Tenable(US:TENB)2022-04-27 03:57Financial Data and Key Metrics Changes - Revenue for Q1 2022 was $159.4 million, representing a 29% year-over-year growth, up from 20% growth in Q1 2021 and 26% growth in the previous quarter [32][33] - Calculated current billings (CCB) grew 31% year-over-year to $156.5 million, marking the fourth consecutive quarter of accelerating CCB growth [31][34] - The percentage of recurring revenue was 95%, primarily due to the annual prepaid subscription model [33] Business Line Data and Key Metrics Changes - The exposure platform, Tenable.ep, which now includes cloud and identity security, saw significant traction and is becoming a rapidly growing portion of new sales [22][20] - New enterprise platform customers grew 39% year-over-year, with strong demand in North America and internationally [36] - Upsell from existing customers was substantial, contributing to a net dollar expansion rate notably above historical rates [37] Market Data and Key Metrics Changes - The cybersecurity market is experiencing increased threats, driving a healthy spending environment and a high demand for understanding cyber exposure and risk [12][11] - The company is seeing strong demand in the public sector, which accounts for approximately 15% of revenue, with a healthy spending environment [102] Company Strategy and Development Direction - The company announced an agreement to acquire Bit Discovery, enhancing its capabilities in external attack surface management [16][51] - The strategy focuses on integrating new capabilities into a unified cyber exposure management platform, which includes advanced analytics and attack path analysis [91][108] - The company aims to continue investing in product development and innovation to maintain its market leadership in vulnerability management [15][25] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the continued growth trajectory, citing strong demand and a favorable market environment for cybersecurity solutions [78][96] - The company anticipates a more normalized spending environment for the remainder of the year, reflecting reduced impacts from previous tailwinds [50][115] - Management highlighted the importance of hiring and retaining talent to support growth and innovation [28][26] Other Important Information - The company reported a gross margin of 81% for the quarter, slightly down from 82% in the previous quarter, attributed to increased public cloud costs [38] - The company generated $32.1 million of unlevered free cash flow in Q1, maintaining confidence in its ability to generate attractive cash flow while investing in the business [47] Q&A Session Summary Question: Clarification on Bit Discovery's Contribution - The contribution from Bit Discovery is not included in the CCB guidance [59][60] Question: Update on OT Security Sales Cycles - There has been increased adoption of the OT platform, and sales cycles are starting to shorten [61][62] Question: Sales and Marketing Spending Expectations - Investments in sales and marketing are expected to be weighted towards the first half of the year, with higher operating margins anticipated in the second half [66][68] Question: Composition of the Quarter's Performance - The company added over 400 new enterprise platform customers and saw strong performance across various segments [70][71] Question: Macro Environment Impact on Europe - The company is confident in its performance despite macroeconomic challenges, with strong demand observed [76][78] Question: Hiring Progress for Sales Reps - The hiring rate for quota-carrying sales reps is notably faster than the previous year, contributing to growth [80][81] Question: Demand for Tenable.ep - Tenable.ep is being well received by customers, with strong adoption across various product lines [84][88] Question: Analytics Investment Monetization - The company plans to include analytic capabilities in the platform while also offering some as separate add-ons [91][92] Question: Seasonal Patterns for CCB Guidance - The company expects to follow typical seasonal patterns, with Q4 being the strongest quarter [114][115] Question: Competitive Advantages and Win Rates - The company has seen improvements in win rates, particularly when first in on opportunities [96][97] Question: Developer Security Demand - The company is early in the market for developer security but sees strong momentum in pipeline growth [100][101] Question: Public Sector Opportunities - The public sector remains a healthy spending environment, with many opportunities in the pipeline [102][103] Question: Differentiation in ASM Market - The company believes it is well positioned to disrupt the ASM space with its acquisition of Bit Discovery [108][109]