Q4 2021 Tenable Holdings Inc Earnings Call

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Speaker 1: 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.

Greetings and 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 final 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 Ms. Erin Karney head of Investor Relations. Thank you you may begin.

Speaker 1: If anyone should require operator assistance during the conference, please press star zero on your telephone keypad.

Speaker 1: I will now turn the conference over to your host, Erin Carney, head of investor relations.

Thank you operator, and thank you all for joining us on today's conference call to discuss carnivals fourth quarter and full year 2021 financial results with me on the call Today Army, Iran, Carnival's, Chief Executive Officer, and Steven <unk>, Chief Financial Officer. Prior to this call we issued a press release announcing.

Speaker 1: With me on the call today, I meet Iran, tenable Chief Executive Officer, and Steve Dent, 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.

Our financial results for the quarter you can find the press release on the IR website at Tenable dotcom.

Speaker 2: 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 and Tenable's business.

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 guidance and expectations for the first quarter and full year 2022 .

Roast and drivers intangibles business changes in the threat landscape in the security industry and our competitive position in the market growth.

Speaker 2: changes in the threat landscape in the security industry and our competitive position in the market.

Speaker 2: growth in our customer demand for and adoption of our solutions, the potential benefits of our acquisitions, plans innovation, and new products and services.

Growth in our customer demand for and adoption of our solution the potential benefits of our acquisition plans and innovation of new products and services.

Speaker 2: Fennel's expectations regarding long-term profitability and the impact of COVID-19 on our business and on the global economy.

<unk> expectations regarding long term profitability and the impact of COVID-19 on our business and on the global economy.

Speaker 2: 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.

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.

Speaker 2: You should not rely upon forward looking statements as a prediction of future events. Forward looking statements represent our management, belief, and assumptions only as of today, and should not be considered representative of our views as of any subsequent date. We disclaimed any obligation to update any forward looking statements or outlook.

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.

Speaker 2: 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 quarterly report on Form 10Q and subsequent reports that we file at the SEC, which are available on the SEC website at SEC.gov.

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 quarterly report on Form 10-Q , and subsequent reports that we file with the SEC, which are available on the SEC's website at SEC Gov in.

Speaker 2: In addition, during today's call, we will discuss non- GAAP financial measures. These non- GAAP financial measures are in addition to, and not as of two four or superior two, measures of financial performance, preparing in accordance with gaps. There are a number of limitations related to the use of these non- GAAP financial measures versus their closest gap equivalent.

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 me.

Speaker 2: Our earnings release that we issued today includes gas to non-gap reconciliation for these measures and is also available on the Invest Relations section of our website. I'll now turn the call over to Amit.

Speaker 3: Thank you, Aaron, and thank you for joining us today. Today I'll discuss our financial performance in Q4, strengthen core VMs.

Thank you Eric and thank you for joining us today.

I'll discuss our financial performance in Q4 strength in core VM.

Speaker 3: Attraction with our individual exposure solutions and the expansion and differentiation of our unified platform. With that,

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.

Speaker 3: We saw tremendous strength in the fourth quarter, driven by contributions from all products and theaters.

We saw tremendous strength in the fourth quarter, driven by contributions from all products and theaters.

Speaker 3: Our CCB growth for the quarter was 29%. Capping the year where we saw accelerated growth at scale bounce with profitability, including strong, unleavened free cash flow.

Our CTV growth for the quarter was 29% capping a year, where we saw accelerated growth at scale bounce with profitability, including strong unlevered free cash flow.

Speaker 3: 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.

During Q4, we added 562, new enterprise platform customers and added 100 net new six figure customers. Both a record adds for us in a single quarter.

Speaker 3: As the leader in VM, our expertise is finding assets.

As the leader of our expertise is finding assets.

Speaker 3: identifying how those assets are configured and how and where they're vulnerable and prioritizing those vulnerabilities and exposures, guiding our customers and how best to manage risks.

Identifying how those assets are configured and how and where they are vulnerable and prioritizing those vulnerabilities and exposures guiding our customers and how best to manage risk.

Speaker 3: Nessus has been and continues to be the standard for assessing system security and vulnerabilities. Over the last three years, we've seen an acceleration of download of Nessus, and in Q4, we saw continued strength with Nessus customers on ramping to our enterprise platform.

This has been and continues to be the standard for assessing system security vulnerabilities.

Over the last few years, we've seen an acceleration of downloads of masses and in Q4, we saw continued strike with with nessus customers on ramping to our enterprise platforms.

Speaker 3: Our drive to lead the market in terms of vulnerability coverage after receive our assessment.

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.

Speaker 3: Time to market for developing new checks as critical new vulnerabilities emerge are highly appreciated and recognized by our customers.

Speaker 3: In Q4, law for J highlighted and continues to highlight the strategic importance of discovering and managing vulnerabilities. Regardless of marketing claims, no laugh, no next-gen firewall, no EDR, no XDR, or any other product is able to assess, identify, and prevent the growing breadth of law for J.

In Q4 last four Jay highlighted and continues to highlight the strategic importance of discovering a magic vulnerabilities, regardless of marketing claims no WAF Nextgen firewall no edr.

E R or any other product is able to assess identify and prevent the growing breadth of law for Jay.

Speaker 3: Tenable already covers over 100 log for J vulnerability detections, including direct checks and checks over HTTP, HTTPS, SNTP, POPP3, I'm not, Telnet, SSH, SNTP, NTP, FTP, NetBios, and other protocols. And we've only begun to pull on the long tail of log for J related issues.

Double already covers over 100 law for Jabil liability detection, including direct checks and checks or http. Https. SMTP top three either telnet SSH SNMP NTP FTP net buyers and other protocols and we've only begun to pull on the long term.

Log for Jay related issues, if it's your mission within the enterprise to answer the question how secure am I how.

Speaker 3: If it's your mission within the enterprise to answer the question, how secure am I, how it risk am I, then Tettable has differentiated itself as a market leader and platform to you.

How at risk of my incredible has differentiated itself as the market leader and platform to use.

Speaker 3: Enterprise and tax services keep expanding, creating opportunities for tentables 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.

Enterprise attack surfaces, keep expanding creating opportunities for tenable is 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.

Speaker 3: We believe we're the only vendor that provides complete understanding of IT and OT conversion environments coupled with a deep understanding of exposure and

We believe we're the only vendor that provides a complete understanding of I T and Ot converged environment, coupled with a deep understanding of exposure and risk.

Speaker 3: This unique understanding of both of these environments enables us to provide a differentiated and compelling solution to mark.

This unique understanding of both of these environments enables us to provide a differentiated and compelling solution in the market.

Speaker 3: We also see strong traction in 10-BLAG, our Active Directory Security Product, and expect that to continue to be very attractive mark.

We also see strong traction in Tenable AG are active directory security product and expect that to continue to be very attractive market for us 86% of enterprises are expected to increase their spending and active directory security in 2022, we believe salt we're solving a great pain.

Speaker 3: 86% of enterprises are expecting to increase their spending and 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.

And this largely greenfield market well, 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.

Speaker 3: 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.

Based capabilities require assessing the security web applications and a deep understanding of containers, we've had cloud native connectors for years and more recently, we've introduced frictionless assessments.

Speaker 3: 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 Acura.

With continued demand from our customers to help them secure their cloud environments, we've extended our investment into Infrastructure's code into kubernetes, and it's a cloud security posture management with the acquisition of <unk>.

Speaker 3: 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 and run times.

As we continue to build out and integrate a full portfolio of cloud capabilities, our reach expand all the way from the far left from building in assessing vulnerabilities in code and fixing up pre production all the way through the far right what were discovering asset evaluating drift and exposures in run time.

Speaker 3: We identify misconfigurations and fix assets across their entire life cycle.

We identified this configurations and fixed assets across their entire lifecycle.

Speaker 3: 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.

Carnival becomes the definitive place to go to for assessing and understanding risk across the entire cloud deployment not just the development piece and that's just the cloud and kubernetes infrastructure configuration, and not just the containers or the virtual machines themselves.

Speaker 3: If it's your job to assess cyber risk for the audit risk

If it's your job to assess cyber risk for the audit and risk Committee.

Speaker 3: for the CSO, for the CEO , for the boards of directors.

For the CSO for the CEO for the boards of directors Tenable E. P. Our exposure platform can help you understand cyber risk in the broader context of your business.

Speaker 3: Tenable EP, our exposure platform, can help you understand cyber risk in the broader context of your business.

Speaker 3: Our market leadership in VM, in assessing and addressing cyber risk, put us in a position of strength to evolve naturally with our customers into new environments.

Our market leadership and V in assessing and addressing cyber risk put us in a position of strength to evolve naturally with our customers into new environments security teams cannot properly assess risk in their it environments without understanding and integrating risk from their <unk> environment the cloud.

Speaker 3: 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.

Others. These demand this unified integrated approach.

Speaker 3: 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 we're seeing this play out in the market Tenable E. T had another strong quarter and we expect that traction to continue as we're now expanding tenable EEP to incorporate more of our exposure solution, including tenable.

Speaker 3: and Tenable CS, which includes Infrastructure as Code, Kubernetes, CSPM, Container, and other cloud security capabilities.

And tenable see US, which includes Infrastructure's code Kubernetes C. S. P M container and other cloud security capabilities with these integrations tenable C. S. As part of EEP will deliver a cloud native application security platform and integrated.

Speaker 3: with these integrations, Tenable CS, as part of...

Speaker 3: will deliver a cloud-native application security platform as an integrated end-to-end security.

In security solution.

Speaker 3: and a complete picture of cyber risk across the modern attacks.

And a complete picture of cyber risk across the modern attack surface with unified visibility into code configuration assets and workloads.

Speaker 3: unified visibility into code, configurations, assets, and work.

Speaker 3: Earlier today, we announced that we've reached an agreement on a tuck-in acquisition of an attack path analysis company in Israel called Sympton, which we expect to close this quarter.

Earlier today, we announced that we've reached an agreement on a tuck in acquisition of an attack path analysis company in Israel called symptoms, which we expect to close this quarter.

Speaker 3: Symptoms technology maps vulnerabilities and exposures across asset types into a task path and prioritizes how to address likely paths of exploitation.

Symptoms technology maps vulnerabilities and exposures across asset types into attack path and prioritizes how to address likely paths of exploitation.

Speaker 3: 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.

After the closing this technology when integrated into E. P well run alongside enhancements to lumen another market, leading analytics, enabling security teams to preemptively focused response efforts ahead of enduring breaches.

Speaker 3: Serving our customers' need 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 workstation.

Serving our customers need to understand their cyber risk is what drives our vision and our expansion across via active directory public cloud and Ot environments into an integrated unified workspace, we believe that the EPA is unified datasets and analytics, where the attack.

Speaker 3: 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.

[noise] analysis will enable <unk> to continue to extend our leadership in cyber risk management.

The world of the CSO.

Is managing many risks.

Cross many interconnected and interdependent system.

Speaker 3: 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 directors.

Assessing risk means understanding discrete elements of exposure, but also their interdependence weaknesses in identity and I T.

Can affect Oh, Gee and shut down our pipeline ransomware and nation state breaches breach I T and target active directory.

Speaker 3: 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...

Attainable, we're not only focused on delivering best of breed technologies and exciting market, we're pursuing our platform vision for understanding and managing cyber risks 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 via yes, we see strong growth in potential and our individual exposure solutions across active directory and operational technologies and cloud security, but if there's one single thought once so conclusion. It's this.

Speaker 3: 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.

Speaker 3: But if there's one single thought, one sole conclusion, it's this.

Speaker 3: that it's nearly impossible to accurately assess the risk associated with any one piece of technology in isolation.

But it's nearly impossible to accurately assess the risk associated with any one piece of technology in isolation.

Speaker 3: 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. Let's

Our unified platform not only brings together market recognized leasing exposure solutions, we're bringing more of these datasets together in a unique cyber exposure platform with differentiated and compelling analytics.

Let's turn the call over to Steve now.

Thanks, Amit.

Speaker 4: As Amit mentioned earlier, we are delighted with the results of the fourth quarter, highlighted by significant acceleration in CCB growth, a notable beat in earnings per share, and attractive levels of unlevered pre-cash flow.

As I mentioned earlier, we are delighted with the results for the fourth quarter highlighted by significant acceleration in GCB growth notable beat in earnings per share and attractive levels of Unlevered free cash flow.

Speaker 4: I will provide more commentary on each of these points momentarily, but first please note that all financial results we discussed today are non-GAAP financial measures.

I will provide more commentary on each of these points momentarily, but first please note that all financial results. We discussed today are non-GAAP financial measures with the exception of revenue.

Speaker 4: As Aaron mentioned at the start of this call, gap to non-gap reconciliations may be found in our earnings release issued earlier today, which is posted on our website. Now on to our results for the quarter. Revenue for the quarter was $134.

As Aaron mentioned at the start of this call GAAP to non-GAAP reconciliations may be found in our earnings release issued earlier today, which is posted on our website.

Now onto our results for the quarter.

Revenue for the quarter was $149 million, which represents 26% year over year growth.

Speaker 4: Revenue in the quarter exceeded the midpoint of our guided range by $5 million.

Revenue in the quarter exceeded the midpoint of our guided range by $5 million.

Speaker 4: Visibility remains high as our percentage of recurring revenue was 95%.

Visibility remains high as our percentage of recurring revenue was 95%.

Speaker 4: primarily a result of our annual prepaid subscription model.

It is primarily a result of our annual prepaid subscription model.

Speaker 4: Revenue for the full year was $541.1 million, which represents 23% growth year-over-year.

Revenue for the full year was $541 1 million, which represents 23% growth year over year.

Speaker 4: The outperformance in revenue is a result of accelerating growth in calculated current billings.

The outperformance in revenue as a result of accelerating growth in calculated current billings.

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Speaker 4: defined as the change in current deferred revenue plus revenue recognized in the quarter grew 29% year-over-year to $194 million.

Defined as the change in current deferred revenue plus revenue recognized in the quarter grew 29% year over year to $194 million.

Speaker 4: Q4 caps a very successful year for us, in which we saw CCB growth accelerate throughout the year.

Q4 cafe very successful year for us in which we saw CCP growth accelerate throughout the year from 20% in Q1 to 23% in Q2 to 25% in Q3 and now to 29% in Q4.

Speaker 4: 20% in Q1, to 23% in Q2, to 25% in Q3, and now to 29% in Q4.

Speaker 4: We attribute this inflection and growth to our differentiated VM capabilities, expanding product portfolio, and increased investment in sales capacity in go-to-market.

We attribute this inflection and growth to our differentiated VM capabilities, expanding product portfolio and increased investment in sales capacity and go to market activities.

Speaker 4: During Q4, we saw strength across the board in both new and renewed business, and in all geographies.

During Q4, we saw strength across the board in both new and renewal business and in all geographies.

Speaker 4: It's important to note that we experience very good linearity entering December and we're on our way to one of our best growth quarters of the year.

It is important to note that we experienced very good linearity entering December .

And we're on our way to one of our best growth quarters of the year.

Speaker 4: However, after the discovery of log 4J in December , we saw a significant uptick in our expansion rates. As customers increased coverage of both assets and applications.

However, after the discovery of log for Jay in December we saw a significant uptick in our expansion rates as customers increased coverage at both assets and applications.

Speaker 4: Our expansion rates also benefited from exceptional renewals, including win-backs and limited customer churn, all of which lifted our net dollar expansion.

Our expansion rates also benefited from exceptional renewals, including win backs and eliminate customer churn all of which lifted our net dollar expansion rate.

Speaker 4: Likewise, we also saw outperformance in new logos, particularly in the mid-market door inside sales efforts, and from no touch, necessary sales channels, given the relatively short sales items.

Likewise, we also saw outperformance in new logos, particularly in the mid market through our inside sales efforts and from no touch necessary channels, given the relatively short sales cycles.

Speaker 4: New logo sales from large market customers with longer sales cycles also saw strong close rates.

New logo sales from large market customers with longer sales cycles also saw strong close rates.

Speaker 4: for opportunities that were already advanced in the Q4 pipeline.

Or opportunities that were already advanced in the Q4 pipeline.

Speaker 4: new pipeline built in the quarter for the large market was also very helpful.

New pipeline build in the quarter for the large market was also very healthy.

Speaker 4: Now in terms of metrics underpinning our strong financial performance, we added 562 new enterprise platform customers in the quarter, which is a record for us. And up from the 460, we added...

Now in terms of metrics underpinning our strong financial performance, we added 562, new enterprise platform customers in the quarter, which is a record for us and up from the 460, we added in.

In Q4 last year.

Speaker 4: We also had success with large deals as we added 100 net new six-figure customers in the quarter, which is up from 66 in the same period last year.

We also had success with large deals as we added 100 net.

Net new six figure customers in the quarter, which is up from 66 in the same period last year.

Speaker 4: Similar to new enterprise platform customers, the number of net new six-figure customers we added in Q4 is our largest ever in a single quarter and brings the total number of new enterprise platform customers spending over $100,000 per atom to almost $1,100.

Similar to new enterprise platform customers. The number of net new six figure customers. We added in Q4 is our largest ever in a single quarter and brings the total number of new enterprise platform customers spending over 100000 per annum to almost 11 contract.

Speaker 4: From a product mix perspective, our exposure solutions, which includes Tenable I.O., Tenable E.P., NS Modules, Active Directory Security, and Operational Technology Security continue to gain traction and saw outsides grow.

From a product mix perspective, our exposure solutions, which includes tenable Io and tenable EP and its modules active directory security and operational technology security continued to gain traction until outside's growth.

Speaker 4: We attribute this strong demand to our customers' need to assess risk holistically across ICFX, identities, and OTS.

We attribute this strong demand to our customers need to assess risk holistically across ICF ex identities and O T asset.

Speaker 4: While we saw strength in cloud use cases, it should be noted that a KERIC's contribution to CCB in the quarter was nominal since the acquisition closed, in Q4 and a KERIC's infrastructure is code capability.

While we saw strength in cloud use cases, it should be noted that <unk> contribution to CCP in the quarter was nominal since the acquisition closed in Q4, and a cure infrastructures co capabilities.

Speaker 4: We're not integrated into our go-to-market motion.

Not integrate it into our go to market motion in the quarter.

Speaker 4: We believe a caretability to assess and secure critical cloud infrastructure prior to deployment will significantly enhance our existing cloud capabilities and augment our strengths in one time.

We believe <unk> ability to assess and secure critical cloud infrastructure prior to deployment will significantly enhance our existing cloud capabilities and augment our strength and onetime environments.

Speaker 4: Accordingly, we plan to soon announce the availability of our more expansive cloud security offering and the integration of these capabilities with EP shortly. And given tail cycles, we expect CCB to begin to benefit in the second half of the year.

Accordingly, we plan to soon announce the availability of our more expansive cloud security offerings and the integration of these capabilities with EP shortly and given sales cycles, we expect <unk> to begin to benefit in the second half of the year.

Speaker 4: In summary, we are delighted with the trim and the top line.

In summary, we are delighted with the trends and the topline this year.

Speaker 4: Now, I'll turn to expenses which include incremental investments in growth and the operating expenses related to a cure.

Now I'll turn to expenses, which includes incremental investments in growth and the operating expenses related to a correct.

Speaker 4: I'll start with Gross Margin, which was 82% this quarter, down 70 basis points from last quarter. Gross Margin from...

I'll start with gross margin, which was 82% this quarter down 70 basis points from last quarter.

Gross margin for the full year was also 82%.

Speaker 4: Calls to the sales increase sequentially due to higher public cloud and related costs associated with the increased customer usage of our products and calls related to scaling the accuracy infrastructure in support of a more expansive cloud security offer.

Cost of sales increased sequentially due to higher public cloud and related costs associated with the increased customer usage of our products and costs related to scaling via care infrastructure in support of a more expansive cloud security offering.

Speaker 4: We are also investing in a broader set of advanced analytics across the attack surface to help customers better predict the attack paths and assess risk holistically.

We're also investing in a broader set of advanced analytics across the attack surface and help customers better predict attack Paas and SaaS risk Holistically.

Speaker 4: Looking ahead, we expect these investments to continue into 2022, which could modestly impact Rosemars.

Looking ahead, we expect these investments to continue into 2022, which could modestly impact gross margin.

Speaker 4: Long-term, we still expect gross margins to be in the high 70 to low 80%.

Long term, we still expect gross margins to be in the high 70 to low 80% range.

Speaker 4: Sales and marketing expense for the quarter was $69.5 million, which is up from $60.7 million last quarter.

Sales and marketing expense for the quarter was $69 5 million, which is up from $60 7 million last quarter.

Speaker 4: Tales of the marking expense reflects higher wages and benefits related to hiring more shell traps and other headcounts as well as accrued payrolls.

Sales and marketing expense reflects higher wages and benefits related to hiring more sales reps and other head count as well as accrued payroll taxes.

Speaker 4: Further, it reflects higher commissions and variable compensation attributed to our strong sales performance in the quarter. An increased investment in marketing for demand-gen and brand-building at PVE for our exposures.

Further it reflects higher commissions and variable compensation attributed to our strong sales performance in the quarter.

And increased investment in marketing for demand Gen and brand building activities for our exposure solutions.

Speaker 4: Adding sales capacity and investing in our go-to market efforts will continue to be an area of focus for us, given the acceleration and growth in 2021. Our expanded product portfolio and the high level of sales, productivity, as well as our ability to generate an attractive ROI on new dollars and best.

Adding sales capacity and investing in our go to market efforts will continue to be an area of focus for us given the acceleration in growth in 2021, our expanded product portfolio and the high level of sales productivity as well as our ability to generate an attractive ROI on new dollars invested.

Speaker 4: Cells are marking expense as a percentage of revenue was 47% in Q4 compared to

Sales and marketing expense as a percentage of revenue was 47% in Q4.

Compared to 44% last quarter.

Speaker 4: The full year sells a marking expense as a percent of revenue, which 44%. And is expected to remain at or near this percentage in 2022, which will give us ample investment dollars to keep pace with the strong.

For the full year sales and marketing expense as a percent of revenue was 44%.

And it is expected to remain at or near this percentage in 2022, which will give us ample investment dollars to keep pace with the strong demand.

Speaker 4: R&D expense for the quarter was 24.9 million, which was consistent with 25.1 million last quarter.

R&D expense for the quarter was $24 9 million, which was consistent with $25 1 million last quarter.

Speaker 4: Although there was little change in R&D expense during the quarter, it should be noted that we added a sizeable team of engineers in cloud security, the tributative tour of Kirik's, and made other hires, which was more than all set by the amount of capitalized software development costs related to expanding our exposure platform and an R&D tax credit we were...

Although there was little change in R&D expense during the quarter. It should be noted that we added a sizable team of engineers and cloud security attributed to Keryx and made other hires which was more than offset by the amount of capitalized software development costs related to expanding our exposure platform.

And an R&D tax credit we received.

Speaker 4: R&D expense as a percentage of revenue was 17% in Q4 compared to 18% last quarter.

R&D expense as a percentage of revenue was 17% in Q4 compared to 18% last quarter.

Speaker 4: For the full year, R&D expense as a percentage of revenue was 18%. And it's expected to increase modestly in 2022, given the increase investment in cloud security, attack path analysis attributed to the symptom acquisition, and a broader set of predictive analytics and platforms.

For the full year R&D expense as a percentage of revenue was 18% and is expected to increase modestly in 2022, given the increased investment in cloud security attack path analysis attributed to the symptom acquisition and a broader set of predictive analytics and platform capabilities.

Speaker 4: GNA expense was 15.8 million compared to 15 million last quarter.

G&A expense was $15 8 million compared to $15 million last quarter.

Speaker 4: If the percentage of revenue, GNA, expense with 11% this quarter and last quarter as well as for the full year.

As a percentage of revenue G&A expense was 11% this quarter and last quarter as well as for the full year.

Speaker 4: We continue to make investments in GNA to support growth and scale of our business.

We continue to make investments in G&A to support growth and scale of our business. We expect G&A expense as a percentage of revenue to remain flat in 2022.

Speaker 4: We expect UNA expense as a percentage of revenue to remain flat in 2022.

Speaker 4: Income from operations with 11.9 million compared to 13.7 million last quarter, which reflects the items I just highlighted.

Income from operations was $11 9 million compared to $13 7 million last quarter, which reflects the items I just highlighted.

Speaker 4: of the full year, non-gapping come from operations with 51 million, compared to 25.8 million in 2020.

For the full year non-GAAP income from operations was $51 million compared to $25 8 million in 2021.

Speaker 4: which was a $25 million improvement despite the additional operating expenses attributed to the all-fed and the care acquisition.

It was a $25 million improvement despite the additional operating expenses actually going to be all set and a character acquisitions.

Speaker 4: Operating margin was 8% for Q4 compared to 10% last quarter.

Operating margin was 8% for Q4 compared to 10% last quarter.

Speaker 4: Operating margin was 9% for the full year compared to 6% for the full year 2020.

Operating margin was 9% for the full year compared to 6% for the full year 2020.

Speaker 4: EPS in the fourth quarter was 5 cents,

EPS in the fourth quarter was <unk>, which was <unk> <unk> better than the high end of our guided range.

Speaker 4: So before year we generate 34 cents of earnings per share versus 19 cents last year. Better.

Full year, we generated 34 cents of earnings per share versus <unk> 19 cents last year.

Now, let's turn to the balance sheet.

Speaker 4: We finished the quarter with 512 million cash in short term investments.

We finished the quarter with 512 million in cash and short term investments.

Speaker 4: Given our strong Q4 results, we saw notable sequential increase in both accounts receivable and total deferred reps.

Given our strong Q4 results. We saw notable sequential increase in both accounts receivable and total deferred revenue.

Speaker 4: At year end, accounts receivable is $137 million, and total deferred revenue was $531 million, including $407 million of current deferred revenue, which gives us a lot of visibility headed into 2022.

At year end accounts receivables of $137 million and total deferred revenue was $531 million, including $407 million.

Current deferred revenue, which gives us a lot of visibility.

Headed into 2022.

Speaker 4: Now, I would like to discuss cashflow. We used 160 million of cash to acquire a carix and paid 3.2 million of interest on our credit facility in October .

Now I would like to discuss cash flow, we used $160 million of cash will acquire keryx and paid $3 2 million of interest on our credit facility in October .

Speaker 4: Thank you for we generated 22.4 million of on-leverage retache flow and for the year we generated 95.2 million, which is a $50.9 million increase over 2020.

In Q4, we generated $22 4 million of Unlevered free cash flow.

And for the year, we generated $95 2 million, which is a $59 million increase over 2020 levels.

Speaker 4: With 95% recurring revenue, high gross margins and high rental rates, we feel confident that we can continue to generate attractive levels of cash flow while continuing to invest in the business.

With 95% recurring revenue high gross margins and high renewal rates, we feel confident that we can continue to generate attractive levels of cash flow, while continuing to invest in the business.

Speaker 4: Striking the right balance between growth and profitability has always been an area of focus.

Striking the right balance between growth and profitability has always been an area of focus for us.

Speaker 4: A good indication of this is our achievement of Royal Authority for the fourth quarter and full year.

A good indication of this is our achievement of rule of 40 for the fourth quarter and full year.

Speaker 4: Achieving this was years in the making and a long-term goal since our IPO in 2018 So we're very pleased to have achieved this important milestone

Achieving this was years in the making and our long term goal since our IPO in 2018. So we're very pleased to have achieved this important milestone.

Speaker 4: As a reminder, we define rule 40 as Rev. New Grove cloths unleavored pre-cash.

As a reminder, we define the rule of 40 as revenue growth plus unlevered free cash flow margin.

Yeah.

Speaker 4: With the results of the quarter behind us, I'd like to discuss our outlook for the first quarter in full year 2022.

With our results for the quarter behind us I'd like to discuss our outlook for the first quarter and full year of 2022.

For the first quarter, we currently expect revs.

Speaker 4: Revenue to be in the range of 152 to 154 million.

Revenue to be in the range of $152 million to $154 million.

Speaker 4: Don Gap, income from operations to be in the range of 10 to 11 minutes.

non-GAAP income from operations to be in the range of $10 million to $11 million.

Speaker 4: non-gap net income to be in the range of 5.2 to 6.2 million, assuming interest expense of 3.5 million and a provision for income tax of 1.3 million.

non-GAAP net income to be in the range of $5 two to $6 2 million, assuming interest expense of $3 5 million and our provision for income tax of $1 3 million.

non-GAAP diluted earnings per share to be in the range of four to five.

Speaker 4: non-GAAP diluted earnings per share to be in the range of $0.04 to $0.05, assuming 117.5 million fully diluted weighted average shares outstanding.

Assuming a $117 5 million fully diluted weighted average shares outstanding.

And for the full year. We currently expect calculated current billings to be in the range of $750 million to $760 million.

Speaker 4: Calculate a curved building to be in the range of 750 to 760 million.

Speaker 4: Revenue to be in the range of 662 to 670 million.

Revenue to be in the range of $662 million to $670 million.

Speaker 4: Non-GAP income from operations to be in the range of 40 to 45 million.

non-GAAP income from operations to be in the range of $40 million to $45 million.

Speaker 4: Non-GAP net income to be in the range of 18.2 to 23.2 million, assuming interest expense of 14 million, and a provision for income taxes of eight.

non-GAAP net income to be in the range of 18, two to $23 2 million, assuming interest expense of $14 million and a provision for income taxes of $8 million.

Speaker 4: non-GAP diluted earnings for share to be in the range of 15 to 19 cents, assuming $119.5 million fully diluted weighted average shares outstanding.

non-GAAP diluted earnings per share to be in the range of <unk>.

15 to 19 sets, assuming $119 5 million fully diluted weighted average shares outstanding.

Speaker 4: Our strong performers use you for and the full year 2021. Give us a lot of confidence in the business and our outlook for 2022.

Our strong performance in Q4, and the full year 2021 give us a lot of confidence in the business and our outlook for 2022.

Speaker 4: In that regard, there are a few comments I want to make that will provide important context to our gut.

In that regard there are a few comments I want to make that will provide important context to our guidance today.

Speaker 4: Our CCB guidance for the full year reflects 22 to 23% growth, which includes some continued tailwinds from log4j and Q1, with more modest contributions expected throughout the remainder of the year.

Our <unk> guidance for the full year reflects 22, 23% growth.

Some continued tailwind from long for Jay in Q1.

With more modest contributions expected throughout the remainder of the year.

Speaker 4: Overall, we're very pleased to be providing CCB and revenue guidance today that is notably above the 20% bar we discussed during our investor day in December .

Overall, we're very pleased to be providing.

<unk> and revenue guidance today that is notably above the 20% bar, we discussed during our Investor day in December .

Speaker 4: In terms of profitability, we exit the year with an 8% operating margin to queue for. Our guidance is 6% to 7% from the full year 2022, which includes 4 to 5 million per quarter of operating expenses related to a curate and to a lesser degree simple.

In terms of profitability, we exit the year with an 8% operating margin in Q4 guide.

<unk>, 6% to 7% from our full year 2022, which includes $4 million to $5 million per quarter of operating expenses related to <unk> and to a lesser degree symptom.

Speaker 4: The incremental investments in R&D attributed to recent acquisitions expand our product's sweet strategically important markets and strengthen our ability to deliver our cyber exposure vision.

The incremental investments in R&D attributed to recent acquisitions expand our product suite strategically important markets and strengthen our ability to deliver on our.

Our cyber exposure vision.

In terms of the quarterly flow of these investments we expect to follow our historical seasonal patterns with higher weighting in the first half of the year, resulting in higher operating margins.

Speaker 4: In terms of the quarterly flow of these investments, we expect to follow our historical seasonal patterns with higher weighting in the first half of the year resulting in higher operating margins, the second half.

Half of the year.

Speaker 4: As discussed earlier, we achieved RULA 40 in Q4 and the full year 2021. So we believe making investments in the face of strong demand will position us well for continued growth and success.

As discussed earlier, we achieved rule of 40 in Q4 and the full year of 2021 to.

So we believe making investments in the face of strong demand will position us well for continued growth and success.

Speaker 4: Long-term, we are confident in our ability to continue to balance growth, with profitability and become a rule of safety company.

Long term, we are confident in our ability to continue to balance growth with profitability and become a rule of 50 company.

Speaker 4: In summary, we're delighted with the results of the quarter. It's still really good about the outlook we are providing today. On now, turn the call back to a minute.

In summary, we're delighted with the results of the quarter I feel really good about the outlook, we're providing today I'll now turn the call back to Amit for some closing comments.

Speaker 3: Thanks Steve. We continue to see increasing levels of differentiation in our core VM capability.

Thanks, Steve.

We do see increasing levels of differentiation in our core VM capabilities. This is particularly exciting given the strategic role that many organizations are increasingly placing on via.

Speaker 3: This is particularly exciting, given the strategic role that many organizations are increasingly placing on VF.

Speaker 3: Our exposure solutions in OT and AD are seeing great traction.

Our exposure solutions in OTC and <unk> are.

We're seeing great traction.

Speaker 3: We're thrilled about the momentum we have in our cloud business, augmented by excerpts, forming an integrated comprehensive cloud off.

We're thrilled about momentum we have in our cloud business augmented by Europe's forming an integrated comprehensive cloud offering.

Speaker 3: And we believe that bring these solutions and data sets into a unified cyber risk management platform with differentiated analytics such as Lumen and attack path analysis.

And we believe that bringing these solutions and datasets into a unified cyber risk management platform with differentiated analytics, such as lumen and attack path analysis.

Speaker 3: And others positions us incredibly well for the long.

And others.

<unk> us incredibly well for the long term.

Speaker 3: We delivered strong results in Q4 and are excited about the road ahead.

We delivered strong results in Q4.

Excited about the road ahead.

We'd now like to open the call up for questions.

Thank you at this time, we'll be conducting a question and answer session. If he would like to ask a question.

Speaker 1: you. At this time we will be conducting a question and answer.

Speaker 1: If you would like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star 2 if you would like to remove your question from the line.

Ryan Please press star one on your telephone keypad, a confirmation tone will indicate your line is in the question queue. You May press star two if he would like to remove your question from the queue for participants using speaker equipment and may be necessary to pick up your handset before pressing the star.

Speaker 1: then using speaker equipment and maybe necessary to take up your hands up before pressing the star keys. One moment.

One moment, please while we poll for questions.

Speaker 1: Our first question is from Hamza, Thaadarwala of Morgan Stanley . Please proceed with your question.

Our first question is from Hamzah <unk>.

<unk> of Morgan Stanley . Please proceed with your question.

Speaker 5: Hey guys, thank you for taking my question and strong finish of the year here.

Hey, guys. Thank you for taking my question and a strong finish to the year here Steve.

Speaker 5: Steve, maybe just first question for you. You mentioned the tailwind from log4j. I was wondering if you could help with quantify what that actual tailwind was in Q4 and what the expectation is for 2022 from a growth contribution standpoint. You mentioned NRR was up. So what was the net retention rate in Q4 relative to what you saw in the quarter prior?

Steve maybe just first question for you you mentioned the tailwind from lock for Jay I was wondering if you could help us quantify what that actual tailwind was in Q4 and what the expectation is for 2022 from a growth contribution standpoint, you mentioned <unk> was up so what was the net retention rate.

In Q4 relative to what you saw in the quarter prior.

Hi.

Thanks for your question and good question.

Speaker 4: As we commented earlier, we saw some upside in the corridor related to log for J.

As we commented earlier, we saw some upside in the quarter related to log for Jay.

Speaker 4: I think it's, you know, the timing's important to note here. Lockford J didn't start us until December , and we were well on our way to having our best growth quarter of the year, which is notable given the acceleration in the business we've demonstrated throughout the year. So as a result, the impact of Lockford J and the quarter was more apparent in areas that had shorter sales cycles, such as renewals.

I think it's you know the timing is important to note here log for Jay didn't surface until December and we were well on our way to having our best growth quarter of the year.

Which is notable given the acceleration in the business we've demonstrated throughout the year. So as a result, the impact of walk for GE in the quarter was more parent in areas that had shorter sales cycles, that's just renewals expanse.

Speaker 4: expansion sales and in terms of new business, more specifically in the mid market and our no touch necessarily sales channels.

Expansion sales and in terms of new business.

More specifically in the mid market and are no touch necessary channels.

Speaker 4: But we are also very pleased to see pipeline and activity levels for larger jails inflect higher in the quarter. So we don't just see this as a pull forward of demand. I think the important point to note here is that Q4CAP did very successful year for us in which we saw accelerating TCB growth. That benefit it from our expanded product portfolio and the investments really were making them go to market that we started making the first half of the year. And as I meet comment earlier, which is

But we are also very pleased to see pipeline and activity levels for larger jails inflect higher in the quarter.

So we don't just see this as a pull forward of demand.

I think the important point to note here is that Q4 capped a very successful year for us in which we saw accelerating.

Tolerating PCB growth.

That benefited from our expanded product portfolio and the investments really we're making in go to market.

That we started making the first half of the year.

Let me comment earlier, what's really different.

Speaker 4: about law for J versus perhaps other vulnerabilities or even high profile data breaches is the pervasiveness and the complexity of it, which is a really a testament to our leadership in the market and the strategic nature of our products.

About wall for GE versus perhaps other vulnerabilities or even high profile data breaches is the pervasiveness and the complexity of it which is really a testament to our leadership in the market and the strategic nature of our products.

Speaker 4: We would regard to 2022, our CCB guidance for the full year does, which is 22 to 23% growth. Does reflect some continued tail lunch from blog4j and Q1.

With regard to 2022, our CCP guidance for the full year does.

Which is 22% 23% growth does reflect some continued tailwind from blog for Jay in Q1.

Speaker 4: given our level of visibility, as well as some contributions, more modest contributions throughout the year. But overall, we feel really good about the momentum in our business and our outlook for the year.

Given our level of visibility as well as some contributions.

More modest contributions throughout the year, but overall, we felt really good about the momentum in our business and our outlook for the year.

Speaker 4: We talked about the net dollar expansion rates. It was strong in quarter and it left it our net dollar expansion rate on an LTM basis back to close to pre-pandemic levels. So overall really solid quarter for us, kept it very successful year and gives us a lot of confidence heading into 2022.

And we talked about the net dollar expansion rates it was strong in quarter and it lifted our net dollar expansion rate on an LTM basis.

Back to you now.

Close to pre pandemic levels. So overall, a really solid quarter for us capped a very successful year and gives us a lot of confidence heading into 2022.

Speaker 5: See if I could just follow up on that. Just on that retention. So like you mentioned it was back to pre-pandemic levels. I think our last two quarters, the net retention, if I'm not mistaken, was trending between like 112, 113. It's a fair to say in Q4, it was back to that, let's say 115 to like, you know, 118 level even.

Steve if I could just follow up on that just on the net retention. So like you mentioned it was back to pre pandemic levels I think over the last few quarters that the net retention if I'm not mistaken was trending between like 112 113 is it fair to say and Q4. It was back to that let's say $1 15 to like you know what.

2018 level even.

Speaker 4: Yeah, so the instinction on make is LTM. What we talk about is LTM basis last 12 months. So if you have a really strong...

Yes.

Instincts distinction I'll make is LTM, what we talk about.

On an LTM basis last 12 months. So if you have a really strong.

Speaker 4: In quarter, we're no rate and expansion rates. It's going to drive a meaningful up left on our LTM number and we saw a meaningful up left in our LTM number because of the strength in the quarter. So I'll actually delight it with the result of the quarter. Obviously expansion rate did benefit from log4j.

In quarter renewal rate in expansion rates, it's going to drive a meaningful uplift on our LTM number and we saw a meaningful uplift in our LTM number.

Because of the strength in the quarter. So absolutely delighted with the result in the quarter, obviously expansion rate did benefit from law for Jay.

Speaker 4: Notwithstanding that, as I commented earlier, we were on our way to having a good quarter of Indiana and he was really strong and the last few weeks of the quarter because a lot for Jay was particularly strong and Reynolds and expansion's been a pivot. Okay, got it. Okay.

But notwithstanding that as I commented earlier.

We're on our way to having a good quarter linearity was really strong in the last few truly the west few weeks of the quarter because a lot for Jaguar.

Particularly strong and renewals and expansions benefited.

Okay got it.

I'll, let the others go thank you.

Speaker 1: Our next question is from Sterling Audi of J.P. Morion. Please proceed with your question.

Our next question is from Sterling Auty of J P. Morgan. Please proceed with your question.

Speaker 6: Yeah, thanks, hi guys. So the first one is you gave us the impact and operating expenses from a care extent and from symptom. But can you give us a sense of what impact that had on the revenue line for guidance for 22?

Yeah. Thanks, Hi, guys. So first one is you.

You gave us the impact in operating expenses from.

I'm curious in and from symptom, but can you give us a sense of what.

Impact that had on the revenue line for guidance for 2002.

Speaker 4: For a cure, it closed in the fourth quarter, and as I comment, we have a full year expenses. Obviously, we're flowing through the guide and it also reflects an additional operating expenses related to the symptom acquisition, which we just announced. And I think it's important to note that symptom is not going to be a separate skill. It's going to be integrated with EP and another areas of our product.

For our carrots carrots close in the fourth quarter and as I commented, we have a full year expenses, obviously, we're flowing through the guide and it also reflects some additional operating expenses related to the symptom acquisition, which we just announced.

I think it's important to note that symptom is not going to be a separate SKU, it's gonna be integrate with E. P.

Areas of our product.

Speaker 4: to provide a deeper and richer insight on our analytics. Amit can speak more directly to that. And with regard to Q-RX, we've announced the expansion of our cloud security offering today. And that's a more expansive product that will begin to be selling. And given sales cycles, we would expect greater contribution in the second half of the year in CCB. And that is reflected.

A deeper and richer insight.

On our analytics.

Can speak more directly to that and with regard to our carrots.

We are.

We've announced the expansion of our of our cloud security offering today and.

That's a more expansive product that will begin to be selling in a given sales cycles, we would expect greater contribution in the second half of the year in <unk>.

And that is reflected in our guidance today as well.

Speaker 6: And then maybe just one follow-up on the gross margin side, just to clarify a comment that you made. You mentioned the continued investments could have a modest impact on gross margins. Is that relative to the gross margin level in the fourth quarter, so we could see some additional pressure from that level or from the level for full year 2021?

And then maybe just one follow up on the gross margin side just to clarify a comment that you made you mentioned the continued investments could have a modest impact on gross margins is that relative to the gross margin level in the fourth quarter. So we could see some additional pressure.

That level or from the level for full year 2021.

Speaker 4: It would be from Q4, based off of what we experienced in the fourth quarter.

It would be from Q4.

What we experienced in the fourth quarter.

Speaker 6: Okay. And just modest impact and kind of stable through the year or is there kind of a pattern where it kind of bottoms and starts to improve at some point?

Okay, and just modest impact and kind of stable through the year or is there kind of a pattern, where it kind of bottoms and it starts to improve at some point.

Speaker 4: You know, I think for now what we commented earlier was directionally, obviously we're expected.

I think for now what we commented earlier was directionally.

Obviously, we would expect.

Speaker 4: You know strong sales in cloud was really pleased with the expansion of the product

Strong sales in cloud, we're really pleased with the expansion of the product.

Speaker 4: I think that will continue to represent a larger percentage of our sales. So as a result, what we're expecting is gross margins to track in line or trend modestly lower to the tune of about 100 bits.

And Carl will continue to represent a larger percentage of our sales. So as a result, what we're expecting is gross margins to track in line or our trend modestly lower to the tune of about 100 bps.

Speaker 4: I think the safe assumption is that's something that we'll experience earlier in the year, and you should assume that going forward for the full year. And to the extent we do better than what our top-line guide calls for today, then obviously margins could continue to benefit from that, because some of these costs are semi-fixed and upfront costs that we're making at least this year, and will potentially drive margin leverage going forward. Thank you.

The safe assumption is that's something that we'll experience earlier in the year and you should assume that going forward for it for the full year and to the extent, we do better than what our top line guide.

Calls for today, then obviously margins could continue to benefit from that because some of these costs are semi fixed and upfront costs that we're making at least this year and.

Potentially drive margin leverage going forward.

Helpful. Thanks.

Got it.

Speaker 1: Our next question is from Saket Kalia of Barclays.

Our next question is from Telia.

Kelly of Barclays.

Please proceed with your question.

Speaker 7: OK, great. Hey guys, thanks for taking my my questions here.

Okay, Great Hey, guys. Thanks for taking my questions here.

Speaker 7: I mean, maybe first for you, you know, a lot of talk about EP in the call, I was just wondering, can you just expand a little bit on the success of the overall bundling strategy and how you're kind of thinking about that strategy in 2022 with bundling?

I mean, maybe maybe first for you.

A lot of talk about EP in the call I was just wondering can you just expand a little bit on the success of the overall bundling strategy and how youre kind of thinking about about that that strategy in 2022 with bundling.

Speaker 3: Yeah, when we first launched EP toward the middle of last year, we saw a lot of both the sales team and customers immediately gravitating toward it. Just the inclusion of what about scanning capabilities and the container security products and other things just make a lot of sense. And obviously the inclusion of lumen is sort of driving analytics on top of it. So we saw very rapid

Yes.

We first launched E P towards middle of last year, we saw a lot of.

Both the sales team and customers immediately gravitating toward it just the inclusion of <unk>.

Whereabouts scanning capabilities from the container security products and other things just make a lot of sense.

And it obviously the inclusion of alumina and start driving analytics on top of it. So we saw very rapid.

Speaker 3: adoption by both the sale team and customer base and and gladiating toward EP. There are two I think key points to make.

Adoption by both the sales team and customer base and gravitating toward.

E P.

There are two other key points to make here one is.

Speaker 3: There's a very natural progression for EP to include active directives capability to full.

There's a very natural progression free E. P to include active directory capability into full.

Speaker 3: sweet of cloud capability in it. So then again, I'm sure there's one who accepts their rest.

Sweet.

Cloud capability.

So the so again.

Others want to assess the risk they're not going to one place where there is just a very natural unified reporting dashboard in a more holistic assessment of risk and then and then the second point is that it's not just a bundling exercise the way kind of PV.

Speaker 3: They're not going to one place for that. There's just a very natural unified reporting, dashboarding, or more holistic assessment of risk. And then the second point is that it's not just a bundling exercise way, kind of the EP.

Speaker 3: Packaging start that is what I just just a packaging or bundling exercise. There's real analytics that are now able to move across assets

Packaging started that it's not just the packaging or bundling exercise, there's real analytics that are now able to move across asset types.

Speaker 8: driving multiple asset types into Lumen. And again, the inclusion of new alert methods like a tack top analysis, we think you make it an absolutely compelling plot.

Driving multiple asset types into lumen and again the inclusion of new.

Analytic methods like attack Cop analysis, we think making it an absolutely.

Compelling platform.

Speaker 7: got it got it that makes a lot of sense Steve maybe for you for my follow up you know nice nice start to the year with with the ccb guy to know the question was just asked on on inorganic contribution to revenue but just to make sure it's asked you know is there any sense that you could give us on ccb guide for twenty twenty two you know i think you've got all said you've got a cure xe and you've got sent them there any just rough sense for kind of how that twenty two to twenty three percent growth kind of looks from a organic and you know it from an organic perspective

Got it got it that makes a lot of sense, Steve maybe for you for my follow up.

Nice start to the year with the CCP got I know the question was just asked just on an inorganic contribution to revenue, but just to make sure. It's asked.

Is there any sense that you could give us on CCP guide for 2022.

You've got all said, you've got <unk> and you've got symptoms are there any just rough sense for kind of how that 22% to 23% growth kind of looks from a organic and from an organic perspective.

Speaker 4: Sure, as a reminder, the companies we've acquired are all very early-stage companies when minimal sales are good at market capability. So our sales to date primarily reflect the success of our good at market efforts and our ability to create and close pipeline opportunities, but post sales.

Sure.

Reminds of the companies. We've acquired are all very early stage companies with minimal sales or go to market capability. So are our sales to date.

<unk> reflects the success of our go to market effort.

Our ability to create and club pipeline opportunities post sale.

Speaker 4: The timing is also worth noting in some of the acquisitions. We, close all said, in 2019, so we've had an OT offering now in the market for two years.

The timing is also worth noting on some of the acquisitions.

So as Al said in 2019, so we've had an ot offering now in the market for two years.

Speaker 8: So we don't consider that inorganic growth.

So we don't.

That inorganic growth.

Speaker 8: And then a curative just recently closed and the fourth quarter. And that's resulting in a more expansive cloud offering for us. It's going to be a newer motion than we said earlier that we do expect contribution. It is reflected in our guide to some degree, but we've expected more than the second half of the year. You know, that really leaves a curative which closed. Are sure I said that we're.

And then our care if you've just recently closed in the fourth quarter and.

That's resulting in a more expansive.

Offering for us, it's going to be a newer motion and we said earlier that we do expect contribution and it's reflected in our.

Our guide to some degree, but we'd expect it more of a second half of the year.

That really leaves.

<unk>, which closed.

Or should I say that really leaves all Ted.

Speaker 8: our Active Directory product, which closed in April . And, you know, both.

Our active directory product, which closed in April .

Both.

Speaker 8: AD and OT did very well for us for the quarter and for the full year. We discussed the contribution to these products on a full-year basis in our investor day.

A D and C.

Oh team did very well for us for the quarter and for the full year, we discussed the contribution to these products and a full year basis in our Investor day.

Speaker 8: We did even a little better than the $20 million we referenced in December . And we would expect continued growth in contributions from those products as well as, you know, more broadly, our exposure solution.

Fair to say.

We did even a little better than the $20 million, we referenced in December .

And we would expect continued growth in contributions from those products as well as.

More broadly our exposure solutions.

Speaker 8: But the one thing that I want to note here that's really important is really with regard to our go-to-market strategy, which is to increasingly integrate new capabilities and features in DEP, our unified exposure platform. Amit commented earlier, but it's worth repeating, it's nearly impossible to accurately assess risk associated with any one piece of technology or asset type in isolation.

But the one thing that I want to note here that is really important.

With regard to our go to market strategy, which is to increasingly integrate new capabilities and features into E. P. Our unified exposure platform comp.

Commented earlier, but it's worth repeating it's nearly impossible to accurately assess risk associated with any one piece of technology or asset types and isolation.

Speaker 8: our products really reinforce each other in the broader value prop of helping customers assess risk holistically. And that is across the attack surface. So breaking out sales of individual products going forward whose capabilities are included in EP or will be included in EP will become less meaningful given how we price and package our solutions and really helping our customers focus on the bigger problem.

Our products really reinforce each other and the broader value prop of helping customers assess risk holistically and that is across the attack surface. So breaking out sales of individual products going forward, whose capabilities are.

Or could it in you pay your will be included in your opinion will become less meaningful given how we price and package our solutions and really helping.

Our customers focus on the on the bigger problem.

Got it makes sense thanks, guys.

Speaker 1: Our next question is from Andrew Nowinski of Wells Fargo.

Our next question is from Andrew Nowinski of Wells Fargo. Please proceed with your question.

Speaker 9: Great, thank you. Congrats on that great quarter. I just want to start with a question on EP again. You know, you've added a lot of components, as you mentioned, AD, and now it sounds like CS will be added to it as well.

Great. Thank you congrats on a great quarter.

Wanted to start with a question on ETE again, we've added a lot of components as you mentioned <unk> and now it sounds like <unk> will be added to it as well.

Speaker 9: Is that, uh, can you just give us any color in terms of how much that would be increasing the price? And should we expect. Maybe accelerating growth in your 100,000 customers in 2022 because of that.

Is that.

Can you just give us any color in terms of how much that would be increasing the price and should we expect maybe accelerating growth in your $100000 customers in 2022 because of that.

Speaker 3: Yeah, and I'll turn that question over to Steve in just a minute, but the way ET is designed is it's a premium solution, it's a premium capability, it's a platform offering that delivers enhanced analytics on top of individual solutions. So if you use VM, you might want to move...

Yes.

I'll turn to turn that question over to stay to just a minute but that's.

Well the way he used his line.

A premium solution.

As a premium capability, it's a platform offering.

Delivers.

<unk> analytics on top of individual solutions. So if you use the.

Wanted to move.

Speaker 3: you might want to purchase through EP because it would give you all the capabilities, the Lumen, LAS, all the other functionality. The same is true if you're using the cloud security product and the same is true if you're using Active Directory. So the way we will monetize the new capabilities and these new products as they're added to EP is that it's a premium pricing, but you still have to pay.

You might want to purchase the repeat because it would give you all the capabilities. The move in was all the other functionality.

The same is true if you're using the cloud security products and the same is true if you use it.

Active directory, so the way, we will monetize the new capabilities and new products, how to TEP is that its a premium pricing, but you still have to pay.

Speaker 8: the asset price for AD or for your cloud workloads and your assets in the cloud. So it's monetized both through an increased asset count as well as a higher price per asset because we're delivering some compelling value out of analytics on AWS.

The asset price for <unk> or.

For your cloud workloads in your assets in the cloud.

So it's monetize both through an increased asset count as well as a higher price per asset because.

We're delivering some compelling value add all the analytics.

On top of those assets.

Speaker 9: Got it. That makes sense. And then I just want to do a question on maybe a clarification on your Log 4J expectations. I think you said you'll be certainly impacting Q1, but then it moderates after that. You know, if you kind of go back to some commentary.

Got it that makes sense.

And then I just wanted to do of course.

Maybe a clarification on your log for Jay or expectation, but I think you said there'll be certainly impact in Q1, but then it moderates after that.

You kind of go back to some commentary.

Speaker 9: you know, from the CISA and...

From the CSA and.

Speaker 9: you know, the White House, they're claiming that this is going to create problems and potential issues for the next two plus years. I'm wondering why do you think it's going to taper off, you know, after Q1 and not really be a driver, a strong driver, maybe even getting worse throughout the year?

The white house or Theyre, claiming that this.

It's going to create problems and potential issues for the next two plus years. So I'm wondering why why do you why do you think it's going to.

Paper off after Q1, and not really be a driver a strong driver maybe even getting worse throughout the year.

Speaker 8: Well, I think it's really what's reflected in our guide, as I mentioned earlier, is certainly more cowings in Q1.

Well I think it's really a.

What's reflected in our guide and as I mentioned earlier.

Is.

Certainly more cowens in Q1.

Speaker 8: To what degree we benefit beyond that, above and beyond the guidance we're providing today really remains to be determined. So the guidance we're offering today respects continued contribution in the first quarter, reflects the strengths

To what degree we benefit beyond that above and beyond the guidance, we're providing today really remains to be determined. So the guidance were offering today respects continued contribution in the first quarter reflects the strength really of.

Speaker 8: really of the overall business, not just for the quarter, but for the full year.

Really the overall business not just for the quarter, but for the full year or so.

Speaker 8: We think we're set up for success in 2022. It gives us confidence to provide the guide that we're providing today. We certainly have, you know, more visibility headed into Q1.

We think we're set up for success in 2022 gives US conference you ought to take to provide the guide that we're providing today, we certainly have more visibility going into Q1, and we do really the remainder of the year.

Speaker 9: we do really, you know, the remainder of the year, but to what extent it continues to benefit us at, you know, to the level which we expect in the first quarter really remains to be seen. So, we'll look forward to providing an update on our call in April . That makes sense. Thanks, guys. Keep up the good work.

But to what extent you can.

Teams to benefit us to the level, which we expect in the first quarter really remains to be seen so we'll look forward to providing an update on our call in April .

That makes sense. Thanks, guys good work.

Our next question is from Gray Powell of V. T. I D. Please proceed with your question.

Speaker 10: All right, thanks for taking my questions and congratulations on a great quarter.

Alright, thanks for thanks for taking my questions and congratulations on a great quarter.

Speaker 10: Thank you. Yeah, absolutely. So, yeah, you highlighted that billings growth accelerated in each of the last four quarters. You just exited the year at 29% growth. And Steve, I know you want to keep people conservative, but do you see a scenario where things could further improve and maybe start growing in excess of 30%? And then if so, I'd just be curious.

Thank you yeah absolutely.

So yeah, you highlighted that billings growth accelerated in each of the last four quarters, you just exited the year at 29% growth and Steve I know you want to keep people conservative.

But do you see a scenario where things could further improve and maybe start growing in excess of that.

Excess of 30% and then if so I'd just be curious like what do you think are the most likely levers or things that could go right to get you there.

Speaker 10: what do you think are the most likely levers or things that could go right to get you there?

Speaker 8: Well, look, the guidance we're providing today is 22 to 23 percent. But that aside, we're chasing a massive market opportunity. We've expanded the product portfolio and we've gone into new markets.

Well look the guidance, we're providing today is 22% to 23%, but that aside we're chasing a massive market opportunity. We've expanded the product portfolio will be going into new markets and markets that are large.

Speaker 8: markets that are large and growing rapidly. We're making investments too. I think that's one of the important things to know is that we started making investments more aggressively really the first half of the year, and it's making a difference really in the top line. Adding sales capacity, we're also achieving higher levels of productivity.

A large and growing.

Rapidly.

We're making investments to I think that's one of the important things to note is that we started making investments more aggressively and really the first half of the year and it's Craig.

It's making a difference really on the top line.

Adding sales capacity, we're also achieving higher levels of productivity.

Speaker 8: We're continuing to evolve the product suite.

We're continuing to evolve.

The product suite.

Speaker 8: Um, you know, and I think all that really makes a difference with the backdrop of.

And I think all of that really makes a difference with the backdrop of.

Speaker 8: not just high-profile data breaches but threats that are very relevant to the problems that we're solving today. So I think it gives us a lot of confidence in our outlook in 2022. We're certainly not going to cap our growth rate, not by any means. This is a big opportunity. We're pleased to see the acceleration and obviously we'll learn more as we work our way throughout the year.

Not just high profile data breaches, but threats that are very relevant to the problems that we're solving today. So I think it gives us a lot of confidence in our outlook in 2022, we're certainly not from a capped our growth rate not by any means.

This is a big opportunity.

We're pleased to see the acceleration.

And.

And.

Obviously, we'll learn more as we work our way throughout the year.

Speaker 10: Okay, that's really helpful. And then just one more quick one. So you all mentioned that a number of customers came back and expanded their coverage of assets in December following log4j. Could you maybe just talk about what that looks like? Like specifically what's the percentage of assets for those customers covering before log4j? And then what did coverage look like afterwards? Would they be like are we talking about doubling in coverage? Or I'll just just kind of get a sense as to how that looks.

Okay. That's really helpful. And then just one more one more quick one so so so you all mentioned.

And then a number of customers came back and expanded their coverage of assets in December following log for Jay could you maybe just talk about what that looked like like like specifically like what percentage of assets, where those customers covering before long for Jay and then like what did coverage look like afterwards.

Are we talking about doubling in coverage or I'm, just trying to get a sense as to how that how that works.

Speaker 11: Yeah, I would say each customer situation is obviously different. I think in many instances, especially from the end...

Yeah, I would say each each customer situation is obviously different I think in many instances, especially.

On the enterprise side.

Speaker 3: they would have some substantive coverage of their environment, but they would also recognize, hey, we haven't been covering these other assets. I mean, don't forget Log4j is a great example of an exploit which is completely portable over any system that runs Java. So they were.

They would have there.

Have some subsidy of coverage of their environment, but they would also recognize hey, we haven't been covering these other aspects I mean don't forget log Virginia is a great example of an exploit.

It is completely portable over any system that runs Jonathan So they were you know.

Speaker 3: Even if you have pervasive coverage of your desktop servers and workstations, there's still lots of other compute devices in the environment that might...

Even if you had pervasive coverage of your.

Desktops servers, and workstations theres still lots of other compute devices in any environment.

Right.

Speaker 3: be able to run Java and might be susceptible or cause problems with respect to Log4J. So I think it's really customer by customer dependent, but I would not.

Are you able to run Java and might be susceptible or cause problems with respect to walk for log for Jason. So I think it's it's.

It's.

You know really customer by customer dependent.

Would not.

Speaker 4: you know, sort of assume it's a natural doubling or anything of that nature.

I assume it's a natural doubling or anything of that nature.

Speaker 12: I was just trying to figure out a rough, you know, ballpark increase. Thanks, Craig.

Got it yeah, I was making that up I was just trying to I'm trying to figure.

Figure out a rough ballpark increase.

Thanks, Greg.

Cool thank you very much.

Our next question is from Brian Essex with Goldman Sachs. Please proceed with your question.

Speaker 4: Yeah, great. Thank you for taking the question and congrats on a nice set of results for the quarter. Yeah, just I guess maybe a meet, you know, I think over the past few quarters or last quarter, we talked about, you know, penetration of MSSP channel. How is contribution from the managed service providers in the quarter and how particularly given the landscape and the threat environment, you know, how is that traction progressing into 2022?

Yeah, great. Thank you for taking the question and congrats on a nice set of results for the quarter.

Yes.

I guess, maybe Amit.

I think over the past few quarters or last quarter, we talked about penetration of MSP channel.

<unk> contribution from the managed service providers in the quarter, and how particularly given the landscape in and in the threat environment.

How is that how is that traction progressing into 2022.

Yeah.

Speaker 11: Yeah, I think the, uh, the, you know, I'll start with the second question. The progression of the environment, I think, becomes a sort of natural tailwind for us, in that it increases visibility, it increases sort of executive awareness, and it increases

Yes, I think the.

Yeah, I'll start with the second question the progression of the study.

Does it become it becomes a sort of a natural.

A tailwind for us in that it increases visibility it increases sort of executive awareness.

And then it increases.

Speaker 11: concern about people making the, you know, in the business leadership or leadership of the business to say, are we exercising a good standard of care with the...

Our concern about people, making the in the business leadership leadership. The book of business to say are we exercising a good a good standard of care with the with the data the systems and the data that are entrusted to us and so the very natural progression when you read about high profile.

Speaker 3: the data and the systems and the data that are entrusted to us. So the very natural progression when you read about high profile, breach a thread after or a vulnerability is always susceptible to this, are we vulnerable? How secure are we? How at risk are we? And that naturally gravitates people toward, you know, the VM program, which is really the center for ground truth around answers.

Breach.

A threat actor or a vulnerability is always susceptible to this are we vulnerable vulnerable how secure are we how at risk are weak and that naturally gravitates people toward the.

<unk> program, which is which is really the center for for ground truth around answered.

Speaker 3: those questions. In terms of MSSP, it's an area where we've made some investment. We continue to see very strong traction. We've got a – I think we put out a momentum kind of press release around our MSSP partners maybe six months or longer ago.

Most of those questions.

In terms of <unk>, it's an area, where we were.

We've made some investment we continue to see.

So very strong traction.

We've got a I think it will.

Put out a press release around our our.

MSP partners may be six months or longer ago.

Speaker 3: you know, 300 plus MSSP partners that we operate with, but more specifically seeing very meaningful traction in.

300, plus.

MSP partners that we operate with more specifically seeing very meaningful traction in.

Speaker 11: you know, in sort of the 20, you know, largest MSSP providers where we believe, you know, our capability can really differentiate itself and marries up with enterprise expectations and requirements. So, we think it's an area where the investment, you know, is beginning to bear fruit and I think more opportunities.

And it's sort of the 20 largest MSP providers, we believe.

Our capability.

Can't really differentiate itself and it marries up with enterprise expectations and requirements. So we think it's an area where the investment is.

Beginning to bear fruit and I think more more opportunities I guess.

Speaker 13: Got it. That's helpful. And then maybe, you know, if I could touch on competitively how you're seeing the current environment for tenable relative to either greenfield opportunities or, you know, competitive displacement, is that shifting at all on the back of the elevated threat environment, particularly with log4j, where, you know, your kind of best of breed status is causing a shift over to tenable, or is it still, you know, or is kind of the, you know,

Got it that's helpful. And then maybe if I could touch on competitively how youre seeing it.

The current environment for tenable relative to either greenfield opportunities or.

Competitive displacement is that shifting at all on the back of the elevated threat environment, particularly with lock for Jay where you're kind of best of breed status is causing a shift over to tenable or is it still.

Whereas kind of the.

Speaker 13: enterprises without a formal vulnerability management platform being driven there because of the vulnerability environment. Maybe we can get, you know, any kind of shift in color there would be helpful.

Enterprises without a formal vulnerability management platform being driven there because of the vulnerability environment, maybe if we get any kind of shift in color there would be helpful.

Speaker 14: Yeah, you know, Steve, I'll let you comment if there's any notable change on the greenfield, but, you know, typically we go out of our way to call this out on a quarter-and-quarter basis. It's been very consistently, you know, about a third of our

Yes, Steve I'll, let you comment if there was any notable change on the Greenfield, but typically we would go out of our way to call. This out on a quarter on quarter basis.

Consistently about.

Third of our new.

Speaker 11: new enterprise, larger new enterprise lands. I will say that, you know, there's notable differentiation, especially in high-profile, you know, vulnerabilities and breaches like Block 4J, where immediately, you know, it's a known issue.

Enterprise larger new enterprise lands I will say that there was notable differentiation, especially in high profile.

Vulnerabilities of breaches Lifelock for Jay were immediately it's a known issue.

Sure.

Speaker 14: CISO, or the CSO, or in many cases, you can fill her up in the food chain, are asking questions about it. We're first to market in terms of.

She ISO or the CSO or in many cases.

We're up in the food chain are asking questions about it.

First to market in terms of.

Speaker 14: detections for these capabilities, in terms of accurate detection for these capabilities, in terms of the flexibility and breadth of coverage that we have for these issues. So, we had CISOs coming back, or VM program managers coming back and saying, by this technology or that technology is telling me fine, and they found 12 instances of this thing, and we've got over 100 different checks. At this point, we're adding

Detections for these capabilities in terms of accurate detection for these capabilities in terms of in terms of the flexibility and breadth of coverage that we have with an issue. So we have T cells coming back or.

VM program managers coming back and saying.

By this technology that technology was telling me fine when they found 12 instances of this thing and we've got over 100 different checks at this point we're adding.

Speaker 14: multiple new checks per day because there's an incredibly long tail on this. Looking at, you know, we're able to identify it over dozens of protocols and multiple applications worked embedded. So this is again, you know, one of those issues where the breath and complexity really allow enterprise.

Multiple new checks per day, because this is an incredibly long tail on this looking at we're able to identify it over dozens of protocols and multiple applications, where it's embedded. So this is again one of those issues were the breath of complexity really allow enterprises.

Speaker 12: to see the differentiation that we bring to the table in terms of coverage and accuracy. And I think that boasts, while at least in the early periods for us, competitive, we've always enjoyed a strong competitive differentiation and competitive win-rates in the awareness and the hot profile nature of new approaches and lawfuls, we'll continue to highlight that for us.

To see the differentiation that we bring to the table in terms of coverage.

Accuracy, and I think that bodes well at least in the early periods for us.

We've always enjoyed a strong competitive differentiation and competitive win rates.

The awareness and.

The high profile nature of Av.

Breaches and one for Jay will continue to highlight the highlight that for us.

Got it that's helpful and Steve is it still the same split.

Speaker 13: It is in terms of greenfield opportunities percent of greenfield opportunities. It did not change meaningfully in the quarter. So, yes, sizable greenfield opportunity and. Obviously, our best to breed status and and and VM certainly is helping. Very helpful. Thank you.

It is in terms of greenfield opportunities per cent of greenfield opportunities that did not change meaningfully in the quarter, So, yes, sizable greenfield opportunity and.

Obviously, our best of breed.

<unk>.

<unk> certainly is helping.

Got it very helpful. Thank you.

Our next question is from Rob Owens with Piper Sandler. Please proceed with your question.

Speaker 13: Hey, guys, this is Justin Roach on for Rob. Just was wondering if you could give some more color on the demand environment in the federal vertical in 4Q, given the strength you saw last quarter and how we should think about it as we move into 22. Should we see any differences in seasonality? Just just given the spending intentions here seem to be pretty high.

Hey, guys. This is Justin Roche on for Rob just was wondering if you could give some more color around the demand environment in the federal vertical in <unk> given the strength you saw last quarter and how we should think about it as you move into 'twenty two should we see any differences in seasonality just just given the spending intentions here seem to be pretty high.

Speaker 14: Yeah, we're very pleased with the approach the federal government's taken to cyber. It's much more aggressive, you know, leaning in than previous administrations have shown. We see continued strength and health in our

Yeah, we're very pleased with the the approach.

Uh huh.

So the government has taken a cyber it's much more aggressive.

And then.

Previous administrations have shown.

We see continued strength in health and are.

Speaker 11: overall federal business. We see a lot of both, you know, large funded and unfunded opportunities. And I think, you know, we'll continue to focus on that market. And we don't – I will also say, you know, we don't see any unanticipated change in seasonality from previous years and previous behaviors. Steve, I don't know if you have an additional call to add on that. No, I –

Overall federal business, we see a lot of large funded and unfunded.

Opportunities in and I think we'll continue to.

Focus on that market and.

We don't.

I'll also say we.

We don't see any.

Unanticipated change in seasonality from previous years.

Previous behaviors, Steve other kind of additional color to add on that.

No.

Well said.

Got it that's it for me thanks, guys.

Speaker 15: Thank you. Our next.

Okay.

Our next question is from Jonathan Ho of William Blair. Please proceed with your question.

Speaker 16: Hi, good afternoon. I just wanted to start out with some of your commentary around the Active Directory security opportunity. Can you maybe give us a sense of whether or not this could be another tip of the spear to maybe go with new customers that are maybe using an alternative platform? And does that maybe open up the opportunity to dislodge those competitors, I guess, longer term?

Hi, Good afternoon, I just wanted to start out with some of your commentary around the active directory security opportunity can you maybe give us a sense of whether or not this could be a.

Another tip of the spear to maybe go with new customers that are maybe using an alternative platform and does that maybe open up the opportunity to dislodge those competitors I guess longer term.

Speaker 14: Absolutely it is, and I think especially in large enterprises where competitors have been entrenched for years, or they've been locked in with, you know, multiple companies.

Absolutely it is and I think especially in large enterprises, where our competitors have been entrenched for years or there'd be locked in with.

Multiyear.

Speaker 14: contract engagement is integrated the VM product into other processes that they have and displacing them is what has been more challenging. In those instances, as soon as we mention VM or some of the cloud security capabilities that we're now bringing to market, there's definitely a very strong openness.

Contract engagement it is integrated.

The product into other parts of the system.

They have.

And displacing them as it has been more challenging.

In those instances.

Soon as we've mentioned.

Or some of the cloud security capabilities that we're now bringing to market.

There is definitely a very strong openness.

Speaker 14: to engaging with us and so we find that

Engaging with us and so we find that.

Speaker 14: In those types of entrenched accounts, Active Directory becomes a clear differentiator and a door opener. And then once we're engaged, you know, the natural move would be to try and broaden the relationship.

In those types of entrenched accounts Act.

Active directory becomes a clear differentiator and a.

A door opener and then once we're engaged the natural the natural move would be to try and broaden the relationship.

Speaker 12: Got it. And then just a quick housekeeping question. Can you give us a sense of the percentage of customers that are maybe starting with EP at this point or maybe some color on those that are trading up to EP as well? Thank you. Hi, Jonathan. This is Steve.

Got it and then just a quick housekeeping.

Housekeeping question can you give us a sense of the percentage of customers that are maybe starting with <unk> at this point or.

Maybe some color on those that are trading up the EPA as well. Thank you.

Okay.

Hi, Jonathan this is Steve.

It's notable I think one of the things we called out was.

Speaker 8: We had a 562 net new platform customers in the quarter, which is a record for us. Our best ever as a public company. That's up from 460 last year. And we're also seeing larger deals. So keep in mind, EP was a product that we launched in Q1.

We added 562 net new.

Platform customers in the quarter, which is a record for us our best ever as a public company. That's up from 460 last year and we're also seeing larger deals. So keep in mind EEP was a product that we launched in Q1.

Speaker 8: And it's gaining major traction here for us. And our mandate was always really about cyber exposure, really holistic risk assessment, more so than VM. So we're absolutely pleased with the results, NEP in the early response. You just be mindful of sales cycles, that 562 new enterprise platform customers.

And it's gaining major traction here for us.

Our our mandate was always really about cyber exposure really holistic risk assessments more so than VM. So we're obviously pleased with the results and the early response.

Mindful of sales cycles.

562, new enterprise platform customers.

Speaker 8: I mean, you know, a good portion of those, or some sizable portion of those is attributed to EP, right? This is a product that we plan to lead with, really, in the mid-market and the enterprise market, you're seeing the impact first, really, in areas where we have shorter sales cycles, such with, you know, mid-market type deals. And the pipeline deal associated with that is also very significant, which I commented on earlier. So, you know, I think it's going to pave the way for, you know,

Okay.

A good portion of those are some type of a portion of those is attributed to ebay right. This is a product that we plan to leave with really in the mid market and the enterprise market you are seeing the impact first.

And the areas, where you have shorter sales cycles, such with mid market type deals.

The pipeline to be able to associate with that is also very significant which I commented on earlier so.

I think it's going to pave the way for a buck.

Speaker 4: King's acceleration in new business, more larger deals, as we cover more areas of the attack surface.

Acceleration in new business more larger deals as we cover more areas of the attack surface.

Great. Thank you.

Speaker 1: Ladies and gentlemen, due to time constraints, we ask that everyone limit themselves to one question per person going forward. Our next question.

Ladies and gentlemen, due to time constraints, we ask that everyone limit themselves to one question per person going forward.

Our next question is from Brad Reback with Stifel. Please proceed with your question.

Speaker 12: Lucky I only have one. Quick question, Steve. As you think about headcount growth for calendar 22, should that be in line with revenue growth?

Lucky I only have one.

Quick question Steve.

As you think about head count growth for calendar 'twenty, two should that be in line with revenue growth.

Yeah.

Speaker 8: You know, we don't we don't guide the headcount growth, but I think it's fair to say that, you know, given the investments that we're making, that we're going to see the acceleration, the headcount growth. And I think, you know, more so than what we saw in 2021, and the two big areas are going to be R&D and sales and marketing. So R&D, especially just given

We don't we don't guide to head count growth, but I think it's fair to say that given.

Given the investments that we're making that we're going to see.

Acceleration in the head count growth I think more so than what we saw in 2021 and the two big areas.

Gonna be R&D and sales and marketing, so R&D, especially just given.

Speaker 8: You know, the product roadmap and, you know, the innovation that's planned for the upcoming years, well as the acquisitions, specifically related to a cure, and a more recently-sentum here.

The product roadmap and.

The innovation that's planned for the upcoming year as well as the acquisitions specifically related to a cure.

And more recently symptom here.

Speaker 8: So certainly continue investments in R&D. And then on the sales and marketing side, we know what we make investments in sales and marketing in that quota capacity, that there's a clear return. We have a lot of momentum in the business.

So certainly continued investments in R&D.

And then on the sales and marketing side.

Now when we make investments in sales and marketing and that quota capacity that there is a clear return.

We have a lot of momentum in the business I think our execution and performance this year or certainly demonstrates that Joe, but we're certainly putting more wood behind both our sales and marketing and R&D.

Speaker 8: I think our execution and performance this year certainly demonstrates that. So we're certainly putting one wood behind both sales and marketing and R&D.

Speaker 4: We end up with a backdrop of a really strong threat environment on the heels of a good quarter and a strong year, it gives us a lot of confidence to do so. So certainly more growth in total headcount the upcoming year than what we experienced last year and specifically in those areas.

And with the backdrop of a really strong threat environment on.

On the heels of a good quarter and a strong year. It gives us a lot of confidence to do so.

More growth and total head count the upcoming year than what we experienced last year and specifically in those areas.

What was 'twenty one growth can you remind us.

Speaker 12: You know, again, we don't disclose growth and headcount, but it was probably more directly in line with overall growth in revenue. Great, thanks.

Again, we don't disclose growth in head count but.

It was probably in lot more directionally in line with overall growth in revenue.

Great. Thanks.

Yeah.

Our next question is from Dan Ives of Wedbush. Please proceed with your question.

Speaker 11: Yeah, just one question. So with EP, I mean, how much of a door opener is that even to larger enterprises? And is there a potential that that accelerates almost some of the sales?

Yes, just one question so.

E P.

How much of a door opener is that even larger enterprises and is there a potential that that accelerates when with some of the sounds like.

Right.

Speaker 3: I think it's absolutely...

I think it's absolutely.

<unk>.

Speaker 14: It's a door opener in two forms.

It's a door opener in two.

Forms.

One is.

Speaker 14: forces a more strategic conversation with large enterprises, right? And the large enterprises are struggling with, okay, I'm gonna use this technology from a cloud-native infrastructure perspective. I've got nothing really helping me with AD. I'm gonna use that technology for VM.

It forces a more strategic conversation with large enterprises, it's right in the large enterprises are struggling with okay I'm going to use this technology from a cloud native infrastructure perspective, nothing really helping me with it and be able to use that technology for rehab.

Speaker 14: You know, this other thing for, you know, my building automation and my, you know, my OT infrastructure, and it's just becomes very complex when you're looking for, whether it's a log 4J or whether you're trying to assess overall cyber risk, you're trying to figure out, okay, well.

This other thing for you all.

By building automation and by my co Chief infrastructure, and it's just because it's very complex when youre looking for whether it's a log for Jay or when you or whether you're trying to assess overall cyber issue. We're trying to figure out okay, well, what's the state how do I reduce that risk. So so it helps.

Speaker 14: What's the state and how do I reduce that risk? So it helps in two key areas. One is...

<unk> in two key areas one is.

<unk>.

Speaker 14: a more strategic conversation with those large enterprises and opening doors that way. And the second is when you're talking about E.P., you're also having a conversation about all of those assets.

A more strategic conversation with those large enterprises.

Opening doors that way and the second is when you're talking about <unk>, you're also having a conversation about all of those asset types, which can be problematic, which you'll see shows are very concerned about and helping them understand okay, well how big of an issue is this.

Speaker 14: which can be problematic, which the CISOs are very concerned about, and helping them understand, okay, well, how big of an issue is this?

Speaker 14: versus other things I have in my environment. And how do I compare the state of readiness from one business unit to another and from one asset type to another? What should I prioritize fixing? So helping them with a higher order.

Versus other things I have in my environment, and how do I compare the state of readiness from one business unit to another.

One asset type to another and what should I prioritize fixing so helping them with that higher order.

Speaker 12: in a way that's got it. So we think it's a great engagement. There's a more strategic level. Thanks.

Analytic until we think it is.

Engagement is a more strategic level.

Okay.

Okay.

Our next question is from Mike Cecos of Needham and company. Please proceed with your question.

Speaker 17: Hi team, thanks for getting me on here and good to see that 22 to 23% growth bogey out there to sort the year. My question really circles back to some of the commentary on the quota carrying reps. Tennisbles discussed its ramping investments in these reps and I think the average rep takes about 10 months to ramp. So for 4Q, the hires that we saw that quarter was at the highest.

Hi team. Thanks for getting me on here and good to see that that 22% to 23% growth bogey out there to start the year.

My question really.

Circles back to some of the commentary on the quota carrying reps.

Tenable is discussed its ramping investments in these reps and I think the average rep takes about 10 months to ramp.

So for for Q.

The hires that we saw that quarter was that the highest.

Speaker 17: carrying reps of any quarter and calendar to 21. And then on that go to market, is there the need for a separate overlay for specific products or the sales rep selling the entire portfolio?

Quota carrying reps of any quarter in color into 'twenty, one and then on that go to market is there the need for.

A separate overlay for specific products or the sales reps selling the entire portfolio.

Speaker 8: Hi Mike, this is Steve. So I think your first question was, quote of caring reps and just directly was cue for higher than at any other point in the year. The answer to that is yes. You know.

Hi, Mike This is Steve.

So I think your first question was quota.

Being reps and just directly with Q4 higher than at any other point in the year the answer to that Jeff.

No.

We.

Speaker 8: We invested the first half of the year, but given the acceleration in the business that we saw throughout the year, it gave us more confidence to do more investment in sales and marketing.

We invested in the first half of the year, but given the acceleration in the business that we saw throughout the year. It gave us more confidence to do more investment in sales and marketing I.

Speaker 8: I think looking back on the year and then looking out in 2022, we expect to have more quota capacity in 2022 than in 2021. So, yes, is the answer to your 1st question.

And I think looking back on the year.

Looking out in 2022, we expect to get more quota capacity in 2022 of them in 2021.

So.

Yes is the answer to your first question.

Speaker 8: I guess with regard to your second question, I want to make sure I understand that, could you repeat it, please?

I guess with regard to your your second question I'll make sure I understand that could you repeat it please.

Speaker 17: Absolutely. So, the question is really around these, the new products that you're bringing on. We think about, I know Symptom is going to be integrated into EP, and you're talking about expanding EP with AD, CS, but is there a need to have a separate overlay for the sales team to sell any of these products, or is the overall sales team is able to go out there and sell the portfolio in its entirety at this point?

Absolutely. So the question is really around these.

The new products that you're bringing on it we think about I know symptoms is gonna be integrated into EEP and you're talking about expanding E. P with a b C.

Yes, but there is there a need to have a separate overlay for the sales team to sell any of these products or is the overall sales team is able to go out there and so the the portfolio in its entirety at this point.

Yes definitely.

Okay.

Speaker 14: There's definitely the ability for our core sales reps to sell the portfolio. We're not acquiring and launching a series of very disparate, very distinct technologies

I was just there was definitely the ability for our core sales reps to sell the portfolio we're not acquire.

Acquiring a.

Launching a series of very disparate sort of distinct technologies.

Speaker 11: which are kind of loosely coupled. As the core team goes out and talks about EP, and the fact that EP does not only include IOU.

Which are kind of loosely coupled as the core team goes out and talks about the fact that it does not.

Speaker 14: and WebOps, but it also includes AD and cloud security, which includes container and Kubernetes and TSPM and infrastructure as code and all of these things. So it's a more strategic message.

Yeah.

But it also includes <unk> and <unk> and cloud security, which which includes container recouping that he's CSPI and Infrastructure's code and all of these things. So so if theyre more strategic message.

Speaker 14: Now, obviously, as you start unpacking that.

Now obviously as you start on packing that.

Speaker 14: Conversations can very quickly get to a level of depth where a core, rep or a core engineer might not yet have record with an expertise. So for some period of time, we'll continue to have specialists which can really do and incredibly be done with you.

Conversations can very quickly get to a level of depth where.

Our core rep or a core engineer it might not.

Might not yet have the requisite expertise and so for some period of time will continue.

Specialists, which can really do an incredibly deep dive with the.

Speaker 17: you know, the team that manages domain controllers in the enterprise, or they want to talk about specific control systems and all other parts of the cloud environment. Terrific. Thank you for the insights, guys. Appreciate it.

The team that manages domain controllers, and the enterprise or they want to talk.

About specific control systems.

And.

Parts of the cloud environment.

Terrific. Thank you for the insights guys I appreciate it.

Our next question is from Andrew Smith of Banbury Capital markets. Please proceed with your question.

Speaker 18: Hi guys, thanks for taking my questions. Could you just compare demand across the different solutions of Corvian, AD and OT? I know there have been several high profile tax in the last 12 to 18 months that have been linked to operational technology and the co-prize active directory, which I believe is driving awareness for those products, but just curious you could compare demand across the different solutions of Corvian, AD and OT. That would be great. Thanks.

Hi, guys. Thanks for taking my question could you just compare demand across the different solutions of core VM, a D and O T. I know there've been several high profile attacks in the last 12 to 18 months that have been linked to operational technology and the compromises active directory, which I believe is driving awareness for those products.

Just curious if you could compare demand across the different solutions of core VM E D and O T that'd be great. Thanks.

Speaker 14: Super high, super high and super high list. Now, it's, we're operating in a high-stripe environment, I think, as you've called out. It's been some very high profile breaches, specifically, you know, calling a pipeline, JVS.

Super High Super Hiper and Super high arrest.

We're operating in a high threat environment and I think as you called out there's been some.

You know very high profile breaches, specifically, you know call it pipeline JV, yes.

Speaker 14: to those operational technologies, just calling out some concerns about the task against US critical infrastructure and operational technology environment. So that's incredibly high profile. Live4J profiling, obviously, sort of core VM at...

Those operational technologies.

Calling out some.

Some concerns about attacks against U S critical.

Restructure and operational technology environments. So so that's that.

It's incredibly high profile a lot for Jay profiling honestly sort of core VM.

Speaker 14: you know, even just the beginning, but obviously with web app scanning and other capabilities.

It's.

Just the beginning, but obviously with web app scanning and other capabilities.

Speaker 14: closely on the heels, as well as some of the cloud security capabilities that we bring to the table. But the exciting part, the sort of very natural observation is that when you look at something like Colonial Pipeline,

Closely closely on the heels as well some of the cloud security capabilities that we bring to the table.

The exciting part of the sort of very natural.

Observation is that when you look at something.

Like colonial pipeline.

Speaker 3: It wasn't just that OG systems went out or were shut down.

Just Oh Gee systems.

Went out or will shut down at the root of it was a compromise of I T systems and active directory and so all of these things are completely intertwined you cannot assess ot security today without also being able to assess it.

Speaker 3: At the root of it was a compromise of IT systems and active directory. And so all of these things are completely intertwined. You cannot assess.

Speaker 11: OT security today without also being able to assess IT and active directory and these other aspects which are completely matched.

Active directory and these other aspects which are completely matched in.

Speaker 14: in an operating environment, and the same is true of identity and cloud and IT. So, you know, we think all of these things, whether it's the high-profile OT breed,

And operating environment and the same is true of identity cloud.

So we think all of these things whether the high profile Ot breech lock for Jay vulnerability.

Speaker 3: A lot for J, vulnerability, which, oh, by the way, exists in the effort, in the efforts itself in OT environments as well. You know, all of these things provide the type of visibility for.

Our ability, which oh by the way.

System assets manifests itself in Ot environments as well.

All of these things provide the type of visibility for.

Speaker 3: in our individual solutions, but also for the strength of our platform.

In our individual solutions, but also for the strength of our platform.

Perfect. Thank you.

Speaker 1: I've reached the end of the question and answer session. I will now turn the call back over to unmute your ran for closing remarks.

We have reached the end of the question and answer session I will now turn the call back over to I mean, Iran for closing remarks.

Speaker 19: Great, let's just thank everybody for joining us for the call. We're super excited about the results we were able to deliver in fourth quarter in 2021. And I'm very excited, obviously, about the actual position that we announced today. And we're excited about the opportunity in front of us. We'll go forward to future engagement. Let's conclude today.

Great I'd love to just thank everybody for joining us for the call. We are Super excited about the results we were able to deliver in the fourth quarter and in 2021 I'm very excited obviously about.

With the.

The acquisition that we announced today and very excited about the opportunity in front of us look forward to future engagement.

This concludes today's conference you may disconnect. Your lines at this time. Thank you for your participation and have a great evening.

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Speaker 1: 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.

Greetings and 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 final 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.

Speaker 1: If anyone should require operator assistance during the conference, please press star zero on your telephone keypad.

Speaker 1: I will now turn the conference over to your host, Erin Kearney, Head of Investor Relations.

I will now turn the conference over to your host Erin Karney head of Investor Relations. Thank you you may begin.

Speaker 2: 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.

Thank you operator, and thank you all for joining us on today's conference call to discuss carnivals fourth quarter and full year 2021 financial results.

Speaker 2: With me on the call today, I meet Iran, tenable Chief Executive Officer, and Steve Dent, 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.

With me on the call today are Iran, Carnival's, Chief Executive Officer, and Steven <unk>, 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 dotcom equally.

Speaker 2: Before we begin, let me remind you that we will make four looking statements during the course of this call, including statement 3-Lading 2, tenable guidance and expectations for the first quarter in full year 2022, growth and drivers in tenable business.

Before we begin let me remind you that we will make forward looking statements. During the course of this call, including statements relating to <unk> guidance and expectations for the first quarter and full year 2022.

And drivers intangibles business.

Speaker 2: changes in the threat landscape in the security industry and our competitive position in the market.

Changes in the threat landscape and the security industry and our competitive position in the market growth.

Speaker 2: growth in our customer demand for and adoption of our solutions, the potential benefits of our acquisitions, planned innovation, and new products and services.

Growth in our customer demand for and adoption of our solutions the potential benefits of our acquisitions planned innovation and new products and services.

Speaker 2: expectations regarding long-term profitability and the impact of COVID-19 on our business and on the global economy.

<unk> expectations regarding long term profitability and the impact of COVID-19 on our business and on the global economy.

Speaker 2: 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.

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.

Speaker 2: 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 do not have any obligation to update any forward-looking statements or outlooks.

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.

Any obligation to update any forward looking statements or outlook.

Speaker 2: 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 with the SEC, which are available on the SEC website at sec.gov.

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 quarterly report on Form 10-Q , and subsequent reports that we file with the SEC which are.

We are available on the SEC website at SEC Gov.

Speaker 2: 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.

During today's call, we will discuss non-GAAP financial measures. These non-GAAP financial measures are in addition to and not as 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.

GAAP equivalents.

Speaker 2: 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.

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 will now turn the call over to me.

Speaker 3: Thank you, Aaron, and thank you for joining us today. Today, I'll discuss our financial performance in Q4, Strengthened Core VM.

Thank you Ed and thank you for joining us today today I'll discuss our financial performance in Q4.

<unk> core VM.

Speaker 4: protraction with our individual exposure solutions, and the expansion and differentiation of our unified platform. With that,

With our individual exposure solutions and the expansion and differentiation of our unified platform.

With that well.

Let me first touch on our Q4 results we.

Speaker 3: We saw tremendous strength in the fourth quarter, driven by contributions from all products and theaters.

We saw tremendous strength in the fourth quarter, driven by contributions from all products and theaters.

Speaker 3: 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.

Our CTV growth for the quarter was 29% capping a year, where we saw accelerated growth at scale balanced with profitability, including strong unlevered free cash flow.

Speaker 3: 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.

During Q4, we added 562, new enterprise platform customers and added 100 net new six figure customers. Both a record adds for us in a single quarter.

Speaker 3: As the leader in VM, our expertise is finding assets.

As the leader of our expertise is finding assets.

Speaker 14: 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.

Identifying how those assets are configured and how and where they are vulnerable and prioritizing those vulnerabilities and exposures guiding our customers and how best to manage risk.

Speaker 3: Nessus has been and continues to be the standard for assessing system security and vulnerabilities. Over the last three years, we've seen an acceleration of downloaded Nessus, and in Q4, we saw continued strength with Nessus customers on ramping to our enterprise platform.

This has been and continues to be the standard for assessing system security vulnerabilities over the last few years, we've seen an acceleration of downloads of message and in Q4, we saw continued strength with with nessus customers on ramping to our enterprise platforms.

Speaker 3: our drive to lead the market in terms of vulnerability coverage, accuracy of our assessments.

Our drive to lead the market in terms of vulnerability coverage accuracy of our assessments time to market for developing new check. This critical new vulnerabilities emerge are highly appreciated and recognized by our customers.

Speaker 3: Time to market for developing new checks as critical new vulnerabilities emerge are highly appreciated and recognized by our customers.

Speaker 3: 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.

In Q4 last Virginia highlighted and continues to highlight the strategic importance of discovering and manages vulnerabilities regardless of marketing claims no WAF Nextgen firewall, no edr xdr or any other product is able to assess identify and prevent the growing breadth.

<unk> for Jay.

Speaker 3: Tentable already covers over 100. Law for J vulnerability detections, including direct check.

<unk> already covers over 100 law for Jabil ability detections, including direct checks and checks over http. Https. SMTP pop three I'm, not telling that SSH SNMP NTP FTP net buyers and other protocols and we've already begun to pull on the long term.

Speaker 3: checks over HTTP, HTTPS, SMTP, POP3, IMAP, Telnet, SSH, SMNP, NTP, FTP, NetBIOS, and other protocols. And we've only begun to pull on the long tail of log4j related issues.

Sales of large <unk> related issues. If it's your mission within the enterprise to answer the question how secure am I, how at risk of my Tenable has differentiated itself as the market leader and platform to use.

Speaker 3: If it's your mission within the enterprise to answer the question, how secure am I, how it risk am I, then TETABL has differentiated itself as a market leader and platform to you.

Speaker 3: Enterprise attack surfaces keep expanding, creating opportunities for tenable 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.

Enterprise attack surfaces, keep expanding creating opportunities for tenable is 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.

Speaker 3: 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.

We believe we are the only vendor that provides a complete understanding of it and Ot converged environments, coupled with a deep understanding of exposure and risk.

Speaker 3: This unique understanding of both of these environments enables us to provide a differentiated and compelling solution in the market.

This unique understanding of both of these environments enables us to provide a differentiated and compelling solution in the market.

Speaker 3: We also see strong traction in Tenable AD, our Active Directory security product, and expect that to continue to be a very attractive market.

We also see strong traction in Tenable AG are active directory security product and expect that to continue to be very attractive market for us 86% of enterprises are expected to increase their spending on active directory security in 2022, we believe salt we're solving a great pain.

Speaker 3: 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 this largely greenfield market, where we have the leading technology.

Speaker 3: 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 investments.

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.

Speaker 3: 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.

Our base capabilities require assessing the security web applications and a deep understanding of containers, we've had cloud native connectors for years and more recently, we've introduced frictionless assessments.

Speaker 3: 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 Acura.

With continued demand from our customers to help them secure their cloud environments, we've extended our investment into Infrastructure's code into Cooper.

And it's a cloud security posture management with the acquisition of <unk>.

Speaker 3: 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 and run times.

As we continue to build out and integrate a full portfolio of cloud capabilities. Our reach expands all the way from the far left from building in assessing vulnerabilities in code and fixing them pre production all the way through to the far right what were discovering asset evaluating drift and exposures in run time.

Speaker 3: We identify misconfigurations and fix assets across their entire life.

We identified this configurations and fixed assets across their entire lifecycle.

Speaker 14: Tenable becomes the definitive place to go to for assessing and understanding risks 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.

Tenable becomes the definitive place to go to for assessing and understanding risk across the entire cloud deployment not just the development piece and that's just the clouded kubernetes infrastructure configuration, and not just the containers or the virtual machines themselves.

Speaker 3: If it's your job to assess cyber risk for the audit risk

If it's your job to assess cyber risk for the audit and risk Committee.

Speaker 14: for the CSO, for the CEO , for the boards of directors.

For the CSO for the CEO for the boards of directors Tenable EEP or exposure platform can help you understand cyber risk in the broader context of your business.

Speaker 3: Tenable EP, our exposure platform, can help you understand cyber risk in the broader context of your business.

Speaker 3: Our market leadership in VM, in assessing and addressing cyber risk, put us in a position of strength to evolve naturally with our customers into new environments.

Our market leadership and vision in assessing and addressing cyber risk put us in a 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 <unk> environment the cloud.

Speaker 14: 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 others.

Demand this unified integrated approach.

Speaker 3: 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.

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 EEP to incorporate more of our exposure solution, including tenable.

Speaker 14: and Tenable CS, which includes infrastructure as code, Kubernetes, CSPM, Container, and other cloud security capabilities.

And credible see us, which includes Infrastructure's code could brunetti, she SPM container and other cloud security capabilities with these integrations tenable CFS as part of EEP will deliver a cloud native application security platform as an integrated end to end.

Speaker 3: with these integrations, Tenable CS, as part of...

Speaker 14: we'll deliver a cloud-native application security platform as an integrated end-to-end security.

Security solution.

Speaker 3: and a complete picture of cyber risk across the modern attack.

And a complete picture of cyber risk across the modern attack surface with unified visibility into code configurations assets and workloads.

Speaker 3: Unified visibility into code, configurations, assets, and work.

Speaker 3: Earlier today, we announced that we've reached an agreement on a tuck-in acquisition of an attack path analysis company in Israel called Sympton, which we expect to close this quarter.

Earlier today, we announced that we've reached an agreement on a tuck in acquisition of an attack path analysis company in Israel called symptoms, which we expect to close this quarter.

Speaker 3: Symptoms technology maps vulnerabilities and exposures across asset types into a task path and prioritizes how to address likely paths of exploitation.

Symptoms technology maps vulnerabilities and exposures across asset types into attack path and prioritizes how to address likely paths of exploitation.

Speaker 3: 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.

After the closing this technology when integrated into EEP will run alongside enhancements to lumen and other market, leading analytics, enabling security teams to preemptively focus response efforts ahead of endurance breaches.

Speaker 14: Serving our customers' need 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 work.

Serving our customers need 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 EPS unified datasets and analytics with the tech path.

Speaker 14: 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.

Analysis will enable <unk> to continue to extend our leadership cyber risk management.

The world of the T cell.

Is managing many risks.

<unk>, many interconnected and interdependent system.

Speaker 3: Confessing risk means understanding discrete elements of exposure, but also their interdependency. Witnesses in identity and IT Can affect OT and shut down a pipeline ransomware and nation-state breaches breach IT and target active direct

Assessing risk means understanding discrete elements of exposure, but also their interdependence weaknesses in identity in it.

Can affect the Ot and shut down our pipeline ransomware and nation state breaches breach at.

Target active directory.

Speaker 3: 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

Attainable, we're not only focused on delivering best of breed technologies and exciting market, we're pursuing our platform vision for understanding and managing cyber risks 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 in potential and our individual exposure solutions across active directory and operational technologies and cloud security, but if there is one single thought one sole conclusion. It's this.

Speaker 3: 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.

Speaker 14: But if there's one single thought, one sole conclusion, it's this.

Speaker 3: that it's nearly impossible to accurately assess the risk associated with any one piece of technology in isolation.

But it is nearly impossible to accurately assess the risk associated with any one piece of technology in isolation.

Speaker 3: 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. What?

Our unified platform not only brings together market recognized leading exposure solutions, where we're bringing more of these datasets together and the unique cyber exposure platform with differentiated and compelling analytics.

Let's turn the call over to Steve now.

Thanks Amy.

Speaker 4: As Amit mentioned earlier, we are delighted with the results for the fourth quarter, highlighted by significant acceleration in CCB growth, a notable beat in earnings per share, and attractive levels of unlevered pre-cash flow.

As I mentioned earlier, we are delighted with the results for the fourth quarter highlighted by significant acceleration in CCP growth notable beat in earnings per share and attractive levels of Unlevered free cash flow.

Speaker 4: I will provide more commentary on each of these points momentarily, but first please note that all financial results we discussed today are non-GAAP financial measures.

I will provide more commentary on each of these points momentarily, but first please note that all financial results. We discussed today are non-GAAP financial measures.

With the exception of revenue.

Speaker 4: As Erin mentioned at the start of this call, gap to non-gap reconciliations may be found in our earnings release issued earlier today, which is posted on our website. Now on to our results for the quarter. Revenue for the quarter was $196.

As Aaron mentioned at the start of this call GAAP to non-GAAP reconciliations may be found in our earnings release issued earlier today, which is posted on our website.

Now onto our results for the quarter.

Revenue for the quarter was $149 million, which represents 26% year over year growth.

Speaker 4: Revenue in the quarter exceeded the midpoint of our guided range by 5 million.

Revenue in the quarter exceeded the midpoint of our guided range by $5 million.

Speaker 4: Visibility remains high as our percentage of recurring revenue was 95 percent.

Visibility remains high as our percentage of recurring revenue was 95%, which.

Speaker 4: primarily a result of our annual prepaid subscription model.

But which is primarily a result of our annual prepaid subscription model.

Speaker 4: Revenue for the full year was $541.1 million, which represents 23% growth year-over-year.

Revenue for the full year was $541 1 million, which represents 23% growth year over year.

The outperformance in revenue as a result of accelerating growth in calculated current billings.

CCD.

Speaker 4: to find as to change in current deferred revenue plus revenue recognized in the quarter, grew 29% year over year to 194 million.

<unk> is the change in current deferred revenue plus revenue recognized in the quarter grew 29% year over year to $194 million.

Speaker 4: Q4 caps a very successful year for us, in which we saw CCB growth accelerate throughout the year.

Q4 cafe very successful year for us in which we saw PCB growth accelerate throughout the year from 20% in Q1 to 23% in Q2 to 25% in Q3 and now to 29% in Q4.

Speaker 4: 20% in Q1, to 23% in Q2, to 25% in Q3, and now to 29% in Q4.

Speaker 4: We attribute this inflection and growth to our differentiated VM capabilities, expanding product portfolio, and increased investment in sales capacity in go-to-market.

We attribute this inflection and growth to our differentiated VM capabilities.

Expanding product portfolio and increased investment in sales capacity and go to market activities.

Speaker 4: During Q4, we saw strength across the board in both new and renewed business, and in all geographies.

During Q4, we saw strength across the board in both new and renewal business and in all geographies.

Speaker 4: It's important to note that we experience very good linearity entering December and we're on our way to one of our best growth quarters of the year.

It's important to note that we experienced very good linearity entering December .

And we're on our way to one of our best growth quarters of the year.

Speaker 4: However, after the discovery of Log4j in December , we saw a significant uptick in our expansion rates as customers increased coverage of both assets and applications.

However, after the discovery of log for Jay in December we saw a significant uptick in our expansion rates as customers increase coverage of both assets and applications.

Speaker 4: Our expansion rates also benefit it from exceptional renewals, including windbacks and limited customer turn, all of which lifted our net dollar expansion.

Our expansion rate also benefited from exceptional renewals, including win backs and eliminate customer churn all of which lifted our net dollar expansion rate.

Speaker 4: Likewise, we also saw outperformance in new logos, particularly in the mid-market through our inside sales efforts, and from no-touch NASA sales channels given the relatively short sales cycle.

Likewise, we also saw outperformance in new logos, particularly in the mid market through our inside sales efforts and from no touch necessary channels, given the relatively short sales cycles.

Speaker 4: New logo sales from large market customers with longer sales cycles also saw strong close rates.

New logo sales from large market customers with longer sales cycles also saw strong close rates.

Speaker 4: for opportunities that were already advanced in the Q4 pipeline.

The opportunities that were already advanced in the Q4 pipeline.

Speaker 4: new pipeline built in the quarter for the large market was also very helpful.

New pipeline build in the quarter for the large market was also very healthy.

Speaker 4: In terms of metrics underpinning our strong financial performance, we added 562 new enterprise platform customers in the quarter, which is a record for us, and up from the 460 we added in Q3.

Now in terms of metrics underpinning our strong financial performance, we added 562, new enterprise platform customers in the quarter, which is a record for us and up from the 460, we added in.

In Q4 last year.

Speaker 4: We also had success with large deals, as we added 100 net new six-figure customers in the quarter, which is up from 66 in the same period last year.

We also had success with large deals as we added 100 net.

Net new six figure customers in the quarter, which is up from 66 in the same period last year.

Speaker 4: Similar to new enterprise platform customers, the number of net new six-figure customers we add it in Q4 is our largest ever at a single quarter and brings the total number of new enterprise platform customers meaning over 100,000 per atom to almost 1100.

Similar to new enterprise platform customers. The number of net new six figure customers. We added in Q4 is our largest ever in a single quarter and brings the total number of new enterprise platform customers spending over 100000 per annum to almost 11 hundreds.

Speaker 4: From a product-mixed perspective, our exposure solutions, which includes Tenable I.O, Tenable EP, and this module's active directory security, and operational technology security, continue to gain traction and saw outside growth.

From a product mix perspective, our exposure solutions, which includes tenable Io and tenable EP and as modules active directory security and operational technology security continued to gain traction and saw outsized growth.

Speaker 4: We attribute this strong demand to our customers' need to assess risk holistically across IT assets, identities, and OTS.

We attribute this strong demand to our customers need to assess risk holistically across Ics ex identities and Ot assets.

Speaker 4: While we saw strength in cloud use cases, it should be noted that Acurix's contribution to CCB in the quarter was nominal since the acquisition closed in Q4 and Acurix infrastructure's code capability.

While we saw strength in cloud use cases, it should be noted that a <unk> contribution to <unk> in the quarter was nominal since the acquisition closed in Q4 and <unk> infrastructure is co capabilities.

Speaker 4: were not integrated into our go-to-market motion.

Not integrated into our go to market motion in the quarter.

Speaker 4: We believe the careability to assess and secure critical cloud infrastructure prior to deployment will significantly enhance our existing cloud capabilities and augment our strength in one time.

We believe the <unk> ability to assess and secure critical cloud infrastructure prior to deployment will significantly enhance our existing cloud capabilities and augment our strength and onetime environments.

Speaker 4: Accordingly, we plan to soon announce the availability of our more expansive cloud security offering and the integration of these capabilities with EP shortly. And given cell cycles, we expect CCB to begin to benefit in the second half of the year.

Accordingly, we plan to soon announce the availability of a more expansive cloud security offerings and the integration of these capabilities with EP shortly and given sales cycles, we expect PCB to begin to benefit in the second half of the year.

Speaker 4: In summary, we are delighted with the trend in the top line this year.

In summary, we are delighted with the trend in the top line this year.

Speaker 4: Now, I'll turn to expenses, which include incremental investments in growth and the operating expenses related to Acura.

Now I'll turn to expenses, which include incremental investments in growth and the operating expenses related to a correct.

Speaker 4: I'll start with Gross Margin, which was 82% this quarter, down 70 basis points from last quarter. Gross Margin from...

I'll start with gross margin, which was 82% this quarter down 70 basis points from last quarter.

Gross margin for the full year was also 82%.

Speaker 4: Cost of sales increased sequentially due to higher public cloud and related costs associated with the increased customer usage of our products and costs related to scaling the Acura's infrastructure in support of a more expansive cloud security.

Cost of sales increased sequentially due to higher public cloud and related costs associated with the increased customer usage of our products and costs related to scaling via curious infrastructure in support of a more expansive cloud security offering.

Speaker 4: We are also investing in a broader set of advanced analytics across the attack surface to help customers better predict attack paths and assess risk holistically.

We are also investing in a broader set of advanced analytics across the attack surface and help customers better predict attack Paas and SaaS risk Holistically.

Speaker 4: Looking ahead, we expect these investments to continue into 2022, which could modestly impact Rosemarsh.

Looking ahead, we expect these investments to continue into 2022, which could modestly impact gross margin.

Speaker 4: Long term, we still expect gross margins to be in the high 70 to low 80 percent.

Long term, we still expect gross margins to be in the high 70 to low 80% range.

Speaker 4: Sales and marketing expense for the quarter was 69.5 million, which is up from 60.7 million last quarter.

Sales and marketing expense for the quarter was $69 5 million, which is up from $60 7 million last quarter.

Speaker 4: Sales and marketing expense reflects higher wages and benefits related to hiring more sales reps and other headcount as well as accrued payroll.

Sales and marketing expense reflects higher wages and benefits related to hiring more sales reps and other head count as well as accrued payroll taxes.

Speaker 4: Further, it reflects higher commissions and variable compensation attributed to our strong sales performance in the quarter. An increased investment in marketing for demand-gen and brand building activities for our exposures.

Further it reflects higher commissions and variable compensation attributed to our strong sales performance in the quarter.

And increased investment in marketing for demand Gen and brand building activities for our exposure solutions.

Speaker 4: Adding sales capacity and investing in our go-to-market efforts will continue to be an area of focus for us, given the acceleration in growth in 2021. Our expanded product portfolio and the high level of sales productivity, as well as our ability to generate an attractive ROI on new dollars invested.

Adding sales capacity and investing in our go to market efforts, we will continue to be an area of focus for us given the acceleration in growth in 2021, our expanded product portfolio and the high level of sales productivity as well as our ability to generate an attractive ROI on new dollars invested.

Speaker 4: Sales are marking expense as a percentage of revenue was 47% in Q4 compared to.

Sales and marketing expense as a percentage of revenue was 47% in Q4.

Compared to 44% last quarter.

Speaker 4: For the full year, sales and marketing expense as a percent of revenue was 44%, and is expected to remain at or near this percentage in 2022, which will give us ample investment dollars to keep pace with the strong.

For the full year sales and marketing expense as a percent of revenue was 44%.

And is expected to remain at or near this percentage in 2022, which will give us ample investment dollars to keep pace with the strong demand.

Speaker 4: R&D expense for the quarter was $24.9 million, which was consistent with $25.1 million last quarter.

R&D.

Expense for the quarter was $24 9 million, which was consistent with $25 1 million last quarter.

Speaker 4: Although there was little change in R&D expense during the quarter, it should be noted that we added a sizable team of engineers in cloud security, attributed to our Keurigs, and made other hires, which was more than offset by the amount of capitalized software development costs related to expanding our exposure platform and an R&D tax credit we received.

Although there was little change in R&D expense during the quarter. It should be noted that we added a sizable team of engineers and cloud security attributed to Keryx and made other hires which was more than offset by the amount of capitalized software development costs related to expanding our exposure platform.

And an R&D tax credit we received.

Speaker 4: R&D expense as a percentage of revenue was 17% in Q4 compared to 18% last quarter.

R&D expense as a percentage of revenue was 17% in Q4 compared to 18% last quarter.

Speaker 4: For the full year, R&D expense as a percentage of revenue was 18% and is expected to increase modestly in 2022 given the increased investment in cloud security, attack path analysis attributed to the symptom acquisition, and a broader set of predictive analytics and platform.

For the full year R&D expense as a percentage of revenue was 18% and is expected to increase modestly in 2022, given the increased investment in cloud security.

Attack path analysis attributed to the symptom acquisition and a broader set of predictive analytics and platform capabilities.

Speaker 4: G&A expense was $15.8 million compared to $15 million last quarter.

G&A expense was $15 8 million compared to $15 million last quarter.

Speaker 4: If the percentage of revenue, GNA, expense with 11% this quarter, and last quarter, as well as for the full year.

As a percentage of revenue G&A expense was 11% this quarter and last quarter as well as for the full year.

Speaker 4: We continue to make investments in GNA to support growth and scale of our business.

We continue to make investments in G&A to support growth and scale of our business. We expect G&A expense as a percentage of revenue to remain flat in 2022.

Speaker 4: We expect G&A expense as a percentage of revenue to remain flat in 2022.

Speaker 4: Income from operations was 11.9 million compared to 13.7 million last quarter, which reflects the items I just highlighted.

Income from operations was $11 9 million compared to $13 $7 million last quarter, which reflects the items I just highlighted for.

Speaker 4: for the full year, non-gapping come from operations with 51 million. Compared to 25.8 million in 2020.

For the full year non-GAAP income from operations was $51 million compared to $25 8 million in 2020.

Speaker 4: which was a $25 million improvement despite the additional operating expenses attributed to the Allstat and Acura acquisitions.

Which was a $25 million improvement despite the additional operating expenses attributed to the offset in a character acquisitions.

Speaker 4: Operating margin was 8% for Q4 compared to 10% last quarter.

Operating margin was 8% for Q4 compared to 10% last quarter.

Speaker 4: Operating margin was 9% for the full year compared to 6% for the full year 2020.

Operating margin was 9% for the full year compared to 6% for the full year 2020.

Speaker 4: EPS in the fourth quarter was $0.05, which was $0.02 better than the high end of our guided.

EPS in the fourth quarter was <unk>, which was <unk> <unk> better than the high end of our guided range.

Speaker 4: So before year, we generated 34 cents of earnings per share versus 19 cents last year.

Full year, we generated 34 cents of earnings per share versus <unk> 19 <unk>.

Last year.

Now, let's turn to the balance sheet.

Speaker 4: We finish the quarter with $512 million in cash in short-term investment.

We finished the quarter with $512 million of cash and short term investments.

Speaker 4: Given our strong Q4 results, we saw a notable sequential increase in both accounts receivable and total deferred revenue.

Given our strong Q4 results. We saw notable sequential increase in both accounts receivable and total deferred revenue.

Speaker 4: At year-end, accounts receivable was $137 million, and total deferred revenue was $531 million, including $407 million of current deferred revenue, which gives us a lot of visibility headed into 2022.

At year end accounts receivables of $137 million and total deferred revenue was $531 million, including $407 million.

Current deferred revenue, which gives us a lot of visibility.

Headed into 2022.

Speaker 4: Now, I would like to discuss cashflow. We used 160 million of cash to acquire a carax and paid 3.2 million of interest on our credit facility in October .

Now I would like to discuss cash flow, we used $160 million of cash to acquire <unk> and paid $3 2 million of interest on our credit facility in October .

Speaker 4: In Q4, we generated $22.4 million of unleveraged re-cash flow, and for the year we generated $95.2 million, which is a $50.9 million increase over 2020 level.

In Q4, we generated $22 4 million of Unlevered free cash flow and for the year, we generated $95 2 million, which is a $59 million increase over 2020 levels.

Speaker 4: With 95% recurring revenue, high gross margins and high rental rates, we feel confident that we can continue to generate attractive levels of cash low while continuing to invest in the business.

With 95% recurring revenue high gross margins and high renewal rates, we feel confident that we can continue to generate attractive levels of cash flow, while continuing to invest in the business.

Speaker 4: Striking the right balance between growth and profitability has always been an area of focus.

Striking the right balance between growth and profitability has always been an area of focus for us.

Speaker 4: A good indication of this is our achievement of rule authority for the fourth quarter and full year.

A good indication of this is our achievement of rule of 40 for the fourth quarter and full year.

Speaker 4: Achieving this was years in the making, and a long-term goal since our IPO in 2018. So we're very pleased to have achieved this important milestone.

Achieving this was years in the making and our long term goal since our IPO in 2018. So we're very pleased to have achieved this important milestone.

Speaker 4: As a reminder, we define Rule 40 as revenue growth plots on levered free cash.

As a reminder, we define the rule of 40 as revenue growth plus unlevered free cash flow margin.

Okay.

Speaker 4: With the results of the quarter behind us, I'd like to discuss our outlook for the first quarter and full year 2022.

With the results of the quarter behind us I'd like to discuss our outlook for the first quarter and full year 2022.

For the first quarter, we currently expect.

Speaker 4: revenue to be in the range of 152 to 154 million.

Revenue to be in the range of $152 million to $154 million.

Speaker 4: non-GAAP income from operations to be in the range of $10 to $11 million.

non-GAAP income from operations to be in the range of $10 million to $11 million.

Speaker 4: non-GAAP net income to be in the range of $5.2 to $6.2 million, assuming interest expense of $3.5 million and a provision for income tax of $1.3 million.

non-GAAP net income to be in the range of $5 two to $6 2 million, assuming interest expense of $3 5 million and our provision for income tax of $1 3 million.

Speaker 4: non-GAP diluted earnings per share to be in the range of four to five cents, assuming 117.5 million fully diluted weighted average shares outstanding.

non-GAAP diluted earnings per share to be in the range of four to five.

Assuming a $117 5 million fully diluted weighted average shares outstanding.

And for the full year. We currently expect calculated current billings to be in the range of $750 million to $760 million.

Speaker 4: Calculate a current building to be in the range of 750 to 760 million.

Speaker 4: revenue to be in the range of $662 to $670 million.

Revenue to be in the range of $662 million to $670 million.

Speaker 4: Non-Gaft income from operations to be in the range of 40 to 45 million.

non-GAAP income from operations to be in the range of $40 million to $45 million.

Speaker 4: non-GAAP net income to be in the range of $18.2 to $23.2 million, assuming interest expense of $14 million, and a provision for income taxes of $8 million.

non-GAAP net income to be in the range of 18, two to $23 2 million, assuming interest expense of $14 million and a provision for income taxes of $8 million.

Speaker 4: non-GAAP diluted earnings per share to be in the range of $0.15 to $0.19, assuming 119.5 million fully diluted weighted average shares outstanding.

non-GAAP diluted earnings per share to be in the range of <unk>.

15 to 19 sets, assuming $119 5 million fully diluted weighted average shares outstanding.

Speaker 4: Our strong performance in Q4 and the full year, 2021, give us a lot of confidence in the business and our outlook for 2022.

Our strong performance in Q4, and the full year 2021 gives us a lot of confidence in the business and our outlook for 2022.

Speaker 4: In that regard, there are a few comments I want to make that will provide important context to our guide.

In that regard there are a few comments I want to make that will provide important context to our guidance today.

Speaker 4: Our CCB guidance for the full year reflects 22 to 23 percent growth, which includes some continued tailwinds from Log 4J and Q1, with more modest contributions expected throughout the remainder of the year.

Our <unk> guidance for the full year reflects 22% to 23% growth which include some continued tailwind from <unk> in Q1.

With more modest contributions expected throughout the remainder of the year.

Speaker 4: Overall, we're very pleased to be providing CCB and revenue guidance today that is notably above the 20% bar we discussed during our investor day in December .

Overall, we're very pleased to be providing.

<unk> and revenue guidance today that is notably above the 20% bar, we discussed during our Investor day in December .

Speaker 4: In terms of profitability, we exit the year with an 8% operating margin in Q4, and are guiding to 6% to 7% for the full year 2022, which includes $4 million to $5 million per quarter of operating expenses related to a Keurig and, to a lesser degree, SIPC.

In terms of profitability, we exit the year with an 8% operating margin in Q4 guide.

Guiding to 6% to 7% from our full year 2022, which includes $4 million to $5 million per quarter of operating expenses related to <unk> and to a lesser degree symptom.

Speaker 4: The incremental investments in R&D attributed to recent acquisitions expand our product suite strategically in port markets and strengthen our ability to deliver our cyber exposure vision.

The incremental investments in R&D attributed to recent acquisitions expand our product suite strategically important markets and strengthen our ability to deliver.

Our cyber exposure vision.

Speaker 4: In terms of the quarterly flow of these investments, we expect to follow our historical seasonal patterns with higher weighting in the first half of the year, resulting in higher operating margins, the second half.

In terms of the quarterly flow of these investments we expect to follow our historical seasonal patterns with higher weighting in the first half of the year, resulting in higher operating margins the second half of the year.

Speaker 4: As discussed earlier, we achieved Rule of 40 in Q4 and the full year 2021. So, we believe making investments in the face of strong demand will position us well for continued growth and success.

As discussed earlier, we achieve rule of 40 in Q4 and the full year 2021. So.

So we believe making investments in the face of strong demand will position us well for continued growth and success.

Speaker 4: Long term, we are confident in our ability to continue to balance growth with profitability and become a rule of 50 company.

Long term, we are confident in our ability to continue to balance growth with profitability and become a rule of 50 company.

Speaker 4: In summary, we're delighted with the results of the quarter and feel really good about the outlook we are providing today. I'll now turn the call back to a

In summary, we're delighted with the results of the quarter.

Really good about the outlook, we're providing today I'll now turn the call back to Amit for some closing comments.

Speaker 14: Thanks Steve. We continue to see increasing levels of differentiation in our core VM capability.

Thanks, Steve.

To see increasing levels of differentiation in our core VM capabilities. This is particularly exciting given the strategic role that many organizations are increasingly placing onvia.

Speaker 14: This is particularly exciting given the strategic role that many organizations are increasingly placing on VF.

Speaker 14: Our exposure solutions in OT and AD are seeing great traction.

Our exposure solutions in OTT and are seeing great traction.

Speaker 14: We're thrilled about the momentum we have in our cloud business, augmented by Ecurix, forming an integrated, comprehensive cloud office.

We're thrilled about the momentum we have in our cloud business augmented by Europe's forming an integrated comprehensive cloud offering.

Speaker 3: And we believe that bringing these solutions and datasets into a unified cyber risk management platform with differentiated analytics such as Lumen and attack path analysis and others positions us incredibly well for the long term.

And we believe that bringing these solutions and datasets into a unified cyber risk management platform with differentiated analytics, such as lumen and attack path analysis.

And others.

<unk> us incredibly well for the long term.

Speaker 3: We delivered strong results in Q4 and are excited about the road ahead.

We delivered strong results in Q4.

Excited about the road ahead.

We'd now like to open the call up for questions.

Speaker 1: At this time, we will be conducting a question and answer session.

Thank you at this time, we'll be conducting a question and answer session. I think it was like asking the question.

Speaker 1: If you would like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star 2 if you would like to remove your question from the line.

Ryan Please press star one on your telephone keypad, a confirmation tone will indicate your line is in the question queue. You May press star two if he would like to remove your question from the queue for participants using speaker equipment and may be necessary to pick up your handset before pressing the star one.

Speaker 1: then using speaker equipment and maybe necessary to take up your handset before pressing the star keys. One moment.

Mom and please poll for questions.

Speaker 1: Our first question is from Hamza Faderwala of Morgan Stanley . Please proceed with your question.

Our first question is from Hamzah <unk>.

<unk> of Morgan Stanley . Please proceed with your question.

Speaker 5: Hey guys, thank you for taking my question and a strong finish to the year here.

Hey, guys. Thank you for taking my question and a strong finish to the year here.

Steve maybe just first question for you you mentioned the tailwind from lock for Jay I was wondering if you could help us quantify what that actual tailwind was in Q4 and what the expectation is for 2022 from a growth contribution standpoint, you mentioned <unk> was up so what was the net retention rate.

In Q4 relative to what you saw in the quarter prior.

Alright, Thanks for your question and good question.

Speaker 8: As we've commented earlier, we saw some upside in the quarter related to log4j.

As we commented earlier, we saw some upside in the quarter related to log for Jay.

Speaker 8: I think the timing is important to note here, Log4J didn't surface until December and we were well on our way to having our best growth quarter of the year, which is notable given the acceleration of the business we've demonstrated throughout the year. So as a result, the impact of Log4J in the quarter was more apparent in areas that had shorter sales cycles, such as Renault's.

I think it's <unk>.

Timing is important to note here log for Jay didn't surface until December and we were well on our way to having our best growth quarter of the year.

Which is notable given the acceleration in the business we've demonstrated throughout the year. So as a result, the impact of law for GE in the quarter was more parent in areas that had shorter sales cycles, that's just renewals.

Speaker 8: expansion sales, and in terms of new business, more specifically in the mid-market, and our no-touch necessary sales channels.

Expansion sales and in terms of new business more.

More specifically in the mid market and are no touch necessary channels.

Speaker 8: But we're also very pleased to see pipeline and activity levels for larger jails inflect higher in the quarter, so we don't just see this as a pull forward of demand. I think the important point to note here is that Q4 capped a very successful year for us in which we saw accelerating CCB growth. That benefited from our expanded product portfolio and the investments really we're making in go-to-market that we started making in the first half of the year. And as Amit commented earlier, which...

But we're also very pleased to see pipeline and activity levels for larger jails inflect higher in the quarter.

So we don't just see this as a pull forward of demand.

I think the important point to note here is that Q4 capped a very successful year for us in which we saw.

Tolerating PCB growth.

Benefiting from our expanded product portfolio and the investment is really we're making in go to market.

That we started making the first half of the year.

And as I commented earlier, what's really different.

Speaker 8: of that log4j versus perhaps other vulnerabilities or even high profile data breaches is the pervasiveness and the complexity of it, which is really a testament to our leadership in the market and the strategic nature of our products.

How about wall for GE versus perhaps other vulnerabilities or even high profile data breaches is the pervasiveness and the complexity of it.

Really a testament to our leadership in the market and the strategic nature of our products.

Speaker 8: With regard to 2022, our CCB guidance for the full year does, which is 22 to 23 percent growth, does reflect some continued tailwinds from Blog4J in Q1.

And with regard to 2022, our CCP guidance for the full year does.

Which is 22% 23% growth does reflect some continued tailwind from blog for Jay in Q1.

Speaker 4: given our level of visibility, as well as with some contributions, more modest contributions throughout the year. But overall, we feel really good about the momentum in our business and our outlook for the year.

Given our level of visibility as well as some contributions.

More modest contributions throughout the year, but overall, we felt really good about the momentum in our business and our outlook for the year.

Speaker 8: We talked about the net dollar expansion rates, it was strong in quarter and it lifted our net dollar expansion rate on an LTM basis back to, you know, close to pre-pandemic level. So, overall, really solid quarter for us, kept a very successful year and gives us a lot of confidence heading into 2022.

And we talked about the net dollar expansion rates it was strong in quarter and it lifted our net dollar expansion rate on an LTM basis.

Back to.

Close to pre pandemic levels. So overall, a really solid quarter froth capped a very successful year and gives us a lot of confidence heading into 2022.

Speaker 5: If I could just follow up on that, just on the net retention. So like you mentioned, it was back to pre-pandemic levels. I think over the last few quarters, the net retention, if I'm not mistaken, was trending between like 112, 113. Is it fair to say in Q4, it was back to that, let's say 115 to like, you know, 118 level even?

Steve if I could just follow up on that just on the net retention. So like you mentioned it was back to pre pandemic levels I think over the last few quarters. The net retention if I'm not mistaken was trending between like 112 113 is it fair to say.

In Q4, it was back to that.

Let's say $1 15 to like you know 118 level even.

Speaker 8: Yes, so the distinction I'll make is LTM. What we talk about is on an LTM basis last 12 months. So if you have a really strong

Yes, so the instincts distinction will make his LTM, what we talk about.

On an LTM basis last 12 months. So if you have a really strong.

Speaker 8: in-quarter renewal rate and expansion rates, it's going to drive a meaningful uplift.

In quarter renewal rate in expansion rates, it's going to drive a more.

<unk> uplift on our LTM number.

Speaker 8: on our LTM number and we saw a meaningful uplift in our LTM number because of the strength in the quarter. So, absolutely delighted with the result in the quarter. Obviously, expansion rate did benefit from Log4J.

We saw a meaningful uplift in our LTM number because of the strength in the quarter, so absolutely delighted with that.

The result in the quarter, obviously expansion rate did benefit from lower for Jay.

Speaker 13: But notwithstanding that, as I commented earlier, we were on our way to having a good quarter. Liniere was really strong in the last few weeks of the quarter because of Lot4J was particularly strong. And renewals and expansions benefited.

Notwithstanding that as I commented earlier.

Yeah.

We're on our way to having a good quarter linearity was really strong in the last few the last few weeks of the quarter because of law for Jay.

What's particularly strong and renewals and expansions benefited.

Okay got it I'll.

Let the others go thank you.

Speaker 1: Our next question is from Sterling Oddy of J.P. Morgan.

Our next question is from Sterling Auty of Jpmorgan. Please proceed with your question.

Speaker 6: Yeah, thanks. Hi, guys. So, first one is you gave us the impact in operating expenses from Acurax and from SimSum, but can you give us a sense of what impact that had on the revenue line for guidance for 22?

Yeah. Thanks, Hi, guys. So first one is.

You gave us the impact in operating expenses from <unk>.

<unk>, San and from symptom, but can you give us a sense of what <unk>.

Impact that had on the revenue line for guidance for 'twenty two.

Speaker 4: For Acurex, Acurex closed in the fourth quarter. And as I've commented, we have a whole year expenses. Obviously, we're flowing through the guide, and it also reflects some additional operating expenses related to the Symptom acquisition, which we just announced. You know, I think it's important to note that Symptom is not going to be a separate SKU. It's going to be integrated with EP and in other areas of our product.

<unk> closed in the fourth quarter and as I commented, we have a full year expenses. Obviously you were flowing through the guide and it also reflects some additional operating expenses related to the symptom acquisition, which we just announced.

I think it's important to note that symptom is not going to be a separate SKU, it's gonna be integrate with E P and in other areas of our product.

Speaker 8: to provide a deeper and richer insight on our analytics. Amit can speak more directly to that. And with regard to Q-Rex, we've announced the expansion of our cloud security offering today. And that's a more expansive product that will begin to be selling. And given sales cycles, we would expect greater contribution in the second half of the year in CCB. And that is reflected.

A deeper and richer insight.

On our analytics.

Speak more directly to that and with regard to our purex.

We are.

We've announced the expansion of our of our cloud security offering today and.

That's a more expansive product that will begin to be selling in a given sales cycles, we would expect greater contribution in the second half of the year in <unk>.

And that is reflected in our guidance today as well.

Speaker 6: And then maybe just one follow-up on the gross margin side, just to clarify a comment that you made. You mentioned the continued investments could have a modest impact on gross margins. Is that relative to the gross margin level in the fourth quarter? So we could see some additional pressure from that level or from the level for full year 2021?

And then maybe just one follow up on the gross margin side just to clarify a comment that you made you mentioned the continued investments could have a modest impact on gross margins is that relative to the gross margin level in the fourth quarter. So we could see some additional pressure from.

That level or from the level for full year 2021.

Speaker 13: It would be from Q4, based off of what we experienced in the fourth quarter.

It would be from Q4 based off of what we experienced in the fourth quarter.

Speaker 6: Okay, and just modest impacts and can I stay able through the years, they're kind of a pattern where it kind of bottoms and starts to improve at some point.

Okay, and just modest impact and kind of stable through the year or is there kind of a pattern, where it kind of bottoms and it starts to improve at some point.

Speaker 8: You know, I think for now, what we commented earlier was directionally, you know, obviously we're expecting.

I think for now what we commented earlier it was directionally.

Obviously, we would expect.

Speaker 8: You know strong sales in cloud really pleased with the expansion of the product

Strong sales in cloud, we're really pleased with the expansion of the product.

Speaker 8: and cloud will continue to represent a larger percentage of our sales. So as a result, what we're expecting is gross margins to track in line or trend modestly lower to the tune of about 100 bit.

And Kyle will continue to represent a larger percentage of our sales.

As a result, what we're expecting gross margins to track in line or our trend modestly lower the tune of about 100 bps.

Speaker 13: I think the safe assumption is that's something that we'll experience earlier in the year. And you should assume that going forward for the full year. And to the extent we do better than what our top-line guide, you know, calls for today, then obviously margins could continue to benefit from that because some of these costs are semi-fixed and upfront costs that we're making at least this year and will potentially drive margin leverage going forward.

I think the safe assumption is that's something that we'll experience earlier in the year.

And you should assume that going forward for it for the full year and to the extent, we do better than what our top line guide.

Calls for today, then obviously margins could continue to benefit from that because some of these costs are semi fixed and upfront costs that we're making at least this year.

Potentially drive margin leverage going forward.

Helpful. Thanks, I appreciate it.

Speaker 1: Our next question is from Stuckhead, Julia, Barclays.

Our next question is from Telia.

Kelly at Barclays.

Please proceed with your question.

Speaker 7: OK, great. Hey guys, thanks for taking my my questions here.

Okay, Great Hey, guys. Thanks for taking my questions here.

Speaker 7: I mean, maybe first for you, you know, a lot of talk about EP in the call, I was just wondering, can you just expand a little bit on the success of the overall bundling strategy and how you're kind of thinking about that strategy in 2022 with bundling?

I mean, maybe maybe first for you.

A lot of talk about EP in the call I was just wondering can you just expand a little bit on the success of the overall bundling strategy and how youre kind of thinking about about that strategy in 2022 with bundling.

Speaker 14: When we first launched EP toward the middle of last year, we saw a lot of both the sales team and customers immediately gravitating toward it. Just the inclusion of web app scanning capabilities and the container security products and other things just make a lot of sense, and obviously the inclusion of Lumen for driving analytics on top of it. You saw a very rapid

Yes.

When we first launched <unk> towards the middle of last year, we saw a lot of.

Both the sales team and customers immediately gravitating toward it just the inclusion of whereabouts scanning capabilities in the container security products and the other things just make a lot of sense.

And obviously, the inclusion of aluminum or cloud the analytics on top of it. So we saw very rapid.

Speaker 11: adoption by both the sales team and customer base and gravitating toward EP. There are two, I think, key points to make.

Adoption by both the sales team and customer base and gravitating toward.

EP.

There are two other key points to make here one is.

Speaker 11: There's a very natural progression for EP to include active direct capability to full.

There is a very natural progression for EEP to include active directory capability into full.

Speaker 11: suite of cloud capability in it, so that again, when customers want to assess their risk...

Sweet.

<unk> capability.

So again when customers want to assess the risk they're not going to one place where there's just a very natural unified reporting dashboard being a more holistic assessment of risk and then and then the second point is that it's not just a bundling exercise the way kind of the PV.

Speaker 11: They're not going to one place where there's just a very natural unified reporting, dashboarding, a more holistic assessment of risk. And then the second point is that it's not just a bundling exercise the way kind of the EP.

Speaker 11: packaging started out, it's not just a packaging or bundling exercise, there's real analytics that are now able to move across assets.

Packaging started that it kind of just just the packaging or bundling exercise, there's real analytics that are now able to move across asset types.

Speaker 11: driving multiple asset types into Lumen. And again, the inclusion of new alert methods like attack cop analysis, we've been making an absolutely compelling plot.

Driving multiple asset types into lumen.

And again the inclusion of new.

Analytic methods like attack top analysis, we think making it an absolutely.

Compelling platform.

Got it got it that makes a lot of sense, Steve maybe for you for my follow up.

Nice start to the year with the CCP got I know the question was just asked just on an inorganic contribution to revenue, but just to make sure. It's asked.

Is there any sense you can give us on CCP guide for 2022, I think you've got all said you've got a cure, but symptoms there any just rough sense for kind of how that 22% to 23% growth kind of looks from a organic and from an organic.

Perspective.

Speaker 8: Sure. Well, as a reminder, the companies we've acquired are all very early-stage companies with minimum sales or go-to-market capability. So our sales to date primarily reflect the success of our go-to-market efforts and our ability to create and close pipeline opportunities post-sale.

Sure.

Mind you. The companies. We've acquired are all very early stage companies with minimal sales or go to market capability. So our sales to date, primarily reflect the success of our go to market effort.

Our ability to create and close pipeline opportunities post sale.

Speaker 8: You know, the timing's also worth noting on some of the acquisitions. We, as all said, in 2019, so we've had an OT offering now in the market for two years.

The timing is also worth noting on some of the acquisitions.

So as Al said in 2019, so we've had an OTT offering now in the market for two years.

Speaker 8: So we don't consider that inorganic growth.

So we don't.

Consider that inorganic growth.

Speaker 8: And then a curative just recently closed and the fourth quarter. And that's resulting in a more expansive cloud offering for us. It's going to be a newer motion than we said earlier that we do expect contribution. And it is reflected in our guide to some degree, but we've expected more that the second half of the year. You know, that really leads a curative which closed. Or should I say that we're.

And then our care if you just recently closed in the fourth quarter.

That's resulting in a more expansive cloud offering for us it's going to be a newer motion and we said earlier that we do expect contribution and it's reflected in our guide to some degree, but we'd expect it more that the second half of the year.

That really leaves.

<unk>, which closed.

Or should I say that really leaves all said.

Speaker 13: of our Active Directory product, which closed in April , and, you know, both.

Our active directory product, which closed in April .

Speaker 8: 80 and even say OT did very well for us for the quarter and for the full year. We discussed the contribution to these products in a full year basis in our investor day. And that could be.

And both.

A D and.

Oh did very well for us for the quarter and for the full year, we discussed the contribution to these products and a full year basis in our Investor day.

Speaker 8: We did even a little better than the 20 million we referenced in December . And we would expect continued growth in contributions from those products as well as, you know, more broadly, our exposure solution.

Fair to say.

We did even a little better than the $20 million, we referenced in December .

And we would expect continued growth in contributions from those products as well as.

More broadly our exposure solutions.

Speaker 8: But the one thing that I want to note here that's really important is really with regard to our go-to-market strategy, which is to increasingly integrate new capabilities and features in DEP, our unified exposure platform. Amit commented earlier, but it's worth repeating, it's nearly impossible to accurately assess risk associated with any one piece of technology or asset type in isolation.

But the one thing that I want to note here that is really important.

With regard to our go to market strategy, which is to increasingly integrate new capabilities and features into E. P.

Exposure platform <unk> com.

In it earlier, but it's worth repeating it's nearly impossible to accurately assess risk associated with any one piece of technology or asset types and isolation.

Speaker 8: Our products really reinforce each other and the broader value prop of helping customers assess risk holistically. And that is across the attack surface. So breaking out sales of individual products going forward whose capabilities are included in EPA or will be included in EPA will become less meaningful given how we price and package our solutions and really helping our customers focus on the bigger problem. Thank you.

Our products really reinforce each other and the broader value prop of helping customers assess risk holistically and that is across the attack surface. So breaking out sales of individual products going forward, whose capabilities are.

Included in the payer will be included in your opinion will become less meaningful given how we price and package our solutions and really helping.

Our customers focus on the on the.

Bigger problems.

Got it makes sense thanks, guys.

Speaker 1: Our next question is from Andrew Noewinsky of Well...

Our next question is from Andrew Nowinski of Wells Fargo. Please proceed with your question.

Speaker 9: Great, thank you. Congrats on that great quarter. I just want to start with a question on EP again. You know, you've added a lot of components, as you mentioned, AD, and now it sounds like CS will be added to it as well.

Great. Thank you congrats on a great quarter.

Wanted to start with a question on ETE again, we've added a lot of components as you mentioned <unk> and now it sounds like <unk> will be added soon as well.

Speaker 9: Is that, uh, can you just give us any color in terms of how much that would be increasing the price? And should we expect. Maybe accelerating growth in your 100,000 customers in 2022 because of that.

Is that.

Can you just give us any color in terms of how much that would be increasing the price and should we expect maybe accelerating growth in your $100000 customers in 2022 because of that.

Speaker 11: Yeah, and I'll turn that question over to Steve in just a minute, but the way ET is designed is it's a premium solution, it's a premium capability, it's a platform offering that delivers enhanced analytics on top of individual solutions. So if you use VM, you might want to move...

Yes.

And I'll turn to turn that question over to stay to just a minute.

What the way E T as designed.

<unk> premium solution.

Premium capability, it's a platform offering.

Delivers.

Danced analytics on top of individual solutions. So if you use the.

One of them.

Speaker 14: you might want to purchase through EP because it would give you all the capabilities, the Lumen, LAS, all the other functionality. The same is true if you're using the cloud security product, and the same is true if you're using Active Directory. So the way we will monetize the new capabilities and these new products as they're added to EP is that it's a premium pricing, but you still have to pay.

You might want to purchase the repeat because it would give you all the capabilities and move in wash all the other functionality.

The same is true if youre using the cloud security product and the same is true if you're using.

Active directory, so the way, we will monetize the new capabilities and new products as they are added to <unk>.

Is that it could premium pricing, but you still have to pay.

Speaker 11: the asset price for AD or for your cloud workloads and your assets in the cloud. So it's monetized both through an increased asset count as well as a higher price per asset because we're delivering some compelling value out of the analytics on AD.

The asset price for <unk> or for your cloud workloads and new assets in the cloud.

So it's monetize both through an increased asset count as well as a higher price per asset because.

We're delivering some compelling value add all the analytics.

On top of those assets.

Speaker 9: Got it. That makes sense. And then I just want to do a question on maybe a clarification on your Log 4J expectation. I think you said you'll be certainly impacting Q1, but then it moderates after that. You know, if you kind of go back to some commentary.

Got it that makes sense.

And then I just wanted to do have a question on maybe a clarification on your log for Jay.

Expectation, but I think you said there'll be certainly impact in Q1, but then it moderates after that.

You kind of go back to some commentary.

Speaker 9: you know, from the CISA and, um,

From the CSA and.

Speaker 9: you know, the White House, they're claiming that this is going to create problems and potential issues for the next two plus years. So I'm wondering, why do you think it's going to taper off after Q1 and not really be a driver, a strong driver, maybe even getting worse throughout the year?

The White house, they're claiming that this is.

It's going to create problems and potential issues for the next two plus years. So I'm wondering why do you why do you think it's going to.

Paper off after Q1, and not really be a driver a strong driver maybe even getting worse throughout the year.

Speaker 13: Well, I think it's really what's reflected in our guide, as I mentioned earlier, is certainly more cowings in Q1.

Well I think it's really a.

What's reflected in our guide and as I mentioned earlier.

Is.

Certainly more tailwind in Q1.

Speaker 13: To what degree we benefit beyond that, above and beyond the guidance we're providing today, really remains to be determined. So the guidance we're offering today respects contribution the first quarter, reflex the strength.

To what degree we benefit beyond that above and beyond the guidance, we're providing today really remains to be determined.

So the guidance were offering today respects continuing contribution in the first quarter reflects the strength really of.

Speaker 8: really of the overall business, not just for the quarter, but for the full year. So we think we're set up for success in 2022. It gives us confidence to provide the guide that we're providing today. We certainly have more visibility headed into Q1.

The overall business not just for the quarter, but for the full year. So.

We think or set up for success in 2022 gives us confidence to provide the guide that we're providing today, we certainly have more visibility.

Speaker 9: we do really, you know, the remainder of the year, but to what extent it continues to benefit us at, you know, to the level which we expect in the first quarter really remains to be seen. So, we'll look forward to providing an update on our call in April . That makes sense. Thanks, guys. Keep up the good work.

Into Q1.

Really the remainder of the year, but.

But to what extent.

To benefit us to the level, which we expect in the first quarter really remains to be seen so we'll look forward to providing an update on our call in April .

That makes sense. Thanks, guys good work.

Our next question is from Gray Powell of D. T. I D. Please proceed with your question.

Speaker 10: Alright, thanks for taking my questions and congratulations on a great quarter.

Alright, thanks for thanks for taking my questions and congratulations on a great quarter.

Speaker 10: Thank you. Yeah, absolutely. So, yeah, you highlighted that billings growth accelerated in each of the last four quarters. You just exited the year at 29% growth. And Steve, I know you want to keep people conservative, but do you see a scenario where things could further improve and maybe start growing in excess of 30%? And then if so, I'd just be curious.

Thank you yeah absolutely.

So yeah, you highlighted that billings growth accelerated.

Each of the last four quarters, you just exited the year at 29% growth and Steve I know you want to keep people Conservatives.

But do you see a scenario where things could further improve and maybe start growing in excess of that in excess of 30% and then if so I'd just be curious like.

Speaker 10: What do you think are the most likely levers or things that could go right to get you there?

What do you think are the most likely levers or things that could go right to get you there.

Speaker 13: Well, look, the guidance we're providing today is 22 to 23 percent. But that aside, we're chasing a massive market opportunity. We've expanded the product portfolio and we've gone into new markets.

Well look the guidance, we're providing today is 22% to 23%, but that aside we're chasing a massive market opportunity we've expanded the product portfolio going into new markets and markets that are.

Speaker 8: markets that are large and growing rapidly. We're making investments too. I think that's one of the important things to know is that we started making investments more aggressively really the first half of the year and it's making a difference really on the top line. Adding sales capacity, we're also achieving higher levels of productivity.

Our large and growing.

<unk> rapidly.

We're making investments to I think thats one of the important things to note is that we started making investments more aggressively and really the first half of the year and it's Craig.

It's making a difference on the top line, adding sales capacity, we're also achieving higher levels of productivity.

Speaker 8: We're continuing to evolve the product suite.

We're continuing to evolve the product suite.

Speaker 8: Um, you know, and I think all that really makes a difference with the backdrop of.

And I think all of that really makes a difference with the backdrop of.

Speaker 8: you know, not just high-profile data breaches, but threats that are very relevant to the problems that we're solving today. So I think it gives us a lot of confidence in our outlook in 2022. We're certainly not going to cap our growth rate, not by any means. This is a big opportunity. We're pleased to see the acceleration. And, you know, and obviously we'll learn more as we work our way throughout the year.

Not just high profile data breaches, but threats that are very relevant to the problems that we're solving today. So I think it gives us a lot of confidence in our outlook in 2022, we're certainly not from a capped our growth right now not by any means.

This is a big opportunity, we're pleased to see the acceleration.

<unk>.

And.

Obviously, we'll learn more as we work our way throughout the year.

Speaker 10: Okay, that's really helpful. And then just one more quick one. So, you all mentioned that a number of customers came back and expanded their coverage of assets in December following Log4J. Could you maybe just talk about what that looked like? Like, specifically, like, what percentage of assets were those customers covering before Log4J? And then, like, what did coverage look like afterwards? Like, are we talking a doubling in coverage? Or, I don't know, I'm just trying to get a sense as to how that looks.

Okay. That's really helpful. And then just one more one more quick one so see you all.

You mentioned.

<unk> got a number of customers came back and expanded their coverage of assets.

December following law for Jay could you, maybe just talk about what that looked like like like specifically like what percentage of assets, where those customers covering before long for Jay and then like what did coverage look like afterwards.

We're talking to a doubling in coverage or I don't know I'm, just trying to get a sense as to how that how that works.

Speaker 20: Yeah, I would say each customer situation is obviously different. I think in many instances, especially from the enterprise perspective,

Yeah, I would say each each customer situation is obviously different I think in many instances, especially.

On the enterprise side.

Speaker 11: they would have some substantive coverage of their environment, but they would also recognize, hey, we haven't been covering these other assets. I mean, don't forget Log4j is a great example of an exploit which is completely portable over any system that runs Java. So they were.

They would have they would have some subsidiary coverage of their environment, but they would also recognize hey, we haven't been covering these other assets I mean don't forget log for Jay is a great example of the exploit which is completely portable over any system that runs Jonathan so they were.

Speaker 11: You know, even if you have pervasive coverage of your desktop servers and workstations, there's still lots of other compute devices in the environment that might...

Even if you had pervasive coverage of your <unk>.

Desktop servers and workstations theres still lots of other compute devices in any environment.

Speaker 11: be able to run Java and might be susceptible or cause problems with respect to law for jasa. I think it's really customer by customer dependent, but I would not.

Right.

Be able to run Java and might be susceptible or cause problems with respect to log for log for Jason. So I think it's it's.

No.

Yeah.

Really customer by customer dependent, but I would not.

Speaker 13: from assuming it's a natural double in the air or anything in that picture.

I assume it's a natural doubling or anything of that nature.

Speaker 12: Yeah, I was just making that up. I was just trying to figure out a rough, you know, ballpark increase. Thanks, Craig.

Got it yeah, I was making that up I was just trying to I'm trying to.

Figure out a rough ballpark increase.

Thanks, Greg.

Cool thank you very much.

Our next question is from Brian Essex with Goldman Sachs. Please proceed with your question.

Speaker 4: Great. Thank you for taking the question and congrats on the next set of results for the quarter. Yeah, just I guess maybe a me, you know, I think with the past two quarters or last quarter, we talked about, you know, penetration of MSSP channel. How is contribution from the managed service providers in the quarter and how, particularly given the landscape and the rather environment, you know, how is that, how is that traction progressing into 2022?

Yeah, great. Thank you for taking the question and congrats on a nice set of results for the quarter.

Just.

I guess, maybe Amit.

Over the past few quarters or last quarter, we talked about penetration of MSP channel.

<unk> contribution from the managed service providers in the quarter, and how particularly given that the landscape and in the threat environment.

How is that how is that traction progressing into 2022.

Yes.

Speaker 11: Yeah, I think the progression of the environment becomes a sort of natural tailwind for us in that it increases visibility, it increases sort of executive awareness, and it increases

Yes, I think the.

Yeah, I'll start with the second question the progression of the fund.

It becomes a sort of a natural.

A tailwind for us in that it increases visibility it increases sort of executive awareness.

And then it increases.

Speaker 11: concern about people making the you know in the business leadership or leadership of the business to say are we exercising a good a good standard of care with the

Our concern about people, making the.

In the business leadership leadership with both the business to say are we exercising a good a good standard of care with the with the data the systems and the data that are.

Speaker 13: the data, the systems and the data that are entrusted to us. So the very natural progression when you read about high profile, breach a thread after or a vulnerability is always susceptible to this, all we vulnerable, how secure we how it risker we, and that naturally gravitates people toward, you know, the VM program, which is really the center for ground truth around answers.

Rusty two lessons so the very natural progression when you read about high profile.

Breach a threat actor or a vulnerability is always susceptible to this are we vulnerable vulnerable how secure are we how at risk are weak and that naturally gravitates people toward the V.

<unk> program, which is which is really the center for for ground truth around answering.

Speaker 11: those questions. In terms of NSSP, it's an area where we've made some investment. We continue to see very strong traction. We've got a, I think we put out a momentum, press release around our NSSP partners maybe six months or longer, though, in the...

Those questions.

In terms of MSP, it's an area, where we were.

We've made some investment we continue to see.

Very strong traction.

We've got a I think we put out a momentum kind of press release around R. R.

<unk> partners may be six months or longer ago.

Speaker 11: you know, 300 plus MSSP partners that we operate with, but more specifically seeing very meaningful traction in.

300, plus.

MSP partners that we operate with more specifically seeing very meaningful traction in.

Speaker 11: you know, in sort of the 20, you know, largest MSSP providers where we believe, you know, our capability can really differentiate itself and it marries up with enterprise expectations and requirements. So, we think it's an area where the investment, you know, is beginning to bear fruit and I think more opportunities.

And sort of the 20 largest MSP providers, we believe.

Capability.

Can't really differentiate itself and marries up with enterprise expectations and requirements. So we think it's an area where the investment is beginning to bear fruit and I think more and more opportunities I guess.

Speaker 17: Got it. That's helpful. And then maybe, you know, if I could touch on competitively, how you're seeing the current environment for tenable relative to either greenfield opportunities or, you know, competitive displacement, is that shifting at all on the back of the elevated threat environment, particularly with log 4j, where, you know, you kind of best to breed status is causing a shift over to tenable, or is it still, you know, or is kind of the, you know,

Got it that's helpful. And then maybe if I could touch on competitively how youre seeing the current environment for tenable relative to either greenfield opportunities or.

Competitive displacement is that shifting at all on the back of the elevated threat environment, particularly with lock for Jay where you've kind of best of breed status is causing a shift over to tenable or is it still.

Whereas kind of the.

Speaker 4: Enterprises without a formal vulnerability management platform being driven there because of the vulnerability environment. Maybe if we get any kind of shifting color that would be helped.

Enterprises without a formal vulnerability management platform being driven there because of the vulnerability environment, maybe if we get any kind of shift in color there would be helpful.

Speaker 13: Yeah, you know, Steve, I'll let you comment if there's any notable change on the greenfield, but, you know, typically we go out of our way to call this out on a quarter and quarter basis. It's been very consistently, you know, about a third of our

Yeah, Steve I'll, let you comment if there was any notable change on the Greenfield, but typically we would go out of our way to call. This out on a quarter to quarter basis.

And very consistently.

A third of our <unk>.

Speaker 11: new, larger, new enterprise lands. I will say that there's notable differentiation, especially in high profile, vulnerabilities of breaches like Lockwood J, where immediately, to no issue, the...

New.

Enterprise larger new enterprise lands I will say that there was notable differentiation, especially.

High profile.

Vulnerabilities of breaches like Blackboard J were immediately it's a known issue the.

Speaker 11: CISO, or the CSO, or in many cases, you can fill her up in the food chain, are asking questions about it. We're first to market in terms of.

She ISO or the CSO or.

Okay.

Further up the food chain are asking questions about it.

First to market in terms of.

Speaker 11: detections for these capabilities, in terms of accurate detection for these capabilities, in terms of the flexibility and breadth of coverage that we have for these issues. So, you know, we had CISOs coming back or, you know, VM program managers coming back and saying, by, you know, this technology or that technology is telling me fine, or they found 12 instances of this thing, and, you know, we've got over 100 different checks at this point, and we're adding.

Detections for these capabilities in terms of accurate detection for these capabilities in terms of exclusive of flexibility and breadth of coverage that we have an issue. So we have T cells coming back or VM.

Graham managers coming back and saying.

By this technology that technology is telling me fine when they found 12 instances of this thing and we've got over 100 different checks at this point we're adding.

Speaker 11: multiple new checks per day, because there's an incredibly long tail on this, we're able to identify it over dozens of protocols and multiple applications where it's embedded. So, this is, again, one of those issues where the breadth and complexity really allow enterprises

Multiple new checks per day, because this is an incredibly long tail on this looking at we're able to identify it over dozens of protocols and multiple applications, where it's embedded. So this is again one of those issues were the breath of complexity really allow enterprises.

Speaker 12: to see the differentiation that we bring to the table in terms of coverage and accuracy. And I think that both, while at least in the early periods for us, competitively, we've always enjoyed a strong competitive differentiation and competitive winrate. And we've had awareness and the hot profile nature of, you know, new approaches and law for jail will continue to highlight that for us.

To see the differentiation that we bring to the table in terms of coverage and accuracy and I think that bodes well at least in the early periods for us competitively.

Competitive we've always enjoyed a strong competitive differentiation and competitive win rates.

The awareness and.

And the high profile nature of newer breaches and one for Jay will continue to highlight how does that for us.

Got it that's helpful and Steve is it still the same split.

Speaker 9: It is in terms of greenfield opportunities percent of greenfield opportunities. It did not change meaningfully in the quarter. So, yes, sizable greenfield opportunity and obviously our best to breed status and and and VM certainly is helping. Very helpful. Thank you.

It is in terms of greenfield opportunities per cent of greenfield opportunities that did not change meaningfully in the quarter. So, yes, sizable greenfield opportunity and obviously our best of breed.

Status.

And <unk> certainly is helping.

Got it very helpful. Thank you.

Our next question is from Rob Owens with Piper Sandler. Please proceed with your question.

Speaker 21: Hey guys, this is Justin Roach on Farab. I was wondering if you could give some more color around the demand environment in the federal vertical and for a Q given the strength you saw last quarter and how we should think about it as moving to 22. Should we see any differences in seasonality, just given the spending intentions here, seem to be pretty high.

Hey, guys. This is Justin Roche on for Rob just was wondering if you could give some more color around the demand environment in the federal vertical in <unk> given the strength you saw last quarter and how we should think about it as you move into 'twenty two should we see any differences in seasonality just given the spending intentions here seem to be pretty high.

Speaker 11: Yeah, we're very pleased with the approach the federal government's taken to cyber. It's much more aggressive, you know, lean in than previous administrations have shown. We see continued strength and health in our...

Yes, we're very pleased with the the approach the.

The federal.

The government has taken a cyber it's much more aggressive.

And then.

Previous administrations have shown.

We see continued strength in health and are.

Speaker 13: overall federal business. We see a lot of both, you know, large funded and unfunded opportunities. And I think, you know, we'll continue to focus on that market. And we don't, I will also say, you know, we don't see any unanticipated change in seasonality from previous years and previous behaviors. Steve, I don't know if you have an additional call to add on that. No, I will.

Overall federal business.

We see a lot of large funded and unfunded.

Opportunities in and I think will continue.

Our focus on that market and.

We don't.

I'll also say we.

We don't see any.

Unanticipated change in seasonality from previous years.

And previous behaviors, Steve I don't think that additional color to add on that.

No.

Well said.

Got it that's it for me thanks, guys.

Speaker 15: None of you are offered to be grateful to Mr. ??????.

Thank you.

Our next question is from Jonathan Ho of William Blair. Please proceed with your question.

Speaker 16: Hi, good afternoon. I just wanted to start out with some of your commentary around the Active Directory security opportunity. Can you maybe give us a sense of whether or not this could be another tip of the spear to maybe go with new customers that are maybe using an alternative platform? And does that maybe open up the opportunity to dislodge those competitors, I guess, longer term?

Hi, Good afternoon, I just wanted to start out with some of your commentary around the active directory security opportunity can you maybe give us a sense of whether or not this could be a.

Another tip of the spear to maybe go with new customers that are maybe using an alternative platform and does that maybe open up the opportunity to dislodge those competitors I guess longer term.

Speaker 13: Absolutely it is. And I think especially in large enterprises where competitors have been entrenched for years or they're good locked in with, you know, both...

Absolutely it is and I think especially in large enterprises, where our competitors have been entrenched for years or there's been locked in with.

Multiyear.

Speaker 11: contracts and engagement is integrated the VM product into other processes that they have and displacing them is and has been more challenging. In those instances as soon as we mentioned VM or some of the crowd security capabilities that we're now bringing to market, there's definitely a very strong openness.

Contraction engagement you integrated the VM products into other parts of the system.

That they have.

And displacing them as it has been more challenging.

Those instances as soon as we mentioned VM or some of the cloud security capabilities that we're now bringing to market.

There is definitely a very strong openness.

Speaker 11: to engaging with us and so we find that

Engaging with us and so we find that.

Speaker 13: In those types of entrenched accounts, Active Directory becomes a clear differentiator and a door opener and then once we're engaged, you know, the natural move would be to try and broaden the relationship.

In those types of entrenched accounts Act.

Active directory becomes a clear differentiator and.

A door opener and then once we're engaged the natural the natural move would be to try and broaden the relationship.

Speaker 12: Got it. And then just a quick housekeeping question. Can you give us a sense of the percentage of customers that are maybe starting with EP at this point or maybe some color on those that are trading up to EP as well? Thank you. Hi, Jonathan. This is Steve.

Got it and then just a quick.

Housekeeping question can you give us a sense of the percentage of customers that are maybe starting with <unk> at this point or.

Maybe some color on those that are trading up the EPA as well. Thank you.

Okay.

Hey, Jonathan this is Steve.

<unk>.

It's notable I think one of the things we called out was.

Speaker 8: We added 562 new platform customers in the quarter, which is a record for us, our best ever as a public company. That's up from 460 last year, and we're also seeing larger deals. So keep in mind, EP was a product that we launched in Q1.

We added 562 net new.

Platform customers in the quarter, which is a record for us our best or ever.

As a public company that's up from 460 last year and we're also seeing larger deals. So keep in mind EEP was a product that we launched in Q1.

Speaker 8: And it's gaining major traction here for us. And our mandate was always really about sidewood exposure, really holistic risk assessment, more so than VM. So we're absolutely pleased with the results, NEP and the early response. You're just mindful of sales cycles. That 562 new enterprise platform customers.

And it's gaining major traction here for us in.

Our mandate was always really about cyber exposure really holistic risk assessments more so than VM.

Absolutely pleased with the results in EP and the early response, just mindful of sales cycles.

562, new enterprise platform customers.

Speaker 8: I mean, you know, a good portion of those, or some sizable portion of those is attributed to EP, right? This is a product that we plan to lead with, really, in the mid-market and the enterprise market, you're seeing the impact first, really, in areas where we have shorter sales cycles, such with, you know, mid-market type deals. And the pipeline bill associated with that is also very significant, which I commented on earlier. So, you know, I think it's going to pave the way for, you know,

Okay.

A good portion of those are.

Some type of a portion of those is attributed to ebay right. This is a product that we plan to Lee with really in the mid market and the enterprise market Youre seeing the impact first really in areas, where we have shorter sales cycles such with.

Mid market type deals and the pipeline to be able to associate with that is also very significant which I commented on earlier so.

I think it's going to pave the way for.

Yeah.

Speaker 13: teams acceleration in new business, more larger deals, as we cover more areas of the attack surface.

The.

Acceleration of new business more larger deals as we cover more areas of the attack surface.

Great. Thank you.

Speaker 1: Ladies and gentlemen, due to time constraints, we ask that everyone limit themselves to one question per person going forward. Our next question.

Ladies and gentlemen, due to time constraints, we ask that everyone limit themselves to one question per person going forward.

Our next question is from Brad Reback with Stifel. Please proceed with your question.

Speaker 12: Lucky I only have one. Quick question, Steve. As you think about headcount growth for calendar 22, should that be in line with revenue growth?

Lucky I only have one.

Quick question Steve.

As you think about head count growth for calendar 'twenty, two should that be in line with revenue growth.

Yeah.

Speaker 13: You know, we don't we don't guide the headcount growth, but I think it's fair to say that, you know, given the investments that we're making, that we're going to see the acceleration, the headcount growth. And I think, you know, more so than what we saw in 2021. And the two big areas are going to be R&D and sales and marketing. So R&D, especially just given

We don't we don't guide to head count growth, but I think it's fair to say that given.

Given the investments that we're making that we're going to see acceleration.

Acceleration of the head count growth I think.

More so than what we saw in 2021 and the two big areas are going to be R&D and sales and marketing so R&D, especially just given.

Speaker 13: you know, the product roadmap and, you know, the innovation that's planned for the upcoming year as well as the acquisitions specifically related to Acura and more recently Symptom here.

The product roadmap and.

The innovation Thats planned for the upcoming year as well as the acquisitions, specifically related to <unk> and more recently symptom here.

Speaker 8: So certainly continue investments in R&D. And then on the sales and marketing side, we know what we make investments in sales and marketing in that quota capacity, that there's a clear return. We have a lot of momentum in the business.

So certainly continued investments in R&D.

And then on the sales and marketing side, we know what we make investments in sales and marketing and that quota capacity.

Theres a clear return.

We have a lot of momentum in the business I think our execution and performance. This year, certainly demonstrates that Joe, but we're certainly putting more wood behind both our sales and marketing and R&D.

Speaker 8: I think our execution and performance this year certainly demonstrates that. So we're certainly putting more wood behind both sales and marketing and our end date.

Speaker 4: We end up with the backdrop of a really strong threat environment on the heels of a good quarter and a strong year, it gives us a lot of confidence to do so. So certainly more growth in total headcount the upcoming year than what we experienced last year and specifically in those areas.

And with the backdrop of a really strong threat environment.

On the heels of a good quarter and a strong year. It gives us a lot of confidence to do so so certainly more growth and total head count the upcoming year than what we experienced last year and specifically in those areas.

And what was 'twenty one growth can you remind us.

Speaker 12: You know, again, we don't just close growth and headcount, but it was probably in more direction, in line with overall growth and revenue. Great sense. Thank you.

Again, we don't disclose growth in head count but.

It was probably in lot more directionally in line with overall growth in revenue.

Great. Thanks.

Okay.

Our next question is from Dan Ives of Wedbush. Please proceed with your question.

Speaker 22: Yeah, just one question. So with EP, I mean, how much of a door opener is that even to larger enterprises? And is there a potential that that accelerates almost some of the sales?

Yes, just one question so we can.

AP.

I mean, how much of a door opener.

Is that even larger enterprises.

Is there a potential that that accelerates some of the sales cycle.

Yeah.

Speaker 3: I think it's absolutely...

I think it's absolutely.

Speaker 11: It's a door opener in two, four.

Uh huh.

It's a door opener.

Two.

Forums.

One is it.

Speaker 11: forces a more strategic conversation with large enterprises, right? And the large enterprises are struggling with, okay, I'm gonna use this technology from a cloud-native infrastructure perspective. I've got nothing really helping me with AD. I'm gonna use that technology for VM.

It forces a more strategic conversation with large enterprises right in the large enterprises are struggling with okay I'm going to use this technology from a cloud native infrastructure perspective, I've got nothing really helping me with it and be able to use that technology for rehab.

Speaker 11: You know, there's other things for, you know, my building automation and my, you know, my fatigue and infrastructure. And it's just because it's very complex when you're looking for it's a law for J here when you're, whether you're trying to get access to a broad cyber risk, you're trying to figure out, okay, well,

This other thing for.

My building automation and by my toe cheek infrastructure and it's just because it's very complex when youre looking for whether it's a law for Jay or when you or whether you're trying to assess overall cyber issue, we're trying to figure out okay well what's.

Speaker 11: What's my state and how do I reduce that risk? So it helps in two key areas. One is,

What's the state how do I reduce that risk.

It helps in two in two key areas one is.

Okay.

Speaker 11: a more strategic conversation with those large enterprises and opening doors that way. And the second is, when you're talking about EP, you're also having a conversation about all of those assets.

A more strategic conversation with those large enterprises and.

And opening doors that way and the second is when Youre talking about <unk>, you're also having a conversation about all of those asset types, which can be problematic, which you'll see shows are very concerned about and helping them understand okay, well how big of an issue is this.

Speaker 11: which can be problematic, which the CISOs are very concerned about, and helping them understand, okay, well, how big of an issue is this?

Speaker 13: versus other things I have in my environment. And how do I compare the state of readiness from one business unit to another and from one asset type to another? What should I prioritize fixing? So helping them with a higher order.

Versus other things.

In my environment, and how do I compare.

A state of readiness from one business unit to another and from one asset type to another and what should I prioritize fixing so helping them with that higher order.

Speaker 12: And so, we think it's a great engagement at a more strategic level. Thanks.

Analytics until we think it is.

Great engagement and a more strategic level.

Thanks.

Our next question is from Mike Cecos of Needham and company. Please proceed with your question.

Speaker 17: Hi team, thanks for getting me on here and good to see that 22 to 23% growth bogey out there to start the year. My question really circles back to the some of the commentary on the quote of carrying reps. Tenables discussed its ramping investments in these reps and I think the average rep takes about 10 months to ramp. So for 4Q, the hires that we saw that quarter was that the highest.

Hi team. Thanks for getting me on here and good to see that 22% to 23% growth bogey out there to start the year.

My question really.

Circles back to some of the commentary on the quota carrying reps.

Tenable is discussed its ramping investments in these reps and I think the average rep takes about 10 months to ramp.

So for for Q.

The hires that we saw that quarter was that the highest.

Speaker 17: carrying reps of any quarter and calendar to 21. And then on that go to market, is there the need for a separate overlay for specific products or the sales rep selling the entire portfolio?

Quota carrying reps of any quarter in color into 'twenty, one and then on that go to market is there the need for a separate overlay for specific products or the sales reps selling the entire portfolio.

Speaker 13: Hi, Mike, this is Steve. I think your first question was go to Caring Reps and just directly with Q4 hire than at any other point in the year. The answer to that is yes. You know.

Hi, Mike This is Steve.

So I think your first question was.

Quota carrying reps and just directly with Q4 higher than at any other point in the year the answer to that is yes.

No.

We.

Speaker 13: We invested the first half of the year, but given the acceleration in the business that we saw throughout the year, it gave us more confidence to do more investment in sales and marketing.

We invested at the first half of the year, but given the acceleration in the business that we saw throughout the year. It gave us more confidence to do more investment in sales and marketing.

Speaker 13: I think looking back on the year and then looking out in 2022, we expect to get more quota capacity in 2022 than in 2021. So, yes is the answer to your first question.

I think looking back on the year.

Looking out in 2022, we expect to get more quota capacity in 2022 of them in 2021. So.

Yes is the answer to your first question.

Speaker 8: I guess with regard to your second question, I wanna make sure I understand that. Could you repeat it, please?

I guess with regard to your second question to make sure I understand that could you repeat it please.

Speaker 17: Absolutely. So, the question is really around these, the new products that you're bringing on. We think about, I know Sympton's going to be integrated into ET, and you're talking about expanding ET with AD, CS, but is there a need to have a separate overlay for the sales team to sell any of these products, or is the overall sales team is able to go out there and sell the portfolio in its entirety at this point?

Absolutely. So the question is really around these.

The new products that you're bringing on are we thinking about I know symptoms is going to be integrated into EEP.

And you're talking about expanding E P with a b.

Yes, but.

There is there a need to have a separate overlay for the sales team to sell any of these products or is the overall sales team is able to go out there and sell the <unk>.

Portfolio in its entirety at this point.

Yes definitely.

Excuse me.

Speaker 11: There's definitely the ability for our core sales reps to sell the portfolio. We're not acquiring and launching a series of very disparate, very distinct technologies

I was just there was definitely the ability for our core sales reps to sell.

The portfolio, we're not acquire.

Acquiring a.

Launching a series of very disparate sort of distinct technologies.

Speaker 20: which are kind of loosely coupled. As the core team goes out and talks about EP, and the fact that EP does not only include IO.

Which are kind of loosely coupled as the core team goes out and talks about.

The fact that the PD does not only include Idaho.

Speaker 11: Yeah, but it also includes AD and cloud security, which includes container, and Kubernetes, and GSPM, and infrastructure as code, and all of these things. So, it's a more strategic message.

What about scale, but it also includes <unk>.

And and cloud security, which which includes container Cooper.

<unk> got an Infrastructure's code and all of these things. So so is there more strategic message.

Speaker 11: Now, obviously, as you start unpacking that.

Now obviously as you start on packing that.

Speaker 13: conversations can very quickly get to a level of depth where a core rep or a core engineer might not, you know, might not yet have the requisite expertise and so for some period of time we'll continue to have specialists which can really do an incredibly deep dive with the

Conversations can very quickly get to a level of depth where.

Our core rep or a core engineer it might not.

It might not yet have the requisite expertise and so for some period of time will continue.

Specialists, which can really do an incredibly deep dive with the.

Speaker 17: you know, the team that manages domain controllers in the enterprise, or they want to talk about specific control systems and all other parts of the cloud environment. Terrific. Thank you for the insights, guys. Appreciate it.

The team that manages domain controllers, and the enterprise or they want to talk.

About specific control systems.

Yes.

And.

Although there are parts of a cloud environment.

Terrific. Thank you for the insights guys I appreciate it.

Our next question is from Andrew Smith of Banbury Capital markets. Please proceed with your question.

Speaker 18: Hi, guys. Thanks for taking my question. Could you just compare demand across the different solutions of Core VM, AD, and OT? I know there have been several high-profile attacks in the last 12 to 18 months that have been linked to operational technology in the Commerzweiz's Active Directory, which I believe is driving awareness for those products, but just curious if you could compare demand across the different solutions of Core VM, AD, and OT. That would be great. Thanks.

Hi, guys. Thanks for taking my question could you just compare demand across the different solutions of core VM.

<unk> and <unk>.

Have there been several high profile attacks in the last 12 to 18 months that have been linked to operational technology and the compromises active directory, which I believe is driving awareness for those products, but just curious if you could compare demand across the different solutions of core VM <unk> and OTT that'd be great. Thanks.

Speaker 11: Super high, super high and super high list. Now, it's, it's, we're operating in a high threat environment, I think, as you've called out. It's been some, you know, very high profile breaches, specifically, you know, calling it pipeline, JVF.

Super High Super Hyper and Super high risk.

We're operating in a high threat environment, and I think as you've called out there have been some.

Very high profile breaches, specifically, you know call it pipeline JV, yes.

Speaker 11: to those operational technologies. You saw CISA calling out some concerns about attacks against U.S. critical infrastructure and operational technology environment. So that's, it's incredibly high profile. A lot of 4J profiling, obviously, sort of core VM at.

To those operational technologies yourself.

Calling out.

Some concerns about attacks against U S critical.

Infrastructure and operational technology environment. So so that's that.

Incredibly high profile.

<unk> for J profiling, obviously sort of core VM.

Speaker 11: you know, even just the beginning, but obviously with what about standing and other capabilities.

That's.

Just the beginning, but obviously with web app scanning and other capabilities.

Speaker 11: closely on the heels, as well as some of the cloud security capabilities that we bring to the table. But the exciting part, you know, the sort of very natural observation is that, you know, when you look at something like Colonial Pipeline,

Closely closely on the heels as well some of the cloud security capabilities that we bring to the table.

The exciting part of the sort of very natural.

Observation is that when you look at something.

Like pulling a pipeline.

Speaker 3: It wasn't just that OG systems went out or were shut down.

Just Oh Gee systems.

Went out or will shut down at the root of it was a compromise of IP systems and active directory and so all of these things are completely intertwined you cannot assess.

Speaker 3: At the root of it was a compromise of IT systems and active directory. And so all of these things are completely intertwined. You cannot assess.

Speaker 11: OT security today without also being able to assess IT and Active Directory and these other aspects which are completely meshed.

Security today without also being able to assess ICD and active directory and these other aspects which are completely matched in.

Speaker 3: in an operating environment, and the same is true of identity and cloud and IT. So, you know, we think all of these things, whether it's the high-profile OT breed,

And the operating environment and the same is true of identity and cloud. So we think all of these things whether the high profile Ot breech lock for Jay.

Speaker 11: the log4j vulnerability, which oh, by the way, exists and manifests itself in OT environments as well. All of these things provide the type of visibility for.

Vulnerability, which oh by the way.

Assistant manifests manifests itself.

Environments as well.

All of these things provide the type of visibility for.

Speaker 13: in our individual solutions, but also for the strength of our platform.

Our individual solutions, but also for the strength of our platform.

Perfect. Thank you.

Speaker 1: We have reached the end of the question-and-answer session. I will now turn the call back over to Amit Eoran for closing remarks.

We have reached the end of the question and answer session I will now turn the call back over to I mean, Iran for closing remarks.

Speaker 19: Great, I'd love to just thank everybody for joining us for the call. We're super excited about the results we were able to deliver in the fourth quarter in 2021. And I'm very excited, obviously, about the acquisition that we announced today, and very excited about the opportunity in front of us to look forward to future engagement. This concludes today's call.

Great.

Thanks, everybody for joining us for the call. We're Super excited about the results we were able to deliver in the fourth quarter and in 2021 and I'm very excited obviously about.

The.

The acquisition that we announced today and very excited about the opportunity in front of us look forward to future engagement.

This concludes today's conference you may disconnect. Your lines at this time. Thank you for your participation and have a great evening.