Tenable (TENB) 25 Oct 222022 Q3 Earnings call transcript

Greetings and welcome to Tenable’s Third Quarter 2022 Earnings Conference Call. At this time, all participants are in listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] Please note, that this conference is being recorded. At this time, I’ll now turn the conference over to Erin Karney, Senior Director, Investor Relations. begin. now may you Erin,

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

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

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

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

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

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

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

Our the also section includes website. turn to Relations these GAAP of issued on I is to available measures for the that release and Investor will Amit. earnings our non-GAAP over we call today now reconciliations

also discuss exposure Thank exciting our delivered non-GAAP solutions XX.X you, QX significantly I revenue release unlevered Exposure performance let delivered our free Erin. growth and for at touch first strong Tenable our with cash $X.XX that, Today One, financial results. EPS QX, flow of will and XX% above in on the We traction Platform. the of of With expectations. me We quarter both million Management our

we're single-digit we quarter to quarter new large very We at the for we which new low customer in figure in enterprise XX EP current Additionally, strong new Overall, additional customers, was a in of a and both existing penetration logos enterprise. had six for strong had adding customer Underfitting the is demonstrating us. record this platform, remained which which XX% grew our Tenable.ep year-over-year XXX, another strength acquisitions, saw demand net particular customers. base, significant only into for pleased sales, the has double digits notably upsell providing strength new as expansion. opportunity our with demand

to was In win a also as markets. the enterprise federal, public addition success in local sector state, to market, and large highlight continue we

have visibility to cyber, understanding be that attack management about How across they key environment, needing the earns even vendor challenging in our conversations, a believe more cyber the us looking on cyber surface. risk only talk into not regularly excited when management leading are better a and risk. leadership are also make We to these macro vulnerability to right to the remain management but focus decisions. and Customers how in managing efforts prevention We priority. us and vulnerability

of relative pre-IPO frequently protect additional up these and native, to the which attack approximately infrastructure's to address identity environment. assets active is analytics cloud XX% Tenable.io, broadened security and products code have and discovery and attack other solutions make solutions overall surface exposure at assess cloud used solutions our and parts as we management. posture remote few last probe the surface Combined, approximately years, facing of such customers management, and our their exposure to help workers, technologies, mobile Exposure X% and external sales include Over and cloud operational XXXX. directory launched integrity of external XX% their and the

made With the to from EP, us. technologies assessment multiple of purchase we customers introduction it for easier

Over the reach approximately the XX%. for uplift seen past EP year, in ASPs we have

together Tenable Tenable threats exposures, more their We whether EP. even increase data of measure understand management, and exposure One, across One sources path for through management the month, release solutions privileges, we risk. a consumption view understand attack down and in as completely have as context or customer's intelligence. demand the and time. an strategic market adoption This over beyond data actionable to risk and premise of security, announced a seen manage brings risk, the it's compelling. new external across Tenable this and brings will helps [ph] be way directory approach new reduce cloud more to and confidence management are unified products and gives us This on One driven order offering integrated identities EP. silos between deliver great the the tax from cloud management of provide Tenable customers of active analyze capable well the platform and exposure entire improvement analytics, into our to One customers [despite] management across their delivering. attack a holistic cyber in surface relationship single and evolution vulnerability breaks siloed assets, And delivers that Tenable analytics insights Tenable's what surplus exposure

differentiate analytics consume that also Tenable prefer Tenable. products, One customers For to enhanced individual delivers that actionable

standalone and analytics. Tenable purchased management. analytics Buying delivers criticality license enhanced vulnerability outstanding a for path For example, with gives attack VM One based customers like asset Tenable.io prioritization

the management path exposure the will foundational we exposure provides our individual users potential efforts combinations we've with views, context. capabilities EP securing identify to movement, in with even and providing [ph] programs. to insights Tenable systems, their Tenable sources new with critical vulnerabilities] highlight a can which terminology, create. teams organization's external success path asset gives go One. believe we've enabling market lateral of as view The seen management. great to other that importance makes Lumin assets exposure introduced are confidence about attack risk using that attack analysis the increasingly while are leading [unpatched Gartner release, into of critical. increasingly And and product and month's exposures continues inventory, analytics their exposure, to three operationalizing New slightly to this cyber an better. of analytic analysts centralized each view managing cyber most With One us process from different talking of

directory, of our As Tenable unprecedented time, Exposure Cyber analytics in tax understand, more management vision. sources leading cloud, leader risk more can will over management, surface. in opportunity One a ingest milestone and beyond. And actionable represents the company entire customers first we a even platform the our to and active platform. an represents and IT, vulnerability measure, major a role their manage we're incorporate data cement as and and deliver across One Tenable insights. and variety from helping

growth proposition and where economic strong The While in efforts that most delivering earnings, helping management are how and we've been to made coupled broaden companies for able this we many operating scale. ability both in the risk efficiency. outlined environment, develop excited growth, more Macro to at we investments us value continue prioritize emphasize plus the years, believe of one especially we're customers last cyber never our attractive target to market risk position in resonating, our deliver and in to our XX% cyber path significant easily to to continue confidence aside, many an investments reduce to in environments on challenging transforming go platform year. we with to better is The give delivering our have be growth management. in understand a exposure to exciting seeking

scale We flows previous cash driving leverage our to meaningfully focus investments on margins are from and on as and we generate increase track operational also efficiency.

in We commentary call the believe expect flow to can cash that million double financial XXXX turn deliver further XXXX. in results. unlevered of and free Steve over $XXX for on our now we will over I to

Amit. Thanks,

with results good the for unlevered momentarily, more results third that I all the by beat but highlighted are sizable line we cash revenue. quarter and We today strong financial in growth, commentary with note non-GAAP measures provide financial will EPS, flow. a top discuss are exception please free of first our pleased

is to be mentioned earnings issued Erin on call, found in of As today, start may this the GAAP which our reconciliations posted our website. at release non-GAAP earlier

to platform on to in results Now, million and current XX% benefited and from deferred change revenue billings quarter Calculated defines the to continued strategy the recognized our and quarter. in the year-over-year market current XXX.X plus revenue the grew investment for our efforts. go

As customers of large Amit adding mentioned transacting terms deals. and earlier, we new best our had one quarters of in

larger to enterprise customer helping and more exposure sizes. deal in customers which and new which is platform momentum XX growth Underpinning translating QX, our XXX added we customers year-over-year is our and become XX% to Specifically, figure respectively. new customers six strategic represents XX% solutions, net us

aside, Difficulty] of which broader to net visibility filings our the our is based We compelling forward in platform upsell customers and DBNER other for plan dollar into going path rate deals in and platform or New expansion products. was [Technical XXX% more provide our a is creating quarterly quarter. the also our adoption to our benefiting further disclose existing DBNER,

generally a expect year-over-year Revenue XXX% represents recurring X.X exceeded in of basis, our to on our fluctuate in Revenue range of which revenue growth from was million. as consistent with within remains year. quarterly periods. may last Visibility XX% to is growth QX high guided XXX.X DBNER range. XX%, percentage the million, and XXX% was we prior up XX% be by the which quarter While was mid-point it

path and quarter. efficient global personnel, release less costs while market down release which revenue of than was to quarter. expense in QX was attack the well lower related XX.X achieving reflecting XX% commission. operations, marketing partially capitalized was software XX.X with efforts. go our XX.X I'll last slightly market expense R&D leverage due offset as and quota marketing contractor decreased operating increased reps, where for by with compared dollars, expense was million from a XX% initial million, start XX%, carrying management. greater to I'll which from XX.X increased absolute and expense Now, sales million, as engineering in includes million, was last last was down which to of headcount Sales XX.X turn percentage to which Tenable development connection expense the to as lower sequentially the of quarter. was events of company sequentially expense go and to quarter, Cost external as attack flat down recent to expense XX.X reflects based was due Sales which analysis and in primarily margin, goods increased increased R&D to percent invest decreased cloud of G&A One, from and surface million spend by gross Tenable offset expense efficiency are incremental costs. growth. compared a sold quarter. more One, XX%, million was last usage revenue was higher to the travel. sequentially our of and last R&D continuing due G&A products which last quarter. we to

operating lower expense as XX% our operations of from Income as to due percentage range, last in takeaway a The payroll have XX.X a costs. here revenue, company, million, a above quarter. As EPS our we notable was natural we over including products the the and in was in to sales of mid-point lower our revenue of better $X.XX, XX% million build, key to lot outperformance quarter, compared G&A the XX.X is, guided and this expenses, market, in than was with guided quarter a and our was remain we and sell of which business such increasing continue R&D. areas efficiency, which growth leverage the range. while mid-point $X.XX focused on the invest

operating approximately share $X.XX costs In above expense FX, OpEx, in due in an currency. stronger lower loss resulted in FX terms by other of offset the quarter the per a of benefit line local in $X.XX dollar in to

deferred million, We turn revenue, visibility of the let's which finished receivable including Now, months. deferred sheet. million balance and next short-term [ph] lot current XXX.X [XXX.X] to million revenue was a twelve in XXX.X the with quarter the revenue of investments. cash gives and XXX total was over into Accounts us

like would to expense and income. Now, discuss interest I

rate our are reset full-year expense at our floating higher ahead, our rate of guidance. guidance Consequently, X.X environment October. interest a additional assuming interest the million previously facility we provided Looking of debt than when end reflects

on our interest environment. rate to and hedge a natural a earnings provide However, rising cash investment expense balances in

As that a free EPS. expense, have We such, of interest interest cash we do flow, impact not will which million a on significant unlevered of net expect is generated XX.X income margin. XX% margin, recurring to flow, continue attractive can we confident continuing With rates, XX% generate high-gross invest feel business. while the we renewal in revenue, cash and levels to of that

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

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

only XXX full-year average billings our midpoint. XXX we the guidance XXX representing reiterating to guidance XX% free in million million flow shares growth cash at range million. EPS diluted current XXX for XXX assumes of and Today, million, of Our weighted are unlevered outstanding, million be to to the calculated

believe the a uncertain an we earlier, given third with but pleased backdrop this execution the are is As prudent our we quarter, in of discussed macro, approach. we

the more has For visibility, raising QX. revenue, we X.X are the full-year achieved mid-point guidance by our at we which million in upside recognition in of

income [ph] across operating approximately passing raising the In by full-year of terms we million the million] globe. continue midpoint, scale the we the as [XX.X along and X efficiently to QX are at in

point, full-year Amit. cash reflects free cash We have call first over we which are to this a today, unlevered flow for business also guide in providing back At significantly confidence the the grow over time. our to the I turn to time like flow

our We in and to to our even the you now in weeks. results ability at hope BTIG, for in Barclays to up market. deliver exceptional like many technology, a confident the our very We're call of Steve. tough conferences differentiated We questions. open Needham, and see the Thanks, future, upcoming

question. Thank Instructions] proceed line your with question And you. you. Please Morgan with Fodderwala our [Operator Hamza Thank the comes first from of Stanley.

on the a lot Hi, strong in a question particularly and around to you. team. customers questions, first We're hearing for way this my Amit, season for macro start Thank consolidation, earnings you environment. taking note. from

all can you're into think runway bit environment? surface your a relates we and Active you as cases of know talk Directory, management, And And now, OT of attack platform. VM not strategy the this think about seeing in I if about bundle customers how really things buy you cyber still broader customers? especially I security, little the, about plus that that to consolidation of strategy, cloud have a used view you just think should it XX,XXX like people security, the as a, sort Tenable lot solution exposure how

our Thanks, – about have runway. seeing customers. the you to growth as We're customers represents platform. now enterprise there's still X% the EP EP market on said, over to platform of enterprise our X.X% on specifically side. the And we XXX lots of Hamza. existing going I'm segment double-digit talk where It

really a expansion of So, of think We there's and lots VM a of program. left. consolidator. in lot still risk, be runway a terrific their and turning an of traction, a lot think about adoption, there’s there's people When we're they're position ask about toward to

we've as products fantastic added consolidate risk management cyber for we're all and directory a like becoming around and position feel platform security tax that. operational as to we've So, security, management a the in things active surface for And capability, technologies. capability, go company really to we added

maybe Steve. And was over the versus XX about margin XX Alright. last Kudos solid, how months perhaps spoke quarter? that the next beat on are say, to growth thinking when for follow-up a just we relative you quick to let's the profitability,

the Thanks question. Hamza for

but very We focus focused fair continue flow. it's on think growth, I on cash say and to margins to we're

So, capacity, hiring spend business, carefully are notwithstanding mentioned. opportunities, with all we're two growth and we of areas we're backdrop adding just given uncertain in I of our that in the quota our our in scrutinizing macro, confidence the R&D,

a [ph] in than the think that are of Today, QX of raising the we indicative business. kind the, results by confidence. So, to [QX lot EPS us this our and I over $X.XX of leverage we're see by expect EPS] more gives

flow XX cash the months. first flow And comments time, we expected quarter, providing over cash the also And also the is in hit directional how made years. that next we the over to a and some next we're about Now, grow guide. free but also fourth for it couple of

the Thanks detail. All for right. all

proceed Piper question. Rob your of the Our next Please line question Sandler. comes with with Owens from

guys my much you thank this And for afternoon. very Great. question taking

Given come sector. what guys of again period, saw hitting public earnings you here, understand maybe are out could lead you us the off for you help

You're usually in you quarter, also mentioned strong but very the and states vertical federal local. this

just performs in local coming been outsized with as and if and So, where Fed in-line Thanks. typically anything across state it's wondering well?

Thanks, saw the comment upside in typically Rob. on. federal from Good greater market and actually we hear to than you. We strength

in strength well the local state, aligns sector, government public And market over out, global the particular, across well think I federal, of strength of seen but we some the quarter, large this that saw we've markets, and segment. that of as enterprise with as only pointed past you quarters couple the rest last in as not the sectors.

Great. Thank you very much.

next from is of with Truist. the Our line Fishbein proceed Joel question your with Please questions.

how my One, That upsell? taking for Amit, these this very and going perform question about operating will quarter? can we go Tenable and quarter. because you] this and for the the think just just execution along taking again would to customers, and of or mean, an terms environment I this fantastic [ph] base Is be [indiscernible] And you, case you follow-up talk macro a upsell potential EP of just margins, Thanks. because approach more Tenable you're one new should or forward lines? on in conservative I and for then where for helpful. metrics this this of profitability Steve, the the the [would fit in just a market maybe price good motion strong but you One Steve. is Thanks the for know is

EP. we as the see evolution of Joel, natural Tenable One

evolve One, across asset store. data flexibility With new efficient to to asset Tenable data a different customers unified in a types very types bringing embrace the gained EP and So, we're great fashion.

reporting from perspective. we So, but analytics an not more also becomes compelling, just from it think unified perspective,

ASP relative the with So, the an think with seeing, similar see to or opportunity now to] what seeing also that sell we'll [opportunity modules. very Tenable better uplift we're One see XX% EP, to were continue to analytic with [ph] additional adoption we we and strong

analytics. have allows and even a One further us which [reach] additional ASPs to which some, [ph] of premium We some sale as Tenable are part through of the edition,

just Lumin in capabilities. other Lumin attack also exposure and saw So, not but cards, analytics or path

earnings your upside in on EPS. base we're both income, to And the margins. question with kind then, Obviously, in be we as of significant operating operating the to with this quarter, our case regard third as going expect of new forward. terms Joel, well delighted And

the were business. going drive Our in to to expectations continue leverage

a We revenue renewal XX% high have recurring natural margin, gross rates, of leverage. lot high so with and is there

very key business, we're which We of are other engineering, spend to the quota in product a is but adding of areas areas our and capacity, in approach side, prioritizing careful business. very talent adding spending the on also taking

Over capability initial some into and the market past to our expanded costs. years, new gone that and startup markets we've few comes go with

other in So, is, today capacity the add the is areas. leverage would characterize you're and natural capacity, where able we're more business to I less seeing leverage what quota quota in

higher pleased the very company margins the in the characteristics we're have quarter to flow cash beyond. in and third confidence and both leverage So, with of drive the

very you much. Thank

you. Thank proceed Saket question. The line your of next question from with the Please Barclays. with Kalia comes

budget love budget Thanks maybe maybe little perspective? guys. higher help is more. a their EP? customer a more to as right consolidate questions does from, that's more And spend, customer you, Hey, a for the new security Tenable Tenable dig from end to going something that's than I maybe help is to or taking great. well. One of security this take is, their the Maybe question from know Tenable to that, I'd need SKU this of bit a just Okay, EP areas of is you related One a for or complementary other One my here into mean,

Yes, One the EP. Tenable we natural is for the think evolution

seeing our customers. – EP. allows different much against for traction asset that – will And efficient your in invest where fashion evolution. understand With you acquisition the of So Do, know multiple the that that great assessment multiple the in One, a with exposure your we're which Tenable is message parts types of environment. natural technologies these in these, it's more for and EP

of analytics consolidating unique can and the the exposed bringing are that [ph] on users back-end, we're data they're we so table, So, what assessment between and and systems looks their internal it. critical to how those efficiently do [permissions] technologies their the What can that the like how from the most attack only assets? what adversaries systems disrupt resources from paths to assets externally and the coming most find integrity are and assets you paths how are those we not and take finishing accessing your we and can could what

So, risk exposure it's evolution very [ph] opportunities. very related segments. we'll about be how management. you cyber a we [comment think able of to] market just natural and a we of actually that and think coupled And think market revenue A cyber are streams lot lot the with of their to tightly VM the

attack answer helping the So, their and their cyber about external just is managed risk exposure question management. surface this people

think this tap a traditional to management, seeing but helping the attack on to adjacent platform, also their not go secure cloud in budgets enterprise expansion security, management, and VM only able the is traction all So, tremendous technologies, surface We're security. after environments. the to active respect risk. your folks natural being of operational to Again, we budget, with identity cloud directory understanding external of

another reason and from consolidate a allows customers standpoint standpoint. technology just budget So, to a both it's that

it. to clear. for I'd stay very for second. Steve, you, just got Got on maybe That's it, EP love a

– roughly the don't, that uplift EP? some you customer that Based some that question customers what's the the and that up and the product was those for mentioned still EP actual I X% is, all off for of opt small with get size relatively you've there a was XX% that are uplift a for was earlier go maybe base, course Steve since right know it gone based seen, of ever on to uplift it's size. that think introduced, been buy that sample that's sample different customers I the just all-in that that but

Saket. is Yes, is want good that realized actual XX% uplift seeing that uplift. And This is I is list make a to price. This price. thing the we're not XX% question, one clear

our we exposure to VM. relative prices XX% standalone we're selling platform EP, when selling higher So, seeing sell

deals, the of And new so, we're and net also our is transacting you're quarter that numbers you only margins. having tremendous for seeing figure positively it in see productivity larger levels, customers, also one six ever can the success best but today, had impacting not uplift

a lot it and represent ahead. to only penetrate of we'll growing percentage, but back into look our sizeable expectation is So, that We customer existing we us with just as gives base. customers, our new a Tenable confidence also not launched customers One continue the base,

Got it. Very Thanks helpful. guys.

Our next question is Brad proceed Please line question. from with your Stifel. of with Reback the

Great. the elongation saw in with correct actually might orders get Thanks a be better very in would that that XQ XQ? assume much. the strength little quarter, the results have the gotten in it to you in didn't Gentlemen, any and here

we think, sales saw Yes, you those we know it describe we that stabilization I would QX. of elongated cycles that experienced in late

year-over-year, forward as or sequentially on level think obviously to significant up this a down should going the level? and we we there one-time more some a items adds, the of were quarter about step then the enterprise it. back And settle customer Got in new historical

exceed Obviously, say that expectations sizes over vary question. just customers for can would fluctuate. from pipeline and I XXX quarter-to-quarter, to we’re good Brad, We Hey new continues and also can enterprise right, platform us. deal opportunities pleased. added

So, this natural with fluctuations. customers seeing platform we're we're pleased not indicate, as see be some us, board going new to enterprise the that but broadly new demand there but as our across a could for norm we're

great. very That's Thanks much.

you. Thank

question. Our your of with from next line Cikos proceed Please Mike Needham. question the with is

better that some that its were it maintain by guide thinking aligned revenue wanted XQ below here, of end but around as but led up know back for you put the as billings? you your and just to to when I so we're the guess I to that again, commentary here, Can guidance. take some views help you A beat specifically you're come was guys. a parameters Steve, Hey, company help could two-parter just why the bit you. us far out laid that there slightly out, to what Thank what frame on was metric?

saw quarter, is we business. strength a by million. attributed $X.X this to revenue, the our Yes. pleased revenue notable With outperformance almost We're with million, outperformance mainly very beat core subscription which $X to regard of in

the of than beat in subscription for Now, passing sales terms then year again expectations delighted in strength quarter quarter changed good on AD our for our regard small strongest our to in outperformance, since CCD think business, the think second guidance was we better prem and CCB, portion through, reaffirm to slightly of for of prem was June. to for in results area and we call a a not execution our expected the absolute quarter. And guide have related for with of the this dollar our sales. reflects set-up And with core half Fourth which AD QX QX. it's on prudent another is seasonally it's really quarter the

could for here. I was about I know the question you there cycle. just tack that. Thank And the earlier if one deal on more question

behavior coming is out the could the versus America I'm segmenting you did is Amit to Europe on commentary by So, from geography? I hear happy want customer on North see performing How if parse How expectations? that. performing changes versus we're to guys any if just expectations?

North and cycles, and we're think in to I pleased strong in North – public global performance continue stabilized terms not by strength sales the America environment, had processes earlier, EMEA. sector America with in have as we it's sales globally still in we of but is strong. see and quarter We our was I Yes. said obviously unimpacted macro

for color. Great. the Thank you

your Andrew question with questions. the from Please Fargo. with Nowinski Wells of is line next Our proceed

I all growth acquisitions, growth Thank question. right. new slow year, the help year it's early, EP, calendar about introduced guided next many have taking can you that this understand All including to impact outlook, you level, you our you've drivers so, just really little you progress excited maybe but might versus at watch for XXXX that takes next to XX% Tenable the with or incremental also estimates to high factors think demand guess, as drivers and I'm year, a growth these One that for we products. ramping these a I balancing might this relative to discuss that puts for your cause growth certainly you to know any growth Tenable us and you new just introduced the for XXXX? the two noted all

as of [indiscernible] I'm clarification. sorry, point a

So, our Amit of some made growth. directional expectation about comments

felt we're in plus, about our certainly And lot the really that, and growing confidence of so, execution that we XX% talked a good today. about delivering

customers. – catalyst we We're new been having much the We business. have become of this be over a has strategically major so a making comments the February, grow good comments course some and progress do not seeing flow XXXX. our portfolio. outlook success expect the providing for also to it’s feel we we're made next and of months. there's expect and We're And in to in for lots about about cash XX of adding relevant call, We're And our the certainly that customers. larger obviously, we're broader the one will EP product We've that more we but additive. an deals. we'll how kind closing we

entered for a today's identity [indiscernible] of doing our cyber markets maturity sales just said, technology, in to [ph]. criticality the assemble we've In I of really then points things the tax that are the market would the security, understanding side, the products. the as and on the active cloud future And from exciting [closed] key drivers CSPM, continued risk of number secular growth using team, container standpoint of make surface I a complexity environment operational a security is specific go siloed one to terms and in guess, technology the of management, directory, market, growth, you and infrastructure from

a and of capabilities resonating platform So, that that the exposure with sales is together cyber really capabilities new unified being in customers lot team. and management are brought a

of we So, reason excitement. there's for lots thought

That's great.

Just the I'm on products as all perspective, could a that landscape the any if markets, maybe your these there's and just seen you have? may given follow-up these relative have two from in win that's of in your changed you to competitors that, that broader have not that you Thanks. wondering they your because improvement to the platform that platform rates see that broader all and most you you typical new to if competitors competitive comment have adjacent anything

Yes.

change the core opportunities, very that VM think there's in in dynamics. I little competitive the

have We rates. exceptional win

that a and this heavily [indiscernible]. again, about exposure, cyber market they customers understanding basically at our we there. continue lot speaks both in story deals seeing to that to and more team, When about we've feel risk, got like to we're confident are momentum to CECL it land and with invest compelling sales cyber a resonating our invested and VM excitement very on teams the We exceptionally of we've higher tell that's broader our the ASPs comes and go-to-market conversations level

good much. very all you work Thank guys. Keep the

you. Thank

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

little to the one better attach upsell good VM is, markets tackle of One type will more other you still results. product? congrats wanted emotion is this kind this the be core thing platform guess, strong and a faster to, leading on bit with of Tenable growing Hi, I an or through the or maybe about understand these afternoon I now of

the that that extremely exposure our [initial in gravitating We it seen and No, One feel We've leading cyber story. Tenable it's time, momentum be new customer first go-to-market I in enterprise. to the for we're with differentiated management efforts and think confident a It expansion platform. this and and sales EP [ph]. like both opportunities customers existing in larger the land] through we'll resonates

great doing us it We've lead got So, for a as default the confidence company. quickly become has it. motion

leverage then from well? come of Got flow as that around, Thanks, from? types What around quick sort expect it. the where leverage free Anything a you cash qualitative you sense can give as of of commentary, us to lines Steve. would operating spending helpful be And follow-up just a a basis? the

in, as sales Well, now, a target I'll handle I sales long-term free most think a our marketing. around and it's spend it. our say, notably has revenue on marketing and Right and mid-XXs let's was, say, of percent

we marketing. lot our and over we in revenue sales XX% So, the of have and range spending Years a were we're in ago, of confidence. XX%

down So, we've and made and a tremendous progress costs lot some Also, on on absorbing in time. that, also that to G&A and we're go. of the we're over fully still early some in leverage the course tick efficiency will there's journey R&D more there and

lot date. a There's to lot So, a leverage demonstrated go. I leverage more of think to we

rental rates, model, and great rate, customers course we're of have landing business over high at very We a only not but of a having lots success also revenue, the recurring time. good growing relationship that

Great. Thank you.

question Please of your next the Our Joshua line from Tilton with question. with proceed Wolfe is Research.

for question. taking guys. Hey, Thanks my

cash How above think kind free last flow what level, us, is guys flow? of are hit the we your in about give a of on does, grow first free wanted for your not growth you your your XXXX just Basically, here? to you also to double confident context attractive question. do how cash in pretty follow-up hit I and XX% XX% flow ability And just target? to you should that ability cash because rank but a kind can stock So still then like free said like you the by it doubling us target, imply hit can of

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Thank you, guys. Very helpful.

of questions. line comes with Davidson. your Our next question Kessinger from the proceed D.A. Rudy Please with

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Yes.

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this. do Tenable on Yes, it's you if I very much. going thank replace not, clear One to to think much want be And Does incremental? be just how you EP?

is One EP. the Tenable evolution of At

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Yes.

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Okay.

I XX% was accounts by other grew your by receivable your sequentially. sequentially and had The revenue question grew X%

quarter the was? can how you loaded of linearity So, just the about talk back-end it

Sure.

we was quarter busiest two review more call, discussed last that In to specifically we than our be from of QX weeks, and a customers, tends inspection the little time levels our experienced the last. in This quarter. different which

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Okay. Thank you.

your with question proceed is Please Our the Gray questions. BTIG. Powell with next of from line

to questions. for correctly. the Great. taking I just Thanks the Yes, wanted guidance understand

the QX that's So, I'm rate. full-year growth XX% long-term it looks math in doing right, your of your XX% guidance the implies high-end billings below just if growth like

Just Is extra about because think we some should macro? there of conservatism there that? how in

consistent of copy a what with it's think – earlier. about I we talked

quarter, delays you going fourth results quarter and the So, the full-year with it's of for to backdrop largest there's the it our what a uncertain at and an the look for we macro. guide CCB, certainly expected unchanged better in quarter if with we third than left our

We have our appropriate guidance the confidence to reaffirm execution, but think it's in today. we

Okay, cool. I'll you it there. leave Thank very much.

question-and-answer this session concludes conference. you. conclude today's this for and will our time, At this you also Thank your participation. Thank

now Have a this time. may at lines You your wonderful disconnect day.