BOSTON & TEL AVIV, Israel--(BUSINESS WIRE)--Tufin (NYSE: TUFN), a company pioneering a policy-centric approach to security and IT operations, today announced financial results for the fourth quarter and the year ended December 31, 2020.

“We finished the year on a strong note with a return to growth and record revenues in the fourth quarter. While 2020 began as a challenging year, I am pleased with our improved execution and recovery in the second half of the year along with the progress we made on SecureCloud which launched early in the year,” said Ruvi Kitov, CEO and Co-Founder. “I am excited to announce that we began a transition to a subscription revenue model this year, which we believe will dramatically improve the quality of our business over time. We will primarily focus on transitioning new logos initially. As I look forward to 2021, I am optimistic about our opportunities as we work to drive durable long-term growth and expand our leadership in the growing Security Policy Management market. As we achieve these goals, we will also create enhanced long-term value, for our shareholders as well as other stakeholders.”

Financial Highlights for the FourthQuarter Ended December 31, 2020

Revenue:

• Total revenue was $31.0 million, up 3% compared with the fourthquarter of 2019.
• Product revenue was $15.0 million, up 5% compared with the fourth quarter of 2019.
• Maintenance and professional services revenue was $16.0 million, up 1% compared with the fourth quarter of 2019.

Gross Profit:

• GAAP gross profit was $25.6 million, or 83% of total revenue, compared to $24.1 million in the fourth quarter of 2019, or 80% of total revenue.
• Non-GAAP gross profit was $26.1 million, or 84% of total revenue, compared to $24.8 million in the fourth quarter of 2019, or 82% of total revenue.

Operating Income (Loss):

• GAAP operating loss was $3.5 million, compared to operating loss of $7.4 million in the fourthquarter of 2019.
• Non-GAAP operating income was $0.4 million, compared to non-GAAP operating loss of $1.9 million in the fourthquarter of 2019.

Net Income (Loss):

• GAAP net loss was $4.4 million, or a loss of $0.12 per diluted share, compared to a GAAP net loss of $7.2 million, or $0.21 per diluted share, in the fourthquarter of 2019.
• Non-GAAP net loss was $1.0 million, or a loss of $0.03 per diluted share, compared to non-GAAP net loss of $2.4 million, or $0.07 per diluted share, in the fourthquarter of 2019.

Financial Highlights for the Full Year Ended December 31, 2020

Revenue:

• Total revenue was $100.8 million, down 2% compared with 2019.
• Product revenue was $38.7 million, down 18% compared with 2019.
• Maintenance and professional services revenue was $62.1 million, up 11% compared with 2019.

Gross Profit:

• GAAP gross profit was $80.6 million, or 80% of total revenue, compared to $83.4 million in 2019, or 81% of total revenue.
• Non-GAAP gross profit was $82.6 million, or 82% of total revenue, compared to $84.9 million in 2019, or 82% of total revenue.

Operating loss:

• GAAP operating loss was $33.9 million, compared to operating loss of $27.0 million in 2019.
• Non-GAAP operating loss was $18.5 million, compared to non-GAAP operating loss of $15.2 million in 2019.

Net Loss:

• GAAP net loss was $35.4 million, or a loss of $0.99 per diluted share, compared to GAAP net loss of $28.1 million, or $1.04 per diluted share, in 2019.
• Non-GAAP net loss was $20.6 million, or a loss of $0.58 per diluted share, compared to non-GAAP net loss of $17.1 million, or $0.63 per diluted share, in 2019.

Balance Sheet and Cash Flow:

• Cash flow used in operating activities during the twelve months ended December 31, 2020 was $17.4 million, compared to cash flow used in operating activities of $9.6 million during the twelve months ended December 31, 2019.
• Total cash, cash equivalents, restricted cash and marketable securities as of December 31, 2020 were $104.0 million, compared to $121.7 million as of December 31, 2019.

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 twelve months ended December 31, 2020 and 2019. An explanation of these measures is also included under the heading “Non-GAAP Financial Measures.”

Recent Business Highlights

• Appointed Raymond Brancato Chief Revenue Officer. Mr. Brancato brings to Tufin an accomplished 27-year sales management track record of delivering revenue growth, implementing strong sales strategies across global organizations, and successfully executing go-to-market transformation in software companies. He joins Tufin from AnyVision, a fast-growing private artificial intelligence company with a subscription-based revenue model, where he was Chief Revenue Officer.
• Announced Tufin SecureCloud™ integration with AWS Network Firewall to deliver security policy management across Amazon Virtual Private Clouds.
• Announced that Tufin SecureCloud™ supports the Google Cloud Platform, allowing customers to use SecureCloud to define and monitor compliance with security guardrails. Tufin customers can now operate secured applications across the three leading cloud providers – Amazon Web Services, Microsoft Azure, and Google Cloud Platform.

Business Outlook

Based on information available as of February 12, 2021, Tufin is issuing guidance as indicated below:

First Quarter 2021:

• Total revenue between $20.6 and $24.6 million.
• Non-GAAP Operating loss between $10.6 and $7.2 million.

Full Year 2021:

• Total revenue between $105.0 and $113.0 million.
• Non-GAAP Operating loss between $38.4 and $31.6 million.

Our guidance reflects an expectation that approximately one third of total new business bookings will come from subscription in 2021.

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.