Form 10-Q - Quarterly report [Sections 13 or 15(d)]

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

__________________

FORM 10-Q

__________________


☒			Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the Quarterly Period Ended June 30, 2024


☐			Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the transition period from _____ to _____

Commission file number 001-38600

__________________

TENABLE HOLDINGS, INC.

(Exact name of registrant as specified in its charter)

__________________


Delaware						47-5580846
(State or other jurisdiction of incorporation or organization)						(I.R.S. Employer Identification Number)

6100 Merriweather Drive, Columbia, Maryland 21044

(Address of principal executive offices, including zip code)

(410) 872-0555

(Registrant’s telephone number, including area code)

__________________

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, par value $0.01 per share	TENB	The Nasdaq Stock Market LLC

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☒

Accelerated filer

☐

Non-accelerated filer

☐

Emerging growth company

☐

Smaller reporting company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

The number of shares of the Registrant's common stock outstanding as of July 31, 2024 was 119,110,431.

TENABLE HOLDINGS, INC.

TABLE OF CONTENTS


		Page
PART I – FINANCIAL INFORMATION
Item 1.	Financial Statements
	Consolidated Balance Sheets	3
	Consolidated Statements of Operations	4
	Consolidated Statements of Comprehensive Loss	5
	Consolidated Statements of Stockholders' Equity	6
	Consolidated Statements of Cash Flows	7
	Notes to Consolidated Financial Statements	8
	1. Business and Summary of Significant Accounting Policies	8
	2. Revenue	9
	3. Cash Equivalents and Short-Term Investments	10
	4. Fair Value Measurements	11
	5. Property and Equipment, Net	12
	6. Acquisitions, Goodwill and Intangible Assets	12
	7. Leases	14
	8. Debt	15
	9. Commitments and Contingencies	16
	10. Stock-Based Compensation	16
	11. Income Taxes	18
	12. Net Loss Per Share	18
	13. Geographic Information	18

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	20
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	35
Item 4.	Controls and Procedures	36
PART II – OTHER INFORMATION
Item 1.	Legal Proceedings	38
Item 1A.	Risk Factors	38
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	43
Item 5.	Other Information	3 9
Item 6.	Exhibits	44
	Signatures	45

Where You Can Find More Information

Investors and others should note that we may announce material business and financial information to our investors using our investor relations website (https://investors.tenable.com), our filings with the Securities and Exchange Commission (SEC), our website, webcasts, press releases, and conference calls. We use these mediums, including our website, to communicate with investors and the general public about our company, our products, and other issues, and for complying with our disclosure obligations under Regulation FD. It is possible that the information that we make available on our website may be deemed to be material information. We therefore encourage investors and others interested in our company to review the information that we make available on our website, in addition to following our SEC filings, our webcasts, press releases, and conference calls. The information we post through these channels is not a part of this Quarterly Report on Form 10-Q. These channels be may updated from time to time on our investor relations website.

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PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

TENABLE HOLDINGS, INC.

CONSOLIDATED BALANCE SHEETS


	June 30, 2024		December 31, 2023
(in thousands, except per share data)	(unaudited)
Assets
Current assets:
Cash and cash equivalents	$	233,467	$	237,132
Short-term investments	253,536		236,840
Accounts receivable (net of allowance for doubtful accounts of $456 and $470 at June 30, 2024 and December 31, 2023, respectively)	179,612		220,060
Deferred commissions	49,388		49,559
Prepaid expenses and other current assets	58,886		61,882
Total current assets	774,889		805,473
Property and equipment, net	41,448		45,436
Deferred commissions (net of current portion)	66,141		72,394
Operating lease right-of-use assets	33,315		34,835
Acquired intangible assets, net	104,488		107,017
Goodwill	541,292		518,539
Other assets	14,776		23,177
Total assets	$	1,576,349	$	1,606,871

Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable and accrued expenses	$	19,543	$	16,941
Accrued compensation	44,119		66,492
Deferred revenue	562,587		580,779
Operating lease liabilities	6,161		5,971
Other current liabilities	5,832		5,655
Total current liabilities	638,242		675,838
Deferred revenue (net of current portion)	163,211		169,718
Term loan, net of issuance costs (net of current portion)	357,969		359,281
Operating lease liabilities (net of current portion)	45,315		48,058
Other liabilities	8,051		7,632
Total liabilities	1,212,788		1,260,527

Stockholders’ equity:
Common stock (par value: $0.01; 500,000 shares authorized; 120,461 and 117,504 shares issued at June 30, 2024 and December 31, 2023, respectively)	1,205		1,175
Additional paid-in capital	1,281,545		1,185,100
Treasury stock (at cost: 1,471 and 356 shares at June 30, 2024 and December 31, 2023, respectively)	(64,925)		(14,934)
Accumulated other comprehensive (loss) income	(271)		38
Accumulated deficit	(853,993)		(825,035)
Total stockholders’ equity	363,561		346,344
Total liabilities and stockholders’ equity	$	1,576,349	$	1,606,871

The accompanying notes are an integral part of these consolidated financial statements.

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TENABLE HOLDINGS, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)


	Three Months Ended June 30,				Six Months Ended June 30,
(in thousands, except per share data)	2024		2023		2024		2023
Revenue	$	221,241	$	195,036	$	437,202	$	383,875
Cost of revenue	48,798		43,514		97,730		89,020
Gross profit	172,443		151,522		339,472		294,855
Operating expenses:
Sales and marketing	101,129		97,800		200,954		194,991
Research and development	45,149		37,845		88,876		76,028
General and administrative	30,302		26,622		61,320		53,737
Restructuring	4,681		—		6,070		—
Total operating expenses	181,261		162,267		357,220		324,756
Loss from operations	(8,818)		(10,745)		(17,748)		(29,901)
Interest income	5,974		6,566		11,598		11,661
Interest expense	(8,073)		(7,750)		(16,185)		(15,089)
Other income (expense), net	93		(944)		(1,217)		(1,491)
Loss before income taxes	(10,824)		(12,873)		(23,552)		(34,820)
Provision for income taxes	3,748		3,101		5,406		6,251
Net loss	$	(14,572)	$	(15,974)	$	(28,958)	$	(41,071)

Net loss per share, basic and diluted	$	(0.12)	$	(0.14)	$	(0.25)	$	(0.36)
Weighted-average shares used to compute net loss per share, basic and diluted	118,681		115,131		118,111		114,465

The accompanying notes are an integral part of these consolidated financial statements.

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TENABLE HOLDINGS, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(Unaudited)


	Three Months Ended June 30,				Six Months Ended June 30,
(in thousands)	2024		2023		2024		2023
Net loss	$	(14,572)	$	(15,974)	$	(28,958)	$	(41,071)
Other comprehensive (loss) income, net of tax:
Unrealized (losses) gains on available-for-sale securities, net	(86)		(30)		(309)		650
Other comprehensive (loss) income	(86)		(30)		(309)		650
Comprehensive loss	$	(14,658)	$	(16,004)	$	(29,267)	$	(40,421)

The accompanying notes are an integral part of these consolidated financial statements.

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TENABLE HOLDINGS, INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

(Unaudited)


				Additional Paid-in Capital				Accumulated Other Comprehensive (Loss) Income				Total Stockholders’ Equity
	Common Stock					Treasury Stock				Accumulated Deficit
(in thousands)	Shares	Amount
Balance at March 31, 2024	119,625	$	1,196	$	1,237,283	$	(39,925)	$	(185)	$	(839,421)	$	358,948
Exercise of stock options	192	1		2,260		—		—		—		2,261
Vesting of restricted stock units	623	7		(7)		—		—		—		—
Vesting of performance stock units	21	1		(1)		—		—		—		—
Issuance of common stock under employee stock purchase plan	—	—		(6)		—		—		—		(6)
Purchase of treasury stock	—	—		—		(25,000)		—		—		(25,000)
Fair value of replacement equity attributable to pre-acquisition service	—	—		42		—		—		—		42
Stock-based compensation	—	—		41,974		—		—		—		41,974
Other comprehensive loss	—	—		—		—		(86)		—		(86)
Net loss	—	—		—		—		—		(14,572)		(14,572)
Balance at June 30, 2024	120,461	$	1,205	$	1,281,545	$	(64,925)	$	(271)	$	(853,993)	$	363,561

Balance at December 31, 2023	117,504	$	1,175	$	1,185,100	$	(14,934)	$	38	$	(825,035)	$	346,344
Exercise of stock options	647	6		4,129		—		—		—		4,135
Vesting of restricted stock units	1,936	20		(20)		—		—		—		—
Vesting of performance stock units	69	1		(1)		—		—		—		—
Issuance of common stock under employee stock purchase plan	305	3		9,875		—		—		—		9,878
Purchase of treasury stock	—	—		—		(49,991)		—		—		(49,991)
Fair value of replacement equity attributable to pre-acquisition service	—	—		42		—		—		—		42
Stock-based compensation	—	—		82,420		—		—		—		82,420
Other comprehensive loss	—	—		—		—		(309)		—		(309)
Net loss	—	—		—		—		—		(28,958)		(28,958)
Balance at June 30, 2024	120,461	$	1,205	$	1,281,545	$	(64,925)	$	(271)	$	(853,993)	$	363,561

Balance at March 31, 2023	114,743	$	1,147	$	1,063,051	$	—	$	(671)	$	(771,848)	$	291,679
Exercise of stock options	86	1		594		—		—		—		595
Vesting of restricted stock units	687	8		(8)		—		—		—		—
Vesting of performance stock units	13	—		—		—		—		—		—
Stock-based compensation	—	—		38,291		—		—		—		38,291
Other comprehensive loss	—	—		—		—		(30)		—		(30)
Net loss	—	—		—		—		—		(15,974)		(15,974)
Balance at June 30, 2023	115,529	$	1,156	$	1,101,928	$	—	$	(701)	$	(787,822)	$	314,561

Balance at December 31, 2022	113,056	$	1,131	$	1,017,837	$	—	$	(1,351)	$	(746,751)	$	270,866
Exercise of stock options	166	2		1,535		—		—		—		1,537
Vesting of restricted stock units	1,930	19		(19)		—		—		—		—
Vesting of performance stock units	65	1		(1)		—		—		—		—
Issuance of common stock under employee stock purchase plan	312	3		9,911		—		—		—		9,914
Stock-based compensation	—	—		72,665		—		—		—		72,665
Other comprehensive income	—	—		—		—		650		—		650
Net loss	—	—		—		—		—		(41,071)		(41,071)
Balance at June 30, 2023	115,529	$	1,156	$	1,101,928	$	—	$	(701)	$	(787,822)	$	314,561

The accompanying notes are an integral part of these consolidated financial statements.

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TENABLE HOLDINGS, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)


	Six Months Ended June 30,
(in thousands)	2024		2023
Cash flows from operating activities:
Net loss	$	(28,958)	$	(41,071)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization	15,864		12,624
Stock-based compensation	81,117		71,977
Net accretion of discounts and amortization of premiums on short-term investments	(4,378)		(3,595)
Amortization of debt issuance costs	662		618
Restructuring	4,528		—
Other	2,184		182
Changes in operating assets and liabilities:
Accounts receivable	40,462		33,997
Prepaid expenses and other assets	18,105		12,649
Accounts payable, accrued expenses and accrued compensation	(20,162)		(1,276)
Deferred revenue	(24,807)		(14,408)
Other current and noncurrent liabilities	(2,867)		(2,758)
Net cash provided by operating activities	81,750		68,939

Cash flows from investing activities:
Purchases of property and equipment	(1,191)		(1,098)
Capitalized software development costs	(4,767)		(2,813)
Purchases of short-term investments	(160,405)		(147,434)
Sales and maturities of short-term investments	147,778		148,760
Proceeds from other investments	3,512		—
Purchases of other investments	(250)		—
Business combinations, net of cash acquired	(29,162)		—
Net cash used in investing activities	(44,485)		(2,585)

Cash flows from financing activities:
Payments on term loan	(1,875)		(1,875)

Proceeds from loan agreement	—		424
Proceeds from stock issued in connection with the employee stock purchase plan	9,878		9,914
Proceeds from the exercise of stock options	4,135		1,537
Purchase of treasury stock	(49,991)		—
Other financing activities	—		(129)
Net cash (used in) provided by financing activities	(37,853)		9,871
Effect of exchange rate changes on cash and cash equivalents and restricted cash	(3,077)		(1,032)
Net (decrease) increase in cash and cash equivalents and restricted cash	(3,665)		75,193
Cash and cash equivalents and restricted cash at beginning of period	237,132		300,866
Cash and cash equivalents and restricted cash at end of period	$	233,467	$	376,059

Supplemental disclosure of cash flow information:
Cash paid for interest	$	15,450	$	18,943
Cash paid for income taxes, net of refunds	5,737		2,236
Supplemental cash flow information related to leases:
Cash payments for operating leases	$	4,640	$	4,590

The accompanying notes are an integral part of these consolidated financial statements.

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TENABLE HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

1. Business and Summary of Significant Accounting Policies

Business Description

Tenable Holdings, Inc. (the “Company,” “we,” "us," or “our”) is a provider of exposure management solutions. Exposure management is an effective discipline for measuring, comparing and reducing cybersecurity risk in today's complex IT environments. Our solutions provide broad visibility into security issues such as vulnerabilities, misconfigurations, internal and regulatory compliance violations and other indicators of the state of an organization’s security across IT infrastructure and applications, cloud environments, Active Directory and industrial internet of things and operational technology environments.

Basis of Presentation

The accompanying consolidated financial statements include the accounts of Tenable Holdings, Inc. and our wholly owned subsidiaries and have been prepared in conformity with United States generally accepted accounting principles (“GAAP”) for interim financial information. All intercompany accounts and transactions have been eliminated in consolidation.

The consolidated statements are unaudited and should be read in conjunction with the consolidated financial statements and related notes included in our 2023 Annual Report on Form 10-K ("10-K") filed with the Securities and Exchange Commission on February 28, 2024. The consolidated financial statements have been prepared on a basis consistent with the audited annual consolidated financial statements included in the 10-K and, in the opinion of management, include all adjustments of a normal recurring nature necessary to fairly state our financial position, our results of operations, and cash flows.

The results for the three and six months ended June 30, 2024 are not necessarily indicative of the operating results expected for the year ending December 31, 2024 or any other future period.

Use of Estimates

The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. These estimates include, but are not limited to, the determination of the estimated economic life of perpetual licenses for revenue recognition, the estimated period of benefit for deferred commissions, the useful lives of long-lived assets, the fair value of acquired intangible assets, the valuation of stock-based compensation, the incremental borrowing rate for operating leases, and the valuation of deferred tax assets and investments. We base these estimates on historical experience and on various other assumptions that we believe to be reasonable. Actual results could differ significantly from these estimates.

Significant Accounting Policies

Our significant accounting policies are described in our 10-K. During the six months ended June 30, 2024, there were no material changes to our significant accounting policies from those described in our 10-K.

Recently Issued Accounting Pronouncements

In November 2023, the Financial Accounting Standards Board (“FASB”) issued ASU 2023-07 - Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, which requires public entities with a single reportable segment to provide all the disclosures required by this standard and all existing segment disclosures in Topic 280 on an interim and annual basis, including new requirements to disclose significant segment expenses that are regularly provided to the Chief Operating Decision Maker ("CODM") and included within the reported measure(s) of a segment's profit or

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loss, the amount and composition of any other segment items, the title and position of the CODM, and how the CODM uses the reported measure(s) of a segment's profit or loss to assess performance and decide how to allocate resources. The guidance is effective for our annual period beginning January 1, 2025, and interim periods thereafter, applied retrospectively with early adoption permitted. We are currently evaluating the impact of adoption of this standard on our consolidated financial statements and disclosures.

In December 2023, the FASB issued ASU 2023-09 - Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which requires public entities to provide greater disaggregation within their annual rate reconciliation, including new requirements to present reconciling items on a gross basis in specified categories, disclose both percentages and dollar amounts, and disaggregate individual reconciling items by jurisdiction and nature when the effect of the items meet a quantitative threshold. The guidance also requires disaggregating the annual disclosure of income taxes paid, net of refunds received, by federal (national), state, and foreign taxes, with separate presentation of individual jurisdictions that meet a quantitative threshold. The guidance is effective for our annual periods beginning January 1, 2025 on a prospective basis, with a retrospective option, and early adoption is permitted. We are currently evaluating the impact of adoption of this standard on our consolidated financial statements and disclosures.

2. Revenue

Disaggregation of Revenue

The following table presents a summary of revenue:


	Three Months Ended June 30,				Six Months Ended June 30,
(in thousands)	2024		2023		2024		2023
Subscription revenue	$	202,538	$	176,767	$	400,173	$	347,865
Perpetual license and maintenance revenue	12,016		12,154		24,172		24,335
Professional services and other revenue	6,687		6,115		12,857		11,675
Revenue	$	221,241	$	195,036	$	437,202	$	383,875

Concentrations

We sell and market our products and services through our field sales force that works closely with our channel partners, which includes a network of distributors and resellers, in developing sales opportunities. We use a two-tiered channel model whereby we sell our products and services to our distributors, which in turn sell to resellers, which then sell to end-users. Revenue derived through our channel network comprised 94% and 92% of revenue in the three and six months ended June 30, 2024, respectively, and 93% in the three and six months ended June 30, 2023. One of our distributors accounted for 34% of revenue in the three and six months ended June 30, 2024 and 36% of revenue in the three and six months ended June 30, 2023. That same distributor accounted for 31% and 32% of accounts receivable at June 30, 2024 and December 31, 2023, respectively.

Contract Balances

We generally bill our customers in advance and accounts receivable are recorded when we have the right to invoice the customer. Contract liabilities consist of deferred revenue and include customer billings and payments received in advance of performance under the contract. In the three months ended June 30, 2024 and 2023 and the six months ended June 30, 2024 and 2023, we recognized revenue of $205.1 million, $179.0 million, $368.7 million, and $319.2 million, respectively, that was included in the deferred revenue balance at the beginning of the respective periods.

Remaining Performance Obligations

At June 30, 2024, the future estimated revenue related to unsatisfied performance obligations was $747.5 million, of which $572.0 million is expected to be recognized as revenue over the next twelve months, and the remainder is expected to be recognized over the four years thereafter.

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Deferred Commissions

The following summarizes the activity of deferred incremental costs of obtaining a contract:


	Three Months Ended June 30,				Six Months Ended June 30,
(in thousands)	2024		2023		2024		2023
Beginning balance	$	117,615	$	108,380	$	121,953	$	111,508
Capitalization of contract acquisition costs	11,466		13,385		20,501		22,292
Amortization of deferred contract acquisition costs	(13,552)		(12,183)		(26,925)		(24,218)
Ending balance	$	115,529	$	109,582	$	115,529	$	109,582

3. Cash Equivalents and Short-Term Investments

The following tables summarize the amortized cost, unrealized gain and loss and estimated fair value of cash equivalents and short-term investments:


	June 30, 2024
(in thousands)	Amortized Cost		Unrealized Gain		Unrealized Loss		Estimated Fair Value
Cash equivalents
Money market funds	$	128,831	$	—	$	—	$	128,831
Total cash equivalents	$	128,831	$	—	$	—	$	128,831

Short-term investments
Commercial paper	$	63,933	$	1	$	(26)	$	63,908
Corporate bonds	86,420		3		(108)		86,315
Asset backed securities	18,171		5		(24)		18,152
Yankee bonds	12,900		—		(28)		12,872
U.S. Treasury and agency obligations	72,383		7		(101)		72,289
Total short-term investments	$	253,807	$	16	$	(287)	$	253,536


	December 31, 2023
(in thousands)	Amortized Cost		Unrealized Gain		Unrealized Loss		Estimated Fair Value
Cash equivalents
Money market funds	$	130,375	$	—	$	—	$	130,375
Total cash equivalents	$	130,375	$	—	$	—	$	130,375

Short-term investments
Commercial paper	$	82,188	$	50	$	(22)	$	82,216
Corporate bonds	61,200		40		(91)		61,149
Asset backed securities	15,032		26		(15)		15,043
Yankee bonds	6,926		4		(17)		6,913
U.S. Treasury and agency obligations	71,456		97		(34)		71,519
Total short-term investments	$	236,802	$	217	$	(179)	$	236,840

We considered the extent to which any unrealized losses on our short-term investments were driven by credit risk and other factors, including market risk, and if it is more-likely-than-not that we would have to sell the security before the

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recovery of the amortized cost basis. At June 30, 2024 and December 31, 2023, our unrealized losses were due to rising market interest rates compared to when the investments were initiated. We do not believe any unrealized losses represent credit losses, and it is unlikely we would sell the investments before we would recover their amortized cost basis.

The contractual maturities of our short-term investments are as follows:


	June 30, 2024				December 31, 2023
(in thousands)	Amortized Cost		Estimated Fair Value		Amortized Cost		Estimated Fair Value
Due within one year	$	209,611	$	209,419	$	219,437	$	219,414
Due between one and two years	44,196		44,117		17,365		17,426
Total short-term investments	$	253,807	$	253,536	$	236,802	$	236,840

At June 30, 2024 and December 31, 2023, cash and cash equivalents included $6.0 million and $5.8 million, respectively, of restricted cash primarily related to collateral for our outstanding letters of credit.

4. Fair Value Measurements

We measure certain financial instruments at fair value using a fair value hierarchy. In the hierarchy, assets are classified based on the lowest level inputs used in valuation into the following categories:

•Level 1 — Quoted prices in active markets for identical assets and liabilities;

•Level 2 — Observable inputs including quoted market prices for similar assets and liabilities in active markets, quoted prices for identical assets and liabilities in inactive markets, or inputs that are corroborated by observable market data; and

•Level 3 — Unobservable inputs.

The following tables summarize assets that are measured at fair value on a recurring basis:


	June 30, 2024
(in thousands)	Level 1		Level 2		Level 3		Total
Cash equivalents
Money market funds	$	128,831	$	—	$	—	$	128,831
Total cash equivalents	$	128,831	$	—	$	—	$	128,831

Short-term investments
Commercial paper	$	—	$	63,908	$	—	$	63,908
Corporate bonds	—		86,315		—		86,315
Asset backed securities	—		18,152		—		18,152
Yankee bonds	—		12,872		—		12,872
U.S. Treasury and agency obligations	—		72,289		—		72,289
Total short-term investments	$	—	$	253,536	$	—	$	253,536

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	December 31, 2023
(in thousands)	Level 1		Level 2		Level 3		Total
Cash equivalents
Money market funds	$	130,375	$	—	$	—	$	130,375
Total cash equivalents	$	130,375	$	—	$	—	$	130,375

Short-term investments
Commercial paper	$	—	$	82,216	$	—	$	82,216
Corporate bonds	—		61,149		—		61,149
Asset backed securities	—		15,043		—		15,043
Yankee bonds	—		6,913		—		6,913
U.S. Treasury and agency obligations	—		71,519		—		71,519
Total short-term investments	$	—	$	236,840	$	—	$	236,840

At June 30, 2024 and December 31, 2023, we had $7.6 million and $9.4 million, respectively, of investments in privately held companies, which are included in other assets on our consolidated balance sheets and classified as level 3 investments. In May 2024, we recognized a $1.5 million gain on the conversion of our simple agreement for future equity ("SAFE") investment to an investment in preferred stock, which was recorded at fair value on the conversion date.

We did not have any liabilities measured and recorded at fair value on a recurring basis at June 30, 2024 and December 31, 2023.

5. Property and Equipment, Net

Property and equipment, net consisted of the following:


(in thousands)	June 30, 2024		December 31, 2023
Computer software and equipment	$	21,027	$	21,845
Internally developed software	38,063		32,261
Furniture and fixtures	5,191		6,513
Leasehold improvements	22,657		29,354
Total	86,938		89,973
Less: accumulated depreciation and amortization	(45,490)		(44,537)
Property and equipment, net	$	41,448	$	45,436

Depreciation and amortization related to property and equipment was $2.8 million, $3.2 million, $6.4 million and $6.5 million in the three months ended June 30, 2024 and 2023 and the six months ended June 30, 2024 and 2023, respectively.

In the three months ended June 30, 2024, we recorded a $4.5 million impairment for furniture and fixtures and leasehold improvements. See Note 7 for additional information.

6. Acquisitions, Goodwill and Intangible Assets

Business Combinations

In June 2024, we acquired Eureka Security, Inc. ("Eureka"), a provider of data security posture management ("DSPM") for cloud environments. Adding Eureka's DSPM capabilities to our solutions provides customers a view into their organization's cloud data security footprint, fight policy drift and misconfigurations that put data at risk, and enables

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customers to continuously improve their security posture over time. We acquired 100% of Eureka's equity through a share purchase agreement for total cash consideration of $29.2 million, net of $0.4 million cash acquired.

Cash consideration, net of cash acquired, was preliminarily allocated as follows:


(in thousands)	Eureka



Intangible assets	$	6,900
Goodwill	22,753


Other current liabilities, net	(449)
Total purchase price	$	29,204

We allocated $6.9 million to Eureka's proprietary technology with an estimated useful life of 5 years.

We are still finalizing the allocation of the purchase price for Eureka, which may change as additional information becomes available.

The results of operations of Eureka are included in our consolidated statements of operations from the acquisition date and were not material. Pro forma results of operations are not presented as they are not material to the consolidated statement of operations.

In general and administrative expense, we recognized $0.7 million, $0.9 million, and $0.1 million of acquisition-related transaction costs in the three months ended June 30, 2024 and the six months ended June 30, 2024 and 2023, respectively.

Goodwill and Acquired Intangible Assets

The changes in the carrying amount of goodwill are as follows:


(in thousands)
Balance at December 31, 2023	$	518,539
Acquired goodwill	22,753
Balance at June 30, 2024	$	541,292

The excess purchase consideration over the fair value of acquired assets and liabilities is recorded as goodwill. The acquired goodwill reflects the synergies we expect from marketing and selling new capabilities from Eureka to our customers. The acquired goodwill is generally not tax deductible.

Acquired intangible assets subject to amortization are as follows:


	June 30, 2024						December 31, 2023
(in thousands)	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
Acquired technology	$	149,437	$	(44,949)	$	104,488	$	142,537	$	(35,520)	$	107,017
Trade name	490		(490)		—		490		(490)		—
	$	149,927	$	(45,439)	$	104,488	$	143,027	$	(36,010)	$	107,017

Amortization of acquired intangible assets was $4.8 million, $3.1 million, $9.4 million and $6.2 million in the three months ended June 30, 2024 and 2023, and the six months ended June 30, 2024 and 2023, respectively. At June 30, 2024, our acquired intangible assets are expected to be amortized over an estimated remaining weighted average period of 5.7 years.

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At June 30, 2024, estimated future amortization of acquired intangible assets is as follows:


(in thousands)
Year ending December 31,
2024(1)	$	10,028
2025	20,055
2026	19,870
2027	17,840
2028	14,797
Thereafter	21,898
Total	$	104,488

_______________

(1) Represents the six months ending December 31, 2024.

7. Leases

We have operating leases for office facilities. The components of lease expense were as follows:


	Three Months Ended June 30,				Six Months Ended June 30,
(in thousands)	2024		2023		2024		2023
Operating lease cost	$	1,890	$	1,902	$	3,785	$	3,790

Rent expense for short-term leases in the three and six months ended June 30, 2024 and 2023 was not material.

In June 2024, we executed a sublease for of a portion of our corporate headquarters through February 2032 and recognized $4.5 million of restructuring expense related to the associated impairment of leasehold improvements and furniture and fixtures. Sublease income will be recorded as a reduction of rent expense.

Supplemental information related to leases was as follows:


	June 30, 2024	December 31, 2023
Operating leases
Weighted average remaining lease term	6.9 years	7.3 years
Weighted average discount rate	5.7%	5.6%


	Three Months Ended June 30,				Six Months Ended June 30,
(in thousands)	2024		2023		2024		2023
ROU assets obtained in exchange for lease obligations
Operating leases	$	806	$	1,234	$	806	$	1,234

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Maturities of operating lease liabilities at June 30, 2024 were as follows:


(in thousands)
Year ending December 31,
2024(1)	$	4,207
2025	9,692
2026	9,039
2027	8,581
2028	7,736
Thereafter	23,386
Total lease payments	62,641
Less: Imputed interest	(11,165)

Total	$	51,476

_______________

(1) Represents the six months ending December 31, 2024.

Operating lease payments in the table above do not include $0.1 million, $0.9 million, $1.7 million, $1.8 million, $1.9 million and $6.4 million of sublease payments we expect to receive in 2024, 2025, 2026, 2027, 2028 and thereafter, respectively.

8. Debt

Credit Agreement

In July 2021, we entered into a credit agreement ("Credit Agreement") which is comprised of:

•a $375.0 million senior secured term loan facility ("Term Loan"); and

•a $50.0 million senior secured revolving credit facility ("Revolving Credit Facility").

The table below summarizes the carrying value of the Term Loan:


(in thousands)	June 30, 2024
Term loan	$	365,625
Less: Unamortized debt discount and issuance costs	(5,021)
Term loan, net of issuance costs	360,604
Less: Term loan, net, current (1)	(2,635)
Term loan, net of issuance costs (net of current portion)	$	357,969

_______________

(1) Term loan, net current is included in other current liabilities on our consolidated balance sheets.

The Term Loan bears interest at a rate of 2.75% per annum over the Secured Overnight Financing Rate ("SOFR"), subject to a 0.50% floor, plus a credit spread adjustment depending on the interest period. The Term Loan is being amortized at 1% per annum in equal quarterly installments until the final payment of $350.6 million on the July 7, 2028 maturity date.

Our Term Loan is recorded at its carrying value. At June 30, 2024, the fair value of our Term Loan was approximately $365.6 million. In the fair value hierarchy, our Term Loan is classified as Level 2 as it is traded in less active markets.

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The maturities of the Term Loan at June 30, 2024 were as follows:


(in thousands)
Year ending December 31,
2024(1)	$	1,875
2025	3,750
2026	3,750
2027	3,750
2028	352,500
Total	$	365,625

_______________

(1) Represents the six months ending December 31, 2024.

We may be subject to mandatory Term Loan prepayments related to the excess cash flow provisions. These prepayments would only be required if our first lien net leverage ratio (as defined in our Credit Agreement) exceeds 3.5 at the end of each year. At June 30, 2024, our first lien net leverage ratio was 1.08.

At June 30, 2024, we had $0.2 million of standby letters of credit outstanding under our Revolving Credit Facility related to one of our operating leases. At June 30, 2024, we were in compliance with the covenants under the Credit Agreement.

9. Commitments and Contingencies

Commitments

In December 2023, we entered into a contract with Microsoft for cloud services from February 2024 through January 2027. Under the terms of the contract we committed to spend €28.5 million. If we do not meet our commitment by the end of the term, we will be required to pay the difference. As of June 30, 2024, we have spent €3.2 million of our commitment.

As of June 30, 2024, we met our existing commitment of $140.6 million with Amazon Web Services, Inc. ("AWS") for cloud services from August 2021 through July 2024. In July 2024, we entered into a new contract with AWS committing to spend $59.7 million, $77.6 million and $93.0 million in years one, two and three, respectively, for a total commitment of $230.3 million from August 2024 to July 2027.

Letters of Credit

At June 30, 2024, we had $5.7 million of standby letters of credit related to our grant agreements with the State of Maryland and our operating leases.

10. Stock-Based Compensation

In 2018, our Board of Directors adopted, and our stockholders approved, our 2018 Equity Incentive Plan ("2018 Plan"). Under the evergreen provision in the 2018 Plan, in January 2024 we reserved an additional 5.9 million shares of our common stock. At June 30, 2024, there were 26.1 million shares available for grant.

Stock-based compensation expense included in the consolidated statements of operations was as follows:


	Three Months Ended June 30,				Six Months Ended June 30,
(in thousands)	2024		2023		2024		2023
Cost of revenue	$	3,288	$	2,906	$	6,270	$	5,531
Sales and marketing	16,276		16,423		31,576		30,817
Research and development	11,799		9,764		22,960		18,629
General and administrative	10,035		8,767		20,311		17,000
Total stock-based compensation expense	$	41,398	$	37,860	$	81,117	$	71,977

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A summary of the unrecognized stock-based compensation expense related to unvested stock at June 30, 2024 is presented below:


	Unrecognized Stock-Based Compensation Expense (in thousands)		Estimated Weighted Average Period (in years)
Restricted stock units ("RSUs")	$	347,395	2.9
Performance stock units ("PSUs")	9,225		3.3
Restricted stock	9,979		1.8
2018 Employee Stock Purchase Plan ("2018 ESPP")	3,570		0.7

Restricted Stock, RSUs and PSUs

A summary of our restricted stock, RSU and PSU activity is presented below:


	Restricted Stock			RSUs			PSUs
(in thousands, except for per share data)	Number of Shares	Weighted Average Grant Date Fair Value		Number of Shares	Weighted Average Grant Date Fair Value		Number of Shares	Weighted Average Grant Date Fair Value
Unvested balance at December 31, 2023	311	$	45.67	7,343	$	43.80	258	$	43.90
Granted	—	—		3,595	46.61		170	47.20
Performance adjustment(1)	—	—		—	—		(10)	43.24
Vested	(62)	45.67		(1,936)	42.80		(69)	43.79
Forfeited	—	—		(536)	44.70		—	—
Unvested balance at June 30, 2024	249	45.67		8,466	45.15		349	45.54

_______________

(1) Represents adjustments due to the achievement of predefined financial performance targets.

Stock Options

A summary of our stock option activity is presented below:


(in thousands, except for exercise prices and years)	Number of Shares	Weighted Average Exercise Price		Weighted-Average Remaining Contractual Term (in years)	Aggregate Intrinsic Value
Outstanding at December 31, 2023	5,095	$	8.95	3.5	$	189,108

Exercised	(647)	6.39			26,036
Forfeited/canceled	—	—			—
Outstanding and exercisable at June 30, 2024	4,448	9.32		3.1	152,410

2018 Employee Stock Purchase Plan

Under the evergreen provision in our 2018 ESPP, in January 2024 we reserved an additional 1.8 million shares of our common stock. At June 30, 2024, there were 10.1 million shares reserved for issuance under our 2018 ESPP.

In the six months ended June 30, 2024, employees purchased 304,579 shares of our common stock at a weighted average price of $32.43 per share, resulting in $9.9 million of cash proceeds. At June 30, 2024, there was $5.3 million of employee contributions to the 2018 ESPP included in accrued compensation.

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The fair value of the 2018 ESPP purchase rights was estimated on the offering or modification dates using a Black-Scholes option-pricing model and the following assumptions:


	Six Months Ended June 30,
	2024	2023
Expected term (in years)	0.5 — 2.0	0.5 — 2.0
Expected volatility	41.1% — 51.4%	51.0% — 58.1%
Risk-free interest rate	4.4% — 5.1%	4.8% — 5.0%
Expected dividend yield	—	—

11. Income Taxes

In the six months ended June 30, 2024, the provision for income taxes included $2.1 million of income taxes in foreign jurisdictions in which we conduct business, $1.7 million of Base Erosion and Anti-Abuse Tax and $1.6 million of discrete items primarily related to withholding taxes on sales to customers.

In the six months ended June 30, 2023, the provision for income taxes included $4.1 million of income taxes in foreign jurisdictions in which we conduct business and $2.2 million of discrete items primarily related to withholding taxes on sales to customers.

12. Net Loss Per Share

The following table sets forth the computation of basic and diluted net loss per share:


	Three Months Ended June 30,				Six Months Ended June 30,
(in thousands, except per share data)	2024		2023		2024		2023
Net loss	$	(14,572)	$	(15,974)	$	(28,958)	$	(41,071)

Weighted-average shares used to compute net loss per share, basic and diluted	118,681		115,131		118,111		114,465
Net loss per share, basic and diluted	$	(0.12)	$	(0.14)	$	(0.25)	$	(0.36)

The following potentially dilutive securities have been excluded from the diluted per share calculations because they would have been antidilutive:


	June 30,
(in thousands)	2024	2023
RSUs	8,466	7,963
Stock options	4,448	5,319
Shares to be issued under the 2018 ESPP	155	210

PSUs	179	143
Restricted stock	249	—
Total	13,497	13,635

13. Geographic Information

We operate as one operating segment. Our Chief Executive Officer, who is our chief operating decision maker, reviews financial information on a consolidated basis for purposes of making operating decisions, allocating resources and evaluating financial performance.

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Revenue by region, based on the address of the end user as specified in our subscription, license or service agreements, was as follows:


	Three Months Ended June 30,				Six Months Ended June 30,
(in thousands)	2024		2023		2024		2023
The Americas	$	136,754	$	122,210	$	271,237	$	241,494
Europe, Middle East and Africa	59,320		50,781		116,358		99,040
Asia Pacific	25,167		22,045		49,607		43,341
Revenue	$	221,241	$	195,036	$	437,202	$	383,875

Customers located in the United States accounted for 54% of revenue in the three and six months ended June 30, 2024 and 55% of revenue in the three and six months ended June 30, 2023. No other country accounted for 10% or more of revenue in the periods presented.

Our property and equipment, net by geographic area is summarized as follows:


(in thousands)	June 30, 2024		December 31, 2023
United States	$	36,683	$	39,497
International	4,765		5,939
Property and equipment, net	$	41,448	$	45,436

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Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with (1) our consolidated financial statements and related notes included elsewhere in this Quarterly Report on Form 10-Q, or this Form 10-Q, and (2) our consolidated financial statements, related notes and management's discussion and analysis of financial condition and results of operations in our Annual Report on Form 10-K for the year ended December 31, 2023, or the 10-K, filed with the Securities and Exchange Commission on February 28, 2024. This Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, or the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act. These statements are often identified by the use of words such as “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “project,” “will,” “would” or the negative or plural of these words or similar expressions or variations. Such forward-looking statements are subject to a number of risks, uncertainties, assumptions and other factors that could cause actual results and the timing of certain events to differ materially from future results expressed or implied by the forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those identified herein, and those discussed in the section titled “Risk Factors,” set forth in Part I, Item IA of the 10-K, in Part II, Item 1A of this Form 10-Q and in our other filings with the SEC. You should not rely upon forward-looking statements as predictions of future events. Furthermore, such forward-looking statements speak only as of the date of this report. Except as required by law, we undertake no obligation to update any forward-looking statements to reflect events or circumstances after the date of such statements.

Overview

We are a leading provider of exposure management solutions. Exposure management is an effective discipline for measuring, comparing and reducing cybersecurity risk in today's complex IT environments.

Our Tenable One Exposure Management Platform, or Tenable One, unifies a variety of data sources into a single exposure view to help organizations gain visibility, prioritize efforts and communicate cyber risks. Building on our existing products, Tenable One is designed to take advantage of the integrations that already exist with our partners and form the foundation of an exposure management program, alongside the other tools, such as endpoint detection and response and firewalls, and required business processes.

With Tenable One, organizations can translate technical data about assets, vulnerabilities and threats into clear business insights and actionable intelligence for security executives and practitioners. The platform combines broad, industry-leading vulnerability coverage, spanning IT assets, cloud resources, containers, web apps and identity systems. Tenable One builds on the speed and breadth of vulnerability coverage from Tenable Research and adds aggregated exposure view analytics, guidance on mitigating attack pathways and a centralized asset inventory.

Tenable One incorporates Tenable Vulnerability Management, Tenable Web App Scanning, Tenable Lumin, Tenable Cloud Security, Tenable Identity Exposure, Tenable Attack Surface Management, Tenable Security Center and Tenable OT Security. All of these products are also offered as standalone solutions, alongside Nessus.

Our platform offerings are primarily sold on a subscription basis with a one-year term. Our subscription terms are generally not longer than three years. These offerings are typically prepaid in advance. To a lesser extent, we recognize revenue ratably for perpetual licenses and the related ongoing maintenance.

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Financial Highlights

Below are our key financial results:


	Three Months Ended June 30,				Six Months Ended June 30,
(in thousands, except per share data)	2024		2023		2024		2023
Revenue	$	221,241	$	195,036	$	437,202	$	383,875
Loss from operations	(8,818)		(10,745)		(17,748)		(29,901)
Net loss	(14,572)		(15,974)		(28,958)		(41,071)
Net loss per share, basic and diluted	(0.12)		(0.14)		(0.25)		(0.36)
Net cash provided by operating activities	31,424		30,193		81,750		68,939
Purchases of property and equipment	(526)		(711)		(1,191)		(1,098)
Capitalized software development costs	(2,235)		(1,790)		(4,767)		(2,813)

Recurring revenue, which includes revenue from subscription arrangements for software (both recognized ratably over the subscription term and upon delivery) and cloud-based solutions and maintenance associated with perpetual licenses, represented 96% of revenue in the three and six months ended June 30, 2024 and 95% of revenue in the three and six months ended June 30, 2023.

Key Operating and Financial Metrics

To supplement our consolidated financial statements, which are prepared and presented in accordance with GAAP, we use and monitor the following operating and financial metrics, which include non-GAAP financial measures, to understand and evaluate our core operating and financial performance.

Calculated Current Billings

We use the non-GAAP measure of calculated current billings, which we believe is a key metric to measure our periodic performance. Given that most of our customers pay in advance, we typically recognize a majority of the related revenue ratably over time. We use calculated current billings to measure and monitor our ability to provide our business with the working capital generated by upfront payments from our customers.

Calculated current billings consists of revenue recognized in a period plus the change in current deferred revenue in the corresponding period. We believe that calculated current billings, which excludes deferred revenue for periods beyond twelve months in a customer’s contractual term, more closely correlates with annual contract value. Variability in total billings, depending on the timing of large multi-year contracts and the preference for annual billing versus multi-year upfront billing, may distort growth in one period over another.

Calculated current billings may vary from period-to-period for a number of reasons, and therefore has a number of limitations as a quarter-to-quarter or year-over-year comparative measure. Calculated current billings in any one period may be impacted by the timing and amount of new sales transactions, the timing and amount of renewal transactions, including early renewals, the mix of the amount of subscriptions and perpetual licenses, and the timing of billing professional services, as well as the timing and amount of multi-year prepaid contracts, all of which could favorably or unfavorably impact quarter-to-quarter and year-over-year comparisons. For example, an increasing number of large sales transactions, for which the timing has and will continue to vary, may occur in quarters subsequent to or in advance of those that we anticipate. Additionally, our calculation of calculated current billings may be different from other companies that report similar financial measures. Because of these and other limitations, you should consider calculated current billings along with revenue and our other GAAP financial results.

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The following table presents a reconciliation of revenue, the most directly comparable financial measure calculated in accordance with GAAP, to calculated current billings:


	Three Months Ended June 30,				Six Months Ended June 30,
(in thousands)	2024		2023		2024		2023
Revenue	$	221,241	$	195,036	$	437,202	$	383,875
Deferred revenue (current), end of period	562,587		495,199		562,587		495,199
Deferred revenue (current), beginning of period(1)	(562,683)		(490,076)		(580,887)		(502,115)
Calculated current billings	$	221,145	$	200,159	$	418,902	$	376,959

_______________

(1) Deferred revenue (current), beginning of period for the three and six months ended June 30, 2024 includes $0.1 million related to acquired deferred revenue.

Free Cash Flow

We use the non-GAAP measure of free cash flow, which we define as GAAP net cash flows from operating activities reduced by purchases of property and equipment and capitalized software development costs. We believe free cash flow is an important liquidity measure of the cash (if any) that is available, after purchases of property and equipment and capitalized software development costs, for investment in our business and to make acquisitions. We believe that free cash flow is useful as a liquidity measure because it measures our ability to generate or use cash.

Our use of free cash flow has limitations as an analytical tool and you should not consider it in isolation or as a substitute for an analysis of our results under GAAP. First, free cash flow is not a substitute for net cash flows from operating activities. Second, other companies may calculate free cash flow or similarly titled non-GAAP financial measures differently or may use other measures to evaluate their performance, all of which could reduce the usefulness of free cash flow as a tool for comparison. Additionally, the utility of free cash flow is further limited as it does not reflect our future contractual commitments and does not represent the total increase or decrease in our cash balance for a given period. Because of these and other limitations, you should consider free cash flow along with net cash provided by operating activities and our other GAAP financial measures.

The following table presents a reconciliation of net cash provided by operating activities, the most directly comparable financial measure calculated in accordance with GAAP, to free cash flow:


	Three Months Ended June 30,				Six Months Ended June 30,
(in thousands)	2024		2023		2024		2023
Net cash provided by operating activities	$	31,424	$	30,193	$	81,750	$	68,939
Purchases of property and equipment	(526)		(711)		(1,191)		(1,098)
Capitalized software development costs	(2,235)		(1,790)		(4,767)		(2,813)
Free cash flow(1)	$	28,663	$	27,692	$	75,792	$	65,028

_______________

(1) Free cash flow for the periods presented was impacted by:


	Three Months Ended June 30,				Six Months Ended June 30,
(in thousands)	2024		2023		2024		2023
Cash paid for interest and other financing costs	$	(7,839)	$	(12,123)	$	(15,450)	$	(18,943)
Employee stock purchase plan activity	3,702		4,419		(2,630)		(271)
Acquisition-related expenses	(197)		(21)		(663)		(259)
Restructuring	(1,597)		—		(5,419)		—

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Customer Metrics

We believe that our customer base provides a significant opportunity to expand sales of our enterprise platform offerings. We define an enterprise platform customer as a customer that has licensed Tenable One, Tenable Vulnerability Management, Tenable Cloud Security, Tenable Identity Exposure, Tenable OT Security or Tenable Security Center for an annual amount of $5,000 or greater. New enterprise platform customers represent new customer logos during the periods presented and do not include customer conversions from Tenable Nessus Expert to enterprise platforms. The following tables summarize key components of our customer base:


	Three Months Ended June 30,
	2024	2023	Change (%)
Number of new enterprise platform customers added in period	408	426	(4)%


	June 30,
	2024	2023	Change (%)
Number of customers with $100,000 and greater in annual contract value at end of period	1,793	1,507	19%

Dollar-Based Net Expansion Rate

Our dollar-based net expansion rate reflects both our customer retention and ability to drive additional sales to our existing customers. Our dollar-based net expansion rate has historically fluctuated and is expected to continue to fluctuate on a quarterly basis as a result of a number of factors, including existing customers' satisfaction with our solutions, existing customer retention, the pricing of our solutions, the availability of competing solutions and the pricing thereof, and the timing of customer renewals. In addition, our sales pipeline opportunities vary from quarter to quarter between new customers and expansion from existing customers, and we do not prioritize one over the other to maximize the dollar-based net expansion rate.

Our dollar-based net expansion rate is evaluated on a last twelve months, or LTM, basis, and is calculated as follows:

•Denominator: To calculate our dollar-based net expansion rate as of the end of a reporting period, we first determine the annual recurring revenue, or ARR, from all active subscriptions (both revenue recognized ratably over the subscription term and upon delivery) and maintenance from perpetual licenses as of the last day of the same reporting period in the prior year. This represents recurring payments that we expect to receive in the next 12-month period from the cohort of customers that existed on the last day of the same reporting period in the prior year.

•Numerator: We measure the ARR for that same cohort of customers representing all subscriptions and maintenance from perpetual licenses based on customer orders as of the end of the reporting period.

We calculate dollar-based net expansion rate by dividing the numerator by the denominator.

The following table presents our dollar-based net expansion rate:


	June 30,
	2024		2023
Dollar-based net expansion rate	109	%	111	%

Non-GAAP Income from Operations and Non-GAAP Operating Margin

We use non-GAAP income from operations along with non-GAAP operating margin as key indicators of our financial performance. We define these non-GAAP financial measures as their respective GAAP measures, excluding the effects of stock-based compensation, acquisition-related expenses, restructuring expenses, costs related to the intra-entity asset transfers resulting from the internal restructuring of legal entities and amortization of acquired intangible assets.

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Acquisition-related expenses include transaction and integration expenses, as well as costs related to the intercompany transfer of acquired intellectual property. Restructuring expenses include non-ordinary course severance, employee related benefits and other charges.

We believe that these non-GAAP financial measures provide useful information about our core operating results over multiple periods. There are a number of limitations related to the use of the non-GAAP financial measures as compared to GAAP loss from operations and operating margin, including that non-GAAP income from operations and non-GAAP operating margin exclude stock-based compensation expense, which has been, and will continue to be, a significant recurring expense in our business and an important part of our compensation strategy.

The following table presents a reconciliation of loss from operations, the most directly comparable financial measure calculated in accordance with GAAP, to non-GAAP income from operations, and operating margin, the most directly comparable financial measure calculated in accordance with GAAP, to non-GAAP operating margin:


	Three Months Ended June 30,						Six Months Ended June 30,
(dollars in thousands)	2024			2023			2024			2023
Loss from operations	$	(8,818)		$	(10,745)		$	(17,748)		$	(29,901)
Stock-based compensation	41,398			37,860			81,117			71,977
Acquisition-related expenses	763			30			924			130
Restructuring	4,681			—			6,070			—

Amortization of acquired intangible assets	4,760			3,073			9,429			6,153
Non-GAAP income from operations	$	42,784		$	30,218		$	79,792		$	48,359

Operating margin	(4)		%	(6)		%	(4)		%	(8)		%
Non-GAAP operating margin	19		%	15		%	18		%	13		%

Non-GAAP Net Income and Non-GAAP Earnings Per Share

We use non-GAAP net income, which excludes stock-based compensation, acquisition-related expenses, restructuring expenses and amortization of acquired intangible assets, as well as the related tax impacts, and the tax impact and related costs of intra-entity asset transfers resulting from the internal restructuring of legal entities as well as deferred income tax benefits recognized in connection with acquisitions, to calculate non-GAAP earnings per share. We believe that these non-GAAP measures provide important information because they facilitate comparisons of our core operating results over multiple periods.

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The following table presents a reconciliation of net loss and net loss per share, the most comparable financial measures calculated in accordance with GAAP, to non-GAAP net income and non-GAAP earnings per share:


	Three Months Ended June 30,				Six Months Ended June 30,
(in thousands, except for per share amounts)	2024		2023		2024		2023
Net loss	$	(14,572)	$	(15,974)	$	(28,958)	$	(41,071)
Stock-based compensation	41,398		37,860		81,117		71,977
Tax impact of stock-based compensation(1)	1,175		1,336		98		2,253
Acquisition-related expenses(2)	763		30		924		130
Restructuring(2)	4,681		—		6,070		—

Amortization of acquired intangible assets(3)	4,760		3,073		9,429		6,153
Tax impact of acquisitions	(43)		(59)		(78)		(113)

Non-GAAP net income	$	38,162	$	26,266	$	68,602	$	39,329

Net loss per share, diluted	$	(0.12)	$	(0.14)	$	(0.25)	$	(0.36)
Stock-based compensation	0.35		0.33		0.69		0.63
Tax impact of stock-based compensation(1)	0.01		0.01		—		0.02
Acquisition-related expenses(2)	—		—		0.01		—
Restructuring(2)	0.04		—		0.05		—

Amortization of acquired intangible assets(3)	0.04		0.03		0.08		0.05
Tax impact of acquisitions	—		—		—		—

Adjustment to diluted earnings per share(4)	(0.01)		(0.01)		(0.02)		(0.01)
Non-GAAP earnings per share, diluted	$	0.31	$	0.22	$	0.56	$	0.33

Weighted-average shares used to compute GAAP net loss per share, diluted	118,681		115,131		118,111		114,465

Weighted-average shares used to compute non-GAAP earnings per share, diluted	123,056		120,057		123,161		119,665

________________

(1) The tax impact of stock-based compensation is based on the tax treatment for the applicable tax jurisdictions.

(2) The tax impact of acquisition-related expenses and restructuring are not material.

(3) The tax impact of the amortization of acquired intangible assets is included in the tax impact of acquisitions.

(4) An adjustment to reconcile GAAP net loss per share, which excludes potentially dilutive shares, to non-GAAP earnings per share, which includes potentially dilutive shares.

Components of Our Results of Operations

Revenue

We generate revenue from subscription arrangements for our software and cloud-based solutions, perpetual licenses, maintenance associated with perpetual licenses and professional services.

Our subscription arrangements generally have annual or multi-year contractual terms to use our software or cloud-based solutions, including ongoing software updates during the contractual period. For software subscriptions that are dependent on ongoing software updates and the ability to identify the latest cybersecurity vulnerabilities, revenue is recognized ratably over the subscription term given the critical utility provided by the ongoing updates that are released through the contract period. When the critical utility of our software does not depend on ongoing updates, we recognize revenue attributable to the license at the time of delivery and the revenue attributable to the maintenance and support ratably over the contract period.

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Our perpetual licenses are generally sold with one or more years of maintenance, which includes ongoing software updates. Given the critical utility provided by the ongoing software updates and updated ability to identify network vulnerabilities included in maintenance, we combine the perpetual license and the maintenance into a single performance obligation. Perpetual license arrangements generally contain a material right related to the customer’s ability to renew maintenance at a price that is less than the initial license fee. We apply a practical alternative to allocating a portion of the transaction price to the material right performance obligation and estimate a hypothetical transaction price which includes fees for expected maintenance renewals based on the estimated economic life of perpetual license contracts. We allocate the transaction price between the cybersecurity subscription provided in the initial contract and the material right related to expected contract renewals based on the hypothetical transaction price. We recognize the amount allocated to the combined license and maintenance performance obligation over the initial contractual period, which is generally one year. We recognize the amount allocated to the material right over the expected maintenance renewal period, which begins at the end of the initial contractual term and is generally four years. We have estimated the five-year economic life of perpetual license contracts based on historical contract attrition, expected renewal periods, the lifecycle of our technology and other factors. This estimate may change over time.

Professional services and other revenue is primarily comprised of advisory services and training related to the deployment and optimization of our products. These services do not result in significant customization of our products. Professional services and other revenue is recognized as the services are performed.

We have historically experienced, and expect in the future to experience, seasonality in entering into agreements with customers. We typically enter into a significantly higher percentage of agreements with new customers, as well as renewal agreements with existing customers, in the third and fourth quarters of the year. The increase in customer agreements in the third quarter is primarily attributable to U.S. government and related agencies, and the increase in the fourth quarter is primarily attributable to large enterprise account buying patterns typical in the software industry. The ratable nature of our subscription revenue makes this seasonality less apparent in our overall financial results. We expect longer purchasing and approval phases of our sales cycle to continue throughout 2024.

Cost of Revenue, Gross Profit and Gross Margin

Cost of revenue includes personnel costs related to our technical support group that provides assistance to customers, including salaries, benefits, bonuses, payroll taxes, stock-based compensation and any ordinary course severance. Cost of revenue also includes cloud infrastructure costs, the costs related to professional services and training, depreciation, amortization of acquired and developed technology, hardware costs and allocated overhead costs, which consist of information technology, facilities and insurance.

We intend to continue to invest additional resources in our cloud-based platform and customer support team as we grow our business. The level and timing of investment in these areas could affect our cost of revenue in the future.

Gross profit, or revenue less cost of revenue, and gross margin, or gross profit as a percentage of revenue, have been and will continue to be affected by various factors, including the timing of our acquisition of new customers and our renewals of and follow-on sales to existing customers, the costs associated with operating our cloud-based platform, the extent to which we expand our customer support team and the extent to which we can increase the efficiency of our technology and infrastructure through technological improvements.

We expect our gross profit to increase in absolute dollars but our gross margin may fluctuate from period to period depending on the interplay of all of these factors, particularly as it relates to cloud infrastructure costs, as we expect revenue from our cloud-based subscriptions to increase as a percentage of revenue.

Operating Expenses

Our operating expenses consist of sales and marketing, research and development, general and administrative and restructuring expenses. Personnel costs are the most significant component of operating expenses and consist of

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salaries, benefits, bonuses, payroll taxes, stock-based compensation and ordinary course severance. Operating expenses also include depreciation and amortization as well as allocated overhead costs, including IT and facilities costs.

Sales and Marketing

Sales and marketing expense consists of personnel costs, sales commissions, marketing programs, travel and entertainment, expenses for conferences, meetings and events and allocated overhead costs. We capitalize sales commissions, including related fringe benefit costs, and recognize the expense over an estimated period of benefit, which ranges between three and four years for subscription arrangements and five years for perpetual license arrangements. Sales commissions on contract renewals are capitalized and amortized ratably over the contract term, with the exception of contracts with renewal periods that are one year or less, in which case the incremental costs are expensed as incurred. Sales commissions on professional services arrangements are expensed as incurred as the contractual periods of these arrangements are generally less than one year.

We intend to continue to make investments in our sales and marketing teams to increase revenue, further penetrate the market and expand our global customer base. We expect our sales and marketing expense to increase in absolute dollars annually and to be our largest operating expense category for the foreseeable future. However, as our revenue increases, we expect our sales and marketing expense to decrease as a percentage of our revenue over the long term. Our sales and marketing expense may fluctuate from period to period due to the timing and extent of these expenses, including sales commissions, which may fluctuate depending on the mix of sales and related expense recognition.

Research and Development

Research and development expense consists of personnel costs, software used to develop our products, travel and entertainment, consulting and professional fees for third-party development resources as well as allocated overhead. Our research and development expense supports our efforts to continue to add capabilities to our existing products and enable the continued detection of new network vulnerabilities.

We expect our research and development expense to continue to increase annually in absolute dollars for the foreseeable future as we continue to invest in research and development efforts to enhance the functionality of our cloud-based platform. However, we expect our research and development expense to decrease as a percentage of our revenue over the long term, although our research and development expense may fluctuate from period to period due to the timing and extent of these expenses.

General and Administrative

General and administrative expense consists of personnel costs for our executive, finance, legal, human resources and administrative departments. Additional expenses include travel and entertainment, professional fees, insurance, allocated overhead and acquisition-related expenses.

We expect our general and administrative expense to continue to increase in absolute dollars and decrease as a percentage of our revenue over the long term, although our general and administrative expense may fluctuate from period to period due to the timing and extent of these expenses.

Restructuring

Restructuring expenses consist of non-ordinary course severance, employee related benefits and other charges to reorganize business operations.

Interest Income, Interest Expense and Other Income (Expense), Net

Interest income consists of income earned on cash and cash equivalents and short-term investments. Interest expense consists primarily of interest expense in connection with our Term Loan, unused commitment fees on our Revolving Credit Facility, and letter of credit fees. Other income (expense), net consists primarily of foreign currency

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remeasurement and transaction gains and losses and any realized and unrealized gains and losses, including impairment losses and gains related to our non-marketable investments.

Provision for Income Taxes

Provision for income taxes consists of income taxes in all foreign jurisdictions in which we conduct business and the related withholding taxes on sales with customers. We have recorded deferred tax assets for which a full valuation allowance has been provided, including net operating loss carryforwards and tax credits. We expect to maintain this full valuation allowance for the foreseeable future as it is more likely than not that some or all of those deferred tax assets may not be realized based on our history of losses.

Results of Operations

The following tables set forth our consolidated results of operations for the periods presented:


	Three Months Ended June 30,				Six Months Ended June 30,
(in thousands)	2024		2023		2024		2023
Revenue	$	221,241	$	195,036	$	437,202	$	383,875
Cost of revenue(1)	48,798		43,514		97,730		89,020
Gross profit	172,443		151,522		339,472		294,855
Operating expenses:
Sales and marketing(1)	101,129		97,800		200,954		194,991
Research and development(1)	45,149		37,845		88,876		76,028
General and administrative(1)	30,302		26,622		61,320		53,737
Restructuring	4,681		—		6,070		—
Total operating expenses	181,261		162,267		357,220		324,756
Loss from operations	(8,818)		(10,745)		(17,748)		(29,901)
Interest income	5,974		6,566		11,598		11,661
Interest expense	(8,073)		(7,750)		(16,185)		(15,089)
Other income (expense), net	93		(944)		(1,217)		(1,491)
Loss before income taxes	(10,824)		(12,873)		(23,552)		(34,820)
Provision for income taxes	3,748		3,101		5,406		6,251
Net loss	$	(14,572)	$	(15,974)	$	(28,958)	$	(41,071)

_______________

(1) Includes stock-based compensation expense as follows:


	Three Months Ended June 30,				Six Months Ended June 30,
(in thousands)	2024		2023		2024		2023
Cost of revenue	$	3,288	$	2,906	$	6,270	$	5,531
Sales and marketing	16,276		16,423		31,576		30,817
Research and development	11,799		9,764		22,960		18,629
General and administrative	10,035		8,767		20,311		17,000
Total stock-based compensation expense	$	41,398	$	37,860	$	81,117	$	71,977

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Comparison of the Three Months Ended June 30, 2024 and 2023

Revenue

The following table presents the increase in revenue:


	Three Months Ended June 30,				Change
(dollars in thousands)	2024		2023		($)		(%)
Subscription revenue	$	202,538	$	176,767	$	25,771	15	%
Perpetual license and maintenance revenue	12,016		12,154		(138)		(1)	%
Professional services and other revenue	6,687		6,115		572		9	%
Revenue	$	221,241	$	195,036	$	26,205	13	%

The increase in revenue of $26.2 million included $27.1 million from existing customers at July 1, 2023, net of a decrease from new customers of $0.9 million. U.S. revenue increased $11.3 million, or 10%. International revenue increased $14.9 million, or 17%.

Cost of Revenue, Gross Profit and Gross Margin


	Three Months Ended June 30,						Change
(dollars in thousands)	2024			2023			($)		(%)
Cost of revenue	$	48,798		$	43,514		$	5,284	12	%
Gross profit	172,443			151,522			20,921		14	%
Gross margin	78		%	78		%

The increase in cost of revenue of $5.3 million was primarily due to:

•a $2.2 million increase in third-party cloud infrastructure costs;

•a $1.7 million increase in amortization of acquired intangibles;

•a $0.9 million increase in professional fees; and

•a $0.4 million increase in personnel costs, primarily in stock-based compensation.

Operating Expenses

Sales and Marketing


	Three Months Ended June 30,				Change
(dollars in thousands)	2024		2023		($)		(%)
Sales and marketing	$	101,129	$	97,800	$	3,329	3	%

The increase in sales and marketing expense of $3.3 million was primarily due to:

•a $3.5 million increase in expenses for demand generation programs, including advertising, sponsorships and brand awareness efforts;

•a $1.2 million increase in sales commissions;

•a $0.9 million increase in allocated overhead; and

•a $0.6 million increase in selling expenses; partially offset by

•a $2.8 million decrease in personnel costs, largely associated with a decrease in headcount.

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Research and Development


	Three Months Ended June 30,				Change
(dollars in thousands)	2024		2023		($)		(%)
Research and development	$	45,149	$	37,845	$	7,304	19	%

The increase in research and development expense of $7.3 million was primarily due to:

•a $5.1 million increase in personnel costs, including $2.0 million in stock-based compensation;

•a $0.8 million increase in third-party cloud infrastructure costs; and

•a $0.8 million increase in allocated overhead.

General and Administrative


	Three Months Ended June 30,				Change
(dollars in thousands)	2024		2023		($)		(%)
General and administrative	$	30,302	$	26,622	$	3,680	14	%

The increase in general and administrative expense of $3.7 million was primarily due to:

•a $2.3 million increase in personnel costs, including $1.3 million in stock-based compensation;

•a $0.8 million increase in professional fees;

•a $0.7 million increase in acquisition-related expenses; and

•a $0.3 million increase in software subscriptions; partially offset by

•a $0.7 million decrease in allocated overhead; and

•a $0.2 million decrease in corporate taxes.

Restructuring


	Three Months Ended June 30,				Change
(dollars in thousands)	2024		2023		($)		(%)
Restructuring	$	4,681	$	—	$	4,681	100	%

Restructuring includes a $4.5 million non-cash impairment of leasehold improvements and furniture and fixtures that was recorded in connection with the sublease of a portion of our headquarters.

Interest Income, Interest Expense and Other Income (Expense), Net


	Three Months Ended June 30,				Change
(dollars in thousands)	2024		2023		($)		(%)
Interest income	$	5,974	$	6,566	$	(592)	(9)	%
Interest expense	(8,073)		(7,750)		(323)		4	%
Other income (expense), net	93		(944)		1,037		(110)	%

The $0.6 million decrease in interest income was due to a decrease in short-term investments. The $0.3 million increase in interest expense was primarily related to an increase in the variable rate of our Term Loan. The $1.0 million

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increase in other income (expense), net was primarily due to a $1.5 million gain on conversion of our SAFE investment, partially offset by a $0.4 million increase in foreign exchange losses.

Provision for Income Taxes


	Three Months Ended June 30,				Change
(dollars in thousands)	2024		2023		($)		(%)
Provision for income taxes	$	3,748	$	3,101	$	647	21	%

In the three months ended June 30, 2024, the provision for income taxes included:

•$1.7 million of income taxes in foreign jurisdictions in which we conduct business;

•$1.2 million related to Base Erosion and Anti-Abuse Tax; and

•$0.8 million of discrete items primarily related to withholding taxes on sales to customers.

In the three months ended June 30, 2023, the provision for income taxes included:

•$2.2 million of income taxes in foreign jurisdictions in which we conduct business; and

•$0.9 million of discrete items primarily related to withholding taxes on sales to customers.

Comparison of the Six Months Ended June 30, 2024 and 2023

Revenue

The following table presents the increase in revenue:


	Six Months Ended June 30,				Change
(dollars in thousands)	2024		2023		($)		(%)
Subscription revenue	$	400,173	$	347,865	$	52,308	15	%
Perpetual license and maintenance revenue	24,172		24,335		(163)		(1)	%
Professional services and other revenue	12,857		11,675		1,182		10	%
Revenue	$	437,202	$	383,875	$	53,327	14	%

The increase in revenue of $53.3 million included $55.4 million from existing customers at July 1, 2023, net of a decrease from new customers of $2.1 million. U.S. revenue increased $23.3 million, or 11%. International revenue increased $30.0 million, or 18%.

Cost of Revenue, Gross Profit and Gross Margin


	Six Months Ended June 30,						Change
(dollars in thousands)	2024			2023			($)		(%)
Cost of revenue	$	97,730		$	89,020		$	8,710	10	%
Gross profit	339,472			294,855			44,617		15	%
Gross margin	78		%	77		%

The increase in cost of revenue of $8.7 million was primarily due to:

•a $3.3 million increase in amortization of intangible assets due to acquired intangible assets;

•a $3.1 million increase in third-party cloud infrastructure costs;

•a $1.2 million increase in professional fees;

•a $0.8 million increase in personnel costs, primarily in stock-based compensation; and

•a $0.5 million increase in allocated overhead.

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Operating Expenses

Sales and Marketing


	Six Months Ended June 30,				Change
(dollars in thousands)	2024		2023		($)		(%)
Sales and marketing	$	200,954	$	194,991	$	5,963	3	%

The increase in sales and marketing expense of $6.0 million was primarily due to:

•a $4.0 million increase in expenses for demand generation programs, including advertising, sponsorships and brand awareness efforts;

•a $2.0 million increase in allocated overhead;

•a $1.9 million increase in sales commissions; and

•a $1.0 million increase in selling expenses; partially offset by

•a $2.9 million decrease in personnel costs, largely associated with a decrease in headcount.

Research and Development


	Six Months Ended June 30,				Change
(dollars in thousands)	2024		2023		($)		(%)
Research and development	$	88,876	$	76,028	$	12,848	17	%

The increase in research and development expense of $12.8 million was primarily due to:

•a $7.6 million increase in personnel costs, including a $4.3 million increase in stock-based compensation;

•a $1.6 million increase in third-party cloud infrastructure costs;

•a $1.4 million increase in allocated overhead;

•a $0.8 million decrease in tax credits;

•a $0.4 million increase in travel and meeting costs; and

•a $0.3 million increase in software subscription costs.

General and Administrative


	Six Months Ended June 30,				Change
(dollars in thousands)	2024		2023		($)		(%)
General and administrative	$	61,320	$	53,737	$	7,583	14	%

The increase in general and administrative expense of $7.6 million was primarily due to:

•a $5.6 million increase in personnel costs including a $3.3 million increase in stock-based compensation;

•a $1.5 million increase in professional fees;

•a $0.8 increase in acquisition-related expenses; and

•a $0.5 million increase in software subscription costs; partially offset by

•a $1.0 million decrease in allocated overhead.

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Restructuring


	Six Months Ended June 30,				Change
(dollars in thousands)	2024		2023		($)		(%)
Restructuring	$	6,070	$	—	$	6,070	100	%

Restructuring includes a $4.5 million non-cash impairment of leasehold improvements and furniture and fixtures that was recorded in connection with the sublease of a portion of our headquarters and $1.6 million in non-ordinary course severance and employee related benefits.

Interest Income, Interest Expense and Other Expense, Net


	Six Months Ended June 30,				Change
(dollars in thousands)	2024		2023		($)		(%)
Interest income	$	11,598	$	11,661	$	(63)	(1)	%
Interest expense	(16,185)		(15,089)		(1,096)		7	%
Other expense, net	(1,217)		(1,491)		274		(18)	%

Interest expense increased $1.1 million due to an increase in the interest rate on our Term Loan. Other expense, net decreased $0.3 million primarily due to a $1.5 million gain on conversion of our SAFE investment, partially offset by a $1.2 million increase in foreign exchange losses.

Provision for Income Taxes


	Six Months Ended June 30,				Change
(dollars in thousands)	2024		2023		($)		(%)
Provision for income taxes	$	5,406	$	6,251	$	(845)	(14)	%

In the six months ended June 30, 2024, the provision for income taxes included:

•$2.1 million of income taxes in foreign jurisdictions in which we conduct business;

•$1.7 million related to Base Erosion and Anti-Abuse Tax; and

•$1.6 million of discrete items primarily related to withholding taxes on sales to customers.

In the six months ended June 30, 2023, the provision for income taxes included:

•$4.1 million income taxes in foreign jurisdictions in which we conduct business; and

•$2.2 million of discrete items primarily related to withholding taxes on sales to customers.

Liquidity and Capital Resources

At June 30, 2024, we had $233.5 million of cash and cash equivalents, which consisted of bank deposits and money market funds, and $253.5 million of short-term investments, which consisted of commercial paper, asset backed securities, U.S. Treasury and agency obligations and corporate and Yankee bonds.

Since our inception, we have primarily financed our operations through cash provided by operations, including payments received from customers using our software products and services. Prior to our IPO, we did not raise any primary institutional capital, and the proceeds of our Series A and Series B redeemable convertible preferred stock financings were used to repurchase shares of capital stock from former stockholders. We have generated significant operating losses as reflected by our accumulated deficit of $854.0 million at June 30, 2024.

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We typically invoice our customers annually in advance and, to a lesser extent, multi-years in advance. Therefore, a substantial source of our cash is from such prepayments, which are included in deferred revenue on our consolidated balance sheets. Deferred revenue consists primarily of the unearned portion of billed fees for our subscriptions and perpetual licenses, which is subsequently recognized as revenue in accordance with our revenue recognition policy. At June 30, 2024, we had deferred revenue of $725.8 million, of which $562.6 million was recorded as a current liability and is expected to be recognized as revenue in the next 12 months, provided all other revenue recognition criteria are met.

Our principal uses of cash in recent periods have been funding our operations, expansion of our sales and marketing and research and development activities, investments in infrastructure, acquiring complementary businesses and technology, and repurchasing shares of our common stock. In June 2024, we acquired Eureka Security, Inc., or Eureka, for approximately $29 million in cash. We may in the future enter into arrangements to acquire or invest in other complementary businesses, services and technologies, including intellectual property rights.

We expect to continue incurring operating losses in the near term. Even though we generated positive cash flows from operations and free cash flow in the six months ended June 30, 2024, we may not be able to sustain these cash flows. We believe that our existing cash and cash equivalents and short-term investments will be sufficient to fund our operating and capital needs for at least the next 12 months and for the foreseeable future. Our future capital requirements will depend on many factors, including our revenue growth rate, subscription renewal activity, the timing and extent of spending to support further infrastructure and research and development efforts, the timing and extent of additional capital expenditures to invest in new and existing office spaces, the expansion of sales and marketing and international operating activities, any acquisitions of complementary businesses and technologies, the timing of our introduction of new product capabilities and enhancements of our platform and the continuing market acceptance of our platform. It may be necessary to seek additional equity or debt financing to fund our operating and capital needs. In the event that financing is required from outside sources, we may not be able to raise it on terms acceptable to us or at all. If we are unable to raise additional capital when desired, or if we cannot expand our operations or otherwise capitalize on our business opportunities because we lack sufficient capital, our business, operating results and financial condition would be adversely affected.

Stock Repurchase Plan

In November 2023, our Board of Directors authorized the repurchase of up to $100 million of our common stock. Through June 30, 2024, we have purchased a total of 1.5 million shares for $64.9 million.

Term Loan and Revolving Credit Facility

In July 2021, we entered into a credit agreement, or the Credit Agreement, which is comprised of a $375.0 million Term Loan and a $50.0 million Revolving Credit Facility, with a $15.0 million letter of credit sublimit. The Term Loan bears interest at a rate of 2.75% per annum over SOFR, subject to a 0.50% floor, plus a credit spread adjustment depending on the interest period.

From January to June 2024, interest rates on our Term Loan have been between 8.18% and 8.22%. The Term Loan is being amortized at 1% per annum in equal quarterly installments until the final payment of $350.6 million on the July 7, 2028 maturity date. We may be subject to mandatory Term Loan prepayments related to the excess cash provisions in the Credit Agreement if our first lien net leverage ratio (as defined in the Credit Agreement) exceeds 3.5. At June 30, 2024, our first lien net leverage ratio was 1.08.

The Revolving Credit Facility bears interest at a rate, depending on first lien net leverage, ranging from 2.00% to 2.50% over SOFR and matures on July 7, 2026. We pay a commitment fee during the term ranging from 0.25% to 0.375% per annum of the average daily undrawn portion of our Revolving Credit Facility. At June 30, 2024, we were in compliance with the covenants and had $0.2 million of standby letters of credit outstanding under the Revolving Credit Facility.

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Cash Flows

The following table summarizes our cash flows for the periods presented:


	Six Months Ended June 30,
(in thousands)	2024		2023
Net cash provided by operating activities	$	81,750	$	68,939
Net cash used in investing activities	(44,485)		(2,585)
Net cash (used in) provided by financing activities	(37,853)		9,871
Effect of exchange rate changes on cash and cash equivalents and restricted cash	(3,077)		(1,032)
Net (decrease) increase in cash and cash equivalents and restricted cash	$	(3,665)	$	75,193

Operating Activities

Our largest source of cash provided by operating activities is cash collections from sales of our products and services, as we typically invoice our customers in advance. Our primary uses of cash are employee compensation costs, third-party cloud infrastructure and other software subscription costs, demand generation expenditures and general corporate costs.

Investing Activities

Net cash used in investing activities increased by $41.9 million, primarily due to a $29.2 million increase in cash paid for acquisitions, a $14.0 million net increase in purchases of short-term investments and a $2.0 million increase in capitalized software development costs, partially offset by $3.5 million in proceeds from our SAFE investments in the six months ended June 30, 2024.

Financing Activities

Net cash used in financing activities increased by $47.7 million, primarily due to the repurchase of common stock under our stock repurchase program of $50.0 million, partially offset by a $2.6 million increase in proceeds from the exercise of stock options.

Contractual Obligations

We have certain contractual obligations for future payments. Refer to Note 7 to our consolidated financial statements for our required operating lease payments and Note 9 for our required payments to Microsoft and AWS for cloud services.

At June 30, 2024, there were no other material changes in our contractual obligations and commitments from those disclosed in our 10-K.

Critical Accounting Policies and Estimates

Our financial statements are prepared in accordance with U.S. GAAP. The preparation of these financial statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue and expenses, as well as related disclosures. We evaluate our estimates and assumptions on an ongoing basis. Our estimates are based on historical experience and various other assumptions that we believe to be reasonable under the circumstances. Our actual results could differ from these estimates.

There have been no material changes to our critical accounting policies and estimates as described in our 10-K.

Item 3. Quantitative and Qualitative Disclosures about Market Risk

We are exposed to market risks in the ordinary course of our business, including interest rate, foreign currency exchange and inflation risks.

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Interest Rate Risk

At June 30, 2024, we had $233.5 million of cash and cash equivalents, which consisted of cash deposits and money market funds. We also had $253.5 million of short-term investments, which consisted of commercial paper, asset backed securities, U.S. treasury and agency securities and corporate and Yankee bonds. Our investments are carried at their fair market values with cumulative unrealized gains or losses recorded as a component of accumulated other comprehensive (loss) income within stockholders' equity. The primary objectives of our investment activities are the preservation of capital, the fulfillment of liquidity needs and the fiduciary control of cash and investments. We do not enter into investments for trading or speculative purposes. Interest-earning instruments carry a degree of interest rate risk; however, a hypothetical 10% change in interest rates during any of the periods presented would not have had a material impact on our financial statements.

In July 2021, we entered into the Credit Agreement comprised of a $375.0 million Term Loan and a $50.0 million Revolving Credit Facility. From January to June 2024, interest rates on our Term Loan have been between 8.18% and 8.22%. In July and August 2024, the Term Loan has an interest rate of 8.21%. A one percentage point increase in the rate would increase 2024 interest expense by $1.2 million.

Foreign Currency Exchange Risk

Substantially all of our sales contracts are denominated in U.S. dollars, with a limited number of contracts denominated in foreign currencies, including foreign denominated leases. A portion of our operating expenses are incurred outside the United States, denominated in foreign currencies and subject to fluctuations due to changes in foreign currency exchange rates, particularly changes in the Euro, British Pound, Australian dollar, Israeli New Shekel, Indian Rupee and Brazilian Real. Strengthening of the U.S. dollar compared to other currencies could result in lower international sales as our products would seem more expensive and could result in lower international operating costs as the U.S. dollar is the functional currency for all of our international subsidiaries. Additionally, fluctuations in foreign currency exchange rates may cause us to recognize remeasurement and transaction gains (losses) in our consolidated statements of operations. As the impact of foreign currency exchange rates has not been material to our historical operating results, we have not entered into derivative or hedging transactions, but we may do so in the future if our exposure to foreign currencies becomes more significant.

Inflation Risk

While we do not believe that inflation has had a material effect on our business, results of operations, or financial condition through June 30, 2024, our costs, specifically employee-related and third-party cloud infrastructure costs, may become subject to significant inflationary pressures, and our inability or failure to fully offset such higher costs could harm our business, results of operations, or financial condition.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

We maintain “disclosure controls and procedures,” as defined in Rule 13a-15(e) and Rule 15d-15(e) under the Exchange Act, that are designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to our management, including our principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure.

Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act ), as of the end of the period covered by this Form 10-Q. Based on such evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that at June 30, 2024, our disclosure controls and procedures were effective to provide reasonable assurance that the information required to be disclosed by us in this Form 10-Q was (a) reported

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within the time periods specified by SEC rules and regulations, and (b) communicated to our management, including our Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding any required disclosure.

Changes in Internal Control Over Financial Reporting

There were no changes in our internal control over financial reporting identified in management’s evaluation pursuant to Rules 13a-15(d) or 15d-15(d) of the Exchange Act during the period covered by this Form 10-Q that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Inherent Limitations on Effectiveness of Internal Controls

In designing and evaluating the disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable, not absolute, assurance of achieving the desired control objectives. In addition, the design of disclosure controls and procedures must reflect the fact that there are resource constraints and that management is required to apply judgment in evaluating the benefits of possible controls and procedures relative to their costs. Our management, including our Chief Executive Officer and Chief Financial Officer, believes that our disclosure controls and procedures and internal control over financial reporting are designed to provide reasonable assurance of achieving their objectives and are effective at the reasonable assurance level. However, our management does not expect that our disclosure controls and procedures or our internal control over financial reporting will prevent all errors and all fraud.

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PART II. OTHER INFORMATION

Item 1. Legal Proceedings

From time to time, we may be subject to legal proceedings and claims in the ordinary course of business. We are not presently a party to any legal proceedings that, if determined adversely to us, would individually or taken together have a material adverse effect on our business, results of operations, financial condition or cash flows. We have received, and may in the future continue to receive, claims from third parties asserting, among other things, infringement of their intellectual property rights. Future litigation may be necessary to defend ourselves, our partners and our customers by determining the scope, enforceability and validity of third-party proprietary rights, or to establish our proprietary rights. The results of any current or future litigation cannot be predicted with certainty, and regardless of the outcome, litigation can have an adverse impact on us because of defense and settlement costs, diversion of management resources and other factors.

Item 1A. Risk Factors

Except for the risk factors disclosed below, there have been no material changes to the risk factors disclosed in Part 1, Item 1A. "Risk Factors" of our Form 10-K for the year ended December 31, 2023 filed with the United States Securities and Exchange Commission ("SEC") on February 28, 2024. Our business is subject to risks and events that, if they occur, could adversely affect our financial condition and results of operations and trading price of our securities. In addition to the other information set forth in this Form 10-Q, you should carefully consider the factors described in Part I, Item 1A. “Risk Factors” of our Form 10-K for the year ended December 31, 2023. We may disclose additional changes to risk factors or disclose additional factors from time to time in our future filings with the SEC. Additional risks and uncertainties not presently known to us or that we currently deem immaterial also may impair our business operations.

Our brand, reputation and ability to attract, retain and serve our customers are dependent in part upon the reliability and accuracy of our data, solutions, infrastructure and those of third parties upon which we rely. If our information technology systems or data, or those of third parties upon which we rely, are or were compromised or disrupted, or if our solutions fail to detect vulnerabilities or incorrectly detect vulnerabilities, or if they contain undetected errors or defects, we could experience adverse consequences.

In the ordinary course of our business, we collect, store, use, transmit, disclose or otherwise process proprietary, confidential, and sensitive information, including personal data, intellectual property, and trade secrets.

We sell cybersecurity products and, as a result, may be at increased risk of being a target of cyberattacks designed to penetrate our platform or internal systems, to compromise our data, alter or modify our source code, or to otherwise impede the performance of our products. Threats to information systems and data come from a variety of sources. In addition to computer “hackers,” threat actors, personnel (such as through theft or misuse), "hacktivists," organized criminal threat actors, sophisticated nation-states and nation-state-supported actors now engage and are expected to continue to engage in cyber-attacks. Nation-state actors and nation-state-supported actors may engage in such attacks for geopolitical reasons and in conjunction with military conflicts and defense activities, including the ongoing conflict between Ukraine and Russia, the ongoing conflict in the Middle East, and rising tensions between China and Taiwan. During times of war and other major conflicts, we, third parties upon which we may rely, and our customers may be vulnerable to a heightened risk of these threats, including retaliatory cyber-attacks that could materially disrupt our systems and operations, supply chain, and ability to produce, sell and distribute our goods and services. We, our customers, and the third parties upon which we rely are subject to a variety of evolving threats, which are prevalent, continue to rise, and increasingly difficult to detect. These threats include but are not limited to: social-engineering attacks (including through deep fakes, which may be increasingly more difficult to identify as fake, and phishing attacks); credential harvesting; malicious code (such as viruses and worms); malware (including as a result of advanced persistent threat intrusions); denial-of-service attacks, credential stuffing; personnel misconduct or error; ransomware attacks; supply-chain attacks; software bugs; server malfunctions; software or hardware failures; loss of data or other information technology assets; adware; telecommunications failures; attacks enhanced or facilitated by artificial intelligence and other similar threats. In particular, ransomware attacks, including those from organized criminal threat actors, nation-states and nation-state supported actors, are becoming increasingly prevalent and severe and can lead to significant interruptions, delays, or outages in our operations, loss of data, loss of income, significant extra expenses to restore data or systems, reputational

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loss and the diversion of funds. To alleviate the financial, operational and reputational impact of a ransomware attack, it may be necessary to make extortion payments, but we may be unable to do so if, for example, applicable laws prohibit such payments.

Additionally, we are incorporated into the supply chain of a large number of companies worldwide and, as a result, if our solutions are compromised, a significant number or, in some instances, all of our customers and their data could be simultaneously affected. The potential liability and associated consequences we could suffer as a result of such a large-scale event could be catastrophic and result in irreparable harm.

The increased prevalence of remote work and use of remote devices has increased risks to our information technology systems and data, as more of our employees utilize network connections, computers and devices outside of our premises or network, including working at home, while in transit and in public locations. Furthermore, future or past business transactions, such as acquisitions or integrations, could expose us to additional cybersecurity risks and vulnerabilities, as our systems could be negatively affected by vulnerabilities present in acquired or integrated entities' systems and technologies. Furthermore, we may discover security issues that were not identified during due diligence of such acquired or integrated entities, and it may be difficult to integrate other companies into our information technology environment and security program.

We rely on third-party service providers and technologies to operate critical business systems, including processing confidential and sensitive information, including, without limitation, cloud-based infrastructure, data center facilities, encryption and authentication technology, employee email and other functions. We also rely on third-party service providers to provide other products, services, or otherwise, to operate our business and elements of our infrastructure, including endpoints. Our ability to monitor these third parties' information security practices is limited, and these third parties may not have adequate information security measures in place. Additionally, software errors or vulnerabilities in these third-party technologies could result in significant disruptions to our information technology systems, leading to downtime, data loss, or compromised data integrity.

If our third-party service providers experience a security incident or other interruption or cause an extended outage or disruption to our systems, we could experience adverse consequences. It is possible that our customers and potential customers would hold us accountable for any security incident affecting our third-party service providers’ infrastructure or other interruption caused by our third-party service providers that impacts our infrastructure. We may incur significant liability from those customers and from other third parties with respect to any such incident. Because our agreements with certain third-party service providers, such as Amazon Web Services, or AWS, limit their liability for damages, we may not be able to recover a material portion of our liabilities to our customers and third parties arising from issues with such third-party service providers, such as AWS, in the event of an incident affecting the third parties’ systems. Moreover, while we may be entitled to damages from other third-party service providers if they fail to satisfy their privacy or security-related obligations to us or if they cause a disruption in our infrastructure, any award may be insufficient to cover our damages, or we may be unable to recover such reward. In addition, supply-chain attacks have increased in frequency and severity and there have been high-profile incidents of third-party service providers causing widespread disruptions in their customers' infrastructures due to errors in their SaaS offerings, such as the Windows outage caused by a flawed CrowdStrike software update that occurred in July of 2024. We cannot guarantee that third parties’ infrastructure in our supply chain or our third-party partners’ supply chains have not been compromised or that errors by our third-party service providers won’t cause disruptions in our infrastructure.

While we have implemented security and technology measures designed to protect against security incidents or other interruptions, there can be no assurance that these measures will be effective. We have experienced, and may in the future experience, disruptions, outages, and other performance problems due to a variety of factors, including infrastructure changes, deliberate or unintentional human or software defects and configuration errors (including by third parties), capacity constraints, fraud or security incidents. We take steps designed to detect, mitigate and remediate vulnerabilities and defects and configuration errors in our information technology systems (such as our hardware and software, including that of third parties upon which we rely) and in our software applications, products and services. We may not, however, be able to detect and remediate all such vulnerabilities, defects or configuration errors on a timely basis. For example, we have identified certain vulnerabilities in our information systems and software applications, and we take steps designed to mitigate the risks associated with known vulnerabilities. Despite our efforts, there can be no assurance that these vulnerability, defect and configuration error mitigation measures will be completely effective. Further,

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we may experience delays in developing and deploying remedial measures and patches designed to address any such identified vulnerabilities, defects or configuration errors.

Any of these or similar threats could cause a security incident or other interruption that can result in unauthorized, unlawful, or accidental acquisition, modification, destruction, loss, alteration, encryption, disclosure of, or access to our proprietary, confidential, and sensitive information or our information technology systems, or those of the third parties upon whom we rely. A security incident or other interruption could disrupt our ability (and that of third parties upon whom we rely) to provide our solutions. In some instances, we or our third-party service providers may not be able to identify the cause or cause of these security incidents or performance problems within an acceptable period of time. If our solutions are unavailable or if our customers are unable to access features of our solutions within a reasonable amount of time or at all, our business could be adversely affected. In addition, if any of the third-party providers we use were to experience or cause a significant or prolonged outage or security incident, our business could be adversely affected. We may expend significant resources or modify our business activities to try to protect against security incidents. Certain data privacy and security obligations may require us to implement and maintain specific security measures, industry-standard or reasonable security measures to protect our information technology systems and proprietary, confidential, and sensitive information, including personal data.

Data protection requirements may also require us to notify relevant stakeholders of security incidents, including affected individuals, partners, collaborators, customers, regulators, law enforcement agencies and others. Such disclosures are costly, and the disclosures or failure to comply with such requirements could lead to adverse consequences.

Additionally, even if we have issued or otherwise made patches or information for vulnerabilities in our software applications, products or services, our customers may be unwilling or unable to deploy such patches and use such information effectively and in a timely manner. Vulnerabilities could be exploited and result in a security incident.

If we, our customers, or a third party upon which we rely, experience or cause a security incident or other interruption, or are perceived to have experienced or caused a security incident or other interruption, we may experience adverse consequences, such as government enforcement actions (for example, investigations, fines, penalties, audits, and inspections); additional reporting obligations and/or oversight; restrictions on processing information (including personal data); litigation (including class claims); indemnification obligations; negative publicity; reputational harm; monetary fund diversions; interruptions of our operations (including availability of data); financial loss (including by issuing credits to our customers); diversion of management attention; and other similar harm. Security incidents or other disruptions and attendant consequences may cause customers to stop using our solutions (including by not renewing their purchases of our solutions), deter new customers from using our solutions, and negatively impact our ability to grow and operate our business.

There can be no assurance that any limitations or exclusions of liabilities in our contracts would be enforceable or adequate or would otherwise protect us from liabilities or damages if we fail to comply with data protection requirements related to information security or security incidents. We cannot be sure that our insurance coverage will be adequate or otherwise protect us from or adequately mitigate liabilities or damages with respect to claims, costs, expenses, litigation, fines, penalties, business loss, data loss, regulatory actions or other impacts arising out of security incidents.

In addition, we face unique risks as a SaaS company, particularly in light of our business model. If our solutions fail to detect vulnerabilities in our customers’ cybersecurity infrastructure, including for remote devices, or if our solutions fail to identify new and increasingly complex methods of cyberattacks, our business may suffer and our customers' businesses may be damaged, including by interrupting their networking traffic or operational technology environments. There is no guarantee that our solutions will detect all vulnerabilities or threats in our customers' systems, especially in light of the rapidly changing security landscape to which we must respond. Additionally, our solutions may falsely detect vulnerabilities or threats that do not actually exist. For example, our solutions rely on information provided by an active community of users who contribute information about new exploits, attacks and vulnerabilities. If the information from these third parties is inaccurate, the potential for false indications of vulnerabilities or threats increases. These false positives, while typical in the industry, may impair the perceived reliability of our offerings. Additionally, our business depends upon the appropriate and successful implementation of our product by our customers. If our customers fail to use our solutions according to our specifications, our customers may suffer a security incident on their own systems or other

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adverse consequences. Even if such an incident is unrelated to our security practices, it could result in our incurring significant economic and operational costs in investigating, remediating, and implementing additional measures to further protect our customers from their own vulnerabilities.

The reliability and continuous availability of our solutions is critical to our success. We have experienced errors or defects in the past in connection with the release of new solutions and product upgrades, and we expect that these errors or defects will be found from time to time in the future in new or enhanced solutions after commercial release. In addition, we use third parties to assist in the development of our products and these third parties could be a source of errors or defects. Some defects may cause our solutions to be vulnerable to attacks, cause them to fail to detect vulnerabilities, or temporarily interrupt customers’ networking traffic or operational technology environments, any of which may damage our customers’ business and could hurt our reputation.

As a result of any of the risks associated with our SaaS business, we may experience adverse consequences. We may also be subject to liability claims for damages related to errors or defects in our solutions.

We have incorporated and may in the future further incorporate generative and other types of artificial intelligence, or AI, processes, algorithms, and technologies into certain of our products and services. This technology is new and developing, and may generate output that is inaccurate or flawed or may not achieve market acceptance, which could result in operational, financial, regulatory, and reputational harm and other adverse consequences to our business.

We have incorporated and may in the future further incorporate AI features in certain of our products and services, including ExposureAI and Tenable AI Assistant. The use of generative AI processes at scale is relatively new, and may lead to challenges, concerns and risks that are significant or that we may not be able to predict, especially if our use of these technologies in our products and services becomes more important to our operations over time. The technologies underpinning these features are in the early stages of commercial use and exist in an emerging regulatory environment, which presents regulatory, litigation, ethical, reputational, operational and financial risks. AI in our products and services may be difficult to deploy successfully due to operational issues inherent to the nature of such technologies, including the development, maintenance and operation of deep learning datasets. Additionally, if we do not have adequate rights to utilize the data or other materials and content that our AI technologies depend on, we may face legal consequences for violating applicable laws, third-party intellectual property, privacy or other rights, or contracts to which we are a party.

Uncertainty in the legal regulatory regime relating to AI and emerging ethical issues surrounding the use of AI may require significant resources to modify and maintain business practices to comply with U.S. and non-U.S. laws, the nature of which cannot be determined at this time. Existing laws and regulations may apply to us or our suppliers, vendors, partners and customers in new ways, and new laws and regulations may be instituted. Many U.S. and international governmental bodies and regulators have proposed, or are in the process of developing, new regulations related to the use of AI and machine learning technologies. For example, the European Union authorities recently adopted a legal framework on AI regulation, the Artificial Intelligence Act (“AI Act”), which applies beyond the European Union’s borders and establishes obligations for AI providers and those deploying AI systems. Other jurisdictions may adopt similar or potentially more restrictive laws, which may render the use of such technologies challenging. The final form of these may impose obligations related to our development, offering and use of AI technologies and expose us to increased risk of regulatory enforcement and litigation.

Our AI technology features may also generate output that is misleading, insecure, inaccurate, harmful or otherwise flawed. Our customers or others may rely on or use such misleading, insecure, harmful or otherwise flawed content to their detriment, which may harm our brand, reputation, business or customers, cause competitive harm or expose us to legal liability. For example, AI algorithms use machine learning and predictive analytics which may be insufficient or of poor quality and reflect inherent biases and could lead to flawed, biased, and inaccurate results. Deficient or inaccurate recommendations, forecasts, or analyses that generative AI applications assist in producing could lead to customer rejection or skepticism of our products, affect our reputation or brand, and negatively affect our financial results. Further, unauthorized use or misuse of AI by our employees or others may result in disclosure of confidential company and customer data, reputational harm, privacy law violations and legal liability. Our use of generative AI may also lead to novel and urgent cybersecurity risks, including related to personal data, which may adversely affect our operations and reputation.

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The nature of our business requires the application of complex accounting rules and regulations and public reporting and corporate governance requirements. If there are significant changes in current principles, financial reporting standards, interpretations or public reporting and corporate governance requirements, or if our estimates or judgments relating to our critical accounting policies or reporting or governance requirements prove to be incorrect, we may experience unexpected financial reporting fluctuations or increased compliance costs and strain on our resources and our results of operations could be adversely affected.

The accounting rules and regulations that we must comply with are complex and subject to interpretation by the Financial Accounting Standards Board, the SEC, and various bodies formed to promulgate and interpret appropriate accounting principles. In addition, many companies’ accounting disclosures are being subjected to heightened scrutiny by regulators and the public. Further, the accounting rules and regulations are continually changing in ways that could impact our financial statements.

The preparation of financial statements in conformity with generally accepted accounting principles in the United States, or U.S. GAAP, requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances, as provided in the section of this report titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” Significant assumptions and estimates used in preparing our consolidated financial statements include the determination of the estimated economic life of perpetual licenses for revenue recognition, the estimated period of benefit for deferred commissions, useful lives of long-lived assets, the valuation of stock-based compensation, the incremental borrowing rate for operating leases, and the valuation of deferred tax assets. Our results of operations may be adversely affected if our assumptions change or if actual circumstances differ from those in our assumptions, which could cause our results of operations to fall below the expectations of securities analysts and investors, resulting in a decline in the trading price of our common stock.

As a public company, we are also subject to the reporting and corporate governance requirements of the Exchange Act, the listing requirements of the Nasdaq Stock Market and other applicable securities rules and regulations, including the Sarbanes-Oxley Act and the Dodd-Frank Wall Street Reform and Consumer Protection Act. Compliance with these rules and regulations increases our legal and financial compliance costs, makes some activities more difficult, time-consuming or costly and increases demand on our systems and resources.

Additionally, we regularly monitor our compliance with applicable financial reporting standards and SEC and applicable listing standard requirements and review new pronouncements, drafts and interpretations thereof that are relevant to us. We might be required to change our accounting policies, alter our operational policies and implement new or enhance existing systems, or we may be required to restate our published financial statements, as a result of new standards or requirements, changes to existing standards or requirements and changes in their interpretation. Such changes to existing standards or requirements or changes in their interpretation may have an adverse effect on our reputation, business, financial position and profit, or cause an adverse deviation from our revenue and operating profit target, which may negatively impact our financial results. Additionally, we may incur substantial professional fees and expend significant management efforts, and we may need to hire additional staff with the appropriate experience and compile systems and processes necessary to adopt these new standards and disclosure or governance requirements.

For example, a number of climate disclosure regulations have been enacted, including the Corporate Sustainability Reporting Directive, the State of California's climate disclosure legislation, and most recently the SEC's climate-related disclosure requirements. These rules may require disclosure on climate-related risks, risk management, governance and targets, and may require the company to calculate and disclose greenhouse gas emissions data and obtain assurance reports on these disclosures. Ongoing compliance with these regulations is expected to be challenging and will heighten the compliance risks identified above. Additionally, our failure or perceived failure to comply with these disclosure requirements could lead to regulatory investigations, litigation, reputational harm, and other adverse business consequences.

In addition, in July 2023, the SEC adopted rules requiring the disclosure of information about a material cybersecurity incident on Form 8-K within four business days of determining that the incident is material, unless the US Attorney General concludes that such a disclosure would pose a substantial risk to national security or public safety. These rules

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also require disclosures describing the processes used to identify, assess and manage cybersecurity risks, management's role in assessing and managing material risks from cybersecurity threats and the board of directors' role in overseeing cybersecurity risks.

Item 2. Unregistered Sales of Equity Securities and Issuer Purchases of Equity Securities

Unregistered Sales of Equity Securities

None.

Use of Proceeds

None.

Issuer Purchases of Equity Securities

A summary of stock repurchases during the three months ended June 30, 2024 is presented below:


(in thousands, except for per share data)	Shares Purchased	Average Price Paid Per Share		Total Number of Shares Purchased as Part of Publicly Announced Plan(1)	Approximate Dollar Value of Shares that May Yet Be Purchased Under Plan(1)
Shares purchased April 1, 2024 to April 30, 2024	—	$	—	—	$	60,075
Shares purchased May 1, 2024 to May 31, 2024	321	43.58		321	46,100
Shares purchased June 1, 2024 to June 30, 2024	268	41.12		268	35,075
	589	$	42.46

_______________

(1) On November 27, 2023, we announced that our Board of Directors authorized the repurchase of up to $100 million of our common stock. Repurchases under the share repurchase program may be made in the open market, in privately negotiated transactions, or in such other manner as determined by us, including through repurchase plans complying with the rules and regulations of the Securities and Exchange Commission. The authorization has no expiration date.

Items 3 and 4 are not applicable and have been omitted.

Item 5. Other Information

Rule 10b5-1 Plan Elections

Raymond Vicks, Jr., a member of our Board of Directors, entered into a prearranged stock trading plan on May 8, 2024 to sell 809 shares of our common stock in January 2025. All of the shares of common stock that may be sold are to be issued upon the vesting of restricted stock units.

This trading plan was entered into during an open insider trading window and is intended to satisfy the affirmative defense of Rule 10b5-1(c) under the Exchange Act and our policies regarding insider transactions.

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Item 6. Exhibits

The following is a list of Exhibits filed as part of this Quarterly Report on Form 10-Q:

Exhibit Number

Description

Location

3.1

Amended and Restated Certificate of Incorporation of Tenable Holdings, Inc.

Previously filed as Exhibit 3.1 to the Company's Current Report on Form 8-K (File No. 001-38600) on July 30, 2018

3.2

Second Amended and Restated Bylaws of Tenable Holdings, Inc.

Previously filed as Exhibit 3.1 to the Company's Current Report on Form 8-K (File No. 001-38600) on November 15, 2023

4.1

Common Stock Certificate of Tenable Holdings, Inc.

Previously filed as Exhibit 4.1 to the Company's Registration Statement on Form S-1 (File No. 333-226002) on July 16, 2018

10.1

Non-Employee Director Compensation Policy

Previously filed as Exhibit 10.1 to the Company's Current Report on Form 8-K (File No. 001-38600) on May 23, 2024

31.1

Certification of the Principal Executive Officer pursuant to Rules 13a-14(a) and 15d-14(a) under the Exchange Act, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

Filed herewith

31.2

Certification of the Principal Financial Officer pursuant to Rules 13a-14(a) and 15d-14(a) under the Exchange Act, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

Filed herewith

32.1*

Certification of the Principal Executive Officer and the Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

Furnished herewith

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

Cover Page Interactive Data File (formatted as Inline XBRL with applicable taxonomy extension information contained in Exhibits 101.SCH, 101.CAL, 101.DEF, 101.LAB and 101.PRE)

________________

(*) This certification is deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liability of that section, nor shall it be deemed incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended.

Table of Contents

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.



		TENABLE HOLDINGS, INC.

Date:	August 6, 2024	By:	/s/ Amit Yoran
			Amit Yoran
			Chairman and Chief Executive Officer
			(On Behalf of the Registrant and as Principal Executive Officer)

Date:	August 6, 2024	By:	/s/ Stephen A. Vintz
			Stephen A. Vintz
			Chief Financial Officer
			(Principal Financial Officer and Principal Accounting Officer)

Exhibit 31.1

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER

PURSUANT TO EXCHANGE ACT RULES 13a-14(a) AND 15d-14(a)

AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Amit Yoran, certify that:

I have reviewed this Quarterly Report on Form 10-Q of Tenable Holdings, Inc.;

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in the Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)

Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)

Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)

Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)

Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

(a)

All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

(b)

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.


Date:	August 6, 2024	By:	/s/ Amit Yoran
			Amit Yoran
			Chairman and Chief Executive Officer
			(Principal Executive Officer)

Exhibit 31.2

CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER

PURSUANT TO EXCHANGE ACT RULES 13a-14(a) AND 15d-14(a)

AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Stephen A. Vintz, certify that:

I have reviewed this Quarterly Report on Form 10-Q of Tenable Holdings, Inc.;

The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)

(b)

(c)

(d)

(a)

(b)

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.


Date:	August 6, 2024	By:	/s/ Stephen A. Vintz
			Stephen A. Vintz
			Chief Financial Officer
			(Principal Financial Officer and Principal Accounting Officer)

Exhibit 32.1

CERTIFICATIONS OF PRINCIPAL EXECUTIVE OFFICER AND PRINCIPAL FINANCIAL OFFICER

PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

Each of the undersigned hereby certifies to the best of his or her knowledge that, pursuant to the requirement set forth in Rule 13a-14(b) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that the Quarterly Report on Form 10-Q of Tenable Holdings, Inc. for the fiscal quarter ended June 30, 2024 fully complies with the requirements of Section 13(a) or 15(d) of the Exchange Act and that information contained in such Quarterly Report on Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of Tenable Holdings, Inc.


Date:	August 6, 2024	By:	/s/ Amit Yoran
			Amit Yoran
			Chairman and Chief Executive Officer
			(Principal Executive Officer)

Date:	August 6, 2024	By:	/s/ Stephen A. Vintz
			Stephen A. Vintz
			Chief Financial Officer
			(Principal Financial Officer and Principal Accounting Officer)

Cover - shares	6 Months Ended
Cover - shares	Jun. 30, 2024	Jul. 31, 2024
Cover [Abstract]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Jun. 30, 2024
Document Transition Report	false
Entity File Number	001-38600
Entity Registrant Name	TENABLE HOLDINGS, INC.
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	47-5580846
Entity Address, Address Line One	6100 Merriweather Drive
Entity Address, City or Town	Columbia
Entity Address, State or Province	MD
Entity Address, Postal Zip Code	21044
City Area Code	410
Local Phone Number	872-0555
Title of 12(b) Security	Common Stock, par value $0.01 per share
Trading Symbol	TENB
Security Exchange Name	NASDAQ
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity Emerging Growth Company	false
Entity Small Business	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		119,110,431
Entity Central Index Key	0001660280
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2024
Document Fiscal Period Focus (i.e. Q1,Q2,Q3,FY)	Q2
Amendment Flag	false

CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Jun. 30, 2024	Dec. 31, 2023
Current assets:
Cash and cash equivalents	$ 233,467	$ 237,132
Short-term investments	253,536	236,840
Accounts receivable (net of allowance for doubtful accounts of $456 and $470 at June 30, 2024 and December 31, 2023, respectively)	179,612	220,060
Deferred commissions	49,388	49,559
Prepaid expenses and other current assets	58,886	61,882
Total current assets	774,889	805,473
Property and equipment, net	41,448	45,436
Deferred commissions (net of current portion)	66,141	72,394
Operating lease right-of-use assets	33,315	34,835
Acquired intangible assets, net	104,488	107,017
Goodwill	541,292	518,539
Other assets	14,776	23,177
Total assets	1,576,349	1,606,871
Current liabilities:
Accounts payable and accrued expenses	19,543	16,941
Accrued compensation	44,119	66,492
Deferred revenue	562,587	580,779
Operating lease liabilities	6,161	5,971
Other current liabilities	5,832	5,655
Total current liabilities	638,242	675,838
Deferred revenue (net of current portion)	163,211	169,718
Term loan, net of issuance costs (net of current portion)	357,969	359,281
Operating lease liabilities (net of current portion)	45,315	48,058
Other liabilities	8,051	7,632
Total liabilities	1,212,788	1,260,527
Stockholders’ equity:
Common stock (par value: $0.01; 500,000 shares authorized; 120,461 and 117,504 shares issued at June 30, 2024 and December 31, 2023, respectively)	1,205	1,175
Additional paid-in capital	1,281,545	1,185,100
Treasury stock (at cost: 1,471 and 356 shares at June 30, 2024 and December 31, 2023, respectively)	(64,925)	(14,934)
Accumulated other comprehensive (loss) income	(271)	38
Accumulated deficit	(853,993)	(825,035)
Total stockholders’ equity	363,561	346,344
Total liabilities and stockholders’ equity	$ 1,576,349	$ 1,606,871

CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) shares in Thousands, $ in Thousands	Jun. 30, 2024	Dec. 31, 2023
Statement of Financial Position [Abstract]
Accounts receivable, allowance for doubtful accounts	$ 456	$ 470
Common stock, par value (in usd per share)	$ 0.01	$ 0.01
Common stock, shares authorized (in shares)	500,000	500,000
Common stock, shares issued (in shares)	120,461	117,504
Treasury Stock (in shares)	1,471	356

CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
Income Statement [Abstract]
Revenue	$ 221,241	$ 195,036	$ 437,202	$ 383,875
Cost of revenue	48,798	43,514	97,730	89,020
Gross profit	172,443	151,522	339,472	294,855
Operating expenses:
Sales and marketing	101,129	97,800	200,954	194,991
Research and development	45,149	37,845	88,876	76,028
General and administrative	30,302	26,622	61,320	53,737
Restructuring	4,681	0	6,070	0
Total operating expenses	181,261	162,267	357,220	324,756
Loss from operations	(8,818)	(10,745)	(17,748)	(29,901)
Interest income	5,974	6,566	11,598	11,661
Interest expense	(8,073)	(7,750)	(16,185)	(15,089)
Other income (expense), net	93	(944)	(1,217)	(1,491)
Loss before income taxes	(10,824)	(12,873)	(23,552)	(34,820)
Provision for income taxes	3,748	3,101	5,406	6,251
Net loss	$ (14,572)	$ (15,974)	$ (28,958)	$ (41,071)
Net loss per share, basic (in usd per share)	$ (0.12)	$ (0.14)	$ (0.25)	$ (0.36)
Net loss per share, diluted (in usd per share)	$ (0.12)	$ (0.14)	$ (0.25)	$ (0.36)
Weighted-average shares used to compute net loss per share, basic (in shares)	118,681	115,131	118,111	114,465
Weighted-average shares used to compute net loss per share, diluted (in shares)	118,681	115,131	118,111	114,465

CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
Statement of Comprehensive Income [Abstract]
Net loss	$ (14,572)	$ (15,974)	$ (28,958)	$ (41,071)
Other comprehensive (loss) income, net of tax:
Unrealized (losses) gains on available-for-sale securities, net	(86)	(30)	(309)	650
Other comprehensive (loss) income	(86)	(30)	(309)	650
Comprehensive loss	$ (14,658)	$ (16,004)	$ (29,267)	$ (40,421)

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) shares in Thousands, $ in Thousands	Total	Common Stock	Additional Paid-in Capital	Treasury Stock	Accumulated Other Comprehensive (Loss) Income	Accumulated Deficit
Beginning Balance (in shares) at Dec. 31, 2022		113,056
Beginning Balance at Dec. 31, 2022	$ 270,866	$ 1,131	$ 1,017,837	$ 0	$ (1,351)	$ (746,751)
Increase (Decrease) in Stockholders' Deficit [Roll Forward]
Exercise of stock options (in shares)		166
Exercise of stock options	1,537	$ 2	1,535
Vesting of restricted stock units (in shares)		1,930
Vesting of restricted stock units	0	$ 19	(19)
Vesting of performance stock units (in shares)		65
Vesting of performance stock units	0	$ 1	(1)
Issuance of common stock under employee stock purchase plan (in shares)		312
Issuance of common stock under employee stock purchase plan	9,914	$ 3	9,911
Stock-based compensation	72,665		72,665
Other comprehensive income (loss)	650				650
Net loss	(41,071)					(41,071)
Ending Balance (in shares) at Jun. 30, 2023		115,529
Ending Balance at Jun. 30, 2023	314,561	$ 1,156	1,101,928	0	(701)	(787,822)
Beginning Balance (in shares) at Mar. 31, 2023		114,743
Beginning Balance at Mar. 31, 2023	291,679	$ 1,147	1,063,051	0	(671)	(771,848)
Increase (Decrease) in Stockholders' Deficit [Roll Forward]
Exercise of stock options (in shares)		86
Exercise of stock options	595	$ 1	594
Vesting of restricted stock units (in shares)		687
Vesting of restricted stock units	0	$ 8	(8)
Vesting of performance stock units (in shares)		13
Stock-based compensation	38,291		38,291
Other comprehensive income (loss)	(30)				(30)
Net loss	(15,974)					(15,974)
Ending Balance (in shares) at Jun. 30, 2023		115,529
Ending Balance at Jun. 30, 2023	314,561	$ 1,156	1,101,928	0	(701)	(787,822)
Beginning Balance (in shares) at Dec. 31, 2023		117,504
Beginning Balance at Dec. 31, 2023	$ 346,344	$ 1,175	1,185,100	(14,934)	38	(825,035)
Increase (Decrease) in Stockholders' Deficit [Roll Forward]
Exercise of stock options (in shares)	647	647
Exercise of stock options	$ 4,135	$ 6	4,129
Vesting of restricted stock units (in shares)		1,936
Vesting of restricted stock units	0	$ 20	(20)
Vesting of performance stock units (in shares)		69
Vesting of performance stock units	0	$ 1	(1)
Issuance of common stock under employee stock purchase plan (in shares)		305
Issuance of common stock under employee stock purchase plan	9,878	$ 3	9,875
Purchase of treasury stock	(49,991)			(49,991)
Fair value of replacement equity attributable to pre-acquisition service	42		42
Stock-based compensation	82,420		82,420
Other comprehensive income (loss)	(309)				(309)
Net loss	(28,958)					(28,958)
Ending Balance (in shares) at Jun. 30, 2024		120,461
Ending Balance at Jun. 30, 2024	363,561	$ 1,205	1,281,545	(64,925)	(271)	(853,993)
Beginning Balance (in shares) at Mar. 31, 2024		119,625
Beginning Balance at Mar. 31, 2024	358,948	$ 1,196	1,237,283	(39,925)	(185)	(839,421)
Increase (Decrease) in Stockholders' Deficit [Roll Forward]
Exercise of stock options (in shares)		192
Exercise of stock options	2,261	$ 1	2,260
Vesting of restricted stock units (in shares)		623
Vesting of restricted stock units	0	$ 7	(7)
Vesting of performance stock units (in shares)		21
Vesting of performance stock units	0	$ 1	(1)
Issuance of common stock under employee stock purchase plan	(6)		(6)
Purchase of treasury stock	(25,000)			(25,000)
Fair value of replacement equity attributable to pre-acquisition service	42		42
Stock-based compensation	41,974		41,974
Other comprehensive income (loss)	(86)				(86)
Net loss	(14,572)					(14,572)
Ending Balance (in shares) at Jun. 30, 2024		120,461
Ending Balance at Jun. 30, 2024	$ 363,561	$ 1,205	$ 1,281,545	$ (64,925)	$ (271)	$ (853,993)

CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023
Cash flows from operating activities:
Net loss	$ (28,958)	$ (41,071)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization	15,864	12,624
Stock-based compensation	81,117	71,977
Net accretion of discounts and amortization of premiums on short-term investments	(4,378)	(3,595)
Amortization of debt issuance costs	662	618
Restructuring	4,528	0
Other	2,184	182
Changes in operating assets and liabilities:
Accounts receivable	40,462	33,997
Prepaid expenses and other assets	18,105	12,649
Accounts payable, accrued expenses and accrued compensation	(20,162)	(1,276)
Deferred revenue	(24,807)	(14,408)
Other current and noncurrent liabilities	(2,867)	(2,758)
Net cash provided by operating activities	81,750	68,939
Cash flows from investing activities:
Purchases of property and equipment	(1,191)	(1,098)
Capitalized software development costs	(4,767)	(2,813)
Purchases of short-term investments	(160,405)	(147,434)
Sales and maturities of short-term investments	147,778	148,760
Proceeds from other investments	3,512	0
Purchases of other investments	(250)	0
Business combinations, net of cash acquired	(29,162)	0
Net cash used in investing activities	(44,485)	(2,585)
Cash flows from financing activities:
Payments on term loan	(1,875)	(1,875)
Proceeds from loan agreement	0	424
Proceeds from stock issued in connection with the employee stock purchase plan	9,878	9,914
Proceeds from the exercise of stock options	4,135	1,537
Purchase of treasury stock	(49,991)	0
Other financing activities	0	(129)
Net cash (used in) provided by financing activities	(37,853)	9,871
Effect of exchange rate changes on cash and cash equivalents and restricted cash	(3,077)	(1,032)
Net (decrease) increase in cash and cash equivalents and restricted cash	(3,665)	75,193
Cash and cash equivalents and restricted cash at beginning of period	237,132	300,866
Cash and cash equivalents and restricted cash at end of period	233,467	376,059
Supplemental disclosure of cash flow information:
Cash paid for interest	15,450	18,943
Cash paid for income taxes, net of refunds	5,737	2,236
Supplemental cash flow information related to leases:
Cash payments for operating leases	$ 4,640	$ 4,590

Business and Summary of Significant Accounting Policies	6 Months Ended
Business and Summary of Significant Accounting Policies	Jun. 30, 2024
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Business and Summary of Significant Accounting Policies	Business and Summary of Significant Accounting Policies Business Description Tenable Holdings, Inc. (the “Company,” “we,” "us," or “our”) is a provider of exposure management solutions. Exposure management is an effective discipline for measuring, comparing and reducing cybersecurity risk in today's complex IT environments. Our solutions provide broad visibility into security issues such as vulnerabilities, misconfigurations, internal and regulatory compliance violations and other indicators of the state of an organization’s security across IT infrastructure and applications, cloud environments, Active Directory and industrial internet of things and operational technology environments. Basis of Presentation The accompanying consolidated financial statements include the accounts of Tenable Holdings, Inc. and our wholly owned subsidiaries and have been prepared in conformity with United States generally accepted accounting principles (“GAAP”) for interim financial information. All intercompany accounts and transactions have been eliminated in consolidation. The consolidated statements are unaudited and should be read in conjunction with the consolidated financial statements and related notes included in our 2023 Annual Report on Form 10-K ("10-K") filed with the Securities and Exchange Commission on February 28, 2024. The consolidated financial statements have been prepared on a basis consistent with the audited annual consolidated financial statements included in the 10-K and, in the opinion of management, include all adjustments of a normal recurring nature necessary to fairly state our financial position, our results of operations, and cash flows. The results for the three and six months ended June 30, 2024 are not necessarily indicative of the operating results expected for the year ending December 31, 2024 or any other future period. Use of Estimates The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. These estimates include, but are not limited to, the determination of the estimated economic life of perpetual licenses for revenue recognition, the estimated period of benefit for deferred commissions, the useful lives of long-lived assets, the fair value of acquired intangible assets, the valuation of stock-based compensation, the incremental borrowing rate for operating leases, and the valuation of deferred tax assets and investments. We base these estimates on historical experience and on various other assumptions that we believe to be reasonable. Actual results could differ significantly from these estimates. Significant Accounting Policies Our significant accounting policies are described in our 10-K. During the six months ended June 30, 2024, there were no material changes to our significant accounting policies from those described in our 10-K. Recently Issued Accounting Pronouncements In November 2023, the Financial Accounting Standards Board (“FASB”) issued ASU 2023-07 - Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, which requires public entities with a single reportable segment to provide all the disclosures required by this standard and all existing segment disclosures in Topic 280 on an interim and annual basis, including new requirements to disclose significant segment expenses that are regularly provided to the Chief Operating Decision Maker ("CODM") and included within the reported measure(s) of a segment's profit or loss, the amount and composition of any other segment items, the title and position of the CODM, and how the CODM uses the reported measure(s) of a segment's profit or loss to assess performance and decide how to allocate resources. The guidance is effective for our annual period beginning January 1, 2025, and interim periods thereafter, applied retrospectively with early adoption permitted. We are currently evaluating the impact of adoption of this standard on our consolidated financial statements and disclosures. In December 2023, the FASB issued ASU 2023-09 - Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which requires public entities to provide greater disaggregation within their annual rate reconciliation, including new requirements to present reconciling items on a gross basis in specified categories, disclose both percentages and dollar amounts, and disaggregate individual reconciling items by jurisdiction and nature when the effect of the items meet a quantitative threshold. The guidance also requires disaggregating the annual disclosure of income taxes paid, net of refunds received, by federal (national), state, and foreign taxes, with separate presentation of individual jurisdictions that meet a quantitative threshold. The guidance is effective for our annual periods beginning January 1, 2025 on a prospective basis, with a retrospective option, and early adoption is permitted. We are currently evaluating the impact of adoption of this standard on our consolidated financial statements and disclosures.

Revenue

6 Months Ended

Jun. 30, 2024

Revenue from Contract with Customer [Abstract]

Revenue

Disaggregation of Revenue

The following table presents a summary of revenue:


	Three Months Ended June 30,				Six Months Ended June 30,
(in thousands)	2024		2023		2024		2023
Subscription revenue	$	202,538	$	176,767	$	400,173	$	347,865
Perpetual license and maintenance revenue	12,016		12,154		24,172		24,335
Professional services and other revenue	6,687		6,115		12,857		11,675
Revenue	$	221,241	$	195,036	$	437,202	$	383,875

Concentrations

Contract Balances

Remaining Performance Obligations

Deferred Commissions

The following summarizes the activity of deferred incremental costs of obtaining a contract:


	Three Months Ended June 30,				Six Months Ended June 30,
(in thousands)	2024		2023		2024		2023
Beginning balance	$	117,615	$	108,380	$	121,953	$	111,508
Capitalization of contract acquisition costs	11,466		13,385		20,501		22,292
Amortization of deferred contract acquisition costs	(13,552)		(12,183)		(26,925)		(24,218)
Ending balance	$	115,529	$	109,582	$	115,529	$	109,582

Cash Equivalents and Short-Term Investments

6 Months Ended

Jun. 30, 2024

Cash and Cash Equivalents [Abstract]

Cash Equivalents and Short-Term Investments

The following tables summarize the amortized cost, unrealized gain and loss and estimated fair value of cash equivalents and short-term investments:


	June 30, 2024
(in thousands)	Amortized Cost		Unrealized Gain		Unrealized Loss		Estimated Fair Value
Cash equivalents
Money market funds	$	128,831	$	—	$	—	$	128,831
Total cash equivalents	$	128,831	$	—	$	—	$	128,831

Short-term investments
Commercial paper	$	63,933	$	1	$	(26)	$	63,908
Corporate bonds	86,420		3		(108)		86,315
Asset backed securities	18,171		5		(24)		18,152
Yankee bonds	12,900		—		(28)		12,872
U.S. Treasury and agency obligations	72,383		7		(101)		72,289
Total short-term investments	$	253,807	$	16	$	(287)	$	253,536


	December 31, 2023
(in thousands)	Amortized Cost		Unrealized Gain		Unrealized Loss		Estimated Fair Value
Cash equivalents
Money market funds	$	130,375	$	—	$	—	$	130,375
Total cash equivalents	$	130,375	$	—	$	—	$	130,375

Short-term investments
Commercial paper	$	82,188	$	50	$	(22)	$	82,216
Corporate bonds	61,200		40		(91)		61,149
Asset backed securities	15,032		26		(15)		15,043
Yankee bonds	6,926		4		(17)		6,913
U.S. Treasury and agency obligations	71,456		97		(34)		71,519
Total short-term investments	$	236,802	$	217	$	(179)	$	236,840

The contractual maturities of our short-term investments are as follows:


	June 30, 2024				December 31, 2023
(in thousands)	Amortized Cost		Estimated Fair Value		Amortized Cost		Estimated Fair Value
Due within one year	$	209,611	$	209,419	$	219,437	$	219,414
Due between one and two years	44,196		44,117		17,365		17,426
Total short-term investments	$	253,807	$	253,536	$	236,802	$	236,840

Fair Value Measurements

6 Months Ended

Jun. 30, 2024

Fair Value Disclosures [Abstract]

Fair Value Measurements

•Level 1 — Quoted prices in active markets for identical assets and liabilities;

•Level 3 — Unobservable inputs.

The following tables summarize assets that are measured at fair value on a recurring basis:


	June 30, 2024
(in thousands)	Level 1		Level 2		Level 3		Total
Cash equivalents
Money market funds	$	128,831	$	—	$	—	$	128,831
Total cash equivalents	$	128,831	$	—	$	—	$	128,831

Short-term investments
Commercial paper	$	—	$	63,908	$	—	$	63,908
Corporate bonds	—		86,315		—		86,315
Asset backed securities	—		18,152		—		18,152
Yankee bonds	—		12,872		—		12,872
U.S. Treasury and agency obligations	—		72,289		—		72,289
Total short-term investments	$	—	$	253,536	$	—	$	253,536


	December 31, 2023
(in thousands)	Level 1		Level 2		Level 3		Total
Cash equivalents
Money market funds	$	130,375	$	—	$	—	$	130,375
Total cash equivalents	$	130,375	$	—	$	—	$	130,375

Short-term investments
Commercial paper	$	—	$	82,216	$	—	$	82,216
Corporate bonds	—		61,149		—		61,149
Asset backed securities	—		15,043		—		15,043
Yankee bonds	—		6,913		—		6,913
U.S. Treasury and agency obligations	—		71,519		—		71,519
Total short-term investments	$	—	$	236,840	$	—	$	236,840

We did not have any liabilities measured and recorded at fair value on a recurring basis at June 30, 2024 and December 31, 2023.

Property and Equipment, Net

6 Months Ended

Jun. 30, 2024

Property, Plant and Equipment [Abstract]

Property and Equipment, Net

Property and equipment, net consisted of the following:


(in thousands)	June 30, 2024		December 31, 2023
Computer software and equipment	$	21,027	$	21,845
Internally developed software	38,063		32,261
Furniture and fixtures	5,191		6,513
Leasehold improvements	22,657		29,354
Total	86,938		89,973
Less: accumulated depreciation and amortization	(45,490)		(44,537)
Property and equipment, net	$	41,448	$	45,436

In the three months ended June 30, 2024, we recorded a $4.5 million impairment for furniture and fixtures and leasehold improvements. See Note 7 for additional information.

Acquisitions, Goodwill and Intangible Assets

6 Months Ended

Jun. 30, 2024

Business Combination, Asset Acquisition, and Joint Venture Formation [Abstract]

Acquisitions, Goodwill and Intangible Assets

Business Combinations

Cash consideration, net of cash acquired, was preliminarily allocated as follows:


(in thousands)	Eureka



Intangible assets	$	6,900
Goodwill	22,753


Other current liabilities, net	(449)
Total purchase price	$	29,204

We allocated $6.9 million to Eureka's proprietary technology with an estimated useful life of 5 years.

We are still finalizing the allocation of the purchase price for Eureka, which may change as additional information becomes available.

Goodwill and Acquired Intangible Assets

The changes in the carrying amount of goodwill are as follows:


(in thousands)
Balance at December 31, 2023	$	518,539
Acquired goodwill	22,753
Balance at June 30, 2024	$	541,292

Acquired intangible assets subject to amortization are as follows:


	June 30, 2024						December 31, 2023
(in thousands)	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
Acquired technology	$	149,437	$	(44,949)	$	104,488	$	142,537	$	(35,520)	$	107,017
Trade name	490		(490)		—		490		(490)		—
	$	149,927	$	(45,439)	$	104,488	$	143,027	$	(36,010)	$	107,017

At June 30, 2024, estimated future amortization of acquired intangible assets is as follows:


(in thousands)
Year ending December 31,
2024(1)	$	10,028
2025	20,055
2026	19,870
2027	17,840
2028	14,797
Thereafter	21,898
Total	$	104,488

_______________

(1) Represents the six months ending December 31, 2024.

Leases

6 Months Ended

Jun. 30, 2024

Leases [Abstract]

Leases

We have operating leases for office facilities. The components of lease expense were as follows:


	Three Months Ended June 30,				Six Months Ended June 30,
(in thousands)	2024		2023		2024		2023
Operating lease cost	$	1,890	$	1,902	$	3,785	$	3,790

Rent expense for short-term leases in the three and six months ended June 30, 2024 and 2023 was not material.

Supplemental information related to leases was as follows:


	June 30, 2024	December 31, 2023
Operating leases
Weighted average remaining lease term	6.9 years	7.3 years
Weighted average discount rate	5.7%	5.6%


	Three Months Ended June 30,				Six Months Ended June 30,
(in thousands)	2024		2023		2024		2023
ROU assets obtained in exchange for lease obligations
Operating leases	$	806	$	1,234	$	806	$	1,234

Maturities of operating lease liabilities at June 30, 2024 were as follows:


(in thousands)
Year ending December 31,
2024(1)	$	4,207
2025	9,692
2026	9,039
2027	8,581
2028	7,736
Thereafter	23,386
Total lease payments	62,641
Less: Imputed interest	(11,165)

Total	$	51,476

_______________

(1) Represents the six months ending December 31, 2024.

Debt

6 Months Ended

Jun. 30, 2024

Debt Disclosure [Abstract]

Debt

Credit Agreement

In July 2021, we entered into a credit agreement ("Credit Agreement") which is comprised of:

•a $375.0 million senior secured term loan facility ("Term Loan"); and

•a $50.0 million senior secured revolving credit facility ("Revolving Credit Facility").

The table below summarizes the carrying value of the Term Loan:


(in thousands)	June 30, 2024
Term loan	$	365,625
Less: Unamortized debt discount and issuance costs	(5,021)
Term loan, net of issuance costs	360,604
Less: Term loan, net, current (1)	(2,635)
Term loan, net of issuance costs (net of current portion)	$	357,969

_______________

(1) Term loan, net current is included in other current liabilities on our consolidated balance sheets.

The maturities of the Term Loan at June 30, 2024 were as follows:


(in thousands)
Year ending December 31,
2024(1)	$	1,875
2025	3,750
2026	3,750
2027	3,750
2028	352,500
Total	$	365,625

_______________

(1) Represents the six months ending December 31, 2024.

Commitments and Contingencies	6 Months Ended
Commitments and Contingencies	Jun. 30, 2024
Commitments and Contingencies Disclosure [Abstract]
Commitments and Contingencies	Commitments and Contingencies Commitments In December 2023, we entered into a contract with Microsoft for cloud services from February 2024 through January 2027. Under the terms of the contract we committed to spend €28.5 million. If we do not meet our commitment by the end of the term, we will be required to pay the difference. As of June 30, 2024, we have spent €3.2 million of our commitment. As of June 30, 2024, we met our existing commitment of $140.6 million with Amazon Web Services, Inc. ("AWS") for cloud services from August 2021 through July 2024. In July 2024, we entered into a new contract with AWS committing to spend $59.7 million, $77.6 million and $93.0 million in years one, two and three, respectively, for a total commitment of $230.3 million from August 2024 to July 2027. Letters of Credit At June 30, 2024, we had $5.7 million of standby letters of credit related to our grant agreements with the State of Maryland and our operating leases.

Stock-Based Compensation

6 Months Ended

Jun. 30, 2024

Share-Based Payment Arrangement [Abstract]

Stock-Based Compensation

Stock-based compensation expense included in the consolidated statements of operations was as follows:


	Three Months Ended June 30,				Six Months Ended June 30,
(in thousands)	2024		2023		2024		2023
Cost of revenue	$	3,288	$	2,906	$	6,270	$	5,531
Sales and marketing	16,276		16,423		31,576		30,817
Research and development	11,799		9,764		22,960		18,629
General and administrative	10,035		8,767		20,311		17,000
Total stock-based compensation expense	$	41,398	$	37,860	$	81,117	$	71,977

A summary of the unrecognized stock-based compensation expense related to unvested stock at June 30, 2024 is presented below:


	Unrecognized Stock-Based Compensation Expense (in thousands)		Estimated Weighted Average Period (in years)
Restricted stock units ("RSUs")	$	347,395	2.9
Performance stock units ("PSUs")	9,225		3.3
Restricted stock	9,979		1.8
2018 Employee Stock Purchase Plan ("2018 ESPP")	3,570		0.7

Restricted Stock, RSUs and PSUs

A summary of our restricted stock, RSU and PSU activity is presented below:


	Restricted Stock			RSUs			PSUs
(in thousands, except for per share data)	Number of Shares	Weighted Average Grant Date Fair Value		Number of Shares	Weighted Average Grant Date Fair Value		Number of Shares	Weighted Average Grant Date Fair Value
Unvested balance at December 31, 2023	311	$	45.67	7,343	$	43.80	258	$	43.90
Granted	—	—		3,595	46.61		170	47.20
Performance adjustment(1)	—	—		—	—		(10)	43.24
Vested	(62)	45.67		(1,936)	42.80		(69)	43.79
Forfeited	—	—		(536)	44.70		—	—
Unvested balance at June 30, 2024	249	45.67		8,466	45.15		349	45.54

_______________

(1) Represents adjustments due to the achievement of predefined financial performance targets.

Stock Options

A summary of our stock option activity is presented below:


(in thousands, except for exercise prices and years)	Number of Shares	Weighted Average Exercise Price		Weighted-Average Remaining Contractual Term (in years)	Aggregate Intrinsic Value
Outstanding at December 31, 2023	5,095	$	8.95	3.5	$	189,108

Exercised	(647)	6.39			26,036
Forfeited/canceled	—	—			—
Outstanding and exercisable at June 30, 2024	4,448	9.32		3.1	152,410

2018 Employee Stock Purchase Plan

The fair value of the 2018 ESPP purchase rights was estimated on the offering or modification dates using a Black-Scholes option-pricing model and the following assumptions:


	Six Months Ended June 30,
	2024	2023
Expected term (in years)	0.5 — 2.0	0.5 — 2.0
Expected volatility	41.1% — 51.4%	51.0% — 58.1%
Risk-free interest rate	4.4% — 5.1%	4.8% — 5.0%
Expected dividend yield	—	—

Income Taxes	6 Months Ended
Income Taxes	Jun. 30, 2024
Income Tax Disclosure [Abstract]
Income Taxes	Income Taxes In the six months ended June 30, 2024, the provision for income taxes included $2.1 million of income taxes in foreign jurisdictions in which we conduct business, $1.7 million of Base Erosion and Anti-Abuse Tax and $1.6 million of discrete items primarily related to withholding taxes on sales to customers. In the six months ended June 30, 2023, the provision for income taxes included $4.1 million of income taxes in foreign jurisdictions in which we conduct business and $2.2 million of discrete items primarily related to withholding taxes on sales to customers.

Net Loss Per Share

6 Months Ended

Jun. 30, 2024

Earnings Per Share [Abstract]

Net Loss Per Share

The following table sets forth the computation of basic and diluted net loss per share:


	Three Months Ended June 30,				Six Months Ended June 30,
(in thousands, except per share data)	2024		2023		2024		2023
Net loss	$	(14,572)	$	(15,974)	$	(28,958)	$	(41,071)

Weighted-average shares used to compute net loss per share, basic and diluted	118,681		115,131		118,111		114,465
Net loss per share, basic and diluted	$	(0.12)	$	(0.14)	$	(0.25)	$	(0.36)

The following potentially dilutive securities have been excluded from the diluted per share calculations because they would have been antidilutive:


	June 30,
(in thousands)	2024	2023
RSUs	8,466	7,963
Stock options	4,448	5,319
Shares to be issued under the 2018 ESPP	155	210

PSUs	179	143
Restricted stock	249	—
Total	13,497	13,635

Geographic Information

6 Months Ended

Jun. 30, 2024

Segment Reporting [Abstract]

Geographic Information

Revenue by region, based on the address of the end user as specified in our subscription, license or service agreements, was as follows:


	Three Months Ended June 30,				Six Months Ended June 30,
(in thousands)	2024		2023		2024		2023
The Americas	$	136,754	$	122,210	$	271,237	$	241,494
Europe, Middle East and Africa	59,320		50,781		116,358		99,040
Asia Pacific	25,167		22,045		49,607		43,341
Revenue	$	221,241	$	195,036	$	437,202	$	383,875

Our property and equipment, net by geographic area is summarized as follows:


(in thousands)	June 30, 2024		December 31, 2023
United States	$	36,683	$	39,497
International	4,765		5,939
Property and equipment, net	$	41,448	$	45,436

Pay vs Performance Disclosure - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
Pay vs Performance Disclosure - USD ($) $ in Thousands	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
Pay vs Performance Disclosure
Net loss	$ (14,572)	$ (15,974)	$ (28,958)	$ (41,071)

Insider Trading Arrangements	3 Months Ended	6 Months Ended
Insider Trading Arrangements	Jun. 30, 2024 shares	Jun. 30, 2024 shares
Trading Arrangements, by Individual
Non-Rule 10b5-1 Arrangement Adopted	false
Rule 10b5-1 Arrangement Terminated	false
Non-Rule 10b5-1 Arrangement Terminated	false
Raymond Vicks, Jr. [Member]
Trading Arrangements, by Individual
Material Terms of Trading Arrangement		Raymond Vicks, Jr., a member of our Board of Directors, entered into a prearranged stock trading plan on May 8, 2024 to sell 809 shares of our common stock in January 2025. All of the shares of common stock that may be sold are to be issued upon the vesting of restricted stock units. This trading plan was entered into during an open insider trading window and is intended to satisfy the affirmative defense of Rule 10b5-1(c) under the Exchange Act and our policies regarding insider transactions.
Name	Raymond Vicks, Jr
Title	Board of Directors
Rule 10b5-1 Arrangement Adopted	true
Adoption Date	May 8, 2024
Aggregate Available	809	809

Business and Summary of Significant Accounting Policies (Policies)	6 Months Ended
	Jun. 30, 2024
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Consolidations	Basis of Presentation The accompanying consolidated financial statements include the accounts of Tenable Holdings, Inc. and our wholly owned subsidiaries and have been prepared in conformity with United States generally accepted accounting principles (“GAAP”) for interim financial information. All intercompany accounts and transactions have been eliminated in consolidation.
Basis of Accounting	The consolidated statements are unaudited and should be read in conjunction with the consolidated financial statements and related notes included in our 2023 Annual Report on Form 10-K ("10-K") filed with the Securities and Exchange Commission on February 28, 2024. The consolidated financial statements have been prepared on a basis consistent with the audited annual consolidated financial statements included in the 10-K and, in the opinion of management, include all adjustments of a normal recurring nature necessary to fairly state our financial position, our results of operations, and cash flows.
Use of Estimates	Use of Estimates The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. These estimates include, but are not limited to, the determination of the estimated economic life of perpetual licenses for revenue recognition, the estimated period of benefit for deferred commissions, the useful lives of long-lived assets, the fair value of acquired intangible assets, the valuation of stock-based compensation, the incremental borrowing rate for operating leases, and the valuation of deferred tax assets and investments. We base these estimates on historical experience and on various other assumptions that we believe to be reasonable. Actual results could differ significantly from these estimates.
Recently Issued Accounting Pronouncements	Recently Issued Accounting Pronouncements In November 2023, the Financial Accounting Standards Board (“FASB”) issued ASU 2023-07 - Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, which requires public entities with a single reportable segment to provide all the disclosures required by this standard and all existing segment disclosures in Topic 280 on an interim and annual basis, including new requirements to disclose significant segment expenses that are regularly provided to the Chief Operating Decision Maker ("CODM") and included within the reported measure(s) of a segment's profit or loss, the amount and composition of any other segment items, the title and position of the CODM, and how the CODM uses the reported measure(s) of a segment's profit or loss to assess performance and decide how to allocate resources. The guidance is effective for our annual period beginning January 1, 2025, and interim periods thereafter, applied retrospectively with early adoption permitted. We are currently evaluating the impact of adoption of this standard on our consolidated financial statements and disclosures. In December 2023, the FASB issued ASU 2023-09 - Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which requires public entities to provide greater disaggregation within their annual rate reconciliation, including new requirements to present reconciling items on a gross basis in specified categories, disclose both percentages and dollar amounts, and disaggregate individual reconciling items by jurisdiction and nature when the effect of the items meet a quantitative threshold. The guidance also requires disaggregating the annual disclosure of income taxes paid, net of refunds received, by federal (national), state, and foreign taxes, with separate presentation of individual jurisdictions that meet a quantitative threshold. The guidance is effective for our annual periods beginning January 1, 2025 on a prospective basis, with a retrospective option, and early adoption is permitted. We are currently evaluating the impact of adoption of this standard on our consolidated financial statements and disclosures.

Revenue (Tables)

6 Months Ended

Jun. 30, 2024

Revenue from Contract with Customer [Abstract]

Schedule of Revenue

The following table presents a summary of revenue:


	Three Months Ended June 30,				Six Months Ended June 30,
(in thousands)	2024		2023		2024		2023
Subscription revenue	$	202,538	$	176,767	$	400,173	$	347,865
Perpetual license and maintenance revenue	12,016		12,154		24,172		24,335
Professional services and other revenue	6,687		6,115		12,857		11,675
Revenue	$	221,241	$	195,036	$	437,202	$	383,875

Schedule of Activity of Deferred Contract Costs

The following summarizes the activity of deferred incremental costs of obtaining a contract:


	Three Months Ended June 30,				Six Months Ended June 30,
(in thousands)	2024		2023		2024		2023
Beginning balance	$	117,615	$	108,380	$	121,953	$	111,508
Capitalization of contract acquisition costs	11,466		13,385		20,501		22,292
Amortization of deferred contract acquisition costs	(13,552)		(12,183)		(26,925)		(24,218)
Ending balance	$	115,529	$	109,582	$	115,529	$	109,582

Cash Equivalents and Short-Term Investments (Tables)

6 Months Ended

Jun. 30, 2024

Cash and Cash Equivalents [Abstract]

Schedule of Amortized Cost, Unrealized Gain and Loss and Estimated Fair Value

The following tables summarize the amortized cost, unrealized gain and loss and estimated fair value of cash equivalents and short-term investments:


	June 30, 2024
(in thousands)	Amortized Cost		Unrealized Gain		Unrealized Loss		Estimated Fair Value
Cash equivalents
Money market funds	$	128,831	$	—	$	—	$	128,831
Total cash equivalents	$	128,831	$	—	$	—	$	128,831

Short-term investments
Commercial paper	$	63,933	$	1	$	(26)	$	63,908
Corporate bonds	86,420		3		(108)		86,315
Asset backed securities	18,171		5		(24)		18,152
Yankee bonds	12,900		—		(28)		12,872
U.S. Treasury and agency obligations	72,383		7		(101)		72,289
Total short-term investments	$	253,807	$	16	$	(287)	$	253,536


	December 31, 2023
(in thousands)	Amortized Cost		Unrealized Gain		Unrealized Loss		Estimated Fair Value
Cash equivalents
Money market funds	$	130,375	$	—	$	—	$	130,375
Total cash equivalents	$	130,375	$	—	$	—	$	130,375

Short-term investments
Commercial paper	$	82,188	$	50	$	(22)	$	82,216
Corporate bonds	61,200		40		(91)		61,149
Asset backed securities	15,032		26		(15)		15,043
Yankee bonds	6,926		4		(17)		6,913
U.S. Treasury and agency obligations	71,456		97		(34)		71,519
Total short-term investments	$	236,802	$	217	$	(179)	$	236,840

Schedule of Contractual Maturities on Short-Term Investments

The contractual maturities of our short-term investments are as follows:


	June 30, 2024				December 31, 2023
(in thousands)	Amortized Cost		Estimated Fair Value		Amortized Cost		Estimated Fair Value
Due within one year	$	209,611	$	209,419	$	219,437	$	219,414
Due between one and two years	44,196		44,117		17,365		17,426
Total short-term investments	$	253,807	$	253,536	$	236,802	$	236,840

Fair Value Measurements (Tables)

6 Months Ended

Jun. 30, 2024

Fair Value Disclosures [Abstract]

Schedule of Assets Measured At Fair Value on Recurring Basis

The following tables summarize assets that are measured at fair value on a recurring basis:


	June 30, 2024
(in thousands)	Level 1		Level 2		Level 3		Total
Cash equivalents
Money market funds	$	128,831	$	—	$	—	$	128,831
Total cash equivalents	$	128,831	$	—	$	—	$	128,831

Short-term investments
Commercial paper	$	—	$	63,908	$	—	$	63,908
Corporate bonds	—		86,315		—		86,315
Asset backed securities	—		18,152		—		18,152
Yankee bonds	—		12,872		—		12,872
U.S. Treasury and agency obligations	—		72,289		—		72,289
Total short-term investments	$	—	$	253,536	$	—	$	253,536


	December 31, 2023
(in thousands)	Level 1		Level 2		Level 3		Total
Cash equivalents
Money market funds	$	130,375	$	—	$	—	$	130,375
Total cash equivalents	$	130,375	$	—	$	—	$	130,375

Short-term investments
Commercial paper	$	—	$	82,216	$	—	$	82,216
Corporate bonds	—		61,149		—		61,149
Asset backed securities	—		15,043		—		15,043
Yankee bonds	—		6,913		—		6,913
U.S. Treasury and agency obligations	—		71,519		—		71,519
Total short-term investments	$	—	$	236,840	$	—	$	236,840

Property and Equipment, Net (Tables)

6 Months Ended

Jun. 30, 2024

Property, Plant and Equipment [Abstract]

Schedule of Property and Equipment, Net

Property and equipment, net consisted of the following:


(in thousands)	June 30, 2024		December 31, 2023
Computer software and equipment	$	21,027	$	21,845
Internally developed software	38,063		32,261
Furniture and fixtures	5,191		6,513
Leasehold improvements	22,657		29,354
Total	86,938		89,973
Less: accumulated depreciation and amortization	(45,490)		(44,537)
Property and equipment, net	$	41,448	$	45,436

Acquisitions, Goodwill and Intangible Assets (Tables)

6 Months Ended

Jun. 30, 2024

Business Combination, Asset Acquisition, and Joint Venture Formation [Abstract]

Schedule of Recognized Identified Assets Acquired and Liabilities Assumed

Cash consideration, net of cash acquired, was preliminarily allocated as follows:


(in thousands)	Eureka



Intangible assets	$	6,900
Goodwill	22,753


Other current liabilities, net	(449)
Total purchase price	$	29,204

Schedule of Goodwill

The changes in the carrying amount of goodwill are as follows:


(in thousands)
Balance at December 31, 2023	$	518,539
Acquired goodwill	22,753
Balance at June 30, 2024	$	541,292

Schedule of Acquired Intangible Assets Subject to Amortization

Acquired intangible assets subject to amortization are as follows:


	June 30, 2024						December 31, 2023
(in thousands)	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
Acquired technology	$	149,437	$	(44,949)	$	104,488	$	142,537	$	(35,520)	$	107,017
Trade name	490		(490)		—		490		(490)		—
	$	149,927	$	(45,439)	$	104,488	$	143,027	$	(36,010)	$	107,017

Schedule of Future Amortization of Intangible Assets

At June 30, 2024, estimated future amortization of acquired intangible assets is as follows:


(in thousands)
Year ending December 31,
2024(1)	$	10,028
2025	20,055
2026	19,870
2027	17,840
2028	14,797
Thereafter	21,898
Total	$	104,488

_______________

(1) Represents the six months ending December 31, 2024.

Leases (Tables)

6 Months Ended

Jun. 30, 2024

Leases [Abstract]

Schedule of Components of Lease Expense and Supplemental Information

The components of lease expense were as follows:


	Three Months Ended June 30,				Six Months Ended June 30,
(in thousands)	2024		2023		2024		2023
Operating lease cost	$	1,890	$	1,902	$	3,785	$	3,790

Supplemental information related to leases was as follows:


	June 30, 2024	December 31, 2023
Operating leases
Weighted average remaining lease term	6.9 years	7.3 years
Weighted average discount rate	5.7%	5.6%


	Three Months Ended June 30,				Six Months Ended June 30,
(in thousands)	2024		2023		2024		2023
ROU assets obtained in exchange for lease obligations
Operating leases	$	806	$	1,234	$	806	$	1,234

Schedule of Maturities of Operating Lease Liabilities

Maturities of operating lease liabilities at June 30, 2024 were as follows:


(in thousands)
Year ending December 31,
2024(1)	$	4,207
2025	9,692
2026	9,039
2027	8,581
2028	7,736
Thereafter	23,386
Total lease payments	62,641
Less: Imputed interest	(11,165)

Total	$	51,476

_______________

(1) Represents the six months ending December 31, 2024.

Debt (Tables)

6 Months Ended

Jun. 30, 2024

Debt Disclosure [Abstract]

Schedule of Carrying Value of Term Loan

The table below summarizes the carrying value of the Term Loan:


(in thousands)	June 30, 2024
Term loan	$	365,625
Less: Unamortized debt discount and issuance costs	(5,021)
Term loan, net of issuance costs	360,604
Less: Term loan, net, current (1)	(2,635)
Term loan, net of issuance costs (net of current portion)	$	357,969

_______________

(1) Term loan, net current is included in other current liabilities on our consolidated balance sheets.

Schedule of Maturities of Term Loan

The maturities of the Term Loan at June 30, 2024 were as follows:


(in thousands)
Year ending December 31,
2024(1)	$	1,875
2025	3,750
2026	3,750
2027	3,750
2028	352,500
Total	$	365,625

_______________

(1) Represents the six months ending December 31, 2024.

Stock-Based Compensation (Tables)

6 Months Ended

Jun. 30, 2024

Share-Based Payment Arrangement [Abstract]

Schedule of Stock-based Compensation Expense

Stock-based compensation expense included in the consolidated statements of operations was as follows:


	Three Months Ended June 30,				Six Months Ended June 30,
(in thousands)	2024		2023		2024		2023
Cost of revenue	$	3,288	$	2,906	$	6,270	$	5,531
Sales and marketing	16,276		16,423		31,576		30,817
Research and development	11,799		9,764		22,960		18,629
General and administrative	10,035		8,767		20,311		17,000
Total stock-based compensation expense	$	41,398	$	37,860	$	81,117	$	71,977

Schedule of Unrecognized Stock-Based Compensation

A summary of the unrecognized stock-based compensation expense related to unvested stock at June 30, 2024 is presented below:


	Unrecognized Stock-Based Compensation Expense (in thousands)		Estimated Weighted Average Period (in years)
Restricted stock units ("RSUs")	$	347,395	2.9
Performance stock units ("PSUs")	9,225		3.3
Restricted stock	9,979		1.8
2018 Employee Stock Purchase Plan ("2018 ESPP")	3,570		0.7

Schedule of RSUs and PSUs

A summary of our restricted stock, RSU and PSU activity is presented below:


	Restricted Stock			RSUs			PSUs
(in thousands, except for per share data)	Number of Shares	Weighted Average Grant Date Fair Value		Number of Shares	Weighted Average Grant Date Fair Value		Number of Shares	Weighted Average Grant Date Fair Value
Unvested balance at December 31, 2023	311	$	45.67	7,343	$	43.80	258	$	43.90
Granted	—	—		3,595	46.61		170	47.20
Performance adjustment(1)	—	—		—	—		(10)	43.24
Vested	(62)	45.67		(1,936)	42.80		(69)	43.79
Forfeited	—	—		(536)	44.70		—	—
Unvested balance at June 30, 2024	249	45.67		8,466	45.15		349	45.54

_______________

(1) Represents adjustments due to the achievement of predefined financial performance targets.

Schedule of Stock Option Activity

A summary of our stock option activity is presented below:


(in thousands, except for exercise prices and years)	Number of Shares	Weighted Average Exercise Price		Weighted-Average Remaining Contractual Term (in years)	Aggregate Intrinsic Value
Outstanding at December 31, 2023	5,095	$	8.95	3.5	$	189,108

Exercised	(647)	6.39			26,036
Forfeited/canceled	—	—			—
Outstanding and exercisable at June 30, 2024	4,448	9.32		3.1	152,410

Schedule of ESPP Valuation Assumptions

The fair value of the 2018 ESPP purchase rights was estimated on the offering or modification dates using a Black-Scholes option-pricing model and the following assumptions:


	Six Months Ended June 30,
	2024	2023
Expected term (in years)	0.5 — 2.0	0.5 — 2.0
Expected volatility	41.1% — 51.4%	51.0% — 58.1%
Risk-free interest rate	4.4% — 5.1%	4.8% — 5.0%
Expected dividend yield	—	—

Net Loss Per Share (Tables)

6 Months Ended

Jun. 30, 2024

Earnings Per Share [Abstract]

Schedule of Computation of Basic and Diluted Net Loss Per Share

The following table sets forth the computation of basic and diluted net loss per share:


	Three Months Ended June 30,				Six Months Ended June 30,
(in thousands, except per share data)	2024		2023		2024		2023
Net loss	$	(14,572)	$	(15,974)	$	(28,958)	$	(41,071)

Weighted-average shares used to compute net loss per share, basic and diluted	118,681		115,131		118,111		114,465
Net loss per share, basic and diluted	$	(0.12)	$	(0.14)	$	(0.25)	$	(0.36)

Schedule of Potentially Dilutive Securities

The following potentially dilutive securities have been excluded from the diluted per share calculations because they would have been antidilutive:


	June 30,
(in thousands)	2024	2023
RSUs	8,466	7,963
Stock options	4,448	5,319
Shares to be issued under the 2018 ESPP	155	210

PSUs	179	143
Restricted stock	249	—
Total	13,497	13,635

Geographic Information (Tables)

6 Months Ended

Jun. 30, 2024

Segment Reporting [Abstract]

Schedule of Revenue by Region

Revenue by region, based on the address of the end user as specified in our subscription, license or service agreements, was as follows:


	Three Months Ended June 30,				Six Months Ended June 30,
(in thousands)	2024		2023		2024		2023
The Americas	$	136,754	$	122,210	$	271,237	$	241,494
Europe, Middle East and Africa	59,320		50,781		116,358		99,040
Asia Pacific	25,167		22,045		49,607		43,341
Revenue	$	221,241	$	195,036	$	437,202	$	383,875

Schedule of Property and Equipment, Net by Geographic Area

Our property and equipment, net by geographic area is summarized as follows:


(in thousands)	June 30, 2024		December 31, 2023
United States	$	36,683	$	39,497
International	4,765		5,939
Property and equipment, net	$	41,448	$	45,436

Revenue - Schedule of Revenue (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
Disaggregation of Revenue [Line Items]
Revenue	$ 221,241	$ 195,036	$ 437,202	$ 383,875
Subscription revenue
Disaggregation of Revenue [Line Items]
Revenue	202,538	176,767	400,173	347,865
Perpetual license and maintenance revenue
Disaggregation of Revenue [Line Items]
Revenue	12,016	12,154	24,172	24,335
Professional services and other revenue
Disaggregation of Revenue [Line Items]
Revenue	$ 6,687	$ 6,115	$ 12,857	$ 11,675

Revenue - Concentrations (Details)	3 Months Ended		6 Months Ended		12 Months Ended
Revenue - Concentrations (Details)	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023	Dec. 31, 2023
Revenue \| Customer Concentration Risk \| One Distributor
Concentration Risk [Line Items]
Concentration risk (in percent)	34.00%	36.00%	34.00%	36.00%
Accounts Receivable \| Customer Concentration Risk \| One Distributor
Concentration Risk [Line Items]
Concentration risk (in percent)			31.00%		32.00%
Channel Network \| Revenue \| Sales Method Risk
Concentration Risk [Line Items]
Concentration risk (in percent)	94.00%	93.00%	92.00%	93.00%

Revenue - Contract Balances (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
Revenue from Contract with Customer [Abstract]
Revenue recognized that was included in deferred revenue	$ 205.1	$ 179.0	$ 368.7	$ 319.2

Revenue - Remaining Performance Obligations (Details) $ in Millions	Jun. 30, 2024 USD ($)
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Future estimated revenue	$ 747.5
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-07-01
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Future estimated revenue	$ 572.0
Expected timing of satisfaction	12 months
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2025-07-01
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Expected timing of satisfaction	4 years

Revenue - Activity of Deferred Contract Costs (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
Capitalized Contract Cost [Roll Forward]
Beginning balance	$ 117,615	$ 108,380	$ 121,953	$ 111,508
Capitalization of contract acquisition costs	11,466	13,385	20,501	22,292
Amortization of deferred contract acquisition costs	(13,552)	(12,183)	(26,925)	(24,218)
Ending balance	$ 115,529	$ 109,582	$ 115,529	$ 109,582

Cash Equivalents and Short-Term Investments - Summary of Amortized Cost, Unrealized Gain and Loss and Estimated Fair Value (Details) - USD ($) $ in Thousands	Jun. 30, 2024	Dec. 31, 2023
Cash and Cash Equivalents [Line Items]
Cash equivalents	$ 128,831	$ 130,375
Amortized Cost	253,807	236,802
Unrealized Gain	16	217
Unrealized Loss	(287)	(179)
Estimated Fair Value	253,536	236,840
Commercial paper
Cash and Cash Equivalents [Line Items]
Amortized Cost	63,933	82,188
Unrealized Gain	1	50
Unrealized Loss	(26)	(22)
Estimated Fair Value	63,908	82,216
Corporate bonds
Cash and Cash Equivalents [Line Items]
Amortized Cost	86,420	61,200
Unrealized Gain	3	40
Unrealized Loss	(108)	(91)
Estimated Fair Value	86,315	61,149
Asset backed securities
Cash and Cash Equivalents [Line Items]
Amortized Cost	18,171	15,032
Unrealized Gain	5	26
Unrealized Loss	(24)	(15)
Estimated Fair Value	18,152	15,043
Yankee bonds
Cash and Cash Equivalents [Line Items]
Amortized Cost	12,900	6,926
Unrealized Gain	0	4
Unrealized Loss	(28)	(17)
Estimated Fair Value	12,872	6,913
U.S. Treasury and agency obligations
Cash and Cash Equivalents [Line Items]
Amortized Cost	72,383	71,456
Unrealized Gain	7	97
Unrealized Loss	(101)	(34)
Estimated Fair Value	72,289	71,519
Total cash equivalents
Cash and Cash Equivalents [Line Items]
Cash equivalents	128,831	130,375
Money market funds
Cash and Cash Equivalents [Line Items]
Cash equivalents	$ 128,831	$ 130,375

Cash Equivalents and Short-Term Investments - Contractual Maturities on Short-Term Investments (Details) - USD ($) $ in Thousands	Jun. 30, 2024	Dec. 31, 2023
Cash and Cash Equivalents [Abstract]
Amortized Cost, Due within on year	$ 209,611	$ 219,437
Amortized Cost, Due between one and two years	44,196	17,365
Amortized Cost	253,807	236,802
Estimated Fair Value, Due within one year	209,419	219,414
Estimated Fair Value, Due between one and two years	44,117	17,426
Estimated Fair Value	$ 253,536	$ 236,840

Cash Equivalents and Short-Term Investments - Narrative (Details) - USD ($) $ in Millions	Jun. 30, 2024	Dec. 31, 2023
Collateral For Letters of Credit
Restricted Cash and Cash Equivalents Items [Line Items]
Restricted cash	$ 6.0	$ 5.8

Fair Value Measurements - Assets Measured At Fair Value on Recurring Basis (Details) - USD ($) $ in Thousands	Jun. 30, 2024	Dec. 31, 2023
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash equivalents	$ 128,831	$ 130,375
Short-term investments	253,536	236,840
Commercial paper
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Short-term investments	63,908	82,216
Corporate bonds
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Short-term investments	86,315	61,149
Asset backed securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Short-term investments	18,152	15,043
Yankee bonds
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Short-term investments	12,872	6,913
U.S. Treasury and agency obligations
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Short-term investments	72,289	71,519
Money market funds
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash equivalents	128,831	130,375
Level 1
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash equivalents	128,831	130,375
Short-term investments	0	0
Level 1 \| Commercial paper
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Short-term investments	0	0
Level 1 \| Corporate bonds
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Short-term investments	0	0
Level 1 \| Asset backed securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Short-term investments	0	0
Level 1 \| Yankee bonds
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Short-term investments	0	0
Level 1 \| U.S. Treasury and agency obligations
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Short-term investments	0	0
Level 1 \| Money market funds
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash equivalents	128,831	130,375
Level 2
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash equivalents	0	0
Short-term investments	253,536	236,840
Level 2 \| Commercial paper
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Short-term investments	63,908	82,216
Level 2 \| Corporate bonds
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Short-term investments	86,315	61,149
Level 2 \| Asset backed securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Short-term investments	18,152	15,043
Level 2 \| Yankee bonds
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Short-term investments	12,872	6,913
Level 2 \| U.S. Treasury and agency obligations
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Short-term investments	72,289	71,519
Level 2 \| Money market funds
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash equivalents	0	0
Level 3
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash equivalents	0	0
Short-term investments	0	0
Level 3 \| Commercial paper
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Short-term investments	0	0
Level 3 \| Corporate bonds
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Short-term investments	0	0
Level 3 \| Asset backed securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Short-term investments	0	0
Level 3 \| Yankee bonds
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Short-term investments	0	0
Level 3 \| U.S. Treasury and agency obligations
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Short-term investments	0	0
Level 3 \| Money market funds
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash equivalents	$ 0	$ 0

Fair Value Measurements - Narrative (Details) - USD ($) $ in Millions	1 Months Ended
	May 31, 2024	Jun. 30, 2024	Dec. 31, 2023
Fair Value Disclosures [Abstract]
Other long-term investments		$ 7.6	$ 9.4
Gain (loss) from SAFE investments	$ 1.5

Property and Equipment, Net - Schedule of Property and Equipment, Net (Details) - USD ($) $ in Thousands	Jun. 30, 2024	Dec. 31, 2023
Property, Plant and Equipment [Line Items]
Total	$ 86,938	$ 89,973
Less: accumulated depreciation and amortization	(45,490)	(44,537)
Property and equipment, net	41,448	45,436
Computer software and equipment
Property, Plant and Equipment [Line Items]
Total	21,027	21,845
Internally developed software
Property, Plant and Equipment [Line Items]
Total	38,063	32,261
Furniture and fixtures
Property, Plant and Equipment [Line Items]
Total	5,191	6,513
Leasehold improvements
Property, Plant and Equipment [Line Items]
Total	$ 22,657	$ 29,354

Property and Equipment, Net - Narrative (Details) - USD ($) $ in Thousands	1 Months Ended	3 Months Ended		6 Months Ended
	Jun. 30, 2024	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
Restructuring Cost and Reserve [Line Items]
Depreciation and amortization		$ 2,800	$ 3,200	$ 6,400	$ 6,500
Restructuring		4,681	$ 0	$ 6,070	$ 0
Impairment Of Right-of-use Asset and Fixed Assets
Restructuring Cost and Reserve [Line Items]
Restructuring	$ 4,500	$ 4,500

Acquisitions, Goodwill and Intangible Assets - Narrative (Details) - USD ($) $ in Millions	1 Months Ended	3 Months Ended		6 Months Ended
	Jun. 30, 2024	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
Business Acquisition [Line Items]
Intangible assets acquired, estimated useful life				5 years 8 months 12 days
Amortization of intangible assets		$ 4.8	$ 3.1	$ 9.4	$ 6.2
General and administrative
Business Acquisition [Line Items]
Acquisition-related transaction costs		$ 0.7		$ 0.1	$ 0.9
Eureka
Business Acquisition [Line Items]
Percentage of voting interests acquired	100.00%	100.00%		100.00%
Business combination, consideration transferred	$ 29.2
Cash acquired	0.4
Intangible assets acquired, cost	$ 6.9
Intangible assets acquired, estimated useful life	5 years

Acquisitions, Goodwill and Intangible Assets - Schedule Of Recognized Identified Assets Acquired And Liabilities Assumed (Details) - USD ($) $ in Thousands	Jun. 30, 2024	Dec. 31, 2023
Business Acquisition [Line Items]
Goodwill	$ 541,292	$ 518,539
Eureka
Business Acquisition [Line Items]
Intangible assets	6,900
Goodwill	22,753
Other current liabilities, net	(449)
Total purchase price	$ 29,204

Acquisitions, Goodwill and Intangible Assets - Schedule of Goodwill (Details) $ in Thousands	6 Months Ended
	Jun. 30, 2024 USD ($)
Goodwill [Roll Forward]
Balance at December 31, 2023	$ 518,539
Acquired goodwill	22,753
Balance at June 30, 2024	$ 541,292

Acquisitions, Goodwill and Intangible Assets - Schedule of Acquired Intangible Assets Subject to Amortization (Details) - USD ($) $ in Thousands	Jun. 30, 2024	Dec. 31, 2023
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	$ 149,927	$ 143,027
Accumulated Amortization	(45,439)	(36,010)
Total	104,488	107,017
Acquired technology
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	149,437	142,537
Accumulated Amortization	(44,949)	(35,520)
Total	104,488	107,017
Trade name
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	490	490
Accumulated Amortization	(490)	(490)
Total	$ 0	$ 0

Acquisitions, Goodwill and Intangible Assets - Schedule of Future Amortization of Intangible Assets (Details) - USD ($) $ in Thousands	Jun. 30, 2024	Dec. 31, 2023
Finite-Lived Intangible Assets, Amortization Expense, Maturity Schedule [Abstract]
2024	$ 10,028
2025	20,055
2026	19,870
2027	17,840
2028	14,797
Thereafter	21,898
Total	$ 104,488	$ 107,017

Leases - Components of Lease Expense (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
Leases [Abstract]
Operating lease cost	$ 1,890	$ 1,902	$ 3,785	$ 3,790

Leases - Narrative (Details) - USD ($) $ in Thousands	1 Months Ended	3 Months Ended		6 Months Ended
Leases - Narrative (Details) - USD ($) $ in Thousands	Jun. 30, 2024	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
Property, Plant, and Equipment, Lessor Asset under Operating Lease [Line Items]
Restructuring		$ 4,681	$ 0	$ 6,070	$ 0
Lessor, sublease income to be received 2024	$ 100	100		100
Lessor, sublease income to be received 2025	900	900		900
Lessor, sublease income to be received 2026	1,700	1,700		1,700
Lessor, sublease income to be received 2027	1,800	1,800		1,800
Lessor, sublease income to be received 2028	1,900	1,900		1,900
Lessor, sublease income to be received thereafter	6,400	6,400		$ 6,400
Impairment Of Right-of-use Asset and Fixed Assets
Property, Plant, and Equipment, Lessor Asset under Operating Lease [Line Items]
Restructuring	$ 4,500	$ 4,500

Leases - Supplemental Information Related to Leases (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023	Dec. 31, 2023
Operating leases
Weighted average remaining lease term (in years)	6 years 10 months 24 days		6 years 10 months 24 days		7 years 3 months 18 days
Weighted average discount rate	5.70%		5.70%		5.60%
ROU assets obtained in exchange for lease obligations
Operating leases	$ 806	$ 1,234	$ 806	$ 1,234

Leases - Operating Lease Liability Maturities (Details) $ in Thousands	Jun. 30, 2024 USD ($)
Leases [Abstract]
2024	$ 4,207
2025	9,692
2026	9,039
2027	8,581
2028	7,736
Thereafter	23,386
Total lease payments	62,641
Less: Imputed interest	(11,165)
Total	$ 51,476

Debt- Narrative (Details)	1 Months Ended
Debt- Narrative (Details)	Jul. 31, 2021 USD ($)	Jun. 30, 2024 USD ($)
Line of Credit Facility [Line Items]
Standby letters of credit		$ 5,700,000
Secured Debt
Line of Credit Facility [Line Items]
Credit facility, maximum borrowing capacity	$ 375,000,000
Basis spread on variable rate	2.75%
Debt instrument, basis spread on variable rate, variable rate floor	0.50%
Annual amortization amount, percent	1.00%
Debt instrument, periodic payment terms, balloon payment to be paid	$ 350,600,000
Long-term debt, fair value		$ 365,600,000
Secured Debt \| Credit Agreement
Line of Credit Facility [Line Items]
Debt Instrument, covenant, leverage ratio, maximum		3.5
Debt instrument, covenant, leverage ratio		1.08
Revolving Credit Facility
Line of Credit Facility [Line Items]
Credit facility, maximum borrowing capacity	$ 50,000,000
Standby letters of credit		$ 200,000

Debt - Carrying Value of Term Loan (Details) $ in Thousands	Jun. 30, 2024 USD ($)
Debt Instrument [Line Items]
Term loan	$ 365,625
Secured Debt
Debt Instrument [Line Items]
Term loan	365,625
Less: Unamortized debt discount and issuance costs	(5,021)
Term loan, net of issuance costs	360,604
Less: Term loan, net, current	(2,635)
Term loan, net of issuance costs (net of current portion)	$ 357,969

Debt - Maturities of Term Loan (Details) $ in Thousands	Jun. 30, 2024 USD ($)
Debt Disclosure [Abstract]
2024	$ 1,875
2025	3,750
2026	3,750
2027	3,750
2028	352,500
Total	$ 365,625

Commitments and Contingencies (Details) € in Millions, $ in Millions	Jul. 31, 2024 USD ($)	Jun. 30, 2024 USD ($)	Jun. 30, 2024 EUR (€)	Dec. 31, 2023 EUR (€)
Line of Credit Facility [Line Items]
Purchase obligation, amount spent \| €			€ 3.2
Standby letters of credit		$ 5.7
Microsoft
Line of Credit Facility [Line Items]
Purchase obligation \| €				€ 28.5
Amazon Web Services (AWS)
Line of Credit Facility [Line Items]
Purchase obligation		$ 140.6
Amazon Web Services (AWS) \| Subsequent Event
Line of Credit Facility [Line Items]
Purchase obligation	$ 230.3
Purchase obligation, to be paid, year one	59.7
Purchase obligation, to be paid, year two	77.6
Purchase obligation, to be paid, year three	$ 93.0

Stock-Based Compensation - Narrative (Details) - USD ($) $ / shares in Units, $ in Thousands	1 Months Ended	6 Months Ended
	Jan. 31, 2024	Jun. 30, 2024	Jun. 30, 2023
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Proceeds from stock issued in connection with the employee stock purchase plan		$ 9,878	$ 9,914
Employee Stock Purchase Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Additional shares reserved (in shares)	1,800,000
Shares available for grant (in shares)		10,100,000
Common stock purchased (in shares)		304,579
Share price (in usd per share)		$ 32.43
Employee contributions		$ 5,300
2018 Equity Incentive Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Additional shares reserved (in shares)	5,900,000
Shares available for grant (in shares)		26,100,000

Stock-Based Compensation - Stock-Based Compensation Expense (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Total stock-based compensation expense	$ 41,398	$ 37,860	$ 81,117	$ 71,977
Cost of revenue
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Total stock-based compensation expense	3,288	2,906	6,270	5,531
Sales and marketing
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Total stock-based compensation expense	16,276	16,423	31,576	30,817
Research and development
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Total stock-based compensation expense	11,799	9,764	22,960	18,629
General and administrative
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Total stock-based compensation expense	$ 10,035	$ 8,767	$ 20,311	$ 17,000

Stock-Based Compensation - Schedule of Unrecognized Stock-Based Compensation (Details) $ in Thousands	6 Months Ended
	Jun. 30, 2024 USD ($)
Restricted stock units ("RSUs")
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unrecognized Stock-Based Compensation Expense (in thousands)	$ 347,395
Estimated Weighted Average Period (in years)	2 years 10 months 24 days
Performance stock units ("PSUs")
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unrecognized Stock-Based Compensation Expense (in thousands)	$ 9,225
Estimated Weighted Average Period (in years)	3 years 3 months 18 days
Restricted Stock
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unrecognized Stock-Based Compensation Expense (in thousands)	$ 9,979
Estimated Weighted Average Period (in years)	1 year 9 months 18 days
2018 Employee Stock Purchase Plan ("2018 ESPP")
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unrecognized Stock-Based Compensation Expense (in thousands)	$ 3,570
Estimated Weighted Average Period (in years)	8 months 12 days

Stock-Based Compensation - RSUs and PSUs (Details) shares in Thousands	6 Months Ended
	Jun. 30, 2024 $ / shares shares
Restricted Stock
Number of Shares
Number of shares unvested, beginning of period (in shares) \| shares	311
Number of shares, granted (in shares) \| shares	0
Number of shares, performance adjustment (in shares) \| shares	0
Number of shares, vested (in shares) \| shares	(62)
Number of shares, forfeited (in shares) \| shares	0
Number of shares unvested, end of period (in shares) \| shares	249
Weighted Average Grant Date Fair Value
Weighted average grant date fair value, beginning of period (in usd per share) \| $ / shares	$ 45.67
Weighted average grant date fair value, granted (in usd per share) \| $ / shares	0
Weighted average grant date fair value, performance adjustment (in usd per share) \| $ / shares	0
Weighted average grant date fair value, vested (in usd per share) \| $ / shares	45.67
Weighted average grant date fair value, forfeited (in usd per share) \| $ / shares	0
Weighted average grant date fair value, end of period (in usd per share) \| $ / shares	$ 45.67
RSUs
Number of Shares
Number of shares unvested, beginning of period (in shares) \| shares	7,343
Number of shares, granted (in shares) \| shares	3,595
Number of shares, performance adjustment (in shares) \| shares	0
Number of shares, vested (in shares) \| shares	(1,936)
Number of shares, forfeited (in shares) \| shares	(536)
Number of shares unvested, end of period (in shares) \| shares	8,466
Weighted Average Grant Date Fair Value
Weighted average grant date fair value, beginning of period (in usd per share) \| $ / shares	$ 43.80
Weighted average grant date fair value, granted (in usd per share) \| $ / shares	46.61
Weighted average grant date fair value, performance adjustment (in usd per share) \| $ / shares	0
Weighted average grant date fair value, vested (in usd per share) \| $ / shares	42.80
Weighted average grant date fair value, forfeited (in usd per share) \| $ / shares	44.70
Weighted average grant date fair value, end of period (in usd per share) \| $ / shares	$ 45.15
PSUs
Number of Shares
Number of shares unvested, beginning of period (in shares) \| shares	258
Number of shares, granted (in shares) \| shares	170
Number of shares, performance adjustment (in shares) \| shares	(10)
Number of shares, vested (in shares) \| shares	(69)
Number of shares, forfeited (in shares) \| shares	0
Number of shares unvested, end of period (in shares) \| shares	349
Weighted Average Grant Date Fair Value
Weighted average grant date fair value, beginning of period (in usd per share) \| $ / shares	$ 43.90
Weighted average grant date fair value, granted (in usd per share) \| $ / shares	47.20
Weighted average grant date fair value, performance adjustment (in usd per share) \| $ / shares	43.24
Weighted average grant date fair value, vested (in usd per share) \| $ / shares	43.79
Weighted average grant date fair value, forfeited (in usd per share) \| $ / shares	0
Weighted average grant date fair value, end of period (in usd per share) \| $ / shares	$ 45.54

Stock-Based Compensation - Stock Option Activity (Details) $ / shares in Units, shares in Thousands, $ in Thousands	6 Months Ended	12 Months Ended
	Jun. 30, 2024 USD ($) $ / shares shares	Dec. 31, 2023 USD ($) $ / shares shares
Number of Shares
Number of shares outstanding, beginning of period (in shares) \| shares	5,095
Number of shares, exercised (in shares) \| shares	(647)
Number of shares, forfeited/canceled (in shares) \| shares	0
Number of shares outstanding, end of period (in shares) \| shares	4,448	5,095
Number of shares exercisable (in shares) \| shares	4,448
Weighted Average Exercise Price
Weighted average exercise price, outstanding, beginning of period (in usd per share) \| $ / shares	$ 8.95
Weighted average exercise price, exercised (in usd per share) \| $ / shares	6.39
Weighted average exercise price, forfeited/canceled (in usd per share) \| $ / shares	0
Weighted average exercise price, outstanding, end of period (in usd per share) \| $ / shares	9.32	$ 8.95
Weighted average exercise price, exercisable (in usd per share) \| $ / shares	$ 9.32
Weighted Average Remaining Contractual Term/ Aggregate Intrinsic Value
Weighted average remaining contractual term (in years), outstanding	3 years 1 month 6 days	3 years 6 months
Weighted average remaining contractual term (in years), exercisable	3 years 1 month 6 days
Aggregate intrinsic value, outstanding, beginning of period \| $	$ 152,410	$ 189,108
Aggregate intrinsic value, exercised \| $	26,036
Aggregate intrinsic value, exercisable, ending of period \| $	$ 152,410

Stock-Based Compensation - Fair Value Assumptions (Details) - Employee Stock Purchase Plan	6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Expected volatility, minimum	41.10%	51.00%
Expected volatility, maximum	51.40%	58.10%
Risk-free interest rate, minimum	4.40%	4.80%
Risk-free interest rate, maximum	5.10%	5.00%
Expected dividend yield	0.00%	0.00%
Minimum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Expected term (in years)	6 months	6 months
Maximum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Expected term (in years)	2 years	2 years

Income Taxes (Details) - USD ($) $ in Millions	6 Months Ended
Income Taxes (Details) - USD ($) $ in Millions	Jun. 30, 2024	Jun. 30, 2023
Income Tax Disclosure [Abstract]
Foreign tax expense	$ 2.1	$ 4.1
Base Erosion and Anti-Abuse Tax (BEAT), amount	1.7
Discrete expenses	$ 1.6	$ 2.2

Net Loss Per Share - Computation of Basic and Diluted Net Loss Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
Earnings Per Share [Abstract]
Net loss	$ (14,572)	$ (15,974)	$ (28,958)	$ (41,071)
Weighted-average shares used to compute net loss per share, basic (in shares)	118,681	115,131	118,111	114,465
Weighted-average shares used to compute net loss per share, diluted (in shares)	118,681	115,131	118,111	114,465
Net loss per share, basic (in usd per share)	$ (0.12)	$ (0.14)	$ (0.25)	$ (0.36)
Net loss per share, diluted (in usd per share)	$ (0.12)	$ (0.14)	$ (0.25)	$ (0.36)

Net Loss Per Share - Schedule of Potentially Dilutive Securities (Details) - shares shares in Thousands	6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded from computation of earnings per share (in shares)	13,497	13,635
RSUs
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded from computation of earnings per share (in shares)	8,466	7,963
Stock options
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded from computation of earnings per share (in shares)	4,448	5,319
Shares to be issued under the 2018 ESPP
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded from computation of earnings per share (in shares)	155	210
PSUs
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded from computation of earnings per share (in shares)	179	143
Restricted Stock
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded from computation of earnings per share (in shares)	249	0

Geographic Information - Narrative (Details) - segment	3 Months Ended		6 Months Ended
Geographic Information - Narrative (Details) - segment	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
Concentration Risk [Line Items]
Number of operating segments			1
United States \| Revenue \| Geographic Concentration Risk
Concentration Risk [Line Items]
Concentration risk (in percent)	54.00%	55.00%	54.00%	55.00%

Geographic Information - Revenue by Geographic Region (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
Revenues from External Customers and Long-Lived Assets [Line Items]
Revenue	$ 221,241	$ 195,036	$ 437,202	$ 383,875
The Americas
Revenues from External Customers and Long-Lived Assets [Line Items]
Revenue	136,754	122,210	271,237	241,494
Europe, Middle East and Africa
Revenues from External Customers and Long-Lived Assets [Line Items]
Revenue	59,320	50,781	116,358	99,040
Asia Pacific
Revenues from External Customers and Long-Lived Assets [Line Items]
Revenue	$ 25,167	$ 22,045	$ 49,607	$ 43,341

Geographic Information - Property and Equipment, Net by Geographic Area (Details) - USD ($) $ in Thousands	Jun. 30, 2024	Dec. 31, 2023
Revenues from External Customers and Long-Lived Assets [Line Items]
Property and equipment, net	$ 41,448	$ 45,436
United States
Revenues from External Customers and Long-Lived Assets [Line Items]
Property and equipment, net	36,683	39,497
International
Revenues from External Customers and Long-Lived Assets [Line Items]
Property and equipment, net	$ 4,765	$ 5,939