Tenable Holdings, Inc.

Greetings and welcome to the tenable fourth quarter 2024 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, please press story zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce our host, Aaron Carney. 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 2024 financial results. With me on the call today are Steve Vince, our Co-Chief Executive Officer and Chief Financial Officer, and Mark Thurmond, our Co-Chief Executive Officer and Chief Operating Officer. Prior to this call, we issued a press release announcing our financial results for the quarter. You can find the press release on our IR website at tenable.com. We will make forward-looking statements during the course of this call, including statements relating to our guidance and expectations for the first quarter and full year 2025, growth and drivers in our business, changes in the threat landscape in the security industry and our competitive position in the market, growth and customer demand for and adoption of our solutions, including Tenable One and cloud security, the potential benefits and financial impact of our potential acquisition of Vulcan Cyber, and our ability to successfully integrate Vulcan Cyber's operations, planned innovation and new products and services, 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 beliefs and assumptions only as of today and should not be considered representative of our views as of any subsequent date. And 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. In addition, all of the financial results we will discuss today are non-GAAP financial measures, with the exception of revenue. 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 press release includes GAAP to non-GAAP reconciliations for these measures. Before I turn the call over to Steve, for those of you who may be interested, we have set up a tribute site for our late CEO, Amit Yaran. We welcome any of you that have stories to share to post them. You can find the site at www.tenable.com forward slash remembering Amit Yaran. I'll now turn the call over to Steve.

Thank you, Erin. I'd like to take a moment to express our heartfelt gratitude for the outpouring of condolences and memories shared in honor of our late CEO, Amit Yoram. The messages we've received from the investment community, as well as friends and colleagues, past and present, have been deeply moving and meaningful. Amit was a trailblazer whose independent and fun-loving spirit shone brightly. His integrity and transparency were qualities many of you value deeply, and his presence is irreplaceable. Mark and I remain steadfast in our commitment to honoring his legacy by continuing to advance Tenable's mission of building a more secure digital future. That said, I'm pleased to join the call today alongside Mark Thurman as we host this call as co-CEOs. We're excited to share our strong results for the quarter, outline our priorities for 2025, and discuss the strategic rationale behind our pending acquisition of Vulcan Cyber. This quarter we delivered exceptional results, exceeding expectations on all of our guided metrics. We achieved 11% CCB growth, which exceeded the midpoint of our guidance by 7.5 million. Operating margin was 25%, which was significantly better than our expectations. We also generated 86 million in unlevered free cash flow, which was also better than expected. In short, we saw strong performance across our business, primarily driven by continued demand for exposure management and cloud security. These results reflect our commitment to evolve our business to address adjacent high-growth markets and deliver incremental value to our customers. As I mentioned earlier, one of the areas of outperformance in the quarter was exposure management, highlighted by Tenable One reaching a record 40% of new business sales. The compelling value that our unified exposure platform delivers is rooted in helping customers identify and focus on the exposures that matter most to their business. Providing these actionable insights through enhanced analytics is the foundation for a holistic approach to risk management and is the driving force behind the strong adoption of Tenable One. In order for our customers to better understand and reduce risk, they need a comprehensive platform that not only contextualizes and prioritizes risk data from systems we assess, but also one that aggregates risk data from their other security providers. Extending our leadership and exposure management by adding third-party data sources and associated remediation workflows across the security stack is a priority for us this year. This brings me to motivation behind our recent announcement of our agreement to acquire Vulkan Cyber. The acquisition of Vulkan will augment our existing data capabilities and accelerate our ability to deliver on the future of exposure management in two ways. First, it will enhance our ability to aggregate and consolidate vast amounts of data into a singular, unified cyber risk data set within Tenable One. Specifically, Vulkan will allow us to integrate data from more than 100 third-party security products, such as endpoint security, cloud security, application security, and vulnerability assessment. These extensive data aggregation capabilities, when combined with our own extensive risk data, will help customers consolidate all exposures across their security stack into a singular, prioritized view from which they can remediate threats. By leveraging this unified risk data set, we believe Tenable will be positioned to advance AI-driven exposure management to transform how customers predict, prioritize, and mitigate risk across the security stack. This brings me to the second key motivator for the acquisition. We expect that Vulcan will accelerate our ability to deliver automated remediation capabilities, sometimes referred to as mobilization. CISOs and their security teams will be able to act faster and more efficiently, resolving their exposures across their security environments with greater precision. With these enhanced remediation capabilities, Tenable One will help ensure that security issues, along with corrective guidance, get into the hands of the security team members to address exposures quickly, wherever they may exist in their environment, whether it be the data center, in apps, in the cloud, and so on. In short, this pending acquisition underscores our commitment to bring the most comprehensive exposure management platform in the market. Another theme for us this year is expanding our footprint in cloud security. This quarter, our cloud security sales more than doubled. with significant wins across both public and private sectors. What differentiates Tenable in this space is our ease of use, pace of innovation, and the ability to offer CNAP integrated with our exposure management platform. Tenable has the ability to assess hybrid environments that most organizations operate in. Few organizations exist solely on premise or just in the cloud. On-premise data centers, private clouds, and public clouds are all part of the equation. And our exposure management approach integrates these disparate environments into a unified strategy. So, in summary, we believe we have strong momentum in exposure management, including cloud security. Consistent with the commentary we provided last quarter on our growth drivers, we believe we will continue to see outsized growth in exposure management, highlighted by our increasing scale in cloud security over the ensuing years. To continue to execute on this growth algorithm, in 2025, we plan to increase our investment in product development and go-to-market, all while continuing to expand our operating and free cash flow margins. We remain firmly committed to a balanced growth approach and returning capital to our shareholders through our share repurchase program, all of which is intended to create long-term value to our shareholders. I'd like to turn the call now over to Mark Thurman.