Tenable(US:TENB)2023-04-24 23:17Financial Data and Key Metrics Changes - Calculated current billings grew 13% year-over-year to $176.8 million [7] - Revenue was $188.8 million, representing 18% year-over-year growth, exceeding the midpoint of the guided range by $1.8 million [116] - Operating margin for the quarter was 10%, which was 500 basis points better than the midpoint of the guidance [117] - Non-GAAP diluted earnings per share was $0.11, better than the midpoint of the guided range [117] - Unlevered free cash flow generated during the quarter was $44.2 million, up from $32.1 million in the previous quarter [95] Business Line Data and Key Metrics Changes - Added 379 new enterprise platform customers and 24 net new six-figure customers in Q1 [23] - Dollar-based net expansion rate was 113% in the quarter, reflecting a decline from previous periods [23][70] - R&D expense increased to $29.3 million, up from $28.7 million last quarter, maintaining 16% of revenue [8] - Sales and marketing expense rose to $82.8 million, up from $78.3 million last quarter, representing 44% of revenue [24] Market Data and Key Metrics Changes - The banking and financial services sector, along with technology and telecom, experienced longer lead times in purchasing and approval phases [4] - These sectors represent approximately 30% of the overall business globally [57][106] - Demand generation added during the quarter exceeded expectations, marking a record for the company [89][92] Company Strategy and Development Direction - Focus on cloud and analytics as key growth areas, with investments in unifying cloud security posture and vulnerability management [5] - Emphasis on operationalizing preventative security through Tenable One, which is becoming a platform of choice for customers [19][90] - Strategy includes moderating investments while maintaining a balance between growth and profitability [9][28] Management's Comments on Operating Environment and Future Outlook - Management acknowledged a challenging selling environment, particularly in the last two weeks of March, impacting deal closures [4][19] - Confidence in the cybersecurity market remains strong, with organizations prioritizing cyber exposure management [19][88] - Outlook for the second quarter and full-year 2023 reflects expectations of longer sales cycles and lower net dollar expansion rates [52][119] Other Important Information - Gross margin expanded to 79% from 78% in the previous quarter, attributed to effective cost management [93] - The company finished the quarter with $616.7 million in cash and short-term investments, providing visibility into future revenue [95] Q&A Session Summary Question: Could you speak to the weakness in the tech and telecom vertical? - Management noted that the elongation of deal approvals was more pronounced in midsized and regional banks, particularly in North America [12][30] Question: How did the banking and financial services sector perform? - The sector historically skews towards larger transactions, and while there were positive signs, short-term headwinds were acknowledged [37][106] Question: What is the outlook for the federal business? - The public sector, including federal, performed well, and management anticipates it to remain strong throughout the year [129] Question: How is the company managing investments in light of the current environment? - The company plans to moderate the pace of new investments while focusing on achieving higher productivity [47][135] Question: What are the expectations for new business in the coming months? - Management expects new business to take longer to close, reflecting the challenges experienced in Q1 [52][119]