Summary of Tenable's Conference Call Company Overview - **Company**: Tenable - **Industry**: Cybersecurity, specifically focusing on exposure management and vulnerability management Key Points Financial Performance - **Q3 Results**: Exceeded expectations on both revenue and earnings, with an 11% revenue growth [11][5] - **Operating Margin**: Increased by 350 basis points year-over-year despite an 18% increase in R&D spending [13] - **Outlook**: Strong guidance for the full year, indicating positive momentum [11] Product and Market Insights - **Exposure Management Platform**: Significant traction with over 300 new customers added, indicating strong demand for the platform [6][5] - **Average Selling Prices (ASPs)**: Notably higher ASPs for exposure management solutions, reflecting increased customer value [7] - **AI Integration**: Launched AI Exposure to identify vulnerabilities in AI applications, enhancing the platform's capabilities [8] Market Position and Strategy - **Category Creation**: Tenable has established exposure management as a distinct category, gaining recognition from industry analysts [16] - **Market Opportunity**: Gartner identifies exposure management as a major opportunity in cybersecurity, with a shift from reactive to proactive security [17][18] - **Customer Insights**: Organizations face challenges managing data from over 80 different security vendors, creating a need for unified risk management [15] Product Adoption and Growth - **Tenable One**: Represents about one-third of the enterprise business, with expectations for significant growth [22][26] - **Customer Retention**: Higher retention rates for Tenable One compared to other products, indicating stickiness and customer satisfaction [46][40] - **Future Growth**: Anticipated that Tenable One will account for over 60% of new sales in the future [26] Challenges and Considerations - **Public Sector Dynamics**: While Tenable has a strong presence in the U.S. public sector, recent leadership changes and market conditions have made new business transactions more challenging [55] - **Billing Practices**: Shift towards annual billing for multi-year agreements is distorting current metrics, necessitating a reevaluation of how to measure growth [37][38] Future Outlook - **Continued Investment**: Commitment to R&D and potential acquisitions to enhance product offerings and market position [58][59] - **Proactive Security Shift**: The market is moving towards proactive security measures, with expectations that spending on proactive solutions will increase significantly over the next 5-10 years [28] Analyst Recognition - **Industry Validation**: Tenable has been recognized as a leader in exposure management by multiple industry analysts, reinforcing its market position [16][60] Additional Insights - **Vulnerability Landscape**: There are currently 300,000 unique vulnerabilities identified, with over 500 billion instances, highlighting the scale of the cybersecurity challenge [19] - **AI Threats**: The rise of AI is leading to more vulnerabilities and necessitating a shift in security strategies [20] This summary encapsulates the key insights and strategic direction of Tenable as discussed in the conference call, highlighting both opportunities and challenges in the cybersecurity landscape.

Group 1 - Cyber attacks are on the rise, making sophisticated cybersecurity solutions essential for protection [1] - Tenable, with a market capitalization of $3.5 billion, is smaller than industry leaders but has a significant addressable market and has increased its 2025 revenue forecast, indicating business momentum [2] - Tenable stock is currently 52% below its record high from 2022, presenting a potential buying opportunity [2] Group 2 - Tenable's Nessus platform is widely deployed for vulnerability management, scanning systems and networks for weaknesses [4] - Nessus has over 2 million users, providing a large customer base for cross-selling additional products [5] - Tenable has developed a suite of cybersecurity solutions to protect identities, manage assets, and secure cloud networks [5] Group 3 - Tenable One is a comprehensive exposure management platform that aggregates various products, including AI-powered solutions [6] - The ExposureAI feature within Tenable One identifies potential attack paths and assists cybersecurity managers in threat mitigation [6] - Tenable One accounted for 40% of new business in the third quarter, highlighting its role in customer acquisition [7] Group 4 - Tenable specializes in exposure management within the cybersecurity industry and offers a platform that combines its best products [8] - The stock trades at a significant discount compared to peers, indicating potential investment opportunities [8]

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 Performance - Q2 2025 revenue reached $247.3 million[11], with a 12% revenue growth[11] - Q2 2025 unlevered free cash flow was $44.3 million[11] - Q2 2025 non-GAAP gross margin was 82%[11] - Q2 2025 recurring revenue was 96%[11] - The forecast for FY 2025 revenue is $981.0 million to $987.0 million[54] - The forecast for FY 2025 unlevered free cash flow is $265.0 million to $275.0 million[54] Market Position and Opportunity - The company has approximately 44,000 customers[11] - The company is the 1 market share leader in Vulnerability Management[11] - Exposure Management is estimated to be a $50 billion market opportunity[27] - The Exposure Management market is expected to have a 20% CAGR from 2025-2027[28] Product and Strategy - The company aggregates 1.5 billion assets[25], normalizes 100+ 3rd party integrations[25], and classifies 150 billion exposures[25]

Financial Performance - Q1 2025 revenue reached $239.1 million[12] - Q1 2025 unlevered free cash flow was $86.8 million[12] - Q1 2025 non-GAAP gross margin was 82%[12] - Q1 2025 recurring revenue was 96%[12] - The company forecasts revenue between $970 million and $980 million for the full year 2025[52] - The company forecasts unlevered free cash flow between $265 million and $275 million for the full year 2025[52] Market Position and Growth - The company is a category leader in Exposure Management[11] - The company has approximately 44,000 customers[12] - The company is ranked 1 in market share in Vulnerability Management[12, 23] - The total addressable market for cyber exposure is estimated at $33 billion with an 18% CAGR[29]