Part I [Business](index=4&type=section&id=Item%201.%20Business) Tenable provides exposure management solutions, showing steady revenue growth to $683.2 million in 2022 despite net losses while serving 43,000 customers globally **Financial Performance (2020-2022)** | Metric | 2022 | 2021 | 2020 | | :--- | :--- | :--- | :--- | | **Total Revenue** | $683.2 million | $541.1 million | $440.2 million | | **Revenue Growth (YoY)** | 26% | 23% | - | | **Net Loss** | ($92.2 million) | ($46.7 million) | ($42.7 million) | | **Cash Flow from Operations** | $131.2 million | $96.8 million | $64.2 million | - As of December 31, 2022, Tenable had approximately **43,000 customers** in over 170 countries, including about **60% of the Fortune 500** and **40% of the Global 2000**[27](index=27&type=chunk)[28](index=28&type=chunk) - The company's growth strategy focuses on acquiring new enterprise customers, expanding asset coverage within the existing customer base, investing in its technology platform, and exploring acquisition opportunities[26](index=26&type=chunk) - Tenable's primary competitors include vulnerability management vendors like **Qualys and Rapid7**, diversified security vendors, endpoint security vendors such as **CrowdStrike**, and cloud security providers like **Palo Alto Networks**[37](index=37&type=chunk) [Overview](index=4&type=section&id=Overview) Tenable provides exposure management solutions to address the expanding modern attack surface by unifying data sources for a comprehensive view of cyber risk - The modern attack surface includes identity and access management systems, operational technology (OT), personal devices (IoT, shadow IT), and tools used by DevOps teams (virtual machines, containers)[15](index=15&type=chunk)[18](index=18&type=chunk) - Tenable launched the **Tenable One Exposure Management Platform** in October 2022 to unify various data sources and provide a single exposure view[17](index=17&type=chunk) [Our Solutions](index=6&type=section&id=Our%20Solutions) The company's core offering is the Tenable One platform, which integrates key products for vulnerability management, cloud security, and Active Directory security - The Tenable One platform incorporates several key products: **Tenable.io** (SaaS Vulnerability Management), **Tenable.io Web Application Scanning**, **Tenable Lumin Exposure View**, **Tenable.cs** (Cloud Security), **Tenable.ad** (Active Directory Security), and **Tenable.asm** (External Attack Surface Management)[21](index=21&type=chunk) - Standalone solutions include **Tenable.sc** (on-premises Vulnerability Management) and **Tenable.ot** (Operational Technology Security)[21](index=21&type=chunk) - In July 2022, the company introduced **Nessus Expert**, which adds Infrastructure as Code (IaC) scanning and external attack surface discovery capabilities[23](index=23&type=chunk) [Sales and Marketing](index=8&type=section&id=Sales%20and%20Marketing) Tenable utilizes a dual sales strategy combining a direct-touch sales force with a two-tiered channel partner model to drive global market penetration - The company uses a **two-tiered channel model**, selling to distributors who sell to resellers, who then sell to end-user customers[26](index=26&type=chunk) - The sales team is geographically divided into the **Americas; Europe, the Middle East and Africa (EMEA); and Asia Pacific and Japan**[30](index=30&type=chunk) [Human Capital](index=11&type=section&id=Human%20Capital) The company's human capital strategy focuses on attracting and retaining talent in a diverse, hybrid workplace with robust compensation and development programs - At the end of 2022, the company had **1,900 employees**, with 796 (approximately 42%) located outside the U.S[47](index=47&type=chunk) - The company promotes a hybrid workplace strategy and offers compensation packages that include base salary, annual bonuses, **equity awards**, and an **Employee Stock Purchase Plan (ESPP)**[49](index=49&type=chunk) - Tenable outsources its data center needs to **Amazon Web Services (AWS)**, and its corporate headquarters is a **LEED Certified Gold** building[55](index=55&type=chunk) [Risk Factors](index=13&type=section&id=Item%201A.%20Risk%20Factors) The company faces significant risks including a history of net losses, intense competition, reliance on renewals, and challenges in data privacy and talent retention [Risks Related to Our Business and Industry](index=14&type=section&id=Risks%20Related%20to%20Our%20Business%20and%20Industry) Operational risks include a history of net losses, intense competition from established and larger vendors, and high dependence on customer subscription renewals - The company has a history of net losses, reporting losses of **$92.2 million in 2022**, $46.7 million in 2021, and $42.7 million in 2020, with an accumulated deficit of **$746.8 million**[64](index=64&type=chunk) - The cybersecurity market is intensely competitive, with rivals including **Qualys, Rapid7, CrowdStrike, and Palo Alto Networks**, and pricing pressure from larger competitors like **Microsoft**[66](index=66&type=chunk)[67](index=67&type=chunk) - Business success depends heavily on **customer subscription renewals** and expansion, as a majority of contracts are for one year with no obligation to renew[98](index=98&type=chunk) - The company relies on third-party data centers, particularly **Amazon Web Services (AWS)**, for its network infrastructure[100](index=100&type=chunk) [Risks Related to Government Regulation, Data Collection and Intellectual Property](index=34&type=section&id=Risks%20Related%20to%20Government%20Regulation%2C%20Data%20Collection%20and%20Intellectual%20Property) The company is subject to complex data privacy laws like GDPR and CCPA, U.S. export controls, and challenges in protecting its intellectual property - The company is subject to numerous data privacy and security laws, including the **EU GDPR, UK GDPR, and CCPA**, which carry the risk of significant fines for non-compliance[105](index=105&type=chunk)[107](index=107&type=chunk)[108](index=108&type=chunk) - As of December 31, 2022, Tenable held **26 issued U.S. patents** and had 25 pending applications, relying on a mix of IP protections[165](index=165&type=chunk) - The use of **open-source software** in Tenable's solutions carries risks, as non-compliance could lead to litigation or require releasing proprietary source code[173](index=173&type=chunk)[174](index=174&type=chunk) [Risks Related to An Investment in Our Common Stock](index=38&type=section&id=Risks%20Related%20to%20An%20Investment%20in%20Our%20Common%20Stock) Investment risks include stock price volatility, a no-dividend policy, and anti-takeover provisions that may limit stockholder influence - The company has **never declared or paid cash dividends** and does not intend to in the foreseeable future, with its credit agreement also restricting payments[180](index=180&type=chunk) - **Anti-takeover provisions**, such as a classified Board of Directors, could delay or prevent a change in control[181](index=181&type=chunk)[182](index=182&type=chunk) - The certificate of incorporation establishes **exclusive forums** for most stockholder disputes, which could limit stockholders' ability to bring claims in other jurisdictions[184](index=184&type=chunk) [Unresolved Staff Comments](index=41&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) The company reports that it has no unresolved staff comments from the Securities and Exchange Commission - None[201](index=201&type=chunk) [Properties](index=41&type=section&id=Item%202.%20Properties) The company's corporate headquarters is a 160,000 square foot leased facility in Columbia, Maryland, supplemented by various international offices - The corporate headquarters in Columbia, Maryland, consists of approximately **160,000 square feet** with a lease expiring in February 2032[202](index=202&type=chunk) [Legal Proceedings](index=41&type=section&id=Item%203.%20Legal%20Proceedings) The company is not currently a party to 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 have a **material adverse effect** on the business[203](index=203&type=chunk) [Mine Safety Disclosures](index=41&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - Not applicable[204](index=204&type=chunk) Part II [Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=42&type=section&id=Item%205.%20Market%20for%20Registrant's%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) Tenable's common stock trades on Nasdaq under "TENB," and the company has never paid dividends, retaining earnings for business expansion - Common stock trades on the **Nasdaq Global Select Market** under the ticker symbol **"TENB"**[207](index=207&type=chunk) - The company has **never paid dividends** and does not intend to in the foreseeable future, as it plans to retain earnings for business growth[208](index=208&type=chunk) [Selected Financial Data](index=43&type=section&id=Item%206.%20Selected%20Financial%20Data) This section presents key consolidated financial data from 2018 to 2022, including revenue, profit, loss, and balance sheet items **Selected Consolidated Statements of Operations Data (in thousands)** | | 2022 | 2021 | 2020 | 2019 | 2018 | | :--- | :--- | :--- | :--- | :--- | :--- | | **Revenue** | $683,191 | $541,130 | $440,221 | $354,586 | $267,360 | | **Gross profit** | $528,402 | $434,734 | $362,667 | $293,768 | $224,193 | | **Loss from operations** | $(67,815) | $(41,768) | $(36,433) | $(90,799) | $(72,581) | | **Net loss** | $(92,222) | $(46,677) | $(42,731) | $(99,013) | $(73,521) | | **Net loss per share, basic and diluted** | $(0.83) | $(0.44) | $(0.42) | $(1.03) | $(1.38) | **Selected Consolidated Balance Sheet Data (in thousands)** | | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | | :--- | :--- | :--- | :--- | :--- | :--- | | **Cash and cash equivalents** | $300,866 | $278,000 | $178,223 | $74,363 | $165,116 | | **Total assets** | $1,439,530 | $1,248,819 | $690,589 | $558,612 | $460,612 | | **Deferred revenue, current and non-current** | $664,602 | $530,885 | $434,510 | $363,127 | $289,903 | | **Total stockholders' equity** | $270,866 | $215,313 | $150,665 | $98,905 | $121,763 | [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=45&type=section&id=Item%207.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses financial results, highlighting 26% revenue growth in 2022, ongoing net losses due to investment, and key non-GAAP performance metrics [Key Operating and Financial Metrics](index=50&type=section&id=Key%20Operating%20and%20Financial%20Metrics) The company tracks key metrics like Calculated Current Billings and Free Cash Flow to evaluate performance, showing strong growth in customer acquisition and expansion **Key Metrics (2020-2022)** | Metric | 2022 | 2021 | 2020 | | :--- | :--- | :--- | :--- | | **Calculated Current Billings** | $776.9M | $617.2M | $494.7M | | **Free Cash Flow** | $112.0M | $90.2M | $44.0M | | **New Enterprise Platform Customers** | 2,078 | 1,882 | 1,455 | | **Customers > $100k ACV** | 1,420 | 1,095 | 837 | | **Dollar-Based Net Expansion Rate** | 117% | 117% | 110% | **Reconciliation of GAAP Loss from Operations to Non-GAAP Income from Operations (in thousands)** | | 2022 | 2021 | 2020 | | :--- | :--- | :--- | :--- | | **Loss from operations (GAAP)** | $(67,815) | $(41,768) | $(36,433) | | Stock-based compensation | 120,633 | 79,405 | 59,573 | | Acquisition-related expenses | 2,642 | 6,901 | 339 | | Costs related to intra-entity asset transfers | 838 | — | — | | Amortization of acquired intangible assets | 11,372 | 6,447 | 2,314 | | **Non-GAAP income from operations** | **$67,670** | **$50,985** | **$25,793** | [Results of Operations](index=58&type=section&id=Results%20of%20Operations) Revenue increased 26% in 2022 driven by subscription sales, while operating expenses grew 25%, widening the operating and net losses from the prior year **Revenue Comparison: 2022 vs 2021 (in thousands)** | Revenue Type | 2022 | 2021 | Change ($) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Subscription | $612,510 | $476,023 | $136,487 | 29% | | Perpetual license and maintenance | $50,699 | $50,333 | $366 | 1% | | Professional services and other | $19,982 | $14,774 | $5,208 | 35% | | **Total Revenue** | **$683,191** | **$541,130** | **$142,061** | **26%** | - The **$79.3 million (29%) increase in sales and marketing expense** in 2022 was primarily due to a $52.5 million increase in personnel costs and a $14.2 million increase in sales commissions[276](index=276&type=chunk)[277](index=277&type=chunk) - The **$27.1 million (23%) increase in research and development expense** in 2022 was mainly driven by a $19.8 million increase in personnel costs[280](index=280&type=chunk)[282](index=282&type=chunk) [Liquidity and Capital Resources](index=64&type=section&id=Liquidity%20and%20Capital%20Resources) The company maintains strong liquidity with $300.9 million in cash, funded primarily by customer prepayments and a $375.0 million term loan **Cash Flow Summary (in thousands)** | Cash Flow Activity | 2022 | 2021 | 2020 | | :--- | :--- | :--- | :--- | | **Net cash provided by operating activities** | $131,151 | $96,765 | $64,232 | | **Net cash (used in) provided by investing activities** | $(128,039) | $(391,590) | $4,079 | | **Net cash provided by financing activities** | $23,318 | $397,646 | $36,403 | - The company entered into a credit agreement in July 2021, which includes a **$375.0 million Term Loan** and a **$50.0 million Revolving Credit Facility**[300](index=300&type=chunk) - At December 31, 2022, the company had a **deferred revenue balance of $664.6 million**, a substantial source of cash from customer prepayments[297](index=297&type=chunk) [Critical Accounting Policies and Estimates](index=66&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) Key accounting policies requiring significant management judgment include revenue recognition, deferred commissions, and the valuation of assets in business combinations - **Revenue Recognition:** For perpetual licenses, the company combines the license and maintenance into a single performance obligation and recognizes revenue over an estimated **five-year economic life**[315](index=315&type=chunk) - **Deferred Commissions:** Sales commissions are capitalized and amortized over an estimated period of benefit, ranging from **three to five years**[320](index=320&type=chunk) - **Business Combinations:** The company allocates the purchase price of acquisitions to tangible and intangible assets, with the excess recorded as goodwill, requiring significant valuation estimates[331](index=331&type=chunk) [Quantitative and Qualitative Disclosures about Market Risk](index=65&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) The company is exposed to market risks from variable interest rates on its debt, foreign currency fluctuations, and potential inflationary pressures - The company's **$375.0 million Term Loan** has a variable interest rate; a one percentage point increase would raise 2023 interest expense by an estimated **$2.5 million**[339](index=339&type=chunk) - **Foreign currency risk** is present due to operating expenses in currencies like the Euro, British Pound, and Israeli New Shekel[341](index=341&type=chunk) [Financial Statements and Supplementary Data](index=67&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) This section contains the company's audited consolidated financial statements and the independent auditor's report for fiscal years 2020 through 2022 **Consolidated Balance Sheet (in thousands)** | | Dec 31, 2022 | Dec 31, 2021 | | :--- | :--- | :--- | | **Total Current Assets** | $857,167 | $749,438 | | **Total Assets** | $1,439,530 | $1,248,819 | | **Total Current Liabilities** | $584,160 | $483,882 | | **Total Liabilities** | $1,168,664 | $1,033,506 | | **Total Stockholders' Equity** | $270,866 | $215,313 | **Consolidated Statement of Operations (in thousands)** | | 2022 | 2021 | 2020 | | :--- | :--- | :--- | :--- | | **Revenue** | $683,191 | $541,130 | $440,221 | | **Gross Profit** | $528,402 | $434,734 | $362,667 | | **Loss from Operations** | $(67,815) | $(41,768) | $(36,433) | | **Net Loss** | $(92,222) | $(46,677) | $(42,731) | [Changes in and Disagreements with Accountants on Accounting and Financial Disclosure](index=97&type=section&id=Item%209.%20Changes%20in%20and%20Disagreements%20with%20Accountants%20on%20Accounting%20and%20Financial%20Disclosure) The company reports no changes in or disagreements with its accountants on accounting and financial disclosure - None[486](index=486&type=chunk) [Controls and Procedures](index=97&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management concluded that the company's disclosure controls and internal control over financial reporting were effective as of December 31, 2022 - Management concluded that as of December 31, 2022, the company's **disclosure controls and procedures were effective**[488](index=488&type=chunk) - Management concluded that the company's **internal control over financial reporting was effective** as of December 31, 2022[489](index=489&type=chunk) [Other Information](index=98&type=section&id=Item%209B.%20Other%20Information) In February 2023, the Board of Directors designated Chief Operating Officer Mark Thurmond as an "executive officer" of the company - On February 23, 2023, **Mark Thurmond, Chief Operating Officer**, was designated as an "executive officer" of the company[493](index=493&type=chunk) [Disclosure Regarding Foreign Jurisdictions that Prevent Inspections](index=98&type=section&id=Item%209C.%20Disclosure%20Regarding%20Foreign%20Jurisdictions%20that%20Prevent%20Inspections) This item is not applicable to the company - None[496](index=496&type=chunk) Part III [Directors, Executive Officers and Corporate Governance](index=99&type=section&id=Item%2010.%20Directors%2C%20Executive%20Officers%20and%20Corporate%20Governance) Information regarding directors, executive officers, and corporate governance is incorporated by reference from the company's 2023 Proxy Statement - Required information is **incorporated by reference** from the company's 2023 Proxy Statement[499](index=499&type=chunk) [Executive Compensation](index=99&type=section&id=Item%2011.%20Executive%20Compensation) Information regarding executive and director compensation is incorporated by reference from the company's 2023 Proxy Statement - Required information is **incorporated by reference** from the company's 2023 Proxy Statement[501](index=501&type=chunk) [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](index=99&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Stockholder%20Matters) Information regarding security ownership is incorporated by reference from the company's 2023 Proxy Statement - Required information is **incorporated by reference** from the company's 2023 Proxy Statement[502](index=502&type=chunk) [Certain Relationships and Related Transactions and Director Independence](index=99&type=section&id=Item%2013.%20Certain%20Relationships%20and%20Related%20Transactions%20and%20Director%20Independence) Information regarding related transactions and director independence is incorporated by reference from the company's 2023 Proxy Statement - Required information is **incorporated by reference** from the company's 2023 Proxy Statement[503](index=503&type=chunk) [Principal Accountant Fees and Services](index=99&type=section&id=Item%2014.%20Principal%20Accountant%20Fees%20and%20Services) Information regarding principal accountant fees and services is incorporated by reference from the company's 2023 Proxy Statement - Required information is **incorporated by reference** from the company's 2023 Proxy Statement[504](index=504&type=chunk) Part IV [Exhibits, Financial Statement Schedules](index=100&type=section&id=Item%2015.%20Exhibits%2C%20Financial%20Statement%20Schedules) This section lists the financial statements, schedules, and exhibits filed with the Form 10-K, including a schedule for valuation and qualifying accounts **Valuation and Qualifying Accounts (Allowance for Doubtful Accounts, in thousands)** | Year Ended Dec 31 | Beginning Balance | Additions Charged to Costs | Deductions | Ending Balance | | :--- | :--- | :--- | :--- | :--- | | **2022** | $524 | $1,154 | $(278) | $1,400 | | **2021** | $261 | $349 | $(86) | $524 | | **2020** | $764 | $336 | $(839) | $261 | [Form 10-K Summary](index=102&type=section&id=Item%2016.%20Form%2010-K%20Summary) The company reports that there is no Form 10-K summary - None[517](index=517&type=chunk)

Tenable Holdings, Inc. (NASDAQ:TENB) Q4 2022 Earnings Conference Call February 7, 2023 4:30 PM ET Company Participants Erin Karney - VP, IR Amit Yoran - CEO Steve Vintz - CFO Conference Call Participants Joel Fishbein - Truist Brian Essex - JPMorgan Rob Owens - Piper Sandler Justin Donati - Wells Fargo Mike Cikos - Needham & Company Saket Kalia - Barclays Mike Walkley - Canaccord Genuity Jonathan Ho - William Blair Joshua Tilton - Wolfe Research Rudy Kessinger - D.A. Davidson Shebly Seyrafi - FBN Securities ...

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 September 30, 2022 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 specifie ...

Tenable Holdings, Inc. (NASDAQ:TENB) Q3 2022 Earnings Conference Call October 25, 2022 4:30 PM ET Company Participants Erin Karney - Senior Director, Investor Relations Amit Yoran - Chief Executive Officer Steve Vintz - Chief Financial Officer Conference Call Participants Hamza Fodderwala - Morgan Stanley Rob Owens - Piper Sandler Joel Fishbein - Truist Saket Kalia - Barclays Brad Reback - Stifel Mike Cikos - Needham Andrew Nowinski - Wells Fargo Jonathan Ho - William Blair Joshua Tilton - Wolfe Research Ru ...

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, 2022 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 ...

Tenable Holdings, Inc. (NASDAQ:TENB) Q2 2022 Earnings Conference Call July 26, 2022 4:30 PM ET Company Participants Erin Karney - Senior Director, IR Amit Yoran - CEO Steve Vintz - CFO Conference Call Participants Hamza Fodderwala - Morgan Stanley Rob Owens - Piper Sandler Saket Kalia - Barclays Mike Cikos - Needham & Co. Brad Reback - Stifel Brian Essex - Goldman Sachs Jonathan Ho - William Blair Gray Powell - BTIG Joshua Tilton - Wolfe Research Rudy Kessinger - D.A. Davidson Mike Walkley - Canaccord Genui ...

| --- | --- | --- | |----------------------------------------------------------------|-------|-------| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | CYBER EXPOSURE | | | | | | | | MANAGING AND MEASURING CYBER RISK IN THE DIGITAL ERA July 2022 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | --- ...

PART I – FINANCIAL INFORMATION [Item 1. Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) This section presents Tenable Holdings, Inc.'s unaudited consolidated financial statements for Q1 2022, detailing financial position, performance, cash flows, and accounting policies [Consolidated Balance Sheets](index=3&type=section&id=Consolidated%20Balance%20Sheets) Consolidated Balance Sheet Highlights (in thousands) | Metric | March 31, 2022 | December 31, 2021 | | :-------------------------------- | :------------- | :---------------- | | Cash and cash equivalents | $287,455 | $278,000 | | Short-term investments | $238,645 | $234,292 | | Accounts receivable, net | $96,381 | $136,601 | | Total current assets | $722,231 | $749,438 | | Goodwill | $280,574 | $261,614 | | Total assets | $1,237,875 | $1,248,819 | | Deferred revenue (current) | $404,786 | $407,498 | | Total current liabilities | $463,805 | $483,882 | | Term loan, net | $364,063 | $364,728 | | Total liabilities | $1,010,907 | $1,033,506 | | Total stockholders' equity | $226,968 | $215,313 | [Consolidated Statements of Operations](index=4&type=section&id=Consolidated%20Statements%20of%20Operations) Consolidated Statements of Operations Highlights (in thousands, except per share data) | Metric | Three Months Ended March 31, 2022 | Three Months Ended March 31, 2021 | | :-------------------------------- | :-------------------------------- | :-------------------------------- | | Revenue | $159,368 | $123,189 | | Cost of revenue | $34,930 | $22,073 | | Gross profit | $124,438 | $101,116 | | Sales and marketing | $81,570 | $58,635 | | Research and development | $34,290 | $26,838 | | General and administrative | $26,126 | $21,445 | | Total operating expenses | $141,986 | $106,918 | | Loss from operations | $(17,548) | $(5,802) | | Net loss | $(24,506) | $(7,748) | | Net loss per share, basic and diluted | $(0.22) | $(0.07) | [Consolidated Statements of Comprehensive Loss](index=5&type=section&id=Consolidated%20Statements%20of%20Comprehensive%20Loss) Consolidated Statements of Comprehensive Loss (in thousands) | Metric | Three Months Ended March 31, 2022 | Three Months Ended March 31, 2021 | | :-------------------------------- | :-------------------------------- | :-------------------------------- | | Net loss | $(24,506) | $(7,748) | | Unrealized losses on available-for-sale securities | $(1,057) | $(2) | | Other comprehensive loss | $(1,057) | $(2) | | Comprehensive loss | $(25,563) | $(7,750) | [Consolidated Statements of Stockholders' Equity](index=6&type=section&id=Consolidated%20Statements%20of%20Stockholders'%20Equity) Consolidated Statements of Stockholders' Equity Highlights (in thousands) | Metric | Balance at December 31, 2021 | Balance at March 31, 2022 | | :-------------------------------- | :--------------------------- | :------------------------ | | Common Stock (Shares) | 108,929 | 110,287 | | Common Stock (Amount) | $1,089 | $1,103 | | Additional Paid-in Capital | $869,059 | $906,263 | | Accumulated Other Comprehensive Loss | $(306) | $(1,363) | | Accumulated Deficit | $(654,529) | $(679,035) | | Total Stockholders' Equity | $215,313 | $226,968 | - Stock-based compensation contributed **$25.7 million** to additional paid-in capital in Q1 2022, up from **$17.0 million** in Q1 2021[19](index=19&type=chunk) [Consolidated Statements of Cash Flows](index=7&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Consolidated Statements of Cash Flows Highlights (in thousands) | Metric | Three Months Ended March 31, 2022 | Three Months Ended March 31, 2021 | | :-------------------------------- | :-------------------------------- | :-------------------------------- | | Net cash provided by operating activities | $32,862 | $38,625 | | Net cash (used in) provided by investing activities | $(33,486) | $578 | | Net cash provided by financing activities | $10,528 | $12,058 | | Net increase in cash and cash equivalents and restricted cash | $9,455 | $50,193 | | Cash and cash equivalents and restricted cash at end of period | $287,726 | $228,656 | - Net cash used in investing activities significantly increased to **$(33.5) million** in Q1 2022, primarily due to the Cymptom acquisition and increased purchases of short-term investments and property and equipment[22](index=22&type=chunk)[160](index=160&type=chunk) [Notes to Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) [1. Business and Summary of Significant Accounting Policies](index=8&type=section&id=1.%20Business%20and%20Summary%20of%20Significant%20Accounting%20Policies) - Tenable Holdings, Inc. provides Cyber Exposure solutions, offering broad visibility into security issues across IT infrastructure, cloud, Active Directory, and operational technology environments[24](index=24&type=chunk) - The consolidated financial statements are unaudited and prepared in conformity with GAAP, consistent with the 2021 Annual Report on Form 10-K, with no material changes to significant accounting policies during the three months ended March 31, 2022[25](index=25&type=chunk)[26](index=26&type=chunk)[29](index=29&type=chunk) [2. Revenue](index=9&type=section&id=2.%20Revenue) Revenue Disaggregation (in thousands) | Revenue Type | Three Months Ended March 31, 2022 | Three Months Ended March 31, 2021 | | :-------------------------------- | :-------------------------------- | :-------------------------------- | | Subscription revenue | $142,687 | $107,402 | | Perpetual license and maintenance revenue | $12,873 | $12,405 | | Professional services and other revenue | $3,808 | $3,382 | | Total Revenue | $159,368 | $123,189 | - Subscription revenue increased by **33%** year-over-year[143](index=143&type=chunk) - **92%** of revenue was derived through the channel network in both Q1 2022 and Q1 2021, with one distributor accounting for **37%** and **41%** of revenue, respectively[32](index=32&type=chunk) Deferred Commissions Activity (in thousands) | Metric | Three Months Ended March 31, 2022 | Three Months Ended March 31, 2021 | | :-------------------------------- | :-------------------------------- | :-------------------------------- | | Beginning balance | $99,949 | $78,876 | | Capitalization of contract acquisition costs | $10,330 | $7,224 | | Amortization of deferred contract acquisition costs | $(11,016) | $(8,800) | | Ending balance | $99,263 | $77,300 | [3. Cash Equivalents and Short-Term Investments](index=10&type=section&id=3.%20Cash%20Equivalents%20and%20Short-Term%20Investments) Cash Equivalents and Short-Term Investments (in thousands) | Asset Type | Amortized Cost (Mar 31, 2022) | Estimated Fair Value (Mar 31, 2022) | Amortized Cost (Dec 31, 2021) | Estimated Fair Value (Dec 31, 2021) | | :-------------------------------- | :------------------------------ | :---------------------------------- | :------------------------------ | :---------------------------------- | | Money market funds | $156,230 | $156,230 | $178,518 | $178,518 | | Commercial paper | $111,521 | $111,224 | $134,165 | $134,118 | | Corporate bonds | $37,339 | $37,087 | $27,169 | $27,128 | | Asset backed securities | $26,358 | $26,168 | $27,464 | $27,411 | | Certificates of deposit | $20,000 | $19,963 | $10,000 | $9,992 | | Supranational bonds | $8,599 | $8,492 | $8,632 | $8,599 | | U.S. Treasury and agency obligations | $36,191 | $35,711 | $27,168 | $27,044 | | Total short-term investments | $240,008 | $238,645 | $234,598 | $234,292 | - Unrealized losses on short-term investments at March 31, 2022, totaling **$(1,363) thousand**, were primarily due to rising market interest rates and are not believed to represent credit losses[36](index=36&type=chunk) [4. Fair Value Measurements](index=11&type=section&id=4.%20Fair%20Value%20Measurements) - Fair value measurements classify assets into Level 1 (quoted prices in active markets), Level 2 (observable inputs), and Level 3 (unobservable inputs)[39](index=39&type=chunk) Fair Value Measurement of Assets (in thousands) | Asset Type | Level 1 (Mar 31, 2022) | Level 2 (Mar 31, 2022) | Total (Mar 31, 2022) | | :-------------------------------- | :----------------------- | :----------------------- | :------------------- | | Money market funds | $156,230 | — | $156,230 | | Commercial paper | — | $111,224 | $111,224 | | Corporate bonds | — | $37,087 | $37,087 | | Asset backed securities | — | $26,168 | $26,168 | | Certificates of deposit | — | $19,963 | $19,963 | | Supranational bonds | — | $8,492 | $8,492 | | U.S. Treasury and agency obligations | — | $35,711 | $35,711 | | Total cash equivalents | $156,230 | — | $156,230 | | Total short-term investments | — | $238,645 | $238,645 | [5. Property and Equipment, Net](index=12&type=section&id=5.%20Property%20and%20Equipment%2C%20Net) Property and Equipment, Net (in thousands) | Asset Type | March 31, 2022 | December 31, 2021 | | :-------------------------------- | :------------- | :---------------- | | Computer software and equipment | $34,120 | $29,203 | | Furniture and fixtures | $5,851 | $5,944 | | Leasehold improvements | $26,926 | $26,713 | | Right-of-use assets under finance leases | $1,343 | $1,343 | | Total | $68,240 | $63,203 | | Less: accumulated depreciation and amortization | $(28,642) | $(26,370) | | Property and equipment, net | $39,598 | $36,833 | - Depreciation and amortization related to property and equipment increased to **$2.5 million** in Q1 2022 from **$2.2 million** in Q1 2021[41](index=41&type=chunk) [6. Acquisition, Goodwill and Intangible Assets](index=12&type=section&id=6.%20Acquisition%2C%20Goodwill%20and%20Intangible%20Assets) - In February 2022, Tenable acquired Cymptom for **$23.0 million** in cash, net of cash acquired, to enhance its platform with proactive attack path measurement and prioritization capabilities[42](index=42&type=chunk) Cymptom Acquisition Purchase Price Allocation (in thousands) | Allocation Item | Amount | | :-------------------------------- | :----- | | Intangible assets | $4,113 | | Goodwill | $18,960 | | Other liabilities, net | $(113) | | Total purchase price | $22,960 | - Goodwill increased to **$280.6 million** at March 31, 2022, from **$261.6 million** at December 31, 2021, primarily due to the Cymptom acquisition[46](index=46&type=chunk) - Amortization of acquired intangible assets increased significantly to **$2.4 million** in Q1 2022 from **$0.6 million** in Q1 2021[47](index=47&type=chunk) [7. Leases](index=14&type=section&id=7.%20Leases) Operating Lease Information | Metric | March 31, 2022 | December 31, 2021 | | :-------------------------------- | :------------- | :---------------- | | Weighted average remaining lease term | 9.1 years | 9.2 years | | Weighted average discount rate | 5.5% | 5.5% | Maturities of Operating Lease Liabilities at March 31, 2022 (in thousands) | Year Ending December 31, | Amount | | :-------------------------------- | :----- | | 2022 (nine months) | $4,655 | | 2023 | $8,214 | | 2024 | $8,349 | | 2025 | $8,189 | | 2026 | $7,410 | | Thereafter | $37,421 | | Total lease payments | $74,238 | | Less: Imputed interest | $(16,989) | | Total | $57,249 | [8. Debt](index=15&type=section&id=8.%20Debt) - In July 2021, Tenable entered into a Credit Agreement consisting of a **$375.0 million** senior secured term loan facility (Term Loan) and a **$50.0 million** senior secured revolving credit facility (Revolving Credit Facility)[51](index=51&type=chunk)[56](index=56&type=chunk) - The Term Loan bears interest at **2.75%** over LIBOR (subject to a **0.50%** floor) and is amortized at **1%** per annum, with a final payment of **$350.6 million** due July 7, 2028[52](index=52&type=chunk) - At March 31, 2022, Tenable was in compliance with all covenants under the Credit Agreement, with no amounts outstanding under the Revolving Credit Facility[55](index=55&type=chunk) [9. Commitments and Contingencies](index=16&type=section&id=9.%20Commitments%20and%20Contingencies) - Tenable has a **$140.6 million** commitment with Amazon Web Services, Inc. for cloud services from August 2021 through July 2024, having met its commitment for the first year as of March 31, 2022[57](index=57&type=chunk) - As of March 31, 2022, Tenable had **$5.7 million** in standby letters of credit, primarily related to grant agreements and operating leases, collateralized by restricted cash[58](index=58&type=chunk) [10. Stock-Based Compensation](index=16&type=section&id=10.%20Stock-Based%20Compensation) Stock-Based Compensation Expense (in thousands) | Category | Three Months Ended March 31, 2022 | Three Months Ended March 31, 2021 | | :-------------------------------- | :-------------------------------- | :-------------------------------- | | Cost of revenue | $1,513 | $937 | | Sales and marketing | $10,065 | $6,296 | | Research and development | $6,463 | $4,156 | | General and administrative | $7,357 | $5,563 | | Total stock-based compensation expense | $25,398 | $16,952 | - Unrecognized stock-based compensation expense at March 31, 2022, totaled **$311.1 million** for RSUs (**3.2 years** remaining), **$9.1 million** for PSUs (**3.9 years** remaining), **$1.0 million** for stock options (**0.2 years** remaining), and **$10.1 million** for the ESPP (**0.9 years** remaining)[60](index=60&type=chunk)[61](index=61&type=chunk)[62](index=62&type=chunk) [11. Income Taxes](index=18&type=section&id=11.%20Income%20Taxes) - The Q1 2022 income tax provision included **$1.7 million** in foreign income taxes, **$0.8 million** current expense from Israel R&D restructuring, and **$0.7 million** in discrete expense items, partially offset by **$0.4 million** deferred tax benefits from the Alsid acquisition[67](index=67&type=chunk) - The Q1 2021 income tax provision included **$1.1 million** in foreign income taxes and **$2.8 million** current expense from Israel R&D restructuring, partially offset by **$1.2 million** discrete benefits from an India Supreme Court decision and **$1.4 million** other discrete benefits[68](index=68&type=chunk) [12. Net Loss Per Share](index=18&type=section&id=12.%20Net%20Loss%20Per%20Share) Net Loss Per Share (in thousands, except per share data) | Metric | Three Months Ended March 31, 2022 | Three Months Ended March 31, 2021 | | :-------------------------------- | :-------------------------------- | :-------------------------------- | | Net loss | $(24,506) | $(7,748) | | Weighted-average shares used to compute net loss per share, basic and diluted | 109,524 | 104,531 | | Net loss per share, basic and diluted | $(0.22) | $(0.07) | - Potentially dilutive securities, including **8.1 million** RSUs and **6.4 million** stock options at March 31, 2022, were excluded from diluted EPS calculations as they were antidilutive[69](index=69&type=chunk) [13. Geographic Information](index=18&type=section&id=13.%20Geographic%20Information) Revenue by Region (in thousands) | Region | Three Months Ended March 31, 2022 | Three Months Ended March 31, 2021 | | :-------------------------------- | :-------------------------------- | :-------------------------------- | | The Americas | $99,500 | $80,595 | | Europe, Middle East and Africa | $43,139 | $29,266 | | Asia Pacific | $16,729 | $13,328 | | Total Revenue | $159,368 | $123,189 | - Customers in the United States accounted for **56%** of revenue in Q1 2022 (down from **59%** in Q1 2021), with international revenue increasing by **40%** year-over-year[71](index=71&type=chunk)[143](index=143&type=chunk) [14. Subsequent Events](index=19&type=section&id=14.%20Subsequent%20Events) - In April 2022, Tenable agreed to acquire Bit Discovery, a leader in external attack surface management (EASM), for **$44.5 million** in cash, with the acquisition expected to close in Q2 2022[73](index=73&type=chunk) [Item 2. 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 Tenable's financial condition and results for Q1 2022, covering business developments, performance, influencing factors, and liquidity, emphasizing its Cyber Exposure solutions and growth strategies [Overview](index=20&type=section&id=Overview) - Tenable is a leading provider of Cyber Exposure solutions, offering broad visibility into security issues across IT, cloud, DevOps, Active Directory, and Industrial IoT/OT environments[76](index=76&type=chunk)[77](index=77&type=chunk) - Revenue for Q1 2022 was **$159.4 million**, a **29%** year-over-year increase, with recurring revenue representing **95%** of total revenue[81](index=81&type=chunk) - The company reported a net loss of **$24.5 million** in Q1 2022, compared to **$7.7 million** in Q1 2021[81](index=81&type=chunk) - No significant adverse impact from the COVID-19 pandemic was observed on the business as of March 31, 2022[82](index=82&type=chunk) [Factors Affecting Our Performance](index=21&type=section&id=Factors%20Affecting%20Our%20Performance) - Tenable focuses on product leadership through continuous innovation in its enterprise platform offerings and Nessus products to manage and reduce Cyber Exposure[84](index=84&type=chunk)[85](index=85&type=chunk) - Growth strategies include acquiring new enterprise platform customers by expanding the sales organization and leveraging channel partners, and expanding revenue from existing customers through broader coverage and upselling from Nessus Professional[86](index=86&type=chunk)[87](index=87&type=chunk)[88](index=88&type=chunk)[89](index=89&type=chunk) - The dollar-based net expansion rate for the three months ended March 31, 2022, exceeded **110%** on a last twelve months (LTM) basis[92](index=92&type=chunk) - The company plans to continue significant investments in sales and marketing, research and development, and potential acquisitions to drive business growth, which may increase short-term net losses[94](index=94&type=chunk)[95](index=95&type=chunk) [Key Operating and Financial Metrics](index=23&type=section&id=Key%20Operating%20and%20Financial%20Metrics) Calculated Current Billings (in thousands) | Metric | Three Months Ended March 31, 2022 | Three Months Ended March 31, 2021 | | :-------------------------------- | :-------------------------------- | :-------------------------------- | | Revenue | $159,368 | $123,189 | | Add: Deferred revenue (current), end of period | $404,786 | $325,113 | | Less: Deferred revenue (current), beginning of period | $(407,635) | $(328,819) | | Calculated current billings | $156,519 | $119,483 | Free Cash Flow and Unlevered Free Cash Flow (in thousands) | Metric | Three Months Ended March 31, 2022 | Three Months Ended March 31, 2021 | | :-------------------------------- | :-------------------------------- | :-------------------------------- | | Net cash provided by operating activities | $32,862 | $38,625 | | Purchases of property and equipment | $(4,811) | $(1,061) | | Free cash flow | $28,051 | $37,564 | | Cash paid for interest and other financing costs | $4,051 | $71 | | Unlevered free cash flow | $32,102 | $37,635 | Enterprise Platform Customer Growth | Metric | Three Months Ended March 31, 2022 | Three Months Ended March 31, 2021 | Change (%) | | :-------------------------------- | :-------------------------------- | :-------------------------------- | :--------- | | New enterprise platform customers added | 459 | 331 | 39% | Customers with $100,000+ Annual Contract Value | Metric | At March 31, 2022 | At March 31, 2021 | Change (%) | | :-------------------------------- | :---------------- | :---------------- | :--------- | | Number of customers | 1,112 | 866 | 28% | Non-GAAP Income from Operations and Operating Margin (in thousands) | Metric | Three Months Ended March 31, 2022 | Three Months Ended March 31, 2021 | | :-------------------------------- | :-------------------------------- | :-------------------------------- | | Loss from operations (GAAP) | $(17,548) | $(5,802) | | Stock-based compensation | $25,398 | $16,952 | | Acquisition-related expenses | $1,341 | $2,158 | | Costs related to intra-entity asset transfers | $838 | — | | Amortization of acquired intangible assets | $2,427 | $579 | | Non-GAAP income from operations | $12,456 | $13,887 | | Operating margin (GAAP) | (11)% | (5)% | | Non-GAAP operating margin | 8% | 11% | Non-GAAP Net Income and Earnings Per Share (in thousands, except per share amounts) | Metric | Three Months Ended March 31, 2022 | Three Months Ended March 31, 2021 | | :-------------------------------- | :-------------------------------- | :-------------------------------- | | Net loss (GAAP) | $(24,506) | $(7,748) | | Stock-based compensation | $25,398 | $16,952 | | Tax impact of stock-based compensation | $1,066 | $(4) | | Acquisition-related expenses | $1,341 | $2,158 | | Costs related to intra-entity asset transfers | $838 | — | | Amortization of acquired intangible assets | $2,427 | $579 | | Tax impact of acquisitions | $(442) | — | | Tax impact of intra-entity asset transfers | $843 | $2,808 | | Non-GAAP net income | $6,965 | $14,745 | | Net loss per share, diluted (GAAP) | $(0.22) | $(0.07) | | Non-GAAP earnings per share, diluted | $0.06 | $0.13 | [Components of Our Results of Operations](index=27&type=section&id=Components%20of%20Our%20Results%20of%20Operations) - Revenue is primarily generated from subscription arrangements (recognized ratably), perpetual licenses with maintenance (combined performance obligation, recognized over initial term and expected renewal period), and professional services (recognized as performed)[119](index=119&type=chunk)[120](index=120&type=chunk)[121](index=121&type=chunk)[122](index=122&type=chunk) - Cost of revenue includes personnel costs for technical support, cloud infrastructure costs, professional services, depreciation, and amortization of acquired technology[124](index=124&type=chunk) - Operating expenses consist of sales and marketing (largest category, expected to increase in absolute dollars), research and development (expected to increase annually), and general and administrative expenses (expected to increase annually due to public company costs)[128](index=128&type=chunk)[130](index=130&type=chunk)[131](index=131&type=chunk)[132](index=132&type=chunk)[133](index=133&type=chunk)[134](index=134&type=chunk) - Interest expense, net, primarily relates to the senior secured term loan facility, while other expense, net, mainly consists of foreign currency remeasurement and transaction gains/losses[135](index=135&type=chunk)[136](index=136&type=chunk)[137](index=137&type=chunk) - Provision for income taxes includes foreign jurisdiction taxes, R&D restructuring expenses, and discrete expense items, with a full valuation allowance maintained for deferred tax assets[138](index=138&type=chunk)[139](index=139&type=chunk)[140](index=140&type=chunk) [Results of Operations](index=31&type=section&id=Results%20of%20Operations) This section compares Tenable's financial results for Q1 2022 and Q1 2021, detailing revenue, cost of revenue, operating expenses, and other financial items Revenue Growth (in thousands) | Revenue Type | Q1 2022 | Q1 2021 | Change ($) | Change (%) | | :-------------------------------- | :------ | :------ | :--------- | :--------- | | Subscription revenue | $142,687 | $107,402 | $35,285 | 33% | | Perpetual license and maintenance revenue | $12,873 | $12,405 | $468 | 4% | | Professional services and other revenue | $3,808 | $3,382 | $426 | 13% | | Total Revenue | $159,368 | $123,189 | $36,179 | 29% | - U.S. revenue increased by **22%**, while international revenue increased by **40%** year-over-year. Approximately **$1.4 million** of Q1 2022 revenue was due to early termination of contracts in Russia and Belarus[143](index=143&type=chunk) - Cost of revenue increased by **$12.9 million** (**58%**), primarily due to a **$7.9 million** increase in third-party cloud infrastructure costs and a **$1.8 million** increase in amortization of intangible assets[144](index=144&type=chunk)[146](index=146&type=chunk) - Gross margin decreased from **82%** in Q1 2021 to **78%** in Q1 2022[144](index=144&type=chunk) - Sales and marketing expense increased by **$22.9 million** (**39%**), driven by a **$13.6 million** increase in personnel costs (including **$3.8 million** stock-based compensation) and a **$4.5 million** increase in sales commissions[145](index=145&type=chunk)[147](index=147&type=chunk) - Research and development expense increased by **$7.5 million** (**28%**), mainly due to a **$5.6 million** increase in personnel costs (including **$2.3 million** stock-based compensation)[145](index=145&type=chunk)[148](index=148&type=chunk) - General and administrative expense increased by **$4.7 million** (**22%**), primarily from a **$3.3 million** increase in personnel costs (including **$1.8 million** stock-based compensation) and a **$0.8 million** increase in intra-entity asset transfer costs[149](index=149&type=chunk)[154](index=154&type=chunk) - Interest expense, net, increased by **$3.3 million**, primarily due to the Term Loan entered into in July 2021[149](index=149&type=chunk) [Liquidity and Capital Resources](index=33&type=section&id=Liquidity%20and%20Capital%20Resources) This section analyzes Tenable's liquidity position, capital resources, and cash flow management, including funding sources, principal uses of cash, and future capital requirements - At March 31, 2022, Tenable had **$287.5 million** in cash and cash equivalents and **$238.6 million** in short-term investments[150](index=150&type=chunk) - Operations are primarily financed through cash provided by operations and customer prepayments (deferred revenue), which totaled **$527.5 million** at March 31, 2022[151](index=151&type=chunk)[152](index=152&type=chunk) - Principal uses of cash include funding operations, expanding sales/marketing and R&D, infrastructure investments, and acquiring complementary businesses (e.g., Cymptom for **$23.0 million** in Q1 2022, Bit Discovery for **$44.5 million** in Q2 2022)[153](index=153&type=chunk) - The company expects existing cash and investments to be sufficient for at least the next 12 months but may require additional equity or debt financing for future growth and acquisitions[154](index=154&type=chunk)[155](index=155&type=chunk) - The **$375.0 million** Term Loan and **$50.0 million** Revolving Credit Facility (from July 2021) are key components of the capital structure, with the company in compliance with covenants as of March 31, 2022[156](index=156&type=chunk)[157](index=157&type=chunk) [Cash Flows](index=34&type=section&id=Cash%20Flows) This section summarizes Tenable's cash flow activities from operations, investing, and financing for the three months ended March 31, 2022 Summary of Cash Flows (in thousands) | Activity | Three Months Ended March 31, 2022 | Three Months Ended March 31, 2021 | | :-------------------------------- | :-------------------------------- | :-------------------------------- | | Net cash provided by operating activities | $32,862 | $38,625 | | Net cash (used in) provided by investing activities | $(33,486) | $578 | | Net cash provided by financing activities | $10,528 | $12,058 | | Net increase in cash and cash equivalents and restricted cash | $9,455 | $50,193 | - Net cash from investing activities decreased by **$34.1 million**, primarily due to the **$23.0 million** Cymptom acquisition, a **$7.4 million** increase in net purchases of short-term investments, and a **$3.8 million** increase in property and equipment purchases[160](index=160&type=chunk) - Net cash from financing activities decreased by **$1.5 million**, mainly due to a **$1.4 million** decrease in stock option exercise proceeds and a **$0.9 million** term loan principal payment, partially offset by an **$0.8 million** increase from the employee stock purchase plan[161](index=161&type=chunk) [Contractual Obligations](index=35&type=section&id=Contractual%20Obligations) This section addresses Tenable's contractual obligations and commitments, referencing details provided in the notes to the consolidated financial statements - No material changes to contractual obligations and commitments were reported from those disclosed in the 10-K, with details on operating lease payments and AWS cloud service commitments referenced in Notes 7 and 9[162](index=162&type=chunk) [Critical Accounting Policies and Estimates](index=35&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) This section confirms that Tenable's financial statements adhere to U.S. GAAP, with no material changes to critical accounting policies or estimates from the 10-K - Financial statements are prepared in accordance with U.S. GAAP, requiring management estimates and assumptions, with no material changes to critical accounting policies and estimates from the 10-K[163](index=163&type=chunk)[164](index=164&type=chunk) [Recently Issued Accounting Pronouncements](index=35&type=section&id=Recently%20Issued%20Accounting%20Pronouncements) This section refers to Note 1 of the consolidated financial statements for information on recently issued accounting pronouncements, including ASU No. 2020-04 - Information regarding recently issued accounting pronouncements is provided in Note 1 to the consolidated financial statements, specifically mentioning ASU No. 2020-04 - Reference Rate Reform[30](index=30&type=chunk)[165](index=165&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=35&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section outlines Tenable's exposure to market risks, including interest rate, foreign currency exchange, and inflation risks, and assesses their potential impact on the company's financial position and results of operations - Tenable is exposed to interest rate risk from its cash, cash equivalents, short-term investments, and the variable-rate Term Loan. A one percentage point increase in the Term Loan rate would increase 2022 interest expense by **$1.6 million**[167](index=167&type=chunk)[168](index=168&type=chunk) - Foreign currency exchange risk primarily affects operating expenses incurred outside the U.S., but its impact has not been material historically, and the company has not engaged in hedging transactions[170](index=170&type=chunk) - Inflation has not had a material effect on the business, but significant inflationary pressures on costs could adversely affect financial condition[171](index=171&type=chunk) [Item 4. Controls and Procedures](index=36&type=section&id=Item%204.%20Controls%20and%20Procedures) This section confirms the effectiveness of Tenable's disclosure controls and procedures as of March 31, 2022, and reports no material changes in internal control over financial reporting. It also acknowledges the inherent limitations of internal control systems - Management, including the CEO and CFO, concluded that disclosure controls and procedures were effective as of March 31, 2022, providing reasonable assurance that required information is recorded, processed, summarized, and reported timely[172](index=172&type=chunk)[173](index=173&type=chunk) - No changes in internal control over financial reporting were identified during the period that materially affected, or are reasonably likely to materially affect, internal control over financial reporting[174](index=174&type=chunk) - Management acknowledges that internal controls, no matter how well designed, can only provide reasonable, not absolute, assurance of achieving control objectives due to inherent limitations and resource constraints[175](index=175&type=chunk)[176](index=176&type=chunk) PART II – OTHER INFORMATION [Item 1. Legal Proceedings](index=38&type=section&id=Item%201.%20Legal%20Proceedings) This section states that Tenable is not currently involved in any legal proceedings that would materially adversely affect its business. However, it acknowledges the potential for future litigation, particularly concerning intellectual property, and the associated costs and management distractions - Tenable is not currently a party to any legal proceedings that would have a material adverse effect on its business, results of operations, financial condition, or cash flows[178](index=178&type=chunk) - The company may face future claims, including intellectual property infringement, and litigation can have an adverse impact due to defense and settlement costs and diversion of management resources[178](index=178&type=chunk) [Item 1A. Risk Factors](index=38&type=section&id=Item%201A.%20Risk%20Factors) This section details significant risks and uncertainties that could materially and adversely affect Tenable's business, financial condition, and results of operations. These risks span operational, competitive, regulatory, and financial aspects, including market dynamics, technological challenges, legal compliance, and investment-related considerations [Selected Risks Affecting Our Business](index=38&type=section&id=Selected%20Risks%20Affecting%20Our%20Business) This section highlights key operational and financial risks that could impact Tenable's business performance and financial stability - Key risks include a history of losses, intense competition, inability to sustain revenue growth, challenges in scaling the business, dependence on reliability and accuracy of data/solutions, fluctuating quarterly results, reliance on customer renewals and expansion, dependence on third-party network infrastructure, stringent data privacy obligations, and reliance on channel partners[180](index=180&type=chunk) [Risks Related to Our Business and Industry](index=39&type=section&id=Risks%20Related%20to%20Our%20Business%20and%20Industry) This section details specific risks inherent to Tenable's business model and the cybersecurity industry, encompassing competitive pressures, growth sustainability, and operational dependencies - Tenable has a history of net losses (**$24.5 million** in Q1 2022) and may not achieve or maintain profitability due to a highly competitive and evolving market, and increased costs from investments in growth[182](index=182&type=chunk)[183](index=183&type=chunk) - The cybersecurity market is intensely competitive, requiring continuous innovation to address dynamic threats and compete with larger, more established vendors and new market entrants[184](index=184&type=chunk)[189](index=189&type=chunk) - Sustaining revenue growth (**29%** YoY in Q1 2022) is uncertain and depends on customer acquisition, expansion, product enhancements, and effective competition[191](index=191&type=chunk) - The business relies heavily on customer renewals and expansion of IT assets/IP addresses under subscriptions; any decline would harm results[211](index=211&type=chunk)[212](index=212&type=chunk) - Reliance on third-party network infrastructure (e.g., AWS) poses risks of service interruptions, security breaches, and potential liability[214](index=214&type=chunk)[215](index=215&type=chunk)[216](index=216&type=chunk) - Compliance with stringent and changing data privacy and security obligations (e.g., CCPA, GDPR) is critical; non-compliance could lead to regulatory actions, fines, and reputational harm[220](index=220&type=chunk)[221](index=221&type=chunk)[222](index=222&type=chunk)[225](index=225&type=chunk) - The company relies on a two-tiered channel partner network (distributors and resellers) for a substantial amount of revenue (**92%** in Q1 2022), with Ingram Micro, Inc. accounting for **37%** of revenue[226](index=226&type=chunk) - Recent and future acquisitions (e.g., Cymptom, Bit Discovery) involve risks such as integration difficulties, unforeseen liabilities, and diversion of resources[259](index=259&type=chunk)[260](index=260&type=chunk)[261](index=261&type=chunk) - The company may require additional capital for growth and acquisitions, which might not be available on acceptable terms, and its existing debt (Term Loan) imposes restrictive covenants[262](index=262&type=chunk)[265](index=265&type=chunk) [Risks Related to Government Regulation, Data Collection and Intellectual Property](index=57&type=section&id=Risks%20Related%20to%20Government%20Regulation%2C%20Data%20Collection%20and%20Intellectual%20Property) This section addresses risks associated with government regulations, data handling, and intellectual property protection, including compliance, potential infringement claims, and open-source software use - Failure to obtain and maintain required security clearances for employees or facility security clearances could adversely affect the ability to secure and perform U.S. government contracts[276](index=276&type=chunk) - Protecting proprietary technology and intellectual property (**24 issued patents**, **17 pending applications**, trademarks, trade secrets) is crucial; failure to do so could harm the business and operating results[277](index=277&type=chunk)[278](index=278&type=chunk)[279](index=279&type=chunk)[282](index=282&type=chunk) - The company may be subject to costly intellectual property rights claims by third parties, potentially requiring significant damages or limiting the use of certain technologies[283](index=283&type=chunk)[284](index=284&type=chunk)[285](index=285&type=chunk) - Use of open source software in solutions carries risks, including potential infringement claims or requirements to publicly release proprietary source code if license terms are not complied with[286](index=286&type=chunk)[287](index=287&type=chunk) [Risks Related to An Investment in Our Common Stock](index=59&type=section&id=Risks%20Related%20to%20An%20Investment%20in%20Our%20Common%20Stock) This section outlines risks specific to investing in Tenable's common stock, including price volatility, potential dilution from future sales, dividend policy, and anti-takeover provisions - The company's stock price may be volatile due to various factors, including operating results, competitor actions, market speculation, and general economic conditions[288](index=288&type=chunk)[289](index=289&type=chunk)[291](index=291&type=chunk) - Future sales of substantial amounts of common stock by the company or its stockholders could depress the market price and impair the ability to raise capital[293](index=293&type=chunk)[294](index=294&type=chunk) - Tenable does not intend to pay dividends for the foreseeable future, meaning investment returns depend solely on stock price appreciation[295](index=295&type=chunk) - Anti-takeover provisions in charter documents and Delaware law could make an acquisition more difficult and limit stockholders' ability to influence management or the Board of Directors[296](index=296&type=chunk)[297](index=297&type=chunk) [General Risks](index=61&type=section&id=General%20Risks) This section covers broad risks such as compliance with anti-corruption laws, export controls, tax law uncertainties, limitations on NOLs, internal control effectiveness, and geopolitical tensions - Non-compliance with anti-corruption laws (e.g., FCPA, U.K. Bribery Act) in domestic and international operations can lead to criminal/civil liability and harm business/reputation[301](index=301&type=chunk)[302](index=302&type=chunk) - Governmental export/import controls and economic sanctions could impair the ability to conduct international business and result in liability for non-compliance[303](index=303&type=chunk)[304](index=304&type=chunk)[305](index=305&type=chunk) - Uncertainties in tax laws and regulations, including potential changes to income and non-income taxes, could materially affect tax obligations and effective tax rate[306](index=306&type=chunk)[307](index=307&type=chunk) - The ability to use net operating losses (NOLs) to offset future taxable income may be limited by Internal Revenue Code provisions (Section 382) or lack of future taxable income[309](index=309&type=chunk)[310](index=310&type=chunk) - Failure to maintain proper and effective internal controls over financial reporting could adversely affect investor confidence and the common stock value[311](index=311&type=chunk)[313](index=313&type=chunk) - The conflict in Ukraine and other geopolitical tensions could negatively impact the global economy and capital markets, potentially affecting customer budgets and purchasing decisions[272](index=272&type=chunk)[273](index=273&type=chunk)[275](index=275&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=65&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section confirms that there were no unregistered sales of equity securities or any use of proceeds to report during the period - No unregistered sales of equity securities occurred during the period[314](index=314&type=chunk) - No proceeds from unregistered sales of equity securities were used during the period[315](index=315&type=chunk) [Item 6. Exhibits](index=66&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed as part of the Quarterly Report on Form 10-Q, including corporate governance documents, certifications, and XBRL data files - Exhibits include the Amended and Restated Certificate of Incorporation, Amended and Restated Bylaws, Common Stock Certificate, Certifications of Principal Executive and Financial Officers (pursuant to Sections 302 and 906 of Sarbanes-Oxley Act), and Inline XBRL Taxonomy Extension Documents[317](index=317&type=chunk) [Signatures](index=67&type=section&id=Signatures) This section contains the official signatures of the registrant's authorized officers, specifically the Chairman and Chief Executive Officer and the Chief Financial Officer, certifying the accuracy and completeness of the Quarterly Report on Form 10-Q - The report is signed by Amit Yoran, Chairman and Chief Executive Officer, and Stephen A. Vintz, Chief Financial Officer, on May 5, 2022, certifying compliance with Securities Exchange Act requirements[322](index=322&type=chunk)

Financial Data and Key Metrics Changes - Revenue for Q1 2022 was $159.4 million, representing a 29% year-over-year growth, up from 20% growth in Q1 2021 and 26% growth in the previous quarter [32][33] - Calculated current billings (CCB) grew 31% year-over-year to $156.5 million, marking the fourth consecutive quarter of accelerating CCB growth [31][34] - The percentage of recurring revenue was 95%, primarily due to the annual prepaid subscription model [33] Business Line Data and Key Metrics Changes - The exposure platform, Tenable.ep, which now includes cloud and identity security, saw significant traction and is becoming a rapidly growing portion of new sales [22][20] - New enterprise platform customers grew 39% year-over-year, with strong demand in North America and internationally [36] - Upsell from existing customers was substantial, contributing to a net dollar expansion rate notably above historical rates [37] Market Data and Key Metrics Changes - The cybersecurity market is experiencing increased threats, driving a healthy spending environment and a high demand for understanding cyber exposure and risk [12][11] - The company is seeing strong demand in the public sector, which accounts for approximately 15% of revenue, with a healthy spending environment [102] Company Strategy and Development Direction - The company announced an agreement to acquire Bit Discovery, enhancing its capabilities in external attack surface management [16][51] - The strategy focuses on integrating new capabilities into a unified cyber exposure management platform, which includes advanced analytics and attack path analysis [91][108] - The company aims to continue investing in product development and innovation to maintain its market leadership in vulnerability management [15][25] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the continued growth trajectory, citing strong demand and a favorable market environment for cybersecurity solutions [78][96] - The company anticipates a more normalized spending environment for the remainder of the year, reflecting reduced impacts from previous tailwinds [50][115] - Management highlighted the importance of hiring and retaining talent to support growth and innovation [28][26] Other Important Information - The company reported a gross margin of 81% for the quarter, slightly down from 82% in the previous quarter, attributed to increased public cloud costs [38] - The company generated $32.1 million of unlevered free cash flow in Q1, maintaining confidence in its ability to generate attractive cash flow while investing in the business [47] Q&A Session Summary Question: Clarification on Bit Discovery's Contribution - The contribution from Bit Discovery is not included in the CCB guidance [59][60] Question: Update on OT Security Sales Cycles - There has been increased adoption of the OT platform, and sales cycles are starting to shorten [61][62] Question: Sales and Marketing Spending Expectations - Investments in sales and marketing are expected to be weighted towards the first half of the year, with higher operating margins anticipated in the second half [66][68] Question: Composition of the Quarter's Performance - The company added over 400 new enterprise platform customers and saw strong performance across various segments [70][71] Question: Macro Environment Impact on Europe - The company is confident in its performance despite macroeconomic challenges, with strong demand observed [76][78] Question: Hiring Progress for Sales Reps - The hiring rate for quota-carrying sales reps is notably faster than the previous year, contributing to growth [80][81] Question: Demand for Tenable.ep - Tenable.ep is being well received by customers, with strong adoption across various product lines [84][88] Question: Analytics Investment Monetization - The company plans to include analytic capabilities in the platform while also offering some as separate add-ons [91][92] Question: Seasonal Patterns for CCB Guidance - The company expects to follow typical seasonal patterns, with Q4 being the strongest quarter [114][115] Question: Competitive Advantages and Win Rates - The company has seen improvements in win rates, particularly when first in on opportunities [96][97] Question: Developer Security Demand - The company is early in the market for developer security but sees strong momentum in pipeline growth [100][101] Question: Public Sector Opportunities - The public sector remains a healthy spending environment, with many opportunities in the pipeline [102][103] Question: Differentiation in ASM Market - The company believes it is well positioned to disrupt the ASM space with its acquisition of Bit Discovery [108][109]

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, 2021 or ☐ Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Title of each class Trading symbol(s) Name of exchange on which registered Common stock, par value $0.01 per share TENB Nasdaq ...