Tenable(TENB) - 2020 Q1 - Quarterly Report

Financial Performance - Revenue for the three months ended March 31, 2020, was $102.6 million, representing a year-over-year growth of 28% compared to $80.3 million in the same period of 2019[66] - Net loss for the three months ended March 31, 2020, was $23.0 million, compared to a net loss of $21.4 million in the same period of 2019[68] - Calculated current billings for the three months ended March 31, 2020, were $99.2 million, up from $81.2 million in the same period of 2019[86] - Revenue for the three months ended March 31, 2020, was $102,648,000, an increase of 28% compared to $80,301,000 in the same period of 2019[119] - Gross profit for the three months ended March 31, 2020, was $83,947,000, compared to $67,075,000 in 2019[119] - Non-GAAP loss from operations for the three months ended March 31, 2020, was $(7,719,000), an improvement from $(13,215,000) in 2019[96] - Gross profit for the same period was $83.9 million, reflecting a 25% increase from $67.1 million in 2019, with a gross margin of 82%[121] Customer Growth - The number of new enterprise platform customers added in the period was 319, representing a 3% increase from 311 in the prior year[91] - The number of customers with annual contract values of $100,000 and greater increased by 35%, from 494 in 2019 to 665 in 2020[92] - The company is focused on upselling existing Nessus Professional customers to its enterprise platform offerings to drive additional revenue growth[75] Expenses and Investments - Total operating expenses for the three months ended March 31, 2020, were $105,619,000, up from $89,760,000 in the same period of 2019[119] - Stock-based compensation expense increased to $13,035,000 in the three months ended March 31, 2020, from $9,319,000 in 2019[119] - Operating expenses for sales and marketing increased by $7.2 million, primarily due to a $2.7 million rise in third-party cloud infrastructure costs[122] - Research and development expenses rose by $4.9 million, totaling $26.8 million, which is a 22% increase compared to 2019[124] - The company expects to continue investing in its cloud-based platform and customer support team, which may affect future cost of revenue[106] - The company anticipates that its sales and marketing expenses will continue to increase in absolute dollars as it aims to grow revenue and expand its global customer base[111] Cash Flow and Liquidity - Free cash flow is defined as GAAP net cash flows from operating activities reduced by purchases of property and equipment, which is an important liquidity measure[87] - As of March 31, 2020, cash and cash equivalents were $107.8 million, with short-term investments totaling $118.9 million[125] - Net cash provided by operating activities was $4.5 million for the three months ended March 31, 2020, compared to a net cash used of $0.9 million in 2019[138] - The company has maintained a cash and cash equivalents balance of $107.8 million as of March 31, 2020, alongside short-term investments totaling $118.9 million[150] - The company expects capital expenditures related to its new corporate headquarters to be approximately $17.0 million in 2020[131] Deferred Revenue - The company has experienced a significant increase in deferred revenue, which is expected to positively impact calculated current billings in 2020[85] - Deferred revenue stood at $358.1 million, with $270.9 million expected to be recognized as revenue in the next 12 months[130] Market and Economic Conditions - The impact of the COVID-19 pandemic on the company's operations remains uncertain, with potential effects on partners, customers, and service providers[132] - Inflation has not had a material effect on the company's business or financial condition, although significant inflationary pressures could pose risks[153] - A hypothetical 10% change in interest rates would not have had a material impact on the company's financial statements[150] Risk Management - The company focuses on capital preservation, liquidity needs, and fiduciary control of cash and investments, avoiding speculative investments[150] - The company has no long-term debt or financial liabilities with floating interest rates, reducing exposure to interest rate fluctuations[151] - Substantially all sales contracts are denominated in U.S. dollars, with limited exposure to foreign currencies, which mitigates foreign currency exchange risk[152] - The company has not entered into derivative or hedging transactions for foreign currency exchange, as historical impacts have not been material[152] - Operating expenses incurred outside the U.S. are subject to foreign currency fluctuations, particularly with the Euro, British Pound, and Australian dollar[152] - The company may consider entering into hedging transactions in the future if foreign currency exposure becomes more significant[152]