TENB - Earnings call transcript Q3 2024

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Operator

Greetings, and welcome to Tenable's Third Quarter 2024 Earnings Conference Call. [Operator Instructions] As a reminder, this conference is being recorded.

I would now like to turn the call over to your host, Erin Karney. Thank you.

You may begin.

Erin Karney

thank to for XXXX discuss and today's us financial operator, call conference Tenable's you, you joining all on results. Thank Third Quarter

our our Steve on Executive call, Officer. we me the press today for this Amit With release the a announcing call Prior to Officer; results our Vintz, Yoran, and issued Chief financial Financial are Chief quarter.

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

and market; innovation expectations related expectations regarding during and and cloud Tenable the flow. the course this customer to make in our our One, our and full will statements guidance in our and and XXXX. forward-looking services and and and solutions, statements quarter profitability our the business, the demand Aware, AI We and new changes security the Growth for including competitive security industry position in drivers call, products fourth of planned XXXX growth in including cash year landscape free threat adoption in long-term for of our and

statements risks these actual beyond cause some control, uncertainties, materially our involve and of could are to those which anticipated which statements. differ from by results forward-looking These

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

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

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

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

release reconciliations for these measures. press GAAP Our includes to non-GAAP

now to call Amit. turn the I'll over

Amit Yoran

expectations We Thank record the adopt delivered flow. you, top and exposure management. as Erin. drive strong increasingly quarter solutions surpassing our continue line, Tenable on free One a and exposure Security for bottom for are demand unlevered customers strong cash the on both quarter, Cloud and to laser-focused results including

healthy Many in trends our deals of One, and exposure saw follow-on business we percentage evolving to for of out spending believe our cloud the customers top a the our September this management to sale broader, precursor range QX Tenable. across A strategic a in of and do and and relationship with posed a We on a security with of the platform continued quarter. more platform many geos Tenable for X both We exposure are across our industries. wide customers journey adoption is embarking us. were management priorities play QX. in on offerings

Tenable One, security continue they be elsewhere. analytics, Within as for look adoption find can't for of customers to our top areas identity they cloud and

approximately for growing on anticipated One that growth as to itself in accounted QX. QX out experience be areas stronger strength As sales Other well a included of our in quarter of rate of a sector XX% Tenable for overall played is and expected. excess and Fed We mid-market. public new business year-end and result, in the historical

public the we that both in we speaks closed some to sector. the to diversification deals customer addition theater. In a quarter, broader can this of base product and This cloud leverage in strong Fed

the of strength area was quarter mid-market. another for mentioned, As

that range, X,XXX specifically broad in We of end have a seeing fairly approaching employees. mid-market customers, the higher and traction definition we're meaningful companies of

enterprise from of the remaining more in stack first look for Tenable types as these One resulting is counterparts, Tenable to unlocking primarily with visibility to approach have to good companies multiple demand This the a these our we actionable X-figure power the customers fact, environments sophisticated our One their mid-market licensed, deliver. that This benefit to of asset while platform. was closed QX. deal In consolidate deal in security. complex Similar products a insights and single vendor the

Conversely, called the scrutiny persisted. out, headwinds some VM new with in including cycles we business longer of previously sales additional deals large and

in did However, we QX. stabilization to see some VM relative

we build, among traction, solid indicates continues opportunity. which Importantly, deals particularly lot believe to see pipe of a large

in for cloud Customers of as One, twice security rather than be infrastructure. in Tenable high to monitor monitoring Tenable as demand applications product. other individually as addition cloud-native Security fastest-growing ASPs we're seeing In to our product products. to need continues coming Cloud cloud with a health our has traction consistent and the whole

unified Our view overall our an to customers. offering cloud brings

priority it should and into insights Further, identifies this immediate efforts. risks where provides remediation they focus

We space, are the validates compete in winning against of most some market. which cloud landmark and the ability deals the players predominant win in often our to

We complex, pace. By aggressive released Tenable's data we CNAPP Security, offering posture greatest innovate posture Resources, to security some more for Security. capabilities and get intelligence and Cloud at expand Tenable our exposure Cloud cloud customers' of capabilities environments to security AI cloud continue and concern. customers recently artificial areas management, expands management extending new into of As an data

better and Aware is Tenable One customers With AI knowing many AI-related AI have the surface. software, our that fully cybersecurity, AI jumped to the operations. weeks rolling rise X challenge, AI without many can rapid privacy plug-ins, without address have the adoption, unauthorized in begun how our to risks. assess AI AI interrupting misconfigurations new and and AI customers evolving libraries customers launch, handle areas tax have on daily another compliance. example To essential and their quickly of using AI customers' already of on a business, considering In of its we've started and all Aware confidently Aware since and enables of easily detects out board QX. in securely around With use safeguards Aware. organizations Aware,

for they and solutions huge track using have is their or this these down. public patriot competitive turn environments. customer some both systems, in the When with traverse they some operate is between mitigate across applications risk, risks areas across we're hybrid to organizations and cloud. in risks in a cloud most to on-prem determine multiple can us. are advantage on-premise customer We heterogeneous believe reside and the When that Tenable exposure look across slowing workloads environments. these an they importantly, where in confident private not environment a into even feel of silos to Most and cases, can as understand a their at their spread they need wants that to uncover both data or and that systems, might And

to matter on our customers. most are the We continuing in lean areas that to

to focus differentiates across how win Our and on formidable and competitors is we Tenable threat business. entire key against large the the hybrid

I'd from like solutions move to offerings. broader a sales our a to constitute sales. as over total spend now XX% Exposure new we VM talking of focused and few exposure of over business minutes an underlying primarily about transformation management XX%

by solutions We non-VM at cases. which how assets is represent are security, customers point, our to total led total Non-VM licensed nearly exposure our looked use XXX%. and of assets. this Tenable At in terms business are approximately exposure X growing at growing One solutions XX%, also what XX% licensed of deploying at for better understand

There and forward. for continued strategy will success set us are going up X key our takeaways that validate we

primary our all become want enhanced licenses consume is One asset our VM and Tenable flagship with analytics. types, First, way customers to the product including for

our portions that The second of and healthy very takeaway primary increasingly are meaningful are is key are identity drivers growth cloud business. rates and at growing

We of are effectively deploying facing. key capital in solve and areas We're toughest some the problems they're flow. with by profitability to while doing balancing innovation this of cash customers strong investing also our delivering help growth

that Board and million execute we're to the vision. on in has of approved our happy share to look forward opportunity of efficiency continue an program. our $XXX our We to front the our incredible us believe announce Given model, buyback to in additional

I'd now to turn over the like to Steve. call

Stephen Vintz

assesses was enterprises in sales large wins of in risk-based million. decisions. indication wins of sophisticated adoption to our security than to telecommunications, exposure in due new offerings. provide in the by earnings. current are revenue to total and X quarter defined approximately in the that deferred medical management trusted allow year-over-year CCB One first and revenue Tenable quarter, our slightly Thanks, Amit. exposure this Current expected very revenue came the plus from XX% XX% with X-figure Highlighted pleased the and quarter in and grew the cloud execution unifies Calculated a to of platform cloud with strength aspects increased technology Overall, data with These better-than-expected a CISOs the we're and CCB in $XXX.X Billings change transportation, data-driven better ability many make our quarter. in marquee recognized clear as the our and industries. and platform customers large infrastructure

One enterprise and expand provides significant a penetrated approximately customers we Tenable XX% for are us relationships customer our customers higher total existing and opportunity One at notably X-figure platform only our new X/X with to customers believe Today, price to points. of Tenable are customers compelling and land We continue base. into total

believe that takeaway lot for we with and the there's So our continued seeing runway is of a growth. are meaningful management platform, exposure we momentum

this in abroad a market to public local misconfigurations across offering We strength sizes, notable Amit agencies. many to As as both attribute and in of for and sector from security exposures, and XXX% hybrid government visualize the access growth our commented all state major as the CNAPP cloud newer ability integrated customers customers, help for year-over-year large also workloads highlight and organizations U.S. was approximately of earlier, environments. our and with wins us well the

and pipeline large We VM this are the maturing in stabilize also in with mid-market pleased market. the outperformance to quarter see a

year-over-year. current Finally, was RPO note growth to also want XX% I that

to net added customers new and X-figure customers Turning XX the new We XXX quarter. other enterprise during highlights. platform

expansion quarter. XXX% Our rate net dollar was this

Our rates strong. renewal remain

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

revenue recurring high at percentage this XX% Our quarter. remained

with was expenses. line our gross quarter, to margin. XX and XX% from this basis which expectations. down turn start points quarter now last in with I'll I'll

last XX% reflects was marketing and cost $XX.X million higher margin our exposure yield $XX.X to basis, gross the from rep dollar higher by would quarter, variable, marketing the part lower of leverage an levels quarter. spending CNAPP productivity Sales percentage commissions. We to on due versus incremental of investment compared absolute investments in our as in of quarter Sales infrastructure semi should was marketing primarily offerings. in sequentially offset and [indiscernible] cloud expense sales was characterize last and to gross the seasonality quarter and which down revenue essentially XX% time. million, in Our fixed platform, and the over in scale some margins expense program continued a the

we as deals. a year adapt this efforts go-to-market and suite our to product in close efficiency selling successfully large greater driving are we Overall, broader

As sales marketing a since percentage decreased spend a basis significantly result, and has XXXX. by as XXX points revenue of

engineering less related to full capitalized expect points headcount recently exposure as higher quarter, as software this acquisition development compared in which expense quarter we trend to time. R&D enhanced quarter and was to costs $XX.X spend sales Eureka quarter. to basis revenue $XX.X expense the this of of quarter. XX up from a ahead, continue revenue was our a percentage was will management. last R&D Looking marketing of R&D percentage to last of XX% analytics to million, lower expense last million as due for and over quarter up comparison was related

the our quarter guidance $X last which in million, the margin [ [indiscernible] of of was basis quarter was from quarter. profitability. of points of last recurring and base exceeded million model, the was reflects than this quarter was range. relative million $XX.X $XX G&A G&A was our and better to We of $XX.X flat the to expense growth million. this percentage guidance midpoint revenue notable operations as up Income quarter. earnings resiliency was revenue balance expense ], for X% our Operating our by a XX% range customer believe XX which with the outperformance from ability and strength

continue $X.XX, to range. full the as was leverage year $X.XX XX% have Overall, XX% we for in than this EPS operating quarter. for XXXX the to the ability business quarter of to increased from better guided our driving XX% very pleased are was which with XXXX midpoint for our margins the

million. We investments. quarter revenue was to Current flow, short-term and the total we balance up with compared well $XXX million finished free revenue basis, gives $XXX cash $XXX unlevered million a into Now $XXX quarter, achieve sheet. of unlevered months. which reach in $XXX $XXX revenue the which during puts generated to and of us was guide On cash $XX.X Accounts million, million us deferred over We receivable let's lot quarter. visibility the annual of million million XX is deferred within next last year-to-date generated to was provided quarter. free expected cash $XX.X a the record the a which to flow we million $XXX million turn last

every we midpoint not July. in we do quarterly, was confident continue call years ensuing Recall, our of flow but operating unlever to flow which do our the cash instead, guide and during the since have the it beginning feel free to can free IPO. year we margin at We the at year done year, and expand of cash that so our the as we over

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

million. the the of income be the $XX expense to net of $X.X $X million, fully be of range to revenue be earnings $XXX expect $XXX million. share Non-GAAP operations weighted in from currently million, assuming of to average shares $X.XX, be $XX range Non-GAAP interest outstanding. million diluted to income assuming in we to to $X.XX $XX range income to quarter, per fourth of $XX to diluted of Non-GAAP million million. a in million the the $XXX.X of for taxes interest in income $X.X million For range provision and million

$XXX.X in And the be operations in range million. to $XX.X be provision million for of finally, and earnings million revenue Non-GAAP full taxes expect $XXX.X we Calculated diluted $XXX.X the range income assuming fully the the be in average share to net $XXX million, be in shares per $XXX.X million $XX.X million to weighted of expense $XXX.X million. assuming from $X.XX of range $XXX $XXX.X million $XX.X currently to Billings of interest of range million. to income to $XXX.X range Non-GAAP for be to interest to a income of non-GAAP income to diluted in of of million, the year, million, to Current million the $X.XX, And outstanding.

of high of we opportunity some our CCB our to compelling part fair here have but solutions. in underlying February, Consistent for exposure very of highlighted solutions the of mix. during related guidance is drivers practice, growth the become fourth next Amit a XXXX The past will believe call to level, will exposure of year. us our with time front the it's growth of adoption drive Earlier, we that as be to year takeaway growth growth our a we our for accelerated our higher provide business next over quarter overall that at larger midpoint this assume a approaching implied our the of

that on our very flow noting we're flow which capital are a million share demonstrates and to that and It's to our strong our commitment our pleased today XXXX cash also to cash the program, to increase repurchase million increasing free leverage deploy million unlevered to $XXX return worth shareholders. to $XXX provided. generation of free announce effectively we we deliver in $XXX target Due previously to operating track

to We [indiscernible] our free in have confidence flow drive our in continued XX% unlevered business over margins cash ability and time. leverage deliver

the I back for some closing will now to comments. turn call Amit

Amit Yoran

Steve. summary, journey company. In becoming are in happy Thanks, where we're with management to the we exposure our

We hope Barclays and progress coming in to success. forward long-term at Fargo to the We are conferences the you by Cloud One the and and look very Wells Tenable encouraged weeks. see in

questions. to up the like call now We open for

Operator

conducting comes Kalia first Thank we'll question question-and-answer you. from Instructions] Saket time, At with session. [Operator a this be Barclays. Our

Saket Kalia

growth you. up maybe XX% start about from broadbrush? hear exposure you touch just quarter? Steve, Could on of on revenue. maybe think fast with how hear forward, maybe you grew for great just you makes that the that was how that It to management total to to everyone and Good team. And this going about

Stephen Vintz

Hi A things. Saket, of this Steve. Good couple question. is

sales. XX% First, what exposure over of constitute we was total said and of over sales new now Solutions XX%

based individual SKUs is that Tenable when and mentioned So stand-alone as sales solutions whole, product of it products. One includes a our Exposure sales we non-VM on of

assets better look what on how sales. in non-VM solutions also to growing asset business XX% and our Tenable are at and customers of represent of XX% use actually understand deploying for we are cases, total our terms licensed One our bases Additionally,

solutions, a total customers. assets So the all on some by this stand-alone reflected basis of for our well licensed both as through our exposure as platform.

So does just not the assets to platform. clear, it include VM be any license within

Amit Yoran

our customers. adoption helps Yes. the growth, we're helpful platform, as us where that traction the And understand where a by we're seeing think because the both I but licensed it also within really we're then seeing seeing that's individually solutions assets the

Saket Kalia

Yes, for tide. you that's do think rising segue just the in mean how Tenable's a faster breadth feels And non-VM those feel portfolio future? you security you. clear maybe natural you do very Cloud I here? cloud question absolutely. for a your goes Much growth for is, about in the sure. security of like Maybe offering where

Amit Yoran

things Yes. offering. We're characterized growing our And it you rapidly time. a as this about rising It's all the think market. cloud large security a do market. I is with very excited

there's tremendous opportunity. think I

and think now leaders and to a things situations and lot discounting a I we to We those don't or beyond winning against concern. have transactions. confidence do We lot above know competitive have there's going have perspective. we're from our where success that, seeing things. market of do share in fair crazy crazy a of toe-to-toe demonstrating of I don't packaging

market the from leading our on seeing added us management going. edge our data we've offering competitive we CNAPP the We've management. of things for posture offerings to security be of of -- customers. announced that itself. AI make capability. speaks competitiveness addition the a posture adoption we're broadened the recently security this where And and full is highly think also We've I This the think

Operator

from with question Hamza comes Our Morgan Fodderwala next Stanley.

Hamza Fodderwala

to little understand wanted I your to bit XXXX. philosophy Steve, QX and guidance just related a around

implied it it pipeline? around Is math, growth CCB consider the bit I'm more that XXXX? a in for what like that you you're QX. my curious concern. by sounds in flush seeing roughly your to So conservatism something guiding QX, And Is to more budget business or about guidance, to in X% we that makes just should related what seeing you're you're assuming X% less you're that or how

Stephen Vintz

Sure.

is guide unpack That full growth. XX%. our that there million guide solutions fourth year to assumes our X% quarter. of of our implied just million. the growth, does XX% And that CCB to growing So bit, how outsized is about to that assets a little in X% see suggest terms continues growth today its $XXX in exposure Amit is talked business $XXX

we growth feel in It are moderation have like short of expectations So level going good We VM. growth that certainly the reflects forward. the to term. some expect of also in these

And call as talked earlier. we about, on the

and opportunities in new We a velocity those overall in have to exit size, large full it's also also lots CCB, the for expectation and fair opportunities. these in But pipe late-stage in it's reflect for both the maturity February. but next as year. of Exposure have year the the growth to VM. top of terms fair funnel pleased now. is we our Moreover, we're the are healthy, give guidance We'll of the to have add here Pipeline obviously, expectations continue and our we with Solutions shape many

to of we growth of we're feel Exposure We with good and with the both regard results and have quarter. VM. Solutions the overall, going expectations So like forward pleased

Operator

Our with Essex next JPMorgan. comes question from Brian

Brian Essex

how for previously federal you recognition the revenue kind I the year, there execution should perhaps Maybe noted this out some so? know changed into have time shed and played played little or for think you of I that a federal may business. the expect what you had And that color over changes on incentives this of we year some issues to that next last quarter? you were that. those -- or me, Could

Amit Yoran

quarter to out played in think that U.S. And Federal. anticipated expected. I be it seasonally our We strong pretty Yes. as much QX

year. some we anything We had business. noted, unusual nature this [indiscernible] to didn't that As last twists year, in the you see

Brian Essex

And maybe quick it. then for a Steve. follow-up Got

you expansion growth progress guardrails and think that XX% outlook the had light the us might As operating versus outlook, few healthy help we how margin pretty you've margins, large going you're maybe of margin how kind of delivered of certainly to the forward can over you of expect understand operating expansion expansion some consistently given growth years. In have? the pretty past much growth

Stephen Vintz

I company, cash since Sure. public free we've flow. as the Well, a been been [indiscernible] say, year to expand I should every able quarter public we've able been think to the increase leverage company, margins and and margin drive we've every or a

as then an XX% margins operating I Just year was in the last on and a basis 'XX. in example, think XXXX [indiscernible] XX% were

quarter, roughly XX%. it's This

call, line last flow On a cash operating said is to cash our the flow And free our margins, expect following plus. margins. By we cash talked flow margins free long-term we margins. for last and to with the about provided free way, flow we similar on increase the we target a the free call, new XX% trend cash

confidence of have we to continue a leverage in the business. drive lot So to

a balanced are We grower.

recurring have XX% revenue. We

We margins healthy with and some getting dollar a have [indiscernible]. And the growth plus XX% product portfolio, certainly, net here. of newer traction broader offerings great gross we're and

same investing. the at we're also But time,

XX% the approaching We year. and it's beginning in sales percent XX%. growth as in spend It's was more XX% quarter and made marketing the line is comments You of a at of we this marketing. efficient this see revenue become the R&D can in tracking quarter, year. roughly that and with last Sales

the overall, very healthy manner. we're the and managing at time, business in way, deploying the margins in a in think walking So very leaning investing we same and capital, effectively managing gradual -- up a innovation

it and next the obviously -- is a we'll plays each to basis Several year, sometimes hundred points will year, about but margins. depending growth out. more, the how see to So that way I think right think year have expand on

Operator

Fishbein Joel from comes Truist question next Securities. Our with

Joel Fishbein

hear those the like AI these and You markets? your Posture love talked what products looks about with and to and competition early pricing days Aware. in traction. early Management I'd how it's I understand AI know

Amit Yoran

in early customers enthusiasm With large that. tremendous A Aware we're -- early using we're and seeing we're tremendous actively that. -- AI Yes. now but obviously, innings, for are adoption seeing the number of

Our monetization Management. asset usage just same AI the is through occurs primarily with And Security true Posture increased counts. increased

Joel Fishbein

environment anything? that, competitive the around if And

Amit Yoran

number between at if other AI Security Posture think coming Management, capability, I large market market are a capability, the apps those in a of to large trough just small with traditional Management. seen you of leading CSPM you which of look a cloud providing include but anything much leading a number don't lighter seeing pretty there's us market or similar others either like AI Security Posture

Operator

next & with Our Mike question Cikos from comes Needham Company.

Michael Cikos

just I on to But similarly wanted about to dynamics that the competitive talk on make sure was [ know dynamics here. continue pricing up ] for Enclave security? the wanted just was portfolio that's [indiscernible] thread a And pricing I I at. that I Joel well. product that and teasing checking as we for

Amit Yoran

on-prem offering. Yes. our other very priced we to it's how With previously similar [indiscernible],

I trying it's dress on So per like IP them number IP we customers addresses the address think this per they're would case, that a asset to license cover. per or In basis. of and

Michael Cikos

check business And the guidance in headwinds here. new its the business the quarter's in guidance, for stand across that all kind of North I'm of seeing maybe one maybe the vulnerability was with back of business, management things America. as VM there. specific implied cautious X new getting sure we're guys just where Tenable. to being how just if out trying the make business trend across it. particularly painted of the pieces VM of were these more sanity by But new on tease cut for that stance, for for -- has to that explained and to new we i.e., trended outside is Tenable one those another board Got Steve then is that you last to with But for cycle more was both And a things was I VM,

Stephen Vintz

the pleased Sure. can of macro, including nearly transact think influenced very this and quarter different. the number quarter logos it's new in add was of this new customers I by but deals, a course, between business we're to in quarter. size is that say fair adding number tougher to the be of this XXX XXX And factors, but the typically Well, a XXX and of no quarter added we be to

think VM used word describe was this and quarter that the I Amit stabilized. stable to earlier

pleased see revenue results execute very with came to slightly so and this than obviously We're pleased the CCB quarter. in the It's quarter. And in better we're expected.

we're see, with we large hard -- working overall, funnel. know We'll So in encouraged that those. but close also we a to opportunities what of lot be have the we

than as I modestly last experienced But would overall, just describe it better what we in the quarter.

Operator

Our comes next with Ho William from Blair. Jonathan question

Jonathan Ho

the results. on Congrats strong

on little types Or of well? does maybe maybe you for to us time of understand to you One get And it that asset bit follow And wanted take platform. bit help Tenable us translate? ASPs Just upfront? up a can One you understand little new Tenable help a do typically as your the from a can how affects lot the benefits

Amit Yoran

Yes.

Jonathan. question, great So

play is higher it's and and can per when the initially see XX% purchasing we'll price VM, purchasing Tenable short So coverage typically what higher asset over XX% to that answer itself stand-alone asset is time, through a for per instance. One price that, out

of the part coverage expansion From assets. of there, or uplift And traditional the and or there enhanced types greater in of and orderings. we available value asset views, of the exposure the in that aren't of path analytics remainder analytics, from VM driver competitive things the coming attack are see products the alumina some

has who expand from a from and and begin to [indiscernible] indicators blast within cover potential who identities the seamlessly might perspective [indiscernible] someone from a environment to initially a their means of what identity or what like that VM access perspective. will us compromise to journey exposure radius frequently and So looks be stepping count management or with that their able to then at looked Tenable One

a So broader XX% is which see we types coverage the answer assets, through initially through to short see gets greater but realized price and of asset, greater coverage, uplift per us then the we'll asset that ASP. higher higher

Jonathan Ho

terms ton environment any competitors of you a or the And environment? your and start gain comments, talk you've then And newer stabilization in of can to these pricing just to the maybe seen some are competitive sense. things stable. relatively traction Makes of whether whether

to from that these around angles. sense want get Just a stabilization

Stephen Vintz

product. been and we'll perspective to into But is in think exceptionally certainly up, newer and infrequently of when hear is competitive them entrants sales key VM comes understanding Yes. And Things for team coming fully the our we'll noise they it stable see from show much our someone looking in VM terms I marketing existent an We'll from enterprise see where market. the the we're situations more market. where differentiator. have do enabled

enterprise customers very quality competitors which more at difference experience quantitative when very test quickly there's a competitors. think and different say, coverage and pronounced against of traditional look in looking newer and our the vis-a-vis Tenable much them I products okay, certainly at even

we and we into win So market. and both stable enjoy -- the exceptionally entrants rates the newer that is -- competitive legacy environment think environment strong against

Operator

with Patrick Our comes next Scotiabank. from Colville question

Unknown Analyst

expansion don't this of you quarter. the guess Hi an ask I to want any I stock just one think there But was about Chris. I authorization. I'm repurchase. guys repurchase repurchase announced stock

then why And quarter? what's through around guess, just repurchase no philosophy So I me buybacks? the talk this

Stephen Vintz

do to Yes. in to authorization to exploration plan share announce not stock to reduce return do our think of we buyback to $XXX but count pleased for we We course, repurchase do and share authorization ongoing shareholders. the reflects in so increase going And the quarter, very so this opportunistically. increase program the our do plan but did a no million capital There's we're forward. which commitment we to

pleased buy obviously, So our on buyback. every the quarter and the back increase and vary to commitment very today that can amount each we

Unknown Analyst

you OT with helpful. that may. second any provide I cloud, guess tailwinds kind look And growth. guess if there, XXXX X% I sales Tenable that kind current question, providing you for early Thank reflected with exposure be kind could of more when X% in of of would with a there's my these If will I into security. super be ITDR, to mean, color in of lot I management numbers? wind of billings

Amit Yoran

Yes.

things. of number a think I

business guidance provide of call a competitive and wanted think solutions rates more call. increasingly rates, ideally going our bit upcoming increasing rates, be and an those put at expand growth part we'll earlier out little we're transparency and think, I and the percentage more the important forward. are obviously, becoming in things of one very we're healthy and highly exposure I we'll win to importantly, that our the in build to to upon revenue, was growing But and we strategic First, able that they're of our things

Stephen Vintz

the higher we confident product be clear, time. business. broadened to course We're But just will [indiscernible] the not feel those And years, today. suite and over growth of our we setting have evolve very diversified expectations that and the

XX%, today, of it's notable and compete able so we opportunities. of we'll growing large and confidence that sustain to And be in business some our very really market XX% have that these

Unknown Analyst

Terrific. Thank you so much and congrats.

Operator

Our next BTIG. Powell Gray with from comes question

Gray Powell

Okay. on It's the good stabilization. Great. to results. the Congrats see

the have budgets. U.S. uncertainty security curious quarter. the deal level. look just around It their this on doesn't So past on how came all elections up about thinking maybe the customers it you impact just just at just like in but results, Have are impact from start caused I'm that any off seen any discussions or if any to high

Amit Yoran

not U.S. have and sort international in on our a about the discussion there's with uncertainty a of taking space, lot cautious approach potential of impacts quarter. budget. We Obviously, in commercial clients we're of to or guide the lot clients that elections federal had so of fourth security

Gray Powell

to question there's or a guess I sort like of exposure of metrics. like more understand these of revenue an I definition total just sure a make XX% related correctly. disclosing just of billings you of then when call sales Steve. When at that And I I'm something number? bookings. disclosures is loose sales, correctly. I thinking sure to more management to a Great. for is that it want want the Okay. Or just make housekeeping

Stephen Vintz

Yes.

we In bookings terms of what that sales, call internally.

Gray Powell

you much. Okay. All right. Perfect. very Thank

Operator

comes Shaul TD question next Our with Cowen. from Eyal

Shaul Eyal

where I when would Steve, a know you or we Amit it's too characterize current budget in compare you early question, My sit, from the maybe stand little where everybody. But given afternoon, the Good fourth seasonal [indiscernible] time? you flush. quarter. you. Thank How

Stephen Vintz

for inaudible you that? question. were Can you part your sorry, repeat I'm of

Shaul Eyal

first this early budget little characterize the this flush seasonality the about at the end Again, in we're seasonal a of quarter. asking year? quarter. was in fourth the given year month I point, versus would Sure. the how you too last of But

Stephen Vintz

Well, far say, quarters experienced expecting say we've flush. that that so Obviously, consistent, if start quarter, budget year. would the in And comes, so characterize October. not what we're it's with should that I I I we're good unremarkable seasonal experienced this and is think fair to more significant familiarity any the with prior upside. a in would to be we've there terms off of within flow

Shaul Eyal

anything way And maybe follow-up from graphic Understood. a perspective, or quarter this a the outstanding other? one

Stephen Vintz

say sorry. I'm You outstanding,

tough a time hearing on We [indiscernible]. have you

Shaul Eyal

a pretty or a perspective? it's reminded, consistent unusual from much apologize, quarter much anything performance geographic pretty I but

Stephen Vintz

noting now in when We earlier ton we strength ] last But geos. some call, discussed, there. the and see rates, that stable in The up it's of of quarter, employees area was a more was No. more mind on the year, X,XXX. we the of geos. been [indiscernible] there, probably on XXX one and We for consistent to mentioned it I the the from deal [ that's This mid-market, a about closed outperformance us. the million employees the bit worth MAM mid-market. mid-market opportunity this across of talked an Keep we as really is little say anywhere a growth thing really just

big getting have are these the expectations great we high traction So success there, having We're We're broader going great and forward. telling offering. there, companies.

Operator

Our next [ with Rankin ] question Robert comes Kothari Baird. from

Unknown Analyst

Baird. [indiscernible]

mentioned sale segment. and following what on the just the Steve, mid-market of closing first with deal you starting in outperforming the So from

wanted I the get sense than can You to quarter. touched than gain a expansion just that how was upon help XXX% rate. lower to of dollar unpack us you if point a net just like last

kind these you factor organizations larger and which, context color elaborate product offerings enterprise. with compactors segments by some are growing and cloud And on expansion a help there and market of exposure then low provide in also course, and strongly. on of can cohorts have other I follow-up. a that you highlighted the within of secure new If If that is

Stephen Vintz

Okay.

deals, a large metrics, fluctuate business X-figure of expansion these wave a quarter. about a the disclosed expansion on quarter-to-quarter. lot customer the in number dollar about naturally our deals, can new of here given transparency we basis. base quarterly question around number provide business rate. not net a the metric. optimize a single of within of a a there's We from And think And customers, of course, our we new net I do And

modestly That deals businesses to lower quarter, we've larger that attributed which as about said, a some opportunities this see in what in of we the on It budgets is did rate within expansion did we discussed. But remarkable XXX roughly the of quarter. timing was here. large We and largely some see new that. was strength just

of a other offering, the price So higher we in I think cloud, products. cloud job. year we're to this momentum our about some talked broader comparison comparison at good in the there Landing ASPs and last points, obviously, higher doing giving and to the giving in notably year

rate, have any us. to net deals opportunity quarter, be is we one the a but obviously, can of bigger another. number logos focus of going So new vary until expansion And of X-figure still given and new the forward course, going here expansion the lands for area big within

Unknown Analyst

customer customers any helpful, be opportunities. the [indiscernible], Steve. trends and looking of these just success. sales, upsell pronounce in your shop free there? And you Super chime the to with terms as they're the guys these we in And right, one-stop the And of anyways, how follow-up their vendors you On how consolidate are positioned mid-market, how terms observe are this you a just the that security you adopting might Amit, pricing or and dynamics around big highlighted, and curious feel it. in to purchasing in. for considering Got behaviors traction

Just wanted you to understand mid-market. approach how

Amit Yoran

think very a of benefit as again, we applicable, the adoption consolidation seeing for as of Gartner, using you talk exposure up we VM from to to which exposure if you part think seeing with employees. is and to some traction mid-market, understanding enhanced management X,XXX we're I VM language our product at TX Yes, with understanding purchase, licenses we're are go foundational approach platform such, management. us, organizations are look and the risk. strategic as this of to the in fairly if large And some analytics including folks seeing more which, up great can and they're to the And TX

security solution, where products security integrated elements also our of cloud there. we're of aspects So sort traction how seeing the the meaningful And cloud of it's us. all security mid-market where with into cloud a our various unified are don't they're cloud the really especially in platform the expertise the for perhaps that have are appreciating all they staffing and looking of security,

think come One So mid-market. I Tenable outperformance Cloud in the natural areas us both Security and for for

Operator

Our Kingsley with comes Canaccord from next Crane Genuity. question

William Kingsley Crane

higher asset, sort Great. a earlier, Congrats on pervasive of much talked more garnering back the One premium is deployments. quarter, similar and on Jonathan's this ASP You XX% the per question to to also XX% of about Tenable

well asset -- and room OT price a question types asset to really think more that is, more as add both to should like per the growth asset to about increase? asset in counting? as you premium Is for asset is the play? in we this growth there Or So as functionality how [indiscernible], per

Amit Yoran

within and platform, we benchmark views, of that VM answer generate more we've to that or histoanalytics In those a base Certainly, lots as pricing the it short path of a Yes. do customer there's leverage exposure room is room product analytics, along We're be existing the to sensitive One types add and in under and trying premium. The to within the continue there. capability of some expand think I enhanced customers count. to analytic both attack asset to to that. order and move standalone when be Lumin comes to procuring the price of existing want asset, as willing procuring the from in to that, stand-alone Tenable believe functionality to dimensions. pay [ product the there's TX additional We part the released ] for to per

a we're of said, with the in still That a asset types. base days massive early broader customer penetrating set of

many many to aware of are them you and pull offering talk ways So CSOs out even has broadened. customers, you were that our of our there when there in

think, continue for to very market the expansion to bringing and probably realize marketing do a to So sales and a of job grow. aggressive or asset of I I to growth think also have new asset some TX way products to natural having, these to count continue types more and we prices is continue

Operator

Our comes Roger next Boyd UBS. with question from

Roger Boyd

just seems that and in last about Amit, you're counter your that outlook. you in more still you you've talked capacity fourth see a lifting? 'XX in just is being presumably dynamics it headwinds quarter it sales really the the -- of uncertainty of license talked tied like would confidence some the with cyclical initial mind, more give it that are cyclically the But cycles? in past? recovery about macro broader a challenged, what continuation in Is expecting and is -- embedded Or quarter expecting to VM not specifically cyclical to

Amit Yoran

going success approach an sets Yes. here Well, trying take that think I we're up to us for forward.

is VM recent absolutely periods nobody's previous that program. you of, do. periods. is that, Nobody we poll programs. hear I'll The they to is they have that expanding their make program, is there the first heard what VM they in What ask rapidly getting are and is nobody comment security in and will as their is VM VM rid may as reducing program foundational as have What you out CSOs

there me things the we're would that improvement confidence that seeing is there. seeing of One improvement give

procure strategic asset of platform is customers to because One VM What more the ASP we want coming expand management hey, enhanced through exposure pay willing customers program. analytics. understanding Tenable I VM seeing and higher requirements these to So a us count their a with to as VM is me. are to I'm seeing say,

analytics. to enhanced want to so now us platform procure coming plus saying, our through and Tenable customers XX% are hey, with we And these VM program VM our of One

future is size, a it been the talking into real the foundational we're a long but visibility exposure the our are and one, that momentum provide, we're as So of which trying do to two, obviously. stake solutions, for that the the time confidence seeing. We've about what in rate as VM our market scope continued laying and we're growth company

Operator

Davidson. Next question Kessinger comes Rudy with from D.A.

Unknown Analyst

for on Andres Rudy. is This

all, quarter. data wanted think fantastic longer give sales update a commentary any the had us? that you be Do cycles. to by would that a Is can Any you you congrats just First quick partially [indiscernible]? helpful. of question. you was ask Last quarter, there said I on affected

Amit Yoran

Steve. turn Yes. And I'll start to off over then it and

introduce what bake we aggressively pushing continued and our and expansion what think guidance I sales quarter. -- do offices play out. would cycle. think contract I of on in more and in but forward same also our we're things to negotiations terms seeing procurement and that sort the sales that I can expectations. continue of going previous the and procurement saw basically itself we only we've we'll don't into anticipating we're cycles it quarter we But to know of them last I as seen We continue and quarter, see to operate CrowdStrike, attribute CrowdStrike officers

Stephen Vintz

right? to And sales prices, no about convert highlighting this next. XX% our to One change probably quarter selling One. We XX the one cycles that's over Tenable range the Tenable in talked uplift up which is XX% there's really from The higher worth sales for anywhere Yes. the to from one notable has happens, XX%. cycle to that is in thing

delivering We're basis types. an So attack obviously through incremental We're customers across move asset prices. covering from and their asset higher on a different getting stand-alone assets product into service more the platform. selling value

higher those prices, seeing having we're offering. selling despite the notably integrated sales shorter actually cycles So with

that I to more insights And attack greater as risk want is the surface. customers and want understand They management their So broadly certainly deliver obviously, are across to industry companies it talk and analysts out resonating. to fact well. taking to speaks others think exposure

Operator

muted? Research. Joshua question Wolfe with next Joshua comes you from Our you Tilton Joshua, are there? are Tilton

Stephen Vintz

there's sound like not question. Does a

Operator

muted. be Yes. may He's queue, in the but he

so going So call, close okay? there's the questions, no to other I'm

Stephen Vintz

Sounds good. you. Thank

Operator

concludes today's conference. This

for your your disconnect and thank lines this time, may you You we participation. at

Tenable (TENB) 30 Oct 242024 Q3 Earnings call transcript