COLUMBIA, Md., June 16, 2025 (GLOBE NEWSWIRE) -- Tenable®, the exposure management company, today announced that Tenable Vulnerability Management has been recognized with a prestigious 2025 Globee® Award for AI-Powered Vulnerability Management. This latest accolade underscores Tenable's market leadership, delivering advanced exposure management solutions that revolutionize the way organizations identify, prioritize and remediate cyber risk. “This achievement is a testament to Tenable's commitment to innovat ...

Tenable (TENB) FY Conference June 10, 2025 01:10 PM ET Speaker0 Okay. Thank you for joining us. My name is Rudy Kessinger, security and infrastructure software here at D. A. Davidson. With us from Tenable, have co CEO, Mark Thurman Mhmm. SVP of FP and A, Chris Fritz. You guys for joining us. Speaker1 Our pleasure. For sure. Great. Thanks for having Speaker0 us. Mark, I think if you could start off by giving just quick overview of Tenable and maybe what I don't know if you guys call it this, maybe kind of Te ...

Core Viewpoint - Tenable Holdings, Inc. intends to acquire Apex Security, Inc. to enhance its capabilities in managing cyber risks associated with the expanding AI attack surface [1][5]. Group 1: Acquisition Details - The acquisition aims to strengthen Tenable's ability to help organizations identify and mitigate cyber risks in an AI-driven environment [1]. - Apex Security, founded in 2023, has gained attention from notable investors and is recognized for its innovative approach to securing AI usage [3]. - The financial terms of the acquisition have not been disclosed, and the deal is expected to close later this quarter [5]. Group 2: Industry Context - The rapid expansion of generative AI tools and autonomous systems is increasing the attack surface, introducing new risks such as shadow AI applications and AI-generated code [2]. - Tenable's existing product, Tenable AI Aware, already assists thousands of organizations in detecting and assessing AI usage, and the addition of Apex's capabilities will enhance governance and policy enforcement [2][3]. - The integration of Apex's offerings into Tenable One is anticipated to deliver comprehensive exposure management solutions in the second half of 2025 [5]. Group 3: Strategic Implications - Tenable's strategy focuses on staying ahead of attack surface expansion by not only managing exposures but also eliminating them proactively [3]. - The acquisition aligns with the industry's trend of treating AI risks as part of broader exposure management rather than in isolation [4]. - The collaboration is expected to provide security teams with the necessary visibility and control to manage AI-generated exposure effectively [3][4].

Core Insights - Tenable announced the recipients of its Global Partner Awards during the fifth annual Tenable AssureWorld virtual partner conference, recognizing partners for their contributions to customer success in exposure management [1][2] - The awards included categories such as Global System Integrator of the Year awarded to IBM, Tenable OT Security Partner of the Year awarded to Siemens Energy, MSSP Partner of the Year awarded to Telefonica, and Global Technology Partner of the Year awarded to AWS [1] - Tenable emphasizes a partner-first approach, focusing on investing in and supporting channel partners to achieve collective success in cybersecurity [2] Company Overview - Tenable is positioned as the exposure management company, addressing cybersecurity gaps that can impact business value, reputation, and trust [4] - The company offers an AI-powered exposure management platform that integrates security visibility and action across various environments, including IT infrastructure and cloud [4] - Tenable serves approximately 44,000 customers globally, aiming to reduce business risk through effective exposure management [4] Partner Program - The Tenable Assure Partner Program provides partners with sales and marketing support, training, certification opportunities, and technical assistance to enhance their business capabilities [3] - The program is designed to help partners deliver exceptional exposure management and risk mitigation solutions [3]

Summary of Tenable's Earnings Call Company Overview - **Company**: Tenable, a cyber exposure company focused on understanding and reducing risk through vulnerability management and exposure management platforms [2][3] Key Financial Highlights - **Revenue**: $239 million, representing an 11% growth, exceeding expectations [3] - **Operating Margin**: Strong at 20% [4] - **Free Cash Flow**: Over $80 million of unlevered free cash flow [4] - **New Customers**: Added over 300 new enterprise platform customers [4] - **Record Deals**: Achieved a record number of seven-figure deals [4] Guidance and Market Outlook - **Cautious Guidance**: Revised guidance downwards by approximately $17 million, reflecting potential longer sales cycles, particularly in the U.S. public sector [8][9] - **Public Sector Dynamics**: 15% of sales come from the U.S. public sector, which is experiencing personnel disruptions affecting sales cycles [7][9] - **Strong Demand**: Despite cautious guidance, the top of the funnel remains strong with good momentum in demand generation [6][10] Strategic Initiatives - **Platform Consolidation**: Tenable One is driving 30% to 40% of new business, focusing on consolidating various security solutions into one platform [17][21] - **FedRAMP Certification**: Achieved certification for Tenable One, enhancing credibility and opportunities in the federal government space [13][19] - **AI Integration**: Emphasizing AI as a key component for enhancing risk insights and operational efficiency [24][47] Competitive Landscape - **Market Position**: Tenable is well-positioned in the exposure management market, differentiating itself from competitors who are not as focused on this area [54][55] - **Cloud Security Growth**: Cloud security is one of the fastest-growing areas, with a 100% growth last year [66] - **Challenges from Competitors**: Noted pressure from larger platform vendors offering VM features, but Tenable maintains a strong competitive edge due to its established customer base and product offerings [51][56] Future Growth Opportunities - **Focus on Innovation**: Investing over 20% in R&D to drive product innovation and market expansion [29][78] - **Public Sector as a Tailwind**: Long-term growth expected from public sector contracts, leveraging past successes in the Department of Defense [80] - **Acquisition Strategy**: Recent acquisition of Vulcan aimed at accelerating market presence and product offerings [29][78] Conclusion - **Optimistic Outlook**: Despite short-term challenges, Tenable remains confident in its growth trajectory, driven by strong demand, innovative product offerings, and strategic positioning in the market [80]

Core Insights - Tenable has introduced significant enhancements to its flagship platform, Tenable One, including Tenable One Connectors and customizable risk dashboards, aimed at providing a comprehensive exposure management solution [1][6] - The platform addresses the challenges posed by the fragmented security landscape, where organizations typically manage an average of 83 disconnected tools, leading to operational inefficiencies and blind spots [2][6] - Tenable One integrates data from both native and third-party security tools, offering a unified view of organizational risk and enabling faster, smarter security decisions [3][4] Product Features - The new ecosystem of out-of-the-box Connectors allows seamless integration with various third-party tools, enhancing endpoint detection, cloud security, and vulnerability management [3] - The Tenable Exposure Data Fabric serves as the platform's scalable, cloud-native architecture, which normalizes and connects data across the security ecosystem [4] - Customizable risk dashboards are designed to streamline reporting processes, providing security teams with tailored insights that align with specific business roles and priorities [5] Market Context - The cybersecurity market is characterized by a saturation of point solutions that operate in isolation, which can hinder security efforts and leave organizations vulnerable [6] - Tenable's acquisition of Vulcan Cyber is highlighted as a strategic move to enhance its capabilities in the exposure management market, reinforcing its commitment to providing comprehensive security solutions [6][8]

Revenue and Growth - Revenue for the three months ended March 31, 2025, was $239,137,000, representing a 10.8% increase from $215,961,000 in the same period of 2024[86] - Total revenue increased by $23,176,000, or 11%, from $215,961,000 in 2024 to $239,137,000 in 2025[132] - Subscription revenue grew by $22,808,000, or 12%, from $197,635,000 in 2024 to $220,443,000 in 2025[132] - Calculated current billings for the three months ended March 31, 2025, were $215,360,000, up from $197,757,000 in 2024, reflecting a growth of 8.9%[91] - Recurring revenue accounted for 96% of total revenue in both the three months ended March 31, 2025, and 2024[86] Profitability and Losses - Net loss for the same period was $22,935,000, compared to a net loss of $14,386,000 in 2024, indicating a 59.5% increase in losses[86] - The company reported a net loss of $22,935,000 for the three months ended March 31, 2025, compared to a net loss of $14,386,000 for the same period in 2024, representing an increase in loss of 59%[106] - Non-GAAP net income for the same period was $44,250,000, up from $30,440,000 in 2024, reflecting a 45% increase[106] - Non-GAAP income from operations for the three months ended March 31, 2025, was $48,677,000, compared to $37,008,000 in 2024, representing a 31.5% increase[104] - Non-GAAP operating margin improved to 20% in 2025 from 17% in 2024[104] Expenses - Sales and marketing expenses rose by $3,357,000, or 3%, from $99,825,000 in 2024 to $103,182,000 in 2025[134] - Research and development expenses increased by $9,496,000, or 22%, from $43,727,000 in 2024 to $53,223,000 in 2025[130] - General and administrative expenses surged to $47,983,000 in 2025, up from $31,018,000 in 2024, marking a 55% increase[130] - Research and development expenses increased by $9.5 million, or 22%, to $53.2 million in Q1 2025 from $43.7 million in Q1 2024[136] - General and administrative expenses rose by $17.0 million, or 55%, to $48.0 million in Q1 2025 compared to $31.0 million in Q1 2024[136] Cash Flow and Investments - Free cash flow for the three months ended March 31, 2025, was $80,230,000, compared to $47,129,000 in 2024, showing a significant increase of 70.3%[94] - Net cash provided by operating activities was $87.4 million in Q1 2025, up from $50.3 million in Q1 2024[153] - Net cash used in investing activities increased by $120.5 million, primarily due to acquisitions[155] - Cash and cash equivalents totaled $233.4 million, with short-term investments at $226.8 million as of March 31, 2025[142] Customer Metrics - The number of new enterprise platform customers added in the period was 361, a decrease of 12% from 410 in the same period of 2024[96] - The number of customers with annual contract values of $100,000 and greater increased by 19%, from 1,717 in 2024 to 2,042 in 2025[97] - The dollar-based net expansion rate was 108% for the twelve months ended March 31, 2025, slightly down from 109% in 2024[100] Deferred Revenue and Acquisitions - Deferred revenue reached $808.4 million, with $633.2 million expected to be recognized as revenue in the next 12 months[144] - The company acquired Vulcan for $148.5 million in cash in February 2025, indicating ongoing market expansion efforts[145] Other Financial Metrics - Interest expense decreased by $1.1 million, or 14%, to $7.0 million in Q1 2025 from $8.1 million in Q1 2024[138] - The provision for income taxes increased by $1.9 million, or 118%, to $1.7 million in Q1 2025 from $3.6 million in Q1 2024[142] - The company expects gross profit to increase in absolute dollars, but gross margin may fluctuate due to cloud infrastructure costs[117] - The company anticipates continued investment in research and development to enhance its cloud-based platform, expecting R&D expenses to rise in absolute dollars annually[123]

Group 1: Cybersecurity Industry Overview - Cybercrime has become a multi-trillion dollar issue, with its scope reportedly tripling over the past decade, making cybersecurity spending essential for businesses despite economic uncertainties [1] - The cybersecurity industry is expected to remain resilient as businesses prioritize protection against financial and reputational damage from breaches [13] Group 2: Company Profile - Tenable - Tenable is a leader in vulnerability management, focusing on proactive cybersecurity to help businesses address network weaknesses before exploitation [2] - The company has a market capitalization of approximately $3.7 billion, positioning it as one of the more affordable stocks in the cybersecurity sector [3] Group 3: Product Portfolio and Innovation - Tenable's Nessus platform is the most widely deployed vulnerability assessment solution, capable of identifying over 99,000 vulnerabilities with high accuracy and low false positive rates [5] - The launch of the Tenable One platform in 2022 integrates various cybersecurity products into a comprehensive exposure management solution, leveraging AI for vulnerability identification and risk assessment [6][7] Group 4: Financial Performance - In the first quarter of 2025, Tenable reported revenue of $239.1 million, an 11% increase year-over-year, surpassing management's forecast of $233 million [9] - Non-GAAP earnings per share for the quarter were $0.36, reflecting a 44% growth compared to the previous year, although the company reported a GAAP loss of $22.9 million due to stock-based compensation and acquisition costs [10][11] Group 5: Future Outlook and Market Potential - Management has slightly revised down its full-year revenue estimate from $976 million to $975 million and adjusted non-GAAP earnings-per-share guidance from $1.56 to $1.48 [12] - Tenable's stock is trading at a price-to-sales ratio of 4, making it cheaper than many peers, despite slower revenue growth compared to competitors like CrowdStrike [14][16] - The company is experiencing increased success in acquiring high-value customers, with plans to launch a new version of Tenable One that could enhance its market position [17] - Tenable has significant growth potential within its estimated $33 billion addressable market, particularly with the Tenable One platform attracting higher-spending clients [18]

Group 1 - The analyst previously had a buy rating on Tenable (TENB) due to strong demand and traction for Tenable One but has now downgraded to a hold rating [1] - The analyst's investment background includes fundamental, technical, and momentum investing, utilizing positive aspects from each approach to refine the investment process [1] - The purpose of writing on Seeking Alpha is to track investment ideas' performance and connect with like-minded investors [1] Group 2 - There is no stock, option, or similar derivative position in any of the companies mentioned, nor plans to initiate any such positions within the next 72 hours [2] - The article expresses the author's own opinions and is not receiving compensation other than from Seeking Alpha [2] - Seeking Alpha does not guarantee past performance as an indicator of future results and does not provide specific investment recommendations [3]

Financial Data and Key Metrics Changes - Revenue for Q1 2025 was $239.1 million, representing an 11% year-over-year growth and exceeding the midpoint of the guided range by $5.1 million [27] - Calculated current billings grew 9% year-over-year to $215.4 million, driven largely by Tenable One and cloud security [26] - Unlevered free cash flow reached a record $87 million during the quarter, reflecting strong operational performance [31] Business Line Data and Key Metrics Changes - Tenable One was a significant driver of new business, accounting for over 30% of new sales in Q1 2025, with notable traction in cloud security [111] - The company added 361 new enterprise platform customers during the quarter, maintaining a net dollar expansion rate of 108% [26][27] - The percentage of recurring revenue remained high at 96% [27] Market Data and Key Metrics Changes - The company secured major wins in both public and private sectors, including a significant federal contract managing over 1 million assets [20] - The competitive environment showed historically high win rates against traditional vulnerability management players, indicating strong market positioning [51] Company Strategy and Development Direction - The company is focused on expanding its exposure management strategy and enhancing its product offerings, particularly through integrations with third-party tools and data sources [11][12] - There is a strong emphasis on AI capabilities to enhance exposure management solutions, leveraging the extensive data accumulated over two decades [12][87] - The strategic priority includes consolidating vendor solutions for customers, particularly in the public sector, to enhance efficiency and reduce costs [96] Management's Comments on Operating Environment and Future Outlook - Management expressed caution regarding the economic environment, particularly in the U.S. public sector, due to budget uncertainties and leadership disruptions [33][71] - Despite the cautious outlook, demand generation remains strong, with a robust pipeline of opportunities [44][68] - The company expects operating margins to improve throughout the year, even while absorbing costs from the Vulcan acquisition [36] Other Important Information - The company repurchased 1.6 million shares for $60 million during the quarter, with a total of $175 million in share repurchases since November 2023 [31] - The company is taking a cautious approach to its guidance for the remainder of the year, reflecting increased economic uncertainty [35] Q&A Session Summary Question: What is driving the incremental caution in guidance? - Management noted ongoing macro uncertainty, particularly in the public sector, and longer lead times for procurement decisions [41][45] Question: How is the competitive environment in vulnerability management? - Management reported historically high win rates against traditional players, indicating strong competitive positioning [51] Question: How does the acquisition of Wiz impact the cloud space? - Management views the acquisition as a market opportunity, with increased activity in RFPs and a shift towards multi-cloud environments [60][62] Question: What are the strategic priorities for the next 100 days? - The focus will be on expanding market opportunities, enhancing the exposure management platform, and leveraging AI for better insights [84][87]