Boston, MA and Tel Aviv, Israel - June 13, 2019 - 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, 2019.

“We are pleased to deliver our first financial results as a public company for the first quarter of 2019,” said Ruvi Kitov, Tufin CEO. “We closed a strong quarter, especially with large enterprises, in which we saw continued validation and demand for network security policy automation. Our solid execution combined with our differentiated solutions continue to drive our success across all geographies and verticals. Increased network complexity and digital transformation are both acting as catalysts for Tufin in our large, under-penetrated market.”

First Quarter 2019 Financial Highlights

  • Revenue:
    • Total revenue was $22.5 million, up 25.4% compared with the first quarter of 2018.
    • Product revenue was $10.6 million, up 26.1% compared with the first quarter of 2018.
    • Maintenance and professional services revenue was $11.9 million, up 24.8% compared with the first quarter of 2018.
  • Gross Profit:
    • GAAP gross profit was $18.4 million, or 82.0% of total revenue, compared to $14.7 million in the first quarter of 2018, or 81.9% of total revenue. Non-GAAP gross profit was $18.7 million, or 83.1% of total revenue, compared to $14.8 million in the first quarter of 2018, or 82.6% of total revenue.
  • Operating Income (Loss):
    • GAAP operating loss was $4.3 million, compared to a loss of $0.2 million in the first quarter of 2018. Non-GAAP operating loss was $3.2 million, compared to operating income of $0.2 million in the first quarter of 2018.
  • Net Income (Loss):
    • GAAP net loss was $4.5 million, or a loss of $0.54 per share, compared to a GAAP net loss of $0.7 million, or $0.09 per share, in the first quarter of 2018, based on 8.3 million and 8.0 million weighted average ordinary shares outstanding, respectively. Non-GAAP net loss was $3.4 million, or a loss of $0.41 per share, compared to a loss of $0.3 million, or $0.04 per share, in the first quarter of 2018.
  • Cash Flow:
    • Net cash provided by operating activities was $11.9 million, compared to net cash provided by operating activities of $15.8 million in the first quarter of 2018.
    • As of March 31, 2019, Tufin had $28.6 million in cash, cash equivalents and restricted cash. This compares with $17.6 million in cash, cash equivalents and restricted cash as of December 31, 2018.
    • Tufin raised net proceeds of approximately $112 million in its recent IPO which closed on April 15, 2019 and, accordingly, are not reflected in the foregoing amounts.

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, 2019 and 2018. An explanation of these measures is also included under the heading “Non-GAAP Financial Measures.”

Recent Business Highlights

  • With our recent release of Tufin Orchestration Suite R19-1, we extended our leadership in network security policy automation enabling our customers to embrace digital transformation while maintaining a strong security posture.
  • We expanded the TAP program to include five new partners: Demisto (now part of Palo Alto Networks), Efficient IPFortressInfoblox and Splunk Phantom.
  • We announced the appointments of Michael Bosnar as VP of Asia-Pacific Sales and Greg McDermott as AVP of Federal Sales, as we strengthen our presence in key new markets and verticals.
  • As part of our transformation to being a public company, we recently added several new members to our Board of Directors: Peter Campbell and Dafna Gruber, who bring vast experience in public company financial reporting, and Tom Schodorf and Brian Gumbel, who bring vast experience in go-to-market growth and execution.

Second Quarter and Full Year 2019 Outlook

Based on information available as of June 13, 2019, Tufin is issuing guidance as indicated below:

Second Quarter 2019:

  • Total revenue between $23 million and $25 million
  • Non-GAAP operating loss between $4.9 million and $6.4 million

Full Year 2019:

  • Total revenue between $105 million and $110 million
  • Non-GAAP operating loss between $10.7 million and $12.7 million

Conference Call Information

To participate in Tufin’s first quarter earnings conference call, please dial (866) 211-3126 in the U.S. or (647) 689-6579 for international participants and enter Conference ID# 5777476. The call will also be webcast live on Tufin’s Investor Relations website at investors.tufin.com. An archive of the webcast will be available on the investor relations section of the company website 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 2000 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

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 allows for more meaningful comparisons between our operating results from period to period. This non-GAAP financial measure is an important tool for financial and operational decision-making and for evaluating our operating results over different periods.

Other companies, including companies in our industry, may calculate non-GAAP operating profit (loss) differently or not at all, which reduces the usefulness of non-GAAP operating profit (loss) as a comparative measure. You should consider non-GAAP operating profit (loss) along with other financial performance measures, including operating profit, 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.

  • We define non-GAAP gross profit as gross profit excluding share-based compensation expense.
  • We define non-GAAP operating profit (loss) as operating profit excluding share-based compensation expense.
  • We define non-GAAP net income as net income excluding share-based compensation expense.

Guidance for non-GAAP financial measures excludes, as applicable, share-based compensation expense. 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 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: 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 final prospectus for the Company’s initial public offering filed with the Securities and Exchange Commission on April 11, 2019. 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

(Unaudited, U.S. dollars in thousands)

 

 

December 31,

March 31,

 

2018

2019

 

 

LIABILITIES, REDEEMABLE CONVERTIBLE PREFERRED SHARES AND SHAREHOLDERS’ DEFICIT

 

 

CURRENT LIABILITIES:

 

 

Current maturities of long-term loan

                           222

                             56

Trade payables

                       3,096

                       6,040

Employee and payroll accrued expenses

                       9,976

                     10,198

Other accounts payables

                       4,890

                       2,284

Operating lease liabilities short term

                              -  

                       1,143

Deferred revenues

                     18,172

                     25,007

Total current liabilities

                     36,356

                     44,728

NON-CURRENT LIABILITIES:

 

 

Long-term deferred revenues

                     13,292

                     18,777

Operating lease liabilities long term

                              -  

                     14,230

Other non-current liabilities

                           732

                           762

Total non-current liabilities

                     14,024

                     33,769

Total liabilities

                     50,380

                     78,497

COMMITMENTS AND CONTINGENCIES (Note 9)

 

 

REDEEMABLE CONVERTIBLE PREFERRED SHARES:

 

 

 Series A preferred shares of NIS 0.015 par value: 10,000,000 preferred shares   

 authorized at December 31, 2018 and March 31, 2019; 7,592,803 preferred

 shares issued and outstanding at December 31, 2018 and March 31, 2019;

                       5,073

                       5,073

Series B preferred shares of NIS 0.015 par value: 3,333,333 preferred shares authorized at December 31, 2018 and March 31, 2019; 2,668,333 preferred shares issued and outstanding at December 31, 2018 and March 31, 2019;

                       4,310

                       4,310

Series C preferred shares of NIS 0.015 par value: 4,666,667 preferred shares authorized at December 31, 2018 and March 31, 2019; 4,621,592 preferred shares issued and outstanding at December 31, 2018 and March 31, 2019;

                     12,416

                     12,416

Series D preferred shares of NIS 0.015 par value: 1,534,021 preferred shares authorized at December 31, 2018 and March 31, 2019; 1,534,021 preferred shares issued and outstanding at December 31, 2018 and March 31, 2019

                       4,900

                       4,900

TOTAL REDEEMABLE CONVERTIBLE PREFERRED SHARES

                     26,699

                     26,699

REDEEMABLE CONVERTIBLE PREFERRED SHARES:

 

 

SHAREHOLDERS’ DEFICIT:

 

 

Ordinary shares of NIS 0.015 par value; 52,666,712 shares authorized at December 31, 2018 and March 31, 2019; 8,265,988 and 8,301,280 shares issued and outstanding at December 31, 2018 and March 31, 2019;

                             30

                             30

Comprehensive income

                     10,337

                     11,479

Accumulated deficit

(40,313)

(44,761)

TOTAL SHAREHOLDERS’ DEFICIT

                   (29,946)

                  (33,252)

TOTAL LIABILITIES, REDEEMABLE CONVERTIBLE PREFERRED SHARES AND SHAREHOLDERS’ DEFICIT

                     47,133

                     71,944

 

 

TUFIN SOFTWARE TECHNOLOGIES LTD.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited, U.S. dollars in thousands, except per share amounts)

 

 

Three Months Ended

 

 

March 31,

March 31,

 

2018

2019

Revenues:

 

 

Product

             8,422

           10,623

Maintenance and professional services

             9,478

           11,831

Total revenues

           17,900

           22,454

Cost of revenues:

 

 

Product

                 657

                 529

Maintenance and professional services

             2,575

             3,509

Total cost of revenues

             3,232

             4,038

Gross profit

           14,668

           18,416

Operating expenses:

 

 

Research and development

             4,670

             6,503

Sales and marketing

             9,147

           13,600

General and administrative

             1,097

             2,588

Total operating expenses

           14,914

           22,691

Operating loss

              (246)

           (4,275)

Financial income (loss), net

              (112)

                   40

Loss before taxes on income

              (358)

           (4,235)

Taxes on income

              (368)

              (213)

Net loss

              (726)

           (4,448)

Basic and diluted net loss per ordinary share

             (0.09)

             (0.54)

Weighted average number of shares used in computing net loss per ordinary share, basic and diluted

     7,997,832

     8,281,662

 

 

 

 

 

 

 

 

 

Share-based Compensation Expense:

 

 

 

Three Months Ended

 

 

March 31,

March 31,

 

2018

2019

Cost of Revenues

                 111

                 235

Research and Development

                   91

                 138

Sales and marketing

                 167

                 489

General and administrative

                   53

                 230

Total share-based compensation expense

                 422

             1,092

       

 

 

 

TUFIN SOFTWARE TECHNOLOGIES LTD.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited, U.S. dollars in thousands, except per share amounts)

 

 

Three Months Ended

 

 

March 31,

March 31,

 

2018

2019

Revenues:

 

 

Product

             8,422

           10,623

Maintenance and professional services

             9,478

           11,831

Total revenues

           17,900

           22,454

Cost of revenues:

 

 

Product

                 657

                 529

Maintenance and professional services

             2,575

             3,509

Total cost of revenues

             3,232

             4,038

Gross profit

           14,668

           18,416

Operating expenses:

 

 

Research and development

             4,670

             6,503

Sales and marketing

             9,147

           13,600

General and administrative

             1,097

             2,588

Total operating expenses

           14,914

           22,691

Operating loss

              (246)

           (4,275)

Financial income (loss), net

              (112)

                   40

Loss before taxes on income

              (358)

           (4,235)

Taxes on income

              (368)

              (213)

Net loss

              (726)

           (4,448)

Basic and diluted net loss per ordinary share

             (0.09)

             (0.54)

Weighted average number of shares used in computing net loss per ordinary share, basic and diluted

     7,997,832

     8,281,662

 

 

 

 

 

 

 

 

 

Share-based Compensation Expense:

 

 

 

Three Months Ended

 

 

March 31,

March 31,

 

2018

2019

Cost of Revenues

                 111

                 235

Research and Development

                   91

                 138

Sales and marketing

                 167

                 489

General and administrative

                   53

                 230

Total share-based compensation expense

                 422

             1,092

 

 

 

TUFIN SOFTWARE TECHNOLOGIES LTD.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited, U.S. dollars in thousands)

 

 

Three Months Ended

 

March 31,

 

2018

2019

CASH FLOWS FROM OPERATING ACTIVITIES:

 

 

Net loss

                         (726)

                      (4,448)

Adjustment to reconcile net loss to net cash provided by (used in) operating activities:

 

 

Depreciation

                           132

                           367

Bad debt expense

                              -  

                             28

Compensation related to options granted to employees

                           422

                       1,092

Other

 (26)

 (201)

Change in operating assets and liability items:

 

 

Accounts receivable

                       7,693

                       2,708

Prepaid expenses and other current assets

 (1,060)

 (639)

Deferred costs

 (67)

 (184)

Deferred taxes and other non-current assets

 (33)

 (381)

Trade payables

                       1,120

                       2,729

Employee and payroll accrued expenses

 (1,431)

                           222

Other accounts payable and non-current liabilities

 (525)

 (2,546)

Operating lease

                              -  

                           838

Deferred revenues

                     10,344

                     12,320

Net cash provided by operating activities

                     15,843

                     11,905

CASH FLOWS FROM INVESTING ACTIVITIES:

 

 

Purchase of fixed assets

 (157)

 (844)

Amounts withdrawn from severance fund

                               3

 (10)

Net cash used in investing activities

 (154)

 (854)

CASH FLOWS FROM FINANCING ACTIVITIES:

 

 

Proceeds from exercise of stock options

                             81

                             50

Deferred offering costs

                              -  

 (103)

Payment of long-term loan

 (167)

 (166)

Net cash used in financing activities

 (86)

 (219)

Effect of exchange rate changes on cash, cash equivalents and restricted cash

                             22

                           208

 

INCREASE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH

                     15,625

                     11,040

 

CASH, CASH EQUIVALENTS AND RESTRICTED CASH AT BEGINNING OF YEAR

                     15,620

                     17,598

CASH, CASH EQUIVALENTS AND RESTRICTED CASH AT END OF PERIOD

                     31,245

                     28,638

 

 

 

 

 

 

 

 

 

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:

 

 

Property and equipment purchased but not yet paid

                             54

                           212

Unpaid offering costs

                              -  

                           666

 

 

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,

 

2018

2019

 Gross profit

                                14,668

                                18,416

 Plus:

 

 

 Share-based compensation

                                     111

                                       235

 Non-GAAP gross profit

14,779

18,651

 

 

 

 

 

 

Reconciliation of Operating loss to Non-GAAP Operating Income (loss):

 

 

 

 

 

Three Months Ended

 

March 31,

March 31,

 

2018

2019

 Operating loss

                                    (246)

                                 (4,275)

 Plus:

 

 

 Share-based compensation

                                     422

                                  1,092

 Non-GAAP Operating income (loss)

                                     176

                                 (3,183)

 

 

 

 

 

 

Reconciliation of Net loss to Non-GAAP Net loss:

 

 

 

 

 

Three Months Ended

 

March 31,

March 31,

 

2018

2019

 Net loss

                                    (726)

                                 (4,448)

 Plus:

 

 

 Share-based compensation

                                     422

                                  1,092

 Non-GAAP net loss

                                 (304)

                               (3,356)

 

 

 

 Non-GAAP net income per share

 

 

 Basic and diluted

 (0.04)

                               (0.41)

 

 

 

 Weighted average number of shares

  7,997,832

                       8,281,662

 

 

 

 

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 2000 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

Investor Relations Contact:
Ryan Burkart
investors@tufin.com

Company contact:
Dan Gaffney
fama PR for Tufin
(617) 986-5036
Tufin@famapr.com

Source: Tufin