Tenable Holdings, Inc.

And welcome to Tenable Q3 2023 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, Vice President, Investor Relations. Thank you, Ms. Connie. You may begin.

Thank you, Operator, and thank you all for joining us on today's conference call to discuss Tenable's third quarter 2023 financial results. With me on the call today are Amit Yaran, our Chief Executive Officer, and Steve Vince, our 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 our guidance and expectations for the fourth quarter and full year 2023 and expectations for the first quarter of 2024, growth and drivers in our business, changes in the threat landscape and the security industry and our competitive position in the market, growth in our customer demand for and adoption of our solutions, including Tenable One, planned innovation and new products and services, the potential benefits and financial impact of our recent acquisition of Aromatic, and our expectations regarding long-term profitability and free cash flow. 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 important factors that could affect our actual results, please refer to those contained in our most recent annual report on Form 10-K our quarterly report on Form 10-Q for the quarter ended June 30, 2023, 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 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. Today I'll provide some context on our financial performance in the quarter, discuss the accelerating momentum we're seeing with our platform, and touch on our growth strategy with cloud. We delivered a solid Q3 with strong contributions from Tenable One, OT, and the public sector. In addition, we continued to deliver significant margin leverage by delivering a $10 million beat to operating income. While the underlying performance of the business was good this quarter, the mix of our business was different than we typically see and led to an unusual divergence between sales and CCB. At a high level, through the outside strength in public sector, we saw a much larger mix shift to perpetual licenses and services with minimal contribution to CCB. A flexible deployment model gives our customers the ability to optimize their architecture in the cloud, on-premise, or hybrid, which directly benefits our customers through unified visibility and simplified management. We believe we are the only vendor to deliver exposure management for both on-premises and hybrid deployments, which enables us to address our customer deployment's biases. During the quarter, we added a record number of seven-figure customers, a testament to the growing importance of our solutions and our strength in public sector and large enterprise. Our products are helping customers secure even more areas of their attack surface, expanding their use cases, and consolidating around printables. In particular, our outperformance in federal reflects a strong mix of business and our expansion into larger, more strategic deals. We're also seeing great traction in signing large OT deals, signaling our growing leadership in this space. This boils down to our installed customer base trusting us to expand beyond VM to help them manage risk using our portfolio of products. We believe our leadership in helping organizations understand risk positions us for considerable opportunity going forward that we think we're still in the early innings of. While we're pleased with our performance in the quarter and soft strength in large deals, we're seeing some softness in the mid-market, which we expect to persist in Q4 and into next year. As their use of technology continues to expand, customers are looking for clarity around their attack surface, including accurately identifying all the assets in their environment and prioritizing which areas of the attack surface are most at risk. Tenable 1 connects the dots from externally facing points of attack across the entire surface of systems, identities, permissions, vulnerabilities, and configurations, and delivers differentiated analytics including building asset inventories and identifying and prioritizing attack tasks which magnify risk. As an innovator, we continue to build out capabilities with Incredible One. We're now using generative AI to deliver faster, more intuitive insights so customers can be more efficient and focus more resources on preventing successful attacks. Additionally, we expect that new features, including AI-fueled identity assessments, will only serve to accelerate our time to value for customers. Looking at the buying patterns of customers, we continue to see a broad distribution of asset types, particularly from our specialty products. We also saw strong adoption from Tenable One from our Security Center customers this quarter. Security Center customers represent a very sizable base that are increasingly operating in hybrid environments. Our ability to deliver The insights and analytics from Tenable One, without requiring them to go through structural changes, resonate deeply with these customers. Within our specialty products, we're seeing increased emphasis on Active Directory security and cloud security as customers continue to struggle with how to adequately manage risks in those areas of their attack surface. Tenable Cloud Security, now with Hermetic, is a complete code-to-cloud, highly competitive CNAP offering. Customers everywhere understand that securing the cloud is critical and incredibly complex. Security teams have to be cloud experts to find and prioritize the most urgent risks and how to address them. In many cases, customers do not even know what assets they have, let alone what access has been granted to those assets. The situation is complicated further as cloud adoption accelerates and naturally multiplies user identities, machine identities, and the complex web of entitlements which grow exponentially. Tenable and or Medic are helping organizations address some of the most difficult challenges in cloud security today. Our cloud security solutions are simplifying security management to meet the increasing and relentless demands of cloud infrastructure growth. Additionally, they enable security professionals to understand the complex relationships and risk across assets, identities, and their entitlements, and reduce the risk caused by explosion in the volume and permission of users and machine identities in the cloud. The unique combination of Tenable and Hermetic gives customers a tightly integrated cloud-native application protection platform and capabilities for cloud environments. An elegant user experience minimizes complexity and can speed adoption. Even the more mature organizations have not yet integrated commonly deployed security tools like infrastructure as code, cloud security posture management, cloud workload protection, and cloud infrastructure entitlement management across multiple cloud environments. Tenable Intermedic can bring together greater context to a customer's overall security program by integrating these point products into a single unified CNAP offering. We're delivering unparalleled insights into identities and access, which go hand-in-hand with configurations and vulnerabilities in being absolutely critical to securing cloud workloads. And with the integration of insights from Tenable One, customers can also consolidate, simplify, and reduce costs. Our sellers are having incredible engagement with our customers, pipeline is drawing out of the gate, and excitement is running high. We continue to execute well with our product vision and balanced growth strategy. Over the next few quarters, we'll continue to execute on a product roadmap and integrate Hermetic which we expect to enable us to demonstrate more leverage in our business. Cybersecurity has never been more important nor more fundamental to our economies and business than it is today, requiring corporate leaders to elevate cybersecurity within their organizations. As just one example, the SEC's recent Cyber Risk Management and Incident Disclosure Rules require disclosures on board oversight and management's role in assessing and managing material risk from cyber security threats. Companies will continue to feel pressure from management teams, boards, and increasingly regulators, shareholders, and customers. And they will continue to turn to Tenable to understand where they're exposed and how to reduce risk. I'll now turn the call over to Steve for further commentary on our financial results and outlook. Thank you.