Tenable (TENB) 24 Apr 232023 Q1 Earnings call transcript

Greetings. Welcome to Tenable’s First Quarter 2023 Earnings Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded.

pleasure Investor your Relations. my Vice Erin now of President is to host, introduce Karney, It Thank you.

now may You begin.

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

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

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

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

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

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

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

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

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

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

to I’ll Amit. now call the turn over

Based I'll the delivered the notable with we and customers, market, experienced focus revenue, quarter, state globally. given with cyber on macro are quarter. our remains the strategic Tenable current strong during of top and organizations financial and the We the on management cash particularly momentum confident we operating provide Today, discuss One. This March. flow at specifically some cyber highlights of for end the headwinds security exposure that a conversations income, is

in for challenges some saw some experienced we While incredibly the business. signs quarter, we our positive

about Let market, broader by making impacted comments current a calculated start me the billings. few which

been back business deals, of of during quarter. and new discussing macro more Some the the particularly conditions longer and large loaded scrutiny cycles, sale we've quarters, continued

weeks of conditions last banking these light. The March exacerbated as two the to crisis came

saw sales what we lead of times and had the in we purchasing longer typically phases Specifically, versus quarter cycle experienced. in first approval our

new out deals and number enterprise in the many in sectors for deals traditionally pushed, which financial and quarter, As reflected result, of telecom, net highly Tenable. strong direct X-figure technology a and the is pushed our and committed a Of services, our ads. qualified banking of were

have to an year. macro expect We these factors to continue impact this

macro important are As note. two points we to current that are navigate there the environment,

The first is that demand remains strong.

record choice platform do during to they're One added of increasingly want Customers was and a Tenable. understand exceeded risk generation the the for New our as using to and and their reduce clearly pipeline so. Tenable expectations quarter

evaluation wins faster at second more rate. that getting we The believe been much competitive our favorable. We're dynamics is have never a tech

intend are more is and In investments which our tech to was the good specifically approximately this that their by looking quarter for quarter XX% news shorter This last we market, to In full win year, LogXj. the phase cybersecurity. approach same cycle than also use us to the one trend the lead sales of platform first fact, in enterprises to with to aided our consolidate was advantage.

high Tenable on their preventative providing and desperately to to return cybersecurity continues allocation enables for beyond One, Tenable percentage business growth management. of be mid-teens exciting our we vulnerability within a noteworthy Tenable the continue achieve new overall in business. customers investment, our of greater to also an a of One a that area One need. of they and licenses single-digit also while It's see represents percentage security us shift

customers, as our our road areas of driving which security management, of map. with in result to Tenable strength to a direct analytics-led seeing has we're cloud unify pursuit security, posture key our to growth and our The validating vulnerability One operationalize Exposure a approach are preventative analytics force investments and for well is existing Cloud as been Management.

majority While misconfigurations. cybersecurity known to causes of does a reactive is and to necessary, root vulnerabilities it of little address breaches, the nothing

risk, to change way thinks prioritize managing Tenable risk. as capabilities getting and risk Exposure rethinking to industry tech are the leading the and vulnerability their vulnerability remediation. And to are faster. data We we're weaknesses it leveraging unearth organizations approach With of Management about wins I One, mentioned, proactively

as do combination There's reputation believe Management leader, of to superiority technology wins as company, a our they security We our choosing to platform. more trust. and teams the so of position that of speed with a doubt the a are partner with our less need Exposure and do no our reflects a

thousands such enables Security as with customers Tenable risk analytics, our to updating to One’s features customers. analytics, tens via Center. data We're and access on-premise delivering benchmarking, environments path of for support One attack committed and privacy Tenable requirements inventory. and regulatory with and organizations hybrid more And to This of asset we're integration Tenable

customers posture understand quickly. Management across single manage and management and to cloud transition security cloud Exposure want streamlines multi-cloud unified One Tenable on-prem a in Tenable through platform. and to for provides environments vulnerability to the means consistently compliance a deployments enforce more One may Customers exposures help risk. hybrid hybrid

cost-effective or more than using one-off is solution and tools. scalable siloed Our

have we headwinds, lot a near-term have which navigating about. While be guide, are excited revise line to us some to we our macro led top

We have an to of environment. vendors both customers successfully are efficiency, to enabling in our are expanding which operating technology industry-leading this and a increase critical consolidate and platform,

more top believe long-term the future. never at building We changing and positioned funnel, about demand are could is competitively. we've Tenable end tech success better we're not the believe I been of strong strategically our wins well-positioned In faster, short, we and be excited for that

to year the progresses. We forward look we free as unlevered on and we cash commitments updating the you of the the remain Additionally, beginning at year. committed operating made delivering flow to

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

Thanks, Amit.

this to market. financial deliver ability commentary quarter operating will Our certainly the efficiency with are accomplishment first, stronger discuss the exception due better-than-expected But momentarily. today profitability please notable more we that non-GAAP provide of a I revenue. note all measures to results in is financial in

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

year-over-year change Now, on plus billings, in for recognized current to current grew the our quarter, results the revenue the $XXX.X in million. to XX% Calculated defined revenue deferred quarter. as

the North pushed financial most of earlier, discussed higher a of our out environment time. of is and resulted notably experienced and in quarter, both busiest the This of more As which two QX, weeks the lands terms in percentage specifically that we expansion during in banking and the telecom historically and selling opportunities deals America in particularly the technology final new Amit challenging sectors. services quarter, large in and a

given and the financial exceeded these that area note we pipe to during other and propensity cyber generated deals. are time and services banking from nature important sophisticated the their to the history. telecom of an our environment, frequently our It's as expectations for and strength customers quarter Despite us, than more a larger remained technology in perspective, of strong company's transact demand and any

financial terms in XXX dollar-based new enterprise added quarter. was net new the XXX% metrics, of platform key and XX in QX.Our six-figure customers expansion rate In customers net we

quarterly the quarter. on worth in a rate can noting, expansion strong the fluctuate Gross retention As reminder, was is a basis.

XX% growth. million, Revenue the our $XXX.X the X.X which represents midpoint exceeded was Revenue million. in of year-over-year guided by range quarter

quarter, high periods. XX% prior recurring of revenue with this consistent is percentage Our remains which and was

I'll XX% now cost with and control good gross are quarter was where last expenses I'll and this start margin, leverage. which demonstrating operating we turn up quarter. to from XX%

exposure margin public our pleased management over absorb our related prior cost initial primarily to gross due to to our infrastructure cloud ability expand newer manage see are offerings. the we and We quarter, cost-effectively provision the as to

to commissions wages QX. XX.X higher quota-carrying costs and attributed and primarily expense marketing reps, Sales personnel hiring associated a million, XX%, expense marketing quarter. last percentage our sales revenue was resuming with due quarter. by expense increased renewal from Sales XX% to offset was and which large million in-person last the XX.X up of annual due marketing as additional Sales in expense our base compared kickoff, sales lower to sales and to incremental was

investments million, R&D increased to expense expense development software R&D was taxes personnel and percentage quarter. associated sequentially resources. XX.X in last additional million last as and revenue was from quarter benefits payroll XX% up this was costs, of expense which quarter. a R&D XX.X and cloud and primarily due

to up as G&A and last to support higher IT XX.X well due expense taxes, million growth. from continued million, as was primarily which fees payroll professional wages higher was XX.X quarter, our and

quarter. revenue, very Income of guided is percentage operations by XX% this G&A was million. X.X above last from a range was XX.X midpoint consistent notably which with quarter, the As of our million, expense

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

our $X.XX, per resulted first than the [$X.XX] range. All this quarter of share in [ph] midpoint was earnings guided which the of in better of

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

free cash gross revenue, continue high renewal and our feel flow rates, the margins operating ensuing expand recurring margins, and high we confident that over can we years. to XX% With

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

range million, X.X X.X and interest of net interest a to of expense XX income for million. non-GAAP XX million, of For taxes million, expect million, million, the million of non-GAAP range XXX XX in to operations quarter, to XX to million to be from in currently revenue be range in second the assuming to provision be of the we million income of XXX the income income X.X

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

$X.XX, diluted want to unlevered are our few in cash to XXX per guidance $X.XX earnings of fully to important to to and be average will context in million that provide to outstanding the XXX.X today. I diluted the a comments share Non-GAAP million XXX free assuming of weighted flow make There range be shares million. range

experienced of March. First, environment of CCB a that reflects end our guide annual at we the continuation the selling

QX over number was we pushed new guidance the generation macro. strong our the quarter, year take the to longer in in close light of business While in that the of the April, of remainder deals will closed assumes demand that out a and of

also is we a in guide QX. contract shorter reflects CCB annual experienced which duration, slightly Our what

QX expect full-year. the the be XX% expected we slightly for XX% lower terms than CCB growth to In flow, of quarterly to

also of impact guidance revenue Our reflects all these the factors.

outperformance terms very to are In quarter, pleased our and in our full-year the confidence outlook the in given of continued first we leverage raise to drive our for profitability, business. income operating

of plan And more execute noting laid that market. to we able out aggressively some year to business guidance That for across February, a the our in that this in invest were calls QX. go it's said, we to for year. worth in more investment the select of hiring remainder on the Recall,

line bottom lower on line based costs reflects to guidance. directly outlook dropped In our addition, that variable our the revised top

macro and We dynamic. the are fluid mindful of was very highly

we ROI balance growth based expect of and continuously our and flow for guide we'll the agile, free also unlevered able on right of that the profitability. the important for to to reevaluate strike spend future It's So, guide we annual our cash to were remain as full-year we between note income. op reiterate today strength

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

Thanks, but challenges. their customers to solve we fluid Steve. environment, important This help indeed very well-positioned our cyber is a strategically most are

a the have you to of We look hope updating up at upcoming conference of in you of questions. open to ton the year. JPMorgan now like to us forward the weeks. opportunity throughout ahead the and for We see We call many

your proceed Our comes the Instructions] from Rob question first with Thank Please with of line you. Owens Sandler. Piper question. [Operator

of guess, the the Good And the deals? Anything the pipeline and my are that from you Thanks. then, addition, steps telecom management or some guys related line? to deals] headcount afternoon. you you speak very Could pushed questions. seeing you're Thank taking in behind [shepherd in reasoning specifically the vertical? much guys a I weakness [ph] perspective Great. for across taking to tech that

headcount the some more think the I has saw of a related impact healthy although was top-end acknowledge a than – of a From as or looked in been lot in there that. to generation of change cycle maybe telecom, saw assets headcount that was funnel, to actually sales process much of procurement any that at tech don't our I very of do it it issue. and demand perspective, specifically we've we activities. demand types We deals number in

have than to faster we periods. faster We actually saw previous lead by technical XX% win in about

finance from was negotiation So, for more and the delay there team. approval perspective, of from final phase, in deal final waiting our the

go-to-market I Management, across doing buying in board So, greater sales beyond to that's, deal got would much visibility internally, team approval And visibility management the kind of that into of and we've financial side teams, risk close. how Exposure the functions of behaviors. in of characterize the I assure number change a think the the the above looking terms [indiscernible], and more a to we're from with things

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

for for Thanks you for taking a my quick quick follow-up question. and one Amit, I one Steve. guess

reaction maybe I through One little curious, Tenable really pricing Tenable talked that understand what bit stable? of of in One. to you that that or could give adopted the an and I'm Just is a some about customers want two if to getting some terms buyer talk about And how have the and, you traction. example pricing flowed has is

Yes.

ASPs. seeing cycles, seen licenses about our we've I higher above Every their One. of achieving think Tenable perspective, VM. super and achieving we're shows excited that toward us allocate beyond point more we're that faster sales data And things we're we're from customer them

of [tax and security, their cloud at surface] at other aspects identity looking So, looking [ph].

sales analytics. larger customer to from deliver yes, compelling they're but And ASPs, which faster consolidation vendor actually perspective, they're reduce our some paying costs. a better able and from can more do more, So perspective, and cycles,

on save ultimately integrated license capabilities Tenable interfaces, than So, through fewer you ends Tenable solutions streamlined which if you expensive activities securing subsequently look these through and like. helping helps cloud VM security up identity on security some operationalize that or for activities platform, and costs and to at unified allowing those helps vendors more the or deliver combination all with operations, identities and of a on and being other API

real Steve, as a just quick, And Okay. follow-up.

the XXXX. reiterated free for of cash sort You, unlevered flow

still million that flow XXX for unlevered million assume the XXXX XXX of is free to can So, intact? cash we

what notwithstanding Hey in the about We're this in said about We'll that excited of beginning Steve. flow will say year, our February year. cash here take of changed current XXXX but next is I nothing Joel, the the is, the we to the committed macro, opportunity. targets at We're business.

free talk and income free in more of cash flow op happy next flow, reaffirming we're year. and February XXXX we're So, in cash about to

you. Great. Thank

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

and financial the of with bit. the in any Maybe services to breadth And there the to regard the terms for question afternoon you weakness could you Could speak little then Rob's enterprises? specific of vertical good size thank if a the follow-up to I deals. taking Hi, question. of the was focus in

would stake. So are a these, for there there Maybe little attach color had lot be maybe rates example, Tenable helpful? One dollars deals a where at of you more greater and was just

Yes.

think the any respect the North – of was certainly it and finance the also I with at the the GL. cycle, more weighted very in in and in to in say America said elongation banks, the we deal financial services midsized team heavily sales other more as the I'd than saw we approvals of regional and toward end banking sector,

of And deals rates Okay. in terms any there? so and breadth concentration of and attach complexity, forth,

is banking Steve. about the pushed North of approximately represent and more the telecom total what would sizable talked and Brian, obviously, that financial board. specifically can of quarter deals weeks sales. the greater and America. I just last in services us. our across two sectors saw for And in Those are XX% we It tech in broadly and was of say this percentage we pretty

whether here. they skew Historically, tend regional very towards larger irrespective Difficulty] also a been strong. they're or And even of it's to [Technical transactions, bank

first to to are here, the that positive with here is at flows. regard a cash gate and for that is remainder the investment is us working and the these the of year. overcome step made outlook about start that we short-term here the seeing headwinds news for good good giving we of good we're obviously, we're fair this expectation success in the of quarter, and our for the quarter, feel of a profitability out but lot signs So, And we're believe the that a

Appreciate you Thank much sense. makes very That the additional color. for it.

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

and thank for my you afternoon question. Good taking

So, great, been the another was a due to if straight, QX? a in seems banking that some the to I the services that of your pause versus QX not in to weeks April was, from you opposed suggest for fact, two sector. get perhaps like quarter, month lot of to customers it anything leg down last there financial this Has as of of

revised is We're this talked the here, tracking the Hamza, of closed some QX, of off said, year. but factored is that I is a April determined some pushed we April. deals That outlook Hi to we our And April. and to We're all by seeing of as start, encouraged data the Steve. closed strong outlook. so us. quarter this was for the certainly our Well, we're will busiest, strong about in out be last of that – specifically we into that for in month June always the our earlier, initially

Got it.

to help banking that lot sounds Thank know size just just you. services big it And there's exposure us for could tell. into So, the like roughly, I services how is and roughly Tenable? goes what a you too like guys? early you sectors. that then different like for revenue financial But like, financial

those some services, you of and and Yes, cybersecurity. the look at not it surprisingly, financial to industries comes when when are tech more sophisticated also banking telecom,

the basis. represent business collectively, global a overall about XX% of So, on those

you. Thank

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

sort the Amit, questions you How just do the about for taking you, a March a rest to change maybe business. if quarter? the little the look year? that federal could my here. bit how verticals, just here did pipeline for And for talk Hi of on little wondering of bit the it was guys. up I in does, Thanks

actually for public remainder on throughout the strong federal to sector us and and the We local saw quarter Yes. that a even strong of a our side the business, we including maybe year. sector anticipate reasonably so be for state more and

maybe it. Steve, it. you. Got And Got for

still You you're talked slightly unlevered kudos. the to durations, flow seeing but contract about cash maybe guide free shorter able so reiterate

of some puts Just takes us think about maybe there. and the help

in Well, we terms we CCB in sure. of Yes, experienced of continuation selling the know reflects a about, talked you environment QX.

that of assuming year. longer logos the new from are remainder to We business, for even new albeit the close will or take upsell

think what we're call of conversion lower were to And we this play do way modeling and the So, prudent rate even here in [and it] is last expecting dollar expansion [ph] than out last net couple so, in lower our on the rates would February. we in weeks.

slightly much partners. expected a opportunities, lines faster, fewer shorter [top due Our our to we're deals. the working We're performance] prepaid is guidance these multi-year does said, [ph] getting qualifying to That strong. and tech duration reflect contract closely with prospects than

calls we that, the that fairly to a the news were on of first other plan this the for able year side, expense of And significant in Now, our lot the side a quarter. execute is, on investment. good

guiding up I to that due able investment, of free actually with be strong QX, to achieve of allows investing the income back Beginning of our we're higher quarter, level that op the couple we're unlevered start also going the us get moderating that to to the to last for of weeks same, we're flow. outlook reaffirm levels and cash not think today and of in forward income, if selective about more op

grower. balanced We've a been always

us high a with are desire in own great quarter each revenue, and to recurring lots and its cash margins, going have with of and of the flow. compelling the we're with business in levels We renewal investments achieve gross right, to front balance is to model of opportunities continue rates, different that high the

Very guys. helpful. Thanks

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

from larger if thanks XXXX? Steve, ad much. still on sorry very XXXX you do missed capacity, to I expect than this. an perspective the Great, But be quarter

we moderation capacity. the quarter also of are, in some We impact investment mentioned, as

QX. added capacity focus quarter So our good here – in we've

is, of focus levels on to achieving is short-term be higher here Our going productivity.

the that call. and discussed our forward we will moderate expectation the investment the business February here at onset specifically we than be of going our what sales the the that on so And contemplated more is across in year for board

are right not would Amit, And guys does before amount an cash do or matter? significant generating reaccelerate need you you CCB the of flow it you do given now, to free transaction Great. M&A

No, I have to for doing before M&A don't CCB wait reaccelerate transactions. we to think

looking market, a capital perspective, for we do sales perspective, be lot I expect this think of that. M&A themselves both in with we struggling, we anticipate well especially of as – at we're from cost a as a and where companies it from make markets want of take opportunities to – not in to available would that available advantage and other to respect

Perfect. Thanks very much.

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

here. initially taking far moderating circle free to I to or those are broadly, some more become we're efficient expenses unlevered to Hi, that preserve in? Thanks to on some where to the guys you reps investments we for areas us coming you for concrete looking looking variable moderation assets, those the there we're back. guys. talking marketing that where the the give if wanted side questions from? quota-carrying as guidance where reduce savings those that examples and sales are other those, of invest as or year. were either is cash guys can company redeployed hires, guess, more you And help I the the hiring I have know for Like, flow in about more beyond

through quarter to throughout provided What the I that results commitments cycles we is us did the of to Yes. pace flow while the capacity, as I'd well believe that that that in head in of contemplated we process both saying, a start the made. the will the we've drive hiring seeing moderating investments remainder count sales we that and tremendous and necessary cash have amount is as change be QX year guess of year. additional enables the longer new we're on by we sales deliver and free the and these

of in I we here, excluding something guess, I Tenable follow-up Any around give it Can sense, that that customers? you for those with where I customers? guys us helpful. existing better commentary know vertical would some but Tenable there have it difficult landing to One success And more be are you guess, greatest weeks you be specific? seeing Understood. the March, but Is new are it the One? with with a the highlighting. continues Is Is sense

Yes.

momentum becomes surprisingly, is understanding with this new I leveraging for us customer acquisition greatest And be an in in think cyber they're not anticipate their the market, broadening exposure. it already easy periods. than we of occurring VM on-ramp customers this previous has more been existing do where to and to difficult

customer So, customer base, motion competitive We a the existing coming that we given do we from our to we land the that expect lot the operating those of think new see there's but Tenable differentiation and One, believe, size sales with market the we're base. of in, sales logos.

Makes a of lot you. sense. Thank

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

afternoon. Good you. Thank Okay.

VM different market identity, security, play number segments, So, including guys cetera. cloud, of app like et across you a

a cycles or you more different one? sales was Just it than concentrated saw those in across maybe wondering in segments all if change product

segments. than or specific buying technology geos. the them. sectors weighted heavily telecom, behavior wasn't saw in in more change weighted product We any one much banking, product No. and the heavily here. North it other America weighted again, to, It all of occur all services, was It's more financial and in But across pretty across

factor? One revenue to your get it Tenable hybrid. are And XX% Okay. there price it. any updated comments with the that then And on-prem ask as the differences was form between still you when about wondering, for on Got recognition I do you a follow-up sell two uplift question being on-prem I solution? and wanted an

Yes.

price One. anything… introducing revenue going on-prem I And know certainly to capabilities to comment yes, now uplift I Tenable – a only be we're because then the not from perspective, recognition have being there's hybrid We separate purchases. actual we're – with can't if the don't for

revenue all a even model continue the time, Almost to sell in subscription it's recurring will change when that no and on-prem. to an way. reference there's Yes, be we revenue and it

you. Thank Okay.

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

From actually. my the for environment. Thanks guys. that in fallout. have for got the the and I And full-year taking understanding, Hi XQ SVB assume the guess macro things that worse guidance initial before my I two did was questions.

all Financial ex baked guide? the pressured guess question are assuming you you'd sell you the business that new rest the to? said I are in that this And in the that year, second for and this guidance assumes my is, Banking assuming just the quarter? the you was business So, the for the remains for into you saw Services, verticals weakness this than weakness question is, weakness of materially the the my verticals rest worse of you Or already that

guess we would I But that into is, in a those saw had the sector – services I the do Yes. other particular companies the Difficulty] believe mentioned those we sectors. sectors [Technical experienced earlier. – have and answer financial in impact that we also, way that challenges other the that

saw we're year. is the more modeling QX of what challenges very the in remainder of same for the basically out the and we themselves or at So, of that playing those end occurring

the the some which busiest their of taking and expansion so actually right achieving lower reflects we and over outlook. rates translating the lower rate. last more And out the rest we're what cautious We net do. these headwinds that the quarter, of to thing of are dollar weeks typically in outlook that's a time two saw Our think year again,

you or communicated expected the is [ph] assuming? previously you've just Steve, range that you're that is lower this – [BBNR] than quarter us? lower that that Is your midpoint that saw And lower of what than

net we can the lower And rest of the you a QX, dollar if LogXj. net at in quarter-to-quarter, from the don't but the it was compare reflects in look strongest expansion keep guidance one year year rate exceptional, of last was we than Our what for mind, dollar rate it of experienced. vary too, expansion because – our

outlook our net last expansion So, we QX. to of of factors the experienced of approach. weeks is think we dollar the the couple this moderating that right reflects due And some rate

guys. Thanks

Seyrafi] proceed Our next question. [Shebly [ph] question your line with Please of the from with comes Securities. FBN

you are did expect the which that by range Thank rate is undercut XXX% How X it going decline. low-end last to question, net decline and you you the expansion to forward? XXX% Related points another won't very of much. confident XXX%, from of the the

used providing we net the of dollar between historically be expansion disclosing instead we to – range, the rate to we expenditure. net were XXX% why the XXX%. that dollar saying not – and provide Well, Yes. we the That's expect

Now, net of We every one the rate. few this. companies quarter, the exact disclosed do that we're expansion dollar

a there's So, business. lot [indiscernible] of the

We platform we customers net also customers. add, new number of of enterprise a with X-figure provide investors new number the

quarter-to-quarter to and we're it's some vary can the opportunities and between natural So, pipeline important new that opportunities expansion from note logos seeing variation.

we saw quarter, some This moderation.

moderate. to it expect We

for outlook will that, approach take the And good I think is in lower. full-year expectation that's moderate to that now. the indeed Our a right

So, the [take XX,XXX [ph] rate] we [ph] customers, [natural have is base. customer] always

the take platform a with we to sell get of portfolio We product quarter. in base, back broad to more monetize base. changed our product have long-term, opportunity on rate, back massive ability within see is continues not terms that to with a into expectation – products current a home nothing here our our And And momentum. the existing and terms in into has the of what expansion our

is, services after in sense bit, some that Republic mess was second the there today is has But that some vertical, notwithstanding a XX% has the Okay. financial believe that stabilized And down it First the the banking fact market. stabilized. the my question sector

did April So, month of in the signs that of see in sector? any you stabilization

news a encouraging. seeing the And April. in would percentage deals that make projects we earlier about good I the that very good is board. we're certainly this not the talked is, across some would we customers pushed, clear. of of say those cancel that closed That I

said, flows of flow, quarter our at the expected strongest. is of always last be seasonal month and intra-quarter of look the business the to kind you the our that if Now

[some] very thing So, the that to right will year, you on right we're capitalize us. with do the determinative, be [ph] is, of are extrapolate certainly to hard be front that in we're quarters seeing what the and in over trying the quarter, something opportunities June when kind to and end of out working but think of pleased the towards rest the the we'll but in our of we see start specifically April, quarter

tech and much Amit demand faster. about getting strong, differentiation, talked remain seen we're competitive wins We've that, to

close. us, we'll to right front opportunities So, and are with we customers think and our in prospects working of be the

Thank Okay. you.

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