Document and Entity Information
Document and Entity Information | 12 Months Ended |
Dec. 31, 2019shares | |
Document And Entity Information | |
Entity Registrant Name | Tufin Software Technologies Ltd. |
Entity Central Index Key | 0001757399 |
Document Type | 20-F |
Document Period End Date | Dec. 31, 2019 |
Amendment Flag | false |
Current Fiscal Year End Date | --12-31 |
Entity a Well-known Seasoned Issuer | No |
Entity a Voluntary Filer | No |
Entity's Reporting Status Current | Yes |
Entity Emerging Growth Company | true |
Elected Not To Use the Extended Transition Period | true |
Entity Filer Category | Non-accelerated Filer |
Entity Common Stock, Shares Outstanding | 35,230,253 |
Document Fiscal Period Focus | FY |
Document Fiscal Year Focus | 2019 |
Entity Shell Company | false |
Entity Interactive Data Current | Yes |
Entity Incorporation State Country Code | IL |
Document Annual Report | true |
Document Transition Report | false |
Document Shell Company Report | false |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
CURRENT ASSETS: | ||
Cash and cash equivalents | $ 118,661 | $ 15,248 |
Restricted bank deposits | 224 | 561 |
Accounts receivable (net of allowance for doubtful accounts of $97 and $77 at December 31, 2018 and December 31, 2019, respectively) | 16,222 | 14,716 |
Prepaid expenses and other current assets | 4,773 | 5,440 |
Total current assets | 139,880 | 35,965 |
NON CURRENT ASSETS: | ||
Long-term restricted bank deposits | 2,844 | 1,789 |
Property and equipment, net | 4,177 | 2,563 |
Operating lease assets | 20,958 | |
Deferred costs | 5,640 | 5,025 |
Deferred tax assets | 1,659 | 689 |
Deferred offering costs | 730 | |
Other non-current assets | 1,574 | 372 |
Total non-current assets | 36,852 | 11,168 |
Total assets | 176,732 | 47,133 |
CURRENT LIABILITIES: | ||
Current maturities of long-term loan | 222 | |
Trade payables | 4,394 | 3,096 |
Employee and payroll accrued expenses | 15,422 | 9,976 |
Other accounts payables | 1,568 | 4,890 |
Operating lease liabilities - current | 2,533 | |
Deferred revenues | 22,725 | 18,172 |
Total current liabilities | 46,642 | 36,356 |
NON-CURRENT LIABILITIES: | ||
Long-term deferred revenues | 12,838 | 13,292 |
Non-Current operating lease liabilities | 22,000 | |
Other non-current liabilities | 930 | 732 |
Total non-current liabilities | 35,768 | 14,024 |
Total liabilities | 82,410 | 50,380 |
COMMITMENTS AND CONTINGENCIES | ||
TOTAL REDEEMABLE CONVERTIBLE PREFERRED SHARES | 26,699 | |
SHAREHOLDERS' EQUITY (DEFICIT): | ||
Ordinary shares of NIS 0.015 par value; 52,666,712 and 150,000,000 shares authorized at December 31, 2018 and December 31, 2019, respectively; 8,265,988 and 35,230,253 shares issued and outstanding at December 31, 2018 and December 31, 2019; | 145 | 30 |
Additional paid-in capital | 162,609 | 10,337 |
Accumulated deficit | (68,432) | (40,313) |
TOTAL SHAREHOLDERS' EQUITY (DEFICIT) | 94,322 | (29,946) |
TOTAL LIABILITIES, REDEEMABLE CONVERTIBLE PREFERRED SHARES AND SHAREHOLDERS' (DEFICIT) | 176,732 | 47,133 |
Series A preferred shares [Member] | ||
NON-CURRENT LIABILITIES: | ||
TOTAL REDEEMABLE CONVERTIBLE PREFERRED SHARES | 5,073 | |
Series B preferred shares [Member] | ||
NON-CURRENT LIABILITIES: | ||
TOTAL REDEEMABLE CONVERTIBLE PREFERRED SHARES | 4,310 | |
Series C preferred shares [Member] | ||
NON-CURRENT LIABILITIES: | ||
TOTAL REDEEMABLE CONVERTIBLE PREFERRED SHARES | 12,416 | |
Series D Preferred Stock [Member] | ||
NON-CURRENT LIABILITIES: | ||
TOTAL REDEEMABLE CONVERTIBLE PREFERRED SHARES | $ 4,900 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) $ in Thousands | Dec. 31, 2019USD ($)shares | Dec. 31, 2019₪ / shares | Dec. 31, 2018USD ($)shares | Dec. 31, 2018₪ / shares |
Accounts Receivable, allowance for doubtful accounts | $ | $ 77 | $ 97 | ||
Preferred shares par value | ₪ / shares | ₪ 0.015 | ₪ 0.015 | ||
Ordinary shares, par value | ₪ / shares | 0.015 | 0.015 | ||
Ordinary shares authorized | 150,000,000 | 52,666,712 | ||
Ordinary shares issued | 35,230,253 | 8,265,988 | ||
Ordinary shares outstanding | 35,230,253 | 8,265,988 | ||
Series A preferred shares [Member] | ||||
Preferred shares par value | ₪ / shares | 0.015 | 0.015 | ||
Preferred shares authorized | 0 | 10,000,000 | ||
Preferred shares issued | 0 | 7,592,803 | ||
Preferred shares outstanding | $ | $ 0 | $ 7,592,803 | ||
Series B preferred shares [Member] | ||||
Preferred shares par value | ₪ / shares | 0.015 | 0.015 | ||
Preferred shares authorized | 0 | 3,333,333 | ||
Preferred shares issued | 0 | 2,668,333 | ||
Preferred shares outstanding | $ | $ 0 | $ 2,668,333 | ||
Series C preferred shares [Member] | ||||
Preferred shares par value | ₪ / shares | 0.015 | 0.015 | ||
Preferred shares authorized | 0 | 4,666,667 | ||
Preferred shares issued | 0 | 4,621,592 | ||
Preferred shares outstanding | $ | $ 0 | $ 4,621,592 | ||
Series D Preferred Stock [Member] | ||||
Preferred shares par value | ₪ / shares | ₪ 0.015 | ₪ 0.015 | ||
Preferred shares authorized | 0 | 1,534,021 | ||
Preferred shares issued | 0 | 1,534,021 | ||
Preferred shares outstanding | $ | $ 0 | $ 1,534,021 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Revenues: | |||
Total revenues | $ 103,270 | $ 84,981 | $ 64,540 |
Cost of revenues: | |||
Total cost of revenues | 19,857 | 13,436 | 9,480 |
Gross profit | 83,413 | 71,545 | 55,060 |
Operating expenses: | |||
Research and development | 31,571 | 21,363 | 17,672 |
Sales and marketing | 63,981 | 46,092 | 35,042 |
General and administrative | 14,884 | 6,022 | 4,608 |
Total operating expenses | 110,436 | 73,477 | 57,322 |
Operating loss | (27,023) | (1,932) | (2,262) |
Financial income (loss), net | (85) | (1,047) | 267 |
Loss before taxes on income | (27,108) | (2,979) | (1,995) |
Taxes on income | (1,011) | (1,283) | (797) |
Net loss | $ (28,119) | $ (4,262) | $ (2,792) |
Basic and diluted net loss per ordinary share | $ (1.04) | $ (0.53) | $ (0.35) |
Weighted average number of shares used in computing net loss per ordinary share, basic and diluted | 27,088,274 | 8,045,647 | 7,872,545 |
Product [Member] | |||
Revenues: | |||
Total revenues | $ 47,365 | $ 42,554 | $ 30,855 |
Cost of revenues: | |||
Total cost of revenues | 2,716 | 2,324 | 1,702 |
Maintenance and Professional Services [Member] | |||
Revenues: | |||
Total revenues | 55,905 | 42,427 | 33,685 |
Cost of revenues: | |||
Total cost of revenues | $ 17,141 | $ 11,112 | $ 7,778 |
CONSOLIDATED STATEMENTS OF REDE
CONSOLIDATED STATEMENTS OF REDEEMABLE CONVERTIBLE PREFERRED SHARES AND CHANGES IN SHAREHOLDERS' EQUITY (DEFICIT) - USD ($) $ in Thousands | Redeemable Convertible Preferred Stock [Member] | Ordinary shares [Member] | Additional paid-in capital [Member] | Accumulated deficit [Member] | Total |
Begining Balance at Dec. 31, 2016 | $ 26,699 | $ 28 | $ 4,352 | $ (36,748) | $ (32,368) |
Begining Balance, (in Shares) at Dec. 31, 2016 | 16,416,749 | 7,631,687 | |||
Cumulative effect adjustment resulting from adoption of new accounting principles | 138 | 3,489 | 3,627 | ||
Issuance of ordinary shares upon exercise of options | $ 1 | 394 | 395 | ||
Issuance of ordinary shares upon exercise of options, shares | 334,925 | ||||
Share-based compensation | 2,110 | 2,110 | |||
Net loss | (2,792) | (2,792) | |||
Ending Balance at Dec. 31, 2017 | $ 26,699 | $ 29 | 6,994 | (36,051) | (29,028) |
Ending Balance, (in Shares) at Dec. 31, 2017 | 16,416,749 | 7,966,612 | |||
Issuance of ordinary shares upon exercise of options | $ 1 | 162 | 163 | ||
Issuance of ordinary shares upon exercise of options, shares | 299,376 | ||||
Share-based compensation | 3,181 | 3,181 | |||
Net loss | (4,262) | (4,262) | |||
Ending Balance at Dec. 31, 2018 | $ 26,699 | $ 30 | 10,337 | (40,313) | $ (29,946) |
Ending Balance, (in Shares) at Dec. 31, 2018 | 16,416,749 | 8,265,988 | 8,265,988 | ||
Issuance of ordinary shares upon exercise of options | $ 7 | 2,289 | $ 2,296 | ||
Issuance of ordinary shares upon exercise of options, shares | 1,674,044 | ||||
Share-based compensation | 10,927 | 10,927 | |||
Conversion of redeemable convertible preferred shares | $ (26,699) | $ 70 | 26,629 | 26,699 | |
Conversion of redeemable convertible preferred shares, shares | (16,416,749) | 16,416,749 | |||
Issuance of ordinary shares upon initial public offering, net | $ 38 | 112,427 | 112,465 | ||
Issuance of ordinary shares upon initial public offering, net, shares | 8,873,472 | ||||
Net loss | (28,119) | (28,119) | |||
Ending Balance at Dec. 31, 2019 | $ 145 | $ 162,609 | $ (68,432) | $ 94,322 | |
Ending Balance, (in Shares) at Dec. 31, 2019 | 35,230,253 | 35,230,253 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | |||
Net loss | $ (28,119) | $ (4,262) | $ (2,792) |
Adjustment to reconcile net loss to net cash provided by (used in) operating activities: | |||
Depreciation | 1,205 | 956 | 368 |
Bad debt expense | 31 | 34 | 63 |
Share-based compensation | 10,927 | 3,181 | 2,110 |
Exchange rate differences on cash, cash equivalents and restricted cash | (712) | 380 | 4 |
Other | 28 | (67) | (69) |
Change in operating assets and liability items: | |||
Accounts receivable | (1,537) | (3,258) | (7,354) |
Prepaid expenses and other current assets | 928 | (3,895) | 36 |
Deferred costs | (648) | (1,352) | (449) |
Deferred taxes and other non-current assets | (1,994) | (149) | (905) |
Trade payables | 1,027 | 2,456 | (253) |
Employee and payroll accrued expenses | 4,191 | 729 | 3,380 |
Other accounts payable and non-current liabilities | (1,923) | 2,367 | (43) |
Net change in operating lease accounts | 2,876 | ||
Deferred revenues | 4,099 | 7,507 | 5,476 |
Net cash provided by (used in) operating activities | (9,621) | 4,627 | (428) |
CASH FLOWS FROM INVESTING ACTIVITIES: | |||
Purchase of fixed assets | (2,548) | (1,690) | (889) |
Other investing activities | (173) | 55 | 50 |
Net cash used in investing activities | (2,721) | (1,635) | (839) |
CASH FLOWS FROM FINANCING ACTIVITIES: | |||
Proceeds from initial public offering, net of underwriting discounts | 115,292 | ||
Payments of offering costs related to initial public offering | (2,645) | (130) | |
Proceeds from exercise of stock options | 2,081 | 163 | 395 |
Proceeds from withholding tax related to employee stock plans | 1,255 | ||
Payment of long-term loan | (222) | (667) | (668) |
Net cash provided by (used in) financing activities | 115,761 | (634) | (273) |
Effect of exchange rate changes on cash, cash equivalents and restricted cash | 712 | (380) | (4) |
INCREASE (DECREASE) IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH | 104,131 | 1,978 | (1,544) |
CASH, CASH EQUIVALENTS AND RESTRICTED CASH AT BEGINNING OF YEAR | 17,598 | 15,620 | 17,164 |
CASH, CASH EQUIVALENTS AND RESTRICTED CASH AT END OF YEAR | 121,729 | 17,598 | 15,620 |
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: | |||
Cash paid for income taxes | 1,578 | 1,027 | 1,386 |
Cash paid for interest | 4 | 95 | 137 |
Property and equipment purchased but not yet paid | 271 | 315 | |
Unpaid offering costs | 52 | 600 | |
Operating lease liabilities arising from obtaining operating right of use assets | 10,063 | ||
Conversion of redeemable convertible preferred shares | 26,699 | ||
Exercise of share options | $ 228 |
GENERAL
GENERAL | 12 Months Ended |
Dec. 31, 2019 | |
General [Abstract] | |
GENERAL | NOTE 1: GENERAL Tufin Software Technologies Ltd. (together with its subsidiaries, “Tufin” or the “Company”) is an Israeli company that develops, markets and sells software-based solutions that help organizations visualize, define and enforce a unified security policy across complex, heterogeneous network environments. Tufin’s solutions automate security policy management, and allow organizations to gain visibility and control over their IT and cloud environments. Substantially all of the Company’s sales of products and services worldwide are made through a global network of distributors and resellers, which sell the products and services to their end-user customers. Tufin Software Technologies Ltd. (the “Company”) was incorporated as an Israeli company on January 2, 2005 and commenced operations on that date. The Company has incorporated wholly owned subsidiaries in the United States, the United Kingdom, Germany, France, Australia and Romania. In April 2019, the Company completed its initial public offering (“IPO”) in which it sold 8,855,000 ordinary shares to the public, including 1,155,000 ordinary shares pursuant to an option granted to the underwriters. The Company received aggregate net proceeds from the IPO of approximately $112,465 thousand, net of underwriting discounts and offering expenses payable by the Company. Upon the execution of the IPO, the Company’s outstanding redeemable convertible preferred shares were converted into 16,416,749 ordinary shares. |
SIGNIFICANT ACCOUNTING POLICIES
SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2019 | |
Accounting Policies [Abstract] | |
SIGNIFICANT ACCOUNTING POLICIES | NOTE 2: SIGNIFICANT ACCOUNTING POLICIES The consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”). a. Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates, judgments and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. The Company evaluates on an ongoing basis its assumptions, including those related to contingencies, income taxes, deferred taxes, share-based compensation, leases and revenue recognition, as well as deferred contract costs. The Company’s management believes that the estimates, judgment and assumptions used are reasonable based upon information available at the time they are made. These estimates, judgments and assumptions can affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the consolidated financial statements, and the reported amounts of revenue and expenses during the reporting periods. Actual results could differ from those estimates. b. Principles of Consolidation The consolidated financial statements comprise the financial statements of Tufin Software Technologies Ltd. and its wholly-owned subsidiaries. All intercompany transactions and balances have been eliminated upon consolidation. c. Functional Currency and Foreign Currency Transactions A substantial majority of the Company’s operations are carried out by the Company in Israel and in the United States. The majority of the Company’s revenues are denominated in U.S. dollars. The Company’s management believes that the U.S. dollar is the currency of the primary economic environment in which the Company and each of its subsidiaries operates. Thus, the functional currency of the Company is the U.S. dollar. Accordingly, monetary balances maintained in currencies other than the U.S. dollar are re-measured into U.S. dollars in accordance with Statement of the Accounting Standard Codification (“ASC”) No. 830 “Foreign Currency Matters” (“ASC No. 830”). All transaction gains and losses of the re-measured monetary balance sheet items are reflected in the statement of operations as financial income or expenses, as appropriate. d. Cash and Cash Equivalents Cash equivalents are short-term highly liquid deposits that are readily convertible to cash with original maturities of three months or less, at the date acquired. e. Restricted Bank Deposits As of December 31, 2018 and 2019, the Company’s bank deposits were denominated in U.S. dollars and NIS and bore yearly interest at weighted average deposits rates of 0.14% and 1.44%, respectively. Bank deposits are presented at their cost, including accrued interest. These deposits are used as security for the rental of premises, credit cards and for the Company’s hedging activities. f. Accounts Receivable Accounts receivable are presented in the Company’s consolidated balance sheet net of allowance for doubtful accounts. The Company estimates the collectability of its accounts receivable balances and adjusts its allowance for doubtful accounts accordingly. On a periodic basis, the Company evaluates its accounts receivable and establishes an allowance for doubtful accounts based on past write-offs and collections, current credit conditions and the age of the balances. The Company evaluates a number of factors to assess collectability, including an evaluation of the creditworthiness of the specific customer, past due amounts, payment history, and current economic conditions. When revenue recognition criteria are not met for a sale transaction that has been billed, the Company does not recognize deferred revenues on the balance sheet or the related account receivable. Accordingly, as of December 31, 2018 and 2019, $25,165 thousand and $22,032 thousand, respectively, were offset from accounts receivable and corresponding amounts were offset from deferred revenues (see Note 7). g. Property and Equipment Property and equipment is stated at cost, net of accumulated depreciation. Depreciation is calculated by the straight-line method over the estimated useful lives of the residual value of the related assets at the following annual rates: % Furniture and fixtures 6 Computers and software 33 Leasehold improvements 10-33 Electronic equipment 15-33 Leasehold improvements are depreciated by the straight-line method over the shorter of the term of the lease (including reasonably assured option periods, if applicable), or the estimated useful life of the improvements. h. Long-Lived Assets The long-lived assets of the Company are reviewed for impairment in accordance with ASC No. 360, “Property, Plant and Equipment” (“ASC No. 360”), whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. The recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to the future undiscounted cash flows expected to be generated by such assets. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. During the years ended December 31, 2017, 2018 and 2019, no impairment triggering events were identified. i. Severance Pay Israeli labor law generally requires payment of severance pay upon dismissal of an employee or upon termination of employment in certain other circumstances. The Company makes ongoing deposits into its Israeli employee pension plans to fund their severance liabilities. For its employees who are employed under Article 14 of the Severance Compensation Act, 1963 (“Article 14”), the Company makes deposits with certain insurance companies for accounts controlled by each applicable employee in order to secure the employee’s rights upon termination. In addition, the related obligations and amounts deposited on behalf of the applicable employees for such obligations are not presented on the Company’s consolidated balance sheets, as the amounts funded are not under the control and management of the Company and the Company is legally released from the obligation to pay any severance payments to the employees once the required deposit amounts have been paid. For the Company’s employees in Israel that began employment prior to Article 14, the Company calculates the liability for severance pay based on the most recent salary of these employees multiplied by the number of years of employment as of the Article 14 inception date. These liabilities are presented under other non-current liabilities in the Company’s consolidated balance sheets. The amounts used to fund these liabilities are included in the Company’s consolidated balance sheets under other non-current assets. Expenses incurred under the Company’s severance and pension plans in connection with its Israeli employees, which represent the majority of the Company’s severance expense, for the years ended December 31, 2017, 2018 and 2019, were $2,024 thousand, $2,330 thousand and $3,091 thousand, respectively. In addition, the Company’s employees in other jurisdictions are entitled to certain pension plans and related severance payments in accordance with local laws and practices. j. Revenue Recognition Effective January 1, 2017, the Company elected to early adopt the requirements of Accounting Standards Update (ASU) 2014-09, Revenue from Contracts with Customers (“Topic 606”) The Company follows five steps to record revenue under Topic 606: (i) identify the contract with a customer, (ii) identify the performance obligations in the contract, (iii) determine the transaction price, (iv) allocate the transaction price to the performance obligations in the contract, and (v) recognize revenue when (or as) the Company satisfies its performance obligations. For each arrangement the Company assesses whether it is acting as the principal that has promised to provide goods or services to its customers or an agent which arranges for goods or services to be provided by the principal to an end customer. The Company’s revenue is reported net of discounts, sales tax, value added tax and related surcharges. The Company generates revenues from selling (i) software license (perpetual and term-based), (ii) maintenance, (iii) hardware and (iv) professional services. The Company sells its products and services primarily through distributors and resellers and also through its direct sales force. The Company determines the appropriate revenue recognition for its contracts with customers by analyzing the type, terms and conditions of each contract or arrangement with a customer. The Company classifies the components of revenue as product or services revenue based on the attributes of the underlying performance obligations. Accordingly, software license and hardware are classified as product revenues. The most significant impact of Topic 606 related to the accounting treatment for term license arrangements and costs to obtain customer contracts. Under the previous revenue recognition standard, the Company recognized term license revenues ratably over the contract period whereas under the new revenue standard term license revenues are recognized upfront, upon delivery, and the associated maintenance revenues are deferred and recognized over the contract period. As a result, upon adoption of Topic 606 on January 1, 2017, the Company recognized a decrease in its deferred revenues amounting to $1,139 thousand with a corresponding adjustment to retained earnings (which decreased the accumulated deficit). The Company has considered the impact of the guidance in ASC 340-40, “Other Assets and Deferred Costs” under the new standard. Under the Company’s previous accounting policy, sales commissions were expensed as incurred. The new standard requires the capitalization of all incremental costs that the Company incurs to obtain a contract with a customer that it would not have incurred if the contract had not been obtained, provided the Company expects to recover the costs. Amortization expense is included in sales and marketing expenses in the accompanying consolidated statements of operations and recorded on a straight-line basis over the expected period of benefit, which is the customer relationship period. Additionally, these costs are periodically reviewed for impairment. As a result, upon adoption of Topic 606 on January 1, 2017, the Company recognized a deferred cost asset amounting to $3,512 thousand with a corresponding adjustment to retained earnings (which decreased the accumulated deficit). Furthermore, as a result of the adoption of Topic 606, the Company recognized on January 1, 2017 the related tax effect of $1,024 thousand as an adjustment to retained earnings (which increased the accumulated deficit). The Company’s contract payment terms typically range between 30 and 120 days. The Company assesses collectability based on several factors, including collection history. The Company elected to disregard the effects of a financing component when the period between when the entity transfers a promised good or service to the customer and when the customer pays for that good or service is one year or less. Nature of Products and Services The Company’s on-premise software licenses are sold through both perpetual and term-based license agreements. These licensing arrangements provide customers with the same product functionality and differ mainly in the duration over which the customer benefits from the software. The Company delivers its software licenses electronically. Electronic delivery occurs when the Company provides the customer with access to the software and license key via a secure portal. Revenue from on-premise software licenses is generally recognized upfront at the point in time when the software is made available to the customer. Hardware revenue is recognized upon delivery which is the point in time at which control has passed. The Company’s contracts with customers for on-premise software licenses include maintenance services and may also include additional professional services, such as training, consulting and implementation. Maintenance services agreements consist of fees for providing software updates on an if and when available basis and for providing technical support for software products for a specified term. Both software updates and technical support have the same pattern of transfer to the customer. Revenues related to maintenance services are recognized ratably over the term of the related maintenance agreement. Revenues related to professional services are recognized as the services are performed or upon the fulfillment of the performance obligation of the related professional services. Payments received in advance of services performed are deferred and recognized when the related services are performed. In contracts with multiple performance obligations, the Company accounts for individual performance obligations separately if they are distinct. The Company allocates the transaction price to each performance obligation based on its relative standalone selling price out of total consideration of the contract. For maintenance and support, the Company determines the standalone selling price based on the price at which the Company separately sells a renewal contract. The Company determines the standalone selling price for sales of licenses using the residual approach as the Company’s licenses are not sold on a standalone basis and due to the high variability of the licenses’ sales prices. For professional services, the Company determines the standalone selling prices based on the price at which the Company separately sells those services. k. Cost of Revenues Cost of product revenues consist primarily of costs associated with the processing and the delivery of the Company’s software licenses to the customers as well as third-party hardware and related shipping costs. Cost of maintenance and professional services revenues consist primarily of personnel costs responsible for providing maintenance and support and professional services. The Company sources its hardware from a single third-party provider based in the U.S. l. Accounting for Share-Based Compensation The Company accounts for share-based compensation in accordance with ASC No. 718, “Compensation-Stock Compensation” (“ASC 718”). ASC 718 requires companies to estimate the fair value of equity-based payment awards on the date of grant using an Option-Pricing Model (“OPM”). The grant date fair value of the award is recognized as an expense in the Company’s consolidated statements of operations based on the graded vesting attribution method over the related requisite service period. The Company selected the Black-Scholes-Merton option pricing model as the most appropriate fair value method for its stock options awards. The Company’s option pricing model requires the input of highly subjective assumptions, including estimated fair value of ordinary share price, the expected share price volatility and expected term. Any changes in these highly subjective assumptions would significantly impact the share-based compensation expense. The fair value of options granted to employees and non-employee is estimated at the date of grant using the following assumptions: The risk-free interest rate assumption is the implied yield currently available on United States treasury zero-coupon issues with a remaining term equal to the expected life of the Company’s options. The dividend yield assumption is based on the Company’s historical experience and expectation of no future dividend payouts and may be subject to substantial changes in the future. The Company has historically not paid cash dividends and has no foreseeable plans to pay cash dividends in the future. The expected share price volatility is based on the historical volatility of the ordinary shares of comparable companies that are publicly traded. The expected term of options granted represents the period of time that options granted are expected to be outstanding. The fair value of the Company’s ordinary shares underlying the share-based awards as of December 31, 2017 and 2018 and for the period from January 1, 2019 to April 11, 2019, were estimated using the hybrid method which takes into consideration a probability-weighted of a non-IPO scenario (which is based on the income approach) and an IPO scenario. Commencing April 11, 2019, the Company’s ordinary shares are publicly traded and are measured based on the Company’s share price on the date of grant. Each of the above factors requires the Company to use judgment and make estimates in determining the percentages and time periods used for the calculation. If the Company were to use different percentages or time periods, the fair value of stock-based option awards could be different. Effective as of January 1, 2017, the Company adopted Accounting Standards Update 2016-09, “Compensation—Stock Compensation (Topic 718)” (“ASU 2016-09”) on a modified retrospective basis. ASU 2016-09 permits entities to make an accounting policy election related to how forfeitures will impact the recognition of compensation cost for share-based compensation, which is to estimate the total number of awards for which the requisite service period will not be rendered or to account for forfeitures as they occur. Upon adoption of ASU 2016-09, the Company elected to change its accounting policy to account for forfeitures as they occur. The change was applied on a modified retrospective basis with a cumulative-effect adjustment to retained earnings of $138 thousand (which increased the accumulated deficit) as of January 1, 2017. m. Research and Development Costs ASC 985 requires capitalization of certain software development costs subsequent to the establishment of technological feasibility. Based on the Company’s product development process, technological feasibility is established upon completion of a working model. The Company does not incur material costs between the completion of the working model and the point at which the products are ready for general release. Therefore, research and development costs are charged to the statement of operations as incurred. n. Sales and Marketing Marketing expenses consist primarily of marketing campaigns and tradeshows. Marketing expenses are charged to the statement of operations, as incurred. Marketing expenses for the years ended December 31, 2018 and 2019, amounted to $8,093 thousand and $10,790 thousand, respectively. o. Income Taxes The Company and its subsidiaries are subject to income taxes in the jurisdictions in which they operate. The Company’s provision for income taxes is based on income tax rates in the tax jurisdictions in which it operates, permanent differences between financial reporting and tax reporting, and available credits and incentives. Deferred taxes are determined utilizing the “asset and liability” approach under ASC-740, “Income Taxes” (“ASC-740”). The asset and liability approach requires the recognition of deferred taxes based on the estimated future tax effects of temporary differences between the carrying amount and tax bases of assets and liabilities under the applicable tax laws, and on effective tax rates in effect when the deferred taxes are expected to be settled or realized. Deferred taxes for each jurisdiction are presented as a non-current net asset or liability, net of any valuation allowances. Valuation allowances are provided unless it is more likely than not that the deferred tax asset will be realized. In determining the appropriate valuation allowances, the Company considers future reversals of existing taxable temporary differences, the most recent projections of future business results, prior earnings history, carryback and carry forward and prudent tax strategies that may enhance the likelihood of realization of a deferred tax asset. Deferred taxes have not been provided for the following items: 1) Taxes that would apply in the event of disposal of investments in first-tier foreign subsidiaries, as it is generally the Company’s intention to hold these investments, not to realize them. 2) Dividends distributable from the income of foreign subsidiaries as the Company does not expect these companies to distribute dividends in the foreseeable future. If these dividends were to be paid, the Company would have to pay additional taxes at a rate of up to 25% on the distribution, and the amount would be recorded as an income tax expense in the period the dividend is declared. ASC-740 also clarifies the accounting and reporting for uncertainties in income tax. ASC-740 prescribes a comprehensive model for the financial statement recognition, measurement, presentation and disclosure of uncertain tax positions taken or expected to be taken in income tax returns. The Company reevaluates these uncertain tax positions on a quarterly basis and makes adjustments as required. The liabilities relating to uncertain tax positions are classified as current in the consolidated balance sheets to the extent the Company anticipates making payments within one year. The Company classifies interest and penalties recognized in the financial statements relating to uncertain tax positions within taxes on income. p. Basic and Diluted Net Loss Per Share: Basic net loss per ordinary share is computed by dividing net loss for each reporting period by the weighted-average number of ordinary shares outstanding during the year. Diluted loss per ordinary share is computed by dividing net loss for each reporting period by the weighted average number of ordinary shares outstanding during the period, plus dilutive potential ordinary shares considered outstanding during the period, in accordance with ASC 260-10 “Earnings Per Share”. The calculation of diluted net loss per share excludes potential share issuances of ordinary shares upon the exercise of share option, warrants to purchase ordinary shares and redeemable preferred shares as the effect is anti-dilutive. The total number of shares related to outstanding options, warrants to purchase ordinary shares and redeemable preferred shares that have been excluded from the calculation of diluted net loss per share for the years ended December 31, 2017, 2018 and 2019 were 6,102,593, 26,667 and 16,416,749 (out of which 27,778 shares represent receipt on account of preferred A shares), 6,750,259, 26,667 and 16,416,749 (out of which 27,778 shares represent receipt on account of preferred A shares), and 7,507,811, 26,667 and 16,416,749 (out of which 27,778 shares represent receipt on account of preferred A shares), respectively. q. Concentration of Credit Risks Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash and cash equivalents, restricted bank deposits, trade receivables and derivative instruments. The Company’s cash and cash equivalents and restricted bank deposits are invested with major banks in Europe, Israel and the United States. Generally, these investments may be redeemed upon demand and the Company believes that the financial institutions that hold the Company’s cash deposits are financially sound and, accordingly, bear minimal risk. The trade receivables of the Company are mainly derived from sales to a diverse set of customers located primarily in the United States, Europe and Asia. The Company performs credit evaluations of its customers and, to date, has not experienced any significant losses from bad debts. As of December 31, 2018 and 2019, each of the following distributors comprised more than 10% of the Company’s accounts receivable: December 31, 2018 2019 Customer A 11 % 14 % Customer B 12 % 15 % Customer C 13 % 12 % For purposes of this calculation, the Company assessed distributors by aggregating distributors within the same holding group. r. Derivative Instruments and Hedging Activities The Company is exposed to global market risks and to the risk that its earnings, cash flows and equity could be adversely impacted by fluctuations in foreign exchange rates. As part of the Company’s risk management strategy, it uses foreign currency exchange forward contracts and other derivative to hedge against certain foreign currency exposures. The derivative instruments hedge a portion of the Company’s non-dollar currency exposure. The Company does not enter into derivative transactions for trading purposes. The Company recognizes these derivative instruments as either assets or liabilities in the consolidated balance sheets at their fair value. Derivatives in a gain position are reported in other current assets in the consolidated balance sheets and derivatives in a loss position are recorded in other accounts payables in the consolidated balance sheets, on a gross basis. All derivative contracts enter into by the Company are classified as non-hedging instruments and accordingly the Company records the changes in fair value of derivative instruments in financial income (expense), net in the consolidated statements of operations. s. Comprehensive Loss There are no items of other comprehensive income or loss generated or incurred by the Company other than net loss. Thus, there are no differences between net loss and comprehensive loss. t. Statement of Cash Flows On January 1, 2017, the Company early adopted ASU 2016-18 “Statement of Cash Flows (Topic 230): Restricted Cash”, which requires companies to include amounts generally described as restricted cash and restricted cash equivalents in cash and cash equivalents when reconciling beginning-of-period and end-of-period total amounts shown on the statement of cash flows. u. Fair Value of Financial Instruments The Company applies ASC No. 820, “Fair Value Measurements and Disclosures” (“ASC 820”), with respect to fair value measurements of all financial assets and liabilities. The fair value hierarchy also requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The fair value of foreign currency contracts (used for hedging purposes) is estimated by obtaining current quotes from banks. Fair value is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or a liability. A three-tier fair value hierarchy is established as a basis for considering such assumptions and for inputs used in the valuation methodologies in measuring fair value: Level 1 - Inputs are unadjusted quoted prices in active markets for identical assets or liabilities that can be accessed at the measurement date. Level 2 - Inputs are quoted prices for similar assets and liabilities in active markets or inputs that are observable for the assets or liabilities, either directly or indirectly through market corroboration, for substantially the full term of the financial instruments. Level 3 - Inputs are unobservable inputs based on the Company’s own assumptions used to measure assets and liabilities at fair value. The inputs require significant management judgment or estimation. In accordance with ASC 820, the Company measures its foreign currency derivative instruments, at fair value using the market approach valuation technique. Foreign currency derivative contracts as detailed in Note 3 are classified within the Level 2 value hierarchy, as the valuation inputs are based on quoted prices and market observable data of similar instruments. v. Legal Contingencies From time to time, the Company becomes involved in legal proceedings or is subject to claims arising in its ordinary course of business. Such matters are generally subject to many uncertainties and outcomes that are not predictable with assurance. The Company accrues for contingencies when the loss is probable, and it can reasonably estimate the amount of any such loss. Loss contingencies considered to be remote by the Company are generally not disclosed unless material. The respective legal fees are expensed as incurred. w. Recently Adopted Accounting Standards In February 2016, the Financial Accounting Standards Board (“FASB”) issued ASU 2016-02 - “Leases” and subsequent related amendments (“ASC 842”). ASC 842 supersedes the lease requirements in Accounting Standards Codification Topic 840. Under ASC 842, lessees are required to recognize a right-of-use asset and a lease liability for their leases, including leases classified as operating leases. Leases are classified as finance or operating, with classification affecting the pattern and classification of expense recognition in the income statement. The lease liability and the right-of-use asset are measured based on the present value of the lease payments over the lease term. ASC 842 also contains amended guidance regarding the identification of embedded leases in service contracts and the identification of lease and non-lease components of an arrangement. In addition, disclosures of qualitative and quantitative information about leasing arrangements are required. ASC 842 became effective for the Company on January 1, 2019. The Company adopted ASC 842 on January 1, 2019, using a modified retrospective transition approach. The Company has also elected to utilize the available package of practical expedients permitted under the transition guidance within ASC 842 which does not require it to reassess the prior conclusions about lease identification, lease classification and initial direct costs. Consequently, financial information was not adjusted, and the disclosures required under the new standard are not provided for dates and periods before January 1, 2019. Upon adoption of ASC 842, the Company recognized operating right-of-use assets of $13.2 million with corresponding operating lease liabilities on its consolidated balance sheet. Furthermore, the right-of-use assets were adjusted and reduced by approximately $700 thousand for accrued rent liabilities. The Company does not have finance leases. See Note 6 for further details. x. Recently Issued Accounting Pronouncements Not Yet Adopted In August 2018, the FASB issued ASU 2018-15 “Intangibles—Goodwill and other—Internal-use software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement that is a Service Contract.” ASU 2018-15 addresses the diversity in practice surrounding the accounting for costs incurred to implement a cloud computing hosting arrangement that is a service contract by establishing a model for capitalizing or expensing such costs, depending on their nature and the stage of the implementation project during which they are incurred and aligns the requirements for capitalization of such implementation costs with the existing guidance for internal-use software. Any capitalized costs are to be amortized over the reasonably certain term of the hosting arrangement and presented in the same line within the statement of operations as the related service arrangement’s fees. ASU 2018-15 also requires enhanced qualitative and quantitative disclosures surrounding hosting arrangements that are service contracts. ASU 2018-15 will be effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019, with early adoption permitted and may be adopted on either a retrospective or prospective basis. The Company expects to adopt ASU 2018-15 effective January 1, 2020 and does not expect it to have a material impact on its consolidated financial statements. In June 2016, the FASB issued ASU 2016-13 that supersedes the existing impairment model for most financial assets to a model that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. ASU 2016-13 requires an entity to recognize an impairment allowance equal to its current estimate of all contractual cash flows the entity does not expect to collect. ASU 2016-13 also requires that credit losses relating to available-for-sale debt securities will be recorded through an allowance for credit losses. The new guidance is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. Early adoption is permitted. The Company expects to adopt ASU 2016-13 effective January 1, 2020 and does not expect it to |
FAIR VALUE MEASUREMENT
FAIR VALUE MEASUREMENT | 12 Months Ended |
Dec. 31, 2019 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE MEASUREMENT | NOTE 3: FAIR VALUE MEASUREMENT The following tables summarize the Company’s financial assets and liabilities that are carried at fair value on a recurring basis, by fair value hierarchy, on the consolidated balance sheet: December 31, 2018 2019 (U.S. $ in thousands) Level 2 Level 2 Assets: Foreign currency exchange derivative instruments $ 90 $ 81 Liabilities: Foreign currency exchange derivative instruments 388 7 $ (298 ) $ 74 The Company’s foreign currency exchange derivative financial instruments are classified as Level 2, as they are not actively traded and are valued using pricing models that use observable market inputs, including interest rate curves and both forward and spot prices for currencies (Level 2 inputs). Other financial instruments consist mainly of cash and cash equivalents, restricted bank deposits, accounts receivable, bank loan, accounts payable and other accounts payables. The fair value of these financial instruments approximates their carrying values. |
CASH, CASH EQUIVALENTS AND REST
CASH, CASH EQUIVALENTS AND RESTRICTED CASH | 12 Months Ended |
Dec. 31, 2019 | |
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents [Abstract] | |
CASH, CASH EQUIVALENTS AND RESTRICTED CASH | NOTE 4: CASH, CASH EQUIVALENTS AND RESTRICTED CASH The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the statement of financial position that sum to the total of the same such amounts shown in the statement of cash flows. December 31, 2018 2019 (U.S. $ in thousands) Cash and cash equivalents $ 15,248 $ 118,661 Restricted bank deposits 561 224 Long-term restricted bank deposits 1,789 2,844 Total cash, cash equivalents, and restricted cash shown in the statement of cash flows $ 17,598 $ 121,729 Amounts included in restricted cash represent those required to be set aside by a contractual agreement with lease, hedging and credit card transactions. |
PROPERTY AND EQUIPMENT, NET
PROPERTY AND EQUIPMENT, NET | 12 Months Ended |
Dec. 31, 2019 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY AND EQUIPMENT, NET | NOTE 5: PROPERTY AND EQUIPMENT, NET December 31, 2018 2019 (U.S. $ in thousands) Property and equipment, net: Cost: Furniture and fixtures $ 1,057 $ 1,640 Computers and software 3,175 4,328 Leasehold improvements 852 668 Electronic equipment 1,419 2,129 6,503 8,765 Less - Accumulated depreciation 3,940 4,588 $ 2,563 $ 4,177 In July 2018, the Company entered into a long-term lease agreement for new offices in Israel until January 31, 2029 with an option to extend until January 31, 2034. As a result, the Company recognized accelerated depreciation for furniture and fixtures and leasehold improvements that belong to the old offices. The start date of the accelerated depreciation applied at July 1, 2018 until March 31, 2019, which reflected the remaining useful life of those assets. Accordingly, those assets were retired from the carrying amount of the property and equipment and the corresponding accumulated depreciation. Depreciation expenses were $368 thousand, $ 956 thousand and $ 1,205 thousand in the years ended December 31, 2017, 2018 and 2019, respectively. |
LEASES
LEASES | 12 Months Ended |
Dec. 31, 2019 | |
Lessee Disclosure [Abstract] | |
LEASES | NOTE 6: LEASES The Company entered into office lease arrangements where its administrative, research and development, support services and sales and marketing activities are located. Those lease arrangements have remaining terms of up to 10 years. As of December 31, 2019, the Company had operating lease right-of-use (“ROU”) assets of $21.0 million, of which $17.3 were located in Israel, and the remaining ROU assets were located in the United States. The Company determines if an arrangement is a lease at inception. If an arrangement is a lease, the Company determines whether it is an operating lease or a finance lease at the lease commencement date. As of December 31, 2019, the Company did not have any finance leases. Operating leases are included in operating lease ROU assets, operating lease liabilities – current, and non-current operating lease liabilities in the Company’s consolidated balance sheets. ROU assets represent the Company’s right to control the use of an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized on the commencement date based on the present value of lease payments over the lease term. The Company uses its incremental borrowing rate based on the information available at the commencement date to determine the present value of the lease payments. The incremental borrowing rate is determined based on factors such as the lease term, credit standing and the economic environment of the location of the lease. Variable lease payments, including payments based on an index or a rate, are expensed as incurred and are not included within the operating lease ROU asset and operating lease liabilities. The Company does not separate non-lease components from lease components for all real estate assets. The Company’s lease terms are the noncancelable periods, including any rent-free periods provided by the lessor, and include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. At lease inception, and in subsequent periods as necessary, the Company estimates the lease term based on its assessment of extension and termination options that are reasonably certain to be exercised. Lease costs are recognized on a straight-line basis over the lease term. The Company has elected the short-term lease recognition exemption for all leases with terms shorter than 12 months. Therefore, the Company does not recognize operating lease ROU asset and operating lease liabilities for those short-term leases. Lease costs for short-term leases are recognized on a straight-line basis over the lease term. The components of lease expense during the period presented were as follows: Year Ended December 31, 2019 Operating lease expense $ 3,110 Short-term lease expense 786 Total lease expense $ 3,896 Rent expense for the years ended December 31, 2017 and 2018 was approximately $1,251 thousand and $2,396 thousand, respectively. Supplemental cash flow information related to operating leases during the period presented was as follows: Year Ended December 31, 2019 (U.S. $ in thousands) Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 1,602 ROU assets obtained in exchange for lease liabilities: Operating leases $ 10,063 Lease term and discount rate related to operating leases as of the period presented were as follows: December 31, 2019 Weighted-average remaining lease term (in years) 8.4 Weighted-average discount rate 7.5 % The maturities of lease liabilities under operating leases as of December 31, 2019 are as follows: 2020 4,127 2021 4,139 2022 4,153 2023 3,892 2024 3,600 Thereafter 12,568 Total undiscounted lease payments $ 32,479 Less: Imputed interest (7,946 ) Total lease liabilities $ 24,533 The aggregate minimum lease commitments under operating leases as of December 31, 2018 are as follows: (U.S. $ in thousands) Year ending December 31: 2019 $ 1,457 2020 2,478 2021 2,486 2022 2,495 2023 and thereafter 12,528 $ 21,444 |
DEFERRED REVENUES AND DEFERRED
DEFERRED REVENUES AND DEFERRED COSTS | 12 Months Ended |
Dec. 31, 2019 | |
Revenue Recognition and Deferred Revenue [Abstract] | |
DEFERRED REVENUES AND DEFERRED COSTS | NOTE 7: DEFERRED REVENUES AND DEFERRED COSTS December 31, 2018 2019 (U.S. $ in thousands) Deferred revenues: Deferred product revenues $ 917 $ 695 Deferred maintenance and professional services revenues 55,712 56,900 56,629 57,595 Less - amounts offset from accounts receivable (25,165 ) (22,032 ) Deferred revenues 31,464 35,563 The change in deferred revenues: Balance at beginning of year 40,332 56,629 Deferred revenue relating to new sales 44,667 40,225 Revenue recognized during the year (28,370 ) (39,259 ) Balance at end of year 56,629 57,595 Less - amounts offset from accounts receivable (25,165 ) (22,032 ) Deferred revenues $ 31,464 $ 35,563 As of December 31, 2018 and 2019, the total remaining performance obligation amounted to $56,629 thousand and $62,610 thousand, respectively. The Company expects that it will satisfy its remaining performance obligations over a period of three years during which, on December 31, 2018 and 2019, $31,461 thousand and $36,547 thousand, respectively, will be recognized in the next twelve months, which constitutes 56% and 58%, respectively, of total remaining performance obligation. Assets Recognized from the Costs to Obtain a Contract with a Customer The Company determined that certain costs related to its sales incentive programs meet the requirements to be capitalized and deferred. These assets are recorded as current and non-current assets. The Company amortizes these deferred costs over the benefit period, currently estimated to be four years. The Company considers the benefit period to exceed the initial contract term for certain costs because of anticipated renewals and because sales commission rates for renewal contracts are not commensurate with sales commissions for initial contracts. December 31, 2018 2019 (U.S. $ in thousands) Balance at beginning of year $ 3,961 $ 5,313 Additional costs deferred 3,111 3,436 Amortization of deferred costs (1,759 ) (2,787 ) Balance at end of year $ 5,313 $ 5,962 |
HEDGING ACTIVITIES
HEDGING ACTIVITIES | 12 Months Ended |
Dec. 31, 2019 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
HEDGING ACTIVITIES | NOTE 8: HEDGING ACTIVITIES The Company carries out transactions involving foreign currency exchange derivative financial instruments. The transactions are designed to hedge the Company’s exposure in currencies other than the U.S. dollar, but are not designated as an accounting hedge. The Company is primarily exposed to foreign exchange risk with respect to recognized assets and liabilities and forecasted transactions denominated in NIS, Euro and GBP. As of December 31, 2018 and 2019, the notional amounts of the Company’s outstanding foreign currency exchange derivative financial instruments, not designated as accounting hedging instruments, were $29.3 million and $22.4 million, respectively, and were used to reduce foreign currency exposures of the NIS, Euro and GBP. With respect to such derivatives, losses of $337 thousand and gains of $366 thousand were recognized under financial income (expense), net for the years ended December 31, 2018 and 2019, respectively. Such gains and losses partially offset the revaluation losses of the balance sheet items, which are also recognized under financial income (expense), net. Balance sheet location Notional Amount Fair Value December 31, 2019 December 31, 2019 (U.S. $ in thousands) Assets derivatives - Foreign currency exchange contracts Other current assets 11,185 $ 81 Liability derivatives - Foreign currency exchange contracts Other accounts payables 11,185 $ 7 Balance sheet location Notional Amount Fair Value December 31, 2018 December 31, 2018 (U.S. $ in thousands) Assets derivatives - Foreign currency exchange contracts Other current assets $ 17,081 90 Liability derivatives - Foreign currency exchange contracts Other accounts payables $ 12,265 388 |
SHAREHOLDERS' EQUITY AND REDEEM
SHAREHOLDERS' EQUITY AND REDEEMABLE CONVERTIBLE PREFERRED SHARES | 12 Months Ended |
Dec. 31, 2019 | |
SHAREHOLDERS' EQUITY AND REDEEMABLE CONVERTIBLE PREFERRED SHARES [Abstract] | |
SHAREHOLDERS' EQUITY AND REDEEMABLE CONVERTIBLE PREFERRED SHARES | NOTE 9: SHAREHOLDERS’ EQUITY AND REDEEMABLE CONVERTIBLE PREFERRED SHARES a) Shareholders’ Equity As of December 31, 2018, the Company had 8,265,988 ordinary shares of NIS 0.015 par value issued and outstanding and 26,667 warrants to purchase ordinary shares. As of December 31, 2019, the Company had 35,230,253 ordinary shares of NIS 0.015 par value issued and outstanding. Upon the closing of the Company’s IPO in April 2019, warrants to purchase 26,667 ordinary shares were exercised on a cashless basis resulting an issuance of 18,472 ordinary shares. Each ordinary share confers upon its holder the right to one vote and to receive dividends as declared by the Board of Directors, In April 2019, the Company completed its IPO in which it sold 8,855,000 ordinary shares to the public, including 1,155,000 ordinary shares pursuant to an option granted to the underwriters. Upon the execution of the IPO, the Company’s outstanding redeemable convertible preferred shares were converted into 16,416,749 ordinary shares. The remaining increase in the issued and outstanding ordinary shares during 2019 was attributable to exercises of stock options. The Company’s ordinary shares are traded on the New York Stock Exchange under the ticker symbol “TUFN”. b) Redeemable Convertible Preferred Shares 1. Between December 2007 and September 2014, the Company entered into four Preferred Share Purchase Agreements with certain investors. As of December 31, 2018, the Company’s redeemable convertible preferred shares of NIS 0.015 par value amounted to $26,699 thousand. Shares of redeemable convertible preferred stock were not mandatorily redeemable. However, a liquidation or deemed liquidation event would have constituted a redemption event that was outside of the Company’s control. As such, all shares of redeemable convertible preferred stock were presented outside of permanent equity. The Company had not adjusted the carrying values of the redeemable convertible preferred stock to the deemed liquidation values of such shares since a liquidation event was not probable as of December 31, 2018. Subsequent adjustments to increase or decrease the carrying values to the ultimate liquidation values would have been made only if and when it became probable that such a liquidation event will occur. 2. As of December 31, 2018, the rights, preferences and privileges with respect to the preferred shares were stipulated in the Company’s then-effective Articles of Association. A summary of significant provisions is outlined below. i. Right of First Refusal ii. Bring Along: iii. Liquidation Preference: i. The holders of preferred D shares were entitled to receive from the distributable proceeds an amount equal to 1.5 times their investment reduced by any amounts already paid to such holders in respect of their preferred D shares. In the event that the distributable proceeds were insufficient for such distribution as described above, then the distributable proceeds were distributed or allocated to the holders of preferred D shares on a pro-rata basis. ii. The holders of preferred C shares were entitled to receive from the remaining distributable proceeds (if any) their investment plus any declared but unpaid dividends, reduced by any amounts already paid to such holders in respect of their preferred C shares; iii. The holders of preferred B shares were entitled to receive from the remaining distributable proceeds (if any) an amount equal to 1.55 times their investment plus any declared but unpaid dividends, reduced by any amounts already paid to such holders in respect of their preferred B shares; iv. The holders of preferred A shares were entitled to receive from the remaining distributable proceeds (if any) an amount equal to 1.33 times their investment plus any declared but unpaid dividends, reduced by any amounts already paid to such holders in respect of their preferred A shares. v. Any remaining distributable proceeds would have been distributed among all the holders of ordinary shares of the Company, including holders of preferred shares. vi. In the event the distributable proceeds in a liquidation or deemed liquidation equalled or exceeded $136.9 million, then the foregoing liquidation preferences for preferred A, B and C shares would be disregarded, and in the event the distributable proceeds in a liquidation or deemed liquidation would have provided the holders of the preferred D shares an amount per each preferred D share equal to three times their investment, then the liquidation preference would have also been disregarded with respect to the preferred D shares iv. Dividend Preference: v. Protective provisions vi. Conversion and conversion price adjustment: Notwithstanding anything to the contrary herein, each preferred share would automatically be converted into fully paid and non-assessable ordinary shares at the then applicable conversion rate, upon: (i) a qualified IPO, which was defined in the Company’s Articles of Association as an IPO at a minimum pre-money valuation of $250 million and resulting in minimum gross proceeds to the Company of $50 million ; As mentioned above, the Company’s redeemable convertible preferred shares were converted into 16,416,749 ordinary shares following the completion of the Company’s IPO in April 2019. As of December 31, 2019, the Company had no redeemable convertible preferred shares issued or outstanding. |
SHARE-BASED COMPENSATION
SHARE-BASED COMPENSATION | 12 Months Ended |
Dec. 31, 2019 | |
Share-based Payment Arrangement [Abstract] | |
SHARE-BASED COMPENSATION | NOTE 10: SHARE-BASED COMPENSATION a. Under the Company’s 2007 Israeli Share Option Plan, as amended in August 2014, September 2015 and July 2017, or the 2007 Plan, its 2008 U.S. Stock Plan, or the 2008 Plan, its 2018 U.S. Equity-Based Incentive Plan, or the 2018 Plan, and the 2019 Equity-Based Incentive Plan, or the 2019 Plan, options exercisable for the Company’s ordinary shares, par value NIS 0.015 per share, may be granted to employees, officers, non-employee consultants and directors of the Company. The 2007 Plan, the 2008 Plan, the 2018 Plan and the 2019 Plan are collectively referred to herein as the Plans. On February 28, 2019, the Company’s board of directors approved the 2019 Plan, which became effective upon shareholder approval on March 21, 2019. The 2019 Plan replaced the 2007 Plan, the 2008 Plan and the 2018 Plan, or the Prior Plans, under which further grants will not be made. The 2019 Plan generally allows for the grant of options, restricted shares, restricted share units and other share-based awards to the Company and its affiliates’ employees. Any share (i) underlying an award under the Plans (in an amount not to exceed 813,515 shares under the Prior Plans) that has expired, or was canceled, terminated, forfeited, repurchased or settled in cash in lieu of the issuance of shares, for any reason, without having been exercised; (ii) tendered to pay the exercise price of an award (or the exercise price or other purchase price of any option or other award under the Prior Plans), or withholding tax obligations with respect to an award (or any awards under the Prior Plans); or (iii) subject to an award (or any award under the Prior Plans) that is not delivered to a grantee because such shares are withheld to pay the exercise price (or of any award under the Prior Plans), or withholding tax obligations with respect to such award (or such other award), will automatically be available for grant under the 2019 Plan. Under the 2019 Plan, options generally have a contractual term of ten years from the grant date. Options granted become exercisable over the requisite service period, which is normally a four-year period beginning on the grant date, subject to continued service to the Company. As of December 31, 2019, 174,655 shares were available for future equity awards under the 2019 Plan. On January 1, 2020, the reserve pool under the 2019 Plan was increased by 1,761,513 shares. b. A summary of the activity in options granted to employees for the year ended December 31, 2019 is as follows, as adjusted for the reverse stock split: Amount of Options Weighted average exercise price Aggregate intrinsic value (U.S. $ in thousands) Balance as of January 1, 2019 6,750,259 $ 1.77 Granted 2,947,691 $ 18.66 Exercised (1, 674,044 ) $ 1.38 Forfeited (516,095 ) $ 6.38 Balance as of December 31, 2019 7,507,811 $ 8.17 $ 77,930 Exercisable as of December 31, 2019 3,256,572 $ 1.70 $ 51,821 A summary of the Company’s options activity for the year ended December 31, 2017, 2018 and 2019 is as follows: December 31, 2017 2018 2019 (U.S. $ in thousands) Cost of revenues $ 332 $ 634 $ 1,514 Research and development 660 731 2,370 Sales and marketing 765 1,458 4,849 General and administrative 353 358 2,194 Total share-based compensation expense $ 2,110 $ 3,181 $ 10,927 In May 2017, the board of directors of the Company approved a 10-year extension of the remaining contractual term of 3,473,515 options originally granted to approximately 240 employees. The total incremental compensation cost resulting from this modification amounted to $895 thousand, out of which $783 thousand was recorded as compensation expense during the year ended December 31, 2017. As of December 31, 2019, the Company had 4,251,239 unvested options, respectively. As of December 31, 2019, the unrecognized compensation cost related to all unvested, equity-classified stock options of $19,945 thousand is expected to be recognized as an expense over a weighted-average period of 1.6 years. The total intrinsic value of options exercised during 2019 was approximately $28,950 thousand. The fair value of stock options granted was estimated using the Black-Scholes option-pricing model. The assumptions used to value options granted during 2019 were as follows: Risk-free interest rate 1.53%-2.63 % Expected option term (years) 5.5-7.0 Expected share price volatility 50.4%-65.9 % Dividend yield 0 % Weighted average grant date fair value 9.63 c. The following table summarizes the Company’s outstanding and exercisable options granted as of December 31, 2019, as adjusted for the reverse stock split: Exercise Price Options outstanding as of December 31, 2019 Weighted average remaining contractual term Options exercisable as of December 31, 2019 Weighted average remaining contractual term (years) (years) $ 0.004 22,668 7.3 22,668 7.3 $ 0.60 23,332 8.6 23,332 8.6 $ 0.64 149,072 9.5 149,072 9.5 $ 0.80 99,168 10.4 99,168 10.4 $ 0.89 33,332 11.1 33,332 11.1 $ 1.41 3,310,990 10.3 2,551,160 10.8 $ 1.76 740,039 8.2 246,948 8.1 $ 7.55 315,159 8.7 77,291 8.7 $ 8.51 341,768 9.0 33,268 8.8 $ 16.68 891,886 9.6 - - $ 19.21 465,261 9.7 - - $ 22.70 1,004,376 9.2 20,333 8.8 $ 29.74 110,760 9.5 - - 7,507,811 9.7 3,256,572 10.4 |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | NOTE 11: INCOME TAXES a. Deferred Tax Assets and Liabilities The components of the Company’s deferred tax assets and liabilities as of December 31, 2018 and 2019 were as follows: As of December 31, 2018 2019 (U.S. $ in thousands) Deferred tax assets: Tax loss carryforwards $ 4,703 $ 9,409 Research and development 4,216 6,141 Deferred revenue 1,334 2,238 Employee and payroll accrued expenses 684 891 Operating lease liability — 1,013 Other — 72 Total deferred tax assets 10,937 19,764 Deferred tax liabilities: Property and equipment, net (129 ) (250 ) Deferred costs (1,352 ) (1,481 ) Operating lease right-of-use asset — (984 ) Other (5 ) — Total deferred tax liabilities (1,486 ) (2,715 ) Total deferred tax assets, net 9,451 17,049 Less valuation allowance for deferred tax assets (8,762 ) (15,390 ) Deferred tax assets $ 689 $ 1,659 The Company’s deferred tax assets are classified entirely in the consolidated balance sheet as non-current assets. Significant judgment is required in determining any valuation allowance recorded against deferred tax assets. In assessing the need for a valuation allowance, the Company considered all available evidence, including past operating results, the most recent projections for taxable income, and prudent and feasible tax planning strategies. The Company reassess its valuation allowance periodically and if future evidence allows for a partial or full release of the valuation allowance, a tax benefit will be recorded accordingly. As of December 31, 2018 and 2019, the Company had recorded a full valuation allowance of $8,762 thousand and $15,390 thousand, respectively, with regard to its deferred taxes, consisting primarily of tax loss carryforwards generated in Israel. On December 22, 2017, the Tax Cuts and Jobs Act (the “Act”) was enacted into law. The new legislation represents fundamental modifications to the U.S. tax system. The Act contains several key tax provisions that will impact the Company’s U.S. subsidiary, including the reduction of the maximum U.S. federal corporate income tax rate from 35% to 21%, effective January 1, 2018. The Act also repeals the corporate alternative minimum tax for tax years beginning after December 31, 2017. U.S. GAAP requires that the impact of tax legislation be recognized in the period in which the law was enacted. The Company revalued its deferred tax assets at the statutory rate of 21% as of December 31, 2017 that will be in effect in 2018 and forward. The Company believes that all future profits of its subsidiaries will be indefinitely reinvested or that there is no expectation to distribute any taxable dividends from these subsidiaries. b. Provision for Income Taxes Loss (Income) before taxes on income for the years ended December 31, 2017, 2018 and 2019 were as follows: December 31, 2017 2018 2019 (U.S. $ in thousands) Israeli 3,319 $ 4,879 $ 29,560 Non-Israeli (1,324 ) (1,900 ) (2,452 ) 1,995 $ 2,979 $ 27,108 The components of taxes on income for the years ended December 31, 2017, 2018 and 2019 were as follows: December 31, 2017 2018 2019 (U.S. $ in thousands) Current Israeli 109 $ 105 $ 164 Non-Israeli 1,277 1,328 1,817 1,386 1,433 1,981 Deferred Israeli 88 (1 ) — Non-Israeli (677 ) (149 ) (970 ) (589 ) (150 ) (970 ) Total taxes on income 797 $ 1,283 $ 1,011 A reconciliation of the theoretical tax benefit and actual taxes on income for the years ended December 31, 2017, 2018 and 2019 is set forth below: December 31, 2017 2018 2019 (U.S. $ in thousands) Loss before taxes on income 1,995 $ 2,979 $ 27,108 Statutory tax rate in Israel 24 % 23 % 23 % Theoretical tax benefit 479 685 6,235 Increase (decrease) in taxes resulting from: Effect of different tax rates applicable in foreign jurisdictions 185 (399 ) (157 ) Operating losses and other temporary differences for which valuation allowance was provided (546 ) (708 ) (4,972 ) Permanent differences (462 ) (756 ) (2,162 ) Uncertain tax position (91 ) (91 ) (158 ) Change in tax rate (255 ) — — Prior years tax adjustments — — 204 Other (107 ) (14 ) (1 ) Actual taxes on income (797 ) $ (1,283 ) $ (1,011 ) Uncertain tax positions Significant judgment is required in evaluating the Company’s tax positions and determining its provision for income taxes. During the ordinary course of business, there are transactions and calculations for which the ultimate tax determination is uncertain. The Company establishes reserves for tax-related uncertainties based on estimates of whether, and the extent to which, additional taxes will be due. These reserves are established when the Company believes that certain positions might be challenged despite its belief that its tax return positions are fully supportable. The Company adjusts these reserves in light of changing facts and circumstances, such as the outcome of a tax audit or changes in the tax law. The provision for income taxes includes the impact of reserve provisions and changes to reserves that are considered appropriate. Year ended December 31, 2017 2018 2019 (U.S. $ in thousands) Balance at beginning of year 330 $ 421 $ 512 Additions for tax positions related to the current year 91 91 158 Balance at end of year 421 $ 512 $ 670 The Company is subject to income taxes in the U.S., Israel and certain other foreign jurisdictions. The Company files income tax returns in various jurisdictions with varying statutes of limitations. Tax returns of the U.S. subsidiary submitted in the United States through 2014 tax year are considered to be final following the completion of an Internal Revenue Service examination. Tax returns of the Israel entity submitted in Israel through the 2013 tax year are considered to be final following the completion of an Israeli Tax Authorities examination. The expiration of the statute of limitations related to the various other foreign and state income tax returns that the Company and its subsidiaries file vary by state and foreign jurisdiction. c. Basis of taxation Company incorporated in the U.S. — tax rate of 35% through December 31, 2017 and 21% in 2018 and thereafter. Company incorporated in Germany — tax rate of 33%. Company incorporated in UK — tax rate of 19%. Company incorporated in France — tax rate of 33%. Tax rates in Israel Company incorporated in Israel — tax rate of 24% for 2017 and 23% in 2018 and thereafter. Tax benefits in Israel Under Israel law, including Amendment No. 60 to the Israel law, the Company may be entitled to various tax benefits such as “approved enterprise” or “benefited enterprise” status, subject to meeting certain conditions, including generating taxable income. As of December 31, 2019, the Company does not anticipate taxable income in the foreseeable future. The main potential tax benefits available are the following: 1) In respect of income derived from the benefited enterprises, the Company is entitled to tax exempt during a period of two years from the year in which the Company first earns taxable income (limited to twelve years from the commencement date). 2) In the event of distribution of a cash dividend from income which was tax exempt as above, the Company would have to pay 25% tax in respect of the amount distributed. 3) Entitlement to the above benefits is conditioned upon the Company’s fulfilling the conditions stipulated by the above law, regulations published thereunder and the certificate of approval for the specific investments in approved enterprises or benefited enterprises. In the event of failure to comply with these conditions, the benefits may be cancelled, and the Company may be required to refund the amount of the benefits, in whole or in part, with the addition of linkage differences to the Israeli CPI and interest. Israel tax loss carryforwards Accumulated losses for tax purposes as of December 31, 2019 amounted to $40,908 thousand, and were generated in Israel. These losses may be carried forward and offset against taxable income in the future for an indefinite period. A full valuation allowance was created against the Company’s deferred tax assets generated in Israel, consisting mostly of net operating loss carryovers. Management currently believes that it is more likely than not that the deferred taxes generated in Israel will not be realized in the foreseeable future. |
FINANCIAL INCOME (LOSS), NET
FINANCIAL INCOME (LOSS), NET | 12 Months Ended |
Dec. 31, 2019 | |
Financial Income (loss), Net [abstract] | |
FINANCIAL INCOME (LOSS), NET | NOTE 12: FINANCIAL INCOME (LOSS), NET Year ended December 31, 2017 2018 2019 (U.S. $ in thousands) Hedging instrument gain (loss), net $ 88 $ (337 ) $ 366 Bank charges (18 ) (89 ) (153 ) Exchange rate gain (loss), net 336 (418 ) (1,175 ) Interest income (expense), net (137 ) (218 ) 878 Other, net (2 ) 15 (1 ) Total financial income (expenses), net $ 267 $ (1,047 ) $ (85 ) |
ENTITY WIDE DISCLOSURES
ENTITY WIDE DISCLOSURES | 12 Months Ended |
Dec. 31, 2019 | |
Segment Reporting [Abstract] | |
ENTITY WIDE DISCLOSURES | NOTE 13: ENTITY WIDE DISCLOSURES ASC 280, “Segment Reporting,” establishes standards for reporting information about operating segments. The Company manages its business based on one operating segment and derives revenues from licensing of software, sales of hardware, providing maintenance and technical support and sales of professional services. The following is a summary of revenues within geographic areas: Year ended December 31, 2017 2018 2019 (U.S. $ in thousands) Geography: Americas: United States 34,718 $ 47,860 $ 55,991 Other 302 407 857 35,020 48,267 56,848 Israel 757 1,161 1,654 EMEA (excluding Germany and Israel) 18,380 23,181 27,102 Germany 6,962 8,253 12,147 APAC 3,421 4,119 5,519 Total 64,540 $ 84,981 $ 103,270 Net sales are attributed to geographic areas based on the location of customer. As of December 31, 2017, 2018 and 2019, each of the following distributors comprised more than 10% of the Company’s revenue: December 31, 2017 2018 2019 Customer A 16 % 13 % 15 % Customer B 13 % 10 % 8 % Disaggregation of Revenue The Company generates revenue from the sale of software products, hardware products, maintenance and support, and professional services. All revenue recognized in the consolidated statement of operations is considered to be revenue from contracts with customers. The following table sets for the disaggregated revenue by revenue type and is consistent with how the Company evaluates its performance obligations: Year ended December 31, 2017 2018 2019 (U.S. $ in thousands) Revenues: Software products $ 28,655 $ 39,300 $ 44,618 Hardware products 2,200 3,254 2,747 Support and maintenance 27,966 37,155 46,019 Professional services 5,719 5,272 9,886 Total revenues $ 64,540 $ 84,981 $ 103,270 Property and equipment, net by geographical area were as follows as of December 31, 2017, 2018 and 2019: December 31, 2017 2018 2019 (U.S. $ in thousands) Americas (primarily the United States) 210 $ 496 $ 959 EMEA 46 81 123 Israel 1,573 1,986 3,095 1,829 $ 2,563 $ 4,177 |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 12 Months Ended |
Dec. 31, 2019 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | NOTE 14: SUBSEQUENT EVENTS a) On March 1, 2020, the Company granted certain of its employees the option to purchase 641,500 ordinary shares at an exercise price of $11.70 per share. b) On February 26, 2020, the Company, along with its directors and officers at the time of its IPO, or the individual defendants, were named as defendants in a putative shareholder class action lawsuit filed in the Supreme Court of the State of New York captioned Matt Primozich v. Tufin Software Technologies Ltd., et al. c) On March 15, 2020, the Company granted certain of its employees the option to purchase 233,000 ordinary shares at an exercise price based on the Company’s share price as of April 1, 2020. In addition, on March 15, 2020, the Company granted certain of its employees 518,300 restricted stock units with a vesting period of four years. |
VALUATION AND QUALIFYING ACCOUN
VALUATION AND QUALIFYING ACCOUNTS | 12 Months Ended |
Dec. 31, 2019 | |
SEC Schedule, 12-09, Valuation and Qualifying Accounts [Abstract] | |
VALUATION AND QUALIFYING ACCOUNTS | VALUATION AND QUALIFYING ACCOUNTS AND RESERVES VALUATION AND QUALIFYING ACCOUNTS (In thousands) Accounts Receivable Allowances Valuation Allowances on Net Deferred Tax Assets Balance as of December 31, 2016 $ - $ 8,625 Charged to costs and expenses 63 886 Charged to other accounts - - Balance as of December 31, 2017 63 9,511 Charged to costs and expenses 34 (749 ) Charged to other accounts - - Balance as of December 31, 2018 97 8,762 Charged to costs and expenses 31 6,628 Charged to other accounts (51 ) - Balance as of December 31, 2019 $ 77 $ 15,390 |
SIGNIFICANT ACCOUNTING POLICI_2
SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2019 | |
Accounting Policies [Abstract] | |
Use of Estimates | a. Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates, judgments and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. The Company evaluates on an ongoing basis its assumptions, including those related to contingencies, income taxes, deferred taxes, share-based compensation, leases and revenue recognition, as well as deferred contract costs. The Company’s management believes that the estimates, judgment and assumptions used are reasonable based upon information available at the time they are made. These estimates, judgments and assumptions can affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the consolidated financial statements, and the reported amounts of revenue and expenses during the reporting periods. Actual results could differ from those estimates. |
Principles of Consolidation | b. Principles of Consolidation The consolidated financial statements comprise the financial statements of Tufin Software Technologies Ltd. and its wholly-owned subsidiaries. All intercompany transactions and balances have been eliminated upon consolidation. |
Functional Currency and Foreign Currency Transactions | c. Functional Currency and Foreign Currency Transactions A substantial majority of the Company’s operations are carried out by the Company in Israel and in the United States. The majority of the Company’s revenues are denominated in U.S. dollars. The Company’s management believes that the U.S. dollar is the currency of the primary economic environment in which the Company and each of its subsidiaries operates. Thus, the functional currency of the Company is the U.S. dollar. Accordingly, monetary balances maintained in currencies other than the U.S. dollar are re-measured into U.S. dollars in accordance with Statement of the Accounting Standard Codification (“ASC”) No. 830 “Foreign Currency Matters” (“ASC No. 830”). All transaction gains and losses of the re-measured monetary balance sheet items are reflected in the statement of operations as financial income or expenses, as appropriate. |
Cash and Cash Equivalents | d. Cash and Cash Equivalents Cash equivalents are short-term highly liquid deposits that are readily convertible to cash with original maturities of three months or less, at the date acquired. |
Restricted Bank Deposits | e. Restricted Bank Deposits As of December 31, 2018 and 2019, the Company’s bank deposits were denominated in U.S. dollars and NIS and bore yearly interest at weighted average deposits rates of 0.14% and 1.44%, respectively. Bank deposits are presented at their cost, including accrued interest. These deposits are used as security for the rental of premises, credit cards and for the Company’s hedging activities. |
Accounts Receivable | f. Accounts Receivable Accounts receivable are presented in the Company’s consolidated balance sheet net of allowance for doubtful accounts. The Company estimates the collectability of its accounts receivable balances and adjusts its allowance for doubtful accounts accordingly. On a periodic basis, the Company evaluates its accounts receivable and establishes an allowance for doubtful accounts based on past write-offs and collections, current credit conditions and the age of the balances. The Company evaluates a number of factors to assess collectability, including an evaluation of the creditworthiness of the specific customer, past due amounts, payment history, and current economic conditions. When revenue recognition criteria are not met for a sale transaction that has been billed, the Company does not recognize deferred revenues on the balance sheet or the related account receivable. Accordingly, as of December 31, 2018 and 2019, $25,165 thousand and $22,032 thousand, respectively, were offset from accounts receivable and corresponding amounts were offset from deferred revenues (see Note 7). |
Property and Equipment | g. Property and Equipment Property and equipment is stated at cost, net of accumulated depreciation. Depreciation is calculated by the straight-line method over the estimated useful lives of the residual value of the related assets at the following annual rates: % Furniture and fixtures 6 Computers and software 33 Leasehold improvements 10-33 Electronic equipment 15-33 Leasehold improvements are depreciated by the straight-line method over the shorter of the term of the lease (including reasonably assured option periods, if applicable), or the estimated useful life of the improvements. |
Long-Lived Assets | h. Long-Lived Assets The long-lived assets of the Company are reviewed for impairment in accordance with ASC No. 360, “Property, Plant and Equipment” (“ASC No. 360”), whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. The recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to the future undiscounted cash flows expected to be generated by such assets. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. During the years ended December 31, 2017, 2018 and 2019, no impairment triggering events were identified. |
Severance Pay | i. Severance Pay Israeli labor law generally requires payment of severance pay upon dismissal of an employee or upon termination of employment in certain other circumstances. The Company makes ongoing deposits into its Israeli employee pension plans to fund their severance liabilities. For its employees who are employed under Article 14 of the Severance Compensation Act, 1963 (“Article 14”), the Company makes deposits with certain insurance companies for accounts controlled by each applicable employee in order to secure the employee’s rights upon termination. In addition, the related obligations and amounts deposited on behalf of the applicable employees for such obligations are not presented on the Company’s consolidated balance sheets, as the amounts funded are not under the control and management of the Company and the Company is legally released from the obligation to pay any severance payments to the employees once the required deposit amounts have been paid. For the Company’s employees in Israel that began employment prior to Article 14, the Company calculates the liability for severance pay based on the most recent salary of these employees multiplied by the number of years of employment as of the Article 14 inception date. These liabilities are presented under other non-current liabilities in the Company’s consolidated balance sheets. The amounts used to fund these liabilities are included in the Company’s consolidated balance sheets under other non-current assets. Expenses incurred under the Company’s severance and pension plans in connection with its Israeli employees, which represent the majority of the Company’s severance expense, for the years ended December 31, 2017, 2018 and 2019, were $2,024 thousand, $2,330 thousand and $3,091 thousand, respectively. In addition, the Company’s employees in other jurisdictions are entitled to certain pension plans and related severance payments in accordance with local laws and practices. |
Revenue Recognition | j. Revenue Recognition Effective January 1, 2017, the Company elected to early adopt the requirements of Accounting Standards Update (ASU) 2014-09, Revenue from Contracts with Customers (“Topic 606”) The Company follows five steps to record revenue under Topic 606: (i) identify the contract with a customer, (ii) identify the performance obligations in the contract, (iii) determine the transaction price, (iv) allocate the transaction price to the performance obligations in the contract, and (v) recognize revenue when (or as) the Company satisfies its performance obligations. For each arrangement the Company assesses whether it is acting as the principal that has promised to provide goods or services to its customers or an agent which arranges for goods or services to be provided by the principal to an end customer. The Company’s revenue is reported net of discounts, sales tax, value added tax and related surcharges. The Company generates revenues from selling (i) software license (perpetual and term-based), (ii) maintenance, (iii) hardware and (iv) professional services. The Company sells its products and services primarily through distributors and resellers and also through its direct sales force. The Company determines the appropriate revenue recognition for its contracts with customers by analyzing the type, terms and conditions of each contract or arrangement with a customer. The Company classifies the components of revenue as product or services revenue based on the attributes of the underlying performance obligations. Accordingly, software license and hardware are classified as product revenues. The most significant impact of Topic 606 related to the accounting treatment for term license arrangements and costs to obtain customer contracts. Under the previous revenue recognition standard, the Company recognized term license revenues ratably over the contract period whereas under the new revenue standard term license revenues are recognized upfront, upon delivery, and the associated maintenance revenues are deferred and recognized over the contract period. As a result, upon adoption of Topic 606 on January 1, 2017, the Company recognized a decrease in its deferred revenues amounting to $1,139 thousand with a corresponding adjustment to retained earnings (which decreased the accumulated deficit). The Company has considered the impact of the guidance in ASC 340-40, “Other Assets and Deferred Costs” under the new standard. Under the Company’s previous accounting policy, sales commissions were expensed as incurred. The new standard requires the capitalization of all incremental costs that the Company incurs to obtain a contract with a customer that it would not have incurred if the contract had not been obtained, provided the Company expects to recover the costs. Amortization expense is included in sales and marketing expenses in the accompanying consolidated statements of operations and recorded on a straight-line basis over the expected period of benefit, which is the customer relationship period. Additionally, these costs are periodically reviewed for impairment. As a result, upon adoption of Topic 606 on January 1, 2017, the Company recognized a deferred cost asset amounting to $3,512 thousand with a corresponding adjustment to retained earnings (which decreased the accumulated deficit). Furthermore, as a result of the adoption of Topic 606, the Company recognized on January 1, 2017 the related tax effect of $1,024 thousand as an adjustment to retained earnings (which increased the accumulated deficit). The Company’s contract payment terms typically range between 30 and 120 days. The Company assesses collectability based on several factors, including collection history. The Company elected to disregard the effects of a financing component when the period between when the entity transfers a promised good or service to the customer and when the customer pays for that good or service is one year or less. Nature of Products and Services The Company’s on-premise software licenses are sold through both perpetual and term-based license agreements. These licensing arrangements provide customers with the same product functionality and differ mainly in the duration over which the customer benefits from the software. The Company delivers its software licenses electronically. Electronic delivery occurs when the Company provides the customer with access to the software and license key via a secure portal. Revenue from on-premise software licenses is generally recognized upfront at the point in time when the software is made available to the customer. Hardware revenue is recognized upon delivery which is the point in time at which control has passed. The Company’s contracts with customers for on-premise software licenses include maintenance services and may also include additional professional services, such as training, consulting and implementation. Maintenance services agreements consist of fees for providing software updates on an if and when available basis and for providing technical support for software products for a specified term. Both software updates and technical support have the same pattern of transfer to the customer. Revenues related to maintenance services are recognized ratably over the term of the related maintenance agreement. Revenues related to professional services are recognized as the services are performed or upon the fulfillment of the performance obligation of the related professional services. Payments received in advance of services performed are deferred and recognized when the related services are performed. In contracts with multiple performance obligations, the Company accounts for individual performance obligations separately if they are distinct. The Company allocates the transaction price to each performance obligation based on its relative standalone selling price out of total consideration of the contract. For maintenance and support, the Company determines the standalone selling price based on the price at which the Company separately sells a renewal contract. The Company determines the standalone selling price for sales of licenses using the residual approach as the Company’s licenses are not sold on a standalone basis and due to the high variability of the licenses’ sales prices. For professional services, the Company determines the standalone selling prices based on the price at which the Company separately sells those services. |
Cost of Revenues | k. Cost of Revenues Cost of product revenues consist primarily of costs associated with the processing and the delivery of the Company’s software licenses to the customers as well as third-party hardware and related shipping costs. Cost of maintenance and professional services revenues consist primarily of personnel costs responsible for providing maintenance and support and professional services. The Company sources its hardware from a single third-party provider based in the U.S. |
Accounting for Share-Based Compensation | l. Accounting for Share-Based Compensation The Company accounts for share-based compensation in accordance with ASC No. 718, “Compensation-Stock Compensation” (“ASC 718”). ASC 718 requires companies to estimate the fair value of equity-based payment awards on the date of grant using an Option-Pricing Model (“OPM”). The grant date fair value of the award is recognized as an expense in the Company’s consolidated statements of operations based on the graded vesting attribution method over the related requisite service period. The Company selected the Black-Scholes-Merton option pricing model as the most appropriate fair value method for its stock options awards. The Company’s option pricing model requires the input of highly subjective assumptions, including estimated fair value of ordinary share price, the expected share price volatility and expected term. Any changes in these highly subjective assumptions would significantly impact the share-based compensation expense. The fair value of options granted to employees and non-employee is estimated at the date of grant using the following assumptions: The risk-free interest rate assumption is the implied yield currently available on United States treasury zero-coupon issues with a remaining term equal to the expected life of the Company’s options. The dividend yield assumption is based on the Company’s historical experience and expectation of no future dividend payouts and may be subject to substantial changes in the future. The Company has historically not paid cash dividends and has no foreseeable plans to pay cash dividends in the future. The expected share price volatility is based on the historical volatility of the ordinary shares of comparable companies that are publicly traded. The expected term of options granted represents the period of time that options granted are expected to be outstanding. The fair value of the Company’s ordinary shares underlying the share-based awards as of December 31, 2017 and 2018 and for the period from January 1, 2019 to April 11, 2019, were estimated using the hybrid method which takes into consideration a probability-weighted of a non-IPO scenario (which is based on the income approach) and an IPO scenario. Commencing April 11, 2019, the Company’s ordinary shares are publicly traded and are measured based on the Company’s share price on the date of grant. Each of the above factors requires the Company to use judgment and make estimates in determining the percentages and time periods used for the calculation. If the Company were to use different percentages or time periods, the fair value of stock-based option awards could be different. Effective as of January 1, 2017, the Company adopted Accounting Standards Update 2016-09, “Compensation—Stock Compensation (Topic 718)” (“ASU 2016-09”) on a modified retrospective basis. ASU 2016-09 permits entities to make an accounting policy election related to how forfeitures will impact the recognition of compensation cost for share-based compensation, which is to estimate the total number of awards for which the requisite service period will not be rendered or to account for forfeitures as they occur. Upon adoption of ASU 2016-09, the Company elected to change its accounting policy to account for forfeitures as they occur. The change was applied on a modified retrospective basis with a cumulative-effect adjustment to retained earnings of $138 thousand (which increased the accumulated deficit) as of January 1, 2017. |
Research and Development Costs | m. Research and Development Costs ASC 985 requires capitalization of certain software development costs subsequent to the establishment of technological feasibility. Based on the Company’s product development process, technological feasibility is established upon completion of a working model. The Company does not incur material costs between the completion of the working model and the point at which the products are ready for general release. Therefore, research and development costs are charged to the statement of operations as incurred. |
Sales and Marketing | n. Sales and Marketing Marketing expenses consist primarily of marketing campaigns and tradeshows. Marketing expenses are charged to the statement of operations, as incurred. Marketing expenses for the years ended December 31, 2018 and 2019, amounted to $8,093 thousand and $10,790 thousand, respectively. |
Income Taxes | o. Income Taxes The Company and its subsidiaries are subject to income taxes in the jurisdictions in which they operate. The Company’s provision for income taxes is based on income tax rates in the tax jurisdictions in which it operates, permanent differences between financial reporting and tax reporting, and available credits and incentives. Deferred taxes are determined utilizing the “asset and liability” approach under ASC-740, “Income Taxes” (“ASC-740”). The asset and liability approach requires the recognition of deferred taxes based on the estimated future tax effects of temporary differences between the carrying amount and tax bases of assets and liabilities under the applicable tax laws, and on effective tax rates in effect when the deferred taxes are expected to be settled or realized. Deferred taxes for each jurisdiction are presented as a non-current net asset or liability, net of any valuation allowances. Valuation allowances are provided unless it is more likely than not that the deferred tax asset will be realized. In determining the appropriate valuation allowances, the Company considers future reversals of existing taxable temporary differences, the most recent projections of future business results, prior earnings history, carryback and carry forward and prudent tax strategies that may enhance the likelihood of realization of a deferred tax asset. Deferred taxes have not been provided for the following items: 1) Taxes that would apply in the event of disposal of investments in first-tier foreign subsidiaries, as it is generally the Company’s intention to hold these investments, not to realize them. 2) Dividends distributable from the income of foreign subsidiaries as the Company does not expect these companies to distribute dividends in the foreseeable future. If these dividends were to be paid, the Company would have to pay additional taxes at a rate of up to 25% on the distribution, and the amount would be recorded as an income tax expense in the period the dividend is declared. ASC-740 also clarifies the accounting and reporting for uncertainties in income tax. ASC-740 prescribes a comprehensive model for the financial statement recognition, measurement, presentation and disclosure of uncertain tax positions taken or expected to be taken in income tax returns. The Company reevaluates these uncertain tax positions on a quarterly basis and makes adjustments as required. The liabilities relating to uncertain tax positions are classified as current in the consolidated balance sheets to the extent the Company anticipates making payments within one year. The Company classifies interest and penalties recognized in the financial statements relating to uncertain tax positions within taxes on income. |
Basic and Diluted Net Loss Per Share: | p. Basic and Diluted Net Loss Per Share: Basic net loss per ordinary share is computed by dividing net loss for each reporting period by the weighted-average number of ordinary shares outstanding during the year. Diluted loss per ordinary share is computed by dividing net loss for each reporting period by the weighted average number of ordinary shares outstanding during the period, plus dilutive potential ordinary shares considered outstanding during the period, in accordance with ASC 260-10 “Earnings Per Share”. The calculation of diluted net loss per share excludes potential share issuances of ordinary shares upon the exercise of share option, warrants to purchase ordinary shares and redeemable preferred shares as the effect is anti-dilutive. The total number of shares related to outstanding options, warrants to purchase ordinary shares and redeemable preferred shares that have been excluded from the calculation of diluted net loss per share for the years ended December 31, 2017, 2018 and 2019 were 6,102,593, 26,667 and 16,416,749 (out of which 27,778 shares represent receipt on account of preferred A shares), 6,750,259, 26,667 and 16,416,749 (out of which 27,778 shares represent receipt on account of preferred A shares), and 7,507,811, 26,667 and 16,416,749 (out of which 27,778 shares represent receipt on account of preferred A shares), respectively. |
Concentration of Credit Risks | q. Concentration of Credit Risks Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash and cash equivalents, restricted bank deposits, trade receivables and derivative instruments. The Company’s cash and cash equivalents and restricted bank deposits are invested with major banks in Europe, Israel and the United States. Generally, these investments may be redeemed upon demand and the Company believes that the financial institutions that hold the Company’s cash deposits are financially sound and, accordingly, bear minimal risk. The trade receivables of the Company are mainly derived from sales to a diverse set of customers located primarily in the United States, Europe and Asia. The Company performs credit evaluations of its customers and, to date, has not experienced any significant losses from bad debts. As of December 31, 2018 and 2019, each of the following distributors comprised more than 10% of the Company’s accounts receivable: December 31, 2018 2019 Customer A 11 % 14 % Customer B 12 % 15 % Customer C 13 % 12 % For purposes of this calculation, the Company assessed distributors by aggregating distributors within the same holding group. |
Derivative Instruments and Hedging Activities | r. Derivative Instruments and Hedging Activities The Company is exposed to global market risks and to the risk that its earnings, cash flows and equity could be adversely impacted by fluctuations in foreign exchange rates. As part of the Company’s risk management strategy, it uses foreign currency exchange forward contracts and other derivative to hedge against certain foreign currency exposures. The derivative instruments hedge a portion of the Company’s non-dollar currency exposure. The Company does not enter into derivative transactions for trading purposes. The Company recognizes these derivative instruments as either assets or liabilities in the consolidated balance sheets at their fair value. Derivatives in a gain position are reported in other current assets in the consolidated balance sheets and derivatives in a loss position are recorded in other accounts payables in the consolidated balance sheets, on a gross basis. All derivative contracts enter into by the Company are classified as non-hedging instruments and accordingly the Company records the changes in fair value of derivative instruments in financial income (expense), net in the consolidated statements of operations. |
Comprehensive Loss | s. Comprehensive Loss There are no items of other comprehensive income or loss generated or incurred by the Company other than net loss. Thus, there are no differences between net loss and comprehensive loss. |
Statement of Cash Flows | t. Statement of Cash Flows On January 1, 2017, the Company early adopted ASU 2016-18 “Statement of Cash Flows (Topic 230): Restricted Cash”, which requires companies to include amounts generally described as restricted cash and restricted cash equivalents in cash and cash equivalents when reconciling beginning-of-period and end-of-period total amounts shown on the statement of cash flows. |
Fair Value of Financial Instruments | u. Fair Value of Financial Instruments The Company applies ASC No. 820, “Fair Value Measurements and Disclosures” (“ASC 820”), with respect to fair value measurements of all financial assets and liabilities. The fair value hierarchy also requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The fair value of foreign currency contracts (used for hedging purposes) is estimated by obtaining current quotes from banks. Fair value is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or a liability. A three-tier fair value hierarchy is established as a basis for considering such assumptions and for inputs used in the valuation methodologies in measuring fair value: Level 1 - Inputs are unadjusted quoted prices in active markets for identical assets or liabilities that can be accessed at the measurement date. Level 2 - Inputs are quoted prices for similar assets and liabilities in active markets or inputs that are observable for the assets or liabilities, either directly or indirectly through market corroboration, for substantially the full term of the financial instruments. Level 3 - Inputs are unobservable inputs based on the Company’s own assumptions used to measure assets and liabilities at fair value. The inputs require significant management judgment or estimation. In accordance with ASC 820, the Company measures its foreign currency derivative instruments, at fair value using the market approach valuation technique. Foreign currency derivative contracts as detailed in Note 3 are classified within the Level 2 value hierarchy, as the valuation inputs are based on quoted prices and market observable data of similar instruments. |
Legal Contingencies | v. Legal Contingencies From time to time, the Company becomes involved in legal proceedings or is subject to claims arising in its ordinary course of business. Such matters are generally subject to many uncertainties and outcomes that are not predictable with assurance. The Company accrues for contingencies when the loss is probable, and it can reasonably estimate the amount of any such loss. Loss contingencies considered to be remote by the Company are generally not disclosed unless material. The respective legal fees are expensed as incurred. |
Recently Adopted Accounting Standards | w. Recently Adopted Accounting Standards In February 2016, the Financial Accounting Standards Board (“FASB”) issued ASU 2016-02 - “Leases” and subsequent related amendments (“ASC 842”). ASC 842 supersedes the lease requirements in Accounting Standards Codification Topic 840. Under ASC 842, lessees are required to recognize a right-of-use asset and a lease liability for their leases, including leases classified as operating leases. Leases are classified as finance or operating, with classification affecting the pattern and classification of expense recognition in the income statement. The lease liability and the right-of-use asset are measured based on the present value of the lease payments over the lease term. ASC 842 also contains amended guidance regarding the identification of embedded leases in service contracts and the identification of lease and non-lease components of an arrangement. In addition, disclosures of qualitative and quantitative information about leasing arrangements are required. ASC 842 became effective for the Company on January 1, 2019. The Company adopted ASC 842 on January 1, 2019, using a modified retrospective transition approach. The Company has also elected to utilize the available package of practical expedients permitted under the transition guidance within ASC 842 which does not require it to reassess the prior conclusions about lease identification, lease classification and initial direct costs. Consequently, financial information was not adjusted, and the disclosures required under the new standard are not provided for dates and periods before January 1, 2019. Upon adoption of ASC 842, the Company recognized operating right-of-use assets of $13.2 million with corresponding operating lease liabilities on its consolidated balance sheet. Furthermore, the right-of-use assets were adjusted and reduced by approximately $700 thousand for accrued rent liabilities. The Company does not have finance leases. See Note 6 for further details. |
Recently Issued Accounting Pronouncements Not Yet Adopted | x. Recently Issued Accounting Pronouncements Not Yet Adopted In August 2018, the FASB issued ASU 2018-15 “Intangibles—Goodwill and other—Internal-use software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement that is a Service Contract.” ASU 2018-15 addresses the diversity in practice surrounding the accounting for costs incurred to implement a cloud computing hosting arrangement that is a service contract by establishing a model for capitalizing or expensing such costs, depending on their nature and the stage of the implementation project during which they are incurred and aligns the requirements for capitalization of such implementation costs with the existing guidance for internal-use software. Any capitalized costs are to be amortized over the reasonably certain term of the hosting arrangement and presented in the same line within the statement of operations as the related service arrangement’s fees. ASU 2018-15 also requires enhanced qualitative and quantitative disclosures surrounding hosting arrangements that are service contracts. ASU 2018-15 will be effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019, with early adoption permitted and may be adopted on either a retrospective or prospective basis. The Company expects to adopt ASU 2018-15 effective January 1, 2020 and does not expect it to have a material impact on its consolidated financial statements. In June 2016, the FASB issued ASU 2016-13 that supersedes the existing impairment model for most financial assets to a model that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. ASU 2016-13 requires an entity to recognize an impairment allowance equal to its current estimate of all contractual cash flows the entity does not expect to collect. ASU 2016-13 also requires that credit losses relating to available-for-sale debt securities will be recorded through an allowance for credit losses. The new guidance is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. Early adoption is permitted. The Company expects to adopt ASU 2016-13 effective January 1, 2020 and does not expect it to have a material impact on its consolidated financial statements. |
Reverse Share Split | y. Reverse Share Split On March 21, 2019, the shareholder general meeting of the Company approved a 1.5:1 reverse share split, which was effected on the date thereof. References made to outstanding shares or per share amounts in the accompanying consolidated financial statements and applicable disclosures have been retroactively adjusted to reflect this one for one and half (1:1.5) reverse stock split. The number of authorized shares as reflected on the Consolidated Balance Sheets was affected by the reverse stock split and accordingly has been adjusted. |
SIGNIFICANT ACCOUNTING POLICI_3
SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Accounting Policies [Abstract] | |
Schedule of Annual Rates of Property and Equipment | Property and equipment is stated at cost, net of accumulated depreciation. Depreciation is calculated by the straight-line method over the estimated useful lives of the residual value of the related assets at the following annual rates: % Furniture and fixtures 6 Computers and software 33 Leasehold improvements 10-33 Electronic equipment 15-33 |
Schedules of Concentration of Risk of Account Receivable | As of December 31, 2018 and 2019, each of the following distributors comprised more than 10% of the Company’s accounts receivable: December 31, 2018 2019 Customer A 11 % 14 % Customer B 12 % 15 % Customer C 13 % 12 % |
FAIR VALUE MEASUREMENT (Tables)
FAIR VALUE MEASUREMENT (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Fair Value Disclosures [Abstract] | |
Schedue of Assets and Liabilities Carried At Fair Value on Recurring Basis | The following tables summarize the Company’s financial assets and liabilities that are carried at fair value on a recurring basis, by fair value hierarchy, on the consolidated balance sheet: December 31, 2018 2019 (U.S. $ in thousands) Level 2 Level 2 Assets: Foreign currency exchange derivative instruments $ 90 $ 81 Liabilities: Foreign currency exchange derivative instruments 388 7 $ (298 ) $ 74 |
CASH, CASH EQUIVALENTS AND RE_2
CASH, CASH EQUIVALENTS AND RESTRICTED CASH (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents [Abstract] | |
Schedule of Reconciliation of Cash, Cash Equivalents and Restricted Cash | The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the statement of financial position that sum to the total of the same such amounts shown in the statement of cash flows. December 31, 2018 2019 (U.S. $ in thousands) Cash and cash equivalents $ 15,248 $ 118,661 Restricted bank deposits 561 224 Long-term restricted bank deposits 1,789 2,844 Total cash, cash equivalents, and restricted cash shown in the statement of cash flows $ 17,598 $ 121,729 |
PROPERTY AND EQUIPMENT, NET (Ta
PROPERTY AND EQUIPMENT, NET (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property and Equipment | December 31, 2018 2019 (U.S. $ in thousands) Property and equipment, net: Cost: Furniture and fixtures $ 1,057 $ 1,640 Computers and software 3,175 4,328 Leasehold improvements 852 668 Electronic equipment 1,419 2,129 6,503 8,765 Less - Accumulated depreciation 3,940 4,588 $ 2,563 $ 4,177 |
LEASES (Tables)
LEASES (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Lessee Disclosure [Abstract] | |
Schedule of Components of Lease Expense | The components of lease expense during the period presented were as follows: Year Ended December 31, 2019 Operating lease expense $ 3,110 Short-term lease expense 786 Total lease expense $ 3,896 |
Schedule of Supplemental Cash Flow Information Related to Operating Leases | Supplemental cash flow information related to operating leases during the period presented was as follows: Year Ended December 31, 2019 (U.S. $ in thousands) Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 1,602 ROU assets obtained in exchange for lease liabilities: Operating leases $ 10,063 |
Schedule of Lease Term and Discount Rate Related to Operating Leases | Lease term and discount rate related to operating leases as of the period presented were as follows: December 31, 2019 Weighted-average remaining lease term (in years) 8.4 Weighted-average discount rate 7.5 % |
Schedule of Maturities of Operating Lease Liabilities | The maturities of lease liabilities under operating leases as of December 31, 2019 are as follows: 2020 4,127 2021 4,139 2022 4,153 2023 3,892 2024 3,600 Thereafter 12,568 Total undiscounted lease payments $ 32,479 Less: Imputed interest (7,946 ) Total lease liabilities $ 24,533 |
Schedule of Opearting Minimum Lease Payments | The aggregate minimum lease commitments under operating leases as of December 31, 2018 are as follows: (U.S. $ in thousands) Year ending December 31: 2019 $ 1,457 2020 2,478 2021 2,486 2022 2,495 2023 and thereafter 12,528 $ 21,444 |
DEFERRED REVENUES AND DEFERRE_2
DEFERRED REVENUES AND DEFERRED COSTS (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Revenue Recognition and Deferred Revenue [Abstract] | |
Schedule of Deferred Revenues and Deferred Costs | December 31, 2018 2019 (U.S. $ in thousands) Deferred revenues: Deferred product revenues $ 917 $ 695 Deferred maintenance and professional services revenues 55,712 56,900 56,629 57,595 Less - amounts offset from accounts receivable (25,165 ) (22,032 ) Deferred revenues 31,464 35,563 The change in deferred revenues: Balance at beginning of year 40,332 56,629 Deferred revenue relating to new sales 44,667 40,225 Revenue recognized during the year (28,370 ) (39,259 ) Balance at end of year 56,629 57,595 Less - amounts offset from accounts receivable (25,165 ) (22,032 ) Deferred revenues $ 31,464 $ 35,563 |
Schedule of Assets Recognized from Costs to Obtain Contract with Customer | The Company considers the benefit period to exceed the initial contract term for certain costs because of anticipated renewals and because sales commission rates for renewal contracts are not commensurate with sales commissions for initial contracts. December 31, 2018 2019 (U.S. $ in thousands) Balance at beginning of year $ 3,961 $ 5,313 Additional costs deferred 3,111 3,436 Amortization of deferred costs (1,759 ) (2,787 ) Balance at end of year $ 5,313 $ 5,962 |
HEDGING ACTIVITIES (Tables)
HEDGING ACTIVITIES (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Derivative Instruments | Such gains and losses partially offset the revaluation losses of the balance sheet items, which are also recognized under financial income (expense), net. Balance sheet location Notional Amount Fair Value December 31, 2019 December 31, 2019 (U.S. $ in thousands) Assets derivatives - Foreign currency exchange contracts Other current assets 11,185 $ 81 Liability derivatives - Foreign currency exchange contracts Other accounts payables 11,185 $ 7 Balance sheet location Notional Amount Fair Value December 31, 2018 December 31, 2018 (U.S. $ in thousands) Assets derivatives - Foreign currency exchange contracts Other current assets $ 17,081 90 Liability derivatives - Foreign currency exchange contracts Other accounts payables $ 12,265 388 |
SHARE-BASED COMPENSATION (Table
SHARE-BASED COMPENSATION (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Share-based Payment Arrangement [Abstract] | |
Schedule of Stock Option Activity Granted to Employees | A summary of the activity in options granted to employees for the year ended December 31, 2019 is as follows, as adjusted for the reverse stock split: Amount of Options Weighted average exercise price Aggregate intrinsic value (U.S. $ in thousands) Balance as of January 1, 2019 6,750,259 $ 1.77 Granted 2,947,691 $ 18.66 Exercised (1, 674,044 ) $ 1.38 Forfeited (516,095 ) $ 6.38 Balance as of December 31, 2019 7,507,811 $ 8.17 $ 77,930 Exercisable as of December 31, 2019 3,256,572 $ 1.70 $ 51,821 |
Schedule of Options Activity | A summary of the Company’s options activity for the year ended December 31, 2017, 2018 and 2019 is as follows: December 31, 2017 2018 2019 (U.S. $ in thousands) Cost of revenues $ 332 $ 634 $ 1,514 Research and development 660 731 2,370 Sales and marketing 765 1,458 4,849 General and administrative 353 358 2,194 Total share-based compensation expense $ 2,110 $ 3,181 $ 10,927 |
Schedule of Assumptions of Fair Value of Stock Options Granted Estimated Using the Black-Scholes Option-pricing Model | The fair value of stock options granted was estimated using the Black-Scholes option-pricing model. The assumptions used to value options granted during 2019 were as follows: Risk-free interest rate 1.53%-2.63 % Expected option term (years) 5.5-7.0 Expected share price volatility 50.4%-65.9 % Dividend yield 0 % Weighted average grant date fair value 9.63 |
Schedule of Outstanding and Exercisable Options Granted | The following table summarizes the Company’s outstanding and exercisable options granted as of December 31, 2019, as adjusted for the reverse stock split: Exercise Price Options outstanding as of December 31, 2019 Weighted average remaining contractual term Options exercisable as of December 31, 2019 Weighted average remaining contractual term (years) (years) $ 0.004 22,668 7.3 22,668 7.3 $ 0.60 23,332 8.6 23,332 8.6 $ 0.64 149,072 9.5 149,072 9.5 $ 0.80 99,168 10.4 99,168 10.4 $ 0.89 33,332 11.1 33,332 11.1 $ 1.41 3,310,990 10.3 2,551,160 10.8 $ 1.76 740,039 8.2 246,948 8.1 $ 7.55 315,159 8.7 77,291 8.7 $ 8.51 341,768 9.0 33,268 8.8 $ 16.68 891,886 9.6 - - $ 19.21 465,261 9.7 - - $ 22.70 1,004,376 9.2 20,333 8.8 $ 29.74 110,760 9.5 - - 7,507,811 9.7 3,256,572 10.4 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
Schedule of Deferred Tax Assets and Liabilities | The components of the Company’s deferred tax assets and liabilities as of December 31, 2018 and 2019 were as follows: As of December 31, 2018 2019 (U.S. $ in thousands) Deferred tax assets: Tax loss carryforwards $ 4,703 $ 9,409 Research and development 4,216 6,141 Deferred revenue 1,334 2,238 Employee and payroll accrued expenses 684 891 Operating lease liability — 1,013 Other — 72 Total deferred tax assets 10,937 19,764 Deferred tax liabilities: Property and equipment, net (129 ) (250 ) Deferred costs (1,352 ) (1,481 ) Operating lease right-of-use asset — (984 ) Other (5 ) — Total deferred tax liabilities (1,486 ) (2,715 ) Total deferred tax assets, net 9,451 17,049 Less valuation allowance for deferred tax assets (8,762 ) (15,390 ) Deferred tax assets $ 689 $ 1,659 |
Schedule of Loss (Income) Before Taxes on Income | Loss (Income) before taxes on income for the years ended December 31, 2017, 2018 and 2019 were as follows: December 31, 2017 2018 2019 (U.S. $ in thousands) Israeli 3,319 $ 4,879 $ 29,560 Non-Israeli (1,324 ) (1,900 ) (2,452 ) 1,995 $ 2,979 $ 27,108 |
Schedule of Taxes on Income | The components of taxes on income for the years ended December 31, 2017, 2018 and 2019 were as follows: December 31, 2017 2018 2019 (U.S. $ in thousands) Current Israeli 109 $ 105 $ 164 Non-Israeli 1,277 1,328 1,817 1,386 1,433 1,981 Deferred Israeli 88 (1 ) — Non-Israeli (677 ) (149 ) (970 ) (589 ) (150 ) (970 ) Total taxes on income 797 $ 1,283 $ 1,011 |
Schedule of Reconciliation Theoretical Tax Benefit and Actual Taxes on Income | A reconciliation of the theoretical tax benefit and actual taxes on income for the years ended December 31, 2017, 2018 and 2019 is set forth below: December 31, 2017 2018 2019 (U.S. $ in thousands) Loss before taxes on income 1,995 $ 2,979 $ 27,108 Statutory tax rate in Israel 24 % 23 % 23 % Theoretical tax benefit 479 685 6,235 Increase (decrease) in taxes resulting from: Effect of different tax rates applicable in foreign jurisdictions 185 (399 ) (157 ) Operating losses and other temporary differences for which valuation allowance was provided (546 ) (708 ) (4,972 ) Permanent differences (462 ) (756 ) (2,162 ) Uncertain tax position (91 ) (91 ) (158 ) Change in tax rate (255 ) — — Prior years tax adjustments — — 204 Other (107 ) (14 ) (1 ) Actual taxes on income (797 ) $ (1,283 ) $ (1,011 ) |
Schedule of Reserve Provisions and Changes | The provision for income taxes includes the impact of reserve provisions and changes to reserves that are considered appropriate. Year ended December 31, 2017 2018 2019 (U.S. $ in thousands) Balance at beginning of year 330 $ 421 $ 512 Additions for tax positions related to the current year 91 91 158 Balance at end of year 421 $ 512 $ 670 |
FINANCIAL INCOME (LOSS), NET (T
FINANCIAL INCOME (LOSS), NET (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Financial Income (loss), Net [abstract] | |
Schedule of Financial Income (Loss), Net | Year ended December 31, 2017 2018 2019 (U.S. $ in thousands) Hedging instrument gain (loss), net $ 88 $ (337 ) $ 366 Bank charges (18 ) (89 ) (153 ) Exchange rate gain (loss), net 336 (418 ) (1,175 ) Interest income (expense), net (137 ) (218 ) 878 Other, net (2 ) 15 (1 ) Total financial income (expenses), net $ 267 $ (1,047 ) $ (85 ) |
ENTITY WIDE DISCLOSURES (Tables
ENTITY WIDE DISCLOSURES (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Segment Reporting [Abstract] | |
Schedule of Summary of Revenues within Geographic Areas | The following is a summary of revenues within geographic areas: Year ended December 31, 2017 2018 2019 (U.S. $ in thousands) Geography: Americas: United States 34,718 $ 47,860 $ 55,991 Other 302 407 857 35,020 48,267 56,848 Israel 757 1,161 1,654 EMEA (excluding Germany and Israel) 18,380 23,181 27,102 Germany 6,962 8,253 12,147 APAC 3,421 4,119 5,519 Total 64,540 $ 84,981 $ 103,270 |
Schedule of Distributors Comprised more than 10% of Company's Revenue | As of December 31, 2017, 2018 and 2019, each of the following distributors comprised more than 10% of the Company’s revenue: December 31, 2017 2018 2019 Customer A 16 % 13 % 15 % Customer B 13 % 10 % 8 % |
Schedule of Disaggregated Revenue by Revenue Type and Performance Obligations | The following table sets for the disaggregated revenue by revenue type and is consistent with how the Company evaluates its performance obligations: Year ended December 31, 2017 2018 2019 (U.S. $ in thousands) Revenues: Software products $ 28,655 $ 39,300 $ 44,618 Hardware products 2,200 3,254 2,747 Support and maintenance 27,966 37,155 46,019 Professional services 5,719 5,272 9,886 Total revenues $ 64,540 $ 84,981 $ 103,270 |
Schedule of Property, Plant and Equipment, Net by Geographical Area | Property and equipment, net by geographical area were as follows as of December 31, 2017, 2018 and 2019: December 31, 2017 2018 2019 (U.S. $ in thousands) Americas (primarily the United States) 210 $ 496 $ 959 EMEA 46 81 123 Israel 1,573 1,986 3,095 1,829 $ 2,563 $ 4,177 |
GENERAL (Details)
GENERAL (Details) - USD ($) $ in Thousands | 1 Months Ended | 12 Months Ended | ||
Apr. 30, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Proceeds from IPO | $ 112,465 | $ 115,292 | ||
IPO [Member] | ||||
Shares sold under initial public offering | 8,855,000 | |||
Options granted to underwriters | 1,155,000 | |||
Redeemable Preferred shares converted | 16,416,749 | |||
Type of stock converted | redeemable convertible preferred shares |
SIGNIFICANT ACCOUNTING POLICI_4
SIGNIFICANT ACCOUNTING POLICIES (Narrative) (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Weighted average deposits rates | 1.44% | 0.14% | ||
Amounts offset from accounts receivable | $ 22,032 | $ 25,165 | ||
Decrease in deferred revenues | 4,099 | 7,507 | $ 5,476 | $ 1,139 |
Deferred cost asset | 3,512 | |||
Increase in accumulated deficit | 1,024 | |||
Cumulative-effect adjustment to retained earnings | $ 138 | |||
Marketing expenses | $ 10,790 | $ 8,093 | ||
Number of shares outstanding options | 7,507,811 | 6,750,259 | 6,102,593 | |
Warrant to purchase purchase ordinary shares | 26,667 | 26,667 | 26,667 | |
Redeemable preferred shares | 16,416,749 | 16,416,749 | 16,416,749 | |
Operating right-of-use assets | $ 20,958 | |||
Reduce accrued rent liability | $ 700 | |||
Reverse Share Split | 1.5 | |||
Severance expenses | $ 3,091 | $ 2,330 | $ 2,024 | |
Series A preferred shares [Member] | ||||
Redeemable preferred shares | 27,778 | 27,778 | 27,778 | |
Accounting Standards Update 2016-02 [Member] | ||||
Operating right-of-use assets | $ 13,200 |
SIGNIFICANT ACCOUNTING POLICI_5
SIGNIFICANT ACCOUNTING POLICIES (Schedule of Annual Rates of Property and Equipment) (Details) | 12 Months Ended |
Dec. 31, 2019 | |
Furniture and Fixtures [Member] | |
Property, Plant and Equipment [Line Items] | |
Annual rates of property and equipment | 6% |
Computers and software [Member] | |
Property, Plant and Equipment [Line Items] | |
Annual rates of property and equipment | 33% |
Leasehold Improvements [Member] | |
Property, Plant and Equipment [Line Items] | |
Annual rates of property and equipment | 10%-33% |
Electronic Equipment [Member] | |
Property, Plant and Equipment [Line Items] | |
Annual rates of property and equipment | 15%-33% |
SIGNIFICANT ACCOUNTING POLICI_6
SIGNIFICANT ACCOUNTING POLICIES (Schedules of Concentration of Risk of Account Receivable) (Details) - Accounts Receivable [Member] | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Customer A [Member] | ||
Concentration Risk [Line Items] | ||
Concentration Risk Percentage | 14.00% | 11.00% |
Customer B [Member] | ||
Concentration Risk [Line Items] | ||
Concentration Risk Percentage | 15.00% | 12.00% |
Customer C [Member] | ||
Concentration Risk [Line Items] | ||
Concentration Risk Percentage | 12.00% | 13.00% |
FAIR VALUE MEASUREMENT (Schedue
FAIR VALUE MEASUREMENT (Schedue of Assets and Liabilities Carried At Fair Value on Recurring Basis) (Details) - Fair Value, Measurements, Recurring [Member] - Not Designated as Hedging Instrument [Member] - Level 2 [Member] - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Assets: | ||
Foreign currency exchange derivative instruments | $ 81 | $ 90 |
Liabilities: | ||
Foreign currency exchange derivative instruments | 7 | 388 |
Net fair value assets (liability) | $ 74 | $ (298) |
CASH, CASH EQUIVALENTS AND RE_3
CASH, CASH EQUIVALENTS AND RESTRICTED CASH (Schedule of Reconciliation of Cash, Cash Equivalents and Restricted Cash) (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents [Abstract] | ||||
Cash and cash equivalents | $ 118,661 | $ 15,248 | ||
Restricted bank deposits | 224 | 561 | ||
Long-term restricted bank deposits | 2,844 | 1,789 | ||
Total cash, cash equivalents, and restricted cash shown in the statement of cash flows | $ 121,729 | $ 17,598 | $ 15,620 | $ 17,164 |
PROPERTY AND EQUIPMENT, NET (Sc
PROPERTY AND EQUIPMENT, NET (Schedule of Property and Equipment) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Property, Plant and Equipment [Line Items] | |||
Property plant and equipment gross | $ 8,765 | $ 6,503 | |
Less - Accumulated depreciation | 4,588 | 3,940 | |
Property and equipment, net | 4,177 | 2,563 | $ 1,829 |
Depreciation expense | 1,205 | 956 | $ 368 |
Furniture and Fixtures [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Property plant and equipment gross | 1,640 | 1,057 | |
Computers and software [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Property plant and equipment gross | 4,328 | 3,175 | |
Leasehold improvements [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Property plant and equipment gross | 668 | 852 | |
Electronic equipment [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Property plant and equipment gross | $ 2,129 | $ 1,419 |
LEASES (Narrative) (Details)
LEASES (Narrative) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2019 | |
Lease arrangements remaining term | 10 years | ||
Operating lease right-of-use | $ 20,958 | ||
Rent expense | $ 2,396 | $ 1,251 | |
Israeli [Member] | |||
Operating lease right-of-use | $ 17,300 |
LEASES (Schedule of Components
LEASES (Schedule of Components of Lease Expense) (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2019USD ($) | |
Lessee Disclosure [Abstract] | |
Operating lease expense | $ 3,110 |
Short-term lease expense | 786 |
Total lease expense | $ 3,896 |
LEASES (Schedule of Supplementa
LEASES (Schedule of Supplemental Cash Flow Information Related to Leases) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Cash paid for amounts included in the measurement of lease liabilities: | |||
Operating cash flows from operating leases | $ 1,602 | ||
ROU assets obtained in exchange for lease liabilities: | |||
Operating leases | $ 10,063 |
LEASES (Schedule of Lease Term
LEASES (Schedule of Lease Term and Discount Rate Related to Operating Leases) (Details) | Dec. 31, 2019 |
Lessee Disclosure [Abstract] | |
Weighted-average remaining lease term (in years) | 8 years 4 months 24 days |
Weighted-average discount rate | 7.50% |
LEASES (Schedule of Maturities
LEASES (Schedule of Maturities of Operating Lease Liabilities) (Details) $ in Thousands | Dec. 31, 2019USD ($) |
Operating leases | |
2020 | $ 4,127 |
2021 | 4,139 |
2022 | 4,153 |
2023 | 3,892 |
2024 | 3,600 |
Thereafter | 12,568 |
Total undiscounted lease payments | 32,479 |
Less: Imputed interest | (7,946) |
Total lease liabilities | $ 24,533 |
LEASES (Schedule of Opearting M
LEASES (Schedule of Opearting Minimum Lease Payments) (Details) $ in Thousands | Dec. 31, 2018USD ($) |
Operating leases | |
2019 | $ 1,457 |
2020 | 2,478 |
2021 | 2,486 |
2022 | 2,495 |
2023 and thereafter | 12,528 |
Total minimum lease commitments | $ 21,444 |
DEFERRED REVENUES AND DEFERRE_3
DEFERRED REVENUES AND DEFERRED COSTS (Narrative) (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Revenue Recognition and Deferred Revenue [Abstract] | |||
Remaining performance obligations | $ 57,595 | $ 56,629 | $ 40,332 |
Remaining performance obligations next twelve months | $ 36,547 | $ 31,461 | |
Revenue remaining performance obligation percentage | 58.00% | 56.00% |
DEFERRED REVENUES AND DEFERRE_4
DEFERRED REVENUES AND DEFERRED COSTS (Schedule of Deferred Revenues and Deferred Costs) (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | |
Deferred revenues: | ||||
Deferred product revenues | $ 695 | $ 917 | ||
Deferred maintenance and professional services revenues | 56,900 | 55,712 | ||
Revenue Remaining Performance Obligation | $ 57,595 | $ 40,332 | 57,595 | 56,629 |
Less - amounts offset from accounts receivable | (22,032) | (25,165) | ||
Deferred revenues | $ 35,563 | $ 31,464 | ||
The change in deferred revenues: | ||||
Balance at beginning of year | 56,629 | 40,332 | ||
Deferred revenue relating to new sales | 40,225 | 44,667 | ||
Revenue recognized during the year | (39,259) | (28,370) | ||
Balance at end of year | $ 57,595 | $ 56,629 |
DEFERRED REVENUES AND DEFERRE_5
DEFERRED REVENUES AND DEFERRED COSTS (Schedule of Assets Recognized from Costs to Obtain Contract with Customer) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Revenue Recognition and Deferred Revenue [Abstract] | ||
Balance at beginning of year | $ 5,313 | $ 3,961 |
Additional costs deferred | 3,436 | 3,111 |
Amortization of deferred costs | (2,787) | (1,759) |
Balance at end of year | $ 5,962 | $ 5,313 |
HEDGING ACTIVITIES (Narrative)
HEDGING ACTIVITIES (Narrative) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
losses on derivatives | $ 337 | $ 337 |
Gain on derivatives | 366 | 366 |
Forward and Zero Cost Collar Contracts [Member] | Not Designated as Hedging Instrument [Member] | ||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
Notional amount | $ 22,400 | $ 29,300 |
HEDGING ACTIVITIES (Schedule of
HEDGING ACTIVITIES (Schedule of Derivative Instruments) (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||
Notional Amount - Assets derivatives - Foreign currency exchange contracts | $ 11,185 | $ 17,081 |
Notional Amount - Liability derivatives - Foreign currency exchange contracts | 11,185 | 12,265 |
Fair Value - Assets derivatives - Foreign currency exchange contracts | 81 | 90 |
Fair Value - Liability derivatives - Foreign currency exchange contracts | $ 7 | $ 388 |
SHAREHOLDERS' EQUITY AND REDE_2
SHAREHOLDERS' EQUITY AND REDEEMABLE CONVERTIBLE PREFERRED SHARES (Details) $ in Thousands | 1 Months Ended | 12 Months Ended | ||||
Apr. 30, 2019USD ($) | Dec. 31, 2019USD ($)shares | Dec. 31, 2018USD ($)shares | Dec. 31, 2017USD ($)shares | Dec. 31, 2019₪ / shares | Dec. 31, 2018₪ / shares | |
Class of Stock [Line Items] | ||||||
Preferred shares par value | ₪ / shares | ₪ 0.015 | ₪ 0.015 | ||||
Ordinary shares issued | 35,230,253 | 8,265,988 | ||||
Ordinary shares outstanding | 35,230,253 | 8,265,988 | ||||
Warrant to purchase purchase ordinary shares | 26,667 | 26,667 | 26,667 | |||
Exercised of issuance ordinary shares | 18,472 | |||||
Redeemable convertible preferred shares, value | $ | $ 26,699 | |||||
Gross proceeds from Initial public offering | $ | $ 112,465 | 115,292 | ||||
Minimum [Member] | ||||||
Class of Stock [Line Items] | ||||||
Gross proceeds from Initial public offering | $ | 50,000 | |||||
Maximum [Member] | ||||||
Class of Stock [Line Items] | ||||||
Distributable proceeds from liquidation or deemed liquidation | $ | $ 136,900 | |||||
IPO [Member] | ||||||
Class of Stock [Line Items] | ||||||
Ordinary shares issued | 8,855,000 | |||||
Warrant to purchase purchase ordinary shares | 1,155,000 | |||||
Redeemable convertible preferred shares | 16,416,749 | |||||
Minimum pre-money valuation initial public offering | $ | $ 250,000 |
SHARE-BASED COMPENSATION (Narra
SHARE-BASED COMPENSATION (Narrative) (Details) $ in Thousands | 1 Months Ended | 12 Months Ended | ||||
May 31, 2017USD ($)Employeesshares | Dec. 31, 2019USD ($)shares | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | Dec. 31, 2019₪ / shares | Dec. 31, 2018₪ / shares | |
Ordinary shares, par value | ₪ / shares | ₪ 0.015 | ₪ 0.015 | ||||
Stock option expired extend | 10 years | |||||
Stock option granted | 3,473,515 | |||||
Number of employees | Employees | 240 | |||||
Incremental compensation cost | $ | $ 895 | |||||
Compensation expense | $ | $ 783 | $ 10,927 | $ 3,181 | $ 2,110 | ||
Number of unvested options | 4,251,239 | |||||
Unrecognized compensation cost | $ | $ 19,945 | |||||
Weighted-average period | 1 year 22 days | |||||
Intrinsic value of options exercised | $ | $ 28,950 | |||||
2019 Stock Option Plan [Member] | ||||||
Ordinary shares, par value | ₪ / shares | ₪ 0.015 | |||||
2019 Stock Option Plan [Member] | Options restricted shares and other sharebased awards member [Member] | ||||||
Stock option expired | 4 years | |||||
Stock option granted | 813,515 | |||||
Contractual term | P10Y | |||||
2019 Stock Option Plan [Member] | Options restricted shares and other sharebased awards member [Member] | Minimum [Member] | ||||||
Shares available for future issuance | 174,655 | |||||
2019 Stock Option Plan [Member] | Options restricted shares and other sharebased awards member [Member] | Maximum [Member] | ||||||
Shares available for future issuance | 1,761,513 |
SHARE-BASED COMPENSATION (Sched
SHARE-BASED COMPENSATION (Schedule of Stock Option Activity Granted to Employees) (Details) - USD ($) $ / shares in Units, $ in Thousands | 1 Months Ended | 12 Months Ended | |
May 31, 2017 | Dec. 31, 2019 | Dec. 31, 2018 | |
Amount of Options | |||
Beginning balance | 6,750,259 | 6,102,593 | |
Granted | 3,473,515 | ||
Ending balance | 7,507,811 | 6,750,259 | |
Stock Options [Member] | |||
Amount of Options | |||
Beginning balance | 6,750,259 | ||
Granted | 2,947,691 | ||
Exercised | (1,674,044) | ||
Forfeited | (516,095) | ||
Ending balance | 7,507,811 | 6,750,259 | |
Exercisable | 3,256,572 | ||
Weighted average exercise price | |||
Beginning balance | $ 1.77 | ||
Granted | 18.66 | ||
Exercised | 1.38 | ||
Forfeited | 6.38 | ||
Ending balance | 8.17 | $ 1.77 | |
Exercisable | $ 1.70 | ||
Ending balance | $ 77,930 | ||
Exercisable | $ 51,821 |
SHARE-BASED COMPENSATION (Sch_2
SHARE-BASED COMPENSATION (Schedule of Options Activity) (Details) - USD ($) $ in Thousands | 1 Months Ended | 12 Months Ended | ||
May 31, 2017 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total share-based compensation expense | $ 783 | $ 10,927 | $ 3,181 | $ 2,110 |
Cost of revenues [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total share-based compensation expense | 1,514 | 634 | 332 | |
Research and Development [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total share-based compensation expense | 2,370 | 731 | 660 | |
Sales and Marketing [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total share-based compensation expense | 4,849 | 1,458 | 765 | |
General and Administrative [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total share-based compensation expense | $ 2,194 | $ 358 | $ 353 |
SHARE-BASED COMPENSATION (Sch_3
SHARE-BASED COMPENSATION (Schedule of Assumptions of Fair Value of Stock Options Granted) (Details) - Stock Options [Member] | 12 Months Ended |
Dec. 31, 2019$ / shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Dividend yield | 0.00% |
Weighted average grant date fair value | $ 9.63 |
Minimum [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Risk-free interest rate | 1.53% |
Expected option term (years) | 5 years 6 months |
Expected share price volatility | 50.40% |
Maximum [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Risk-free interest rate | 2.63% |
Expected option term (years) | 7 years |
Expected share price volatility | 65.90% |
SHARE-BASED COMPENSATION (Sch_4
SHARE-BASED COMPENSATION (Schedule of Outstanding and Exercisable Options Granted) (Details) | 12 Months Ended |
Dec. 31, 2019$ / sharesshares | |
Options outstanding | 7,507,811 |
Options exercisable | 3,256,572 |
0.004 [Member] | |
Exercise Price | $ / shares | $ 0.004 |
Options outstanding | 22,668 |
Weighted average remaining contractual term | 7 years 11 days |
Options exercisable | 22,668 |
Weighted average remaining contractual term | 7 years 11 days |
0.60 [Member] | |
Exercise Price | $ / shares | $ 0.60 |
Options outstanding | 23,332 |
Weighted average remaining contractual term | 8 years 22 days |
Options exercisable | 23,332 |
Weighted average remaining contractual term | 8 years 22 days |
0.64 [Member] | |
Exercise Price | $ / shares | $ 0.64 |
Options outstanding | 149,072 |
Weighted average remaining contractual term | 9 years 6 months |
Options exercisable | 149,072 |
Weighted average remaining contractual term | 9 years 6 months |
0.80 [Member] | |
Exercise Price | $ / shares | $ 0.80 |
Options outstanding | 99,168 |
Weighted average remaining contractual term | 10 years 15 days |
Options exercisable | 99,168 |
Weighted average remaining contractual term | 10 years 15 days |
0.89 [Member] | |
Exercise Price | $ / shares | $ 0.89 |
Options outstanding | 33,332 |
Weighted average remaining contractual term | 11 years 4 days |
Options exercisable | 33,332 |
Weighted average remaining contractual term | 11 years 4 days |
1.41 [Member] | |
Exercise Price | $ / shares | $ 1.41 |
Options outstanding | 3,310,990 |
Weighted average remaining contractual term | 10 years 11 days |
Options exercisable | 2,551,160 |
Weighted average remaining contractual term | 10 years 29 days |
1.76 [Member] | |
Exercise Price | $ / shares | $ 1.76 |
Options outstanding | 740,039 |
Weighted average remaining contractual term | 8 years 7 days |
Options exercisable | 246,948 |
Weighted average remaining contractual term | 8 years 4 days |
7.55 [Member] | |
Exercise Price | $ / shares | $ 7.55 |
Options outstanding | 315,159 |
Weighted average remaining contractual term | 8 years 26 days |
Options exercisable | 77,291 |
Weighted average remaining contractual term | 8 years 26 days |
8.51 [Member] | |
Exercise Price | $ / shares | $ 8.51 |
Options outstanding | 341,768 |
Weighted average remaining contractual term | 9 years |
Options exercisable | 33,268 |
Weighted average remaining contractual term | 8 years 29 days |
16.68 [Member] | |
Exercise Price | $ / shares | $ 16.68 |
Options outstanding | 891,886 |
Weighted average remaining contractual term | 9 years 22 days |
Options exercisable | |
19.21 [Member] | |
Exercise Price | $ / shares | $ 19.21 |
Options outstanding | 465,261 |
Weighted average remaining contractual term | 9 years 26 days |
Options exercisable | |
22.70 [Member] | |
Exercise Price | $ / shares | $ 22.70 |
Options outstanding | 1,004,376 |
Weighted average remaining contractual term | 9 years 7 days |
Options exercisable | 20,333 |
Weighted average remaining contractual term | 8 years 29 days |
29.74 [Member] | |
Exercise Price | $ / shares | $ 29.74 |
Options outstanding | 110,760 |
Weighted average remaining contractual term | 9 years 6 months |
Options exercisable |
INCOME TAXES (Narrative) (Detai
INCOME TAXES (Narrative) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Valuation allowance for deferred tax assets | $ 15,390 | $ 8,762 | |
Corporate income tax rate | 23.00% | 24.00% | |
Tax rate effect on dividend distribution | 25.00% | ||
Loss carryforwards | $ 40,908 | ||
US | |||
Corporate income tax rate | 21.00% | 35.00% | |
Germany | |||
Corporate income tax rate | 33.00% | ||
UK | |||
Corporate income tax rate | 19.00% | ||
France | |||
Corporate income tax rate | 33.00% | ||
Minimum [Member] | |||
Corporate income tax rate | 35.00% | ||
Maximum [Member] | |||
Corporate income tax rate | 21.00% |
INCOME TAXES (Schedule of Defer
INCOME TAXES (Schedule of Deferred Tax Assets and Liabilities) (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Deferred tax assets: | ||
Tax loss carryforwards | $ 9,409 | $ 4,703 |
Research and development | 6,141 | 4,216 |
Deferred revenue | 2,238 | 1,334 |
Employee and payroll accrued expenses | 891 | 684 |
Operating lease liability | 1,013 | |
Other | 72 | |
Total deferred tax assets | 19,764 | 10,937 |
Deferred tax liabilities: | ||
Property and equipment, net | (250) | (129) |
Deferred costs | (1,481) | (1,352) |
Operating lease right-of-use asset | (984) | |
Other | (5) | |
Total deferred tax liabilities | (2,715) | (1,486) |
Total deferred tax assets, net | 17,049 | 9,451 |
Less valuation allowance for deferred tax assets | (15,390) | (8,762) |
Net deferred tax assets | $ 1,659 | $ 689 |
INCOME TAXES (Schedule of Loss
INCOME TAXES (Schedule of Loss (Income) Before Taxes on Income) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Loss before taxes on income | $ 27,108 | $ 2,979 | $ 1,995 |
Israeli [Member] | |||
Loss before taxes on income | 29,560 | 4,879 | 3,319 |
Non-Israeli [Member] | |||
Loss before taxes on income | $ (2,452) | $ (1,900) | $ (1,324) |
INCOME TAXES (Schedule of Taxes
INCOME TAXES (Schedule of Taxes on Income) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Current | $ 1,981 | $ 1,433 | $ 1,386 |
Deferred | (970) | (150) | (589) |
Total taxes on income | 1,011 | 1,283 | 797 |
Israeli [Member] | |||
Current | 164 | 105 | 109 |
Deferred | (1) | 88 | |
Non-Israeli [Member] | |||
Current | 1,817 | 1,328 | 1,277 |
Deferred | $ (970) | $ (149) | $ (677) |
INCOME TAXES (Schedule of Recon
INCOME TAXES (Schedule of Reconciliation Theoretical Tax Benefit and Actual Taxes on Income) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |||
Loss before taxes on income | $ 27,108 | $ 2,979 | $ 1,995 |
Statutory tax rate in Israel | 23.00% | 23.00% | 24.00% |
Theoretical tax benefit | $ 6,235 | $ 685 | $ 479 |
Increase (decrease) in taxes resulting from: | |||
Effect of different tax rates applicable in foreign jurisdictions | (157) | (399) | 185 |
Operating losses and other temporary differences for which valuation allowance was provided | (4,972) | (708) | (546) |
Permanent differences | (2,162) | (756) | (462) |
Uncertain tax position | (158) | (91) | (91) |
Change in tax rate | (255) | ||
Prior years tax adjustment | 204 | ||
Other | (1) | (14) | (107) |
Total taxes on income | $ (1,011) | $ (1,283) | $ (797) |
INCOME TAXES (Schedule of Reser
INCOME TAXES (Schedule of Reserve Provisions and Changes) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |||
Balance at beginning of year | $ 512 | $ 421 | $ 330 |
Additions for tax positions related to the current year | 158 | 91 | 91 |
Balance at end of year | $ 670 | $ 512 | $ 421 |
FINANCIAL INCOME (LOSS), NET (S
FINANCIAL INCOME (LOSS), NET (Schedule of Financial Income (Loss), Net) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Financial Income (loss), Net [abstract] | |||
Hedging instrument gain (loss), net | $ 366 | $ (337) | $ 88 |
Bank charges | (153) | (89) | (18) |
Exchange rate gain (loss), net | (1,175) | (418) | 336 |
Interest income (expense), net | 878 | (218) | (137) |
Other, net | (1) | 15 | (2) |
Total financial income (expenses), net | $ (85) | $ (1,047) | $ 267 |
ENTITY WIDE DISCLOSURES (Schedu
ENTITY WIDE DISCLOSURES (Schedule of Summary of Revenues within Geographic Areas) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Geography: | |||
Total | $ 103,270 | $ 84,981 | $ 64,540 |
Americas United States [Member] | |||
Geography: | |||
Total | 55,991 | 47,860 | 34,718 |
Americas Other [Member] | |||
Geography: | |||
Total | 857 | 407 | 302 |
Americas [Member] | |||
Geography: | |||
Total | 56,848 | 48,267 | 35,020 |
Israel [Member] | |||
Geography: | |||
Total | 1,654 | 1,161 | 757 |
EMEA (excluding Germany and Israel) [Member] | |||
Geography: | |||
Total | 27,102 | 23,181 | 18,380 |
Germany [Member] | |||
Geography: | |||
Total | 12,147 | 8,253 | 6,962 |
APAC [Member] | |||
Geography: | |||
Total | $ 5,519 | $ 4,119 | $ 3,421 |
ENTITY WIDE DISCLOSURES (Sche_2
ENTITY WIDE DISCLOSURES (Schedule of Distributors Comprised more than 10% of Company's Revenue) (Details) | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Customer A [Member] | |||
Revenue, Major Customer [Line Items] | |||
Revenue percentage by distributors | 15.00% | 13.00% | 16.00% |
Customer B [Member] | |||
Revenue, Major Customer [Line Items] | |||
Revenue percentage by distributors | 8.00% | 10.00% | 13.00% |
ENTITY WIDE DISCLOSURES (Sche_3
ENTITY WIDE DISCLOSURES (Schedule of Disaggregated Revenue by Revenue Type and Performance Obligations) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Revenues: | |||
Total revenues | $ 103,270 | $ 84,981 | $ 64,540 |
Software products [Member] | |||
Revenues: | |||
Total revenues | 44,618 | 39,300 | 28,655 |
Hardware products [Member] | |||
Revenues: | |||
Total revenues | 2,747 | 3,254 | 2,200 |
Support and maintenance [Member] | |||
Revenues: | |||
Total revenues | 46,019 | 37,155 | 27,966 |
Professional services [Member] | |||
Revenues: | |||
Total revenues | $ 9,886 | $ 5,272 | $ 5,719 |
ENTITY WIDE DISCLOSURES (Sche_4
ENTITY WIDE DISCLOSURES (Schedule of Property, Plant and Equipment, Net by Geographical Area) (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Property and equipment, net | $ 4,177 | $ 2,563 | $ 1,829 |
Americas (primarily the United States) [Member] | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Property and equipment, net | 959 | 496 | 210 |
EMEA [Member] | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Property and equipment, net | 123 | 81 | 46 |
Israel [Member] | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Property and equipment, net | $ 3,095 | $ 1,986 | $ 1,573 |
SUBSEQUENT EVENTS (Details)
SUBSEQUENT EVENTS (Details) - USD ($) $ / shares in Units, $ in Thousands | Mar. 15, 2020 | May 31, 2017 | Dec. 31, 2019 | Mar. 01, 2020 |
Subsequent Event [Line Items] | ||||
Insurance deductible | $ 2,500 | |||
Granted | 3,473,515 | |||
Subsequent Event [Member] | ||||
Subsequent Event [Line Items] | ||||
Ordinary shares issued | 641,500 | |||
Exercise price | $ 11.70 | |||
Granted | 233,000 | |||
Subsequent Event [Member] | RSU's [Member] | ||||
Subsequent Event [Line Items] | ||||
Granted | 518,300 | |||
Vesting period | 4 years |
VALUATION AND QUALIFYING ACCO_2
VALUATION AND QUALIFYING ACCOUNTS (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Valuation Allowances on Net Deferred Tax Assets [Member] | |||
Balance | $ 8,762 | $ 9,511 | $ 8,625 |
Charged to costs and expenses | 6,628 | (749) | 886 |
Charged to other accounts | |||
Balance | 15,390 | 8,762 | 9,511 |
Accounts Receivable Allowances [Member] | |||
Balance | 97 | 63 | |
Charged to costs and expenses | 31 | 34 | 63 |
Charged to other accounts | (51) | ||
Balance | $ 77 | $ 97 | $ 63 |