Tenable Holdings Inc (TENB) Q3 2024 Earnings Call Highlights: Strong Growth in Cloud Security ...

GuruFocus News
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In This Article:

  • Revenue: $227.1 million, representing 13% year-over-year growth.

  • Calculated Current Billings (CCB): $248.4 million, up 11% year over year.

  • Gross Margin: 81% for the quarter.

  • Operating Margin: 20% for the quarter.

  • Net Dollar Expansion Rate: 108% for the quarter.

  • Unlevered Free Cash Flow: $60.8 million for the quarter.

  • Cash and Short-term Investments: $548 million at the end of the quarter.

  • Deferred Revenue: $747 million total, with $584 million current deferred revenue.

  • EPS: $0.32, $0.03 better than the midpoint of guidance.

  • New Enterprise Platform Customers: 386 added during the quarter.

  • Six-Figure Customers: 60 net new added during the quarter.

  • Tenable One Sales: Approximately 30% of total new sales in the quarter.

  • Cloud Security Growth: Approximately 100% year-over-year growth.

  • Share Buyback Program: Increased by $200 million.

Release Date: October 30, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

  • Tenable Holdings Inc (NASDAQ:TENB) delivered strong financial results for the quarter, surpassing expectations on both the top and bottom line.

  • Tenable One and Cloud Security continue to drive strong demand, with Tenable One accounting for approximately 30% of new sales in Q3.

  • The company closed its first seven-figure mid-market deal, indicating significant traction in this segment.

  • Tenable Cloud Security is the fastest-growing product, with ASPs twice as high as other products, and is experiencing 100% year-over-year growth.

  • The Board approved an additional $200 million to the share buyback program, reflecting confidence in the company's future prospects.

Negative Points

  • Longer sales cycles and additional scrutiny in new business and large VM deals persisted, although there was some stabilization in VM relative to Q2.

  • The net dollar expansion rate was slightly lower this quarter, attributed to timing and budgets on some large deals.

  • There is no expectation of a significant seasonal budget flush in Q4, indicating cautious guidance.

  • The competitive environment remains challenging, with newer entrants in the market, although Tenable maintains strong win rates.

  • Sales cycles for Tenable One, despite higher selling prices, are notably shorter, indicating potential pressure on pricing dynamics.

Q & A Highlights

Q: Steve, could you touch on how fast exposure management grew this quarter and how you think about its growth going forward? A: Exposure solutions now constitute over 50% of new sales and over 35% of total sales. Non-VM solutions on an asset basis are growing 30% and represent 20% of our total sales. This reflects the traction we're seeing within our solutions both as a platform and individually licensed assets.

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