Core Insights - Tenable Holdings, Inc. is recognized as a promising AI stock for investment in 2026, with Wells Fargo initiating coverage with an Equal Weight rating and a price target of $13 [1] - The company holds a significant 27% market share in vulnerability management, bolstered by its Nessus product, which has established its competitive position [1] - Wells Fargo highlights the vulnerability management market as relatively small and penetrated, with a focus on greater value creation at the runtime layer [2] Company Position and Market Dynamics - Tenable is positioned as an AI-powered cybersecurity firm specializing in exposure management, with around 44,000 organizations globally relying on its platform to manage cyber risk [4] - In a CIO survey conducted by Wells Fargo, vulnerability management and endpoint management were ranked as the seventh strategic spending priority, with Tenable being recognized as the 12th most strategic security vendor [2] - Competitive pressures are noted, particularly from larger consolidators with more strategic core businesses, which may impact Tenable's market position [2][3] Product and Future Outlook - Tenable One is identified as a promising product despite the competitive landscape, indicating potential for future growth [3] - The overall sentiment from Wells Fargo suggests that while Tenable has investment potential, other AI stocks may present greater upside with less downside risk [5]

Core Insights - The company has successfully pivoted towards Tenable One and exposure management, recognizing it as a larger opportunity compared to traditional vulnerability management [1] - The company has historically excelled in discovering and assessing network-based devices, and has expanded its core use case into other domains, including operational technology (OT) capabilities [1] - The company has broadened its focus to include cloud security, addressing misconfigurations, identity security, and web application scanning, as well as assessing the AI attack surface, which is a significant threat vector in security [2]

Summary of Tenable's Conference Call Company Overview - **Company**: Tenable - **Industry**: Cybersecurity - **Key Executives**: Steve Vintz (Co-CEO), Matt Brown (CFO) Core Points and Arguments Transition to Exposure Management - Tenable has pivoted towards **Tenable One** and exposure management, recognizing it as a larger opportunity compared to traditional vulnerability management (VM) [2][3] - The company has expanded its core use case from network-based devices to include operational technology (OT), cloud misconfigurations, identity security, and web application scanning [2][3] Importance of Open Platforms - A successful exposure management platform must integrate data from various security companies, with Tenable having over **300 connectors** [3][6] - The goal is to correlate risks and prioritize remediation efforts for customers, enhancing their ability to manage security risks effectively [5][6] Growth in Average Selling Prices (ASPs) - Transitioning to the Tenable One platform has resulted in ASPs being **30%-80% higher** compared to standalone VM offerings [8] - The platform now accounts for approximately **40% of new sales**, indicating increased strategic relevance to customers [8][11] Shift Towards Proactive Security - The industry is moving from reactive security (detect and respond) to proactive security (risk reduction), which is expected to drive increased spending in exposure management [9][10] - Tenable aims to help customers reduce risk through orchestrated remediation and bulk configuration changes in multi-cloud environments [5][6] AI and Cybersecurity - Tenable sees AI as an opportunity to enhance its offerings, particularly in discovering **Shadow AI applications** and monitoring sensitive information input into AI models [16][17] - The company is positioned to help customers understand and mitigate risks associated with AI, which is becoming a board-level concern [18][52] Customer Engagement and Retention - Tenable has seen an increase in large multi-year strategic transactions, leading to lower churn rates among platform customers [11][12] - The company is focused on customer-friendly pricing and packaging to encourage platform adoption without forcing upgrades [35][36] Integration and Market Position - Tenable's integration capabilities are crucial in a fragmented cybersecurity market, allowing for better visibility and risk reduction [36][38] - The company has experienced a **35%-40% increase** in long-term remaining performance obligations (RPO), indicating customers are making larger upfront commitments [39] Federal Market Insights - The federal sector is expected to grow in line with overall company growth, with potential for gaining market share [44][46] Financial Performance and Guidance - Tenable reported a **10.5% year-over-year growth** and guided for **7% growth** in fiscal 2027 [47][48] - The company is investing heavily in R&D while expanding operating margins, with a projected **150 basis points** increase in operating margin by 2026 [77][78] Capital Allocation Strategy - Tenable has increased its share repurchase authorization to **$340 million**, indicating a belief that shares are undervalued [87][89] - The company will balance buybacks with organic investments and opportunistic M&A [92] Additional Important Insights - The sales cycle for Tenable One has shortened, with a notable **seven-figure deal** related to AI exposure management [52][53] - The company is focused on creating opportunities and increasing customer engagement through its platform-first approach [40][63] This summary encapsulates the key points discussed during the conference call, highlighting Tenable's strategic direction, market positioning, and financial outlook.

Core Insights - Tenable Holdings, Inc. has been recognized as a leader in AI-powered exposure assessment by Gartner in its 2025 AI Vendor Race, highlighting its strong position in the cybersecurity market [1][2]. Company Overview - Tenable is identified as an exposure management company that focuses on closing cybersecurity gaps that can undermine business value, reputation, and trust [6]. - The company serves over 40,000 customers globally, providing a platform that unifies security visibility, insight, and action across various attack surfaces [6]. AI and Exposure Management - Tenable's recognition is attributed to its effective use of AI in enhancing vulnerability assessment, asset discovery, and attack surface analysis [2]. - The company employs AI to aggregate and normalize data related to assets, exposures, and threats, which aids in proactive defense strategies [2][3]. - Tenable One, the company's exposure management platform, integrates discovery, protection, and governance for AI across enterprises, including SaaS platforms and cloud services [3]. Strategic Positioning - Gartner notes that Tenable is positioning its platform as a comprehensive source for all exposure data, which will improve risk assessment and remediation workflows [3]. - The company emphasizes the importance of mastering both defensive AI capabilities and securing AI from threats, positioning itself as a leader in both areas [3].

Core Insights - Tenable is a cybersecurity company focused on exposure management, providing tools to help enterprises patch vulnerabilities before exploitation [1] - With a market capitalization of $2.5 billion, Tenable is significantly smaller than competitors like CrowdStrike and Palo Alto Networks, which are valued around $100 billion [2] - Analysts are optimistic about Tenable, with a consensus rating of "buy" and a price target indicating potential upside [3] Company Overview - Tenable owns Nessus, a widely adopted vulnerability management solution that scans for vulnerabilities in operating systems, networks, and devices [4] - In 2022, Tenable launched Tenable One, a comprehensive exposure management solution that integrates AI to enhance vulnerability identification [5] Financial Performance - In Q4 2025, Tenable One contributed to 46% of new business, indicating strong demand for AI-powered cybersecurity solutions [6] - Tenable achieved a record revenue of $999.4 million in 2025, an 11% increase from the previous year, surpassing management's guidance [7]

Core Insights - Tenable Holdings, Inc. (NASDAQ:TENB) is recognized as one of the 14 oversold value stocks to consider for investment [1] - The company reported strong fourth-quarter and full-year results, highlighting the continued adoption of Tenable One and AI-driven security solutions [2] Financial Performance - In Q4, Tenable recorded a revenue growth of 11% year-over-year (YoY) to $260.50 million, with current billings increasing by 8% to $327.80 million [3] - The non-GAAP net income for Q4 rose 13% YoY to $57.30 million, although the company reported a GAAP net loss of $0.70 million [3] - For the full year 2025, Tenable achieved revenue of $999.4 million, also up 11% YoY, with non-GAAP net income at $194.40 million and unlevered free cash flow growing to $277.00 million [4] Shareholder Returns and Guidance - During Q4, Tenable added 502 enterprise customers and expanded its share repurchase program by $150 million [3] - For 2026, the company expects revenue to be between $1.065 billion and $1.075 billion, with non-GAAP EPS projected in the range of $1.81 to $1.90 [5] - Management's optimism is based on strong platform adoption, AI integration, and operational efficiency [5] Business Focus - Tenable specializes in developing cybersecurity solutions, with a portfolio that includes tenable.io, tenable.sc, and Nessus Professional, serving various sectors such as finance, healthcare, energy, cloud, and retail [5]

Core Thesis - Tenable Holdings, Inc. (TENB) is positioned as a leader in proactive cybersecurity, focusing on comprehensive exposure management rather than reactive breach detection [3][4] Company Overview - TENB's share price was $22.47 as of January 28th, with a forward P/E ratio of 13.00 [1] - The company serves 44,000 customers, including approximately 65% of the Fortune 500, with no single customer contributing more than 2% of revenue [4] Product and Market Position - The flagship platform, Tenable One, consolidates various security tools, providing a unified view of the digital attack surface across on-premises IT, cloud applications, operational technology, and remote devices [3][4] - This holistic approach enables companies to prioritize and address critical risks proactively, reflecting a shift in the cybersecurity industry where less than 5% of global spending is currently allocated to preemptive measures [4] Financial Performance - TENB is profitable on a GAAP basis and generates positive free cash flow while investing heavily in R&D to enhance Tenable One's capabilities in AI, cloud, and exposure management technologies [5] - The company has engaged in strategic acquisitions to bolster platform functionality and market position, including Bit Discovery, Ermetic, Eureka Security, Vulcan Cyber, and Apex Security [5] Strategic Initiatives - TENB has returned capital to shareholders through significant buybacks and has aligned management incentives with performance-linked equity [5] - Rumors of a potential sale have emerged, supported by increased professional fees and management's preparation for strategic options [6] Investment Catalysts - TENB's strong market position, deep ties to U.S. federal and public sector clients, and disciplined capital allocation present multiple catalysts for investment, including organic growth, strategic M&A, and potential acquisition upside [6]

Core Insights - The company reported strong demand driven by AI-related security risks, with executives noting that AI is a common topic in customer discussions and highlighting the need for a platform approach to address security gaps [1][4][6] Financial Performance - In Q4, the company achieved revenue of $260.5 million, reflecting a 10.5% year-over-year increase, and an 11% revenue growth for the full year [3][4] - The operating margin for Q4 was reported at 24%, with a non-GAAP gross margin of 82.7%, up from 81.7% a year ago [5][12] - Non-GAAP EPS for Q4 was $0.48, an increase from $0.41, attributed to higher profitability and fewer diluted shares outstanding [13] Customer Growth and Platform Adoption - The company added over 500 new enterprise platform customers in the quarter, with Tenable One accounting for 46% of new business in Q4, marking a record high [2][6] - Management emphasized the importance of Tenable One in consolidating fragmented solutions and addressing customer needs for comprehensive risk management [11][19] Strategic Initiatives - The company is focusing on AI exposure management, having closed significant deals, including a seven-figure contract with a major telecom [6][18] - A departmental realignment was initiated to enhance innovation in Tenable One and AI security, resulting in restructuring expenses [17] Future Outlook - For 2026, the company guided revenue between $1.065 billion and $1.075 billion, marking the first time revenue is expected to surpass $1 billion [14] - The company also projected unlevered free cash flow of $285 million to $295 million for the full year 2026, despite anticipated headwinds from billing patterns [15][16]

Financial Data and Key Metrics Changes - Revenue for Q4 was $260.5 million, representing a year-over-year growth of 10.5% and a full-year growth of 11.0% [20][21] - Non-GAAP gross margin for Q4 was 82.7%, an increase from 81.7% in Q4 2024, while the full-year gross margin was 82.1%, compared to 81.4% in the prior year [23][24] - Non-GAAP earnings per share for Q4 was $0.48, up 17.1% from $0.41 in Q4 2024, and for the full year, it was $1.59, an increase of 23.3% from $1.29 in 2024 [25] Business Line Data and Key Metrics Changes - Tenable One accounted for 46% of new business in Q4, marking a significant milestone for the platform [7][22] - The company added 502 new customers in Q4, the highest in two years, indicating strong demand for Tenable One [7][20] - The net dollar expansion rate was 106%, exceeding expectations [23][70] Market Data and Key Metrics Changes - Tenable was recognized as a leader in the 2025 Gartner Magic Quadrant for Exposure Assessment Platforms and as a Customers' Choice in the 2025 Gartner Peer Insights [14][15] - The company is experiencing strong demand driven by the rapid adoption of AI, closing its first seven-figure deal related to AI exposure in Q4 [16] Company Strategy and Development Direction - The company is focusing on a platform-first approach, emphasizing unified visibility, insight, and action to manage risk across complex attack surfaces [9][10] - Investments are being made in AI security and advanced remediation capabilities, with a belief that remediation will be a major part of the next chapter in exposure management [10][11] - The company aims to leverage its extensive exposure data to create competitive advantages and drive scalability [11] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the momentum of Tenable One and the growing opportunities in AI exposure, setting a foundation for returning to accelerating growth in 2026 [34][33] - The company expects revenue for Q1 2026 to be in the range of $257 million to $260 million, representing a year-over-year increase of 8.1% at the midpoint [28] - For the full year 2026, revenue is expected to be between $1.065 billion and $1.075 billion, marking a year-over-year increase of 7.1% at the midpoint [29] Other Important Information - The company repurchased 2.3 million shares for $62.5 million in Q4, with a total of 10.6 million shares repurchased for $362.4 million since November 2023 [26] - A restructuring effort was initiated, incurring $3.1 million in expenses in Q4, with an expectation of approximately $5 million more in the first half of 2026 [31] Q&A Session Summary Question: Regarding the large customer cohort and net additions of $100,000 ACV customers - Management noted that while new business was strong with 500 new customers added, the value of these new customers was higher than in the past, and expansion within large customers was also strong [35] Question: On the success with AI exposure and customer activity - Management indicated that AI is a prevalent topic in every customer conversation, with significant interest in securing AI workloads and addressing governance issues [37] Question: About the adoption of additional modules within Tenable One - Management highlighted that customers are increasingly adopting the platform for holistic risk assessment, with a focus on visibility, insights, and action [43] Question: On the dynamics of billings duration and guidance - Management explained that while there are headwinds from billings duration, they are confident in revenue growth and operational income for 2026, despite the changes in billing patterns [46][47] Question: Regarding the strength in professional services - Management attributed the increase in professional services to the deployment of the platform at scale, which requires more support for exposure management initiatives [62] Question: On the pricing environment and ASPs - Management confirmed that there was no pricing pressure and that selling Tenable One allows for higher pricing due to the consolidation of multiple tools into a single platform [90]

Financial Data and Key Metrics Changes - Revenue for Q4 was $260.5 million, representing a year-over-year growth of 10.5%, and full-year growth of 11.0% [20][21] - Non-GAAP gross margin for Q4 was 82.7%, an increase from 81.7% in Q4 2024, while full-year gross margin was 82.1%, compared to 81.4% in the prior year [23][24] - Non-GAAP income from operations for Q4 was $63.7 million, or 24.4% of revenue, with full-year income growing to $219.0 million, or 21.9% of revenue [24] - Non-GAAP earnings per share for Q4 was $0.48, an increase of 17.1% from $0.41 in Q4 2024, and for the full year, it was $1.59, up 23.3% from $1.29 in 2024 [25] Business Line Data and Key Metrics Changes - Tenable One accounted for 46% of new business in Q4, marking a record for the company [7][22] - The company added 502 new customers in Q4, with many adopting Tenable One directly [21] - The net dollar expansion rate was 106%, exceeding expectations [23][69] Market Data and Key Metrics Changes - The company was recognized as a leader in the Exposure Management category by IDC and in the unified vulnerability management category by Forrester [14] - Tenable was named a leader in the 2025 Gartner Magic Quadrant for Exposure Assessment Platforms [14] Company Strategy and Development Direction - The company is focusing on a platform-first approach, emphasizing unified visibility, insight, and action to manage risk across complex attack surfaces [9][10] - Investments are being made in AI security and orchestration capabilities, with a strong belief that remediation will be a major part of the next chapter in exposure management [10][11] - The company aims to leverage its vast amounts of exposure data to deliver data-driven scalability and transparency [11] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the momentum of Tenable One and the growing opportunity in AI exposure management [28][29] - The company expects revenue for Q1 2026 to be in the range of $257 million to $260 million, representing a year-over-year increase of 8.1% at the midpoint [29] - For full-year 2026, revenue is expected to be in the range of $1.065 billion to $1.075 billion, exceeding the $1 billion milestone for the first time [29] Other Important Information - The company repurchased 2.3 million shares for $62.5 million in Q4, with a total of 10.6 million shares repurchased for $362.4 million since November 2023 [26] - A $150 million increase to the share repurchase authorization was approved, bringing the total to $338 million [26] Q&A Session Summary Question: Can you explain the lower net additions of $100,000 ACV customers? - Management noted that while new business was strong, the expansion within large customers was more significant, indicating a shift towards larger deal sizes [35][36] Question: How is customer interest in AI exposure evolving? - AI is a prevalent topic in customer conversations, with significant interest in managing AI exposure and security [37][38] Question: What additional modules within Tenable One are customers adopting? - Customers are increasingly adopting modules for traditional VM, web app, cloud security, and securing the AI attack surface [44][45] Question: How should we interpret the guidance for CCB in 2026? - Management indicated that while there are headwinds from billings duration, they expect CCB to align with current consensus expectations due to strong underlying business momentum [47][48] Question: What is the outlook for professional services? - The demand for professional services is increasing as customers deploy the platform at scale, leading to larger transactions [61][62] Question: How is the pricing environment currently? - Management reported no pricing pressure and noted strong ASPs, particularly when selling Tenable One [90]