Tenable Announces First Quarter 2024 Financial Results COLUMBIA, Maryland, May 1, 2024 — Tenable Holdings, Inc. ("Tenable") (Nasdaq: TENB), the Exposure Management company, today announced financial results for the quarter ended March 31, 2024. "We delivered strong results for the first quarter, highlighted by 14% revenue growth and 17% operating margin driven by traction in our unified platform," said Amit Yoran, Chairman and CEO of Tenable. "Our exposure management solutions, including Tenable One and Clo ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ______________________________________ FORM 10-K ______________________________________ ☒ Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the fiscal year ended December 31, 2023 or (Exact name of registrant as specified in its charter) ______________________________________ (State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification Number) Delaware 47-5580846 6 ...

Tenable Holdings (NASDAQ:TENB) Q4 2023 Results Earnings Conference Call February 7, 2024 4:30 PM ET Company Participants Erin Karney - Vice President of Investor Relations Amit Yoran - Chairman and Chief Executive Officer Steve Vintz - Chief Financial Officer Conference Call Participants Rob Owens - Piper Sandler & Co. Joel Fishbein - Truist Securities Mike Cikos - Needham & Company Jonathan Ho - William Blair Matthew Saltzman - Morgan Stanley Brian Essex - J.P. Morgan Dan Ives - Wedbush Securities Brad Reb ...

PART I [Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) This section presents the unaudited consolidated financial statements for the period ended September 30, 2023, detailing financial position, operational performance, cash flows, and key accounting notes [Consolidated Balance Sheets](index=3&type=section&id=Consolidated%20Balance%20Sheets) The balance sheet as of September 30, 2023, shows total assets increased to **$1.52 billion**, driven by higher cash, with equity rising to **$343.7 million** Consolidated Balance Sheet Highlights (in thousands) | Account | Sep 30, 2023 | Dec 31, 2022 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $445,316 | $300,866 | | Total current assets | $971,067 | $857,167 | | Total assets | $1,524,446 | $1,439,530 | | **Liabilities & Equity** | | | | Deferred revenue (current) | $518,372 | $502,115 | | Total liabilities | $1,180,773 | $1,168,664 | | Total stockholders' equity | $343,673 | $270,866 | | Total liabilities and stockholders' equity | $1,524,446 | $1,439,530 | [Consolidated Statements of Operations](index=4&type=section&id=Consolidated%20Statements%20of%20Operations) Q3 2023 revenue increased **15%** to **$201.5 million**, with net loss narrowing to **$(15.6) million** from **$(18.7) million** year-over-year Statement of Operations Summary (in thousands, except per share data) | Metric | Q3 2023 | Q3 2022 | Nine Months 2023 | Nine Months 2022 | | :--- | :--- | :--- | :--- | :--- | | Revenue | $201,529 | $174,851 | $585,404 | $498,560 | | Gross Profit | $155,775 | $136,269 | $450,630 | $389,011 | | Loss from operations | $(7,913) | $(12,958) | $(37,814) | $(53,726) | | Net loss | $(15,565) | $(18,730) | $(56,636) | $(70,735) | | Net loss per share | $(0.13) | $(0.17) | $(0.49) | $(0.64) | [Consolidated Statements of Cash Flows](index=7&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Net cash from operations for the nine months ended September 30, 2023, increased to **$111.4 million**, with a significant shift to positive investing cash flow Cash Flow Summary (Nine Months Ended Sep 30, in thousands) | Activity | 2023 | 2022 | | :--- | :--- | :--- | | Net cash provided by operating activities | $111,350 | $99,233 | | Net cash provided by (used in) investing activities | $19,619 | $(108,003) | | Net cash provided by financing activities | $16,043 | $23,195 | | Net increase in cash and cash equivalents | $144,450 | $10,149 | [Notes to Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) Notes detail key accounting policies, significant revenue concentration, remaining performance obligations, and the **$244 million** acquisition of Ermetic Ltd - Subscription revenue is the primary revenue source, accounting for **$183.3 million (91%)** of the **$201.5 million** total revenue in Q3 2023[30](index=30&type=chunk) - The company has a significant concentration with one distributor, which accounted for **36%** of revenue in the first nine months of 2023 and **37%** of accounts receivable at September 30, 2023[31](index=31&type=chunk) - As of September 30, 2023, the company had **$697.2 million** in remaining performance obligations, with **$528.4 million** expected to be recognized as revenue over the next twelve months[33](index=33&type=chunk) - In October 2023, the company acquired Ermetic Ltd., a cloud infrastructure entitlement management provider, for a total purchase price of approximately **$244 million**[70](index=70&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=20&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses Q3 2023 financial performance, highlighting **15% revenue growth**, strong liquidity, and the impact of the **$244 million** Ermetic acquisition - Revenue for Q3 2023 was **$201.5 million**, a **15%** year-over-year increase, with recurring revenue representing **95%** of total revenue for the quarter[79](index=79&type=chunk)[80](index=80&type=chunk) - The company experienced longer sales cycle times in the purchasing and approval phases starting in Q1 2023, a trend that has continued and may persist into 2024[110](index=110&type=chunk) - In October 2023, the company acquired Ermetic for approximately **$244 million** in cash to enhance its Tenable One Exposure Management Platform[148](index=148&type=chunk)[70](index=70&type=chunk) [Key Operating and Financial Metrics](index=21&type=section&id=Key%20Operating%20and%20Financial%20Metrics) Key metrics for Q3 2023 show **Calculated Current Billings** up **8%** to **$224.7 million** and **Free Cash Flow** increasing to **$40.3 million** Key Metrics Performance | Metric | Q3 2023 | Q3 2022 | Change (%) | | :--- | :--- | :--- | :--- | | Calculated Current Billings (in millions) | $224.7 | $207.3 | 8% | | Free Cash Flow (in millions) | $40.3 | $31.5 | 28% | | Customers > $100k ACV | 1,565 | 1,280 | 22% | | Dollar-Based Net Expansion Rate | 111% | 118% | (7 p.p.) | Non-GAAP Income from Operations Reconciliation (in thousands) | Description | Q3 2023 | Q3 2022 | | :--- | :--- | :--- | | Loss from operations (GAAP) | $(7,913) | $(12,958) | | Stock-based compensation | $36,835 | $32,643 | | Acquisition-related expenses | $4,598 | $322 | | Amortization of acquired intangible assets | $3,055 | $3,080 | | **Non-GAAP income from operations** | **$36,575** | **$23,087** | [Results of Operations](index=29&type=section&id=Results%20of%20Operations) Q3 2023 revenue grew **15%** driven by existing customers, while cost of revenue and general and administrative expenses increased due to cloud infrastructure and acquisition-related costs - Q3 2023 revenue increased by **$26.7 million**, with **$30.6 million** from existing customers offsetting a **$3.9 million** decrease from new customers[127](index=127&type=chunk) - Cost of revenue increased by **19%** in Q3 2023, primarily due to a **$3.4 million** increase in third-party cloud infrastructure costs and a **$2.6 million** increase in personnel costs[128](index=128&type=chunk)[129](index=129&type=chunk) - General and administrative expenses increased by **28%** in Q3 2023, largely due to a **$4.3 million** increase in acquisition-related expenses[131](index=131&type=chunk)[134](index=134&type=chunk) - Other expense, net increased by **$4.4 million** in Q3 2023, primarily due to a **$5.0 million** impairment loss on a SAFE investment[132](index=132&type=chunk) [Liquidity and Capital Resources](index=34&type=section&id=Liquidity%20and%20Capital%20Resources) The company maintains a strong liquidity position with **$445.3 million** in cash and **$247.7 million** in short-term investments, sufficient for future needs including the Ermetic acquisition - At September 30, 2023, the company had **$445.3 million** in cash and cash equivalents and **$247.7 million** in short-term investments[144](index=144&type=chunk) - A substantial source of cash is from customer prepayments, with a deferred revenue balance of **$681.5 million** as of September 30, 2023[146](index=146&type=chunk) - The company's Term Loan interest rates have been between **7.16%** and **8.20%** from January to September 2023, and the company was in compliance with all debt covenants[151](index=151&type=chunk)[152](index=152&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=36&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company identifies interest rate, foreign currency, and inflation as primary market risks, with a **1%** interest rate increase potentially raising interest expense by **$0.3 million** - The company is exposed to interest rate risk on its **$375.0 million** variable-rate Term Loan, where a one percentage point increase would increase 2023 interest expense by **$0.3 million**[163](index=163&type=chunk) - Foreign currency exchange risk is limited as substantially all sales contracts are denominated in U.S. dollars, but a portion of operating expenses are incurred in foreign currencies like the Euro, British Pound, and Israeli New Shekel[164](index=164&type=chunk) - Inflation has not had a material effect but is a risk, particularly for employee-related and third-party cloud infrastructure costs[165](index=165&type=chunk) [Controls and Procedures](index=37&type=section&id=Item%204.%20Controls%20and%20Procedures) Management, including the CEO and CFO, concluded that disclosure controls and procedures were effective as of September 30, 2023, with no material changes to internal controls - Management, including the CEO and CFO, concluded that as of September 30, 2023, the company's disclosure controls and procedures were effective[167](index=167&type=chunk) - There were no material changes in the company's internal control over financial reporting during the quarter[169](index=169&type=chunk) PART II [Legal Proceedings](index=39&type=section&id=Item%201.%20Legal%20Proceedings) The company is not currently involved in any legal proceedings that would have a material adverse effect on its business or financial condition - Tenable is not presently a party to any legal proceedings that would individually or collectively have a material adverse effect on the company[173](index=173&type=chunk) [Risk Factors](index=39&type=section&id=Item%201A.%20Risk%20Factors) New risk factors include complex accounting rules, acquisition integration challenges, and geopolitical risks from the conflict in Israel impacting R&D operations - A new risk factor highlights that complex accounting rules and incorrect management estimates (e.g., for revenue recognition, deferred commissions) could adversely affect financial results[175](index=175&type=chunk)[177](index=177&type=chunk) - Acquisitions, such as the recent purchase of Ermetic, introduce risks including integration difficulties, unforeseen liabilities, and potential disruption to business operations[182](index=182&type=chunk) - The company identifies a new geopolitical risk due to the conflict in Israel, as its R&D teams for Tenable OT Security and the newly acquired Ermetic are located in Tel Aviv, which could materially impact product roadmaps[185](index=185&type=chunk)[186](index=186&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=41&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company reported no unregistered sales of equity securities during the reporting period - There were no unregistered sales of equity securities in the period[188](index=188&type=chunk) [Exhibits](index=42&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed with the Quarterly Report on Form 10-Q, including the Ermetic Share Purchase Agreement and officer certifications - The exhibits filed with the report include the Ermetic Share Purchase Agreement, officer certifications (302 and 906), and XBRL files[191](index=191&type=chunk)

Financial Data and Key Metrics Changes - Calculated current billings (CCB) grew 8% year-over-year to $224.7 million, while revenue was $201.5 million, representing 15% year-over-year growth [19][22] - The dollar-based net expansion rate was 111%, consistent with the previous quarter [22] - The company finished the quarter with $693 million in cash and short-term investments, and generated approximately $48 million of unlevered free cash flow during the quarter [23][24] Business Line Data and Key Metrics Changes - Tenable One represented 20% of new sales in the quarter and grew over 100% year-over-year [31] - The company added a record number of seven-figure customers, indicating strong performance in large enterprise and public sector [16][21] - There was softness in the mid-market, particularly with new logos, which is expected to persist into the next year [6][31] Market Data and Key Metrics Changes - Significant outperformance was noted in the public sector, especially in U.S. Federal, benefiting from a robust spending environment [29] - The mix of business shifted towards perpetual licenses and professional services, which minimally contributed to CCB [15][29] - The company is seeing increased emphasis on active directory security and cloud security within its specialty products [8] Company Strategy and Development Direction - The company continues to innovate within Tenable One, leveraging generative AI for faster insights and efficiency [7] - The integration of Ermetic is expected to enhance cloud security offerings and provide a competitive edge in the CNAPP market [27][40] - The company aims to balance growth with profitability, expecting unlevered free cash flow to grow approximately 25% next year [35] Management's Comments on Operating Environment and Future Outlook - Management noted a cautious outlook from buyers in the market, impacting conversion rates [20] - The company anticipates mid-teen CCB growth for 2024, reflecting contributions from Ermetic and current selling conditions [34][78] - Management expressed confidence in the strength of their product offerings and the ability to capture market share despite macroeconomic challenges [70][93] Other Important Information - The company is raising its outlook for income from operations for the full year by $10 million, reflecting strong underlying performance [24] - The gross margin for the quarter was 80%, slightly down from 81% in the previous quarter [32] - The company expects to see a budget flush in Q4, which typically represents over 30% of total sales [105] Q&A Session Summary Question: What competitive dynamics does Tenable face in the cloud security market? - Management indicated that they are seeing competition from major CNAPP vendors but believe their integrated offerings provide a competitive advantage [40][49] Question: How is the integration of Ermetic progressing? - Management acknowledged some modest delays in integration activities but emphasized that strategic progress continues [52] Question: What is the outlook for the mid-market segment? - Management noted that the mid-market is experiencing softness, particularly in new logos, but remains optimistic about overall performance [71][81] Question: How does Tenable One's pricing compare to standalone VM? - Management stated that selling prices for Tenable One are approximately 70% higher than standalone VM due to its comprehensive asset coverage [120] Question: What is the company's approach to cash utilization? - Management highlighted the fragmented nature of the security market and indicated that cash is being used for strategic acquisitions and investments in cloud security [75]

Financial Performance & Growth - The company's Q3 2023 revenue reached $201.5 million, representing a 15% growth[9] - The company's Q3 2023 calculated current billings (CCB) was $224.7 million, an 8% increase[9] - The company forecasts revenue between $783 million and $791 million for the full year 2023[40] - The company anticipates calculated current billings between $879 million and $887 million for the full year[59] - The company's Q3 recurring revenue accounts for 95% of total revenue[9, 35] Market Position & Strategy - The company is a category leader in the Exposure Management market[24] - The company has approximately 43,000 customers, including ~60% of the Fortune 500 and ~40% of the Global 2000[24] - The company is ranked 1 by IDC in market share in the Worldwide Vulnerability Management market[30] Customer Acquisition & Value - The company is focused on landing higher value customers, with an increasing number of $100K+ ACV (Annual Contract Value) accounts[37] - The company is expanding its enterprise platform customer base[37] Profitability - The company achieved an 80% Non-GAAP Gross Margin in Q3 2023[24, 68] - The company's Q3 2023 Unlevered Free Cash Flow was $48.2 million[24] - The company's Q3 2023 Non-GAAP operating margin was 18%[58]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 __________________ FORM 10-Q __________________ ☒ Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the Quarterly Period Ended June 30, 2023 or ☐ Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the transition period from _____ to _____ Commission file number 001-38600 __________________ TENABLE HOLDINGS, INC. (Exact name of registrant as specified in ...

Financial Data and Key Metrics Changes - Revenue for Q2 was $195 million, representing a 19% year-over-year growth, exceeding the midpoint of guidance by $5 million [79] - Calculated current billings grew 15% year-over-year to $200.2 million [76] - Gross margin improved to 81% from 79% in the previous quarter, attributed to the scalability of public cloud infrastructure [49] - Operating margin for the quarter was 15%, which was 470 basis points better than the midpoint of guidance [81] - EPS was $0.22, approximately $0.09 better than the midpoint of the guided range [52] Business Line Data and Key Metrics Changes - The company added 426 new enterprise customers and 63 net new six-figure customers in Q2, indicating a return to typical quarterly additions [67] - Tenable One now comprises over 20% of total new enterprise sales, contributing to higher average selling prices (ASPs) [40][77] - The dollar-based net expansion rate was 111% in the quarter, slightly down from 113% in the previous quarter [48] Market Data and Key Metrics Changes - The company observed stabilization in banking, financial services, tech, and telecom sectors compared to Q1 [46] - Strong demand was noted in the public sector, driven by regulatory requirements for cybersecurity improvements [72] Company Strategy and Development Direction - The company is focused on integrating operational technology (OT) into Tenable One, enhancing its platform capabilities [44] - There is a strategic emphasis on leveraging AI to improve product intelligence and customer experience [22][124] - The company plans to reinvest a portion of the earnings upside into go-to-market and product development for future growth [81][85] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in navigating the macroeconomic environment and highlighted a return to a more predictable selling environment [45][105] - The outlook for the second half of the year includes expectations for revenue in the range of $197 million to $199 million for Q3 [84] - The company raised its full-year guidance for CCB revenue and earnings, reflecting a balanced growth approach [85] Other Important Information - The company generated approximately $40 million of unlevered free cash flow during the quarter, exceeding expectations [53] - The total deferred revenue was $650.2 million, providing visibility into future revenue [82] Q&A Session Summary Question: What is the size of the SC installed base? - The company has over 40,000 customers, with a sizable SC customer base representing a several hundred million dollar opportunity for Tenable One [94] Question: What is the outlook for the OT business? - Management is bullish about the OT business, citing market-leading technology and strong competitive positioning [98] Question: How did early renewals impact the quarter? - The company saw a higher-than-expected percentage of early renewals, contributing approximately $2 million to the quarter's results [99][116] Question: What modules within Tenable One are customers opting for? - There is significant demand for cloud security and identity management capabilities within the Tenable One platform [100] Question: How is the company addressing AI applications? - The company is leveraging AI to enhance product intelligence and improve customer risk management capabilities [124][155]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 __________________ FORM 10-Q __________________ ☒ Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the Quarterly Period Ended March 31, 2023 or ☐ Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the transition period from _____ to _____ Commission file number 001-38600 __________________ TENABLE HOLDINGS, INC. (Exact name of registrant as specified in ...

Financial Data and Key Metrics Changes - Calculated current billings grew 13% year-over-year to $176.8 million [7] - Revenue was $188.8 million, representing 18% year-over-year growth, exceeding the midpoint of the guided range by $1.8 million [116] - Operating margin for the quarter was 10%, which was 500 basis points better than the midpoint of the guidance [117] - Non-GAAP diluted earnings per share was $0.11, better than the midpoint of the guided range [117] - Unlevered free cash flow generated during the quarter was $44.2 million, up from $32.1 million in the previous quarter [95] Business Line Data and Key Metrics Changes - Added 379 new enterprise platform customers and 24 net new six-figure customers in Q1 [23] - Dollar-based net expansion rate was 113% in the quarter, reflecting a decline from previous periods [23][70] - R&D expense increased to $29.3 million, up from $28.7 million last quarter, maintaining 16% of revenue [8] - Sales and marketing expense rose to $82.8 million, up from $78.3 million last quarter, representing 44% of revenue [24] Market Data and Key Metrics Changes - The banking and financial services sector, along with technology and telecom, experienced longer lead times in purchasing and approval phases [4] - These sectors represent approximately 30% of the overall business globally [57][106] - Demand generation added during the quarter exceeded expectations, marking a record for the company [89][92] Company Strategy and Development Direction - Focus on cloud and analytics as key growth areas, with investments in unifying cloud security posture and vulnerability management [5] - Emphasis on operationalizing preventative security through Tenable One, which is becoming a platform of choice for customers [19][90] - Strategy includes moderating investments while maintaining a balance between growth and profitability [9][28] Management's Comments on Operating Environment and Future Outlook - Management acknowledged a challenging selling environment, particularly in the last two weeks of March, impacting deal closures [4][19] - Confidence in the cybersecurity market remains strong, with organizations prioritizing cyber exposure management [19][88] - Outlook for the second quarter and full-year 2023 reflects expectations of longer sales cycles and lower net dollar expansion rates [52][119] Other Important Information - Gross margin expanded to 79% from 78% in the previous quarter, attributed to effective cost management [93] - The company finished the quarter with $616.7 million in cash and short-term investments, providing visibility into future revenue [95] Q&A Session Summary Question: Could you speak to the weakness in the tech and telecom vertical? - Management noted that the elongation of deal approvals was more pronounced in midsized and regional banks, particularly in North America [12][30] Question: How did the banking and financial services sector perform? - The sector historically skews towards larger transactions, and while there were positive signs, short-term headwinds were acknowledged [37][106] Question: What is the outlook for the federal business? - The public sector, including federal, performed well, and management anticipates it to remain strong throughout the year [129] Question: How is the company managing investments in light of the current environment? - The company plans to moderate the pace of new investments while focusing on achieving higher productivity [47][135] Question: What are the expectations for new business in the coming months? - Management expects new business to take longer to close, reflecting the challenges experienced in Q1 [52][119]