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
IP, Fortress, Infoblox 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 Assets CURRENT ASSETS:
Cash and cash equivalents 15,248 26,177 Restricted bank deposits
561 577 Accounts receivable (net of allowance for doubtful accounts
of $97 and $124 at
December 31, 2018 and March 31, 2019,
respectively)
14,716 11,980 Prepaid expenses and other current assets 5,440
6,042
Total current assets 35,965
44,776 NON CURRENT ASSETS: Long-term restricted bank
deposits 1,789 1,884 Property and equipment, net 2,563 3,252
Deferred costs 5,025 5,245 Deferred tax assets 689 1,013 Deferred
offering costs 730 1,499 Operating lease right of use assets -
13,836 Other non-current assets 372 439
Total non-current
assets 11,168 27,168 Total assets
47,133 71,944
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
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
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version on businesswire.com: https://www.businesswire.com/news/home/20190613005155/en/
Jeff Drewfama PR for Tufin(617) 986-5004tufin@famapr.com
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