Tufin Announces Third Quarter 2021 Results
Tufin (NYSE: TUFN) reported third quarter 2021 revenue of $28.0 million, a 9% increase year-over-year, driven by a 17% growth in product revenue to $11.7 million. However, the company faced a GAAP operating loss of $9.0 million compared to $5.0 million last year. Non-GAAP losses also worsened, reaching $5.4 million. Despite these losses, Tufin emphasized strong subscription growth, with 46% of new bookings being subscriptions. The company expects fourth quarter revenues between $30.9 million and $36.9 million.
- Revenue increased 9% year-over-year.
- Product revenue grew 17% year-over-year.
- Subscription deals represented approximately 46% of new business bookings.
- GAAP operating loss increased to $9.0 million from $5.0 million year-over-year.
- Non-GAAP operating loss rose to $5.4 million from $1.0 million year-over-year.
- GAAP net loss amounted to $9.4 million, a loss of $0.25 per share, compared to $5.1 million, or $0.14 per share, in Q3 2020.
Third quarter revenue of
GAAP operating loss of
“I am very pleased to report another good quarter, driven by
Kitov continued, “Our results demonstrate not only our ability to drive new growth, but also our ability to serve our existing customers, as we help them navigate today’s rapidly changing IT environment and the ever-increasing security threats. We believe we are well-positioned to continue to deliver value for all of our stakeholders going forward.”
Financial Highlights for the Third Quarter Ended
Revenue:
-
Total revenue was
$28.0 million 9% compared with the third quarter of 2020. -
Product revenue was
$11.7 million 17% compared with the third quarter of 2020. -
Maintenance and professional services revenue was
$16.3 million 4% compared with the third quarter of 2020.
Gross Profit:
-
GAAP gross profit was
$22.2 million 79% of total revenue, compared to$21.0 million 82% of total revenue. -
Non-GAAP gross profit was
$22.6 million 81% of total revenue, compared to$21.6 million 84% of total revenue.
Operating Loss:
-
GAAP operating loss was
$9.0 million $5.0 million -
Non-GAAP operating loss was
$5.4 million $1.0 million
Net Loss:
-
GAAP net loss was
$9.4 million $0.25 $5.1 million $0.14 -
Non-GAAP net loss was
$6.3 million $0.17 $1.2 million $0.03
Balance Sheet and Cash Flow:
-
Cash flow used for operating activities during the nine months ended
September 30, 2021 was$10.6 million $15.7 million September 30, 2020 . -
Total cash, cash equivalents, restricted cash and marketable securities as of
September 30, 2021 were$92.9 million $104.0 million 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 and nine months ended
Recent Business Highlights
- Tufin announced it was named “Policy Management Solution of the Year” by CyberSecurity Breakthrough Awards, a leading independent market intelligence organization that recognizes the top companies, technologies, and products in the global information security market.
- Tufin announced the release of Tufin Orchestration Suite R21-3, featuring a new integration with Zscaler Cloud Firewall, to centralize and simplify Secure Access Service Edge (SASE) policy management alongside other vendors’ security policies. This release also includes a new security policy dashboard, providing real-time, unified insight into operational, security, and compliance data from multiple security platforms. In addition, with R21-3, users can accelerate data center migration by leveraging new SecureChange workflows to automatically clone security policies of networks and remove obsolete networks from these policies across the multi-vendor, hybrid environment.
Business Outlook
Based on information available as of
Fourth Quarter 2021:
-
Total revenue between
$30.9 million $36.9 million -
Non-GAAP operating profit/loss between
$4.9 million $0.2 million
Full Year 2021:
-
Total revenue between
$106.0 million $112.0 million -
Non-GAAP operating loss between
$27.4 million $22.3 million
Conference Call Information
In conjunction with this announcement, the Company will host a conference call today,
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
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 profit (loss) as operating profit (loss) excluding share-based compensation expense, shelf registration costs and one-time expenses associated with the reorganization of one of our subsidiaries.
-
We define non-GAAP net income (loss) as net income (loss) excluding share-based compensation expense, shelf registration costs, one-time expenses associated with the reorganization 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 shelf registration costs and 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
Guidance for non-GAAP financial measures excludes, as applicable, share-based compensation expense and certain non-recurring costs. 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 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 the novel coronavirus (“COVID-19”) on the budgets of our clients and on economic conditions generally; successful management of our business model, as well as current and future growth, particularly with respect to our plans to transition to a subscription-based business model over time; political conditions and economic downturns, particularly in the areas where we operate; compliance, managerial and regulatory risks associated with international sales and operations; our expectation that policy-centric, automated solutions will garner a growing share of enterprise security spending; our expectations for growth in certain key verticals and geographic regions and our intention to expand internationally; our ability to maintain effective internal controls over financial reporting; our expectations concerning seasonality and the predictability of our sales cycle; our expectations regarding customer relationships developed by our hybrid sales model; our expectations regarding customer relationships, including our ability to acquire new customers or sell additional products and services to existing customers; competition from a wide variety of competitive vendors; our ability to compete and increase positive market awareness of our brand; our ability to align future and past performance by generating sufficient revenue; the compatibility of our offerings with the existing technologies of our customers; plans to deploy additional cloud-based subscription products over time; reliance on certain products and customers to generate large portions of our revenue, as well as reliance on a single third-party manufacture to fulfill certain orders; our intention to make further investments in our products, including the Tufin Orchestration Suite; our expectations regarding sales of our newest business product, SecureCloud, as well as sales driven by channel partners and technology alliance partners through joint selling efforts; out dependence on a single manufacturer to fulfill certain software license orders; the effect of cybersecurity threats or attacks on our technologies, products or services; real or perceived shortcomings, defects or vulnerabilities in our solutions or internal network system; compliance with laws, regulations and requirements in the jurisdictions where we operate; expectations regarding the outcome of current litigation; ability to protect and defend our intellectual property rights; effectively managing, investing in, growing and maintaining key personnel; growth in the enterprise security and network management product markets; volatility of our share price and trading market activity; impact of being incorporated and located in
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited) |
||||||||
|
|
|
|
|
|
|
||
|
|
2020 |
|
|
2021 |
|
||
Assets |
|
|
|
|
|
|
||
CURRENT ASSETS: |
|
|
|
|
|
|
||
Cash and cash equivalents |
|
$ |
58,449 |
|
|
|
55,365 |
|
|
|
|
19,586 |
|
|
|
18,191 |
|
Accounts receivable (net of allowance for credit losses of
and |
|
|
16,674 |
|
|
|
11,110 |
|
Prepaid expenses and other current assets |
|
|
7,159 |
|
|
|
9,524 |
|
Total current assets |
|
|
101,868 |
|
|
|
94,190 |
|
NON CURRENT ASSETS: |
|
|
|
|
|
|
|
|
Long-term restricted bank deposits |
|
|
3,268 |
|
|
|
3,251 |
|
|
|
|
22,705 |
|
|
|
16,092 |
|
Property and equipment, net |
|
|
4,502 |
|
|
|
4,882 |
|
Deferred costs |
|
|
6,348 |
|
|
|
7,400 |
|
Deferred tax assets |
|
|
1,346 |
|
|
|
2,199 |
|
Operating lease assets |
|
|
18,802 |
|
|
|
17,059 |
|
Other non-current assets |
|
|
1,512 |
|
|
|
1,304 |
|
Total non-current assets |
|
|
58,483 |
|
|
|
52,187 |
|
Total assets |
|
$ |
160,351 |
|
|
|
146,377 |
|
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited) |
||||||||
|
|
|
|
|
|
|
||
|
|
2020 |
|
|
2021 |
|
||
LIABILITIES AND SHAREHOLDERS’ EQUITY |
|
|
|
|
|
|
||
CURRENT LIABILITIES: |
|
|
|
|
|
|
||
Trade payables |
|
$ |
4,147 |
|
|
|
5,392 |
|
Employee and payroll accrued expenses |
|
|
17,985 |
|
|
|
17,825 |
|
Other accounts payables |
|
|
578 |
|
|
|
734 |
|
Operating lease liabilities – current |
|
|
3,185 |
|
|
|
3,304 |
|
Deferred revenues |
|
|
24,940 |
|
|
|
27,544 |
|
Total current liabilities |
|
|
50,835 |
|
|
|
54,799 |
|
NON-CURRENT LIABILITIES: |
|
|
|
|
|
|
|
|
Long-term deferred revenues |
|
|
12,815 |
|
|
|
17,136 |
|
Non-current operating lease liabilities |
|
|
20,240 |
|
|
|
17,981 |
|
Other non-current liabilities |
|
|
1,282 |
|
|
|
1,385 |
|
Total non-current liabilities |
|
|
34,337 |
|
|
|
36,502 |
|
Total liabilities |
|
|
85,172 |
|
|
|
91,301 |
|
|
|
|
|
|
|
|
|
|
SHAREHOLDERS’ EQUITY: |
|
|
|
|
|
|
|
|
Ordinary shares of |
|
|
148 |
|
|
|
154 |
|
Additional paid-in capital |
|
|
178,864 |
|
|
|
191,657 |
|
Accumulated other comprehensive income |
|
|
5 |
|
|
|
(3) |
|
Accumulated deficit |
|
|
(103,838) |
|
|
|
(136,732) |
|
TOTAL SHAREHOLDERS’ EQUITY |
|
|
75,179 |
|
|
|
55,076 |
|
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY |
|
|
160,351 |
|
|
|
146,377 |
|
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited) |
||||||||||||||||||
|
Three Months Ended |
Nine Months Ended |
||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
2020 |
|
|
2021 |
|
|
2020 |
|
|
2021 |
|
|
||||||
Revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Product |
|
10,000 |
|
|
11,734 |
|
|
23,705 |
|
|
|
27,512 |
|
|||||
Maintenance and professional services |
|
15,606 |
|
|
16,281 |
|
46,177 |
|
|
|
47,601 |
|
||||||
Total revenues |
|
25,606 |
|
|
28,015 |
|
|
69,882 |
|
|
|
75,113 |
|
|||||
Cost of revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Product |
|
523 |
|
|
844 |
|
|
1,736 |
|
|
|
2,175 |
|
|||||
Maintenance and professional services |
|
4,044 |
|
|
4,971 |
|
|
13,157 |
|
|
|
14,837 |
|
|||||
Total cost of revenues |
|
4,567 |
|
|
5,815 |
|
|
14,893 |
|
|
|
17,012 |
|
|||||
Gross profit |
|
21,039 |
|
|
22,200 |
|
|
54,989 |
|
|
|
58,101 |
|
|||||
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Research and development |
|
8,071 |
|
|
9,674 |
|
|
26,282 |
|
|
|
29,728 |
|
|||||
Sales and marketing |
|
12,988 |
|
|
15,455 |
|
|
44,453 |
|
|
|
43,687 |
|
|||||
General and administrative |
|
4,994 |
|
|
6,028 |
|
|
14,718 |
|
|
|
17,913 |
|
|||||
Total operating expenses |
|
26,053 |
|
|
31,157 |
|
|
85,453 |
|
|
|
91,328 |
|
|||||
Operating loss |
|
(5,014) |
|
|
(8,957) |
|
|
(30,464) |
|
|
|
(33,227) |
|
|||||
Financial income (expense), net |
|
240 |
|
|
(385) |
|
|
676 |
|
|
|
(626) |
|
|||||
Loss before taxes on income |
|
(4,774) |
|
|
(9,342) |
|
|
(29,788) |
|
|
|
(33,853) |
|
|||||
Taxes on income |
|
(373) |
|
|
(97) |
|
|
(1,216) |
|
|
|
959 |
|
|||||
Net loss |
|
(5,147) |
|
|
(9,439) |
|
|
(31,004) |
|
|
|
(32,894) |
|
|||||
Basic and diluted net loss per ordinary share |
|
(0.14) |
|
|
(0.25) |
|
|
(0.87) |
|
|
|
(0.89) |
|
|||||
Weighted average number of shares used in computing net loss per ordinary share, basic and diluted |
|
35,758 |
|
|
37,478 |
|
|
35,621 |
|
|
|
36,971 |
|
|||||
Share-based Compensation Expense: |
|
|
|
|
|||||||||||
|
Three Months Ended |
|
Nine Months Ended |
||||||||||||
|
September 30, |
|
|
|
|
|
|
|
|
September 30, |
|
|
|||
|
2020 |
|
|
2021 |
|
|
2020 |
|
|
2021 |
|
|
|||
Cost of revenues |
574 |
|
|
393 |
|
|
1,536 |
|
|
1,454 |
|
|
|||
Research and development |
|
1,244 |
|
846 |
|
3,427 |
|
|
|
3,208 |
|
||||
Sales and marketing |
|
1,118 |
|
1,094 |
|
3,327 |
|
|
|
2,737 |
|
||||
General and administrative |
|
1,056 |
|
1,211 |
|
2,894 |
|
|
|
3,315 |
|||||
Total share-based compensation expense |
|
3,992 |
|
3,544 |
|
11,184 |
|
|
|
10,714 |
|
||||
|
|
||||||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited) |
||||||||
|
|
Nine Months Ended |
|
|||||
|
|
|
|
|||||
|
|
2020 |
|
|
2021 |
|
||
CASH FLOWS FROM OPERATING ACTIVITIES: |
|
|
|
|
|
|
||
Net loss |
|
|
(31,004) |
|
|
|
(32,894) |
|
Adjustment to reconcile net loss to net cash used in operating activities: |
|
|
|
|
|
|
|
|
Depreciation |
|
|
1,068 |
|
|
|
1,403 |
|
Share-based compensation |
|
|
11,184 |
|
|
|
10,714 |
|
Amortization of premium on marketable securities |
|
|
35 |
|
|
|
237 |
|
Exchange rate differences on cash, cash equivalents and restricted cash |
|
|
276 |
|
|
|
279 |
|
|
|
|
|
|
|
|
|
|
Change in operating assets and liabilities items: |
|
|
|
|
|
|
|
|
Accounts receivable, net |
|
|
4,580 |
|
|
|
5,564 |
|
Prepaid expenses and other current assets |
|
|
(3,126) |
|
|
|
(2,735) |
|
Deferred costs |
|
|
232 |
|
|
|
(953) |
|
Deferred taxes and other non-current assets |
|
|
255 |
|
|
|
(645) |
|
Trade payables |
|
|
119 |
|
|
|
1,245 |
|
Employee and payroll accrued expenses |
|
|
184 |
|
|
|
354 |
|
Other accounts payable and non-current liabilities |
|
|
(533) |
|
|
|
279 |
|
Operating lease |
|
|
(220) |
|
|
|
(397) |
|
Deferred revenues |
|
|
1,258 |
|
|
|
6,925 |
|
Net cash used in operating activities |
|
|
(15,692) |
|
|
|
(10,624) |
|
CASH FLOWS FROM INVESTING ACTIVITIES: |
|
|
|
|
|
|
|
|
Purchase of fixed assets |
|
|
(1,960) |
|
|
|
(1,370) |
|
Investment in marketable securities |
|
|
(26,182) |
|
|
|
(16,127) |
|
Proceeds from maturities of marketable securities |
|
|
- |
|
|
|
23,919 |
|
Net cash used in investing activities |
|
|
(28,142) |
|
|
|
6,422 |
|
CASH FLOWS FROM FINANCING ACTIVITIES: |
|
|
|
|
|
|
|
|
Proceeds from exercise of share options |
|
|
1,081 |
|
|
|
1,894 |
|
Changes in withholding tax related to employee share plans |
|
|
(1,233) |
|
|
|
(514) |
|
Net cash provided by (used in) financing activities |
|
|
(152) |
|
|
|
1,380 |
|
Effect of exchange rate changes on cash, cash equivalents and restricted cash |
|
|
(276) |
|
|
|
(279) |
|
|
|
|
|
|
|
|
|
|
INCREASE (DECREASE) IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH |
|
|
(44,262) |
|
|
|
(3,101) |
|
|
|
|
|
|
|
|
|
|
CASH, CASH EQUIVALENTS AND RESTRICTED CASH AT BEGINNING OF PERIOD |
|
|
121,729 |
|
|
|
61,717 |
|
CASH, CASH EQUIVALENTS AND RESTRICTED CASH AT END OF PERIOD |
|
|
77,467 |
|
|
|
58,616 |
|
|
|
|
|
|
|
|
|
|
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: |
|
|
|
|
|
|
|
|
Property and equipment purchased but not yet paid |
|
|
- |
|
|
|
29 |
|
RECONCILIATION OF GAAP MEASURES TO NON-GAAP MEASURES
(Unaudited) |
||||||||||||||||
Reconciliation of Gross Profit to Non-GAAP Gross Profit: |
|
|
|
|||||||||||||
|
|
|
|
|||||||||||||
|
Three Months Ended |
|
|
Nine Months Ended |
|
|||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
2020 |
|
|
2021 |
|
|
2020 |
|
|
2021 |
|
|||||
Gross profit |
21,039 |
|
|
22,200 |
|
|
54,989 |
|
|
58,101 |
|
|||||
Plus: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Share-based compensation |
|
574 |
|
|
393 |
|
|
1,536 |
|
|
|
1,454 |
|
|||
Non-GAAP gross profit |
|
21,613 |
|
|
22,593 |
|
|
56,525 |
|
|
|
59,555 |
|
|||
|
|
|||||||||||||||
Reconciliation of Operating Loss to Non-GAAP Operating Loss:
|
|
|
|
|||||||||||||
|
|
|
|
|||||||||||||
|
Three Months Ended |
|
|
Nine Months Ended |
|
|||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
2020 |
|
|
2021 |
|
|
2020 |
|
|
2021 |
|
|||||
Operating loss |
(5,014) |
|
|
(8,957) |
|
|
(30,464) |
|
|
(33,227) |
|
|||||
Plus: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Share-based compensation |
|
3,992 |
|
|
3,544 |
|
|
11,184 |
|
|
|
10,714 |
|
|||
Shelf registration costs |
|
|
|
|
|
|
|
126 |
|
|
|
|
|
|||
One-time reorganization charges |
|
|
|
|
|
|
|
322 |
|
|
|
|
|
|||
Non-GAAP operating loss |
|
(1,022) |
|
|
(5,413) |
|
|
(18,832) |
|
|
|
(22,513) |
|
|||
|
|
|||||||||||||||
Reconciliation of Net Loss to Non-GAAP Net Loss:
|
|
|
|
|||||||||||||
|
|
|
|
|||||||||||||
|
Three Months Ended |
|
|
Nine Months Ended |
|
|||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
2020 |
|
|
2021 |
|
|
2020 |
|
|
2021 |
|
|||||
Net loss |
(5,147) |
|
|
(9,439) |
|
|
(31,004) |
|
|
(32,894) |
|
|||||
Plus: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Share-based compensation |
|
3,992 |
|
|
3,544 |
|
|
11,184 |
|
|
|
10,714 |
|
|||
Shelf registration costs |
|
- |
|
|
- |
|
|
126 |
|
|
|
- |
|
|||
One-time reorganization charges |
|
- |
|
|
- |
|
|
322 |
|
|
|
- |
|
|||
Taxes on income related to non-GAAP adjustments |
|
(18) |
|
|
(358) |
|
|
(285) |
|
|
|
(2,077) |
|
|||
Non-GAAP net loss |
|
(1,173) |
|
|
(6,253) |
|
|
(19,657) |
|
|
|
(24,257) |
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Non-GAAP net income per share - basic and diluted |
|
(0.03) |
|
|
(0.17) |
|
|
(0.55) |
|
|
|
(0.66) |
|
|||
Weighted average number of shares |
|
35,758 |
|
|
37,478 |
|
|
35,621 |
|
|
|
36,971 |
|
|||
|
|
|||||||||||||||
About Tufin
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/20211109005619/en/
Investor Relations:
investors@tufin.com
Corporate Communications Manager
susan.rivera@tufin.com
Source: Tufin
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