Tenable Holdings, Inc.

Greetings and welcome to the Tenable First Quarter Earnings Conference Call. At this time, all participants are in a listen-only mode. A brief question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Aaron Carney. Thank you, Aaron. You may begin.

Thank you, Operator, and thank you all for joining us on today's conference call to discuss Tenable's first quarter 2021 financial results. With me on the call today are Amit Yoran, Tenable's Chief Executive Officer, and Steve Vince, Chief Financial Officer. Prior to this call, we issued a press release announcing our financial results for the quarter. You can find the press release on the IR website at tenable.com. Before we begin, let me remind you that we will make forward-looking statements during the course of this call, including statements relating to Tenable's guidance and expectations for the second quarter and full year 2021, growth in drivers in Tenable's business, changes in the threat landscape in the security industry and our competitive position in the market, growth in our customer demand for and adoption of our solutions, the potential benefits of the acquisition of ALSID, planned innovation and new products and services, tenable expectations regarding long-term profitability and the impact of COVID-19 on our business and on the global economy. These forward-looking statements involve risks and uncertainties, some of which are beyond our control, which could cause actual results to differ materially from those anticipated by these statements. You should not rely upon forward-looking statements as a prediction of future events. Forward-looking statements represent our management's beliefs and assumptions only as of today and should not be considered representative of our views as of any subsequent date. We disclaim any obligation to update any forward-looking statements or outlook. For further discussion of the material risks and other important factors that could affect our actual results, please refer to those contained in our most recent annual report on Form 10-K. and subsequent reports that we file with the SEC, which are available on the SEC website at sec.gov. In addition, during today's call, we will discuss non-GAAP financial measures. These non-GAAP financial measures are in addition to and not a substitute for or superior to measures of financial performance prepared in accordance with GAAP. There are a number of limitations related to the use of these non-GAAP financial measures versus their closest GAAP equivalent. Our earnings release that we issued today includes gap to non-gap reconciliations for these measures and is also available on the investor relations section of our website. Before I turn the call over to Amit, I want to quickly bring to your attention the corporate social responsibility report we recently published to support our environmental, social, and governance initiative. The report can be found on our investor relations website with the direction of our board of directors, executive leadership, and other relevant parties, we pulled internal and external sources to do a deep dive into our ESG practices. We are very excited about the results and encourage you to take a look at the published report. I'll now turn the call over to Amit.

Thank you, Erin, and thank you all for joining us today. First, I want to say that we're very pleased to announce the closing of our acquisition of Alcid and welcome the Alcid team to Tenable. We'll talk more about Alcid after a quick review of the quarter. Today I'll highlight our strong Q1 results, the rising importance of cyber exposure and our holistic approach to our portfolio, including Tenable AP and our new Active Directory solution, Tenable AD, and new partnerships we've added that we think further validate our market leadership and strengthen our ability to assist customers with rapid remediation. With that, let me first touch on our Q1 results. We are off to a great start for the year, as reflected in our compelling Q1 results. Our calculated current billings and revenue each grew 20% year over year, driven in part by recent cyber incidents, the acceleration of shifts to the cloud, and growing cross-sell opportunities. We also had strong free cash flow in the quarter, saw an expansion of our non-GAAP operating margin, and had an eight penny beat in EPS. Steve will discuss the quarter in greater detail but we feel these results put us on a solid footing to have a very successful year and are a reflection of the growing demand for our solutions and our attractive business model. Recent high-profile breaches have highlighted the need for comprehensive vulnerability management and an understanding of where exposure exists to enable attack disruption and facilitate informed incident response. VM and cyber exposure play a central role in providing broad visibility into the attack surface. What Tenable offers, the continuous dynamic monitoring of assets and user permissions, along with the means to prioritize remediation based on risk, is more important than ever. Key highlights from the quarter are continued traction in cloud and cross-sell, including contribution from Tenable.io and the launch of Tenable.ep. Tenable.ep is a new go-to-market motion across our platform of products that includes Tenable I.O., Lumen, Web App Security, and Container Security. In addition, with the closing of OSID, we have simultaneously launched Tenable AD, a solution designed to audit and monitor Active Directory security and disrupt identity as an attack path in both advanced persistent threats and common hacks. Our customers recognize that as the attack surface continues to expand, A holistic approach to cyber exposure is the most effective way to measure, prioritize, and manage risk. I'd like now to talk about Tenable EP. Given the momentum of our solutions, we're looking for new ways to deliver more leverage to our customers and make it easier for them to benefit from the full suite of our capabilities. In Q1, we announced Tenable EP, enabling customers to use more of Tenable's capabilities in combination as a unified platform. EP enables our customers to effectively assess the modern attack surface by combining VM, web app, container, and Lumen in a unified platform and allows customers to dynamically allocate licenses across all asset types according to their needs and modify as their environment changes. This gives customers flexibility to take a holistic rather than piecemeal approach to assessing exposure, and then prioritize the results through Lumen to obtain recommended actions based on risk. Tenable EP was made available for sale in late February, and I'm very happy to say that we're seeing really good adoption and interest from our customers. A great example of this is a competitive takeaway with a global customer. This customer had been actively seeking a combination Tenable I.O., container, and web app security to improve visibility. In addition, we were able to show the value of Lumen, which became the key differentiator from a technology perspective. EP provided the unified platform they needed for both the short and long term. The result was a six-figure Tenable EP win. We are enthusiastic about the meaningful early wins and the growing pipeline we are seeing with EP. In addition to momentum in Tenable I.O. and expansions from frictionless assessment, we expect Tenable EP to advance our role in securing our customers' cloud deployments. Now, onto our very exciting acquisition of Alcid. We are thrilled to announce the closing of Alcid and simultaneously launch Tenable AD, our new Active Directory security solution. This solution is designed to secure Active Directory environments and disrupt adversary attack paths. AD environments are incredibly complex and are a top concern for many of the CISOs we speak with. Tenable AD provides insights into the weaknesses in Active Directory deployments and identifies misconfigurations that can be used to elevate permissions and create persistent access. AD is the basis for managing user permissions across on-prem and hybrid cloud deployments. It is foundational to the security of cloud workloads security of remote work, and adopting zero trust architectures. We are excited to expand our cyber exposure solution and advance our cross-sell opportunities to include this capability. In summary, we see strong momentum and expanding use cases for our broader platform of products. Recent events, such as the security breaches in water facilities in Florida and Kansas, highlight the need for proper cyber risk management especially in the operational technology sector. This has been further emphasized by the recent presidential executive order on understanding vulnerabilities and securing bulk power systems. As part of the critical infrastructure supporting the global pandemic, a large multinational medical device manufacturer required visibility into their production assets to better understand and manage their risk. Partnering with a global advisory, Tenable offered a unique differentiator across both IT and OT. We remain excited about the opportunity to help enterprises understand and manage their OT risk. Across our portfolio products, our platform enables customers to take a holistic, continuous approach to managing risk. Our offerings deliver differentiated solutions designed to answer the fundamental questions of how exposed am I, how at risk am I, And what should I do about it? Now at Tenable, we talk a lot about the importance of being best of breed. This approach and differentiated capabilities help us forge stronger partnerships and an expansive ecosystem. We had two particularly exciting partnerships solidified during the first quarter. We're excited about our new partnership with IBM, where we're a preferred partner for fully integrated vulnerability insights native within IBM's SIEM. IBM chose Tenable as the preferred partner due to our technology leadership, including covering more vulnerabilities and providing both on-prem and cloud-based offerings, ease of transition, and our market leadership. We also announced our new partnership with HCL BigFix, a leading endpoint management platform, making it easier for our customers to automate remediation using the infrastructure platforms they've already selected. In summary, we're off to a great start for the year, and we're excited about our outlook. Our portfolio creates a compelling way to measure and manage risk. We believe foundational drivers like digital transformation, the shift to cloud, and zero trust will continue to fuel long-term success in our business. I will now turn the call over to Steve.