The cybersecurity market has cooled substantially from the highs it enjoyed over the past few years. Now many companies are scrambling to prove their worth.
Amid the chill, a number of companies have taken it upon themselves to release financial information in a show of strength and defiance—an attempt at separating themselves from the pack. Tanium, an IT operations and cybersecurity firm that was last valued at $3.75 billion by private investors, according to venture capital database firm Pitchbook, is the latest to do so.
Orion Hindawi, Tanium’s CEO and cofounder, offered Coins2Day an exclusive peek at the company’s books. “A common theme we’re hearing over and over again with customers is to explain why we’ll be bigger and better in three years, in five years, in 10 years,” Hindawi said. “They don’t want to make an investment in a technology and deploy it unless they know there’s longevity to it.”
Hindawi shared these details in an effort to showcase Tanium’s health in contrast to struggling peers. The company made “well over $200 million in revenue” over the course of its last fiscal year, Hindawi told Coins2Day, growing 70% over the year prior.
Tanium’s annual recurring revenue grew more than 80% to approximately $230 million in the past year, he added.
“Our operating cash flow is substantially positive,” Hindawi said. The company has more than $20 million in free cash flow, he continued, a figure that is about four times greater than it was in the year prior.
That influx has contributed to year-end cash and equivalents in excess of $300 million—a figure Hindawi has mentioned in previous interviews. The number may assuage prospective investors that the company has no dire need for liquidity, though it may continue pursue additional private investment rounds as an option enabling employees to cash out of their holdings.
Tanium was profitable in the fourth quarter of last year, Hindawi said, despite continued, aggressive investment in expansion: “I do expect to maintain that profitability moving forward.”
“Investors are sick of funding companies that have no possibility of ever making money,” Hindawi said. “When the musical chairs stop, a lot of companies cannot continue to operate as they were.”
One stat that the CEO lingered on involved customer retention. On average last year Tanium retained almost all of its customers—a hair under 100%, Hindawi said.
“We had a 150% renewal rate,” Hindawi added, meaning that “if a customer spent a dollar with us last year, then they spent $1.50 with us next year.” In Tanium’s case, this often takes the form of customers buying additional, premium “modules,” or capabilities, to supplement its core product, which helps techies manage IT infrastructure.
Hindawi has spoken about his desire eventually to take his company public before. “It’s one of the obvious options for a go-forward plan for the company,” he told Coins2Day, adding that he is continuing to consider the benefits and cons.
“An IPO is one way to achieve liquidity and that’s really all it is,” he said. “We mythologize this thing into an unbelievably important event.”
But the public markets are not Hindawi’s top priority at the moment.
Says the CEO: “I don’t spend 80% of my time with bankers.”
