SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549


 
FORM 6-K
 
 
REPORT OF FOREIGN PRIVATE ISSUER
Pursuant to Rule 13a-16 or 15d-16 of the
Securities Exchange Act of 1934
 
For the month of November 2021
 
Commission File Number: 001-38866
 


Tufin Software Technologies Ltd.
(Translation of registrant’s name into English)
 

 
Tufin Software Technologies Ltd.
5 HaShalom Road, ToHa Tower
Tel Aviv 6789205, Israel
 (Address of principal executive offices)
 

 
Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F.
 
Form 20-F         Form 40-F
 
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1):
 
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7):
 


EXPLANATORY NOTE
 
On November 09, 2021, Tufin Software Technologies Ltd. (the “Company”, “Tufin” or “we”) issued a press release entitled “Tufin Announces Third Quarter 2021 Results” announcing its financial results for the period ended September 30, 2021. A copy of this press release is furnished as Exhibit 99.1 herewith.
 
Other than as indicated below, the information in this Form 6-K (including in Exhibit 99.1) shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act.

The U.S. GAAP financial information contained in (i) the consolidated balance sheets (Unaudited), (ii) the consolidated statements of operations (Unaudited) and (iii) the consolidated statement of cash flows (Unaudited) included in the press release attached as Exhibit 99.1 to this Report on Form 6-K are hereby incorporated by reference into the Company’s registration statements on Form F-3 (File No. 333-239715) and Form S-8 (File Nos. 333-231985, 333-237291 and 333-253994).

2


SIGNATURES
 
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
 
 
TUFIN SOFTWARE TECHNOLOGIES LTD.
 
 
 
 
 
Date: November 09, 2021
By:
/s/ Reuven Kitov
 
 
 
Reuven Kitov
 
 
 
CEO & Chairman of the Board of Directors
 
 
3

 
EXHIBIT INDEX
 
 
 
Exhibit
 
Description
 
 
 

4

Exhibit 99.1


Tufin Announces Third Quarter 2021 Results
Third quarter revenue of $28.0 million increased 9% year-over-year
GAAP operating loss of $9.0 million and non-GAAP operating loss of $5.4 million

Boston, MA and Tel Aviv, Israel – November 9, 2021 - Tufin (NYSE: TUFN), a company pioneering a policy-centric approach to security and IT operations, today announced financial results for the third quarter ended September 30, 2021.

“I am very pleased to report another good quarter, driven by 17% year-over-year product revenue growth,” said Ruvi Kitov, Tufin’s CEO and Co-Founder. “We added several significant subscription deals, with subscriptions representing approximately 46% of new business bookings for the first nine months of the year; positioning us well ahead of our goals in our transition to a subscription-based model. We made substantial progress across our strategic initiatives, completed the key hires to round out our sales management, and saw more organizations across multiple industries emerging from the challenges of the pandemic, ready to invest in network security policy automation.”

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 September 30, 2021
 
Revenue:
Total revenue was $28.0 million, up 9% compared with the third quarter of 2020.
Product revenue was $11.7 million, up 17% compared with the third quarter of 2020.
Maintenance and professional services revenue was $16.3 million, up 4% compared with the third quarter of 2020.

Gross Profit:
GAAP gross profit was $22.2 million, or 79% of total revenue, compared to $21.0 million in the third quarter of 2020, or 82% of total revenue.
Non-GAAP gross profit was $22.6 million, or 81% of total revenue, compared to $21.6 million in the third quarter of 2020, or 84% of total revenue.

Operating Loss:
GAAP operating loss was $9.0 million, compared to $5.0 million in the third quarter of 2020.
Non-GAAP operating loss was $5.4 million, compared to $1.0 million in the third quarter of 2020.
 
Net Loss:
GAAP net loss was $9.4 million, or a loss of $0.25 per share, compared to a GAAP net loss of $5.1 million, or a loss of $0.14 per share, in the third quarter of 2020. 
Non-GAAP net loss was $6.3 million, or a loss of $0.17 per share, compared to a loss of $1.2 million, or a loss of $0.03 per share, in the third quarter of 2020.
 
Balance Sheet and Cash Flow:
Cash flow used for operating activities during the nine months ended September 30, 2021 was $10.6 million, compared to cash flow used for operating activities of $15.7 million during the nine months ended September 30, 2020.
Total cash, cash equivalents, restricted cash and marketable securities as of September 30, 2021 were $92.9 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 and nine months ended September 30, 2021 and 2020. An explanation of these measures is also included under the heading “Non-GAAP Financial Measures.”


 
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 November 09, 2021, Tufin is issuing guidance as indicated below:

Fourth Quarter 2021:
Total revenue between $30.9 million and $36.9 million.
Non-GAAP operating profit/loss between $4.9 million loss and $0.2 million profit.

Full Year 2021:
Total revenue between $106.0 million and $112.0 million.
Non-GAAP operating loss between $27.4 million and $22.3 million.
 
Conference Call Information

In conjunction with this announcement, the Company will host a conference call today, November 9, 2021, at 8:00am Eastern Time, to discuss the Company’s third 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# 13724309. 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 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 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 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. 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 Israel; expectations regarding our tax classifications; 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,
   
September 30,
 
 
 
2020
   
2021
 
Assets
           
CURRENT ASSETS:
           
Cash and cash equivalents
 
$
58,449
     
55,365
 
Marketable Securities - short term
   
19,586
     
18,191
 
Accounts receivable (net of allowance for credit losses of $85 at December 31, 2020
and September 30, 2021)
   
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
 
Marketable Securities - long term
   
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
 


TUFIN SOFTWARE TECHNOLOGIES LTD.
CONDENSED CONSOLIDATED BALANCE SHEETS
U.S. dollars in thousands (except share data)
(Unaudited)

 
 
December 31,
   
September 30,
 
 
 
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 NIS 0.015 par value; 150,000,000 shares authorized at December 31, 2020 and September 30, 2021, respectively; 35,972,470 and 37,754,199 shares issued and outstanding at December 31, 2020 and September 30, 2021, respectively;
   
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
 



TUFIN SOFTWARE TECHNOLOGIES LTD.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
U.S. dollars in thousands (except per share data)
(Unaudited)

 
 
Three Months Ended
   
Nine Months Ended
 
 
 
September 30,
   
September 30,
   
September 30,
   
September 30,
 
 
 
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,
   
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
 




TUFIN SOFTWARE TECHNOLOGIES LTD.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
U.S. dollars in thousands
(Unaudited)

 
 
Nine Months Ended
 
 
 
September 30,
 
 
 
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 provided by (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
 



TUFIN SOFTWARE TECHNOLOGIES LTD.
RECONCILIATION OF GAAP MEASURES TO NON-GAAP MEASURES
U.S. dollars in thousands (except per share data)
(Unaudited)

Reconciliation of Gross Profit to Non-GAAP Gross Profit:
           
             
 
 
Three Months Ended
   
Nine Months Ended
 
 
 
September 30,
   
September 30,
   
September 30,
   
September 30,
 
 
 
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
 
 
 
September 30,
   
September 30,
   
September 30,
   
September 30,
 
 
 
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
 
 
 
September 30,
   
September 30,
   
September 30,
   
September 30,
 
 
 
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