(State or other jurisdiction of incorporation or organization) | (Commission File Number) | (I.R.S. Employer Identification Number) |
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | |
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | |
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | |
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
Exhibit Number | Description | |
99.1 | ||
101.SCH | Inline XBRL Taxonomy Extension Schema Document. | |
101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document. | |
101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document. | |
101.LAB | Inline XBRL Taxonomy Extension Label Linkbase Document. | |
101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document. | |
104 | The cover page from Tenable's 8-K filed on October 29, 2019, formatted in Inline XBRL. |
TENABLE HOLDINGS, INC. | |||
Date: | October 29, 2019 | By: | /s/ Stephen A. Riddick |
Stephen A. Riddick | |||
General Counsel and Corporate Secretary |
• | Added 387 new enterprise platform customers and 51 net new six figure customers |
• | Revenue of $91.9 million, up 32% year-over-year |
• | GAAP net loss per share of $0.18; pro forma non-GAAP net loss per share of $0.07, a 50% improvement year-over-year |
• | Revenue was $91.9 million, representing a 32% increase year-over-year. |
• | Calculated current billings was $110.6 million, representing a 28% increase year-over-year. |
• | GAAP loss from operations was $18.3 million, compared to a loss of $21.1 million in the third quarter of 2018. |
• | Non-GAAP loss from operations was $7.7 million, compared to a loss of $12.2 million in the third quarter of 2018. |
• | GAAP net loss was $17.6 million, compared to a loss of $20.9 million in the third quarter of 2018. |
• | GAAP net loss per share was $0.18, compared to a loss per share of $0.28 in the third quarter of 2018. |
• | Non-GAAP net loss was $6.7 million, compared to a loss of $12.0 million in the third quarter of 2018. |
• | Pro forma non-GAAP net loss per share was $0.07, compared to a loss per share of $0.14 in the third quarter of 2018. |
• | Cash and cash equivalents and short-term investments were $296.6 million at September 30, 2019, compared to $283.2 million at December 31, 2018. |
• | Net cash used in operating activities was $4.7 million, compared to $1.8 million in the third quarter of 2018. Free cash flow was $(9.6) million, compared to $(2.9) million in the third quarter of 2018. Both net cash used in operating activities and free cash flow included a $3.7 million reduction related to employee stock purchase plan activity, compared to a $2.3 million benefit in the third quarter of 2018. In addition, capital expenditures related to our new headquarters were $2.4 million in the third quarter of 2019. |
• | Added 387 new enterprise platform customers and 51 net new six figure customers. |
• | LuminTM, the company's advanced visualization, analytics and measurement solution that enables customers to calculate, communicate and compare their cyber exposure while managing risk, became available for sale in Q3. |
• | Tenable named a Leader in Vulnerability Risk Management in "The Forrester WaveTM: Vulnerability Risk Management, Q4 2019," which ranked the company the highest among 13 vendors in the Strategy and Current Offering categories. |
• | Announced that Tenable.io® is the number one platform in the market for vulnerability and security configuration coverage, according to an analysis and report by Principled Technologies. |
• | Revenue in the range of $93.5 million to $94.5 million. |
• | Non-GAAP loss from operations in the range of $12.0 million to $11.0 million. |
• | Non-GAAP net loss in the range of $11.5 million to $10.5 million. |
• | Non-GAAP net loss per share in the range of $0.12 to $0.11, assuming 97.7 million weighted average shares outstanding. |
• | Revenue in the range of $351.0 million to $352.0 million. |
• | Calculated current billings in the range of $407.0 million to $417.0 million. |
• | Non-GAAP loss from operations in the range of $43.6 million to $42.6 million. |
• | Non-GAAP net loss in the range of $40.8 million to $39.8 million. |
• | Non-GAAP net loss per share in the range of $0.42 to $0.41, assuming 96.1 million weighted average shares outstanding. |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
(in thousands, except per share data) | 2019 | 2018 | 2019 | 2018 | |||||||||||
Revenue | $ | 91,852 | $ | 69,440 | $ | 257,537 | $ | 192,139 | |||||||
Cost of revenue(1) | 15,245 | 12,161 | 42,389 | 30,768 | |||||||||||
Gross profit | 76,607 | 57,279 | 215,148 | 161,371 | |||||||||||
Operating expenses: | |||||||||||||||
Sales and marketing(1) | 56,699 | 44,550 | 165,403 | 125,964 | |||||||||||
Research and development(1) | 20,763 | 20,553 | 64,396 | 55,529 | |||||||||||
General and administrative(1) | 17,472 | 13,272 | 48,595 | 32,868 | |||||||||||
Total operating expenses | 94,934 | 78,375 | 278,394 | 214,361 | |||||||||||
Loss from operations | (18,327 | ) | (21,096 | ) | (63,246 | ) | (52,990 | ) | |||||||
Interest income, net | 1,527 | 894 | 4,677 | 845 | |||||||||||
Other expense, net | (240 | ) | (185 | ) | (576 | ) | (605 | ) | |||||||
Loss before income taxes | (17,040 | ) | (20,387 | ) | (59,145 | ) | (52,750 | ) | |||||||
Provision for income taxes | 600 | 482 | 1,563 | 1,157 | |||||||||||
Net loss | (17,640 | ) | (20,869 | ) | (60,708 | ) | (53,907 | ) | |||||||
Accretion of Series A and B redeemable convertible preferred stock | — | (55 | ) | — | (434 | ) | |||||||||
Net loss attributable to common stockholders | $ | (17,640 | ) | $ | (20,924 | ) | $ | (60,708 | ) | $ | (54,341 | ) | |||
Net loss per share attributable to common stockholders, basic and diluted | $ | (0.18 | ) | $ | (0.28 | ) | $ | (0.64 | ) | $ | (1.34 | ) | |||
Weighted-average shares used to compute net loss per share attributable to common stockholders, basic and diluted | 96,709 | 74,261 | 95,433 | 40,688 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
Cost of revenue | $ | 694 | $ | 692 | $ | 2,088 | $ | 883 | |||||||
Sales and marketing | 3,521 | 2,707 | 11,102 | 3,984 | |||||||||||
Research and development | 2,124 | 2,427 | 6,595 | 3,594 | |||||||||||
General and administrative | 4,160 | 2,957 | 11,406 | 5,745 | |||||||||||
Total stock-based compensation | $ | 10,499 | $ | 8,783 | $ | 31,191 | $ | 14,206 |
September 30, 2019 | December 31, 2018 | ||||||
(in thousands, except per share data) | (unaudited) | ||||||
Assets | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 171,303 | $ | 165,116 | |||
Short-term investments | 125,333 | 118,119 | |||||
Accounts receivable (net of allowance for doubtful accounts of $557 and $188 at September 30, 2019 and December 31, 2018, respectively) | 81,201 | 68,261 | |||||
Deferred commissions | 26,030 | 23,272 | |||||
Prepaid expenses and other current assets | 21,126 | 22,020 | |||||
Total current assets | 424,993 | 396,788 | |||||
Property and equipment, net | 18,525 | 11,348 | |||||
Deferred commissions (net of current portion) | 38,493 | 36,162 | |||||
Operating lease right-of-use assets | 40,346 | 8,504 | |||||
Other assets | 9,855 | 7,810 | |||||
Total assets | $ | 532,212 | $ | 460,612 | |||
Liabilities and Stockholders’ Equity | |||||||
Current liabilities: | |||||||
Accounts payable | $ | 795 | $ | 171 | |||
Accrued expenses | 9,474 | 5,554 | |||||
Accrued compensation | 24,244 | 29,594 | |||||
Deferred revenue | 245,985 | 213,644 | |||||
Operating lease liabilities | 3,970 | 4,262 | |||||
Other current liabilities | 701 | 1,079 | |||||
Total current liabilities | 285,169 | 254,304 | |||||
Deferred revenue (net of current portion) | 83,390 | 76,259 | |||||
Operating lease liabilities (net of current portion) | 37,788 | 6,055 | |||||
Other liabilities | 2,677 | 2,231 | |||||
Total liabilities | 409,024 | 338,849 | |||||
Stockholders’ equity: | |||||||
Common stock (par value: $0.01; 500,000 shares authorized; 97,960 and 93,126 shares issued and outstanding at September 30, 2019 and December 31, 2018, respectively) | 980 | 931 | |||||
Additional paid-in capital | 648,964 | 586,940 | |||||
Accumulated other comprehensive income | 60 | — | |||||
Accumulated deficit | (526,816 | ) | (466,108 | ) | |||
Total stockholders’ equity | 123,188 | 121,763 | |||||
Total liabilities and stockholders’ equity | $ | 532,212 | $ | 460,612 |
Nine Months Ended September 30, | |||||||
(in thousands) | 2019 | 2018 | |||||
Cash flows from operating activities: | |||||||
Net loss | $ | (60,708 | ) | $ | (53,907 | ) | |
Adjustments to reconcile net loss to net cash used in operating activities: | |||||||
Depreciation and amortization | 4,604 | 4,580 | |||||
Stock-based compensation | 31,191 | 14,206 | |||||
Other | (787 | ) | 771 | ||||
Changes in operating assets and liabilities: | |||||||
Accounts receivable | (13,309 | ) | (8,190 | ) | |||
Prepaid expenses and other current assets | 820 | 941 | |||||
Deferred commissions | (5,089 | ) | (2,708 | ) | |||
Other assets | (2,386 | ) | 315 | ||||
Accounts payable and accrued expenses | 3,892 | 1,930 | |||||
Accrued compensation | (5,350 | ) | 1,252 | ||||
Deferred revenue | 39,472 | 39,880 | |||||
Other current liabilities | (195 | ) | (4 | ) | |||
Other liabilities | 173 | (71 | ) | ||||
Net cash used in operating activities | (7,672 | ) | (1,005 | ) | |||
Cash flows from investing activities: | |||||||
Purchases of property and equipment | (10,262 | ) | (4,140 | ) | |||
Purchases of short-term investments | (179,703 | ) | (34,114 | ) | |||
Sales and maturities of short-term investments | 174,485 | — | |||||
Net cash used in investing activities | (15,480 | ) | (38,254 | ) | |||
Cash flows from financing activities: | |||||||
Proceeds from initial public offering, net of underwriting discounts and commissions | — | 268,531 | |||||
Payments of costs related to initial public offering | — | (3,732 | ) | ||||
Principal payments under finance lease obligations | (12 | ) | (389 | ) | |||
Proceeds from stock issued in connection with the employee stock purchase plan | 15,129 | — | |||||
Proceeds from the exercise of stock options | 15,448 | 1,415 | |||||
Repurchases of common stock | — | (75 | ) | ||||
Net cash provided by financing activities | 30,565 | 265,750 | |||||
Effect of exchange rate changes on cash and cash equivalents and restricted cash | (1,226 | ) | (675 | ) | |||
Net increase in cash and cash equivalents and restricted cash | 6,187 | 225,816 | |||||
Cash and cash equivalents and restricted cash at beginning of period | 165,378 | 27,472 | |||||
Cash and cash equivalents and restricted cash at end of period | $ | 171,565 | $ | 253,288 |
Revenue | Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||
(in thousands) | 2019 | 2018 | 2019 | 2018 | |||||||||||
Subscription revenue | $ | 75,503 | $ | 53,511 | $ | 209,610 | $ | 146,568 | |||||||
Perpetual license and maintenance revenue | 13,797 | 13,864 | 40,877 | 40,753 | |||||||||||
Professional services and other revenue | 2,552 | 2,065 | 7,050 | 4,818 | |||||||||||
Revenue(1) | $ | 91,852 | $ | 69,440 | $ | 257,537 | $ | 192,139 |
Calculated Current Billings | Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||
(in thousands) | 2019 | 2018 | 2019 | 2018 | |||||||||||
Revenue | $ | 91,852 | $ | 69,440 | $ | 257,537 | $ | 192,139 | |||||||
Add: Deferred revenue (current), end of period | 245,985 | 191,578 | 245,985 | 191,578 | |||||||||||
Less: Deferred revenue (current), beginning of period | (227,227 | ) | (174,277 | ) | (213,644 | ) | (154,898 | ) | |||||||
Calculated current billings | $ | 110,610 | $ | 86,741 | $ | 289,878 | $ | 228,819 |
Free Cash Flow | Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||
(in thousands) | 2019 | 2018 | 2019 | 2018 | |||||||||||
Net cash used in operating activities | $ | (4,675 | ) | $ | (1,751 | ) | $ | (7,672 | ) | $ | (1,005 | ) | |||
Purchases of property and equipment | (4,927 | ) | (1,162 | ) | (10,262 | ) | (4,140 | ) | |||||||
Free cash flow(1) | $ | (9,602 | ) | $ | (2,913 | ) | $ | (17,934 | ) | $ | (5,145 | ) |
Non-GAAP Loss from Operations and Non-GAAP Operating Margin | Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||
(dollars in thousands) | 2019 | 2018 | 2019 | 2018 | |||||||||||
Loss from operations | $ | (18,327 | ) | $ | (21,096 | ) | $ | (63,246 | ) | $ | (52,990 | ) | |||
Stock-based compensation | 10,499 | 8,783 | 31,191 | 14,206 | |||||||||||
Amortization of intangible assets | 125 | 151 | 427 | 453 | |||||||||||
Non-GAAP loss from operations | $ | (7,703 | ) | $ | (12,162 | ) | $ | (31,628 | ) | $ | (38,331 | ) | |||
Operating margin | (20 | )% | (30 | )% | (25 | )% | (28 | )% | |||||||
Non-GAAP operating margin | (8 | )% | (18 | )% | (12 | )% | (20 | )% |
Non-GAAP Net Loss, Non-GAAP Net Loss Per Share and Pro forma Non-GAAP Net Loss Per Share | Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||
(in thousands, except per share data) | 2019 | 2018 | 2019 | 2018 | |||||||||||
Net loss attributable to common stockholders | $ | (17,640 | ) | $ | (20,924 | ) | $ | (60,708 | ) | $ | (54,341 | ) | |||
Accretion of Series A and B redeemable convertible preferred stock | — | 55 | — | 434 | |||||||||||
Stock-based compensation | 10,499 | 8,783 | 31,191 | 14,206 | |||||||||||
Tax impact of stock-based compensation(1) | 273 | (90 | ) | (255 | ) | (138 | ) | ||||||||
Amortization of intangible assets(1) | 125 | 151 | 427 | 453 | |||||||||||
Non-GAAP net loss | $ | (6,743 | ) | $ | (12,025 | ) | $ | (29,345 | ) | $ | (39,386 | ) | |||
Net loss per share attributable to common stockholders, basic and diluted | $ | (0.18 | ) | $ | (0.28 | ) | $ | (0.64 | ) | $ | (1.34 | ) | |||
Accretion of Series A and B redeemable convertible preferred stock | — | — | — | 0.01 | |||||||||||
Stock-based compensation | 0.11 | 0.12 | 0.33 | 0.35 | |||||||||||
Tax impact of stock-based compensation(1) | — | — | — | — | |||||||||||
Amortization of intangible assets(1) | — | — | — | 0.01 | |||||||||||
Non-GAAP net loss per share, basic and diluted | $ | (0.07 | ) | $ | (0.16 | ) | $ | (0.31 | ) | $ | (0.97 | ) | |||
Weighted-average shares used to compute net loss per share attributable to common stockholders and non-GAAP net loss per share, basic and diluted | 96,709 | 74,261 | 95,433 | 40,688 | |||||||||||
Pro forma adjustment to reflect the assumed conversion of our convertible redeemable preferred stock as of the beginning of the period | — | 14,449 | — | 41,590 | |||||||||||
Weighted-average shares used to compute pro forma non-GAAP net loss per share, basic and diluted | 96,709 | 88,710 | 95,433 | 82,278 | |||||||||||
Pro forma non-GAAP net loss per share, basic and diluted | $ | (0.07 | ) | $ | (0.14 | ) | $ | (0.31 | ) | $ | (0.48 | ) |
Non-GAAP Gross Profit and Non-GAAP Gross Margin | Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||
(dollars in thousands) | 2019 | 2018 | 2019 | 2018 | |||||||||||
Gross profit | $ | 76,607 | $ | 57,279 | $ | 215,148 | $ | 161,371 | |||||||
Stock-based compensation | 694 | 692 | 2,088 | 883 | |||||||||||
Amortization of intangible assets | 125 | 151 | 427 | 453 | |||||||||||
Non-GAAP gross profit | $ | 77,426 | $ | 58,122 | $ | 217,663 | $ | 162,707 | |||||||
Gross margin | 83 | % | 82 | % | 84 | % | 84 | % | |||||||
Non-GAAP gross margin | 84 | % | 84 | % | 85 | % | 85 | % |
Non-GAAP Sales and Marketing Expense | Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||
(dollars in thousands) | 2019 | 2018 | 2019 | 2018 | |||||||||||
Sales and marketing expense | $ | 56,699 | $ | 44,550 | $ | 165,403 | $ | 125,964 | |||||||
Less: Stock-based compensation | 3,521 | 2,707 | 11,102 | 3,984 | |||||||||||
Non-GAAP sales and marketing expense | $ | 53,178 | $ | 41,843 | $ | 154,301 | $ | 121,980 | |||||||
Non-GAAP sales and marketing expense as % of revenue | 58 | % | 60 | % | 60 | % | 63 | % |
Non-GAAP Research and Development Expense | Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||
(dollars in thousands) | 2019 | 2018 | 2019 | 2018 | |||||||||||
Research and development expense | $ | 20,763 | $ | 20,553 | $ | 64,396 | $ | 55,529 | |||||||
Less: Stock-based compensation | 2,124 | 2,427 | 6,595 | 3,594 | |||||||||||
Non-GAAP research and development expense | $ | 18,639 | $ | 18,126 | $ | 57,801 | $ | 51,935 | |||||||
Non-GAAP research and development expense as % of revenue | 20 | % | 26 | % | 22 | % | 27 | % |
Non-GAAP General and Administrative Expense | Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||
(dollars in thousands) | 2019 | 2018 | 2019 | 2018 | |||||||||||
General and administrative expense | $ | 17,472 | $ | 13,272 | $ | 48,595 | $ | 32,868 | |||||||
Less: Stock-based compensation | 4,160 | 2,957 | 11,406 | 5,745 | |||||||||||
Non-GAAP general and administrative expense | $ | 13,312 | $ | 10,315 | $ | 37,189 | $ | 27,123 | |||||||
Non-GAAP general and administrative expense as % of revenue | 14 | % | 15 | % | 14 | % | 14 | % |
Forecasted Non-GAAP Loss from Operations | Three Months Ending December 31, 2019 | Year Ending December 31, 2019 | |||||||||||||
(in millions) | Low | High | Low | High | |||||||||||
Forecasted loss from operations | $ | (22.2 | ) | $ | (21.2 | ) | $ | (85.4 | ) | $ | (84.4 | ) | |||
Forecasted stock-based compensation | 10.2 | 10.2 | 41.4 | 41.4 | |||||||||||
Forecasted amortization of intangible assets | — | — | 0.4 | 0.4 | |||||||||||
Forecasted non-GAAP loss from operations | $ | (12.0 | ) | $ | (11.0 | ) | $ | (43.6 | ) | $ | (42.6 | ) |
Forecasted Non-GAAP Net Loss and Non-GAAP Net Loss Per Share | Three Months Ending December 31, 2019 | Year Ending December 31, 2019 | |||||||||||||
(in millions, except per share data) | Low | High | Low | High | |||||||||||
Forecasted net loss | $ | (21.7 | ) | $ | (20.7 | ) | $ | (82.6 | ) | $ | (81.6 | ) | |||
Forecasted stock-based compensation(1) | 10.2 | 10.2 | 41.4 | 41.4 | |||||||||||
Forecasted amortization of intangible assets | — | — | 0.4 | 0.4 | |||||||||||
Forecasted non-GAAP net loss | $ | (11.5 | ) | $ | (10.5 | ) | $ | (40.8 | ) | $ | (39.8 | ) | |||
Forecasted net loss per share, basic and diluted | $ | (0.22 | ) | $ | (0.21 | ) | $ | (0.86 | ) | $ | (0.85 | ) | |||
Forecasted stock-based compensation(1) | 0.10 | 0.10 | 0.44 | 0.44 | |||||||||||
Forecasted amortization of intangible assets | — | — | — | — | |||||||||||
Forecasted Non-GAAP net loss per share, basic and diluted | $ | (0.12 | ) | $ | (0.11 | ) | $ | (0.42 | ) | $ | (0.41 | ) | |||
Forecasted weighted-average shares used to compute net loss per share, basic and diluted | 97.7 | 97.7 | 96.1 | 96.1 |