Tufin Software Technologies (TUFN) 20-F 7 Mar 22 2021 FY Annual report (foreign) Financial data

Document and Entity Information

Document and Entity Information	12 Months Ended
	Dec. 31, 2021shares
Document Type	20-F
Amendment Flag	false
Document Registration Statement	false
Document Annual Report	true
Document Transition Report	false
Document Shell Company Report	false
Document Period End Date	Dec. 31, 2021
Entity File Number	001-38866
Entity Registrant Name	TUFIN SOFTWARE TECHNOLOGIES LTD.
Entity Incorporation, State or Country Code	IL
Entity Address, Address Line One	5 HaShalom Road
Entity Address, Address Line Two	ToHa Tower
Entity Address, City or Town	Tel Aviv
Entity Address Country	IL
Entity Address, Postal Zip Code	6789205
Title of 12(b) Security	Ordinary shares, par value NIS 0.015 per share
Trading Symbol	TUFN
Name of Exchange on which Security is Registered	NYSE
Entity Common Stock, Shares Outstanding	37,851,120
Entity Well-known Seasoned Issuer	No
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Accelerated Filer
Entity Emerging Growth Company	true
Entity Ex Transition Period	true
Document Accounting Standard	U.S. GAAP
Auditor Attestation Flag	true
Entity Shell Company	false
Entity Central Index Key	0001757399
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2021
Document Fiscal Period Focus	FY
Auditor Name	Kesselman & Kesselman
Auditor Location	Tel-Aviv, Israel
Auditor Firm Id	1309
Business Contact [Member]
Contact Personnel Name	Jack Wakileh
Entity Address, Address Line One	5 HaShalom Road
Entity Address, Address Line Two	ToHa Tower
Entity Address, City or Town	Tel Aviv
Entity Address Country	IL
Entity Address, Postal Zip Code	6789205
City Area Code	972
Local Phone Number	612-8118

CONSOLIDATED BALANCE SHEETS

CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Dec. 31, 2021	Dec. 31, 2020
CURRENT ASSETS:
Cash and cash equivalents	$ 44,439	$ 58,449
Marketable Securities - short term	18,177	19,586
Accounts receivable (net of allowance for credit losses of $85 at December 31, 2020 and December 31, 2021)	19,156	16,674
Prepaid expenses and other current assets	8,765	7,159
Total current assets	90,537	101,868
NON CURRENT ASSETS:
Long-term restricted bank deposits	3,251	3,268
Marketable Securities - long term	23,514	22,705
Property and equipment, net	5,007	4,502
Operating lease assets	16,457	18,802
Deferred costs	8,728	6,348
Deferred tax assets	2,533	1,346
Other non-current assets	1,366	1,512
Total non-current assets	60,856	58,483
Total assets	151,393	160,351
CURRENT LIABILITIES:
Accounts payables	5,191	4,147
Employee and payroll accrued expenses	21,123	17,985
Other accounts payables	677	578
Operating lease liabilities - current	3,437	3,185
Deferred revenues	28,386	24,940
Total current liabilities	58,814	50,835
NON-CURRENT LIABILITIES:
Long-term deferred revenues	18,740	12,815
Non-current operating lease liabilities	17,837	20,240
Other non-current liabilities	1,681	1,282
Total non-current liabilities	38,258	34,337
Total liabilities	97,072	85,172
COMMITMENTS AND CONTINGENCIES (see note 14)
SHAREHOLDERS' EQUITY:
Ordinary shares of NIS 0.015 par value; 150,000,000 shares authorized at December 31, 2020 and December 31, 2021; 35,972,470 and 37,851,120 shares issued and outstanding at December 31, 2020 and December 31, 2021, respectively	157	148
Additional paid-in capital	195,041	178,864
Accumulated other comprehensive income (loss)	(113)	5
Accumulated deficit	(140,764)	(103,838)
TOTAL SHAREHOLDERS' EQUITY	54,321	75,179
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY	$ 151,393	$ 160,351

CONSOLIDATED BALANCE SHEETS (Pa

CONSOLIDATED BALANCE SHEETS (Parenthetical) $ in Thousands	Dec. 31, 2021USD ($)shares	Dec. 31, 2020USD ($)shares
Statement of Financial Position [Abstract]
Accounts Receivable, allowance for credit losses | $	$ 85	$ 85
Ordinary shares authorized	150,000,000	150,000,000
Ordinary shares issued	37,851,120	35,972,470
Ordinary shares outstanding	37,851,120	35,972,470

CONSOLIDATED STATEMENTS OF COMP

CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Revenues:
Total revenues	$ 110,949	$ 100,834	$ 103,270
Cost of revenues:
Total cost of revenues	23,112	20,247	19,857
Gross profit	87,837	80,587	83,413
Operating expenses:
Research and development	39,584	34,978	31,571
Sales and marketing	60,378	59,484	63,981
General and administrative	24,204	20,050	14,884
Total operating expenses	124,166	114,512	110,436
Operating loss	(36,329)	(33,925)	(27,023)
Financial income (expense), net	(1,104)	114	(85)
Loss before taxes on income	(37,433)	(33,811)	(27,108)
Taxes on income	507	(1,595)	(1,011)
Net loss	$ (36,926)	$ (35,406)	$ (28,119)
Basic and diluted net loss per ordinary share	$ (0.99)	$ (0.99)	$ (1.04)
Weighted average number of shares used in computing net loss per share - basic and diluted (in thousands)	37,180	35,674	27,088
Comprehensive Loss
Net loss	$ (36,926)	$ (35,406)	$ (28,119)
Other comprehensive income (loss):
Unrealized gain (loss) from available-for-sale securities	(118)	5
Total comprehensive loss	(37,044)	(35,401)	(28,119)
Product [Member]
Revenues:
Total revenues	46,593	38,690	47,365
Cost of revenues:
Total cost of revenues	3,291	2,940	2,716
Maintenance and Professional Services [Member]
Revenues:
Total revenues	64,356	62,144	55,905
Cost of revenues:
Total cost of revenues	$ 19,821	$ 17,307	$ 17,141

CONSOLIDATED STATEMENTS OF CHAN

CONSOLIDATED STATEMENTS OF CHANGES IN REDEEMABLE CONVERTIBLE PREFERRED SHARES AND CHANGES IN SHAREHOLDERS' EQUITY (DEFICIT) - USD ($) $ in Thousands	Redeemable Convertible Preferred Share [Member]	Ordinary Shares [Member]	Additional Paid-in Capital [Member]	Accumulated other comprehensive income (loss) [Member]	Accumulated Deficit [Member]	Total
Begining Balance at Dec. 31, 2018	$ 26,699	$ 30	$ 10,337		$ (40,313)	$ (29,946)
Begining Balance, (in Shares) at Dec. 31, 2018	16,416,749	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
Issuance of ordinary shares upon exercise of options		$ 3	1,230			1,233
Issuance of ordinary shares upon exercise of options, shares		742,217
Share-based compensation			15,025			15,025
Other comprehensive income				$ 5		5
Net loss					(35,406)	(35,406)
Ending Balance at Dec. 31, 2020		$ 148	178,864	5	(103,838)	$ 75,179
Ending Balance, (in Shares) at Dec. 31, 2020		35,972,470				35,972,470
Issuance of ordinary shares upon exercise of options		$ 9	2,281			$ 2,290
Issuance of ordinary shares upon exercise of options, shares		1,878,650
Share-based compensation			13,896			13,896
Other comprehensive income				(118)		(118)
Net loss					(36,926)	(36,926)
Ending Balance at Dec. 31, 2021		$ 157	$ 195,041	$ (113)	$ (140,764)	$ 54,321
Ending Balance, (in Shares) at Dec. 31, 2021		37,851,120				37,851,120

CONSOLIDATED STATEMENTS OF CASH

CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$ (36,926)	$ (35,406)	$ (28,119)
Adjustment to reconcile net loss to net cash used in operating activities:
Depreciation	1,904	1,523	1,205
Share-based compensation	13,896	15,025	10,927
Amortization of premium and accretion of discount on marketable securities, net	308	95
Exchange rate differences on cash, cash equivalents and restricted cash	179	(1,146)	(712)
Other			28
Change in operating assets and liabilities items:
Accounts receivable, net	(2,482)	(452)	(1,506)
Prepaid expenses and other current assets	(2,174)	(2,640)	928
Deferred costs	(2,344)	(665)	(648)
Deferred taxes	(1,187)	313	(970)
Other non-current assets	146	62	(1,024)
Accounts payable	1,044	(247)	1,027
Employee and payroll accrued expenses	3,627	3,275	4,191
Other accounts payable and non-current liabilities	202	(416)	(1,923)
Net change in operating lease accounts	194	1,048	2,876
Deferred revenues	9,371	2,192	4,099
Net cash used in operating activities	(14,242)	(17,439)	(9,621)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of fixed assets	(1,678)	(2,070)	(2,548)
Investment in marketable securities	(29,227)	(44,381)
Proceeds from maturities of marketable securities	29,414	2,069
Other investing activities			(173)
Net cash used in investing activities	(1,491)	(44,382)	(2,721)
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)
Proceeds from exercise of stock options	2,374	1,376	2,081
Changes in proceeds from withholdings related to stock plans	(489)	(713)	1,255
Payment of long-term loan			(222)
Net cash provided by financing activities	1,885	663	115,761
Effect of exchange rate changes on cash, cash equivalents and restricted cash	(179)	1,146	712
INCREASE (DECREASE) IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH	(14,027)	(60,012)	104,131
CASH, CASH EQUIVALENTS AND RESTRICTED CASH AT BEGINNING OF YEAR	61,717	121,729	17,598
CASH, CASH EQUIVALENTS AND RESTRICTED CASH AT END OF YEAR	47,690	61,717	121,729
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid for income taxes	409	2,419	1,578
Cash paid for interest			4
Non-cash investing and financing activities:
Property and equipment purchased but not yet paid	345	49	271
Unpaid offering costs			52
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	$ 1	$ 85	$ 228

GENERAL

GENERAL	12 Months Ended
	Dec. 31, 2021
General [Abstract]
GENERAL	NOTE 1: GENERAL Business Description 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. 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

SIGNIFICANT ACCOUNTING POLICIES

SIGNIFICANT ACCOUNTING POLICIES	12 Months Ended
	Dec. 31, 2021
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. The COVID-19 pandemic including the global emergence of new variants, continue to persist and create business and economic uncertainty and volatility in the global markets. The Company had made certain precautionary measures to its operations in order to help minimize the risk of its employees including employ a hybrid remote-work arrangement and suspend non-essential travels. The Company considered the impact of COVID-19 on its estimates and assumptions. As of the date of issuance of these financial statements, the Company is not aware of any specific event or circumstance that would require the Company to update its estimates, assumptions and judgments or revise the carrying value of its assets or liabilities. The full impact of COVID-19 on the Company’s business, results of operations, and financial condition may depend on numerous evolving factors that are highly uncertain and cannot be accurately predicted. As additional information is obtained, the Company may be required to update its estimates and assumptions. Actual results could differ from those estimates and any such differences may be material to the Company’s financial statements. The Company will continue to monitor the evolving situation and will assess the relevant implications on its consolidated financial statements. F - 8 TUFIN SOFTWARE TECHNOLOGIES LTD. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS b. Principles of Consolidation The consolidated financial statements comprise the financial statements of the Company 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 denominated 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 consolidated statement of comprehensive loss 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. F - 9 TUFIN SOFTWARE TECHNOLOGIES LTD. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS e. Marketable Securities The Company accounts for its investments in marketable securities in accordance with ASC No. 320, “Investments—Debt Securities”. The Company determines the appropriate classification of its investments in marketable securities at the time of purchase and re-evaluates the appropriate classifications at each balance sheet date. As of December 31, 2021, all of the Company’s investments in marketable debt securities are classified as available-for-sale. The Company’s available-for-sale marketable debt securities primarily consist of U.S. government, U.S. government agencies and corporate debt. Accordingly, the Company’s marketable debt securities are recorded at fair value on the balance sheet. Unrealized gains and losses on marketable debt securities classified as available-for-sale are recorded in other comprehensive income (loss). Realized gains and losses on sale of marketable debt securities are included in financial income (expense), net in the consolidated statement of comprehensive loss. The cost of marketable securities sold is determined using the specific identification method. The amortized cost of marketable debt securities is adjusted for amortization of premiums and accretion of discounts to maturity. Such amortization and accretion are included in the Company’s financial income (expenses), net in the consolidated statement of comprehensive loss. The Company classifies its marketable debt securities as either short-term or long-term based on each instrument’s underlying contractual maturity date. When the estimated fair value of a debt security is below its amortized cost, the debt security is assessed using the Current Expected Credit Losses model (in accordance with ASU 2016-13) in order to determine what portion of that difference, if any, is caused by expected credit losses. The amortized cost of the debt security will be reduced to its fair value if it is more likely than not that the Company is required to sell the impaired security before recovery of its amortized cost basis, or it has the intention to sell the security. If neither of these conditions are met, the Company determines whether the impairment is due to credit losses by comparing the present value of the expected cash flows of the security with its amortized cost basis. The amount of impairment recognized is limited to the excess of the amortized cost over the fair value of the security. An allowance for credit losses for the excess of amortized cost over the expected cash flows is recognized in financial income (expense), net on the consolidated statements of comprehensive loss. During the year ended December 31, 2021 and 2020, the Company did not recognize an allowance for credit losses on its available-for-sale marketable debt securities. f. Accounts Receivable Accounts receivable are recorded based on the invoiced amount and presented in the Company’s consolidated balance sheet net of allowance for credit losses for potential uncollectible amounts. The allowance for credit losses is based on the Company’s assessment of collectability by reviewing accounts receivable on an aggregated basis where similar characteristics exist and on an individual basis when it identifies specific customers with known disputes or collectability issues. In addition, the Company considers a number of factors to assess collectability, including the past due status, creditworthiness of the specific customer, payment history and reasonable and supportable forecasts of future economic conditions, as well as other applicable forward-looking information in order to calculate its estimated credit losses. Changes in the allowance for expected credit losses are recorded under general and administrative expenses in the consolidated statements of comprehensive loss. The Company’s allowance for credit losses for its accounts receivable consists of the following activity: December 31, 2019 2020 2021 (U.S. $ in thousands) Beginning balance $ 97 $ 77 $ 85 Charged to general and administrative 31 85 - Accounts receivable write-off (51 ) (77 ) - Ending Balance $ 77 $ 85 $ 85 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 contract assets. Accordingly, as of December 31, 2020 and 2021, $22,936 thousand and $26,100 thousand, respectively, were offset from contract assets and corresponding amounts were offset from deferred revenues (see Note 8). F - 10 TUFIN SOFTWARE TECHNOLOGIES LTD. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS g. Long-term Restricted Bank Deposits As of December 31, 2020 and 2021, the Company’s bank deposits were denominated mainly in U.S. dollars and NIS and bore yearly interest at weighted average deposits rates of 1.39% and 0.01%, respectively. These deposits are primarily used for collateralizing the Company’s lease contracts, credit cards and for the Company’s hedging activities. Restricted bank deposits are classified based on the expected expiration date of the respective restriction. Bank deposits are presented at their cost, including accrued interest. The Company’s long-term restricted bank deposits are included with cash and cash equivalents when reconciling beginning-of-period and end-of-period total amounts shown on the consolidated statement of cash flows (see also Note 4 to the consolidated financial statements). h. Leases 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, 2020 and 2021, the Company did not have any finance leases. Operating leases are included in operating lease assets, operating lease liabilities – current, and non-current operating lease liabilities in the Company’s consolidated balance sheets. Operating lease 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 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 was estimated 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 asset and operating lease liabilities. The Company does not separate non-lease components from lease components for its leases of real estate. 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 does not recognize operating lease asset and operating lease liabilities for leases with terms shorter than 12 months. Lease costs for short-term leases are recognized on a straight-line basis over the lease term. i. 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 10 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. j. Impairment of 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, 2019, 2020 and 2021, no impairment triggering events were identified. F - 11 TUFIN SOFTWARE TECHNOLOGIES LTD. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS k. 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, 2019, 2020 and 2021, were $3,091 thousands, $3,659 thousands and $4,343 thousands, respectively. The Company’s subsidiary in the United States offers a defined contribution retirement plan (the “Plan”) under the provisions of Section 401(k) of the Internal Revenue Code of 1986, as amended (the “Code”) that covers eligible employees as defined in the Plan. All eligible employees may elect to contribute up to an annual maximum, of the lesser of 100% of their annual compensation to the plan through salary deferrals, subject to Internal Revenue Service limits, but not greater than $19,500 per year (for certain employees over 50 years of age the maximum contribution is $26,000 per year). Commencing 2021, the Company’s subsidiary in the United States, at its discretion, offers matching contributions equal to 3% of the employee's annual compensation. For the year ended December 31, 2021 the Company made 401(k) Plan contributions of approximately $135 thousands. 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. These plans are accounted as contribution plans. l. Revenue Recognition The Company follows the five-step model to recognize revenue under ASC 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 (iv) professional services and to a lesser extent (v) software as a service (“SaaS”) offerings which were immaterial for the years ended December 31, 2019, 2020 and 2021. 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. F - 12 TUFIN SOFTWARE TECHNOLOGIES LTD. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 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 uses the practical expedient and does not assess the existence of a significant financing component when the difference between payment and revenue recognition is less than a year. 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 SaaS are also recognized ratably over the term of the related 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 and SaaS, the Company determines the standalone selling prices based on the price at which the Company separately sells those services. m. Deferred Contract Costs The Company accounts for deferred contract costs in accordance with ASC No. 340-40, “Other Assets and Deferred Costs” (“ASC 340-40”). Under ASC 340-40, 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, are deferred. The Company defer contract costs that are recoverable and incremental to obtaining customer sales contracts. These costs include sales commissions to sales and marketing and certain management personnel based on their attainment of certain predetermined sales goals. Sales commissions paid for initial contracts, which are not commensurate with sales commissions paid for renewal contracts, are deferred and amortized over an expected period of benefit. Based on its technology, customer contracts and other factors, the Company has determined the expected period of benefit to be approximately four years. Sales commissions for renewal contracts are deferred and then amortized on a straight-line basis over the related contractual period. Amortization expenses related to these costs are primarily included in sales and marketing expenses in the consolidated statements of comprehensive loss. The Company presents deferred contract costs from contracts which are less than 12 months under prepaid expenses and other current assets and deferred contract costs related to contracts that are greater than 12 months under deferred costs (see also Note 8 to the consolidated financial statements). F - 13 TUFIN SOFTWARE TECHNOLOGIES LTD. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS n. 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. The Company sources its hardware from a single third-party provider based in the U.S. Cost of maintenance and professional services revenues consist primarily of personnel costs responsible for providing maintenance and support and professional services. o. Accounting for Share-Based Compensation The Company accounts for share-based compensation, including stock options and restricted stock units (“RSUs”) 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 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 the expected share price volatility and expected term. Any changes in these highly subjective assumptions would significantly impact the share-based compensation expense. During the year ended December 31, 2021 no stock options were granted. During the years ended December 31 2019 and 2020, the fair value of stock options granted to employees is estimated at the date of grant using the following assumptions: The risk-free interest rate assumption is based on the implied yield curve, at the time of grant, on U.S. treasury zero-coupon issues with a remaining term equal to the expected term of the Company’s stock 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, as well as the historical volatility of the Company’s ordinary shares. The expected term of options granted represents the period of time that options granted are expected to be outstanding. The expected option term is calculated using the simplified method, as the Company concludes that currently its historical share option exercise experience does not provide an adequate basis to estimate its expected option term. The fair value of the Company’s ordinary shares underlying the share-based awards 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. The fair value of the Company’s RSUs is measured based on the fair value of the Company’s ordinary shares on the date of grant. The Company recognizes compensation expenses for its share-based option awards and RSUs on the graded vesting attribution method over the requisite service period (primarily a four-year period). Each of the above factors requires the Company to use judgment and make estimates in determining the inputs used for the calculation of the fair value of its stock-based option awards. If the Company were to use different inputs, the fair value of its stock-based option awards could be materially different. p. 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 comprehensive loss as incurred. F - 14 TUFIN SOFTWARE TECHNOLOGIES LTD. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS q. Advertising Expense Advertising expenses consist primarily of campaigns, tradeshows, digital advertising, branding and public relations. Advertising expenses are charged to the statement of comprehensive loss, as incurred. Advertising expenses for the years ended December 31, 2019, 2020 and 2021, amounted to $5,522, $3,143 and $3,755 thousand, respectively. r. 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 2) Undistributed earnings of the Company's foreign subsidiaries, since the Company has the ability and intention 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 Company classifies interest and penalties recognized in the financial statements relating to uncertain tax positions within taxes on income. s. 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 options, unvested RSUs, warrants to purchase ordinary shares and redeemable preferred shares as their effect is anti-dilutive. The total number of shares related to outstanding stock 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 year ended December 31, 2019 was 7,507,811, 26,667 and 16,416,749 (out of which 27,778 shares represent receipt on account of preferred A shares), respectively. The total number of shares related to outstanding stock options and unvested RSUs that have been excluded from the calculation of diluted net loss per share for the year ended December 31, 2020 was 6,930,143 and 1,311,702, respectively. The total number of shares related to outstanding stock options and unvested RSUs that have been excluded from the calculation of diluted net loss per share for the year ended December 31, 2021 was 4,716,941 and 2,458,254, respectively. F - 15 TUFIN SOFTWARE TECHNOLOGIES LTD. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS t. Concentration of Credit Risks Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash and cash equivalents, marketable securities, 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 Company's marketable debt securities consist of investments, which are highly rated by credit agencies, in government, corporate and government sponsored enterprises debentures. The Company's investment policy, approved by the Board of Directors, limits the amount that the Company may invest in any one type of investment or issuer, in order to reduce credit risk concentrations. 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. Concentration of credit risk with respect to trade receivables is limited by credit limits, ongoing credit evaluation and account monitoring procedures. As of December 31, 2020 and 2021, each of the following customers comprised more than 10% of the Company’s accounts receivable: December 31, 2020 2021 Customer A 12 % 17 % Customer B 16 % 11 % Customer C 6 % 11 % Customer D 11 % 10 % For purposes of this calculation, the Company assessed distributors by aggregating distributors within the same holding group. u. 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 fluctuatio

FAIR VALUE MEASUREMENT

FAIR VALUE MEASUREMENT	12 Months Ended
	Dec. 31, 2021
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, 2020 2021 (U.S. $ in thousands) Level 2 Level 2 Assets: Marketable securities $ 42,291 $ 41,691 Foreign currency exchange derivative instruments 295 322 Liabilities: Foreign currency exchange derivative instruments 8 37 $ 42,578 $ 41,976 The Company’s marketable securities are classified as Level 2 as these assets are valued using observable data, either directly or indirectly, that may include quoted market prices for similar instruments, broker-dealer quotes, market spreads, nonbinding market prices that are corroborated by observable market data and other observable market information. The Company’s foreign currency exchange derivative financial instruments are classified as Level 2, as they represent foreign currency forward and option contracts that are not actively traded and are valued using pricing models that use observable market inputs, including interest rate curves and both forward rates and spot prices for currencies (Level 2 inputs). The fair value of foreign currency exchange derivative instruments was estimated by obtaining current quotes from banks and third-party valuations. Other financial instruments consist mainly of cash and cash equivalents, restricted bank deposits, accounts receivable, 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, 2021
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 bank deposits 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, 2020 2021 (U.S. $ in thousands) Cash and cash equivalents $ 58,449 $ 44,439 Long-term restricted bank deposits 3,268 3,251 Total cash, cash equivalents, and restricted cash shown in the statement of cash flows $ 61,717 $ 47,690 Amounts included in restricted bank deposits represent those required to be set aside by a contractual agreement with lease, hedging and credit card transactions.

MARKETABLE SECURITIES

MARKETABLE SECURITIES	12 Months Ended
	Dec. 31, 2021
Debt Securities, Available-for-sale, Amortized Cost [Abstract]
MARKETABLE SECURITIES	NOTE 5: MARKETABLE SECURITIES The following tables summarize the amortized cost, unrealized gains and losses, and fair value of available-for-sale marketable securities as of December 31, 2020 and 2021: December 31, 2021 (U.S. dollars in thousands) Amortized cost Gross unrealized losses Gross unrealized gains Fair value U.S. government and agency debentures $ 32,591 (97 ) - 32,494 Corporate debentures 9,213 (16 ) - 9,197 Total $ 41,804 (113 ) - 41,691 December 31, 2020 (U.S. dollars in thousands) Amortized cost Gross unrealized losses Gross unrealized gains Fair value U.S. government and agency debentures $ 32,578 $ (5 ) $ 1 $ 32,574 Corporate debentures 9,708 (1 ) 10 9,717 Total $ 42,286 $ (6 ) $ 11 $ 42,291 December 31, 2021 (U.S. dollars in thousands) Amortized cost Fair value Due within one year $ 18,217 $ 18,177 Due between one and two years 23,587 23,514 Total $ 41,804 $ 41,691 December 31, 2020 (U.S. dollars in thousands) Amortized cost Fair value Due within one year $ 19,585 $ 19,586 Due between one and two years 22,701 22,705 Total $ 42,286 $ 42,291

PROPERTY AND EQUIPMENT, NET

PROPERTY AND EQUIPMENT, NET	12 Months Ended
	Dec. 31, 2021
Property, Plant and Equipment [Abstract]
PROPERTY AND EQUIPMENT, NET	NOTE 6: PROPERTY AND EQUIPMENT, NET December 31, 2020 2021 (U.S. $ in thousands) Property and equipment, net: Cost: Furniture and fixtures $ 1,883 $ 1,906 Computers and software 4,731 4,910 Leasehold improvements 907 907 Electronic equipment 2,374 3,251 9,895 10,974 Less - Accumulated depreciation 5,393 5,967 $ 4,502 $ 5,007 Depreciation expenses were $1,205 thousands, $ 1,523 thousands and $ 1,904 thousands in the years ended December 31, 2019, 2020 and 2021, respectively.

LEASES

LEASES	12 Months Ended
	Dec. 31, 2021
Lessee Disclosure [Abstract]
LEASES	NOTE 7: 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 8 years. As of December 31, 2021, the Company had operating lease right-of-use (“ROU”) assets of $16.5 million, of which $14.4 were located in Israel, and the remaining ROU assets were located in the United States. The components of lease expense during the period presented were as follows: Year Ended December 31, 2019 2020 2021 (U.S. $ in thousands) Operating lease expense $ 3,110 $ 3,791 $ 3,869 Short-term lease expense 786 545 269 Total lease expense $ 3,896 $ 4,336 $ 4,138 F - 21 TUFIN SOFTWARE TECHNOLOGIES LTD. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Supplemental cash flow information related to operating leases during the period presented was as follows:   Year Ended December 31, 2019 December 31, 2020 December 31, 2021 (U.S. $ in thousands) Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases 1,602 $ 4,169 $ 4,356 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:   Year Ended December 31, 2019 2020 2021 Weighted-average remaining lease term (in years) 8.4 7.6 6.7 Weighted-average discount rate 7.5 % 7.6 % 7.7 % The maturities of lease liabilities under operating leases as of December 31, 2021 are as follows: (U.S. $ in thousands) 2022 4,514 2023 4,251 2024 3,953 2025 3,431 2026 3,431 Thereafter 7,148 Total undiscounted lease payments $ 26,728 Less: Imputed interest (5,454 ) Total lease liabilities $ 21,274

DEFERRED REVENUES AND DEFERRED

DEFERRED REVENUES AND DEFERRED COSTS	12 Months Ended
	Dec. 31, 2021
Revenue Recognition and Deferred Revenue [Abstract]
DEFERRED REVENUES AND DEFERRED COSTS	NOTE 8: DEFERRED REVENUES AND DEFERRED COSTS December 31, 2020 2021 (U.S. $ in thousands) Deferred revenues: Deferred product revenues $ 1,515 $ 1,799 Deferred maintenance and professional services revenues 59,176 71,427 60,691 73,226 Less - amounts offset from contract assets (22,936 ) (26,100 ) Deferred revenues 37,755 47,126 Changes in deferred revenues: Beginning of year 57,595 60,691 Deferred revenue relating to new sales 44,105 54,427 Revenue recognized during the year (41,009 ) (41,892 ) End of year 60,691 73,226 Less - amounts offset from contract assets (22,936 ) (26,100 ) Deferred revenues balance $ 37,755 $ 47,126 As of December 31, 2021, the total remaining performance obligations amounted to $78,045 thousand. The Company expects that it will satisfy the majority of its remaining performance obligations over a period of three years, of which, $42,890 thousands will be recognized in the next twelve months, which constitutes 55% of total remaining performance obligations. 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, 2020 2021 (U.S. $ in thousands) Balance at beginning of year $ 5,962 $ 6,627 Additional costs deferred 3,398 5,176 Amortization of deferred costs (2,733 ) (2,832 ) Balance at end of year $ 6,627 $ 8,971

HEDGING ACTIVITIES

HEDGING ACTIVITIES	12 Months Ended
	Dec. 31, 2021
Derivative Instruments and Hedging Activities Disclosure [Abstract]
HEDGING ACTIVITIES	NOTE 9: 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, 2020 and 2021, the notional amounts of the Company’s outstanding foreign currency exchange derivative financial instruments that were not designated as accounting hedging instruments, were $17.6 million and $26.9 million, respectively, and were used to reduce foreign currency exposures of the NIS. With respect to such derivatives, gains of $366 thousand, $86 thousand and losses of $80 thousand were recognized under financial income (expense), net for the years ended December 31, 2019, 2020 and 2021, respectively. Such gains and losses partially offset the revaluation impact of the balance sheet items, which are also recognized under financial income (expense), net. These foreign currency exchange derivative financial instruments mature through August 2022. Balance sheet location Notional Amount Fair Value December 31, 2021 December 31, 2021 (U.S. $ in thousands) Assets derivatives - Foreign currency exchange contracts Other current assets $ 16,332 $ 322 Liability derivatives - Foreign currency exchange contracts Other accounts payables $ 10,579 $ 37 Balance sheet location Notional Amount Fair Value December 31, 2020 December 31, 2020 (U.S. $ in thousands) Assets derivatives - Foreign currency exchange contracts Other current assets $ 8,796 $ 295 Liability derivatives - Foreign currency exchange contracts Other accounts payables $ 8,796 $ 8

SHAREHOLDERS' EQUITY

SHAREHOLDERS' EQUITY	12 Months Ended
	Dec. 31, 2021
Share-based Payment Arrangement [Abstract]
SHAREHOLDERS' EQUITY	NOTE 10: SHAREHOLDERS’ EQUITY a) Share capital Each ordinary share confers upon its holder the right to one vote and to receive dividends as declared by the Board of Directors, which prior to the IPO was subject to the priority rights of holders of preferred shares. 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 The Company’s ordinary shares are traded on the New York Stock Exchange under the ticker symbol “TUFN”. b) Stock-based compensation plans 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. Options and RSUs granted under the 2019 Plan become exercisable over the requisite service period, which is generally a four-year period beginning on the grant date, subject to continued service to the Company. As of December 31, 2021, 1,038,499 shares were available for future equity awards under the 2019 Plan. On January 1, 2022, the reserve pool under the 2019 Plan was increased by 1,892,556 shares. F - 25 TUFIN SOFTWARE TECHNOLOGIES LTD. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Stock Options A summary of the stock option activity for the year ended December 31, 2021 is as follows: Number of Options Weighted average exercise price Aggregate intrinsic value (U.S. $ in thousands) Balance as of January 1, 2021 6,930,143 $ 8.51 Exercised (1,370,119 ) $ 1.67 Forfeited (843,083 ) $ 12.82 Balance as of December 31, 2021 4,716,941 $ 9.73 $ 20,462 Exercisable as of December 31, 2021 3,467,471 $ 7.75 $ 19,378 The following table summarizes the Company’s outstanding and exercisable options granted as of December 31, 2021: Options Outstanding Options Exercisable Exercise Price Options outstanding as of December 31, 2021 Weighted average remaining contractual term Options exercisable as of December 31, 2021 Weighted average remaining contractual term (years) (years) $ 0.004 - $ 1.76 2,069,939 8.7 2,013,187 8.8 $ 7.55 - $ 11.70 970,794 7.5 504,671 7.3 $ 16.68 - $ 19.21 931,627 7.6 497,811 7.6 $ 22.70 - $ 29.74 744,581 7.3 451,802 7.3 4,716,941 8.0 3,467,471 8.2 The total intrinsic value of options exercised for the years ended December 31, 2020 and 2021 was approximately $7,705 thousands and $14,222 thousands, respectively. The fair value of stock options granted was estimated using the Black-Scholes option-pricing model to determine the fair value of stock options granted during the years ended December 31, 2019 and 2020. No options were granted during the year ended December 31, 2021. The following assumptions were applied in determining the options’ fair value on their grant date: Year ended December 31, 2019 2020 Expected volatility 50.4%-65.9% 51.7%-56.2% Expected dividends yields 0% 0% Expected term (in years) 5.5-7.0 5.5-7.0 Risk free rate 1.53%-2.63% 0.31%-1.03% Weighted average grant date fair value $ 9.63 $ 5.36 As of December 31, 2021, the Company had 1,249,470 unvested options. As of December 31, 2021, the total unrecognized compensation cost related to all unvested stock options of approximately $2.5 million is expected to be recognized as an expense over a weighted-average recognition period of approximately 0.7 year. F - 26 TUFIN SOFTWARE TECHNOLOGIES LTD. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Restricted Stock Units A summary of the Company’s RSUs activity for the year ended December 31, 2021 is as follows: Number of RSUs Weighted Average Grant Date Fair Value Balance as of January 1, 2021 1,311,702 $ 9.21 Granted 2,008,531 $ 11.31 Vested (508,531 ) $ 9.46 Forfeited (353,448 ) $ 10.77 Unvested RSUs as of December 31, 2021 2,458,254 $ 10.65 As of December 31, 2021, the unrecognized compensation cost related to all unvested RSUs of approximately $15.1 million is expected to be recognized as an expense over a weighted-average recognition period of approximately 1.1 year. In the first quarter of 2022, the Company granted certain of its employees 1,719,300 restricted stock units with a vesting period of four years. Stock-based compensation expense for stock options and RSUs included in the Company’s Statements of Comprehensive Loss were allocated as follows: December 31, 2019 2020 2021 (U.S. $ in thousands) Cost of revenues $ 1,514 $ 2,024 $ 1,812 Research and development 2,370 4,437 3,867 Sales and marketing 4,849 4,635 3,772 General and administrative 2,194 3,929 4,445 Total share-based compensation expense $ 10,927 $ 15,025 $ 13,896

INCOME TAXES

INCOME TAXES	12 Months Ended
	Dec. 31, 2021
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, 2020 and 2021 were as follows: As of December 31, 2020 2021 (U.S. $ in thousands) Deferred tax assets: Tax loss carryforwards $ 17,543 $ 26,588 Research and development 7,132 7,796 Deferred revenue 1,480 1,562 Employee and payroll accrued expenses 1,335 1,485 Share-based compensation 389 1,174 Operating lease liability 4,947 4,446 Issuance expense 982 - Other 89 104 Total deferred tax assets 33,897 43,155 Deferred tax liabilities: Property and equipment, net (289 ) (292 ) Deferred costs (1,629 ) (2,231 ) Operating lease right-of-use asset (4,212 ) (3,390 ) Total deferred tax liabilities (6,130 ) (5,913 ) Total deferred tax assets, net $ 27,767 $ 37,242 Less valuation allowance for deferred tax assets (26,421 ) (34,709 ) Deferred tax assets $ 1,346 $ 2,533 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, 2020 and 2021, the Company had recorded a full valuation allowance of $26,421 thousand and $34,709 thousand, respectively, with regard to its deferred taxes, consisting primarily of tax loss carryforwards generated in Israel. A summary of the Company’s valuation allowance activity on deferred tax assets was as follows: December 31, 2019 2020 2021 (U.S. $ in thousands) Beginning balance $ 8,762 $ 15,390 $ 26,421 Additions charged to income tax expense 6,628 11,031 8,288 Ending balance $ 15,390 $ 26,421 $ 34,709 F - 28 TUFIN SOFTWARE TECHNOLOGIES LTD. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 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, 2019, 2020 and 2021 were as follows:   December 31, 2019 2020 2021 (U.S. $ in thousands) Israeli 29,560 $ 36,347 $ 39,904 Non-Israeli (2,452 ) (2,536 ) (2,471 ) 27,108 $ 33,811 $ 37,433 The components of taxes on income for the years ended December 31, 2019, 2020 and 2021 were as follows:   December 31, 2019 2020 2021 (U.S. $ in thousands) Current Israeli 164 $ 336 $ 385 Non-Israeli 1,817 946 295 1,981 1,282 680 Deferred Israeli - - - Non-Israeli (970 ) 313 (1,187 ) (970 ) 313 (1,187 ) Total taxes on income 1,011 $ 1,595 $ (507 ) F - 29 TUFIN SOFTWARE TECHNOLOGIES LTD. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS A reconciliation of the theoretical tax benefit and actual taxes on income for the years ended December 31, 2019, 2020 and 2021 is set forth below: December 31, 2019 2020 2021 (U.S. $ in thousands) Loss before taxes on income 27,108 $ 33,811 $ 37,433 Statutory tax rate in Israel 23 % 23 % 23 % Theoretical tax benefit 6,235 7,777 8,610 Increase in income tax expense resulting from: Effect of different tax rates applicable in foreign jurisdictions (157 ) (128 ) (58 ) Operating losses and other temporary differences for which valuation allowance was provided (4,972 ) (5,784 ) (6,838 ) Permanent differences (2,162 ) (3,017 ) (1,132 ) Uncertain tax position (158 ) (336 ) (385 ) Other 203 (107 ) 310 Actual taxes on income (1,011 ) $ (1,595 ) $ 507 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, 2019 2020 2021 (U.S. $ in thousands) Balance at beginning of year 512 $ 670 $ 1,006 Additions for tax positions related to the current year 158 336 385 Balance at end of year 670 $ 1,006 $ 1,391 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 2017 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 2016 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. Although the Company believes that it has adequately provided for any reasonably foreseeable outcomes related to tax audits and settlement, there is no assurance that the final tax outcome of its tax audits will not be different from that which is reflected in the Company's income tax provisions. Such differences could have a material effect on the Company's income tax provision, cash flow from operating activities and net income in the period in which such determination is made. F - 30 TUFIN SOFTWARE TECHNOLOGIES LTD. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS c. Basis of taxation Company incorporated in the U.S. — tax rate of 21%.   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 23%. 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, 2021, 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 2) In the event of distribution of a cash dividend from income which was tax exempt as above, the Company 3) Entitlement to the above benefits is conditioned upon the Company’s fulfilling the conditions stipulated by the Israel tax loss carryforwards Accumulated losses for tax purposes as of December 31, 2021 amounted to approximately $110 million 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 (EXPENSES), NE

FINANCIAL INCOME (EXPENSES), NET	12 Months Ended
	Dec. 31, 2021
Financial Income (expenses), Net [abstract]
FINANCIAL INCOME (EXPENSES), NET	NOTE 12: FINANCIAL INCOME (EXPENSES), NET Year ended December 31, 2019 2020 2021 (U.S. $ in thousands) Hedging instrument gain (loss), net $ 366 $ 86 $ (80 ) Bank charges (153 ) (175 ) (261 ) Exchange rate loss, net (1,175 ) (49 ) (853 ) Interest income (expense), net 878 347 401 Amortization of premium on marketable securities - (95 ) (308 ) Other, net (1 ) - (3 ) Total financial income (expenses), net $ (85 ) $ 114 $ (1,104 )

ENTITY WIDE DISCLOSURES

ENTITY WIDE DISCLOSURES	12 Months Ended
	Dec. 31, 2021
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, 2019 2020 2021 (U.S. $ in thousands) Geography: Americas: United States 55,991 $ 53,334 $ 55,936 Other 857 1,311 972 56,848 54,645 56,908 Israel 1,654 1,493 1,681 EMEA (excluding Germany and Israel) 27,102 27,073 30,997 Germany 12,147 11,548 14,302 APAC 5,519 6,075 7,061 Total 103,270 $ 100,834 $ 110,949 Revenues are attributed to geographic areas based on the location of customer. As of December 31, 2019, 2020 and 2021, each of the following customers comprised more than 10% of the Company’s revenue: December 31, 2019 2020 2021 Customer A 15 % 15 % 15 % Customer B 9 % 10 % 12 % F - 32 TUFIN SOFTWARE TECHNOLOGIES LTD. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 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, 2019 2020 2021 (U.S. $ in thousands) Revenues: Software products $ 44,618 $ 35,898 $ 42,936 Hardware products 2,747 2,792 3,657 Support and maintenance 46,019 50,794 53,975 Professional services 9,886 11,350 10,381 Total revenues $ 103,270 $ 100,834 $ 110,949 Property and equipment, net by geographical area were as follows as of December 31, 2019, 2020 and 2021: December 31, 2019 2020 2021 (U.S. $ in thousands) Americas (primarily the United States) 959 $ 1,125 $ 1,093 EMEA 123 108 158 Israel 3,095 3,269 3,756 4,177 $ 4,502 $ 5,007

COMMITMENTS AND CONTINGENT LIAB

COMMITMENTS AND CONTINGENT LIABILITIES	12 Months Ended
	Dec. 31, 2021
Commitments and Contingencies Disclosure [Abstract]
COMMITMENTS AND CONTINGENT LIABILITIES	NOTE 14: COMMITMENTS AND CONTINGENT LIABILITIES Legal Proceedings The Company, along with its directors and officers (the “Individual Defendants”) at the time of its initial public offering (“IPO”) were named as defendants in four putative shareholder class action lawsuits filed in the Supreme Court of the State of New York on (1) February 26, 2020, captioned Matt Primozich v. Tufin Software Technologies Ltd., et al., Allen v. Tufin Software Technologies Ltd., et al., Avi Shmuely v. Tufin Software Technologies Ltd., et al., Michael Roche v.Tufin Software Technologies Ltd., et al., In the Tufin State Actions, the plaintiffs, seeking to represent a class of all purchasers and acquirers of the Company’s ordinary shares issued in connection with the Company’s April 2019 IPO, allege that the (1) the defendants made material misstatements or failed to disclose material information in the IPO Offering Documents, thereby allegedly violating Section 11 of the Securities Act and (2) the Individual Defendants were “control persons” of the Company by virtue of their positions, and thereby are allegedly liable under Section 15 of the Securities Act. The Roche Action also asserted a claim under Section 12(a)(2) of the Securities Act alleging that defendants issued, caused to be issued, and/or signed the IPO Offering Documents in connection with issuance of stock to shareholders in the IPO. On August 5, 2021, the state court entered an order consolidating the Tufin State Actions and appointing lead plaintiffs and class counsel. On August 16, 2021, these lead plaintiffs filed a consolidated amended complaint, which asserts claims under Sections 11 and 15 of the Securities Act and names only Tufin and the Individual Defendants as defendants. On September 15, 2021, the defendants filed a motion to stay the Tufin State Actions pending resolution of the parallel federal action discussed below. The motion also requested, in the alternative, that the court enter an order holding the PSLRA’s mandatory stay of discovery applies or staying discovery as a discretionary matter pending resolution of motions to dismiss in both the federal and state court actions. The motion was fully briefed as of November 3, 2021. The parties also filed a stipulation extending the defendants’ deadline to respond to the consolidated amended complaint until 45 days after a decision resolving the motion to stay. On December 8, 2021, the court entered an order staying the Tufin State Actions pending resolution of the motion to dismiss pending in the parallel federal action. As discussed below, the federal court issued a decision on the motion to dismiss on February 25, 2022. On March 3, 2022, the state court entered an order lifting the stay. Two federal class actions were also filed in the Southern District of New York: (1) the matter captioned Matthew Ellison v. Tufin Software Technologies Ltd. et al. Michaelson v. Tufin Software Technologies Ltd. et al. The Company is also subject to certain indemnification obligations with respect to the Individual Defendants, IPO Underwriter Defendants, and the SPO Underwriter Defendants, in connection with the Tufin State Actions and Tufin Federal Actions. Based on information currently available and the current stage of the litigation, the Company is unable to reasonably estimate a possible loss or range of possible losses, if any, with regard to the Tufin State Action and Tufin Federal Actions; therefore, no estimated liability has been recorded in the Company’s consolidated balance sheets as of December 31, 2021. The Company will continue to evaluate information as it becomes known and will record an estimate for losses at the time or times if and when it is probable that a loss will be incurred and the amount of the loss is reasonably estimable.

SIGNIFICANT ACCOUNTING POLICI_2

SIGNIFICANT ACCOUNTING POLICIES (Policies)	12 Months Ended
	Dec. 31, 2021
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. The COVID-19 pandemic including the global emergence of new variants, continue to persist and create business and economic uncertainty and volatility in the global markets. The Company had made certain precautionary measures to its operations in order to help minimize the risk of its employees including employ a hybrid remote-work arrangement and suspend non-essential travels. The Company considered the impact of COVID-19 on its estimates and assumptions. As of the date of issuance of these financial statements, the Company is not aware of any specific event or circumstance that would require the Company to update its estimates, assumptions and judgments or revise the carrying value of its assets or liabilities. The full impact of COVID-19 on the Company’s business, results of operations, and financial condition may depend on numerous evolving factors that are highly uncertain and cannot be accurately predicted. As additional information is obtained, the Company may be required to update its estimates and assumptions. Actual results could differ from those estimates and any such differences may be material to the Company’s financial statements. The Company will continue to monitor the evolving situation and will assess the relevant implications on its consolidated financial statements.
Principles of Consolidation	b. Principles of Consolidation The consolidated financial statements comprise the financial statements of the Company 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 denominated 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 consolidated statement of comprehensive loss 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.
Marketable Securities	e. Marketable Securities The Company accounts for its investments in marketable securities in accordance with ASC No. 320, “Investments—Debt Securities”. The Company determines the appropriate classification of its investments in marketable securities at the time of purchase and re-evaluates the appropriate classifications at each balance sheet date. As of December 31, 2021, all of the Company’s investments in marketable debt securities are classified as available-for-sale. The Company’s available-for-sale marketable debt securities primarily consist of U.S. government, U.S. government agencies and corporate debt. Accordingly, the Company’s marketable debt securities are recorded at fair value on the balance sheet. Unrealized gains and losses on marketable debt securities classified as available-for-sale are recorded in other comprehensive income (loss). Realized gains and losses on sale of marketable debt securities are included in financial income (expense), net in the consolidated statement of comprehensive loss. The cost of marketable securities sold is determined using the specific identification method. The amortized cost of marketable debt securities is adjusted for amortization of premiums and accretion of discounts to maturity. Such amortization and accretion are included in the Company’s financial income (expenses), net in the consolidated statement of comprehensive loss. The Company classifies its marketable debt securities as either short-term or long-term based on each instrument’s underlying contractual maturity date. When the estimated fair value of a debt security is below its amortized cost, the debt security is assessed using the Current Expected Credit Losses model (in accordance with ASU 2016-13) in order to determine what portion of that difference, if any, is caused by expected credit losses. The amortized cost of the debt security will be reduced to its fair value if it is more likely than not that the Company is required to sell the impaired security before recovery of its amortized cost basis, or it has the intention to sell the security. If neither of these conditions are met, the Company determines whether the impairment is due to credit losses by comparing the present value of the expected cash flows of the security with its amortized cost basis. The amount of impairment recognized is limited to the excess of the amortized cost over the fair value of the security. An allowance for credit losses for the excess of amortized cost over the expected cash flows is recognized in financial income (expense), net on the consolidated statements of comprehensive loss. During the year ended December 31, 2021 and 2020, the Company did not recognize an allowance for credit losses on its available-for-sale marketable debt securities.
Accounts Receivable	f. Accounts Receivable Accounts receivable are recorded based on the invoiced amount and presented in the Company’s consolidated balance sheet net of allowance for credit losses for potential uncollectible amounts. The allowance for credit losses is based on the Company’s assessment of collectability by reviewing accounts receivable on an aggregated basis where similar characteristics exist and on an individual basis when it identifies specific customers with known disputes or collectability issues. In addition, the Company considers a number of factors to assess collectability, including the past due status, creditworthiness of the specific customer, payment history and reasonable and supportable forecasts of future economic conditions, as well as other applicable forward-looking information in order to calculate its estimated credit losses. Changes in the allowance for expected credit losses are recorded under general and administrative expenses in the consolidated statements of comprehensive loss. The Company’s allowance for credit losses for its accounts receivable consists of the following activity: December 31, 2019 2020 2021 (U.S. $ in thousands) Beginning balance $ 97 $ 77 $ 85 Charged to general and administrative 31 85 - Accounts receivable write-off (51 ) (77 ) - Ending Balance $ 77 $ 85 $ 85 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 contract assets. Accordingly, as of December 31, 2020 and 2021, $22,936 thousand and $26,100 thousand, respectively, were offset from contract assets and corresponding amounts were offset from deferred revenues (see Note 8).
Long-term Restricted Bank Deposits	g. Long-term Restricted Bank Deposits As of December 31, 2020 and 2021, the Company’s bank deposits were denominated mainly in U.S. dollars and NIS and bore yearly interest at weighted average deposits rates of 1.39% and 0.01%, respectively. These deposits are primarily used for collateralizing the Company’s lease contracts, credit cards and for the Company’s hedging activities. Restricted bank deposits are classified based on the expected expiration date of the respective restriction. Bank deposits are presented at their cost, including accrued interest. The Company’s long-term restricted bank deposits are included with cash and cash equivalents when reconciling beginning-of-period and end-of-period total amounts shown on the consolidated statement of cash flows (see also Note 4 to the consolidated financial statements).
Leases	h. Leases 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, 2020 and 2021, the Company did not have any finance leases. Operating leases are included in operating lease assets, operating lease liabilities – current, and non-current operating lease liabilities in the Company’s consolidated balance sheets. Operating lease 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 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 was estimated 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 asset and operating lease liabilities. The Company does not separate non-lease components from lease components for its leases of real estate. 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 does not recognize operating lease asset and operating lease liabilities for leases with terms shorter than 12 months. Lease costs for short-term leases are recognized on a straight-line basis over the lease term.
Property and Equipment	i. 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 10 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.
Impairment of Long-Lived Assets	j. Impairment of 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, 2019, 2020 and 2021, no impairment triggering events were identified.
Severance Pay	k. 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, 2019, 2020 and 2021, were $3,091 thousands, $3,659 thousands and $4,343 thousands, respectively. The Company’s subsidiary in the United States offers a defined contribution retirement plan (the “Plan”) under the provisions of Section 401(k) of the Internal Revenue Code of 1986, as amended (the “Code”) that covers eligible employees as defined in the Plan. All eligible employees may elect to contribute up to an annual maximum, of the lesser of 100% of their annual compensation to the plan through salary deferrals, subject to Internal Revenue Service limits, but not greater than $19,500 per year (for certain employees over 50 years of age the maximum contribution is $26,000 per year). Commencing 2021, the Company’s subsidiary in the United States, at its discretion, offers matching contributions equal to 3% of the employee's annual compensation. For the year ended December 31, 2021 the Company made 401(k) Plan contributions of approximately $135 thousands. 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. These plans are accounted as contribution plans.
Revenue Recognition	l. Revenue Recognition The Company follows the five-step model to recognize revenue under ASC 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 (iv) professional services and to a lesser extent (v) software as a service (“SaaS”) offerings which were immaterial for the years ended December 31, 2019, 2020 and 2021. 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. F - 12 TUFIN SOFTWARE TECHNOLOGIES LTD. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 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 uses the practical expedient and does not assess the existence of a significant financing component when the difference between payment and revenue recognition is less than a year. 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 SaaS are also recognized ratably over the term of the related 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 and SaaS, the Company determines the standalone selling prices based on the price at which the Company separately sells those services.
Deferred Contract Costs	m. Deferred Contract Costs The Company accounts for deferred contract costs in accordance with ASC No. 340-40, “Other Assets and Deferred Costs” (“ASC 340-40”). Under ASC 340-40, 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, are deferred. The Company defer contract costs that are recoverable and incremental to obtaining customer sales contracts. These costs include sales commissions to sales and marketing and certain management personnel based on their attainment of certain predetermined sales goals. Sales commissions paid for initial contracts, which are not commensurate with sales commissions paid for renewal contracts, are deferred and amortized over an expected period of benefit. Based on its technology, customer contracts and other factors, the Company has determined the expected period of benefit to be approximately four years. Sales commissions for renewal contracts are deferred and then amortized on a straight-line basis over the related contractual period. Amortization expenses related to these costs are primarily included in sales and marketing expenses in the consolidated statements of comprehensive loss. The Company presents deferred contract costs from contracts which are less than 12 months under prepaid expenses and other current assets and deferred contract costs related to contracts that are greater than 12 months under deferred costs (see also Note 8 to the consolidated financial statements).
Cost of Revenues	n. 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. The Company sources its hardware from a single third-party provider based in the U.S. Cost of maintenance and professional services revenues consist primarily of personnel costs responsible for providing maintenance and support and professional services.
Accounting for Share-Based Compensation	o. Accounting for Share-Based Compensation The Company accounts for share-based compensation, including stock options and restricted stock units (“RSUs”) 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 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 the expected share price volatility and expected term. Any changes in these highly subjective assumptions would significantly impact the share-based compensation expense. During the year ended December 31, 2021 no stock options were granted. During the years ended December 31 2019 and 2020, the fair value of stock options granted to employees is estimated at the date of grant using the following assumptions: The risk-free interest rate assumption is based on the implied yield curve, at the time of grant, on U.S. treasury zero-coupon issues with a remaining term equal to the expected term of the Company’s stock 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, as well as the historical volatility of the Company’s ordinary shares. The expected term of options granted represents the period of time that options granted are expected to be outstanding. The expected option term is calculated using the simplified method, as the Company concludes that currently its historical share option exercise experience does not provide an adequate basis to estimate its expected option term. The fair value of the Company’s ordinary shares underlying the share-based awards 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. The fair value of the Company’s RSUs is measured based on the fair value of the Company’s ordinary shares on the date of grant. The Company recognizes compensation expenses for its share-based option awards and RSUs on the graded vesting attribution method over the requisite service period (primarily a four-year period). Each of the above factors requires the Company to use judgment and make estimates in determining the inputs used for the calculation of the fair value of its stock-based option awards. If the Company were to use different inputs, the fair value of its stock-based option awards could be materially different.
Research and Development Costs	p. 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 comprehensive loss as incurred.
Advertising Expense	q. Advertising Expense Advertising expenses consist primarily of campaigns, tradeshows, digital advertising, branding and public relations. Advertising expenses are charged to the statement of comprehensive loss, as incurred. Advertising expenses for the years ended December 31, 2019, 2020 and 2021, amounted to $5,522, $3,143 and $3,755 thousand, respectively.
Income Taxes	r. 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 2) Undistributed earnings of the Company's foreign subsidiaries, since the Company has the ability and intention 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 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:	s. 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 options, unvested RSUs, warrants to purchase ordinary shares and redeemable preferred shares as their effect is anti-dilutive. The total number of shares related to outstanding stock 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 year ended December 31, 2019 was 7,507,811, 26,667 and 16,416,749 (out of which 27,778 shares represent receipt on account of preferred A shares), respectively. The total number of shares related to outstanding stock options and unvested RSUs that have been excluded from the calculation of diluted net loss per share for the year ended December 31, 2020 was 6,930,143 and 1,311,702, respectively. The total number of shares related to outstanding stock options and unvested RSUs that have been excluded from the calculation of diluted net loss per share for the year ended December 31, 2021 was 4,716,941 and 2,458,254, respectively.
Concentration of Credit Risks	t. Concentration of Credit Risks Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash and cash equivalents, marketable securities, 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 Company's marketable debt securities consist of investments, which are highly rated by credit agencies, in government, corporate and government sponsored enterprises debentures. The Company's investment policy, approved by the Board of Directors, limits the amount that the Company may invest in any one type of investment or issuer, in order to reduce credit risk concentrations. 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. Concentration of credit risk with respect to trade receivables is limited by credit limits, ongoing credit evaluation and account monitoring procedures. As of December 31, 2020 and 2021, each of the following customers comprised more than 10% of the Company’s accounts receivable: December 31, 2020 2021 Customer A 12 % 17 % Customer B 16 % 11 % Customer C 6 % 11 % Customer D 11 % 10 % For purposes of this calculation, the Company assessed distributors by aggregating distributors within the same holding group.
Derivative Instruments and Hedging Activities	u. 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 entered 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 statement of comprehensive loss.
Fair Value of Financial Instruments	v. 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 Company’s financial assets and liabilities that are measured at are measured at fair value on a recurring basis include marketable securities and derivative contracts. 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. F - 16 TUFIN SOFTWARE TECHNOLOGIES LTD. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 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’s foreign currency derivative instruments and marketable securities are classified within the Level 2 value hierarchy (see Note 3).
Legal Contingencies	w. 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	y. Recently Adopted Accounting Standards In December 2019, the Financial Accounting Standards Board ("FASB") issued ASU 2019-12 “Income Taxes (Topic 740)—Simplifying the Accounting for Income Taxes” (the “update”). The amendments in this update simplify the accounting for income taxes by removing the following exceptions in ASC 740: (1) exception to the incremental approach for intra-period tax allocation when there is a loss from continuing operations and income or a gain from other items; (2) exception to the requirement to recognize a deferred tax liability for equity method investments when a foreign subsidiary becomes an equity method investment; (3) exception to the ability not to recognize a deferred tax liability for a foreign subsidiary when a foreign equity method investment becomes a subsidiary; and (4) exception to the general methodology for calculating income taxes in an interim period when a year-to-date loss exceeds the anticipated loss for the year. In addition, the update also simplifies the accounting for income taxes in certain topics as follows: (1) requiring that an entity recognize a franchise tax (or similar tax) that is partially based on income as an income-based tax and account for any incremental amount incurred as a non-income-based tax; (2) requiring that an entity evaluate when a step up in the tax basis of goodwill should be considered part of the business combination in which the book goodwill was originally recognized and when it should be considered a separate transaction; (3) specifying that an entity can elect (rather than be required to) allocate the consolidated amount of current and deferred tax expense to a legal entity that is not subject to tax in its separate financial statements; and (4) requiring that an entity reflect the effect of an enacted change in tax laws or rates in the annual effective tax rate computation in the interim period that includes the enactment date. The Company adopted ASU 2019-12 effective January 1, 2020 1, with no material impact on its consolidated financial statements. In March 2020, the FASB issued ASU 2020-04, "Reference Rate Reform (Topic 848) - Facilitation of the Effects of Reference Rate Reform on Financial Reporting". In addition, in January 2021, the FASB issued ASU 2021-01, "Reference Rate Reform (Topic 848)- Scope". The amendments in these ASUs apply to all entities that have contracts, hedging relationships, and other transactions that reference LIBOR or another reference rate expected to be discontinued because of reference rate reform. Together, these ASUs provide optional expedients and exceptions for applying generally accepted accounting principles (GAAP) to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. The expedients and exceptions provided by the amendments do not apply to contract modifications made and hedging relationships entered into or evaluated after December 31, 2022, except for hedging relationships existing as of December 31, 2022, that an entity has elected certain optional expedients for and that are retained through the end of the hedging relationship. These ASUs were effective upon issuance and may be applied prospectively to contract modifications and hedging relationships entered into or evaluated through December 31, 2022. The adoption of the new guidance did not have a material impact on the Company’s consolidated financial statements.
Recently Issued Accounting Pronouncements Not Yet Adopted	z. Recently Issued Accounting Standards Not Yet Adopted In November 2021, the FASB issued ASU 2021-10, "Government Assistance (Topic 832)- Disclosures by Business Entities about Government Assistance". This ASU requires annual disclosures for transactions with a government authority that are accounted for by applying a grant or contribution model. These amendments are effective for annual periods beginning after December 15, 2021, with early adoption permitted. The Company is currently evaluating this guidance to determine the impact it may have on its consolidated financial statements.

SIGNIFICANT ACCOUNTING POLICI_3

SIGNIFICANT ACCOUNTING POLICIES (Tables)	12 Months Ended
	Dec. 31, 2021
Accounting Policies [Abstract]
Schedule of Allowance for Credit Losses for Accounts Receivable	The Company’s allowance for credit losses for its accounts receivable consists of the following activity: December 31, 2019 2020 2021 (U.S. $ in thousands) Beginning balance $ 97 $ 77 $ 85 Charged to general and administrative 31 85 - Accounts receivable write-off (51 ) (77 ) - Ending Balance $ 77 $ 85 $ 85
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 10 Computers and software 33 Leasehold improvements 10-33 Electronic equipment 15-33
Schedules of Concentration of Risk of Account Receivable	As of December 31, 2020 and 2021, each of the following customers comprised more than 10% of the Company’s accounts receivable: December 31, 2020 2021 Customer A 12 % 17 % Customer B 16 % 11 % Customer C 6 % 11 % Customer D 11 % 10 %

FAIR VALUE MEASUREMENT (Tables)

FAIR VALUE MEASUREMENT (Tables)	12 Months Ended
	Dec. 31, 2021
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, 2020 2021 (U.S. $ in thousands) Level 2 Level 2 Assets: Marketable securities $ 42,291 $ 41,691 Foreign currency exchange derivative instruments 295 322 Liabilities: Foreign currency exchange derivative instruments 8 37 $ 42,578 $ 41,976

CASH, CASH EQUIVALENTS AND RE_2

CASH, CASH EQUIVALENTS AND RESTRICTED CASH (Tables)	12 Months Ended
	Dec. 31, 2021
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 bank deposits 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, 2020 2021 (U.S. $ in thousands) Cash and cash equivalents $ 58,449 $ 44,439 Long-term restricted bank deposits 3,268 3,251 Total cash, cash equivalents, and restricted cash shown in the statement of cash flows $ 61,717 $ 47,690

MARKETABLE SECURITIES (Tables)

MARKETABLE SECURITIES (Tables)	12 Months Ended
	Dec. 31, 2021
Debt Securities, Available-for-sale, Amortized Cost [Abstract]
Schedue of Amortized Cost, Unrealized Gains and Losses	The following tables summarize the amortized cost, unrealized gains and losses, and fair value of available-for-sale marketable securities as of December 31, 2020 and 2021: December 31, 2021 (U.S. dollars in thousands) Amortized cost Gross unrealized losses Gross unrealized gains Fair value U.S. government and agency debentures $ 32,591 (97 ) - 32,494 Corporate debentures 9,213 (16 ) - 9,197 Total $ 41,804 (113 ) - 41,691 December 31, 2020 (U.S. dollars in thousands) Amortized cost Gross unrealized losses Gross unrealized gains Fair value U.S. government and agency debentures $ 32,578 $ (5 ) $ 1 $ 32,574 Corporate debentures 9,708 (1 ) 10 9,717 Total $ 42,286 $ (6 ) $ 11 $ 42,291
Schedue of Fair Value of Available-For-Sale Marketable Securities	December 31, 2021 (U.S. dollars in thousands) Amortized cost Fair value Due within one year $ 18,217 $ 18,177 Due between one and two years 23,587 23,514 Total $ 41,804 $ 41,691 December 31, 2020 (U.S. dollars in thousands) Amortized cost Fair value Due within one year $ 19,585 $ 19,586 Due between one and two years 22,701 22,705 Total $ 42,286 $ 42,291

PROPERTY AND EQUIPMENT, NET (Ta

PROPERTY AND EQUIPMENT, NET (Tables)	12 Months Ended
	Dec. 31, 2021
Property, Plant and Equipment [Abstract]
Schedule of Property and Equipment	December 31, 2020 2021 (U.S. $ in thousands) Property and equipment, net: Cost: Furniture and fixtures $ 1,883 $ 1,906 Computers and software 4,731 4,910 Leasehold improvements 907 907 Electronic equipment 2,374 3,251 9,895 10,974 Less - Accumulated depreciation 5,393 5,967 $ 4,502 $ 5,007

LEASES (Tables)

LEASES (Tables)	12 Months Ended
	Dec. 31, 2021
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 2020 2021 (U.S. $ in thousands) Operating lease expense $ 3,110 $ 3,791 $ 3,869 Short-term lease expense 786 545 269 Total lease expense $ 3,896 $ 4,336 $ 4,138
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 December 31, 2020 December 31, 2021 (U.S. $ in thousands) Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases 1,602 $ 4,169 $ 4,356 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:   Year Ended December 31, 2019 2020 2021 Weighted-average remaining lease term (in years) 8.4 7.6 6.7 Weighted-average discount rate 7.5 % 7.6 % 7.7 %
Schedule of Maturities of Operating Lease Liabilities	The maturities of lease liabilities under operating leases as of December 31, 2021 are as follows: (U.S. $ in thousands) 2022 4,514 2023 4,251 2024 3,953 2025 3,431 2026 3,431 Thereafter 7,148 Total undiscounted lease payments $ 26,728 Less: Imputed interest (5,454 ) Total lease liabilities $ 21,274

DEFERRED REVENUES AND DEFERRE_2

DEFERRED REVENUES AND DEFERRED COSTS (Tables)	12 Months Ended
	Dec. 31, 2021
Revenue Recognition and Deferred Revenue [Abstract]
Schedule of Deferred Revenues and Deferred Costs	December 31, 2020 2021 (U.S. $ in thousands) Deferred revenues: Deferred product revenues $ 1,515 $ 1,799 Deferred maintenance and professional services revenues 59,176 71,427 60,691 73,226 Less - amounts offset from contract assets (22,936 ) (26,100 ) Deferred revenues 37,755 47,126 Changes in deferred revenues: Beginning of year 57,595 60,691 Deferred revenue relating to new sales 44,105 54,427 Revenue recognized during the year (41,009 ) (41,892 ) End of year 60,691 73,226 Less - amounts offset from contract assets (22,936 ) (26,100 ) Deferred revenues balance $ 37,755 $ 47,126
Schedule of Assets Recognized from Costs to Obtain Contract with 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, 2020 2021 (U.S. $ in thousands) Balance at beginning of year $ 5,962 $ 6,627 Additional costs deferred 3,398 5,176 Amortization of deferred costs (2,733 ) (2,832 ) Balance at end of year $ 6,627 $ 8,971

HEDGING ACTIVITIES (Tables)

HEDGING ACTIVITIES (Tables)	12 Months Ended
	Dec. 31, 2021
Derivative Instruments and Hedging Activities Disclosure [Abstract]
Schedule of Derivative Instruments	As of December 31, 2020 and 2021, the notional amounts of the Company’s outstanding foreign currency exchange derivative financial instruments that were not designated as accounting hedging instruments, were $17.6 million and $26.9 million, respectively, and were used to reduce foreign currency exposures of the NIS. With respect to such derivatives, gains of $366 thousand, $86 thousand and losses of $80 thousand were recognized under financial income (expense), net for the years ended December 31, 2019, 2020 and 2021, respectively. Such gains and losses partially offset the revaluation impact of the balance sheet items, which are also recognized under financial income (expense), net. These foreign currency exchange derivative financial instruments mature through August 2022. Balance sheet location Notional Amount Fair Value December 31, 2021 December 31, 2021 (U.S. $ in thousands) Assets derivatives - Foreign currency exchange contracts Other current assets $ 16,332 $ 322 Liability derivatives - Foreign currency exchange contracts Other accounts payables $ 10,579 $ 37 Balance sheet location Notional Amount Fair Value December 31, 2020 December 31, 2020 (U.S. $ in thousands) Assets derivatives - Foreign currency exchange contracts Other current assets $ 8,796 $ 295 Liability derivatives - Foreign currency exchange contracts Other accounts payables $ 8,796 $ 8

SHAREHOLDERS' EQUITY (Tables)

SHAREHOLDERS' EQUITY (Tables)	12 Months Ended
	Dec. 31, 2021
Share-based Payment Arrangement [Abstract]
Schedule of Stock Option Activity	A summary of the stock option activity for the year ended December 31, 2021 is as follows: Number of Options Weighted average exercise price Aggregate intrinsic value (U.S. $ in thousands) Balance as of January 1, 2021 6,930,143 $ 8.51 Exercised (1,370,119 ) $ 1.67 Forfeited (843,083 ) $ 12.82 Balance as of December 31, 2021 4,716,941 $ 9.73 $ 20,462 Exercisable as of December 31, 2021 3,467,471 $ 7.75 $ 19,378
Schedule of Outstanding and Exercisable Options Granted	The following table summarizes the Company’s outstanding and exercisable options granted as of December 31, 2021: Options Outstanding Options Exercisable Exercise Price Options outstanding as of December 31, 2021 Weighted average remaining contractual term Options exercisable as of December 31, 2021 Weighted average remaining contractual term (years) (years) $ 0.004 - $ 1.76 2,069,939 8.7 2,013,187 8.8 $ 7.55 - $ 11.70 970,794 7.5 504,671 7.3 $ 16.68 - $ 19.21 931,627 7.6 497,811 7.6 $ 22.70 - $ 29.74 744,581 7.3 451,802 7.3 4,716,941 8.0 3,467,471 8.2
Schedule of Assumptions of Fair Value of Stock Options Granted	The fair value of stock options granted was estimated using the Black-Scholes option-pricing model to determine the fair value of stock options granted during the years ended December 31, 2019 and 2020. No options were granted during the year ended December 31, 2021. The following assumptions were applied in determining the options’ fair value on their grant date: Year ended December 31, 2019 2020 Expected volatility 50.4%-65.9% 51.7%-56.2% Expected dividends yields 0% 0% Expected term (in years) 5.5-7.0 5.5-7.0 Risk free rate 1.53%-2.63% 0.31%-1.03% Weighted average grant date fair value $ 9.63 $ 5.36
Schedule of RSUs Activity	A summary of the Company’s RSUs activity for the year ended December 31, 2021 is as follows: Number of RSUs Weighted Average Grant Date Fair Value Balance as of January 1, 2021 1,311,702 $ 9.21 Granted 2,008,531 $ 11.31 Vested (508,531 ) $ 9.46 Forfeited (353,448 ) $ 10.77 Unvested RSUs as of December 31, 2021 2,458,254 $ 10.65
Schedule of Share Based Compensation Expense	Stock-based compensation expense for stock options and RSUs included in the Company’s Statements of Comprehensive Loss were allocated as follows: December 31, 2019 2020 2021 (U.S. $ in thousands) Cost of revenues $ 1,514 $ 2,024 $ 1,812 Research and development 2,370 4,437 3,867 Sales and marketing 4,849 4,635 3,772 General and administrative 2,194 3,929 4,445 Total share-based compensation expense $ 10,927 $ 15,025 $ 13,896

INCOME TAXES (Tables)

INCOME TAXES (Tables)	12 Months Ended
	Dec. 31, 2021
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, 2020 and 2021 were as follows: As of December 31, 2020 2021 (U.S. $ in thousands) Deferred tax assets: Tax loss carryforwards $ 17,543 $ 26,588 Research and development 7,132 7,796 Deferred revenue 1,480 1,562 Employee and payroll accrued expenses 1,335 1,485 Share-based compensation 389 1,174 Operating lease liability 4,947 4,446 Issuance expense 982 - Other 89 104 Total deferred tax assets 33,897 43,155 Deferred tax liabilities: Property and equipment, net (289 ) (292 ) Deferred costs (1,629 ) (2,231 ) Operating lease right-of-use asset (4,212 ) (3,390 ) Total deferred tax liabilities (6,130 ) (5,913 ) Total deferred tax assets, net $ 27,767 $ 37,242 Less valuation allowance for deferred tax assets (26,421 ) (34,709 ) Deferred tax assets $ 1,346 $ 2,533
Schedule of Valuation Allowance Activity on Deferred Tax Asset	A summary of the Company’s valuation allowance activity on deferred tax assets was as follows: December 31, 2019 2020 2021 (U.S. $ in thousands) Beginning balance $ 8,762 $ 15,390 $ 26,421 Additions charged to income tax expense 6,628 11,031 8,288 Ending balance $ 15,390 $ 26,421 $ 34,709
Schedule of Loss (Income) Before Taxes on Income	Loss (Income) before taxes on income for the years ended December 31, 2019, 2020 and 2021 were as follows:   December 31, 2019 2020 2021 (U.S. $ in thousands) Israeli 29,560 $ 36,347 $ 39,904 Non-Israeli (2,452 ) (2,536 ) (2,471 ) 27,108 $ 33,811 $ 37,433
Schedule of Taxes on Income	The components of taxes on income for the years ended December 31, 2019, 2020 and 2021 were as follows:   December 31, 2019 2020 2021 (U.S. $ in thousands) Current Israeli 164 $ 336 $ 385 Non-Israeli 1,817 946 295 1,981 1,282 680 Deferred Israeli - - - Non-Israeli (970 ) 313 (1,187 ) (970 ) 313 (1,187 ) Total taxes on income 1,011 $ 1,595 $ (507 )
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, 2019, 2020 and 2021 is set forth below: December 31, 2019 2020 2021 (U.S. $ in thousands) Loss before taxes on income 27,108 $ 33,811 $ 37,433 Statutory tax rate in Israel 23 % 23 % 23 % Theoretical tax benefit 6,235 7,777 8,610 Increase in income tax expense resulting from: Effect of different tax rates applicable in foreign jurisdictions (157 ) (128 ) (58 ) Operating losses and other temporary differences for which valuation allowance was provided (4,972 ) (5,784 ) (6,838 ) Permanent differences (2,162 ) (3,017 ) (1,132 ) Uncertain tax position (158 ) (336 ) (385 ) Other 203 (107 ) 310 Actual taxes on income (1,011 ) $ (1,595 ) $ 507
Schedule of Reserve Provisions and Changes	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, 2019 2020 2021 (U.S. $ in thousands) Balance at beginning of year 512 $ 670 $ 1,006 Additions for tax positions related to the current year 158 336 385 Balance at end of year 670 $ 1,006 $ 1,391

FINANCIAL INCOME (EXPENSES), _2

FINANCIAL INCOME (EXPENSES), NET (Tables)	12 Months Ended
	Dec. 31, 2021
Financial Income (expenses), Net [abstract]
Schedule of Financial Income (Expenses), Net	Year ended December 31, 2019 2020 2021 (U.S. $ in thousands) Hedging instrument gain (loss), net $ 366 $ 86 $ (80 ) Bank charges (153 ) (175 ) (261 ) Exchange rate loss, net (1,175 ) (49 ) (853 ) Interest income (expense), net 878 347 401 Amortization of premium on marketable securities - (95 ) (308 ) Other, net (1 ) - (3 ) Total financial income (expenses), net $ (85 ) $ 114 $ (1,104 )

ENTITY WIDE DISCLOSURES (Tables

ENTITY WIDE DISCLOSURES (Tables)	12 Months Ended
	Dec. 31, 2021
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, 2019 2020 2021 (U.S. $ in thousands) Geography: Americas: United States 55,991 $ 53,334 $ 55,936 Other 857 1,311 972 56,848 54,645 56,908 Israel 1,654 1,493 1,681 EMEA (excluding Germany and Israel) 27,102 27,073 30,997 Germany 12,147 11,548 14,302 APAC 5,519 6,075 7,061 Total 103,270 $ 100,834 $ 110,949
Schedule of Distributors Comprised more than 10% of Company's Revenue	As of December 31, 2019, 2020 and 2021, each of the following customers comprised more than 10% of the Company’s revenue: December 31, 2019 2020 2021 Customer A 15 % 15 % 15 % Customer B 9 % 10 % 12 %
Schedule of Disaggregated Revenue by Revenue Type and Performance Obligations	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, 2019 2020 2021 (U.S. $ in thousands) Revenues: Software products $ 44,618 $ 35,898 $ 42,936 Hardware products 2,747 2,792 3,657 Support and maintenance 46,019 50,794 53,975 Professional services 9,886 11,350 10,381 Total revenues $ 103,270 $ 100,834 $ 110,949
Schedule of Property, Plant and Equipment, Net by Geographical Area	Property and equipment, net by geographical area were as follows as of December 31, 2019, 2020 and 2021: December 31, 2019 2020 2021 (U.S. $ in thousands) Americas (primarily the United States) 959 $ 1,125 $ 1,093 EMEA 123 108 158 Israel 3,095 3,269 3,756 4,177 $ 4,502 $ 5,007

GENERAL (Details)

GENERAL (Details) - USD ($) $ in Thousands	1 Months Ended	12 Months Ended
	Apr. 30, 2019	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
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, 2021	Dec. 31, 2020	Dec. 31, 2019
Weighted average deposits rates	0.01%	1.39%
Amounts offset from accounts receivable	$ 26,100	$ 22,936
Marketing expenses	$ 3,755	$ 3,143	$ 5,522
Number of shares outstanding options	4,716,941	6,930,143	7,507,811
Warrant to purchase purchase ordinary shares			26,667
Redeemable preferred shares		1,311,702	16,416,749
Severance expenses	$ 4,343	$ 3,659	$ 3,091
Employees contribution in percentage	100.00%
Employees contribution	$ 19,500
Company contribution	3.00%
401(k) Plan contribution	$ 135
Series A preferred shares [Member]
Redeemable preferred shares			27,778
RSU's [Member]
Number of shares outstanding options	2,458,254
Maximum [Member]
Employees contribution	$ 26,000

SIGNIFICANT ACCOUNTING POLICI_5

SIGNIFICANT ACCOUNTING POLICIES (Schedule of Allowance for Credit Losses for Accounts Receivable) (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Accounting Policies [Abstract]
Beginning balance	$ 85	$ 77	$ 97
Charged to general and administrative		85	31
Accounts receivable write-off		(77)	(51)
Ending Balance	$ 85	$ 85	$ 77

SIGNIFICANT ACCOUNTING POLICI_6

SIGNIFICANT ACCOUNTING POLICIES (Schedule of Annual Rates of Property and Equipment) (Details)	12 Months Ended
	Dec. 31, 2021
Furniture and Fixtures [Member]
Property, Plant and Equipment [Line Items]
Annual rates of property and equipment	10
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_7

SIGNIFICANT ACCOUNTING POLICIES (Schedules of Concentration of Risk of Account Receivable) (Details) - Accounts Receivable [Member] - Customer Concentration Risk [Member]	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020
Customer A [Member]
Concentration Risk [Line Items]
Concentration Risk Percentage	17.00%	12.00%
Customer B [Member]
Concentration Risk [Line Items]
Concentration Risk Percentage	11.00%	16.00%
Customer C [Member]
Concentration Risk [Line Items]
Concentration Risk Percentage	11.00%	6.00%
Customer D [Member]
Concentration Risk [Line Items]
Concentration Risk Percentage	10.00%	11.00%

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, 2021	Dec. 31, 2020
Assets:
Marketable Securities	$ 41,691	$ 42,291
Foreign currency exchange derivative instruments	322	295
Liabilities:
Foreign currency exchange derivative instruments	37	8
Net fair value assets (liability)	$ 41,976	$ 42,578

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, 2021	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents [Abstract]
Cash and cash equivalents	$ 44,439	$ 58,449
Long-term restricted bank deposits	3,251	3,268
Total cash, cash equivalents, and restricted cash shown in the statement of cash flows	$ 47,690	$ 61,717	$ 121,729	$ 17,598

MARKETABLE SECURITIES (Schedue

MARKETABLE SECURITIES (Schedue of Amortized Cost, Unrealized Gains and Losses) (Details) - USD ($) $ in Thousands	Dec. 31, 2021	Dec. 31, 2020
Amortized cost	$ 41,804	$ 42,286
Gross unrealized losses	(113)	(6)
Gross unrealized gains		11
Fair value	41,691	42,291
U.S. government and agency debentures [Member]
Amortized cost	32,591	32,578
Gross unrealized losses	(97)	(5)
Gross unrealized gains		1
Fair value	32,494	32,574
Corporate debentures [Member]
Amortized cost	9,213	9,708
Gross unrealized losses	(16)	(1)
Gross unrealized gains		10
Fair value	$ 9,197	$ 9,717

MARKETABLE SECURITIES (Schedu_2

MARKETABLE SECURITIES (Schedue of Fair Value of Available-For-Sale Marketable Securities) (Details) - USD ($) $ in Thousands	Dec. 31, 2021	Dec. 31, 2020
Amortized cost
Due within one year	$ 18,217	$ 19,585
Due between one and two years	23,587	22,701
Total Amortized cost	41,804	42,286
Fair value
Due within one year	18,177	19,586
Due between one and two years	23,514	22,705
Total Fair value	$ 41,691	$ 42,291

PROPERTY AND EQUIPMENT, NET (Sc

PROPERTY AND EQUIPMENT, NET (Schedule of Property and Equipment) (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Property, Plant and Equipment [Line Items]
Property plant and equipment gross	$ 10,974	$ 9,895
Less - Accumulated depreciation	5,967	5,393
Property and equipment, net	5,007	4,502	$ 4,177
Depreciation expense	1,904	1,523	$ 1,205
Furniture and Fixtures [Member]
Property, Plant and Equipment [Line Items]
Property plant and equipment gross	1,906	1,883
Computers and software [Member]
Property, Plant and Equipment [Line Items]
Property plant and equipment gross	4,910	4,731
Leasehold improvements [Member]
Property, Plant and Equipment [Line Items]
Property plant and equipment gross	907	907
Electronic equipment [Member]
Property, Plant and Equipment [Line Items]
Property plant and equipment gross	$ 3,251	$ 2,374

LEASES (Narrative) (Details)

LEASES (Narrative) (Details) - USD ($) $ in Thousands	Dec. 31, 2021	Dec. 31, 2020
Lease arrangements remaining term	8 years
Operating lease right-of-use	$ 16,457	$ 18,802
Israeli [Member]
Operating lease right-of-use	$ 14,400

LEASES (Schedule of Components

LEASES (Schedule of Components of Lease Expense) (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Lessee Disclosure [Abstract]
Operating lease expense	$ 3,869	$ 3,791	$ 3,110
Short-term lease expense	269	545	786
Total lease expense	$ 4,138	$ 4,336	$ 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, 2021	Dec. 31, 2020	Dec. 31, 2019
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$ 4,356	$ 4,169	$ 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, 2021	Dec. 31, 2020	Dec. 31, 2019
Lessee Disclosure [Abstract]
Weighted-average remaining lease term (in years)	6 years 8 months 12 days	7 years 7 months 6 days	8 years 4 months 24 days
Weighted-average discount rate	7.70%	7.60%	7.50%

LEASES (Schedule of Maturities

LEASES (Schedule of Maturities of Operating Lease Liabilities) (Details) $ in Thousands	Dec. 31, 2021USD ($)
Operating leases
2022	$ 4,514
2023	4,251
2024	3,953
2025	3,431
2026	3,431
Thereafter	7,148
Total undiscounted lease payments	26,728
Less: Imputed interest	(5,454)
Total lease liabilities	$ 21,274

DEFERRED REVENUES AND DEFERRE_3

DEFERRED REVENUES AND DEFERRED COSTS (Narrative) (Details) $ in Thousands	Dec. 31, 2021USD ($)
Revenue Recognition and Deferred Revenue [Abstract]
Remaining performance obligations	$ 78,045
Remaining performance obligations next twelve months	$ 42,890
Revenue remaining performance obligation percentage	55.00%

DEFERRED REVENUES AND DEFERRE_4

DEFERRED REVENUES AND DEFERRED COSTS (Schedule of Deferred Revenues) (Details) - USD ($) $ in Thousands	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Deferred revenues:
Deferred product revenues	$ 1,799	$ 1,515
Deferred maintenance and professional services revenues	71,427	59,176
Total deferred revenues before adjustment for amounts offset from contract assets	73,226	60,691	$ 57,595
Less - amounts offset from contract assets	(26,100)	(22,936)
Deferred revenues	$ 47,126	$ 37,755

DEFERRED REVENUES AND DEFERRE_5

DEFERRED REVENUES AND DEFERRED COSTS (Schedule of Changes in Deferred Revenues) (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020
Changes in deferred revenues:
Balance at beginning of year	$ 60,691	$ 57,595
Deferred revenue relating to new sales	54,427	44,105
Revenue recognized during the year	(41,892)	(41,009)
Balance at end of year	$ 73,226	$ 60,691

DEFERRED REVENUES AND DEFERRE_6

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, 2021	Dec. 31, 2020
Revenue Recognition and Deferred Revenue [Abstract]
Balance at beginning of year	$ 6,627	$ 5,962
Additional costs deferred	5,176	3,398
Amortization of deferred costs	(2,832)	(2,733)
Balance at end of year	$ 8,971	$ 6,627

HEDGING ACTIVITIES (Narrative)

HEDGING ACTIVITIES (Narrative) (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Losses on derivatives			$ 366
Gain on derivatives	$ 80	$ 86
Forward and Zero Cost Collar Contracts [Member] | Not Designated as Hedging Instrument [Member]
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Notional amount	$ 26,900	$ 17,600

HEDGING ACTIVITIES (Schedule of

HEDGING ACTIVITIES (Schedule of Derivative Instruments) (Details) - USD ($) $ in Thousands	Dec. 31, 2021	Dec. 31, 2020
Derivative Instruments and Hedging Activities Disclosure [Abstract]
Notional Amount - Assets derivatives - Foreign currency exchange contracts	$ 16,332	$ 8,796
Notional Amount - Liability derivatives - Foreign currency exchange contracts	10,579	8,796
Fair Value - Assets derivatives - Foreign currency exchange contracts	322	295
Fair Value - Liability derivatives - Foreign currency exchange contracts	$ 37	$ 8

SHAREHOLDERS' EQUITY (Details)

SHAREHOLDERS' EQUITY (Details) $ in Thousands	Mar. 01, 2022shares	Apr. 30, 2019shares	Dec. 31, 2021USD ($)shares	Dec. 31, 2020USD ($)	Jan. 03, 2022shares	Dec. 31, 2021₪ / shares	Dec. 31, 2020₪ / shares	Dec. 31, 2019shares
Class of Stock [Line Items]
Warrant to purchase purchase ordinary shares								26,667
Ordinary shares, par value | ₪ / shares						₪ 0.015	₪ 0.015
Granted			2,008,531
Number of unvested options			1,249,470
Unrecognized compensation cost | $			$ 2,500
Weighted-average period			8 months 12 days
Intrinsic value of options exercised | $			$ 14,222	$ 7,705
RSU's [Member]
Class of Stock [Line Items]
Granted	1,719,300
Unrecognized compensation cost | $			$ 15,100
Weighted-average period			1 year 1 month 6 days
2019 Stock Option Plan [Member]
Class of Stock [Line Items]
Ordinary shares, par value | ₪ / shares						₪ 0.015
2019 Stock Option Plan [Member] | Options restricted shares and other sharebased awards member [Member]
Class of Stock [Line Items]
Vesting period			4 years
Stock option granted			813,515
2019 Stock Option Plan [Member] | Options restricted shares and other sharebased awards member [Member] | Minimum [Member]
Class of Stock [Line Items]
Shares available for future issuance			1,038,499
2019 Stock Option Plan [Member] | Options restricted shares and other sharebased awards member [Member] | Maximum [Member]
Class of Stock [Line Items]
Shares available for future issuance					1,892,556
IPO [Member]
Class of Stock [Line Items]
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
Warrant to purchase purchase ordinary shares		26,667
Exercised of issuance ordinary shares		18,472

SHAREHOLDERS' EQUITY (Schedule

SHAREHOLDERS' EQUITY (Schedule of Stock Option Activity) (Details) - USD ($) $ / shares in Units, $ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020
Numbers of Options
Balance as of January 1, 2021	6,930,143	7,507,811
Balance as of December 31, 2021	4,716,941	6,930,143
Stock Options [Member]
Numbers of Options
Balance as of January 1, 2021	6,930,143
Exercised	(1,370,119)
Forfeited	(843,083)
Balance as of December 31, 2021	4,716,941	6,930,143
Exercisable as of December 31, 2021	3,467,471
Weighted average exercise price
Balance as of January 1, 2020	$ 8.51
Exercised	1.67
Forfeited	12.82
Balance as of December 31, 2021	9.73	$ 8.51
Exercisable as of December 31, 2021	$ 7.75
Balance as of December 31, 2021	$ 20,462
Exercisable as of December 31, 2021	$ 19,378

SHAREHOLDERS' EQUITY (Schedul_2

SHAREHOLDERS' EQUITY (Schedule of Outstanding and Exercisable Options Granted) (Details)	12 Months Ended
	Dec. 31, 2021$ / sharesshares
Options outstanding	4,716,941
Weighted average remaining contractual term	8 years
Options exercisable	3,467,471
Weighted average remaining contractual term	8 years 2 months 12 days
$ 0.004 - $ 1.76 [Member]
Exercise price, minimum | $ / shares	$ 0.004
Exercise price, maximum | $ / shares	$ 1.76
Options outstanding	2,069,939
Weighted average remaining contractual term	8 years 8 months 12 days
Options exercisable	2,013,187
Weighted average remaining contractual term	8 years 9 months 18 days
$ 7.55 - $ 11.70 [Member]
Exercise price, minimum | $ / shares	$ 7.55
Exercise price, maximum | $ / shares	$ 11.70
Options outstanding	970,794
Weighted average remaining contractual term	7 years 6 months
Options exercisable	504,671
Weighted average remaining contractual term	7 years 3 months 18 days
$ 16.68 - $ 19.21 [Member]
Exercise price, minimum | $ / shares	$ 16.68
Exercise price, maximum | $ / shares	$ 19.21
Options outstanding	931,627
Weighted average remaining contractual term	7 years 7 months 6 days
Options exercisable	497,811
Weighted average remaining contractual term	7 years 7 months 6 days
$ 22.70 - $ 29.74 [Member]
Exercise price, minimum | $ / shares	$ 22.70
Exercise price, maximum | $ / shares	$ 29.74
Options outstanding	744,581
Weighted average remaining contractual term	7 years 3 months 18 days
Options exercisable	451,802
Weighted average remaining contractual term	7 years 3 months 18 days

SHAREHOLDERS' EQUITY (Schedul_3

SHAREHOLDERS' EQUITY (Schedule of Assumptions of Fair Value of Stock Options Granted) (Details) - Stock Options [Member] - $ / shares	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Expected dividends yields	0.00%	0.00%
Weighted average grant date fair value	$ 9.63	$ 5.36
Minimum [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Expected volatility	50.40%	51.70%
Expected term (in years)	5 years 6 months	5 years 6 months
Risk free rate	1.53%	0.31%
Maximum [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Expected volatility	65.90%	56.20%
Expected term (in years)	7 years	7 years
Risk free rate	2.63%	1.03%

SHAREHOLDERS' EQUITY (Schedul_4

SHAREHOLDERS' EQUITY (Schedule of RSUs Activity) (Details)	12 Months Ended
	Dec. 31, 2021$ / sharesshares
Amount of RSUs
Balance as of January 1, 2021 | shares	1,311,702
Granted | shares	2,008,531
Vested | shares	(508,531)
Forfeited | shares	(353,448)
Unvested RSUs as of December 31, 2021 | shares	2,458,254
Weighted average grant date fair value
Balance as of January 1, 2021 | $ / shares	$ 9.21
Granted | $ / shares	11.31
Vested | $ / shares	9.46
Forfeited | $ / shares	10.77
Unvested RSUs as of December 31, 2021 | $ / shares	$ 10.65

SHAREHOLDERS' EQUITY (Schedul_5

SHAREHOLDERS' EQUITY (Schedule of Share Based Compensation Expense) (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total share-based compensation expense	$ 13,896	$ 15,025	$ 10,927
Cost of revenues [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total share-based compensation expense	1,812	2,024	1,514
Research and Development [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total share-based compensation expense	3,867	4,437	2,370
Sales and Marketing [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total share-based compensation expense	3,772	4,635	4,849
General and Administrative [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total share-based compensation expense	$ 4,445	$ 3,929	$ 2,194

INCOME TAXES (Narrative) (Detai

INCOME TAXES (Narrative) (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Valuation allowance for deferred tax assets	$ 34,709	$ 26,421	$ 15,390	$ 8,762
Corporate income tax rate	23.00%
Tax rate effect on dividend distribution	25.00%
Loss carryforwards	$ 110,000
US
Corporate income tax rate	21.00%
Germany
Corporate income tax rate	33.00%
UK
Corporate income tax rate	19.00%
France
Corporate income tax rate	33.00%

INCOME TAXES (Schedule of Defer

INCOME TAXES (Schedule of Deferred Tax Assets and Liabilities) (Details) - USD ($) $ in Thousands	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Deferred tax assets:
Tax loss carryforwards	$ 26,588	$ 17,543
Research and development	7,796	7,132
Deferred revenue	1,562	1,480
Employee and payroll accrued expenses	1,485	1,335
Share-based compensation	1,174	389
Operating lease liability	4,446	4,947
Issuance expense		982
Other	104	89
Total deferred tax assets	43,155	33,897
Deferred tax liabilities:
Property and equipment, net	(292)	(289)
Deferred costs	(2,231)	(1,629)
Operating lease right-of-use asset	(3,390)	(4,212)
Total deferred tax liabilities	(5,913)	(6,130)
Total deferred tax assets, net	37,242	27,767
Less valuation allowance for deferred tax assets	(34,709)	(26,421)	$ (15,390)	$ (8,762)
Net deferred tax assets	$ 2,533	$ 1,346

INCOME TAXES (Schedule of Valua

INCOME TAXES (Schedule of Valuation Allowance Activity on Deferred Tax Assets) (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Income Tax Disclosure [Abstract]
Beginning balance	$ 26,421	$ 15,390	$ 8,762
Additions charged to income tax expense	8,288	11,031	6,628
Ending balance	$ 34,709	$ 26,421	$ 15,390

INCOME TAXES (Schedule of Loss

INCOME TAXES (Schedule of Loss (Income) Before Taxes on Income) (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Loss before taxes on income	$ 37,433	$ 33,811	$ 27,108
Israeli [Member]
Loss before taxes on income	39,904	36,347	29,560
Non-Israeli [Member]
Loss before taxes on income	$ (2,471)	$ (2,536)	$ (2,452)

INCOME TAXES (Schedule of Taxes

INCOME TAXES (Schedule of Taxes on Income) (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Current	$ 680	$ 1,282	$ 1,981
Deferred	(1,187)	313	(970)
Total taxes on income	(507)	1,595	1,011
Israeli [Member]
Current	385	336	164
Deferred
Non-Israeli [Member]
Current	295	946	1,817
Deferred	$ (1,187)	$ 313	$ (970)

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, 2021	Dec. 31, 2020	Dec. 31, 2019
Income Tax Disclosure [Abstract]
Loss before taxes on income	$ 37,433	$ 33,811	$ 27,108
Statutory tax rate in Israel	23.00%	23.00%	23.00%
Theoretical tax benefit	$ 8,610	$ 7,777	$ 6,235
Increase in income tax expense resulting from:
Effect of different tax rates applicable in foreign jurisdictions	(58)	(128)	(157)
Operating losses and other temporary differences for which valuation allowance was provided	(6,838)	(5,784)	(4,972)
Permanent differences	(1,132)	(3,017)	(2,162)
Uncertain tax position	(385)	(336)	(158)
Other	310	(107)	203
Total taxes on income	$ 507	$ (1,595)	$ (1,011)

INCOME TAXES (Schedule of Reser

INCOME TAXES (Schedule of Reserve Provisions and Changes) (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Income Tax Disclosure [Abstract]
Balance at beginning of year	$ 1,006	$ 670	$ 512
Additions for tax positions related to the current year	385	336	158
Balance at end of year	$ 1,391	$ 1,006	$ 670

FINANCIAL INCOME (EXPENSES), _3

FINANCIAL INCOME (EXPENSES), NET (Schedule of Financial Income (Expenses), Net) (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Financial Income (expenses), Net [abstract]
Hedging instrument gain (loss), net	$ (80)	$ 86	$ 366
Bank charges	(261)	(175)	(153)
Exchange rate loss, net	(853)	(49)	(1,175)
Interest income (expense), net	401	347	878
Amortization of premium on marketable securities	(308)	(95)
Other, net	(3)		(1)
Total financial income (expenses), net	$ (1,104)	$ 114	$ (85)

ENTITY WIDE DISCLOSURES (Schedu

ENTITY WIDE DISCLOSURES (Schedule of Summary of Revenues within Geographic Areas) (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Geography:
Total	$ 110,949	$ 100,834	$ 103,270
US
Geography:
Total	55,936	53,334	55,991
Americas Other [Member]
Geography:
Total	972	1,311	857
Americas (primarily the United States) [Member]
Geography:
Total	56,908	54,645	56,848
Israeli [Member]
Geography:
Total	1,681	1,493	1,654
EMEA (excluding Germany and Israel) [Member]
Geography:
Total	30,997	27,073	27,102
Germany
Geography:
Total	14,302	11,548	12,147
APAC [Member]
Geography:
Total	$ 7,061	$ 6,075	$ 5,519

ENTITY WIDE DISCLOSURES (Sche_2

ENTITY WIDE DISCLOSURES (Schedule of Distributors Comprised more than 10% of Company's Revenue) (Details) - Sales Revenue, Net [Member] - Customer Concentration Risk [Member]	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Customer A [Member]
Revenue, Major Customer [Line Items]
Revenue percentage by distributors	15.00%	15.00%	15.00%
Customer B [Member]
Revenue, Major Customer [Line Items]
Revenue percentage by distributors	12.00%	10.00%	9.00%

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, 2021	Dec. 31, 2020	Dec. 31, 2019
Revenues:
Total revenues	$ 110,949	$ 100,834	$ 103,270
Software products [Member]
Revenues:
Total revenues	42,936	35,898	44,618
Hardware products [Member]
Revenues:
Total revenues	3,657	2,792	2,747
Support and maintenance [Member]
Revenues:
Total revenues	53,975	50,794	46,019
Professional services [Member]
Revenues:
Total revenues	$ 10,381	$ 11,350	$ 9,886

ENTITY WIDE DISCLOSURES (Sche_4

ENTITY WIDE DISCLOSURES (Schedule of Property, Plant and Equipment, Net by Geographical Area) (Details) - USD ($) $ in Thousands	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Revenues from External Customers and Long-Lived Assets [Line Items]
Property and equipment, net	$ 5,007	$ 4,502	$ 4,177
Americas (primarily the United States) [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Property and equipment, net	1,093	1,125	959
EMEA [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Property and equipment, net	158	108	123
Israeli [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Property and equipment, net	$ 3,756	$ 3,269	$ 3,095