Financial Data and Key Metrics Changes - Rapid7 ended Q3 2025 with $838 million in ARR, a 2% year-over-year growth, with revenue for the quarter at $218 million, also reflecting a 2% year-over-year increase [5][24] - Operating income was $37 million, exceeding guidance, and free cash flow generated in the quarter was $30 million, bringing year-to-date free cash flow to $98 million [5][25] - Product subscription revenue grew 2% year-over-year to $210 million, while professional services revenue continued to decline [24] Business Line Data and Key Metrics Changes - The Managed Detection and Response (MDR) business, which constitutes over half of ARR, continues to grow at double digits [6][19] - ARR per customer increased by 2%, with an average ARR per customer of over $72,000 [24] - International revenue represented 25% of total revenue and grew 8% year-over-year [24] Market Data and Key Metrics Changes - The customer spending environment remains challenged, particularly in large deals, but there are promising signs for future growth in detection and response [23] - The demand for integrated exposure and detection programs is growing, driven by regulatory pressures for compliance and reporting [15] Company Strategy and Development Direction - Rapid7 is focusing on enhancing its AI-powered security operations platform, integrating exposure management and threat detection to improve customer outcomes [9][18] - The company is making significant organizational changes, including new leadership appointments, to accelerate growth and improve operational alignment [6][20] - The strategy includes expanding partnerships, such as with Microsoft, to enhance managed detection and response capabilities [12][56] Management's Comments on Operating Environment and Future Outlook - Management acknowledges falling short of ARR guidance and is taking actions to rebuild confidence with the investment community [8] - The company is optimistic about its roadmap and strategy, despite longer deal cycles due to platform consolidation opportunities [10][18] - The outlook for Q4 includes a flat ARR quarter-over-quarter, with tightened full-year revenue guidance of $856-$858 million, representing 1%-2% growth [26][27] Other Important Information - The company is transitioning its traditional VM customer base to an integrated exposure management model through Exposure Command [19] - The new Chief Financial Officer, Rafe Brown, is expected to drive operational excellence and scale growth in SaaS businesses [20][48] Q&A Session Summary Question: Economic model of MDR and margin dynamics - Management indicated that MDR operates at higher gross margins than average MDR companies due to investments in automation and AI capabilities [31][32] Question: International vs. domestic growth rates - International revenue is growing faster than the overall business, with a focus on aligning sales processes across regions [33] Question: Pricing pressure in the MDR business - Despite flat ARR per customer growth, management believes they can continue to grow the MDR business profitably and effectively [35][36] Question: Large deal pipeline and Q4 outlook - Management is confident in the large deal pipeline but acknowledges variability in timing and conversion rates [41][42] Question: Leadership changes and priorities for Rafe Brown - Rafe Brown is expected to enhance operational acumen and drive growth through effective pricing and packaging strategies [47][48] Question: Value of traditional VM to SIEM MDR - Management is transitioning from traditional on-premise workloads to more strategic, value-added services, focusing on managed detection and response [51][53] Question: Expectations from Microsoft partnership - The partnership is expected to grow through technology integration and potential go-to-market collaboration [56] Question: Visibility around pipeline and close rates - Management is working on standardizing processes to improve visibility and accuracy in managing larger deal cycles [58] Question: Exposure Command's performance and customer engagement - Exposure Command is showing larger deal sizes and longer deal cycles, with a focus on upgrading existing customers [61][62]

Financial Data and Key Metrics Changes - Revenue for Q3 2025 was $252.4 million, representing an 11.2% year-over-year growth [20] - Non-GAAP gross margin was 81.6%, an increase from 81.4% in Q3 2024 [21] - Non-GAAP income from operations was $58.9 million, or 23.3% of revenue, compared to $45 million, or 19.8% of revenue in Q3 2024 [21] - Non-GAAP earnings per share for the quarter was $0.42, an increase of 31.3% from $0.32 in Q3 2024 [22] - Cash and short-term investments totaled $383.6 million, with unleveraged free cash flow of $58.5 million for the quarter [22][23] Business Line Data and Key Metrics Changes - Tenable One, the exposure management platform, represented approximately 40% of new business during the quarter [7] - 437 new enterprise platform customers were added, a 13% increase compared to Q3 2024 [7] - The percentage of recurring revenue remained high at 95% [20] Market Data and Key Metrics Changes - Tenable was recognized as a leader in exposure management by Forrester and IDC during Q3 [13] - The company reported a net dollar expansion rate of 106% [21] Company Strategy and Development Direction - The company is focusing on a shift from reactive to preemptive security, driven by advancements in AI [8][9] - Significant investments in R&D, up over 20% year-to-date, are aimed at enhancing Tenable One [10] - The company is building a comprehensive exposure management platform that integrates various security tools and data sources [11][12] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the pipeline and renewal business, indicating minimal exposure to potential government shutdown impacts [31][38] - The company raised its full-year guidance for calculated current billings and revenue, reflecting confidence in sustained growth [24][25] Other Important Information - The company repurchased 2 million shares for $60 million during the quarter, totaling 8.3 million shares repurchased for $300 million since November 2023 [23] - The company launched Tenable AI Exposure to help organizations manage risks associated with generative AI [10] Q&A Session Summary Question: Performance in U.S. Federal vertical - Management noted strong performance in the public sector and U.S. Federal, in line with expectations despite potential shutdowns [31] Question: Impact of CISA 2015 expiration on CVE reporting - Management does not anticipate significant negative impacts from the expiration based on current feedback [39] Question: Changes to guidance philosophy - Management indicated no substantial changes to guidance philosophy, emphasizing a high-functioning team [45] Question: Billings guidance and visibility - Management expressed increased positivity about the year due to strong Q3 performance and visibility into Q4 [47] Question: AI innovation roadmap - Management is considering both organic growth and M&A for AI innovations, focusing on proactive security [74] Question: Percentage of customers on Tenable One - Approximately 3,000 out of 18,000 enterprise customers are using Tenable One, with significant upsell opportunities [64] Question: Demand environment across markets - Demand was consistent across various sectors, with strong performance in new customer acquisitions [92] Question: Multi-cloud support and cloud security performance - Management noted active discussions regarding multi-cloud support and expressed optimism about cloud business growth [99]

Financial Data and Key Metrics Changes - In Q3 2025, the company reported revenue of $252.4 million, reflecting an 11.2% year-over-year growth [20] - Non-GAAP gross margin increased to 81.6% from 81.4% in Q3 2024 [21] - Non-GAAP income from operations was $58.9 million, or 23.3% of revenue, compared to $45 million, or 19.8% of revenue in Q3 2024 [22] - Non-GAAP earnings per share for the quarter was $0.42, up 31.3% from $0.32 in Q3 2024 [22] - Cash and short-term investments totaled $383.6 million, with unleveraged free cash flow of $58.5 million for the quarter [23][24] Business Line Data and Key Metrics Changes - Tenable One, the exposure management platform, represented approximately 40% of new business during the quarter [6] - The company added 437 new enterprise platform customers, a 13% increase compared to Q3 2024 [6] - The percentage of recurring revenue remained high at 95% [20] Market Data and Key Metrics Changes - The company was recognized as a leader in exposure management by Forrester and IDC during Q3 [13] - IDC reported that Tenable ranked number one in its latest market share report [13] Company Strategy and Development Direction - The company is focusing on a shift from reactive cybersecurity to a more preventative and preemptive approach, driven by AI advancements [7][8] - Significant investments in R&D, with over 20% increase year-to-date, are aimed at enhancing Tenable One [10] - The company is building a comprehensive exposure management platform that integrates various security tools and data sources [11][12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the pipeline and renewal business, indicating minimal exposure to potential government shutdown impacts [31][35] - The company raised its full-year guidance for calculated current billings and revenue, reflecting optimism for continued growth [25][26] Other Important Information - The company repurchased 2 million shares for $60 million during the quarter, totaling 8.3 million shares repurchased for $300 million since November 2023 [24] - The company launched Tenable AI Exposure to help organizations manage risks associated with generative AI [10] Q&A Session Summary Question: Performance in U.S. Federal vertical - Management noted strong performance in the public sector and U.S. Federal, aligning with expectations despite seasonal challenges [31] Question: Impact of government shutdowns on Q4 - Management indicated minimal exposure to potential shutdown impacts, with strong renewal business and a positive pipeline outlook [35] Question: Changes in guidance philosophy - Management confirmed no substantial changes to guidance philosophy, emphasizing a high-functioning team and focus on key metrics [40] Question: Billings guidance and visibility - Management expressed increased confidence in year-end visibility, leading to a slight upward adjustment in guidance [41] Question: AI innovation roadmap - Management indicated a dual approach of organic growth and potential M&A to enhance AI capabilities in response to evolving threats [64] Question: Contribution of integrations to deal velocity - Management highlighted that over 300 validated integrations enhance deal velocity and customer insights, supporting unified visibility [91]

Business Overview - Tenable offers a unique approach to a secular growth opportunity in Exposure Management[10] - The company's platform unifies data across network, cloud, Identity, OT, and DevOps environments[10] - AI-driven analytics are used for prioritization and benchmarking[10] - Tenable One is designed to be a comprehensive Exposure Management Platform[17] Market Opportunity & Competitive Position - Exposure Management represents a $50 billion market opportunity[25] - Tenable holds the 1 market share at 26.6% in the Worldwide Device Vulnerability and Exposure Management market[29] Financial Performance - Q3 2025 revenue reached $252.4 million, reflecting 11% year-over-year growth[35] - Calculated Current Billings (CCB) for Q3 2025 were $267.5 million, an 8% year-over-year increase[35] - Short-Term Remaining Performance Obligations (RPO) grew to $669 million, a 13% year-over-year increase[35] - The company anticipates full year 2025 revenue between $988 million and $992 million[54] - The company anticipates full year 2025 Calculated Current Billings between $1.040 billion and $1.048 billion[54]

Financial Results Announcement - Tenable Holdings, Inc. will release its financial results for the third quarter ended September 30, 2025, after the U.S. market close on October 29, 2025 [1] - A conference call will be held on the same day at 4:30 p.m. ET to discuss the results [1] Webcast and Dial-in Information - A live webcast of the conference call will be available on the Tenable Investor Relations website [2] - Domestic dial-in number is 1-877-407-9716 and international dial-in number is 1-201-493-6779 [2] - An archived replay of the call will be available following the event [2] Company Overview - Tenable is an exposure management company focused on closing cybersecurity gaps that affect business value, reputation, and trust [3] - The company offers an AI-powered exposure management platform that integrates security visibility, insight, and action across various attack surfaces [3] - Tenable serves approximately 44,000 customers globally, helping to reduce business risk associated with security exposure [3]

Core Insights - Tenable has been ranked first in worldwide market share for exposure management in the IDC report for 2024, marking seven consecutive years of market share leadership [1][4][6] - The company attributes its success to early adoption of exposure management concepts, a strong partner ecosystem, and a channel-first strategy [2][4] - The Tenable One platform integrates data from over 300 security tools, providing a unified, AI-powered view of exposures across various attack surfaces [3][4] Company Developments - Tenable recently acquired Apex Security to enhance its AI capabilities, launching Tenable AI Exposure to improve visibility into AI usage and associated risks [5] - The IDC report emphasizes that exposure management offers a more comprehensive view than traditional vulnerability management, focusing on the fusion of multiple exposure sources [6] - Tenable was also recognized as a Leader in the IDC MarketScape: Worldwide Exposure Management 2025 Vendor Assessment [6]

Group 1 - Tenable Holdings, Inc. is recognized as a strong cybersecurity stock, with Stifel maintaining a 'Hold' rating and a price target of $35 following discussions with Co-CEO Steve Vintz [1][2] - The company has a gross profit margin of 78% and aims to increase this margin through its Tenable One and Cloud Security offerings, which are expected to enhance revenue growth currently at 11.4% over the last 12 months [2][4] - Stifel is focusing on developing a preemptive exposure management platform that integrates visibility, insight, and action, while also anticipating growth in operational technology and cybersecurity sectors [3][4] Group 2 - Tenable Holdings operates as an Exposure Management company, providing organizations with insights into their cyber risk by analyzing their attack surfaces, including IT infrastructure and cloud environments [4]

Core Insights - Rapid7, Inc. has been recognized as a Leader in the IDC MarketScape: Worldwide Exposure Management 2025 Vendor Assessment, highlighting its strong position in the threat detection and exposure management market [1][7] Company Overview - Rapid7 is focused on creating a safer digital world by simplifying cybersecurity and making it more accessible, serving over 11,000 global customers [6] - The company offers a comprehensive security solution that integrates cloud risk management with threat detection and response [6] Product Highlights - The Command Platform, an AI-powered security operations platform, is central to Rapid7's offerings, providing unified solutions for exposure management and threat detection [2][3] - Exposure Command enables organizations to detect and prioritize exposures across hybrid environments, offering full visibility into their attack surface and risk-based vulnerability prioritization [3][4] Market Positioning - The IDC MarketScape report emphasizes the importance of prioritization for security teams, noting that Rapid7 connects visibility, asset classification, and prioritization effectively [4][7] - Rapid7's capabilities include a normalized view of the attack surface, real-world risk prioritization, accelerated remediation, and scalability to complex environments [7]

Company Overview - Tenable has been recognized as a Leader in the IDC MarketScape: Worldwide Exposure Management 2025 Vendor Assessment, highlighting its strong position in the exposure management sector [1] - The company's flagship platform, Tenable One, is noted for its ability to unify visibility, insight, and action across various attack surfaces, including IT, cloud, AI, identity, and operational technology [2][3] Product Features - Tenable One offers over 300 integrations, making it the most interconnected exposure management platform available [2] - The platform provides a complete, contextualized view of risk and advanced prioritization, enabling organizations to focus on critical areas [2][3] - Tenable's AI-driven analytics enhance risk prioritization and accelerate response times, with features like generative AI for remediation guidance and attack path generation [3][6] Market Insights - The IDC MarketScape emphasizes the need for proactive cybersecurity solutions that offer comprehensive attack surface visibility and risk prioritization [3] - Organizations are encouraged to consider Tenable One for its ability to consolidate siloed risk data and integrate both Tenable-native and third-party data sources [3] - The report highlights the importance of addressing security silos as attack surfaces expand, particularly with the rise of AI [3] Recent Developments - Tenable has introduced Tenable AI Exposure, a solution designed to manage risks associated with generative AI, which is integrated into Tenable One [3] - The company has also enhanced its Vulnerability Priority Rating (VPR) using generative AI to improve precision in identifying significant risks [3]

Financial Data and Key Metrics Changes - In Q2 2025, the company achieved a revenue of $247.3 million, reflecting a 12% year-over-year growth and exceeding the midpoint of the guided range by $5.3 million [28][29] - The operating margin for the quarter was 19%, which is approximately 100 basis points better than the midpoint of the guided range [31] - The net dollar expansion rate was 107% for the quarter, indicating strong customer retention and upsell [27][66] Business Line Data and Key Metrics Changes - The exposure management platform, Tenable One, accounted for 40% of total new sales in the quarter, highlighting its growing adoption [7][27] - The company added 367 new enterprise platform customers and 76 net new six-figure customers during the quarter [27][66] - Current RPO (Remaining Performance Obligations) grew 12% year-over-year, reflecting increasing momentum with Tenable One [27] Market Data and Key Metrics Changes - The public sector showed better-than-expected performance, particularly in the SLED (State, Local, Education) business, driven by strong platform sales [9][10] - The company noted a positive outlook for the U.S. Federal market, with improved visibility into the renewal base despite a cautious spending environment [10][41] Company Strategy and Development Direction - The company is focusing on expanding its AI capabilities and integrating them into the Tenable One platform, particularly following the acquisition of Apex Security [26][75] - The strategic emphasis is on preemptive security, which involves reducing risk before breaches occur, rather than just responding after an attack [10][17] - The company aims to unify visibility, insights, and actions across various asset types, enhancing its competitive edge in the exposure management space [58][60] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to drive momentum and growth, particularly with the Tenable One platform [41][66] - The outlook for Q3 and the full year 2025 has been raised, reflecting improved visibility and performance in the federal market [34][35] - The company anticipates continued strong demand for its exposure management solutions as organizations modernize their security strategies [25][26] Other Important Information - The company reported a gross margin of 82% for the quarter, which is flat compared to the previous quarter [29] - The company has a strong cash position with $387 million in cash and short-term investments, providing flexibility for future investments and share repurchases [32][33] Q&A Session Summary Question: Comparison of current quarter with previous expectations - Management noted improved visibility in the federal business and a strong pipeline, leading to an upward revision of guidance [41][42] Question: Expectations for Tenable One penetration - The company highlighted that exposure solutions represent over 20% of total sales, with significant growth potential in the platform [45][46] Question: Competitive landscape in exposure management - Management emphasized Tenable One's hybrid capabilities and unified platform as key differentiators against traditional VM players [56][60] Question: Larger deal sizes and their sources - The company indicated that larger deals are coming from both new logos and existing customers, with a strong focus on the Tenable One platform [66][67] Question: Strategy for securing generative AI in enterprises - The acquisition of Apex is expected to enhance the company's AI capabilities, providing customers with better governance and security for AI resources [72][75] Question: Adoption metrics for AI solutions - Over 6,000 customers are using AI aware to detect shadow AI applications, with the capabilities from Apex being integrated into the Tenable One platform [83][84] Question: Performance of specific products and verticals - The company reported strong performance in exposure management and noted that the VM market met expectations without significant outperformance [88][91] Question: Opportunities in OT and hybrid environments - Management highlighted growth in sectors like data centers and manufacturing, where customers are seeking unified exposure management solutions [97][98]