Tenable Holdings, Inc. Q1 FY2025 earnings call

• Strong Q1 results with 11% YoY revenue growth and 36% unlevered free cash flow margin. - Tenable One drove acceleration in new sales, including record seven-figure wins. - Integration of Vulcan Cyber's capabilities to expand third-party data integrations and enhance AI strategy. - Major customer wins across industries, including federal, financial, and Fortune 100, showcasing Tenable One's expansion. - Focus on AI as a force multiplier for exposure management insights, tying risks to real-time remediation.

Revenue for the quarter was $239.1 million, representing 11% year-over-year growth. Recurring revenue remained high at 96%. Gross margin was 82%, flat relative to the previous quarter. Sales and marketing expense was $85.5 million, up from $80.1 million the prior quarter. R&D expense was $39 million, up from $32.5 million last quarter. G&A expense was $22.7 million, up from $20.5 million last quarter. Income from operations was $48.7 million, exceeding the guided range. EPS was $0.36 per share, $0.095 better than the midpoint of the guided range.

• Q2 revenue expected to be in the range of $241 million to $243 million. - Full year calculated current billings expected to be $1.25 billion to $1.45 billion, revenue $970 million to $980 million. - Non-GAAP income from operations expected $205 million to $215 million, non-GAAP net income $178 million to $188 million. - Unlevered free cash flow range $265 million to $275 million. - Cautious approach due to macro uncertainty, particularly in U.S. public sector with longer deal lead times.

• Macro economic uncertainty impacting deal visibility. - Visibility issues in U.S. public sector due to personnel disruptions and open leadership roles. - Geopolitical risks potentially disrupting enterprise business and sales cycles.

Q: Brian Essex asked about the guidance and incremental caution in the business.

A: Steve Vintz responded that macro uncertainty, especially in U.S. public sector with disrupted procurement and leadership roles, led to cautious outlook but strong top-of-funnel demand.

Q: Saket Kalia asked about the competitive environment in VM.

A: Steve Vintz stated high win rates against traditional VM players and strong compete level in the space.

Q: Andrew Nowinski asked about cloud business and Google's acquisition of Wiz.

A: Steve Vintz and Mark Thurmond mentioned Google's acquisition creates market opportunities, with increased customer interest in multi-cloud and consolidation.

Q: Matt Calitri asked about U.S. federal business visibility.

A: Steve Vintz and Mark Thurmond discussed longer deal lead times, personnel disruptions in civilian agencies, but strong top-of-funnel and FedRAMP authorization benefits.

Q: Ethan asked about implications of CVE program funding.

A: Steve Vintz said collaboration is important, and Tenable contributes to CVE program, recognizing its importance.