TENABLE HLDGS INC earnings calls

Where Tenable One customers come from

Q (Michael Cikos · Needham & Company): How many of the 5,000+ Tenable One customers are existing customers who adopted Tenable One versus new logos?

A: Management said growth was broad. They had a large number of new logos, many of which were Tenable One, and they also saw many VM customers and legacy Tenable One customers convert to the new SKU.

Competition from endpoint vendors

Q (Michael Cikos · Needham & Company): Are endpoint vendors showing up more in deals or bundling to compete with Tenable One?

A: Management said endpoint vendors showed up but they saw no change in competitive dynamics in Q3 and win rates actually improved. Sellers and channel partners are now more efficient selling Tenable One, and Hexa is a big differentiator in those wins.

"No, listen, they're out there, and we didn't see any change whatsoever from a competitive dynamic in Q3." — Mark Thurmond (CEO)

Scanning frequency and pricing changes

Q (Rudy Kessinger · D.A. Davidson): With more vulnerabilities (e.g., Mythos/PHP2Shell) will customers scan more and can Tenable change pricing to capture usage with Hexa? Also, what share of assets are Tier 1 vs Tier 2/3?

A: Management said pricing and packaging have evolved, with ASPs and selling prices increasing and Hexa driving increased prompt volume. They remain primarily asset-based but are also charging on volume (not per scan) to avoid discouraging usage. They said most assets they protect are Tier 1, which helps explain higher selling prices.

"We don't want to do it based on the number of scans." — Stephen Vintz (CEO)

Drivers of growth: expansion vs new products

Q (Jonathan Ho · William Blair): How much of the quarter's growth was asset expansion, upsell, or new product sales? And does Tenable One expand types of assets covered?

A: Management said the quarter was balanced: strong expansion in the installed base, many large VM customers converted to Tenable One, and strong new-logo performance. They said moving customers to Advanced brings 2–4 different asset types, more advanced attack-path analysis, and more Hexa tokens, and most new/expanded Tenable One deals are on Advanced.

"When you move up to especially Advanced, you're usually looking at 2, 3, sometimes 4 different asset types." — Mark Thurmond (CEO)

PHP2Shell impact and gross margin with Hexa

Q (Roger Boyd · UBS): How did Log4j compare as a tailwind, what impact might PHP2Shell have, and could Hexa prompt volume pressure gross margins?

A: Management said PHP2Shell had little impact on the quarter given timing but customer engagement is high and it reinforces exposure management demand. On gross margin, management said gross margins were about 81.5% (low 80s) and they expect margins to remain about there; Hexa doesn't pressure margins because customers upgrade into the platform and add-on SKUs protect margin after allotments are used.

"Hexa is not putting pressure on our gross margins because in order to get access to Hexa, customers need to upgrade into the platform, which is a huge pull then for customers to upgrade." — Matthew Brown (CFO)

Hexa add-on SKU and recognition

Q (Benjamin Goldberg · Stifel Financial): Did the add-on SKU for Hexa increase this quarter and how is it recognized (ratably or consumption)?

A: Management said they saw a tick up in the add-on SKU this quarter but the main revenue driver is moving customers into the platform, especially Advanced, which allows significant Hexa volume. They noted about three-quarters of new business is choosing Tenable One Advanced, and platform adoption is the larger growth driver.

"But for us, the main draw really is in moving folks into the platform and specifically into Advanced where they're allowed a pretty significant volume for Hexa usage." — Mark Thurmond (CEO)

OT security momentum and patching roadmap

Q (William Bellamy · Jefferies): Is OT gaining momentum in federal and can OT be cross-sold broadly? Also, where is Tenable on autonomous patching?

A: Management said OT adoption is gaining momentum globally and federal and state/local were strong contributors this quarter. On patching and remediation, management described exposure management as identify, prioritize, and remediate; they do some remediation natively and integrate with third parties and will continue to deepen remediation and orchestration capabilities, with Hexa a key part of that effort.

"Number one, identify every -- all your exposures across a wide range of domains." — Stephen Vintz (CEO)

Why management raised the full-year guide

Q (Conner Weed · Scotiabank): What in the business and pipeline gave confidence to raise the full-year guide?

A: Management said the strong Q3 performance plus pipeline growth into Q4 gave confidence to raise the guide. They also expect CCB to tick up slightly in Q4, which supports the guide increase.

"We think that probably ticks up slightly in Q4, and that's giving us confidence to be able to raise the guide for revenue in Q4 as well." — Matthew Brown (CFO)

Federal business strength and outlook

Q (Abhishek Murli · Morgan Stanley): How much did federal contribute outside OT, and what is the federal landscape like now?

A: Management said federal was strong this quarter and Tenable has market leadership across many federal agencies. They noted new AI security policies in the last 6 months should be a tailwind, and they are working with CISA and other federal programs, expecting continued strength in U.S. public sector budgets.

"We believe that policy will ultimately be a tailwind for Tenable." — Stephen Vintz (CEO)

Net enterprise adds vs new logos difference

Q (Robbie Owens · Piper Sandler): Why is there a delta between net enterprise adds year-over-year and record new-logo Tenable One quarter? Also, outlook for expansion rate in Q4?

A: Management said they added 413 new enterprise customers and the bigger driver of value is that larger customers are spending more, with new six-figure accounts up 18% year-over-year and net dollar retention improving. They expect the 107% expansion rate to hold in Q4 and noted federal helped Q3 and should do well in Q4.

"But the dynamic that I think is driving value even more is actually the value that the larger customers are bringing." — Mark Thurmond (CEO)

Hexa usage and long-term growth (connection check)

Q (Joshua Tilton · Wolfe): Can you hear me? (Then asked about Hexa usage and tokens, and trajectory toward long-term growth targets.)

A: Management said Hexa now supports continuous, coordinated AI agents that identify exposures and orchestrate fixes, and customer usage and adoption of Hexa grew dramatically. They said Hexa automates drudgery and speeds remediation from days to hours or minutes, and on long-term targets management cited strong leading indicators like new business and bookings that support their midterm goals.

Hexa usage trends and growth trajectory

Q (Joshua Tilton · Wolfe): Since the Hexa switch, how has usage changed and how do customers handle token limits? Also, will revenue growth trend to double digits next year toward long-term targets?

A: Management said Hexa now has coordinated AI agents and usage has risen sharply; customers automate routines and Hexa cuts remediation time from days to hours or minutes. On growth, management said they feel good about long-term targets and are focused on leading indicators—new business and bookings are strong—and revenue will follow though it lags bookings.

"What used to take hours or should I say days, now it gets done in hours and sometimes even minutes and customers can build automated routines." — Stephen Vintz (CEO)

Tenable One uplift and on-ramp effects

Q (Richard Poland · Wells Fargo): Is the expected Advanced uplift (roughly 25% plus) being realized now, or is the priority getting customers onto the platform first?

A: Management said it's both: new customers are coming directly into the platform and spending more, and once on the platform customers expand usage. They noted platform customers pay much more than Nessus or stand-alone SKUs, and Nessus still serves as an on-ramp into higher-value products.

"Average customer value is double in the platform what it is versus stand-alone SKUs." — Mark Thurmond (CEO)