Tenable Holdings, Inc.

Greetings. Welcome to the Tenable Q4 2021 Earnings Conference Call. At this time, all participants are in a listen-only mode. A 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. Please note this conference is being recorded. I will now turn the conference over to your host, Erin Carney, Head of Investor Relations. Thank you. You may begin.

Thank you, Operator, and thank you all for joining us on today's conference call to discuss Tenable's fourth quarter and full year 2021 financial results. With me on the call today are Amit Yaran, 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 first quarter and full year 2022, 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 our acquisitions, planned innovation, and new products and services. Tenable's 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 a 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 quarterly report on Form 10-Q and subsequent reports that we file at 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 equivalents. Our earnings release that we issued today includes GAAP to non-GAAP reconciliations for these measures and is also available on the investor relations section of our website. I'll now turn the call over to Amit.

Thank you, Erin, and thank you for joining us today. Today I'll discuss our financial performance in Q4, strengthened core VM, attraction with our individual exposure solutions, and the expansion and differentiation of our unified platform. With that, Let me first touch on our Q4 results. We saw tremendous strength in the fourth quarter, driven by contributions from all products and theaters. Our CCB growth for the quarter was 29%, capping the year where we saw accelerated growth at scale, balanced with profitability, including strong unlevered free cash flow. During Q4, we added 562 new enterprise platform customers and added 100 net new six-figure customers. Both are record ads for us in a single quarter. As the leader in VM, our expertise is finding assets, identifying how those assets are configured and how and where they're vulnerable, and prioritizing those vulnerabilities and exposures, guiding our customers on how best to manage risk. Nessus has been and continues to be the standard for assessing system security and vulnerabilities. Over the last few years, we've seen an acceleration of downloads of Nessus, and in Q4, we saw continued strength with Nessus customers on-ramping to our enterprise platforms. Our drive to lead the market in terms of vulnerability coverage, accuracy of our assessments, time to market for developing new checks as critical new vulnerabilities emerge, are highly appreciated and recognized by our customers. In Q4, Log4j highlighted and continues to highlight the strategic importance of discovering and managing vulnerabilities. Regardless of marketing claims, no WAF, no next-gen firewall, no EDR, no XDR, or any other product is able to assess, identify, and prevent the growing breadth of Log4j. Tenable already covers over 100 Log4j vulnerability detections, including direct checks and checks over HTTP, HTTPS, SNTP, POP3, IMAP, Telnet, SSH, SNMP, NTP, FTP, NetBIOS, and other protocols. And we've only begun to pull on the long tail of Log4j-related issues. If it's your mission within the enterprise to answer the question, how secure am I, How at risk am I? Then Tenable has differentiated itself as the market leader and platform to use. Enterprise attack surfaces keep expanding, creating opportunities for Tenable's exposure solutions. We saw another quarter of tremendous traction in our solutions for operational technology and Active Directory as we bring our expertise to these underserved markets. We believe we're the only vendor that provides complete understanding of IT and OT converged environments, coupled with a deep understanding of exposure and risk. This unique understanding of both of these environments enables us to provide a differentiated and compelling solution in the market. We also see strong traction in Tenable AD, our Active Directory security product, and expect that to continue to be a very attractive market for us. 86% of enterprises are expecting to increase their spending on Active Directory security in 2022. We believe we're solving a great pain point in this largely greenfield market where we have the leading technology. In addition to our traction in these markets, we're seeing strength in our cloud products and excitement around cloud expansion. We've long focused on helping our customers secure their cloud environments. Cloud-based capabilities require assessing the security of web applications and a deep understanding of containers. We've had cloud-native connectors for years, and more recently, we've introduced frictionless assessment. With continued demand from our customers to help them secure their cloud environments, we've extended our investment into infrastructure as code, into Kubernetes, and into cloud security posture management with the acquisition of Acurex. As we continue to build out and integrate our full portfolio of cloud capabilities, our reach expands all the way from the far left, from building and assessing vulnerabilities in code and fixing them pre-production, all the way through the far right, where we're discovering assets, evaluating drift and exposures in runtime. We identify misconfigurations and fix assets across their entire lifecycle. Tenable becomes the definitive place to go to for assessing and understanding risk across the entire cloud deployment, not just the development piece and not just the cloud and Kubernetes infrastructure configuration and not just the containers or the virtual machines themselves. If it's your job to assess cyber risk for the audit and risk committee, for the CSO, for the CEO, for the boards of directors, Tenable EP, our exposure platform, can help you understand cyber risk in the broader context of your business. Our market leadership in VM in assessing and addressing cyber risk put us in position of strength to evolve naturally with our customers into new environments. Security teams cannot properly assess risk in their IT environment without understanding and integrating risk from their AD environment, their cloud environment and others. They demand this unified integrated approach. And we're seeing this play out in the market. Tenable EP had another strong quarter and we expect that traction to continue as we're now expanding Tenable EP to incorporate more of our exposure solution, including Tenable AD and Tenable CS, which includes Infrastructure as Code, Kubernetes, CSPM, Container, and other cloud security capabilities. With these integrations, Tenable CS, as part of EP, will deliver a cloud-native application security platform as an integrated end-to-end security solution and a complete picture of cyber risk across the modern attack surface with unified visibility into code, configurations, assets, and workloads. Earlier today, we announced that we've reached an agreement on a tuck-in acquisition of an attack path analysis company in Israel called Symptom, which we expect to close this quarter. Symptoms technology maps vulnerabilities and exposures across asset types into attack paths and prioritizes how to address likely paths of exploitation. After the closing, this technology, when integrated into EP, will run alongside enhancements to Lumen and other market-leading analytics, enabling security teams to preemptively focus response efforts ahead of and during breaches. Serving our customers' needs to understand their cyber risk is what drives our vision and our expansion across VM, Active Directory, public clouds, and OT environments into an integrated, unified workspace. We believe augmenting EP's unified data sets and analytics with attack path analysis will enable Tenable to continue to extend our leadership in cyber risk management. The world of the CISO is managing many risks across many interconnected and interdependent systems. Assessing risk means understanding discrete elements of exposure, but also their interdependency. Weaknesses in identity and IT can affect OT and shut down a pipeline. Ransomware and nation state breaches breach IT and target Active Directory. At Tenable, we're not only focused on delivering best-of-breed technologies in exciting markets, We're pursuing a platform vision for understanding and managing cyber risk that we believe is unlike anything else available. And this brings me to the key conclusion I want to leave you with. Yes, we see strong performance in VM. Yes, we see strong growth and potential in our individual exposure solutions across Active Directory and operational technologies and cloud security. But if there's one single thought, one sole conclusion, it's this. that it's nearly impossible to accurately assess the risk associated with any one piece of technology in isolation. Our unified platform not only brings together market-recognized leading exposure solutions, we're bringing more of these data sets together in a unique cyber exposure platform with differentiated and compelling analytics. I'd like to turn the call over to Steve now.