Tufin (TUFN) Misses Q1 EPS by 1c, Revenues Beat

Tufin (NYSE: TUFN) reported Q1 EPS of ($0.41), $0.01 worse than the analyst estimate of ($0.40). Revenue for the quarter came in at $22.45 million versus the consensus estimate of $21.34 million.

Financial Highlights for the First Quarter Ended March 31, 2020

Revenue:

• Total revenue was $21.2 million, down 5% compared with the first quarter of 2019.
• Product revenue was $5.8 million, down 45% compared with the first quarter of 2019.
• Maintenance and professional services revenue was $15.4 million, up 31% compared with the first quarter of 2019.

Gross Profit:

• GAAP gross profit was $15.7 million, or 74% of total revenue, compared to GAAP gross profit of $18.4 million in the first quarter of 2019, or 82% of total revenue.
• Non-GAAP gross profit was $16.2 million, or 76% of total revenue, compared to non-GAAP gross profit of $18.7 million in the first quarter of 2019, or 83% of total revenue.

Operating Loss:

• GAAP operating loss was $17.3 million, compared to GAAP operating loss of $4.3 million in the first quarter of 2019.
• Non-GAAP operating loss was $13.3 million, compared to non-GAAP operating loss of $3.2 million in the first quarter of 2019.

Net Loss:

• GAAP net loss was $17.0 million, or a loss of $0.48 per share, compared to GAAP net loss of $4.4 million, or a loss of $0.54 per share, in the first quarter of 2019.
• Non-GAAP net loss was $13.2 million, or a loss of $0.37 per share, compared to non-GAAP net loss of $3.4 million, or a loss of $0.41 per share, in the first quarter of 2019.

“We are operating in challenging times and our business was impacted late in the first quarter by disruptions related to COVID-19.” said Ruvi Kitov, CEO and co-founder of Tufin. “Given our perpetual license business model and the normal back-end loaded nature of our business, we typically close a large percentage of deals in the last two weeks of the quarter which coincided with an unprecedented wave of “stay at home” orders and inevitably some deals were delayed.”

“However, the vast majority of delayed deals remain in our pipeline which continues to show healthy growth year over year. Since the end of the first quarter, we have seen most customers re-engaging as they have adjusted to remote work. Customer spending plans are being re-prioritized and we’re seeing that, in many cases, Tufin’s products and services remain a priority as they help customers improve network security and do more with less through automation, both of which are vitally important today.”

“Despite those positive signs, a great deal of uncertainty remains in our market and we have lower visibility on the timing of pipeline conversion to closing business. As a result, we have taken necessary measures to adjust our business for the current environment through operational changes and cost reductions.”

“The global business disruption from COVID-19 remains significant, but the increased efficiency and security that our products deliver by automating manual, error-prone network change processes have only become more important. For that reason, I remain confident in the long-term opportunity ahead of us.”

Business Outlook

“As previously announced, we have withdrawn our prior financial guidance for the full year 2020 due to the uncertainty and reduced visibility around timing of closing transactions associated with the COVID-19 pandemic,” said Ruvi Kitov. “For that reason, we will not be providing second quarter or full year 2020 guidance at this time.”

For earnings history and earnings-related data on Tufin (TUFN) click here.

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