Tenable(TENB) - 2025 Q4 - Earnings Call Transcript

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]