Tenable Holdings Inc Q2 2025 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Rob Owens - Piper Sandler - Analyst : Great. Thank you so much for taking my question. would love it for you to compare and contrast a little bit this quarter with, I guess, where you were 90 days ago? I mean, clearly, we're a little closer to the Fed fiscal year-end. And Steve, you talked about US spend, how you're getting incrementally more positive. It does feel like we're getting cross currents from other vendors out there talking about potential truncation of deals, things going maybe even less than one year. So I'd love to better understand how your visibility is better here and your confidence is better? And on the commercial front, maybe just help us understand. It seems like you're seeing a nice upsell relative to Tenable One in consolidation. Just what's driving some of those underlying trends and strength there? Thank you very much.

Question: Brian Essex - JPMorgan Chase & Co - Analyst : Hi, good afternoon, and thank you for taking the question. Maybe to pivot on that last point, Steve, on kind of One penetration. Great to see the call out in the press release and the strength that you're seeing across the platform. But I guess, what's embedded in your expectations maybe for the remainder of the year? And how meaningful can Tenable One and non-VM exposure solutions penetration be within the installed base? And maybe what might it take to get a little bit better acceleration there? Thank you. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JULY 30, 2025 / 8:30PM, TENB.OQ - Q2 2025 Tenable Holdings Inc Earnings Call

Question: Brian Essex - JPMorgan Chase & Co - Analyst : Is there a level of penetration that you're targeting that could get you to? Like what would it take to get you to double-digit growth rates like from a billings perspective?

Question: Saket Kalia - Barclays Services Corp - Analyst : Okay, great. Hey guys, thanks for taking my questions here and a nice quarter. Mark, maybe for you, just to tie together some of the details that's been talked about. You had some nice examples of customer wins in your prepared remarks. Maybe the question is, could you talk about the competitive landscape a little bit in the exposure space? And maybe touch on how Tenable One is helping you differentiate versus a traditional VM player or versus other point players in other spaces? Does that make sense? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JULY 30, 2025 / 8:30PM, TENB.OQ - Q2 2025 Tenable Holdings Inc Earnings Call

Question: Saket Kalia - Barclays Services Corp - Analyst : Super helpful. Thanks, guys.

Question: Andrew Nowinski - Wells Fargo Securities LLC - Analyst : Good afternoon. Thank you for taking the question. So nice job on the quarter. You noted you're seeing these larger deal sizes, the six- and seven-figure deals. I'm really wondering, are those coming from -- more from like new logos versus renewals? Because it looks like your net retention rate went down a little bit sequentially. And so I'm assuming that's coming from stronger new logo growth, but would love to hear your thoughts on that? And kind of where you see net retention bottoming out here? Thank you. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JULY 30, 2025 / 8:30PM, TENB.OQ - Q2 2025 Tenable Holdings Inc Earnings Call

Question: Andrew Nowinski - Wells Fargo Securities LLC - Analyst : Perfect. Thanks, Steve.

Question: Joe Vander - Scotiabank - Analyst : Hi, this is Joe and on for Patrick Colville. Can you talk to us about your strategy to help secure the use of generative AI in the enterprise with Apex and AI aware it seems like it's something that that you're thinking pretty deeply about. So maybe go over that and why Tenable has the right to win here?

Question: Joe Vander - Scotiabank - Analyst : Makes sense. Thanks, Steve, and Mark.

Question: Roger Boyd - UBS AG - Analyst : Great, thanks for taking the question. Maybe to expand on that. I think last quarter, you provided some metrics around adoption of AI Aware, and it's nice to see that pop post the Apex acquisition. But in addition to that, secondly, can you just remind us what you've said about monetization of AI Aware. I'm guessing that as you embed Apex into Tenable One, that story changes a little bit, but would love to get your perspective there. Thanks. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JULY 30, 2025 / 8:30PM, TENB.OQ - Q2 2025 Tenable Holdings Inc Earnings Call

Question: Roger Boyd - UBS AG - Analyst : That's helpful. Thanks, Steve.

Question: Rudy Kessinger - D.A. Davidson & Co - Analyst : Hey guys, This is Andres Paroli. Maybe I hear you about the level of outperformance in Q2 was driven by a more favorable mix and upfront revenue recognition. But -- could you maybe unpack what products and verticals did outperform your expectations in Q2? And maybe if you could give us some data points around the core VM market and what are you seeing there that will be very helpful as well? Thank you.

Question: Rudy Kessinger - D.A. Davidson & Co - Analyst : Thank you.

Question: Jonathan Ruykhaver - Cantor Fitzgerald - Analyst : Yeah, Thank you. So the 360 new enterprise platform customers in the 76 net new six-figure customers was impressive. Can you talk about that sales motion? Are there any incentives both either direct or through the channel that might be influencing that success? And then looking at the remainder of the year, how should we be thinking of new platform adds versus expansion because it does seem that with Apex, OT exposure management and just the broadening product portfolio, that expansion is also a compelling opportunity. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JULY 30, 2025 / 8:30PM, TENB.OQ - Q2 2025 Tenable Holdings Inc Earnings Call

Question: Jonathan Ruykhaver - Cantor Fitzgerald - Analyst : Yeah, make sense. Thanks for the color.

Question: Junaid Siddiqui - Truist Securities - Analyst : Hi, this is Junaid Siddiqui. Thanks for taking my question. I just wanted to ask about your cloud strategy around CNAPP. And you talked about last quarter about Wiz being the acquisition by Google being a potential net benefit for you. Are you seeing any additional RFPs that you're being invited to? And has that contributed to any growth in your cloud security business? Thank you.

Question: Shaul Eyal - TD Cowen - Analyst : Thank you. Good afternoon, and congrats on your quarterly performance and improved outlook. Mark or Steve, I wanted to ask specifically about your July performance, which is coming to an end tomorrow. Maybe market comes as an easy layup with respect to your reply to Jonathan. I'm beginning to hear some beats and pieces that July has been trending ahead of historical seasonality trends, maybe anecdotally, but curious, what is it that you're seeing out there as the first month of your third quarter is coming to an end? Thank you.

Question: Shrenik Kothari - Robert W. Baird & Co Inc - Analyst : Yeah, thanks for taking my question. So congrats, Steve, Mark and team. Just a follow-up to earlier question by Andrew and your answer around federal scrutiny and net retention. And with the improved visibility in the federal renewals you mentioned, specifically on the retention expansion opportunity. Can you comment on whether these federal renewals are skewing towards kind of more tactical VM, but also seeing more opportunity for platform consolidation, Tenable One, for example, or cloud workloads. Like any comments on how these renewals can see potential kind of added value from Tenable One, if you may? Thanks.

Question: Shrenik Kothari - Robert W. Baird & Co Inc - Analyst : Very helpful, thanks a lot.