioners, Let management attention validation on Exposure the from analysts widespread point. deeper gaining industry go security and first

inclusive is solutions. solutions representing focus work early delivering with the identifying programs our is company breaches. This approximately paying in of is our just new to Tenable defend security to sales and of opportunity, exposure this fact, closing and against it is management program now these difficult risks In to their off innovative focus makes Gartner XXXX of suffer solid no that an based will predicts to half there exposures sophisticated security complex security And better exposure advanced We to isolation commitment forcing by thanks threats attack leverage believe than on positioned prioritizing realizing extremely very are tool fewer their our organizations ongoing quarter, and disjointed, products and teams management of investments X/X for still This seize in campaigns sets. customers approach momentum managing tools. types different methods to Security result like a multiple One. failing Tenable to them. or more total

infrastructure from access move configurations, attacker simply multibillion-dollar creates an misconfigured of previously exactly running there exploit insights stope point leverage to pipe. are the that from what visibility One's unified example parts involves Tenable a to automotive is is not designed great these vulnerability, impact across deliver. cloud. approach selected identity Tenable gain to One for separate risk example, and assets, cloud For risk to from This Tenable of able identify One that A over limitations and A to solutions they a a Tenable. gain tax incumbent Recognizing across Point critical in the laterally their amines, QX. management end the circus. service key and access in in spanning looking privileged risks vulnerability of They're an unified consolidates domains. permission identities and replaced solutions, across understanding remediate on-prem an may with company to from

our of their competitors for remediation pure-play customer outperformed rest it adopting the visibility security also using risk, of in Tenable and products the opted and truth. CNAPP specific integrates fact their control new to Customers Tenable environment. no the using this because their and security While rest the exposures capabilities. One. We OT to prospects stack to Conversations product limitations and encounter uncovering with cloud connection cloud underscore with that grips that solution customers coming manage scenarios it cloud well-known the often are extend with realize security and that to repeatedly has fundamental several to a system of thinking. using them of lead dangerous like the way Notably, separate the

capabilities scenarios with our are is the of are These interconnected CNAPP You reasons understand compartmentalized. risk cannot OT our fully traction an like the your management why gaining when solutions customers. risk and our environment practice

These threat, hundreds around their from coverage, aspects of of visualizations our to Given information exposure scope in tailored We and in our the access customers lake path the capacity the vulnerability, stands an data. that identify to environment. our answers tool bring into queries entire out all to and aggressively is advice. billions assistance continued the product the entitlement our foundation specific management that of advancements AI of life built identity funds, This insights by data offer interactive CNAPP many delivers vulnerability prioritize real-time OT. our new underpins capabilities is of to portfolio. Last encompasses strengthened risk. exposure gleaned robust configuration Each deep more This from products leverage Tenable to data and attack to to innovate management including quarter, we exposure Titan. integration mitigation AI specific and to along latest generative of

talent these help at guidance huge enhance to In fixing again, productivity, marked positioned and forefront exposure cybersecurity and of AI-driven In addition, enhancements customized era it an our streamline the workflows, Tenable once issues. provides by shortages, generative for management security insights boost innovation.

products that are ability has unified and platform. exposure expansion. understand We better an management have broader platform, it delivered impressive cloud in we core enable or demonstrated OT, risk, it's remediate differentiate way delivering we our our that well as with solutions Whether are and margin as customers doing security identity, our in to to our a

to my note, diagnosis. my impacted. wishes has thanks personal on going treatment well, everyone My recent been for voice is Finally, the temporarily regarding well but a

with more our commentary to be As advance even in and future. I'll the result, results you able further financial in for a participate look on will you investor speaking in near not and apologize Steve Q&A upcoming the subjecting But call to fully do Steve. events now the time turn I to I session over to the today forward for in with outlook.

Stephen Vintz

glad humor. you your see I'm not have to Amit. sense lost Thanks, that of

operating Now outlook $XXX.X line for on expectations reflect quarter for we to current year-over-year today. revenue Calculated grew billings million. are deferred increasing results annual the top change accordingly, as the quarter, our CCB defined and recognized which our quarter, revenue in income. current better-than-expected exceeded plus XX% CCB and in the to growth

security earlier, Exposure commented security, which Tenable was As XX% One and to security new identity cloud up One stand-alone and enterprise major sales, quarter a the solutions, highlight of and from includes total quarter. last Amit management Tenable in solutions exposure grew XX% our quarter. total the of believe security in enterprise for delivers XX% insights the demand approximately We technology sales actionable our new growing and it teams. represented this and operational reflects their CISOs the to

Sales customers to exceptionally to us. Turning other highlights. strong for were new

our impacted XXX enterprise in acquired our XXX% year-over-year healthy To This new net of put added which ACV our a one X-figure rate, customers, we very and Pipeline customers. lands. customers new win management since and expansion platform XXX% encouraging. that ACV XX% strong During logos variance best we matters of last is and for here quarter, the natural this resulted saw is in new market. strength newly the including result enabling large in from growth new year-over-year to to The sales we for The logo XXXX. share new is and in in strength dynamic this perspective, quarters number nearly dollar quarter growth was the was of lands, it's in to mix believe, we us and between pipeline of compared expansion. us generation opportunities the exposure which quarter, also a takeaway was believe

strong count concentrated headwind were crisis this the dropped that the remainder higher-than-usual in customers always of the customers quarter. threshold and consequently, of of the impacts last do is given outlier X-figure to metric because the out who number I in year. who these March the customer an the last This a customers result the dip some services number than calculation year. to $XXX,XXX threshold net dropped X% by this was the Our not the 'XX a financial This that would customers have primarily was this $XXX,XXX quarter. expect of X-figure more below QX net telecom new for be in in quarter. note year. new regional quarter. X-figure in tech we banking This decreased below any of of dynamic lands verticals now of by number and which And we new XXXX, offset of in QX impacted this logo a LTM of

the midpoint P&L the growth. $XXX quarter. the to million, of range our million. which quarter by in Revenue exceeded on Now XX% represents year-over-year guided the $X Revenue was for

quarter. percentage high Our XX% public now gross efficiency in XX% expense trend efforts quarter. to revenue quarter this integration as the the was expense percentage of revenue successful from expect than been margin, lower million, revenue which our annual our profitable $XX.X marketing this with $X was from XX% R&D offset sales higher guidance. commission marketing of the that quarter. million. Operating credits benefited up quarter of this as from [indiscernible] of conference costs, outperformance the and from expense of expense and efficiency reflects marketing quarter. costs and to was increased percentage certain the exceeded the R&D quarter quarter as the the our expense sales our of than compared revenue quarter last million, our management this the our by exposure and for optimization our which midpoint was ability we foreign due was spend XX% other as last reduced XX%, basis million largely last better to guided I'll of headcount in expense analytics this last primarily last well expenses Gross quarter. G&A quarter deliver of percentage range and XXX quarter is are margin better in and pleased The largest and expected the associated Income of and up received the start sequentially to and our expenses. margin G&A resulted while this and compared by midpoint points remains to earnings and and a timing XX% the which efforts, expense turn guided sequentially $XX.X Sales XX% and program to quarter, significantly primarily was to growth $X.XX the with was opportunities. million due Overall, able cloud expense to scale million, last cost was $XX.X to spend continuing our million Sales which increased was quarter. which remainder in of R&D drive than last $XX have leverage February. the lower than was compared personnel of seasonally will beginning midpoint with business this quarter. I better year. the for go-to-market which quarter XX% was op was to was market was infrastructure overall as partially The in VM expense cloud due from tax from in at EPS the and a we $XX.X which which marketing down we kickoff in as was over sizable in year. R&D X% a $X.XX, operations lower payroll upside. taxes, million, at beat and range. was higher recurring quarter improved with revenue significant cost primarily percentage of $XX.X to platform. Sales EPS last was income our expectations. invest which a $XX.X reset

generated revenue deferred total the in deferred we revenue over was XX balance expand from and our us of expected We finished turn cash high $XXX.X quarter. short-term free flow confident let's which cash receivable gives ensuing which investments. million. that sheet. and to the years. continue margins months. $XXX.X a the recurring feel Now lot can and is $XXX.X million $XXX.X next quarter, cash With over with million the operating we margins Current was quarter visibility and million $XX.X of Accounts was unlevered last $XX.X renewal free million, We revenue, rates, revenue million flow to into during gross the up

BB November. Our attention Moody's upgrade free late the higher has the recently to in well credit our as margin upgraded issuer also rating profile rating of as as to BA S&P's agencies minus caught

of of share program. for aggregate stock an shares our million repurchase authorization That $XX of we common the During million. price $XX.X purchase repurchased remaining XXX,XXX under leaves quarter, our

evaluate We program the our our as stock forward to size to factors. continue as well to partially share we'll approach take a on of programmatic evaluation offsetting going other the continue creep, based common and of

and behind remainder quarter our the the I'd of of the results to the QX like outlook year. discuss With us, for

$XXX the income from For of the million, million non-GAAP range of $XXX currently $X.X assuming we million. income to net million, $XX second of in the to the revenue interest interest in million $XX be expense million to in range of $XX operations expect income to quarter, to range be be Non-GAAP income Non-GAAP be interest million unlevered in to million. of to of from to to increased weighted expense million, outstanding range be million would the to be income diluted in and of million, $XXX in revenue cash of in million, free interest the $XXX net million the commentary for million assuming regarding of million. fully the provide to provision to be shares Non-GAAP assuming range $XX million. to of shares we year, $X.X calculated fully the the of $X.X to of diluted to $XXX the provision a million range to million earnings And and income range in in to range million XXX.X $XX.X of for to and $XXX of $XXX per today. the million to operations taxes billings diluted Non-GAAP for $XX.X $XXX income weighted in range of and range $XX.X assuming million. be a to taxes $X.XX million. I $XXX of diluted income $XXX Non-GAAP current average $X.XX, outstanding. share $XXX million like expect XXX earnings be some million. our outlook full per $X.XX, currently average be $X.XX share $XXX flow

year last represents a modestly the revenue in Ermetic. to provided CCB $X I the at guide a build our continue full midpoint accelerate comments with from midpoint. capabilities a million some raise XX% Consistent first XX% offering on year year million a in million growth of in of second and our expectations for expect the our million opportunities and range range. the beat $X QX the reflects the $X call, CNAP the at to the half as we expansive CCB acquired of reflects Our beat connection half a and the we the with directional to pipeline in in Similarly, and $X growth raise newly of more of

of a XX% terrific which for to also is midpoint, Our full over basis year our and guidance improvement is prior start margin a the us. at operating year reflects guidance today point XX a the

of million onetime QX expect which the to million similar we incremental place years to investment half benefits to our in charge force resulting are more with provide follow that impairment excluded that in are results. And an range associated unlevered million restructuring took from higher million million result of $X update we provided. we the is note restructuring to on weighted first January, was a as spending expected We in continue which a Further, incurred We to in $X $X.X QX to with in flow call. sublease reduction to prior still the the update better previously a February. also year, on of in the as be that portion seasonal to severance related Please estate, to patterns costs cash than costs free discussed expenses our will in in the $X noncash our negotiations margins I $X our QX. real the next finally, reminder, of in half. operating non-GAAP that want restructuring second in

Amit Yoran

expansion. was healthy by Steve. summary, of and balance marked QX Thanks, In a growth margin

coming Vice see Also of the about as excited questions is company the conference we where the are Morgan participate today here the for at up We us. the weeks. We and call our We to Senior opportunity to Stanley Steve. Products are like Jason Q&A Merrick, now President, open a hope to in you front session. in for in

Operator

Truist with Fishbein Joel Securities. of line the from comes question first The Instructions] [Operator

Joel Fishbein

included love the quarter. I'd I the there that I cloud to that And just quick security. a Steve. know about for to understand automotive in talked competitive Amit And have about congrats win Ermetic. on around like space. that the dynamics ask space follow-up just a I'd good

Operator

and Please go go ahead. ahead Mr. Karney, speak.

unmuted. has All Your right. line been

and a them speaker Just Ladies the Please been be moment. gentlemen, on disconnected. quickly me give reconnected. get line hold, while has we

line the been and Difficulty] Ladies Please reconnected. [Technical has gentlemen, go ahead. speaker

Joel Fishbein

And of maybe Obviously, I competitive good automotive talk be differentiates had Jason, the And the the quick is Ermetic. offering quarter. would with that competitive the great. dynamics dynamics Amit fairly you on I'm one that the about Congrats won and have marketplace on hermetic the about obviously call, you what around mentioned you for company. Steve. that win in the helpful. crowded. the a for curious and space follow-up why that's

Unknown Executive

very for Joel, thank much you the question.

cloud we So the have competitive our excited Tenable specific our customers customers we to Aromatic but it the expansive entire with the class brings could also choose capabilities, be across not ability with more that within and security capabilities even flexibility our solution more more the security with their platform, portfolio offering. the leverage components gives to CNAPP so for

in with CIEM to customers [ are competitors made code, entitlements management the believe the So CSPM, gives ability are can the cloud. a CIEM ]. have differentiator the got workloads infrastructure's that have called us CWPP. industry-leading we working choosing add also into And other our in. This today capabilities, the cloud capability customers of acronym [ that visibility we've in that this choose organizations solution is the security for is ] Even But to cloud entitlement the infrastructure market. a

able Tenable competitive data dynamic One cloud and the bring is One. to Now into Tenable major being the other security

Operator

of Essex the Brian with Morgan. from comes JP line question next The

Brian Essex

unusual. head spending get far, QX was how Steve, insight last around about sense year? the spending that's last as a spend a could in maybe in bit last macro? this into side year, year? year. that recovery the a see to pipeline how disruption great be you we the to willing side, I QX. union unfolding you after give Are us Maybe the bit would of whether either was maybe so you I bank in so far to credit the season, And you're know any enterprise your enterprises What where compare wondering you're seeing seeing earnings Jason was are so environment the that the or talk environment is small looking early and or it environment weakness, strength selling

Stephen Vintz

Sure. taking now platform. very security adoption engineers partners, I there's within Not current go first, we a priority. top seeing is means exposure to confines exposed of our certainly, gain only We're remains create partners too, exposure lot of analysts, the This cyber Overall reducing and are industry continues organizations we're folks. category to and earlier, earlier I'll momentum pioneered a heard executing validation. is market. management And management about specifically spend as higher well, as to that widespread seeing exposure practitioners think from say but talking healthy starting space departments. large a and security We're the also Steve. breaches. management Clearly, management critical enterprise the and practices with exposure you and our as in Gartner,

quarter, So management of unified sales one from represented exposure strength the our new XX% and for us, what major platform of this areas quarter. our One, up Tenable XX% offering, last with total it's of it

we're saw engagement core there we're on generating, enjoy of partner And We front. very the seeing pleased the where business, we specifically to both with the the funnel that of Top remains the strong. very here, VM also some cloud. win continue demand we're gate and terrific in high customer our out rates. strength

across we're a providing start good seeing good spending result. to we're as board, the and good think year, So outlook we overall, the a

Operator

the of Saket Barclays. Next question from comes Kalia with line

Saket Kalia

with you. start to just maybe Steve,

see management on One Do versus of of driving point, la of Tenable last even often? anecdotes gravitating VM mix nice are the there that what as any most modules you buying kind percentage that are growing customers that on versus Just of carte. What sort that a have exposure One sales. are modules of or get of data great a core to outside sort just you Tenable new most uplift a on Because towards? just

Stephen Vintz

specifically win the security manufacturer. is we We won win mandate. that with Tenable good the quarter, a a largest -- Well, a cloud of X-figure our example One, Yes. European within

tip purchase, now of along security, the OT and for then was an displaced into the that also on. spear recently all us. that we we more integrated with incumbent VM have Tenable And vendor, sold So which we

So we to also One a I surface also of continues I risk surface, and balls OT, but and categories would consolidate only VM, and in the but attack all say only just we the the get as the Tenable connecting analytics. And that for not of the allowing identities also lateral of mentioned. for that can to and offer many in breadth Tenable across cloud understand One insights those Webapp posture terms those secure, that movement. also good who areas of one and is attack to not customers entitlements the modules now is of means the the the the it's us the threats was It's of traction us. but make with security, all

of So resonating exposure traction with it's also there's we could a mentioned in only not getting be not I certainly, the as One. earlier. And lot with again, with partners. just well management. more pleased but Tenable we're And customers momentum

Saket Kalia

That's maybe in one the quarter. of follow-up, stood both that just for great. that And to better thing the you me and you also maybe related for Jason, and that something gave. ACV But out logo maybe and it's my sort new to answer was it's

maybe is that some driving that new maybe VM on with be new typically called And about particularly you particularly helpful. it's one Maybe Any there that's with that of and market. do performance thoughts it's you gains. all success, driving I talked logos. feel a think thoughts like reasons just that market think of share what Steve. sort some it's Maybe -- what's just exposure, sort about, as but Any the of would around, that out, you things logos? but momentum better I good

Unknown Executive

Tenable, conversations Yes, And I for surface. the portfolio in One, an explain looking does more a customer. third-party that from it's a of to an great is ever-growing our area inventory an with more the customers. in Tenable, We starting identities, -- data about more products I question. cloud, We organization tell this. deal starts can a with the market have to CISOs that vendor. nonhuman. And with dictate at single for are bit able is even And we're can build a solution you that's human than It what that think bring help can to bring we assets. be from I having little Tenable in attack we maybe for OT. with bring We it this and assets and the

organization So bring to able understand being ability the for. this of in they're responsible what information all an to assets has

power analytics, then optimize and together these actionability. the This This drives all analyze prioritization The details, as assets drive contacts inventory. business the executive look a bring is also groups the this it, findings. risk. we normalize to And the we that remediation. importantly, and of is give We with peer step lastly, second with you what help give be the management, We to really able and it's clients. just circular. regulation But the for helps we for prioritization. then with things need if organization information to we helps technical with business this and remediated. with and And combinations, boards is from what with One associated Tenable We be is to ability is, risk important. and information. share we why then piece look contextualize think the for about look ability it's third We to truly toxic And

prioritization, and of for with we with One analyze the that is help that the constantly the help changes, We we power and optimization. inventory So inventory risk We inventory. build Tenable the commination. continually the and toxic

Operator

Stanley. of Fodderwala Morgan with Next Hamza question the comes from line

Hamza Fodderwala

macro you days of just lot you any a year? QX trends how you guidance Steve, environment wondering, and as the give it on again, for And on early when pipeline could would characterize your gave there. last for the to relates relative for full the environment uncertainty out QX I'm spending ago? to commentary XX guidance

Stephen Vintz

and we quarter And also first revenue. as this beat for an specifically only the we CCP year. healthy, in outlook and QX, both remains QX, providing, a providing beat of flowing revenue. pipeline setting also we're QX, for Well, we're to but not is reminder, regard areas. the and We're beat is through strong, we the the We're the CCB, in for both for those think, time and with outlook expectations raising

the improved VM say to as believe, XX So our some there. I were about regard And The strong. year where opportunity for we the certainly us, QX, remain One there's and for for of business. strong lots outlook core is outlook continuing would more in of earlier areas ago. to talked absolutely is even strength, with we days we and than Tenable

of the progress also specifically the strong again mid-market. year areas cloud sizes healthy were us X-figure quarter. more deal deals. Pending that fluid in of making to resonate have good the off be We're transacting was Some continue We're this continues OT in The start. past a us, a to for been only the but favorable. over to environment enterprise lot with there, market, large for mid-market.

us strength. also was defense area another mid-market run of And say was QX, interest the I infrastructure the public critical and in would sector. certainly, in for So Fed an

remains federal. quarter. we upside Federal, state say, open in the in great traction as opportunity this resolution see around we influencing exceptionally year's upside year different we And would of and the U.S. continuing have quarter year. customers year, for stronger bit some last as good ever the Fed. and in I a and another That strong strong. to higher seen to did down year Pipeline than and environment, selling end. have we've activity the us saw cap Fed said, strong starting is to the also And little local Funds are We CR a of from expect slow in but is now had last agencies, the and

So certainly we start we're we're results to bullish regard on year a it with quarter. for certainly think the good to the and and excited, a our outlook providing

Operator

from Fargo. of question line with Nowinski Next comes Wells Andrew the

Andrew Nowinski

demand? Fed ask, to on maybe relates of recovering guess your is well. that going And one forward? of how follow-up as Fed pipeline the pretty much side, Great was I just it the Ivanti in Amit's did to quarter of on widespread or an hear the that vulnerability to the that wanted impact drivers I it the industry. Steve, going have seems a

Stephen Vintz

as a fast, in Things We what see like some big a the results defense there. an would impact a But level. tailwind certainly quarter. up And local certainly strength seeing OT of higher continues of and that for infrastructure. area and don't also kind upside commented they I well, the and ton I us. have within pretty also can Tenable at critical But drove at in to that, federal was One say, the Fed earlier, we're current [indiscernible] remains bubble where state is in QX resonate

in QX, So strong year-end ahead excited overall Fed the strong only September us very for for into there, super spending not about environment what's Fed. also is I'm quarter. but headed

Andrew Nowinski

about looks Okay. And about it going you then when that like it guess forward? this will out? do are rate the dipped I think to how thinking retention down And you bottom net quarter. XXX%

Stephen Vintz

quarter. a quarter, the expansion. the versus in call, us. rate more By new with that that, these we metric, fluctuate are our KPIs aggregate. good a a And really can that around for we that customers expansion of of number the lot in our number customers. of rate meant the will the deals. quarter-to-quarter. of towards note We've single We evaluated disclosed say our net business skewed provide. important And of one the to is be mix disclosed not large was new a regards I'll naturally is thing It's optimize on the with color our business of as Well, And in in to say the metrics thing and mentioned way, Yes. expansion the earlier of business, all metrics that the I to very provide consequence do a Sure. we I from current

a with modestly by metrics. our that our the of said, growth year, more improvement quarter. for one feel outlook of the consistent or in have So our year, have quarter, we forward. of is respect the and indeed to that the it last the you results for top That see good And second would with be track influence about could reflects to in that rate, we fluctuations factors an which expansion appreciation the going higher half those better possible driven

Operator

Reback Stifel. Brad Next from question with line the comes of

Brad Reback

half Steve, for remarks, in acceleration year, better back the need of know to consistent prepared talked quarter. to with happen? CCP you that things that growth I during in the the about get What last an are

Stephen Vintz

Sure. I would say a couple of things.

First, one, our again, our very do. Number And to with the [Indiscernible] were which mandates Ermetic top platform, this clear. build Ermetic capabilities and have year. two, very the the is last call. last we we acquired October in integrate pipeline opportunities. certainly consistent offered Number work current track done that we we'll on [Indiscernible], of of up

expect year, those first that in of quarter, to we XX% pipeline to as growth said we half we directionally higher of the honestly those today. regard closing in security over So in ensuing and we of which slightly we And quarter course lower the opportunities, then QX. second with growth, in the set deliver we outperformance the product to expectations XX% growth year, the integration to months. guide the particular towards opportunities delighted to to start cloud half build also as work We're the gave we said have the was first relative that last the -- complete

you other the The could we're certainly not a certainly engagement bullish to and that fact our going getting we with more Fed, I'll mandates be catalyst thing We have, the be about that's that tell pipeline to customers. growth. the is

year So our changed outlook relative for the last. in nothing's this quarter really to

Operator

from the of Ho line Jonathan comes William Blair. question Next with

Jonathan Ho

as he Just wanted Amit well. continues to improve to also and my echo with prayers as thoughts

you changed but sense of the adoption markets, get discussions, the a what's you've of in of are maybe solutions? in OT -- these in number this what's we the Just terms OT wanted to And there? where a terms times mentioned around from curve

Unknown Executive

Great absolutely. Yes, question.

the So is seeing what quite interesting. industry you're in

be the CISOs requirements. are accept the able risk of security the take to OT With CISO, having to more over the to role

setting responsibility this The on CISOs also take So but in controls, this. and we're systems. of seeing we industrial manufacturing now not only are them having in to building are management

that with just board management a recently, a he has is the who Just from mandate responsible system. for in now was CISO financial his sector, the building services gotten I

responsibility. this we're having seeing -- take across the on trend board, where now and more to CISOs So and more are

being only OT opportunities a identity really space. do cloud, find we by but to not of and a together, significant opportunity, seeing an number give bring to OT we from have unique in So and the and are able the being visibility able bring data we that that

Operator

Company. Cikos line with comes & Next the question Mike from Needham of

Michael Cikos

I better here I think I for first just today. one to the guidance that want Steven. make understand the have sure we

for. be, I consensus versus guys So in top you beyond that I just full better was, are and above year understanding slightly the know wanted And a where XQ taking to to get XQ XQ what but coming below up second right? on half line just function the this us? acceleration that of change that out we're flush mid-market. it for outperformance related better a Is you pipe in really here? for that you're seeing around looking Fed? Any Is in part assumptions Can

Stephen Vintz

Sure.

first I mentioned, the QX, of any this we're commentary around is quarter. the as time terms in First, providing

sector revised we continuing QX the I us. in mid-market. Number during into of for opportunities. there's as end And September. of It's pipeline reflective the specifically So Fed's outperformance source we're that well is terms outlook of we year the say execution factors spending of the year, as -- the And we're the of where in talked to certainly, the the number will security, one, as fiscal cloud and impacting confluence QX I for our would in guide think in public that building in be two, a strength course tailwind see head are we're environment, about there's we think year. giving a the strong. that,

the end, line with for think you not the that success, the set giving also we're it's XXX the for We at rest to revenue, the high for up year. guide well in consensus. XXX current if but look in of only overall, the So we're quarter,

Michael Cikos

path should I really So that enterprise, Tenable's that of had One you on is a it. drive the for over released shift about up part analysis, with I product AI Tenable here. SKU, really is if SKU you We and helping Got will, Tenable it's if right? Jason think your One higher could saw know attack an packages? GenAI we assisted to higher-tier towards that, those And the if just and strategy second, a will, tiering, capabilities

Unknown Executive

That was a great question.

been the over the vulnerability have understand -- information differentiates industry to organizations we in doing we're to We've leader be So that in competitive AI, At are fundamentally, to proprietary what that they XX for across doing competitive Tenable and have to I information, think, a landscape. important within the Tenable, have that as first, management. we it's have AI this market years.

So cyber information, we other data have a organization. any knowing rich ton threat more of and about bone than and

then us leverage piece ability second The we to product. and is the to from and bringing customers our that of this model have put ability part throughout giving XX,XXX-plus the our the train insights as in

AI first function providing Tenable One top-tier there. that at place into the our attack we the and is of offering. analytics So it And put was again, part that

manufacturer. that's just of are analytics systems management today, prioritization help the board. AI drive connected. attack for organizations the is exposure the actually The And seeing visualization we're to that got path and how a large with team enabled shipping we've but So example, across instance, leveraging one actually

Our plan and also entire AI across is portfolio. capability it embed take the the in function

just help going drive it's -- drive solutions. we're top explainability, capability tier with identity super be So One we're all not be bringing and excited bringing capability. to the into about analytic components, We're going Tenable organizations service-delivered prioritization And exposure our that analytics. this because going bringing this going be into to this it's into our to to of we're

Operator

Next with Patrick of line question comes Colville the from Scotiabank.

Patrick Edwin Colville

to mean quarters be I of and is got part of on of story. Steve, gas competitive I X in question. year vulnerability want really the you've ask about call management. the couple competitor this last Tenable a the to terms who me in Great investment. ask a you let stepping over environment

rule? vulnerability impacting these another Tenable got deep seeing dynamics are You've quite in in you and that's of guess payer a the what I restructuring. competitive going in through management, how are terms

Stephen Vintz

was favorable. market of the are upside say quarter. would there competitive Well, dynamics and source a in I very the us for VM

high. been we've course recognize It's believe Our believe the over recent And We win market apparent. phenomenon and we doing our not differentiation there this market. us. We of the Investing of in investing. close very rates been have elsewhere. the is opportunity to success And something remain we translates very is VM importance a years. rates the for that

leader. So are, we and unequivocal clear believe, we a

customer largest base. the have We

or that terms good there we're coming such use success device can selling the of but device coming expensive most those Tenable new of XXX number also those of addressing offerings in I/O. adding our One. Now VM of number case, from a customers coverage, good Tenable are security VM a and VM see from you having And One coverage, are as center quarter. terms But in a or within yes, core customers

for VM invest in. It's market. an important to to incredibly is So one us, we're going continue

vendors. continuing differentiate, continuing to are incumbent We and to we're displace

largest opportunity. our earlier, mentioned we As

VM and announced those where we in stories current deal that that we quarter. largest the incumbent, a this there's opportunity, Our many the quarter was X-figure within XXX customers displaced all like

also want also investing add to bullish VM. we VM are going forward. in incredibly we that overall, So on in innovation I And

some we're resting to -- of laurels. customers. create are new to be really, that capabilities on lot not going adding excitement on focused that our We're for the going practitioner truly our So VM a is

Operator

Gary line of Next with question the Powell from comes BTIG.

Gray Powell

Tenable there? that hoping just to Is the us what of there and the products contribution that anything the management then bigger to OT helpful. was broader security at some of solutions, like you you can cloud more on the stats like of One in as disclosures. do Or gave sales of The on dig like and in XX% new was other really to I a Yes, some on XX% contributed? sense incremental was exposure give stand-alone

Stephen Vintz

say I of half nearly is One will bookings do Tenable look, XX%. or is, And We by we not said disclose CCB the, product. what

products So or our selling OT, the or XX% platform nearly from the use case. solutions. security stand-alone to either is address such sales new coming as half solutions of individual selling [indiscernible] cloud individually management a of specific exposure is management

related did What more in both. securities, only success our expect building having to we're to closing start deals regarding half expansive we year opportunities of offering. Ermetic the as in so the cloud half look of contribution of greater the pipeline the second we say, -- And CNAPP and the begin to though, second year acquisition with regard

One, the So cloud during security expect be year. security good growth overall, you both us with seeing of Tenable we're the we I growth in would specifically. cloud for and good to Tenable continue Obviously, say see challenge to in course One

Operator

Next question comes from the line Eyal, of Shaul Cowen. TD

Shaul Eyal

My announced logos, Congrats were new the Leaving or -- logos. and just better. you Amit and discussed, greenfield? Great also mostly they results. much aside is on to you on question mostly doing or that that had hear sizable the they mostly XXX were displacement were displacement

Stephen Vintz

And average our we VM could enterprise-wide of They solution. an quarter integrator, It's logos VM. greenfield these customers question. using X/X of customers, all is a I'll within no what be systems this had VM said are be MSSP said have outsourcing they say could a That's in we have that using opportunities. different. about new on no specifically, What good was or are and

not but in opportunity of invest as elsewhere as VM, of cloud, untapped OT. lots of for cyber, such and all in certainly look markets to us, only identity we there's within So some biggest the

again, And dynamics, very competitive have our there's some change we about within consequently, incumbents. X/X the displacements. win So high And certainly VM. a these to of in of opportunities against which are no rate. means greenfield, are continue

Operator

Next with DA the Davidson. line Rudy question comes from of Kissinger

Unknown Analyst

is Rudy. This Miranda for on Andres

congrats guys. contribution quick for Could the model? we that data use QX? Or a points you to for question on hermetic the just CCB in and revenue can all, numbers. First you have other the any quantify I of

Stephen Vintz

We changed said because since expansive at QX. work quarter. market more of the QX, expect changed X in in that offering, Well, We on and CCB product. Ermetic second call. come Armada growth has And of CNAPP to We're emetic contributed integrating greater the and that's selling Ermetic outlook this we minimally year. we closed expect right? for incremental half and not expected, points last in hard We're of the a our not specifically, our has

Rudy Kessinger

from just And your -- What overlay in the one. sales Great. quick the came years. what past -- teams a of percent

could us portfolio entire maybe some selling rates you the are If give past there? you announced? since sales reps And that the any seeing you successfully color

Stephen Vintz

Yes. not Well, offering. sales we're rep combined if seeing selling all, of most, our

we're surface prices the leading more attack Also for close helps deals all So is of with broadly with the that we're case X use are lands transacting X-figure logo the great highest company Tenable our us in It obviously selling [Indiscernible], customers of our Number and risk coming with into so resonates at getting their customers. One. through having rates customers. larger some higher selling least Tenable half across traction of understand and and success One. new One, Tenable a our

of reps app continue we from the portfolio, and market web ASM, product do In last we overlays, have on have the which we the we selling continue but call, having well, leader, talked which new VM, products is markets very broadened that have the we so terms course it's Look, OT, brought market, to the a had as be of about product the something we years, singular security, our focus identity success on to over the also broadened those portfolio really and those. but have to important in such and in sales mainstream, our security, the on to evolve cloud of addressing Initially, security, organization's continue efficiency use products the and Again, right have overlay that reps products become our ability what specialists less platform. specialist we've here, you're and of exposure own those. recognized success had have really sell requires do marketing of today some and the you we to are we going overlay spend the reliant seeing terms that, to it reps, think become reflects what when sales be I more But those broader reps, in and is we selling adjacent

Operator

Next line with of Patil question comes from Shyam the Susquehanna.

Unknown Analyst

side. on you for one This is on Shyam. is Aaron Jason, the for product this maybe

offerings on and road that answer generated ago gave map. minutes AI a few You the helpful

fruit longer-term the see kind the of and can what AI we of do add on more what's opportunity? in about terms Just the road think a in things term as of low-hanging generative as objective map, you near versus you

Unknown Executive

absolutely. Yes, question. Great

go that we we So from our pieces think I will leverage perspective, a will product AI couple of a capabilities. when there's

able First an of that and enrich practitioner information foremost, helps asset. it to is understands pull security being together risk the a and

that lot you're and is not to The going use this hear So identity to a called ability with together combination. toxic us a just pull combine term data. information, enrich asset more the but this it

individual an to So I've access to information AI to this that that. and you pull now very ability credentials, has with together together I able expose critical elevated gives being can this of all the pull that system got quickly.

an component And explainability within this. there's so

We're practitioner also going of So what information fruit. kind a be of that instead an an I easy, a enabling of a this all to customers, is quickly of for data we call, capability. because going amount providing hanging mining significant our through would low AI collect for Chatbot

So of as tenable at it fingertips. think your a expert

get of even not they from where information, can need So vulnerable the context say, my to generative think to? improvement. areas questions can CEO that business of to able they're top "Hey, AI is blind ability my spots, I that are do standpoint, you scanning And organizations being What AI what a help that areas that find threats?

with AI that I our drive think explainability, well, it they're business capabilities prioritization going outcomes. So also while to can with help

assets being up. domain got cloud that grouping our service came tax or services that brought a a got not in of management sub up are You've that scanned, of just you've grouping in product a

those And going to a being our So super Tenable powerful got for the is with highlight the and portfolio. I product to data that think I are phenomenal that really opportunity LLM able think, powerful. again, cases across business make we've organizations, important

Operator

Research. O'Neill from comes question next Patrick the The of line Wolf with

Unknown Analyst

on Patrick for Josh. is This

and was little more generally Just being worse retention anything Finserve being that get gross telecom outside NRR. color out you there to on XXX% call expansion or the worse tech of out? called a names the to Is hoping on

Stephen Vintz

retention in it is really the rate really this this mix Hi, was QX, Steve. moderation, of was business. the the No, This is skewed quarter. of new. is And a function towards expansion

customers. within Specifically, lots XXX logo X-figure year-over-year by And we added we of new platform Tenable customers, those new grew cohort of XX% from lands. acquired ACV new customers, One newly

impact for and quarter So for expansion business. a very us, had our good us certainly That's an for on rate. that strong new a thing

Unknown Analyst

metric, I should that you of then or of And X we into and but baked guidance? about explicitly into full the How what's you to the number that don't quick think the measure know follow-up, mind. guidance around guide forward one baked sort to sort what's that don't business if year going NRR?

Stephen Vintz

Sure.

Again, X we provide in outlook for platform KPIs would customers. our X, terms would not outlook I customers. does half the of in the more, large for the of key reflect provide that We higher provide. if reasons least that that see just improvement new in of of year at number the So year, our And mean enterprise growth described. we we second

say, any -- come to I would expansion of we X, rate. at the one those can disclosed us. It least And see of also X one should need metrics. improvement from We specifically in

Operator

teleconference. you. concludes Thank today's This

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

Tenable (TENB) 1 May 242024 Q1 Earnings call transcript