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Transforming Security Policy Management April 11, 2019 1 - - PowerPoint PPT Presentation
Transforming Security Policy Management April 11, 2019 1 - - PowerPoint PPT Presentation
Transforming Security Policy Management April 11, 2019 1 Disclaimer This presentation contains forward-looking statements. All statements other than statements of historical fact contained in this presentation are forward-looking statements. In
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Disclaimer
This presentation contains forward-looking statements. All statements other than statements of historical fact contained in this presentation are forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as “may,” “will,” “should,” “expects,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” “potential” or “continue” or the negative of these terms or other comparable terminology. These statements are only current predictions and are subject to known and unknown risks, uncertainties and other factors that may cause our or our industry’s actual results, levels of activity, performance or achievements to be materially different from those anticipated by the forward-looking statements. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. For a description of the risks we face, see the “Risk Factors” section of the prospectus we have filed with the Securities and Exchange Commission, which is available by visiting the SEC’s website at www.sec.gov. Except as required by law, we are under no duty to update or revise any of the forward-looking statements, whether as a result of new information, future events or otherwise, after the date of this presentation. In addition to U.S. GAAP financials, this presentation includes certain non-GAAP financial measures. These non-GAAP financial measures are in addition to, and not a substitute for or superior to, measures of financial performance prepared in accordance with U.S. GAAP. These non-GAAP measures are in addition to, and not a substitute or superior to, measures of financial performance prepared in accordance with GAAP. A reconciliation of non-GAAP measures to the most directly comparable GAAP measures is contained in the appendix to this presentation. This presentation contains statistical data that we obtained from industry publications and reports generated by third parties. Although we believe that the publications and reports are reliable, we have not independently verified this statistical data. The trademarks included herein are the property of the owners thereof and are used for reference purposes only. Such use should not be construed as an endorsement of our products or services.
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We are the Security Policy Company
Who can talk to whom? What can talk to what?
2,000+
Global Customers2
424
Employees1
$85M
Total Revenue1
30%+
Revenue Growth1
90%+
Maintenance Renewal Rates1
1 12 months ended December 31, 2018 2 Since inception
80%+
Gross Margin1
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Investment Highlights
Pioneering a policy-centric and automation-based approach to managing Security and DevOps Diverse, blue-chip enterprise customer base with significant opportunity for further expansion Uniquely positioned to capitalize on a largely untapped $10bn+ security policy management market Founder-led management team focused on innovation and with a proven track record of executing
- n growth opportunity
Strong revenue growth coupled with balanced financial discipline Best-in-class suite of solutions transform security posture, enable continuous compliance and enhance business agility Centralized, real-time visibility of connectivity and security vulnerability across native, virtual and cloud environments
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Enterprises are rapidly adopting Cloud and IoT – resulting in complex, fragmented networks and a huge attack surface In response, enterprises continue to implement additional firewalls and other security measures but most lack effective, comprehensive and automated policy management
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Manual approaches cannot address today’s challenges
Growing complexity
- f software-defined
networks Evolving regulatory and compliance requirements Increasing frequency and sophistication of cyberattacks Accelerating pace
- f application
development and deployment
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Cybersecurity and network ops require a new approach
Introducing a centralized security management layer that analyzes, defines and implements enterprise-specific security policies
Policy-centric security Automation of network changes Data-driven Open and extensible framework
We have developed highly differentiated technology with four main pillars:
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Tufin Value Proposition
Reduce complexity of managing hybrid and fragmented networks Implement security changes in minutes instead of days Ensure continuous compliance with security standards Enable agile software development through tailored DevOps functionality
Maximize Agility & Security with Security Policy Orchestration
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Highly innovative, broad suite of solutions
SecureTrack™ SecureChange™ SecureApp™
(2004) (2009) (2012) (Apr 2018) (Nov 2018) Firewall & Security Policy Management Network Security Change Automation Application Connectivity Management Security Automation for Containers & Microservices Security Automation for Public Clouds FOUNDATIONAL AUTOMATION CLOUD-NATIVE
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Built for hybrid enterprise environments
Enterprise IT
SecureApp™ SecureChange™ SecureTrack™
Cloud-Native IT Service Management Other 3rd Party Solutions Scripting & Automation Firewalls Public Cloud Private Cloud Networks
Unified Security Policy REST APIs IT Operations
Enterprise Applications
DevOps
Code Repositories CI/CD Tools Containers
Collectors and Provisioning Engines Analysis Engines
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Tufin addresses a massive, high-growth emerging market
$2.9B
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$1.2B
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$6.2B
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ANNUAL OPPORTUNITY =$10.3B4
- 1. Bottoms-up analysis is calculated using total number of firewalls within various customer segments (High End, Large Enterprise, Mid Enterprise, and SMB), level of compliance and automation need within each
customer segment, and average compliance and automation spend per firewall.
- 2. Annual TAM represents an assumed 5% of orchestration spend based on annual public IaaS & PaaS markets.
- 3. Annual TAM represents management assumptions of security management spend based on Vmware NSX and Cisco ACI sales
- 4. 2019; management estimates and third party research.
Physical Network Public Cloud Security Orchestration Private Cloud SDN Orchestration
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Go-to-market strategy
Annual and Multiyear Renewals Payable in Advance
Mid-Market Top 2000-6000 Enterprise Top 2000 Recurring Revenue
Inside Sales Centralized Territory Direct Regional Target Accounts
Channel CSIs Our products and services are sold through our field and inside sales teams and global network of approximately
150 active channel partners
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Land and expand across the network stack
Platforms Customer Adoption Evolution
SecureTrack™ SecureChange™ SecureApp™
Firewalls Public Cloud Private Cloud Networks
Application Connectivity Change Automation Compliance
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FINANCE COMMUNICATION MANUFACTURING ENERGY HEALTHCARE & PHARMA RETAIL
2,000+ Customers Worldwide1
- 1. Since inception.
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Tufin Competitive Differentiation
Market leadership and proven track-record of success Clear ROI over manual, error-prone spreadsheets that cannot keep pace with today’s application delivery cycle First-to-market with automation and superior topology mapping vs. competition Vendor-agnostic, scalable enterprise-grade solutions Customer-first approach with premium support services
10+ years of innovation Mission critical in today’s Cybersecurity and DevOps environments
1000s
- f Network Devices
(e.g., Firewalls, Routers)
Integration, Customization, Optimization, Training
Source: Company information.
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Case Study
THE PROBLEM
- Takes days to plan and implement
network security policy changes
- Lack visibility into accuracy of changes in
network of more than 700 firewalls
THE RESULT THE SOLUTION
SecureChange™ SecureTrack™ Boosted agility, security and productivity
- Changes are automated and
implemented in 1 hour
- Improved overall security
posture through well-defined processes
- Enabled team to free up
resources to address strategic projects SecureApp™
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Land-and-expand
- Upsell within install
base
Huge untapped market in Global 2000
- White space in
large enterprises
Long tail – smaller enterprise accounts
- Building Inside Sales
for high velocity sales model
New markets and verticals
- Recently entered
Japan
- New federal program
- New MSSP offering
Cloud & DevOps
- Address new use
cases in cloud and DevOps ecosystem
Substantial growth drivers
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Experienced management team
Ruvi Kitov
CEO, Chairman & Co-Founder
Reuven Harrison
CTO & Co-Founder
Jack Wakileh
CFO
Pat Walsh
CMO
Kevin Maloney
SVP, Sales
Shaily Hamenahem
VP, Human Resources
Yoram Gronich
VP, R&D
Ofer Or
VP, Products
Pamela Cyr
SVP, Business Development
Raj Motwane
VP, Global Services & Support
Financial overview
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Financial highlights
Rapid Revenue Growth
- 30%+ historical growth1
Attractive Customer Economics
- Strong land and expand model; ~60% of revenue from existing
customers1
- Increasing spend from large enterprises1
- 90%+ maintenance renewal rates1
Diverse Base with Significant Expansion Opportunity
- Includes 15% of the Global 20002
- $201k avg. spend from Global 2000 customers, excl. maintenance
renewals1
- Geographically diverse revenue base
Strong Capital Management
- Historically operating at or near breakeven
- Only ~$28mm in capital raised since inception
- Strategic investments to drive growth and support increasing scale
1 12 months ended December 31, 2018 2 Accounts since inception with over $50k LTV as of December 31, 2018, based on 2018 Global 2000
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Our financial model
Composition of Total Revenue ($mm)
31 43 28 37 6 5 65 85
2017 2018
Product Maintenance and support Professional services
57% 38% 5%
Americas EMEA APAC
Total Revenue by Geography1
6% 44% 50% % of total
1 12 months ended December 31, 2018
32%
- ‘Stickiness’ of product lends to high renewal rate and revenue transparency
- Diversified revenue streams across industries and geographies
- Large, growing maintenance base
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12 13 15 24 18 19 19 29
Rapid revenue growth ($mm)
44% 45% % 28%
Gross margin: 84% 80% 83% 86% 85% 83% 88% Q1’17 Q1’18 Q2’17 Q2’18 Q3’17 Q3’18 Q4’17
20%
Q4’18
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Growth potential as enterprises adopt our approach
- Greenfield:
Only 15% of the Global 2000 are currently customers1
- Expansion:
Significant parts of current customers' networks are not yet covered by Tufin
- Up-sell:
Approximately 50% of current customers have yet to adopt Automation
149 153
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GLOBAL 2000 ACCOUNT PENETRATION (# OF ACCOUNTS)1
Tufin Compliance-only customers Tufin Automation customers Global 2000 prospects
1 Accounts since inception with over $50k LTV as of December 31, 2018, based on 2018 Global 2000
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Strong Gross Profit Margins
Gross profit margin (%)
89% 93% 95% 97% 92% 96% 95% 95% 79% 74% 78% 76% 73% 75% 73% 74% 84% 83% 85% 88% 82% 85% 83% 86% Q1'17 Q2'17 Q3'17 Q4'17 Q1'18 Q2'18 Q3'18 Q4'18 Product
- Maint. & PS
Total
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NEW CUSTOMERS EXISTING CUSTOMERS
* Not Including renewals
Growth driven by proven land and expand model
~60% of revenue from existing customers1
1 12 months ended December 31, 2018
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Customer spend generated from annual end-customer cohorts ($000s) *
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Strategic investments for growth1
R&D as % of Revenue (%) S&M as % of Revenue (%) G&A as % of Revenue (%)
26% 24% 2017 2018 53% 53% 2017 2018 7% 7% 2017 2018
- Positioned to maintain
technology leadership
- Accelerated investment
levels in sales force to address market opportunity and expand into new territories
- Positioned to support
increasing scale
Non-GAAP operating income (loss) (%)
(0%) 1% 2017 2018
- Improving margin profile
- 1. Non-GAAP, for the 12 months ended December.
Note: Please see Appendix for calculations of non-GAAP financial measures and GAAP reconciliations.
Appendix
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GAAP to non-GAAP reconciliation
(1) Non-GAAP operating loss is a non-GAAP financial measure. We define non-GAAP operating loss as operating profit excluding share-based compensation expense. 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 allows for more meaningful comparisons between our operating results from period to period. This non-GAAP financial measure is an important tool for financial and operational decision-making and for evaluating our operating results over different periods.
2017 2018 GAAP Share-based compensation Non- GAAP GAAP Share-based compensation Non- GAAP Gross Margin 85.3% 0.5% 85.8% 84.2% 0.7% 84.9% Research and development expenses (in thousands) $ 17,672 $ (660) $ 17,012 $ 21,363 $ (731) $ 20,632 Sales and marketing expenses (in thousands) $ 35,042 $ (765) $ 34,277 $ 46,092 $ (1,458) $ 44,634 General and administrative expenses (in thousands) $ 4,608 $ (353) $ 4,255 $ 6,022 $ (358) $ 5,664 Operating Margin (3.5)% 3.3% (0.2)% (2.3)% 3.7% 1.5%
Reconciliation of Operating Loss to Non-GAAP Operating Loss: Operating loss $ (2,262) $ (1,932) Add: share based compensation $ 2,110 $ 3,181 Non-GAAP operating loss(1) $ (152) $ 1,249 Year ended December 31, 2017
(in thousands)
2018
(in thousands)