Greetings and welcome to the Tenable Second Quarter 2025 Earnings Conference Call. At this time, all participants are in a listen-only mode. A brief question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press Star 0 on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Aaron Carney, Vice President Investor Relations. Thank you. You may begin. Thank you, Operator. Thank you all for joining us on today's conference call to discuss Tenable's Second Quarter 2025 financial results. With me on the call today are Co-Chief Executive Officers Steve Vintz and Mark Thurmond. Prior to this call, we issued a press release announcing our financial results for the quarter. You can find the press release on our IR website at tenable.com. We will make forward-looking statements during the course of this call, including statements relating to our guidance and expectations for the third quarter and full year 2025, growth and drivers in our business, changes in the threat landscape in the security industry and our competitive position in the market, growth and customer demand for and adoption of our solutions including Tenable One, cloud security, and Exposure Management, our ability to expand integrations with third-party tools and data sources, planned innovation and new products and services, including new capabilities from our acquisition of Apex, and our expectations regarding long-term profitability and free cash flow. These forward-looking statements involve risks and uncertainties, some of which are beyond our control, which could cause actual results to differ materially from those anticipated by these statements. You should not rely upon forward-looking statements as a prediction of future events. Forward-looking statements represent our beliefs and assumptions only as of today and should not be considered representative of our views as of any subsequent date, and we disclaim any obligation to update any forward-looking statements or outlook. For 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 annual report on Form 10-K and subsequent reports that we file with the SEC. In addition, all of the financial results we will discuss today are non-GAAP financial measures with the exception of revenue. These non-GAAP financial measures are in addition to and not a substitute for or superior to measures of financial performance prepared in accordance with GAAP. There are a number of limitations related to the use of these non-GAAP financial measures versus their closest GAAP equivalents. Our press release includes GAAP to non-GAAP reconciliations for these measures. I'll now turn the call over to Steve. Thank you, Aaron. We're excited to share our strong results for the quarter, discuss momentum and recent enhancements to our Exposure Management platform, including recent investments in AI, and highlight some key customer wins for the quarter. In Q2, we beat all of our guided metrics, delivering 12% revenue year-over-year growth and 19% operating margin. We attribute our performance in the quarter to the growing adoption of our Exposure Management platform, Tenable One, which was 40% of total new sales this quarter. Exposure Management is about providing the unified, risk-based, and business-contextualized view of an organization's cyber risk, enabling them to continuously prioritize and remediate the most critical exposures before they can be exploited. The benefit of Exposure Management to our customers is clear: unified visibility, smarter data-driven decisions, and faster, more effective risk reduction. For Tenable, this important secular shift in the market to preemptive security is resulting in broader asset coverage and larger deal sizes, including a growing number of six and seven figure deals. Mark will delve into our customer wins in the quarter as we are seeing more customers consolidate on Tenable One. Now, with the acquisition of Apex Security, which closed during the quarter, we are expanding our AI Aware and AI SPM capabilities in the platform to secure the rapidly expanding AI attack surface. Drilling a little further into the specific areas of traction in the quarter, cloud and VM continue to be critical priorities for our customers. Within Tenable One, we also saw strong adoption with OT. As you recall, in April we highlighted public sector as an area where we were expecting to experience some pressure. The quarter played out slightly better than expected in public sector, driven largely by strong platform sales in our SLED business, which was aided by their June fiscal year end. Specifically with regard to U.S. federal, we feel incrementally more positive as we head into the second half of the year, particularly in our renewal base where visibility is improving despite a spending environment with heightened levels of review and scrutiny. The momentum we're experiencing with our platform is a reflection of the importance our customers are placing on preemptive security, which is the practice of reducing risk before a breach occurs rather than solely detecting and responding after an attacker has already gained access. We're building on that momentum by continuing to advance our product roadmap and extend our leadership in this category. Exposure Management as a discipline is built on three foundational unifying visibility to discover and monitor every asset, unifying insight to contextualize and prioritize risk, and unifying action to mobilize remediation and measure impact. These pillars are essential to reducing cyber risk at scale, and Tenable is leading the way across all three. First, Unifying Visibility. Effective risk reduction starts with comprehensive visibility. That's why broad, continuous discovery is foundational to Exposure Management. Tenable continues to make strong progress here, particularly in expanding third-party integrations across the security stack. We recently surpassed 300 validated integrations spanning cloud, application, security, identity, and more, making Tenable One the most open and interconnected Exposure Management platform in the market. These connections not only expand visibility but also lay the groundwork for deeper insight and smarter action. AI is also enhancing visibility by helping customers discover and classify assets that might otherwise remain hidden, from misconfigured cloud workloads to unmanaged devices and ephemeral containers. By analyzing network traffic, configuration drift, and usage patterns, our AI reduces blind spots and ensures customers a more accurate and comprehensive view of their attack surface. Second, Unifying Insight. Once assets and exposures are discovered, the next challenge is understanding what matters and what needs to be prioritized. That's where context comes in, and it's where Tenable sets itself apart. Our integrated data set, enriched with over two decades of exposure, telemetry, and real-time threat intelligence, powers a suite of AI capabilities purpose-built for Exposure Management. Sentinel's AI doesn't just detect known risk, it's evolving to proactively identify emerging threats, map likely attack paths, and surface exposures that are most likely to be exploited in our customer-specific environments. It's being designed to use predictive modeling to assess the blast radius of vulnerabilities, analyze attacker behavior to anticipate their next move, and continuously update prioritization and conditions as they change. This isn't just a smarter way to triage alerts, it's a more strategic way to understand interconnected risk across hybrid environments and focus on what truly matters. Finally, unifying action insight is only valuable if it drives results. That's why we're transforming Tenable One from a system of record into a system of action. Our AI now delivers intelligent environment-specific remediation guidance designed to help security teams reduce mean time to remediate and focus on what matters most. The majority of breach victims are compromised by known vulnerabilities that went unaddressed not because the risks weren't identified, but because they weren't acted upon. It's a clear example of the last mile problem, which is getting the right exposure data into the right teams with the right context to drive resolution. Remediation isn't just patching, it's adjusting configurations, disabling risky accounts, tightening access controls, and more. Exposure Management demands a broader, more adaptive response than traditional Vulnerability Management. That's why we're embedding automation, analytics, and decision support directly into customer workflows, closing the gap between insight and action. The result here is faster remediation, broadening adoption, and, we believe, a stronger position for Tenable as a leader in Exposure Management. Remember, in this new AI-powered world, we're seeing more frequent pervasive attacks leveraging AI, resulting in shorter mean time from known vulnerabilities to exploitation, which demands faster remediation. In short, while understanding, contextualizing, and prioritizing risk is critical, preemptive security increasingly means leveraging that visibility and insight to empower customers to act in real time and seamlessly integrate remediation into their process. I'd now like to turn the call over to Mark. Thanks, Steve. Our customers consistently face the same challenges: complex hybrid systems to secure, interconnected systems with siloed views, and new technologies evolving faster than they can be secured. Our mandate is to help our customers identify and address the risks these problems introduce. That's precisely what we're doing. Our deep roots in VM are the foundation of our EM leadership, enabling Tenable One to provide a profound understanding of hybrid environments, and our expansion into other areas of the attack surface uniquely positions us to break down silos. This is why we're seeing constant traction with Tenable One this quarter. That partnership was on full display with major Tenable One expansions across industries. We secured strong wins against major players in VM, EM, and cloud, directly resulting from not just extending our leadership, but also shaping what Exposure Management looks like. During the quarter, we had a number of notable wins spanning products, theaters, and industries. I'd like to take a moment to highlight a few that are a good reflection of what we're seeing broadly across the business and what we've highlighted in our prepared remarks. We kicked off the quarter with a major win at the state level, one of two significant public sector victories this quarter. What started as a straightforward VM expansion quickly evolved into a full Tenable One adoption. The customer expanded beyond VM to include cloud identity and web app security, consolidating multiple capabilities into a single, unified platform. It's a great example of a growing trend. Organizations are turning to Tenable One to streamline and strengthen their preemptive security strategies. That momentum carried into the private sector as well. A standout example is a major entertainment company that turned to Tenable One to secure its OT environment and gain a more complete view of risk. What began as a search for better OT coverage quickly led to consolidation on Tenable One with a focus on both VM and OT. This is where we shine. Tenable's ability to span IT and OT environments with unified visibility gives us a competitive edge. Not every customer is looking to rip and replace, and that's where our flexibility truly stands out. A European global luxury brand with a mature security program wanted deeper risk insights and stronger preemptive security without disrupting their existing stack. They chose Tenable to expand their third party asset and risk management program, tapping into the power of Tenable while maintaining the tools they already rely on. It's a great example of how we meet customers where they are, delivering value without forcing a full consolidation. What is increasingly clear from all these customer examples is that as cyber threats become more frequent and sophisticated, customers are shifting their focus toward preemptive strategies, and industry analysts and others are following suit, placing greater emphasis on Exposure Management and the platforms that enable it. This growing momentum was reinforced by two key pieces of industry research that were recently released. Last week, Forrester named Tenable a leader in unified Vulnerability Management, awarding us the highest score for the strength of our strategy. In fact, Tenable received the highest possible scores in seven different categories, more than any other vendor, including Vision and Roadmap. In addition, Tenable was recognized as a major player in IDC's inaugural CNAPP MarketScape. We were chosen from a very substantial list of vendors for our ability to enable customers to reduce their risk by reducing noise and prioritizing remediation through clear, actionable insights. We see this recognition as validation of our strategy and further evidence that Exposure Management is becoming central to modern cybersecurity. Finally, Gartner now predicts that by 2028, investments in technologies that reduce threat exposure will grow twice as fast as those focused on detection and response. The takeaway is customers recognize the value of a unified Exposure Management platform, and Tenable is leading the shift to Exposure Management. As organizations modernize with cloud, AI, and hybrid IT OT environments, they're turning to us to unify and simplify their security strategy. Our platform is the foundation for how forward looking teams manage risk. Looking forward, as Steve highlighted, we are investing in areas that are tackling our customers' largest pain points. Knowing how to secure AI is one of the greatest frustrations facing customers today. With our acquisition of Apex, we plan to offer a holistic approach to understanding their AI risk. By providing visibility into AI usage, detecting AI-related vulnerabilities, securing AI resources and data configurations, and integrating AI security into our broader Exposure Management platform, we believe we will be able to make AI security a key part of our customers' preemptive security program. With that, I'll turn the call back over to Steve to dive deeper into our results for the quarter. Thank you. Thanks Mark. As a reminder, our results include the impact of the Apex Security acquisition which closed on June 6th. Calculated Current Billings, defined as revenue recognized in the quarter plus the change in current deferred revenue, grew 8% year over year to $238.6 million. Our growing momentum with Tenable One is inflecting deal sizes higher as we added 76 net new six-figure customers during the quarter on an LTM basis. We also added 367 new enterprise platform customers, and our net dollar expansion rate was 107% this quarter. We continue to have strong gross dollar renewal rates. We're also pleased to continue to see our backlog accelerate significantly during the quarter. Current RPO grew 12% year- over- year, 400 basis points ahead of CCB growth, while total RPO growth was 19%, reflecting over 40% year- over- year growth in long-term RPO. RPO reflects the increasing momentum with our Tenable One platform as more customers are making multi-year commitments to more fully deploy Exposure Management solutions given its strategic importance to understand and reduce risk holistically across the enterprise. Now on to the P&L. For the quarter, revenue was $247.3 million, which represents 12% year- over- year growth. Revenue in the quarter exceeded the midpoint of our guided range by $5.3 million. This level of outperformance was driven in part by a more favorable mix of business with upfront revenue recognition that we're not anticipating in the second half of the year. Our percentage of recurring revenue remains high at 96%. Gross margin was 82% this quarter, flat relative to last quarter. Looking at the second half of the year, we expect gross margins to be flat to modestly lower due to the launch of third-party data, remediation automation workflows, and new AI security capabilities. Sales and marketing expense was $89 million, up from $85 million last quarter, and as a percentage of revenue was 36%, flat relative to last quarter. Sales and marketing expense was higher sequentially primarily due to industry events and incremental investments in sales capacity, partially offset by costs in Q1 related to our annual sales kickoff conference. Looking ahead, we expect sales and marketing as a percent of revenue to trend somewhat lower, reflecting higher levels of sales productivity and greater efficiency in our go-to-market organization. R&D expense was $43.4 million, which is up from $39 million last quarter. As a result, R&D expense as a percentage of revenue was 18% this quarter, up from 16% last quarter. This increase on both a dollar basis and as a percentage of revenue was primarily related to the continued investment in R&D, including additional personnel costs related to our acquisitions of Vulcan and Apex. G&A expense was $22.7 million, which was flat relative to last quarter on an absolute dollar basis and as a percentage of revenue. Income from continuing operations was $47.7 million and exceeded the midpoint of our guided range by nearly $4 million. Operating margin for the quarter was 19%, which is approximately 100 basis points better than the midpoint of our guided range. We are very pleased with our ability to drive continued leverage in the business while investing for growth and absorbing the additional OpEx related to our acquisitions completed in the first half of the year. EPS for the quarter was $0.34, which was $0.04 better than the midpoint of our guided range. Now let's turn to the balance sheet. We finished the quarter with $387 million in cash and short term investments. Accounts receivable was $181 million and total deferred revenue was $798 million. Current deferred revenue was $625 million, which gives us a lot of visibility into expected revenue over the next 12 months. We generated $44 million of Unlevered Free Cash Flow during the quarter, bringing year to date $131 million of Unlevered Free Cash Flow, putting our annual guide well within reach. During the quarter we utilized $48 million of net cash for the Apex acquisition as well as $65 million repurchased 2 million shares in total. We've now repurchased 6.3 million shares for approximately $240 million since November of 2023 and have $60 million of the previous repurchase authorization remaining with our strong operating leverage and increasing free cash flow generation. We're very pleased to announce today that an additional $250 million increase to our share repurchase program which demonstrates our continued commitment to effectively deploy and return capital to shareholders. We have confidence in our ability to drive continued leverage in the business while investing for growth and delivering compelling Unlevered Free Cash Flow margins over time. With the results of the quarter behind us, I'd like to discuss our outlook for Q3 in the full year 2025. For the third quarter we currently expect revenue to be in the range of $246 million to $248 million. Non-GAAP income from operations to be in the range of $52 million to $54 million, non-GAAP net income to be in the range of $44 million to $46 million, assuming interest expense of $7.2 million, interest income of $3.3 million, and a provision for income taxes of $3.4 million, and non-GAAP diluted earnings per share to be in the range of $0.36 to $0.37, assuming 123 million fully diluted weighted average shares outstanding for the full year. We currently expect Calculated Current Billings to be in the range of $1.038 billion to $1.048 billion, revenue to be in the range of $981 million to $987 million, non-GAAP income from operations to be in the range of $205 million to $215 million, non-GAAP net income to be in the range of $179 million to $189 million, assuming interest expense of $28.5 million, interest income of $15.6 million, and a provision for income taxes of $12.8 million, non-GAAP diluted earnings per share to be in the range of $1.45 to $1.53, assuming 123.5 million fully diluted weighted average shares outstanding, and Unlevered Free Cash Flow to be in the range of $265 million to $275 million. As discussed since our last earnings call in April, we continue to gain traction with our Tenable One platform, and visibility into the spending environment in the public sector has improved, specifically with respect to renewals. As a result, we raised the midpoint of our guided range by $8 million and the high end by $3 million. This improved outlook will modestly benefit Q3 and Q4 to a greater degree. Turning to operating income, the outlook today reflects our strong outperformance in the second quarter as well as the improved outlook for the rest of the year, offset by the incremental OpEx related to the Apex acquisition. Therefore, we are pleased to reiterate our expectations for the full year. Similarly, we reiterated our Unlevered Free Cash Flow guidance of $265 million to $275 million while absorbing approximately $6.5 million of expected impact from Apex. The takeaway here is we are pleased with the results of the quarter, balancing growth with profitability while expanding our market opportunities. Moreover, we're excited for the second half of the year. That said, Mark and I would like to thank everyone for joining us today on the call. We're very excited about the opportunity ahead and look forward to updating you throughout the year. We also hope to see you at the Stifel and Piper Sandler conferences in the coming weeks. We'd now like to open the call for questions. Thank you. We will now be conducting a question and answer session. If you would like to ask a question, please press Star one on your telephone keypad. A confirmation tone will indicate that your line is in the question queue. We ask that analysts limit themselves to one question so that others can have the opportunity to do so as well. You may press Star two if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment please. While we poll for questions, our first question comes from Rob Owens with Piper Sandler. Please proceed with your question. Great. Thank you so much for taking my question. Would love for you to compare and. Contrast a little bit this quarter. I guess where you were 90 days ago. I mean, clearly we're a little closer to the U.S. federal fiscal year end. Steve, you talked about U.S. federal, how you're getting incrementally more positive. It does feel like we're getting cross currents from other vendors out there talking. About potential truncation of deals, things going. Maybe even less than one year. would love to better understand how your visibility is better here and your confidence is better. On the commercial front, maybe just help us understand, it seems like you're seeing a nice upsell relative to Tenable One and consolidation. Just what's. Driving some of those underlying trends and strength there. Thank you very much. Hey Rob, this is Steve. I'll talk about what's different now versus 90 days ago. First, we're delighted to deliver upside in the quarter. We beat our expectations for CCB and consequently we're raising the guide, $8 million at the midpoint and $3 million at the high end of the range. As we commented earlier, visibility, we believe, particularly with our federal business, where we provided some cautionary comments on our last call, seems to be improving there and most notably in our renewal base. We have a major leadership position in the U.S. federal s pecifically with regard to VM and we have a sizable customer base there. As we head into the second half of the year, we have strong pipeline, lots of opportunities. We do recognize that some of those opportunities will take longer to transact, perhaps more so on the civilian side, but just more broadly across the U.S. federal and we have greater visibility into our renewal base and that's what's reflected into the outlook today. In short, we have a lot of confidence in our ability to continue to drive momentum in the business and we're getting a lot of traction with Tenable One. It's now 40% of our total new sales and 30% or more of our total sales. We're seeing some of the highest selling prices, some of our highest close rates and some of our highest renewal rates with the platform. Our next question comes from Brian Essex with JPMorgan. Please proceed with your question. Hi, good afternoon and thank you for. Taking the question, maybe to pivot on that last point, Steve, on Tenable One penetration. Great to see the call out in the press release and the strength that you're seeing across the platform. I guess what's embedded in your expectations, maybe for the remainder of the year? How meaningful can Tenable One and non-VM exposure solutions penetration be within the install base, and maybe what might it take to get a little bit better acceleration there? Thank you. Sure. We often talk about our business in the context of this growth algo, which is Exposure Solutions, and the underlying growth and mix of business there relative to VM. Vulnerability Management and exposure solutions represent over 20% of our total sales. Mix continues to inflect higher there, and we're getting great traction, seeing outsized growth, and we're seeing good durable growth in Vulnerability Management. The big opportunity for us is really with the platform. We're seeing a ton of market pull. It's clear that customers want to be able to unify visibility, unify insights, and unify actions. That's a real challenge for a lot of our customers today. We're one of the only providers in the market that has the ability to consolidate both world-class first-party assessment data as well as rich data from other security providers into a single correlated view of risk across cloud and OT and the network and SaaS. This is really important for us to deliver to our customers, and that's why we're seeing success there with the platform. We're focusing a lot of our go-to-market efforts around the platform. We're focusing a lot of our engineering efforts around the platform and certainly leveraging AI to be able to deliver incremental capability to customers. Is there a level of penetration that you're targeting that could get you to, like, what would it take to get you to double digit growth rates? Like, from a billings perspective. it wouldn't take a lot to inflect it higher. Just looking at that mix of business. What we said was Tenable One is roughly 40% of our total new sales and 30% of total sales. It just takes modest movement there, to be honest with you. We also want to see good stability in the U.S. federal market. The federal market is a little bit of a headwind right now. Despite that, we're delivering better than expected results. It will be a major tailwind of growth for us in the future. We're certainly clear about that. We have a leadership position there. Right now there's just a little less visibility and as a result we're taking a bit of a cautious approach and deals will take a little longer to transact there and close. It doesn't take a lot certainly to accelerate growth higher. We're confident we can deliver on that. Mark and I are focused on that and we're investing to do just that. Super helpful. Thank you so much. Our next question comes from Saket Kalia with Barclays. Please proceed with your question. Okay, great. Hey guys, thanks for taking my questions here. Nice quarter. Thank you. Mark, maybe for you, just to tie. Together, some of the details that's been talked about, you had some nice examples. Of customer wins in your prepared remarks. Maybe the question is, could you talk? About the competitive landscape a little bit in the exposure space, and maybe touch on how Tenable One is helping you. Differentiate versus a traditional VM player or versus other point players in other spaces. Does that make sense? Yep. No. Totally makes sense. No. I love the question because it is truly the biggest differentiator we have. As Steve highlighted, we have pivoted this company to be laser focused in driving Tenable One. That's why you're seeing some of these results and that's why you're kind of seeing us execute on this platform play around Tenable One. Really, when you look at some of those customer examples, and all of those customer examples were competitive deals, meaning we were going against either some of our traditional competitors head to head or non-traditional players and we were able to beat them. A couple of those deals were seven-figure deals. What we're able to do is when we go in to Tenable One, there's a few points that absolutely differentiate us. First and foremost, very basic, but we are hybrid. A lot of these environments are still on-prem and in the cloud and we can go in and address all of these complex companies and organizations and governments that are hybrid. That is a huge differentiator. The second part is when we go in there and we are able to have this compelling discussion around improved and unified visibility, insights, and actions. It allows customers to consolidate. If you looked at some of those examples, when we look at our largest deals, there are multiple asset types as part of the Tenable One transaction. You're not just talking about BaseCore VM, you're talking about cloud security, web application scanning, OT, identity, attack surface management. Right now we are the one player that can actually go out there in a unified platform, bring it all together, be able to have it beautifully laid out elegantly in regard to our dashboard and our capability to allow our users to make really fast, quick decisions and take action and get insight. We're able to do that. Our win rates this quarter were some of the highest win rates we've seen as a company. We feel like we are just going to continue to gain this traction account by account, install base by install base, and show our differentiation. The one last thing, I know this is long-winded, but it is super important that I think people realize this isn't just Tenable saying how we've differentiated. We now have an enormous amount of analysts that are listing us, especially over the last few weeks with Forrester and IDC and others listing us as the leader in these categories in Exposure Management and unified Vulnerability Management. Major player in CNAPP. You're now having analysts really recognize some of the hard work we've been doing is now paying off. Short summary there, but that's really why we're differentiating and why we're doing extremely well against our competitors. Super helpful. Thanks, guys. Our next question comes from Andrew Nowinski with Wells Fargo. Please proceed with your question. Good afternoon. Thank you for taking the question. Nice job on the quarter. You noted you're seeing these larger deal sizes, the six and seven figure deals. I'm really wondering, are those coming more from new logos versus renewals? Because it looks like your net retention. Rate went down a little bit sequentially. I'm assuming that's coming from stronger new. Logo growth, but love to hear your. Thoughts on that and kind of where you see net retention bottoming out here. Thank you. Sure. Our gross dollar renewal rate continues to be very healthy, and it demonstrates strength in our customer base. As you pointed out, our expansion rate did moderate to 107% this quarter. A notable contributing factor here is the constrained spending environment in the U.S. federal sector. As I mentioned earlier, we have a strong leadership position there. We have a sizable customer base, and it's just taking longer to convert on some of those expansion opportunities in Fed due to greater scrutiny and more levels of review and approval. We believe that indeed will inflect higher, certainly over a future period. It's a big opportunity. Looking more broadly at our business, there are a lot of metrics that we provide for investors to understand the overall health and momentum. Of note here, as you commented, was really the strength in new business from new logos. We added over 350 new enterprise customers in the quarter, so demand from new customers remains healthy, especially with large deals due to the growing adoption of Tenable One. The other thing I'll say is that customers, speaking of Tenable One, are making longer term commitments here. Our CCB growth in the quarter is 8%. If you look at the growth overall in RPO, current RPO growth was double digits, long term RPO growth was about 40%. What you're seeing is customers—70% of all of our multi-year deals with these annual commitments are coming from the platform. Customers are not only spending more, we not only have the highest conversion rates with the platform and the highest renewal rates, but we are developing deeper and longer relationships with our customers because of the platform. Strength of the platform obviously is translating to incremental opportunities not only within our customer base, despite some of the uncertainty or lack of visibility around the Fed, but also is translating to lots of new logos as well and longer term commitments. Perfect. Thanks Steve. Our next question comes from Patrick Colville with Scotiabank. Please proceed with your question. Hi, this is Joe Vandrick on for Patrick Colville. Can you talk to us about your. Strategy to help secure the use of generative AI in the enterprise? With Apex and AI Aware, it seems. Like it's something that you're thinking pretty deeply about. Maybe go over that and why. Tenable has the right to win here. Let's talk a little bit about Apex in the context of our broader AI strategy. We're transforming our customer security programs by making Tenable One more intelligent through the use of AI. It's an arms race out there. There are lots of hackers that are leveraging AI for more advanced and persistent attacks with greater frequency. We have to be able to leverage AI to strengthen our customers' defenses. In terms of Apex, it really accelerates our investment in AI by adding a governance and enforcement layer. Prior to the acquisition, what we had brought to market at Tenable organically was really twofold: number one, AI Aware, which is all about discovery and awareness. It tells you what AI we have, what customers have, where it is, and the known vulnerabilities. We also have AI SPM, which focuses on cloud posture and configurations, determines how your AI resources are set up in the cloud, and if it's secure. Apex really extends our own capabilities with AI by going deeper into the applications, by monitoring prompts and interactions for misuse, and provides a clear governance and enforcement use case to our customers so they can use AI more safely and more broadly. AI for us is really a force multiplier for the insights we can deliver to our customers across our vast data fabric, which has taken over 20 years of exposure data. We continue to leverage agentic to drive higher levels of remediation and orchestration for our customers to reduce risk. Yeah, the only thing I'll piggyback on is just in regards to kind of seeing the customer demand. I mean, it was pretty amazing after we acquired Apex, the type of interest that we saw from our install base and from our customers. We talked a little bit earlier in the call about the competitive dynamic. I mean, we are absolutely differentiating ourselves even to the next level in regards to our AI strategy. A lot of our install base was very used to using AI Aware and AI SPM, but we've got now significant enterprise customers wanting to use Apex, and now that we're going to be embedding it into the Tenable One platform, this literally solves a real world problem that customers are kind of scratching their head on how to solve. We're now bringing it to them within the platform. We talk about differentiation. This is absolutely something that is gaining a ton of traction. Just keep in mind the deal just closed in Q2, right, and we're already seeing pretty significant pipe build in demand. Very, very optimistic. It was one of the customers kind of cheering us on in regards to doing this acquisition because it's something that solves a real problem for them. From a go to market and. Channel perspective, people are pretty excited. Makes sense. Thanks, Steve and Mark. Our next question comes from Roger Boyd with UBS. Please proceed with your question. Great, thanks for taking the question. Maybe to expand on that, I think. Last quarter you provided some metrics around. Adoption of AI Aware and it's nice to see that pop post the Apex acquisition. In addition to that, secondly, can. You just remind us what you've said. About monetization of AI Aware, suggesting that. As you embed Apex into Tenable One. That story changes a little bit. We'd love to get your perspective there. Thanks. Yeah, I think what we said publicly is that we have over 6,000 customers that are using AI Aware to detect shadow AI applications, browser plugins, internally developed AI applications, and in terms of modernization, how we look at the capabilities that we acquired from Apex, it will not be sold separately, it will be sold as part of the platform. AI. How we look at it is an asset type, and we offer it in Tenable One to help our customers secure the AI attack surface. It's similar to an asset type like VM or cloud or OT. As Mark mentioned, we're getting some good early traction there, but obviously we see it as an important attack vector we need to help our customers secure and requires a platform approach. That's helpful. Thanks, Steve. Our next question comes from Rudy Kessinger with D.A. Davidson. Please proceed with your question. Hey guys, this is Andres for Rudy. Thank you for taking my question, and great quarter. Maybe I hear you about, you know, the level of outperformance in Q2 was driven by a more favorable mix and upfront revenue recognition. Could you maybe unpack what products. Did verticals outperform your expectations in Q2? Maybe if you could give us some data points around the core Exposure Management market and what you're seeing there. That will be very helpful as well. Thank you. Okay, just to be clear here, the upfront revenue recognition has nothing to do with CCB. We exceeded expectations for CCB in the second quarter, and that was really driven by strength of the platform. As I mentioned earlier, it's 40% of our new sales and 30% of total sales. OT was also strong here. The takeaway here is it's some of our highest selling prices. We're getting great traction. It's a large and growing market opportunity, Exposure Management, and industry analysts and others are taking note, and it will be a catalyst of growth here. The continued traction we have with the platform and in terms of revenue, there was the mix of business within revenue can vary from quarter to quarter, and opportunities among products can also vary. This quarter, the mix was slightly higher than expected. With regard to products that have some upfront revenue recognition, we don't expect that to continue in the second half of the year, and that's factored in our outlook for the full year. Yeah, and the only thing I'll add there, you asked a question about VM. You know, VM was strong this quarter. We hit where we thought we would hit for VM. It wasn't like this massive outperformance, but came in exactly where we forecasted. We feel really good about that number and about the growth there. I think when you look at some of the overachievement, as Steve kind of highlighted, it is all about driving Tenable One. It's about the multiple asset types. It's about the premium we get when we sell Tenable One. That is kind of where you saw the beat take place here in Q2. We're very happy with our core VM business. Thank you. Our next question comes from Jonathan Ho with William Blair. Please proceed with your question. Hi. Good afternoon. Let me echo my congratulations as well. You mentioned strength in the OT and hybrid IT OT environments. Can you talk about where you're maybe seeing more opportunities and maybe what's driving sort of resurgence on the OT side? Thank you. You bet. Yeah. No, it was a great quarter for OT, and our Q3 for OT actually looks pretty strong, too. What we're seeing there is certain verticals are really starting to play out. We're seeing really good growth. Actually, data center build out is a great example of a vertical that's doing extremely well in regard to adopting OT and then looking at a consolidated platform. You look at food processing, you look at manufacturing, you look at the entertainment industry. Think of casinos and big, large hotels as some areas we're doing extremely well. Really what's happening is this convergence, right? These folks are saying, hey, we need OT, and we also need Exposure Management. We need to be looking at not just our operational technology, but all of these other asset types. One of the deals that I highlighted was actually driven from an OT initiative. When the CISO fully understood what Exposure Management was about and how much more visibility they could get in regard to doing Exposure Management and looking at VM and other asset types, that was how we differentiated from a pure play OT provider that cannot do that. That concern story of IT OT going into the CISO is having a massive amount of relevance right now in the market. We are actually seeing this adoption pick up. As you know, Steve kind of highlighted the numbers. We're happy with our Q2 performance, and we're looking for a strong Q3 there also. We are encouraged of what we're seeing. Thank you. Our next question comes from Mike Cikos with Needham & Co. Please proceed with your question. Mike, are you there? Okay, Mike, if you're not muted right now we'll put you back in the queue and we'll move on to the next question here. Our next question is from Jonathan Ruykhaver with Cantor Fitzgerald. Please proceed with your question. Thank you. Good afternoon. The 360 new enterprise platform customers and the 76 net new six-figure customers was impressive. Can you talk about that sales motion? Are there any incentives, either direct or through the channel, that might be influencing that success? Looking at the remainder of the year, how should we be thinking of new platform add versus expansion? It does seem that with Apex OT Exposure Management and just the broadening product portfolio, expansion is also a compelling opportunity. Yeah, no, totally agree. It is a compelling opportunity. In regards to new logos, we didn't actually do anything different. I think what you're seeing is just this basic adoption of Tenable One and of the platform approach. I think as everyone on this call is very aware, we are 100% channel company, so we don't do direct business, and we've got a very loyal channel. They are getting more comfortable in regards to positioning Tenable One, and as you guys do your channel checks, everything comes back relatively positive in regards to what our channel is getting enabled on, how they're getting trained, and their comfort level of positioning Tenable One is pretty significant. I think that's really where you're seeing the traction. In regard to our own sellers, again, no real major shifts, no big compensation changes or anything like that at all. I think it's just more higher activities. We're seeing good pipeline growth. Some of our marketing and branding exercises are paying off in regard to the top line pipeline build. I think it is strong, and I don't want to underplay the third party analyst when they're giving you validation in the market. It isn't just Tenable in our partner community saying we're the best EM solution, it's now analysts starting to say it, and I think that's got some forward momentum. I think that's really it. No big structural changes, no comp changes, nothing along those lines. Yep, makes sense. Thanks for the color. Our next question comes from Junaid Siddiqui at Truist Securities. Please proceed with your question. Hi, this is Junaid Siddiqui from Truist. Thanks for taking my question. I just wanted to ask about your. Cloud strategy around CNAPP, and you talked. About last quarter, about Wiz being the. Acquisition by Google being a potential net benefit for you. Are you seeing any additional RFPs that? You're being invited to, and has that. Contributed to any growth in your cloud security business? Thank you. Yeah, I mean we had a really strong cloud security in Q2. Pipeline looks good for Q3. Q4. We did see a bit of an increase in regard to inbound inquiries in regard to RFPs once the Wiz-Google acquisition was announced. You are not seeing anyone rip and replace Wiz by any stretch of the imagination, but there is conversation at the CISO level of dual vendor strategy, opening up the door, looking at other players. We have seen a pipeline growth there and I think one of the big factors you've got to always keep in mind with Tenable and our CNAPP solution is we sell the majority of that as part of the Tenable One platform. When we truly go in and differentiate from a platform perspective, that's when we have success selling cloud. We had a good quarter and we're optimistic about Q3, Q4, and we said it last quarter, it's a net positive for us, bottom line. We're going to continue to drive pipeline off it and then see how we convert. Our next question comes from Saket Kalia with Barclays. Please proceed with your question. Thank you. Good afternoon and congrats on your quarterly performance and improved outlook. Mark or Steve, I wanted to ask specifically about your July performance, which is coming to an end tomorrow maybe. Mark, it comes as an easy layup. With respect to your reply to Jonathan, I'm beginning to hear some bits and pieces that July has been trending ahead of historical seasonality trends, maybe anecdotally, but curious. What is it that you're seeing out there as the first month of your. Third quarter is coming to an end. Thank you. Good question. Today, with the end of July, we take everything into consideration when we provide an outlook for the year. We look at the flow of our business and specifically look at the first month and the results for the quarter, then combine that with pipeline opportunities and our outlook for the rest of the year when we provide an update on our guidance. As we mentioned on the top line for CCB, we raised the midpoint by $8 million due to outperformance in the quarter and increasing confidence in the business in the second half of the year. I would also say that flow is no different now than any other quarter, where a lot of our new business is closed and transacted in the last month. This quarter, we're heading into what often is a seasonally strong U.S. federal quarter. We have a number of pipeline opportunities we're going to be working hard to close and convert. These are very sizable opportunities and very strategic deals, all focused around not only VM but also the platform. Our next question is from Shrenik Kathari with Baird. Please proceed with your question. Yeah, thanks for taking my questions. Congrats Steve, Mark and team. Just a follow up to earlier question by Andrew and your answer around federal scrutiny and net retention, and with the improved visibility in the federal renewals you mentioned specifically on the retention expansion opportunity, can you comment on whether these federal renewals are skewing towards more tactical VM but also seeing more opportunity for platform consolidation, Tenable One, for example, or cloud workloads? Any comments on how these renewals can see potential kind of added value from Tenable One, if you may. Thanks. Sure. To clarify, the increased visibility that we have around our renewal base and U.S. federal is specifically on the renewal itself. We have a number of large six and seven figure expansion opportunities within U.S. federal. We're not saying that we have increased confidence around that or increased visibility. We're cautiously optimistic. We have a lot of pipeline opportunities. These are big meaningful deals and we'll be working hard to close them. We're saying we just have a little more visibility into the renewals themselves. The expansion opportunities do cut across not only just VM, where historically we've got a sizable base of business there, but also cut across other things like cloud, OT, but more broadly the platform itself. Totally great. Steve kind of nailed it right there. It is better visibility in regards to that renewal base and new business is still going to be something where we've got to really micro because there's still, you know, some issues and challenges that flow through the U.S. federal government. We are definitely a little more optimistic. I think when you look at Tenable One, the great news, right, is we now have FedRAMP authorization for Tenable One and for our cloud security. As a traditionally very, very strong VM core base there, obviously we're engaged with that install base, talking to them about Tenable One, talking to them about cloud security and other asset types. We're feeling good and we're happy that we have a little more visibility on the renewal base and we'll go from there. Very helpful. Thanks a lot. We have reached the end of our Q&A session, which concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation.