Tenable(US:TENB)2023-07-25 23:56Financial Data and Key Metrics Changes - Revenue for Q2 was $195 million, representing a 19% year-over-year growth, exceeding the midpoint of guidance by $5 million [79] - Calculated current billings grew 15% year-over-year to $200.2 million [76] - Gross margin improved to 81% from 79% in the previous quarter, attributed to the scalability of public cloud infrastructure [49] - Operating margin for the quarter was 15%, which was 470 basis points better than the midpoint of guidance [81] - EPS was $0.22, approximately $0.09 better than the midpoint of the guided range [52] Business Line Data and Key Metrics Changes - The company added 426 new enterprise customers and 63 net new six-figure customers in Q2, indicating a return to typical quarterly additions [67] - Tenable One now comprises over 20% of total new enterprise sales, contributing to higher average selling prices (ASPs) [40][77] - The dollar-based net expansion rate was 111% in the quarter, slightly down from 113% in the previous quarter [48] Market Data and Key Metrics Changes - The company observed stabilization in banking, financial services, tech, and telecom sectors compared to Q1 [46] - Strong demand was noted in the public sector, driven by regulatory requirements for cybersecurity improvements [72] Company Strategy and Development Direction - The company is focused on integrating operational technology (OT) into Tenable One, enhancing its platform capabilities [44] - There is a strategic emphasis on leveraging AI to improve product intelligence and customer experience [22][124] - The company plans to reinvest a portion of the earnings upside into go-to-market and product development for future growth [81][85] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in navigating the macroeconomic environment and highlighted a return to a more predictable selling environment [45][105] - The outlook for the second half of the year includes expectations for revenue in the range of $197 million to $199 million for Q3 [84] - The company raised its full-year guidance for CCB revenue and earnings, reflecting a balanced growth approach [85] Other Important Information - The company generated approximately $40 million of unlevered free cash flow during the quarter, exceeding expectations [53] - The total deferred revenue was $650.2 million, providing visibility into future revenue [82] Q&A Session Summary Question: What is the size of the SC installed base? - The company has over 40,000 customers, with a sizable SC customer base representing a several hundred million dollar opportunity for Tenable One [94] Question: What is the outlook for the OT business? - Management is bullish about the OT business, citing market-leading technology and strong competitive positioning [98] Question: How did early renewals impact the quarter? - The company saw a higher-than-expected percentage of early renewals, contributing approximately $2 million to the quarter's results [99][116] Question: What modules within Tenable One are customers opting for? - There is significant demand for cloud security and identity management capabilities within the Tenable One platform [100] Question: How is the company addressing AI applications? - The company is leveraging AI to enhance product intelligence and improve customer risk management capabilities [124][155]