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TUFIN SOFTWARE TECHNOLOGIES LTD.
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Date: May 12, 2020
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By:
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/s/ Reuven Kitov
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Reuven Kitov
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CEO & Chairman of the Board of Directors
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Exhibit
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Description
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Revenue:
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• Total revenue was $21.2 million, down 5% compared with the first quarter of 2019.
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• Product revenue was $5.8 million, down 45% compared with the first quarter of 2019.
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• Maintenance and professional services revenue was $15.4 million, up 31% compared with the first quarter of 2019.
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Gross Profit:
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• 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.
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Operating Loss:
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• 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.
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Net Loss:
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• 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.
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Balance Sheet and Cash Flow:
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• Cash flow generated from operating activities during the three months ended March 31, 2020 was $0.5 million, compared to cash flow generated
from operating activities of $11.9 million during the three months ended March 31, 2019.
• Total cash, cash equivalents and restricted cash as of March 31, 2020 were $120.5 million, compared to total cash, cash equivalents and
restricted cash of $121.7 million as of December 31, 2019.
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The tables at the end of this press release include a reconciliation of GAAP to non-GAAP gross profit, operating loss and net loss for the three months ended March 31, 2020 and 2019. An explanation of these
measures is also included under the heading “Non-GAAP Financial Measures.”
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• Announced the launch of the Tufin Firewall Change Tracker, a free tool that delivers real-time visibility into firewall rule changes for
organizations of all sizes.
• Tufin SecureCloud is now available on IBM’s Red Hat Marketplace. The marketplace is a significant milestone in building a strong ecosystem
around Red Hat OpenShift, an important strategic compute platform for the future. Now, the Red Hat OpenShift install base can try and purchase Tufin SecureCloud on the Red Hat Marketplace.
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.”
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We define non-GAAP gross profit as gross profit excluding share-based compensation expense.
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We define non-GAAP operating loss as operating loss excluding share-based compensation expense and one-time expenses associated with the reorganization of one of our subsidiaries.
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We define non-GAAP net loss as net loss excluding share-based compensation expense, one-time expenses associated with the reorganization of one of our subsidiaries and the tax effect of these non-GAAP adjustments.
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December 31,
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March 31,
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2019
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2020
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Assets
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CURRENT ASSETS:
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Cash and cash equivalents
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118,661
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117,511
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Restricted bank deposits
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224
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219
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Accounts receivable (net of allowance for doubtful accounts of $77 at December 31, 2019 and March 31, 2020)
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16,222
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10,171
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Prepaid expenses and other current assets
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4,773
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6,035
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Total current assets
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139,880
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133,936
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NON CURRENT ASSETS:
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Long-term restricted bank deposits
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2,844
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2,777
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Property and equipment, net
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4,177
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4,646
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Deferred costs
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5,640
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5,379
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Deferred tax assets
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1,659
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1,595
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Operating lease assets
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20,958
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20,423
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Other non-current assets
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1,574
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1,623
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Total non-current assets
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36,852
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36,443
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Total assets
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176,732
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170,379
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December 31,
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March 31,
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2019
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2020
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LIABILITIES AND SHAREHOLDERS’ EQUITY
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CURRENT LIABILITIES:
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Trade payables
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4,394
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4,320
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Employee and payroll accrued expenses
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15,422
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14,331
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Other accounts payables
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1,568
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2,516
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Operating lease liabilities – current
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2,533
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2,884
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Deferred revenues
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22,725
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27,885
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Total current liabilities
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46,642
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51,936
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NON-CURRENT LIABILITIES:
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Long-term deferred revenues
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12,838
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15,539
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Non-current operating lease liabilities
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22,000
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20,428
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Other non-current liabilities
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930
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965
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Total non-current liabilities
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35,768
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36,932
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Total liabilities
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82,410
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88,868
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SHAREHOLDERS’ EQUITY:
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Ordinary shares of NIS 0.015 par value; 150,000,000 shares authorized at December 31, 2019 and March 31, 2020, respectively; 35,230,253 and 35,607,022 shares issued and
outstanding at December 31, 2019 and March 31, 2020;
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145
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147
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Additional paid-in capital
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162,609
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166,840
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Accumulated deficit
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(68,432
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(85,476
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TOTAL SHAREHOLDERS’ EQUITY
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94,322
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81,511
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TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY
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176,732
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170,379
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Three Months Ended
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March 31,
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March 31,
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2019
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2020
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Revenues:
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Product
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10,623
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5,804
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Maintenance and professional services
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11,831
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15,440
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Total revenues
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22,454
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21,244
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Cost of revenues:
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Product
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529
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553
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Maintenance and professional services
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3,509
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5,017
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Total cost of revenues
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4,038
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5,570
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Gross profit
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18,416
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15,674
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Operating expenses:
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Research and development
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6,503
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10,178
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Sales and marketing
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13,600
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17,829
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General and administrative
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2,588
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4,931
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Total operating expenses
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22,691
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32,938
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Operating loss
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(4,275
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(17,264
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Financial income, net
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40
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563
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Loss before taxes on income
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(4,235
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(16,701
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Taxes on income
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(213
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(343
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Net loss
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(4,448
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(17,044
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Basic and diluted net loss per ordinary share
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(0.54
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(0.48
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Weighted average number of shares used in computing net loss per ordinary share, basic and diluted
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8,281,662
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35,452,522
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Three Months Ended
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March 31,
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2019
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2020
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CASH FLOWS FROM OPERATING ACTIVITIES:
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Net loss
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(4,448
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(17,044
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Adjustment to reconcile net loss to net cash provided by operating activities:
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Depreciation
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367
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332
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Bad debt expense
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28
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-
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Share-based compensation
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1,092
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3,655
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Exchange rate differences on cash, cash equivalents and restricted cash
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(208
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297
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Other
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7
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2
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Change in operating assets and liability items:
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Accounts receivable
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2,708
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6,051
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Prepaid expenses and other current assets
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(639
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(1,400
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Deferred costs
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(184
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264
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Deferred taxes and other non-current assets
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(381
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15
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Trade payables
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2,729
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(74
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Employee and payroll accrued expenses
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222
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(13
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Other accounts payable and non-current liabilities
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(2,546
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1,200
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Operating lease
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838
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(686
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Deferred revenues
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12,320
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7,861
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Net cash provided by operating activities
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11,905
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460
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CASH FLOWS FROM INVESTING ACTIVITIES:
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Purchase of fixed assets
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(844
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(1,018
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Other investing activities
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(10
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-
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Net cash used in investing activities
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(854
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(1,018
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CASH FLOWS FROM FINANCING ACTIVITIES:
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Changes in withholding taxes related to employee stock plans
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-
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(1,078
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Payments of offering costs related to initial public offering
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(103
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-
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Proceeds from exercise of stock options
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50
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711
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Payment of long-term loan
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(166
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-
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Net cash used in financing activities
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(219
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(367
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Effect of exchange rate changes on cash, cash equivalents and restricted cash
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208
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(297
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)
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INCREASE (DECREASE) IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH
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11,040
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(1,222
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CASH, CASH EQUIVALENTS AND RESTRICTED CASH AT BEGINNING OF PERIOD
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17,598
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121,729
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CASH, CASH EQUIVALENTS AND RESTRICTED CASH AT END OF PERIOD
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28,638
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120,507
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SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
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Property and equipment purchased but not yet paid
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212
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53
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Unpaid offering costs
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666
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52
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Exercise of share options
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-
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93
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Reconciliation of Gross Profit to Non-GAAP Gross Profit:
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Three Months Ended
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March 31,
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March 31,
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2019
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2020
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Gross profit
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18,416
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15,674
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Plus:
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Share-based compensation
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235
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495
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Non-GAAP gross profit
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18,651
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16,169
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Reconciliation of Operating loss to Non-GAAP Operating loss:
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Three Months Ended
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March 31,
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March 31,
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2019
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2020
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Operating loss
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(4,275
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(17,264
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Plus:
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Share-based compensation
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1,092
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3,655
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One-time reorganization charges
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-
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322
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Non-GAAP Operating loss
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(3,183
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(13,287
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