First quarter revenue of $21.4 million increase
1% year-over-year
GAAP operating loss of $12.8 million and
non-GAAP operating loss of $9.5 million
Tufin (NYSE: TUFN), a company pioneering a policy-centric
approach to security and IT operations, today announced financial
results for the first quarter ended March 31, 2021.
“We are pleased to deliver another quarter of year-over-year
product revenue growth, with the subscription transition in the
first quarter exceeding our expectations,” said Ruvi Kitov, Tufin’s
CEO and Co-Founder. “We expanded our security policy management
capabilities, with the announcement of the Tufin Orchestration
Suite version R 21-1, and the new additions to the marketplace for
vulnerability management and Cisco ACI automation.”
Kitov added, “We continue to work on our transformation and
strive to improve execution and remain agile, to fully participate
in the ongoing recovery and set the stage for long-term growth.
Early indications give us confidence that our strategic direction
and the effectiveness of our actions thus far in 2021 will drive
long-term value for our stakeholders.”
Financial Highlights for the First Quarter Ended March 31,
2021
Revenue:
- Total revenue was $21.4 million, up 1% compared with the first
quarter of 2020.
- Product revenue was $6.0 million, up 4% compared with the first
quarter of 2020.
- Maintenance and professional services revenue was $15.3
million, in line with the first quarter of 2020.
Gross Profit:
- GAAP gross profit was $16.0 million, or 75% of total revenue,
compared to $15.7 million in the first quarter of 2020, or 74% of
total revenue.
- Non-GAAP gross profit was $16.5 million, or 77% of total
revenue, compared to $16.2 million in the first quarter of 2020, or
76% of total revenue.
Operating Loss:
- GAAP operating loss was $12.8 million, compared to operating
loss of $17.3 million in the first quarter of 2020.
- Non-GAAP operating loss was $9.5 million, compared to non-GAAP
operating loss of $13.3 million in the first quarter of 2020.
Net Loss:
- GAAP net loss was $11.6 million, or a loss of $0.32 per share,
compared to net loss of $17.0 million, or a loss of $0.48 per
share, in the first quarter of 2020.
- Non-GAAP net loss was $9.8 million, or a loss of $0.27 per
share, compared to non-GAAP loss of $13.2 million, or a loss of
$0.37 per share, in the first quarter of 2020.
Balance Sheet and Cash Flow:
- Cash flow generated from operating activities during the three
months ended March 31, 2021 was $9.3 million, compared to cash flow
generated from operating activities of $0.5 million during the
three months ended March 31, 2020.
- Total cash, cash equivalents restricted cash and marketable
securities as of March 31, 2021 were $113.9 million, compared to
$104.0 million as of December 31, 2020.
The tables at the end of this press release include a
reconciliation of GAAP to non-GAAP gross profit, operating income
and net income for the three months ended March 31, 2021 and 2020.
An explanation of these measures is also included under the heading
“Non-GAAP Financial Measures.”
Recent Business Highlights
- Announced the release of Tufin Orchestration Suite R 21-1.
Integrating SecureChange and SecureCloud, the latest version adds
automation capabilities for Microsoft Azure customers. It also
extends the automation capabilities of SecureChange to include
external platforms that are not directly managed by the Tufin
Orchestration Suite, enabling customers to centrally manage
security changes for any platform across their hybrid
environment.
- Announced two new Marketplace apps:
- The Policy Change Automation (PCA) app for Cisco ACI enables
automation of ACI contracts through an integration of SecureChange
with Ansible playbooks.
- The Vulnerability-Based Change Automation App (VCA)
automatically retrieves data from vulnerability scanners and
reflects the results in the risk assessment step of a change
request. Customers can ensure there are no risky vulnerabilities in
the source or destination of a change ticket before provisioning
new network access.
- Announced that CRN named Addie Finch, Tufin’s Director of
Channel Sales, Americas, to the Women of the Channel list for 2021,
which recognizes the achievements of female leaders in the IT
channel.
Business Outlook
Based on information available as of May 13, 2021, Tufin is
issuing guidance as indicated below:
Second Quarter 2021:
- Total revenue between $21.0 and $25.0 million
- Non-GAAP operating loss between $12.7 and $9.3 million
Full Year 2021:
- Total revenue between $105.0 and $113.0 million
- Non-GAAP operating loss between $33.8 and $27.0 million
Conference Call Information
In conjunction with this announcement, the Company will host a
conference call today, May 13, 2021, at 8:00am Eastern Time, to
discuss the Company’s first quarter financial results and its
business outlook. To participate in the call, please dial
877-407-2988 in the U.S. or 201-389-0923 for international
participants and enter Conference ID# 13718996. The call will also
be webcast live on Tufin’s Investor Relations website at
investors.tufin.com.
Following the conference call, an archive of the webcast will be
available on the investor relations section of the Company
website’s two hours after the live call ends.
About Tufin
Tufin (NYSE: TUFN) simplifies management of some of the largest,
most complex networks in the world, consisting of thousands of
firewall and network devices and emerging hybrid cloud
infrastructures. Enterprises select the company’s Tufin
Orchestration Suite™ to increase agility in the face of
ever-changing business demands while maintaining a robust security
posture. The Suite reduces the attack surface and meets the need
for greater visibility into secure and reliable application
connectivity. With over 2,000 customers since its inception,
Tufin’s network security automation enables enterprises to
implement changes in minutes instead of days, while improving their
security posture and business agility.
Non-GAAP Financial Measures
We believe that providing non-GAAP financial measures that
exclude, as applicable, share-based compensation expense and
certain non-recurring costs, as well as, the tax effect of these
non-GAAP adjustments, allows for more meaningful comparisons
between our operating results from period to period. These non-GAAP
financial measures are an important tool for financial and
operational decision-making and for evaluating our operating
results over different periods:
- We define non-GAAP gross profit as gross profit excluding
share-based compensation expense.
- We define non-GAAP operating income (loss) as operating income
(loss) excluding share-based compensation expense and one-time
expenses associated with reorganization in of one of our
subsidiaries.
- We define non-GAAP net income as net income excluding
share-based compensation expense, one-time expenses associated with
reorganization in of one of our subsidiaries and the tax effect of
these non-GAAP adjustments.
Because of varying available valuation methodologies, subjective
assumptions and the variety of equity instruments that can impact a
company’s non-cash expense, we believe that providing non-GAAP
financial measures that exclude non-cash share-based compensation
expense allow for more meaningful comparisons between our operating
results from period to period. In addition, we believe that
providing non-GAAP financial measures that exclude one-time
expenses associated with the reorganization of one of our
subsidiaries allows for more meaningful comparisons between our
operating results from period to period since these non-recurring
costs are not representative or indicative of our ongoing
operations. We also believe that the tax effects related to the
non-GAAP adjustments set forth above do not reflect the performance
of our core business and would impact period-to-period
comparability.
Other companies, including companies in our industry, may
calculate non-GAAP gross profit, non-GAAP operating income (loss)
and non-GAAP net income (loss) differently or not at all, which
reduces the usefulness these non-GAAP financial measures for
comparison. You should consider these non-GAAP financial measures
along with other financial performance measures, including gross
profit, operating income (loss) and net income (loss), and our
financial results presented in accordance with U.S. GAAP. Tufin
urges investors to review the reconciliation of its non-GAAP
financial measures to the comparable U.S. GAAP financial measures
included below, and not to rely on any single financial measure to
evaluate its business.
Guidance for non-GAAP financial measures excludes, as
applicable, share-based compensation expense and certain
non-recurring costs, as applicable. A reconciliation of the
non-GAAP financial measures guidance to the corresponding GAAP
measures is not available on a forward-looking basis due to the
uncertainty regarding, and the potential variability and
significance of, the amounts of share-based compensation expense
and certain non-recurring costs, as applicable, that are excluded
from the guidance. Accordingly, a reconciliation of the non-GAAP
financial measures guidance to the corresponding GAAP measures for
future periods is not available without unreasonable effort.
Cautionary Language Concerning Forward-Looking
Statements
This release contains forward-looking statements, which express
the current beliefs and expectations of Tufin’s (the “Company”)
management. In some cases, forward-looking statements may be
identified by terminology such as “believe,” “may,” “estimate,”
“continue,” “anticipate,” “intend,” “should,” “plan,” “expect,”
“predict,” “potential” or the negative of these terms or other
similar expressions. Such statements involve a number of known and
unknown risks and uncertainties that could cause the Company’s
future results, performance or achievements to differ significantly
from the results, performance or achievements expressed or implied
by such forward-looking statements. Important factors that could
cause or contribute to such differences include risks relating to:
the impact of COVID-19 on the budgets of our clients and on
economic conditions generally; changes in the rapidly evolving
enterprise network landscape; failure to effectively manage growth;
potential near-term declines in our operating and net profit
margins and our revenue growth rate; real or perceived
shortcomings, defects or vulnerabilities in the Company’s solutions
or internal network system, or the failure of the Company’s
customers or channel partners to correctly implement the Company’s
solutions; fluctuations in quarterly results of operations; the
inability to acquire new customers or sell additional products and
services to existing customers; competition from a wide variety of
competitive vendors; the Company’s ability to successfully
integrate potential future acquisitions; and other factors
discussed under the heading “Risk Factors” in the Company’s most
recent annual report on Form 20-F filed with the Securities and
Exchange Commission. Forward-looking statements in this release are
made pursuant to the safe harbor provisions contained in the
Private Securities Litigation Reform Act of 1995. These
forward-looking statements are made only as of the date hereof, and
the Company undertakes no obligation to update or revise the
forward-looking statements, whether as a result of new information,
future events or otherwise.
TUFIN SOFTWARE TECHNOLOGIES
LTD.
CONDENSED CONSOLIDATED BALANCE
SHEETS
U.S. dollars in
thousands
(Unaudited)
December 31,
March 31,
2020
2021
Assets
CURRENT ASSETS:
Cash and cash equivalents
58,449
67,400
Marketable Securities - short term
19,586
19,632
Accounts receivable (net of allowance for
credit losses of $85 at December 31, 2020
and March 31, 2021)
16,674
8,019
Prepaid expenses and other current
assets
7,159
8,508
Total current assets
101,868
103,559
NON CURRENT ASSETS:
Long-term restricted bank deposits
3,268
3,164
Marketable Securities - long term
22,705
23,678
Property and equipment, net
4,502
4,401
Operating lease assets
18,802
18,231
Deferred costs
6,348
6,155
Deferred tax assets
1,346
1,592
Other non-current assets
1,512
1,619
Total non-current assets
58,483
58,840
Total assets
160,351
162,399
TUFIN SOFTWARE TECHNOLOGIES
LTD.
CONDENSED CONSOLIDATED BALANCE
SHEETS
U.S. dollars in thousands
(except share data)
(Unaudited)
December 31,
March 31,
2020
2021
LIABILITIES AND SHAREHOLDERS’
EQUITY
CURRENT LIABILITIES:
Trade payables
4,147
4,413
Employee and payroll accrued expenses
17,985
17,227
Other accounts payables
578
751
Operating lease liabilities – current
3,185
3,138
Deferred revenues
24,940
31,103
Total current liabilities
50,835
56,632
NON-CURRENT LIABILITIES:
Long-term deferred revenues
12,815
17,404
Non-current operating lease
liabilities
20,240
18,874
Other non-current liabilities
1,282
1,306
Total non-current liabilities
34,337
37,584
Total liabilities
85,172
94,216
COMMITMENTS AND CONTINGENCIES
SHAREHOLDERS’ EQUITY:
Ordinary shares of NIS 0.015 par value;
150,000,000 shares authorized at December 31, 2020 and March 31,
2021; 35,972,470 and 36,770,773 shares issued and outstanding at
December 31, 2020 and March 31, 2021, respectively
148
152
Additional paid-in capital
178,864
183,481
Accumulated other comprehensive income
(loss)
5
(22
)
Accumulated deficit
(103,838
)
(115,428
)
TOTAL SHAREHOLDERS’ EQUITY
75,179
68,183
TOTAL LIABILITIES AND SHAREHOLDERS’
EQUITY
160,351
162,399
TUFIN SOFTWARE TECHNOLOGIES
LTD.
CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS
U.S. dollars in thousands
(except per share amounts)
(Unaudited)
Three Months Ended
March 31,
March 31,
2020
2021
Revenues:
Product
5,804
6,031
Maintenance and professional services
15,440
15,329
Total revenues
21,244
21,360
Cost of revenues:
Product
553
753
Maintenance and professional services
5,017
4,651
Total cost of revenues
5,570
5,404
Gross profit
15,674
15,956
Operating expenses:
Research and development
10,178
9,640
Sales and marketing
17,829
13,564
General and administrative
4,931
5,596
Total operating expenses
32,938
28,800
Operating loss
(17,264
)
(12,844
)
Financial income, net
563
65
Loss before taxes on income
(16,701
)
(12,779
)
Taxes on income
(343
)
1,189
Net loss
(17,044
)
(11,590
)
Basic and diluted net loss per ordinary
share
(0.48
)
(0.32
)
Weighted average number of shares used in
computing net loss per ordinary share - basic and diluted
35,453
36,395
Share-based Compensation
Expense:
Three Months Ended
March 31,
March 31,
2020
2021
Cost of revenues
495
523
Research and development
1,070
1,127
Sales and marketing
1,187
741
General and administrative
903
957
Total share-based compensation expense
3,655
3,348
TUFIN SOFTWARE TECHNOLOGIES
LTD.
CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS
(Unaudited, U.S. dollars in
thousands)
Three Months Ended
March 31,
2020
2021
CASH FLOWS FROM OPERATING
ACTIVITIES:
Net loss
(17,044
)
(11,590
)
Adjustment to reconcile net loss to net
cash provided by operating activities:
Depreciation
332
404
Share-based compensation
3,655
3,348
Amortization of premium and accretion of
discount on marketable securities, net
-
80
Exchange rate differences on cash, cash
equivalents and restricted cash
297
526
Other
2
-
Change in operating assets and
liability items:
Accounts receivable
6,051
8,655
Prepaid expenses and other current
assets
(1,400
)
(1,514
)
Deferred costs
264
230
Deferred taxes and other non-current
assets
15
(353
)
Trade payables
(74
)
266
Employee and payroll accrued expenses
(13
)
(839
)
Other accounts payable and non-current
liabilities
1,200
188
Operating lease
(686
)
(842
)
Deferred revenues
7,861
10,752
Net cash provided by operating
activities
460
9,311
CASH FLOWS FROM INVESTING
ACTIVITIES:
Purchase of fixed assets
(1,018
)
(294
)
Investment in marketable securities
-
(10,076
)
Proceeds from maturities of marketable
securities
-
8,995
Net cash used in investing activities
(1,018
)
(1,375
)
CASH FLOWS FROM FINANCING
ACTIVITIES:
Changes in withholding taxes related to
employee stock plans
(1,078
)
80
Proceeds from exercise of stock
options
711
1,357
Net cash provided by (used in) financing
activities
(367
)
1,437
Effect of exchange rate changes on
cash, cash equivalents and restricted cash
(297
)
(526
)
INCREASE (DECREASE) IN CASH, CASH
EQUIVALENTS AND RESTRICTED CASH
(1,222
)
8,847
CASH, CASH EQUIVALENTS AND RESTRICTED
CASH AT BEGINNING OF PERIOD
121,729
61,717
CASH, CASH EQUIVALENTS AND RESTRICTED
CASH AT END OF PERIOD
120,507
70,564
SUPPLEMENTAL DISCLOSURE OF CASH FLOW
INFORMATION:
Property and equipment purchased but not
yet paid
53
58
Exercise of share options
93
-
TUFIN SOFTWARE TECHNOLOGIES
LTD.
RECONCILIATION OF GAAP
MEASURES TO NON-GAAP MEASURES
(Unaudited, U.S. dollars in
thousands)
Reconciliation of Gross Profit to
Non-GAAP Gross Profit:
Three Months Ended
March 31,
March 31,
2020
2021
Gross profit
15,674
15,956
Plus:
Share-based compensation
495
523
Non-GAAP gross profit
16,169
16,479
Reconciliation of Operating loss to
Non-GAAP Operating loss:
Three Months Ended
March 31
March 31,
2020
2021
Operating loss
(17,264
)
(12,844
)
Plus:
Share-based compensation
3,655
3,348
One-time reorganization charges
322
-
Non-GAAP Operating loss
(13,287
)
(9,496
)
Reconciliation of Net loss to Non-GAAP
Net loss:
Three Months Ended
March 31,
March 31,
2020
2021
Net loss
(17,044
)
(11,590
)
Plus:
Share-based compensation
3,655
3,348
Other
322
-
Taxes on income related to non-GAAP
adjustments
(172
)
(1,605
)
Non-GAAP Net loss
(13,239
)
(9,847
)
Non-GAAP net income per share
Basic and diluted
(0.37
)
(0.27
)
Weighted average number of
shares
35,453
36,395
About Tufin
Tufin (NYSE: TUFN) simplifies management of some of the largest,
most complex networks in the world, consisting of thousands of
firewall and network devices and emerging hybrid cloud
infrastructures. Enterprises select the Tufin Orchestration Suite™
to increase agility in the face of ever-changing business demands
while maintaining a robust security posture. The Suite reduces the
attack surface and meets the need for greater visibility into
secure and reliable application connectivity. With over 2,000
customers since its inception, Tufin’s network security automation
enables enterprises to implement changes in minutes instead of
days, while improving their security posture and business
agility.
Find out more at: www.tufin.com
Follow Tufin on Twitter: @TufinTech
Read more on Tufin’s blog: Suite Talk
View source
version on businesswire.com: https://www.businesswire.com/news/home/20210513005503/en/
Investor Relations: Jackie Marcus or Michael Cummings
investors@tufin.com
Media Relations: Susan Rivera Corporate Communications
Manager, Tufin susan.rivera@tufin.com
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