Tenable (TENB) 7 Feb 232022 Q4 Earnings call transcript

Greetings. Welcome to Tenable’s Q4 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.

conference Investor your Relations. the Vice Erin turn of President now over host, to Karney, I’ll

You now may begin.

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

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

Before industry first new the the for customer that competitive the profitability and course you and innovation growth XXXX, of quarter we and in security in relating landscape we cash during call, this adoption our forward-looking guidance and including and full statements our business, year statements me and begin, and threat in drivers free changes of market, demand regarding in flow. expectations let and to the products the services; our will our long-term and for planned growth remind our solutions; in position our make expectations

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

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

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

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

of financial during or These in and performance to financial measures addition, substitute superior GAAP. are not for a will measures. discuss financial accordance non-GAAP with call, non-GAAP in to today's we In measures addition prepared

measures are closest There equivalent. the to financial versus their limitations these non-GAAP of number GAAP a related use of

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

turn over Amit. will to now call the I

Today, Tenable Erin. we're and beyond the vulnerability our discuss performance, and strong you, traction our seeing Thank financial One, I'll management exposure management. with growth

fourth that, With delivered the strong touch first year-over-year. financial growth In quarter, at revenue let our performance. me on XX% we

unlevered above In million, addition, income free was $XX.X non-GAAP $XX.X and flow expectations. from both operations was million cash

expectations full the of our with For year, full well growth in from income year XX% and CCB results $XX.X our initial million above were operations.

Additionally, we which net XX% year-over-year. a six-figure quarter strong another customers, XXX as is with deals added and us is new for had record up large we

demonstration building. more corporate validating and are deals the the Even year, further strategy accelerated the importantly, we our momentum of throughout number six-figure of

As market, new management, the acquisition, great leader customer in market we're including renewals, vulnerability seeing demand in expansions. the and

We of beyond continue put target believe VM to strategic understand six-figure risk. thesis their reduce traditional years to in position and customers VM great the a Our as of deals in more Tenable to leadership cyber driving acceleration bigger, deals. move has

close OT, in proving performance is including with where we opportunity, market strong number of had ability early are an We six-figure stage deals. our This tremendous to transactions. a now larger

We detail more One, also discuss Tenable shortly. saw particular in strength will I which in

investments including as go-to-market, innovation a technology we in to and our by Tenable, At continue ourselves prioritize partner ecosystem. product leader continuing to differentiate

greatest where And our several Over to the quarters, QX opportunities success. see clearly seeing indicate, our as market. the in align the quickly results we moved last we have we efforts are

market. is in go-to-market the and around platform resonating to efforts decision Our product focus our unified

we're excited launching seeing incredibly since the are One. We by traction Tenable

saw One the And Tenable relative rapid customers macro, uplift to continues quarter. and from numbers continue to healthy new NEXUS. lands in SC, of of upsell a percentage across we well customers as as business existing represented material we as see mid-teens standalone see total with a despite VM. new IO, tougher from broad-based and adoption One Demand Tenable was to

excited One licenses Tenable note to of across including attack power that leveraging the infrastructure, their customers are truly more cloud also platform. We're the allocating surface of their

One, including more Selectively, VM XX% able new in exposure Tenable our XX% driving leadership strategic in leverage to ago. larger solutions up now renewals for We're approximately natural represent our upsell business, to from year our One, and making Tenable us of transactions. a a

a don't telling view attack deliver surface VM, across their security, external They're combination vulnerabilities, that Threat of and and to their brings silo misconfigurations, unified of and One single right attach will looking account Tenable technology. actors objectives. limit analytics. identity to for management overprovisioning cloud meet active one directory the

offer and Security the operating and operations. analytics, vulnerabilities, platform on and determine access first security been teams in operationalize solutions, path internal could their One to point external collaboration truly across capabilities, of these Analysis believe entire security. to and created combinations to products building we have permissions, Path It which enables we Attack inventory, the within Leveraging which specialized from Tenable achieves us misconfigurations enhanced isolation sensitive points result asset to targets. stack. preventative

and to market It's do Operationalizing and hard of us understanding really objective time. requires this a of been to positions at prioritization. very that understanding deep deliver preventative long history for security on the long has it uniquely objective. deep an level exposures context a a our vulnerabilities, in It's

customers issues and gives broader security believe security with enables related across technology us operate Connecting risk to visibility in teams helping edge this We have functions. across siloed more efficiently. customers our our into our an also points security

need security more teams to Additionally, market with conditions, these less. do in

economic more we example buyer, vendor company. win consistently attracting a a media crucial investments As which great senior is very consolidation, more Tenable are global this One of with technology A enables large require a is as and scrutiny.

not assets. their vendors, consolidate their doing and but attack They were VM secure different asset unified transformation through they only across visibility at them surface so, looking to cloud, going external in and types. their digital a enabled One also to large were vendors Tenable

road Years Tenable the exposure vision concept that in in great aligned the out that managing ago, One next step realizes set map leadership with a cyber leverages and and VM for our exposure. we vision. pioneered of management

Customers the exposure. leadership critical cyber importance our of and VM talk a industry security analysts developing as continues and improvement discipline, actionable plans. exposure the particular, cyber alike program a in to Gartner of to validate as advancing about exposure posture management management importance

believe We commentary with of attributes One. well the very Tenable aligns their

VM market year fourth recently XXXX IDC XXXX market Additionally, share leader published in for highlighting share the row. as the their Tenable report, a

holistic the number the and is of risk prioritization year. a view accelerating around IDC added commentary as vulnerabilities importance every of

the the of company, cover As our choice to we've earned of they look we and attack the as now in VM leader of to their surface. a be trust customers more platform-first vendor believe

Tenable use interest of Since the adoption cloud an around looking and manage this seeing tax of services. Customers One, One release exposures for into native immediate and their to understand portion risks of are improve visibility cases. Tenable we're cloud assets,

tools. cost than provides consistently unified in continued a compliance to a use point cloud environments provider and across scalable is is means and hybrid This enforce single multi-cloud more effective that security platform and and of delivered posture

Tenable product In save Tenable.io a One company. converting fact, instead One. aviation upsell for to great within this large a and cloud Tenable They expanded by from a was from example security budget QX of another

we focus investment innovation, to support, enterprise and increase we'll to in we ecosystem. capacity, our continue As on customer to quota will and customer look experience, continue XXXX, partner our

$XXX reiterating guide in making our this cash XXXX. annual While million to free also unlevered target in flow delivering we're year for cash investments, these and a $XXX million strong flow

growth profitable we're able execute incredibly In distribution in we opportunity another execute investments market to proud deliver to with successful with great the front of in look innovation, and confidence of to our short, leaves yet to and this me ability Our forward will in that us. be ability on year.

financial Steve to over further call for results. our the turn now commentary on I'll

Amit. Thanks

pleased We momentarily, are results note expected the provide commentary first, for demand. fourth I revenue. with quarter, of better growth our financial will financial due non-GAAP strong more the than all results but with highlighted profitability today we that discuss by customer measures to and please exception are

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

to billings, as defined the year-over-year of in the vulnerability million $XXX.X to on benefited for Tenable deferred in recognized management momentum current the current platform. revenue plus quarter. in and results grew exposure One, strength management XX% revenue from Calculated change Now, quarter continued our and the

Underpinning strong demand. topline results customer than our better expected is

new XXX platform XXX new in QX. added enterprise net Specifically, six-figure and customers we customers

While year-over-year. XX% exceptional, grew are in large particular, both metrics deals,

most us exposure vast The major build the ecosystem increasingly sizes takeaway serve here for to management. customers made allow to for years risk investments our of over and global VM the of all traditional we've in unified a partners or and effectively markets extend is reach

benefiting Tenable expansion Our creates is the upsell a compelling remained platform our and in also One dollar-based was quarter. customers for XXX% and net rate, strong path which our

While range. XXX% quarterly within a fluctuate it this to on be expansion basis, generally XXX% we may a rate expect to

of which XX% the by midpoint recurring remains XX%, guided $XXX.X percentage was is in exceeded was range strong represents of million, revenue our which quarter Revenue Revenue periods. with growth. year-over-year our prior consistent as $X.X the Visibility million.

for from margin, expenses, turn a also the year full in leverage quarter. which innovation. I'll was we investments operating to Gross notable are to growth and last I'll XX% XX.X%, where margin gross now with continuing decrease prioritize demonstrating while XX%. start was

of anticipated, One, As external our demand includes products, launched primarily due higher Analysis quarter including Attack the cloud-based sequentially, and Path which Tenable increased surface management. and was revenue cost attack fourth to for in

costs gross adoption offerings. the our XX% throughout XXXX we modestly year margins as range increases Tenable One of initial for absorbed with the the exposure we to full in improving management the to and ahead, expect Looking newer margins be high related year

quarter, was Sales and last $XX.X in greater reflects quarter. our strong in marketing compensation expense efforts. sales which Sales performance a million, XX% well and and and as as personnel of $XX.X marketing was expense taxes attributed the renewal to variable our compared percentage and to up efficiency go-to-market was commissions XX% from expense as base reflecting quarter. last marketing sales million costs, including higher higher higher Sales revenue payroll

and For subsequent year, of from last a capitalized lower this revenue expense software million sequentially marketing expense last launch as quarter costs R&D the $XX.X as percentage of was a QX, million, up to quarter. sales increased R&D $XX.X XX% One. which development was to was primarily due and R&D Tenable expense revenue full was the in of expense percentage quarter. XX%.

expense XX%. R&D was year, a full revenue the percentage For of as

G&A expense up quarter. $XX.X was $XX.X million, from which million was last

G&A expense was of full the as quarter percentage for last XX% this year. a as As quarter well revenue, and

G&A support of business. to to continue investments We the will our make in scale and growth

in efficiency of million due $XX.Xmillion, business. was and operational $X.X operations range the the results from better-than-expected above Income line to midpoint our our top greater guidance

was midpoint margin quarter margins than of Operating guidance. even points was in XX%. exposure base Operating our takeaway is, dynamic invest growth our margin to the sizable better we've platform. was for and expand year customer the our XXXbasis XX%, environment, leadership, a been efficiently market operating here able The leveraging VM the which management by for broad and for

of to of cost severance. By with which the capitalize a headcount, reduction we we employees, as the with we priorities, in terms X,XXX closely in well-positioned in fourth opportunities enter year quarter, aligning force of are our XXXX reflects more wended million In in structure us. resulting our the on investment believe X% front $X.X

of was resulted of our midpoint $X.XX, All quarter fourth which than EPS of in in the range. guided approximately the $X.XX better this

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

attractive from cash $XX.X business. cash high in renewal the the discuss year. to million flow full gross last margins and With can levels continuing the I we momentarily. to cash we recurring in that million detail of greater up rates, which $XX.X flow of while confident continue feel is will invest $XXX.X generated generate revenue, free unlevered high flow, quarter and XX% during year, million We for

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

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

of be $XXX to non-GAAP currently to the $XXX $XXX full And non-GAAP of million. interest the in to expense net $X.X and current to income expect million, of range to $XXX a to $XX to the calculated income taxes $XX million be year, million be be range from of we in range the million, revenue range for billings in provision the million to million, million operations assuming for of income $XXmillion, of $XX.X in $XX million

diluted earnings Non-GAAP XXX to in flow unlevered of the shares in share outstanding average the to million range $XXX $X.XX range weighted and to assuming free $X.XX million. fully be per diluted to of cash and $XXX be million

to today I comments are provide There few make guidance. context will that want important our to a

of heading quarter, gives for bottom-line, closed see hundreds added a many XXXX. we results our large of into us deals new and lot confidence record of top one most the a with in of delighted customers highly the we're in the number markets and dynamic First, beating We're which years.

more exposure at to effectively building unified across resources. help asked functions security when better are security time Tenable customers the to less a enterprise security insights do and risks the teams interlock One, assess across by Our being analytics platform, siloed provides with

And the reflects CCB our guidance Accordingly, is uncertainty. of we given build, continues current cautious the environment. while are year appropriately macro to spending the initial XX%to for which mindful growth, XX% believe pipeline we

to of quarterly growth quarterly last our half. compares year second and higher growth terms year-over-year with half year we first In modestly strong modest the due of in the the flow, expect lower in

In profitability, approximately full grow for the operations terms expect reflecting an of we from margin. income year to XX%, XX%

sales seasonal patterns investment same We pandemic, years a also excited QX in in and half that the of hosting be reflected second first live with operating for discrete also a higher the which prior incremental our to in We're expect guide. is time is follow kickoff year. in-person spending the as QX to the expense the margins since --

guidance year XX% flow, to in for flow the represents cash regard margin, With our up is XX% which cash a from resulting last free unlevered XX% year. growth, full

unlevered with high throughout QX to seasonal generally year, expect our flow margin cash ramp the as free point. We typical

from quarterly plan the We're provide to update very But payments annual note our to cash please free can of and pleased do timing flow unlevered for an today. guide we guide not that as collections quarter-to-quarter. vary

QX is next call. be to expected Our on our update midyear

of investments One to enables final comment flow to make on while The cash parting and market. and flow. go continuing innovation strength our strategic in of cash business free model We us generate better-than-expected levered improvement in this to QX. type delivered

for to an on the strong target our and providing to to guide, are way $XXX million is, guide the well year, that We -- we $XXX million are XXXX. achieving initial

In drive of summary, effectively lot and our in to we have business a our ability and higher confidence of cash flow. scale levels grow

for some over turn point, to Amit to closing back the this comments. I'd call At like

our Thanks in tough exceptional of the future, upcoming We our our many hope a and deliver Steve. in results at We're weeks. to Stanley Conference the technology, differentiated see even very ability confident to Morgan market. you in

open We'd now like the call for up to questions.

time, and will a you at session. Thank be [Operator Instructions] question-and-answer this we conducting

Our first the of question question. with comes Please Fodderwala proceed from with Stanley. Morgan your Hamza line

Hamza. Thanks guys. on for It's for question. taking Hey the [indiscernible]

had just you then the any around ahead? guys seeing of federal can you've situation. in a time, year been And guys opportunity? on you Thanks. on the deals hit also ahead. unevenness of just There's over kind getting some curious incremental last pushed. deals pipeline difficult to I'm are for year commentary for Obviously, wanted what closing the Just macro terms year provide

with good generally a buying pipeline. we've pretty We're opportunities. rhythm, understanding feel several pleased over behaviors see good I where the last like we invest customer to gotten quarters of able continued Thanks. and

of prioritization enterprise market One enterprise to and candidly, customers the ability So, especially through in well. VM, Tenable our move as machines the

about good pipe. feel So,

very consistent say it's seasonality. I'd space, terms previous federal in the years of terms -- In of with

typically in the and especially momentum year, good we're but building So, well. pipeline third what's state we're building the the the that we quarter, markets feel as and local weighted about throughout in the that

Is that all Hamza?

you. thank Yes,

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

quarter. my I are customers on Tenable thinking little One, bit great taking how down want understand surface product Amit, new for a to question Thanks just to and cycle. attack drill about the massive management? Love

And also talk price the uplift. about

that the You've mentioned kickoff to how about I little previously, doing that's-- bit know XX% go-to-market just year. you're plus. Love detail understand more this a sales structure.

So, XXXX really that? be can would But you Thanks. could any goodyear a color helpful. provide be really for

that directionally think at looking XX%. I Yes, still

consistent with high updated One. both of to sales Tenable I'd previously haven't say but customers the customer to gravitating that single-digit and percentage directionally we figure, increasing seems what seen new the and with percentage of sales a now And team it. double-digit One. So, Tenable be It's we've base existing on

think I makes sense. message the resonates. It

at They asset analytics, compelling a risk, understanding and more path complete including a gotten much more vulnerability they exposure, management inventory a of can historically of with which haven't the things, of attack look perspective set more of cyber complete types program. analytics

other consolidation. The to allows vendor spend piece it and is do us

another up only look spend them increasing cover One some VM, security. going identity, for one at but surface being to offer vendor So, pricing, cloud their for also at VM, volume-based going attack by another to assets a or vendor we their attractive can not for than Tenable looking management, also to cloud-based vendor much to going external which traditional more ends

customers. has function, resonating So, we're with seeing and really it been great leverage go-to-market in

expect accelerate. We if not to trend continue, that

Joe, is Steve. this And

past no the quarter in of matter Tenable we XX%, was uplift on we're a clarity, different. is the said One, As getting this

transacting customers. the of adding why having reasons of a uplift. one We're lots getting It's larger large we're we're substantial great So, success deals.

Amit. just or is big follow-up, just obviously very -- one opportunity. And quick Great. a OT Steve,

I through in you -- competitive but of with feels And go know OT dynamics it me to OT days, Can to I opportunity? deals? the to what we're some are in think greenfield. and this we regard early inning -- just be these

we're the Yes, I'd second in probably this say -- point. we're still probably at inning

you to questions or deployments If OT, of We've some is a along we'd at looking factories, I a the workflows as OT say come they're about of rewind the data facilities, couple couple what procurements. entered trying that we've up the pilot where with the product. entered Phase would a come operationalize small years of couple clock and

the couple we've types of follow-on quarters, a some of last six we're over what And seven-figure is deals, of global types said and seeing transactions. deployments,

we're that momentum seeing So, build.

I think very as a fast we're is deliberate, market and it's the doesn't still market, real. it's the but as think that early IT the market, in move spending and very I

feel In competitive like a at our we're in market when to it the number, space. OT the environment. landscape, comes and say two against IT/OT leads is and really private converged small I'd compelling dynamics terms just pure-play-focused technology predominantly We competing three vendors competitive of or looking the

look if have as They systems or floors environments, or factory they floor exclusively IT control those you factory well. look bunch OT. if pipeline are at you a today at a operations OT other in IT So, of systems,

ability risk And incredible think, include significant in unique we're, IT, which us. of think would and I for OT a it's competitive we insight to both and so facility, advantage for overall deliver our

you so much. Thank

proceed JPMorgan. line the with question next Please with question. Brian of Essex from comes your Our

to of maybe coverage the seen different and now? on how environment. can they to Do different up kind in way? afternoon or in can headwinds Any you a you've what's good color Amit, And additional terms Maybe, macro tend customers follow you you provide for taking asset spending react incremental question. to past? approach Hi, just maybe -- of thank color the

could side? maybe does on of that to -- on coverage kind how seeing And impact EP, And does maybe touch that Tenable from somewhat ability environment? a your the expand is kind it One of of Maybe and you that are insulate bit? if you that you asset adoption

an Yes, from Brian, had a from business successful expansion We quarter very great dollar question. business net a expansion perspective. perspective

as number assets seeing through the or of are where more seeing the them Tenable assets in presence covering identity get licenses allocating of where to periods. different smaller expand both for we other we're One, customers areas we as So, cloud previous particular, they're in well security, types

hunt pretty in required I think has identify and gotten new how rhythm are of transact customer environments business. to the that budget workflows how sales a the through in identify into the in identifying good order team opportunities, to to terms

said, clock of hey, inspection, paying forecasting. If think sales those you elongation rewind are sales we're our rigorous We're nitpick And cycles. three off. the I quarters processes so, we seeing across more implementing or

we ability more think just I it's sales transacting pipe to business operating I think the good this about and we're in both confident tougher the But in. team transactions. environment, and feels in reality pretty close macro, our feel

Keep it. to one. Got you. That’s Thank helpful. real it that

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

Great. Could takes question. progressed, just quarter a took you Steve, taking what And and puts numbers, you there? you standpoint. how on effect from conservatism to Thanks my anecdotes into guess, linearity the I discounted, around what XXXX different for the speak the maybe regarding to that just end,

Rob, good there. Hi questions

our strong closed weeks. quarters very First, of we at We say had the a continue we last That's quarter. back-end the deals I and what so typically than be loaded finish to see. December in of would lot to couple especially a more

a well increasingly, I out before priorities. as macro evaluate customers to consequence believe fairs how budgets the market, cyber to their customers but are spending quarters purchase. continue in We to a is play this this think and pretty see waiting scrutinize of committing exposure

loaded a think is back-end linearity is now more little in I prior certainly the we've than what So, here takeaway seen quarters. that

further, the XXXX, and to head We're year. in XX% even we compare, guide. assuming CCB challenging we grew be will terms into a first, where have And deteriorate our CCB in QX macro continue in much particularly tougher guide, guide, our we of potentially as our that's and last reflected

trying large think lots But of take customers, are new healthy. a the the we're adding think pleased adding lots quarter, to of approach pipeline we're here. with I I customers, overall, on cautious But levels progress

to-date, how in rest of lot a dynamic this up business year our we'll to and have guidance good -- of our initially plays said but ability very And see year progress selling environment. obviously, the gate. we the and there's out, As lot out and to with 'reencouraged be the the in of in have of a feel about we our confidence successful we

Great.

Just the one for me. Thanks.

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

Hi, this for Thank Justin Donati is Andrew. taking our on questions. you for

on a talking congrats When enterprise about were you good about So, quarter. the with strength pipeline, you spoke your specifically customers.

seeing Just you. difference of wondering Thank in if buying versus customers your you're customers? mid-market between terms behavior any enterprise your

the No, lands continued I side, but the as certainly in and and think much health in number just the including net we the expands new saw mid-market in If on pretty lands the across slightly in smaller customers maybe new the strength well. well. anything, as the in board, the of mid-market enterprise strength

quick And just follow-up. a as Great. then

your in go-to-market. about investments continued talked your You

expecting year? to hires plans Just the taking sales your slightly more wondering or conservative a front-end that if for this you're you're approach are coming what be in And year. more loaded

foremost, in planning think say, are adding hire And to Well, fair capacity. first more it's and I to quota we XXXX.

more that in is going than to in quota XXXX. expectation capacity XXXX we're we add Our did

been very to active perspective of in to a bringing and a We innovation that product lot And from products well. are We've a have market. big certainly investments on double and our down continue part new of invest obviously in product confidence and business. as

timing the little call the factors on that talk bit influenced a those about investments. kind of did We the of

front is First tend are load We hiring hiring. the early year. in to

year the of hires more with the first specifically of QX. come will in So, and online the half

year, in We first other our sales year, also and event in-person many will the and which as of have this of kickoff, the industry number live annual events a half others. be RSA such

margin offering drive clearly lot to have terms We're providing continue today, to ability we're making lot of of margin and and our we cash to in a leverage. be pleased a investments. operating confidence that flow in further of the guide very So,

the appreciate color. I

next Our Needham the Cikos your of proceed comes line with Please question & from Mike Company. question. with

earlier enterprise I for you customer taking strong to spoken and versus some touch mid-market to. expansion here. to answered the respect on the behavior. Hi guys. did Thanks the questions I with know want we've questions obviously,

cycles, elongation front? that's customer driving in in QX? But would any the geographic helpful, too, spoke really any you color maybe stable way And have it what versus out we with be we for pepper that thinking of I'm relatively what Have Or here sales theater. behavior. when could in on any they and if been about seen about kind

Mike, great you. to hear from

We elongation of in what team we allows in in forecasting methodology. or and to since adjusted significant have sales confidence the sales change cycle any year. have just not about our seen any sales QX their processes spoke I last And think that continued

consistent performance in all At I think we're think terms fairly this across out of In and geos. major theaters geos, I last year, called seeing geos. we some any behaviors peculiar point,

if you we think cybersecurity want color I XXXX? as That's through customers have Can But great. calendar already. about the fact put more, QX, provide to together additional that could. just And it budgets one almost we're ask given halfway did their any just for about how I

But But cyber all as being Obviously, to about the since as this more scrutiny annual insulated in customer that. to know QX the talking the we're what Steve, sector, here. curious of being in tap housekeeping And increased conversations perceived real sales about you are end is just I quick person. kickoff spoke been a those on like?

you. is that beneficial. how Thank are quantify talking way Or an about would an incremental item we those to $X expense much to of any there million? fronts be any $X million Is color both on

maybe Amit XXXX. a Yes, customer and little I of questions budgets color think both and your provide bit spending I'll on on color interject some commentary here will with for

your We're First, flow was us. gate. how with determinative monthly given in January. to but our question does look encouraged, encouraged very for -- saw be the I I'm and here will regard obviously, by reflected that's out like we typical of March what today, think in it outlook

investment is that to say million. much We're north The million. other kickoff, talking of sales of regard quantum larger I'll thing than $X with $X the

a it's since be sales excited We're item. a well large pleased this rest our very live kickoff -- first discrete as as is our the to doing our sales So pandemic really about the and the team time of in-person for company. year it

our and cash believe, a the with in is improve and prior is flow throughout as factored in what it's margins gate expectation strong we've guidance margins will and we with years. operating our to guidance, regard year, that our consistent seen Obviously,

I thing see would remains Yes, the healthy. with I called our customers we're traction, OT out the VM expand seeing in security. their only cloud sales around We VM quarter. think One market the of to that course coverage. during continuing add We very great strength especially the And to Tenable it also is

customer are there. budgets So,

the some interest, think cost-effective I a play around become that to them. think the lot customers platform we excited One. that introduced of And that. of consolidation dialogue for I There's of a vendor a can analytics Tenable with extent about are very lot strategic we've newer

into continue feel the next of year, but year. you forward look factor a Tenable play I during year and larger course larger One looks going we like to to like will the throughout So, the updating it and

turn and That's the guide I'll see great guide Thank to to colleagues. calendar well. think when you. the cash flow XXXX free to over reiterated as hear. we about Good profitability unlevered it my

your Our of Kalia Saket Barclays. next proceed Please line the question. comes with with question from

lowers customers with maybe and you, to addressed. guys, additional Tenable I'm customers from here. ROI the It risk at apologies so about to One, wondering was of a you talk if they ROI? could when of already look talk includes but like about Hey been But you how One? much are more that if this questions thinking I has start my valuable how about profile, just just platform sort Tenable for the Okay. curious, product Great. taking thanks Amit, kind

Hey question. answers Saket, couple it. to of couple a great obvious of a There's and nonobvious

I from just think the consolidation cost vendor most is obvious standpoint. reduction a

to assets also requirements. using your you cloud XX,XXX Directory Active -- now let's you're requirements, for want a security random if Tenable example, at and VM, your have say, So, look look you

assets one one XX,XXX and you -- on in vendor, one XX,XXX through you're a those the VMwares. If going Active to cloud X,XXX through on to Directory addition separate you're through solutions, for on spending need

you spend your XX,XXX volume Tenable on it's discount, with can If one Tenable you're One. and buy a Tenable consolidating One, through

Scrutineer budget And today's is environment through and so meaningful, happening for in in with and is leverage vendor the we what's consolidation differentiation budget, spend macro the us. compelling think which -- very

the The than going bring table analytics. able second is in disparate We to analytics to analytics and vendors. are the unified simply to more

other places, instance, -- across think, particular your very Prioritizing an addressed, whether exists what for we a vulnerability think, software compelling. is be everywhere in exists environment, inventory cloud environment needs to piece differentiation. your we So, be across on-prem, a it's asset or anywhere of building compelling can

stove what the assets hey, a the path get me and external paths asset various at pretty and of to solutions. my to a analytics and this is could type buying that from permissions say, users sensitive Internet-facing Looking individual from compelling top-top are and is what differentiator attack to systems vulnerabilities surface compared internal

as seeing well sales team standpoint, as the and standpoint we're analytics approach consolidation both and value platform And why risk really makes to and a sense. exposure from cost toward gravitate the both customers the a it. vendor think just and that's understanding we So,

in think becomes part curious as but costs, QX? of it. bit that's was my Got I'm you. that about if it. you a down from lot sequentially that hosting how Tenable just One was XXXX follow-up gross of apologies bigger Again, can the XXXX for Got talked about, guessing in presumably maybe but talk we a a this for about sense. Steve, That here makes margins little for business?

margin Sure. something recent rates. is is a ASM, One impacted new which launch quarter of and us. of domain The question, products as by Great cost The attribution case. in over fourth use new the some as expected higher is is leverage we the came in see penetration Saket. for we gross time can

Tenable have cyber inventory supporting Also Exposure functionality is such more robust Attack and to with a as which Analysis asset One, we critical Lumin Path View.

we that fully impacting expect come and time. areas absorb over some semi-fixed to innovation gross these So, are of new with margins. certainly that's costs initial

call course Overall, year. XX% gross the stay that and we margins of we've in gross improve kind on very during to said margins, to pleased gross we with the expect for margins expect the the range and of XXXX, high

guys. helpful. Very Thanks

proceed your question the comes from with Our Canaccord Please Instructions] [Operator question. line of Genuity. with Mike next Walkley

percent strong of believe sustained you Great. of years base, single-digits Thanks. My while on a what of base study go Amit, year. that ultimately it's customer currently, congratulations your One, Tenable the also the you be source should penetration couple strong close when do the growth? high upgrade will had to to that could where the over next

obviously, leading be company. lot as new potential. new think, sales. on we're seeing Tenable focus a a teens that is And question. percentage there's One. tremendous putting And it I on We're for indicator a our in Yes, high of great coming what sales The it's would of

larger would continues potential. seen, of pretty as over long-term So, and remain about moving to as percentage time, remains to larger One, where but a we it be that Tenable to could customers healthy, go the see excited we're long

Okay, XXXX, competitors lot momentum quick a guys certainly in great. sale? And potentially your entering have of Any question. whether competitive follow-up changes And One. a just up with the for environment themselves Tenable putting you

change favorable XXXX? environment any seems enter that the in more you Just as competitive

I mean, about competitive Yes, environment. that, good about wouldn't we the obviously, feel I but really speculate

our consistent We this in strong. we especially strong exceptionally win rates market those exceptionally competitors. remain remains win are pretty primary -- against saying That have rates that

are but specific sales feel while they into them those And anecdotally, talk gives about as a going a opportunity, very exceptionally Tenable any to like feels update to team the continues have VM well. And that, I'd ours to value candidly, we say significant climb differentiated lose. in One capability to don't really confident

well goes taking and event questions. in-person thanks my your hope I for Great.

Great. you. Thank

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

I my echo to seeing for to products. me there into dig identity little over well? of Directory let and terms a the demand congratulations be about maybe and afternoon a you're in bit product maybe time as good what and talk as in larger Hi, bit set that little potential the Active well. wanted Can a you

there's Well, -- tremendous think it's we market potential there.

target XX% As adversary and controllers you a Mandiant it's one state it's number directly breach ransomware, after Directory. for of Active as whether going know, on Jonathan, domain nation we hackers, whether where the is Active ransomware or saw Directory is over

to a as number the when clean is any in mess and the environment get Active of complexity of pieces and to enterprise and the software large into deploy almost keep Directory, an should trick at Directory we environments. they impossible number modify you software of of installed Active look pieces of

a area. organizations maybe of know this it's They So, audit and teams don't -- solution problem. a most clearly do enough. a annual assessment a Active which big consultant The is in an have Directory not having their solution security and or environments,

of quarter had it team The So, great market we a the We into and has feel like lot Active confidence QX. Active Directory bringing Directory in product sales a there's in tremendous opportunity. with customers.

the and excited about that in an Active as both increasingly and Active as One Directory playing So, with Tenable potential, XXXX identities. large role unlocking well the of Directory we're some analytics in

Great. And just as a follow-up for Steve.

some from? of means and a was you. your there what that Can maybe a bit small us margins, where Thank give detail think terms force. of more maybe risk I in maybe reduction cuts little in came the on the you

that's an as really about was position in it and with to broad year like And fairly better we're functional improving with we efficiency great the in talked cost of feel with across the Yes, this Amit a front opportunity base our aligning earlier. departments, operational eye market many us. investments, make

then we're expectation adding capacity lots comments than terms did of of in our one XXXX to quota is in of in that XXXX. quota I made have investments more we going earlier Making and capacity. the product And was

good the dynamic, environment growth. years, the achieving demand we've of driving job levels growth leverage highly over with profitability, margin remains done Obviously, a and sustainable balancing but

you. Thank

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

of But My at points? almost my your quarter. one look sounds I just feedback each has VM, incrementally like throughout reconcile guys if you for of six-figure Thanks first the gotten in you guys. incrementally would especially But kind the high maybe last I on to is year from we those Hey kind help have guys question. us it your channel, better, adds. gotten data level. Could taking regards results, say, worse guess,

I checks, channel the see of for terms we it. don't think -- We in Yes, you. this don't

remain programs. bullish the their VM questions more their provider to partners and -- about and customers and that are and VM on their asked Our differentiate very feel very to VM capabilities more leading vendor expand as bullish security looking Tenable bullish as more are channel of executive ability and

-- Are really systems we your our questions good Are comes vulnerable, of patching those endpoint we your we are types quickly negligent, your logging care? solution. answering not vulnerable, from firewall, I we those or VM enough? executive from from not -- are think your being where of Are we exercising standard program,

We're conversations well are questions broader VM. of as it more So, customers. we executives types. of allows with more seeing set our We're that like across strategic that seeing One conversations asking a even bodes in have cyber, feel asset us Tenable to in results. for our And

both given invest will and partners, with So, and I we're that remain our market. the we Cyber conversations and in think customers in our increasingly channel seeing remain Exposure VM strategy. And committed in we've own and what to to committed results confidence our

transact in Yes. is, mind in And add the XXX countries. one keep that thing that sales I'll we

I a only the if -- have hundreds partner or sometimes even so speak the but a very talking view We channel to you're can't have specific to partners market. our a channel of or into contact maybe may checks, and to that VM business

collectively our also, And our solutions exposure about total XX% of represent sales.

top the larger analytics, done in for even identity security having opportunities points playing success focus customers selling pain and really becoming and such broadening market and years, as we've security to over we're customers, platform a and good the this year. priorities So, which a more our our spending are relevant cloud job strategically and

is communicating Makes it are the initial that sense. And sounds think your you about level of worse. or XXXX actually follow-up. just you gets de-risked? I you the terms deeper more in de-risked that take quantify there guys definitely inside macro opinion, It then just assumes outside else like a anything the that, can guidance in Is exactly guide for one of talked is CCB quick what that

like kind of out? else can numbers in those to expect to you NRR talk guide shake kind versus that help us expansion where Anything should XXXX you of the de-risked? business, are new feel Maybe

think guide have quarter our good, like that’s Each Yes, it dynamic, that's described the CCB as different but own to market right And right? its year highly in the think in approach is cautious. for we right. we we is a this,

that expectation our the is XXXX the into And remain and going first half macro perhaps worsen year. even challenged will the of will

for be whatever prepared comes to our we So, way. want

we stronger success, We've the as than strong of all tech identifying for and and past good have us, we've services, financial opportunities closing some quarters. where larger particularly talked others, those. are Really several deals a earlier, about was done verticals job over larger

us. good sense we a really for well of have working what's So,

we're regard rates. potentially think that could the macro And with I maybe even taking to and guide, I just we're renewal cautious close impact think the more assuming a approach, rates.

new deals. logos But will remain the strong. new quarter. lands, our what our rates continue lots did expectation that to large I But Upsell very We renewal is tougher say could is be strong transact for of that add in XXXX. in was

the Appreciate update. guys. Thanks

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

questions talk my and a Tenable there. lot Certainly, guys. about Hey, traction One good of thanks for taking

VM. think was leading maybe with the started before you sales about talking last it quarter guys leading really as the with to product force, quarter, I that opposed

we cycles are of to percent months? Tenable changed leading are opposed where know One speak just last where with deals the if maybe over can VM. that you how reps don't evolution? Just your to the that six I in as or But has

the Yes, gives them One a experiencing the and customers in Tenable of of with I think seeing results the the level customer sales that confidence traction are increasing confidence. an team lot has product,

time of we more more But to and pipeline, in is One, accelerate with differentiation. obviously, heavily continue that more and and Tenable to sales. weighted the teens percentage a expect towards kickoff remains more it pipeline training sales and Today, new

a you grown have I'm the maybe consolidation you some there guess secondly, in in over the curious VM of larger, product. kind I cyber curious, consolidation last those platforms vendor about of some vendor then And couple if guys. out larger talked it. playing a you in broader I'm VM seeing that for the are throwing out in out Got with of other you're product hurt also as years. platforms positive mix cycles there some there

markets of making I lot And back noise four, two SIM them their for noise. start and are been there's then five-plus course you make a gravitating a vendors would what years, quickly the quarter lot more going inferior We aggressively VM investing products about of others. they CrowdStrike, companies is understand and and very or and sales core elsewhere. team see to their are logging a Yes, where that their Tanium, years, candidly, their of tell much Microsoft over they

never and So, especially and phase audit in is We vendors product the enterprise. experience them larger VMware and -- qualitatively where IT of independent a see a function see certainly product competition. an a we participating like understanding first never like beyond almost differentiated important feel got rule and we've and quantitatively those a

guess add would is VM. to is our I footprint other than thing broader only obviously, I the that

represent, which Steve other VM really And our So, than XX% to now are solutions not are if sales. customers as understand looking our more solutions broadly Cyber Exposure even of really competitive. said, offer capability Cyprus

for in. me Thanks it. Got squeezing

comes line with FBN question next of Securities. with our And from proceed Please the your Shebly question. Seyrafi

you very much. Yes. Thank

quarters. the on the any were decelerating EMEA, two call-outs in for geo side, So, there example, was here growth last

well. in QX in comp tough a have You EMEA as

side. on callouts the any Just geo

No, expectations is pretty to what theaters both said and I performed much segments. the in enterprise that think earlier geo all commercial we just on side,

performance. our felt markets and international So, good the the of international balance about

separately, had X,XXX year. end think in but QX, the headcount reduction and And I a -- for Okay. employees said of X% the you you

that's What's for and expectation A, think growth growth salesperson or B, I up your headcount year-to-year. XX% in so XXXX? quota-carrying

provide we following QX Well, results. our headcount Sure. year-end at

earlier, the to for we a and investments, is and go-to-market. product hiring, But So we're annual part planning notably of as most number guidance. not are this discussed our upcoming -- provide make we in year as we

past of we more lot couple this of XXXX. only quota not the quota of quarter we quarters. terms capacity a to XXXX In results expect the Unequivocally, but in in we add have did capacity, than on confidence based of

of adding lots of large lots deals. customers So we're transacting

here reassessing the in climate constantly we're XXXX business these discussed so position thoughtfully layer, and add is fortunate the going Look, we priorities. to The we takeaway But the investment as the pandemic. we're because very our in is since pretty we're investments make grew workforce to headcount.

Our workforce delivering invest three puts grew us in years, total, XX% margin over position to this still a which in improvement. while last great year the

good that front a are cost we're doing with the investment think we aligning opportunities job in base us. our of So,

you. Thank

And gentlemen, and have this this your and day. we have reached Thank disconnect end may lines session. the And today's time. at of a you the you. concludes ladies good also conference question-and-answer