Core Viewpoint - Varonis Systems (VRNS) reported quarterly earnings of $0.08 per share, exceeding the Zacks Consensus Estimate of $0.03 per share, but down from $0.18 per share a year ago, indicating a significant earnings surprise of +155.59% [1] Financial Performance - The company achieved revenues of $173.37 million for the quarter ended December 2025, surpassing the Zacks Consensus Estimate by 2.87% and showing an increase from $158.51 million year-over-year [2] - Over the last four quarters, Varonis has exceeded consensus EPS estimates three times and has also topped consensus revenue estimates three times [2] Stock Performance and Outlook - Varonis shares have declined approximately 10.8% since the beginning of the year, contrasting with the S&P 500's gain of 1.9% [3] - The future performance of Varonis stock will largely depend on management's commentary during the earnings call and the revisions of earnings estimates [3][4] Earnings Estimates - The current consensus EPS estimate for the upcoming quarter is $0.04 on revenues of $163.79 million, and for the current fiscal year, it is $0.38 on revenues of $717.32 million [7] - The estimate revisions trend for Varonis was mixed prior to the earnings release, resulting in a Zacks Rank 3 (Hold), indicating expected performance in line with the market [6] Industry Context - The security industry, to which Varonis belongs, is currently ranked in the bottom 16% of over 250 Zacks industries, suggesting potential challenges ahead [8] - Another company in the same industry, Palo Alto Networks (PANW), is expected to report quarterly earnings of $0.93 per share, reflecting a year-over-year increase of +14.8% [9]

Financial Data and Key Metrics Changes - In Q4 2025, total ARR increased 16% year-over-year to $745.4 million, with SaaS ARR at $638.5 million, representing 86% of total ARR and a 32% year-over-year increase excluding conversions [6][21] - Free cash flow for 2025 was $131.9 million, up from $108.5 million in the previous year [22] - Q4 total revenues were $173.4 million, a 9% increase year-over-year, with SaaS revenues at $142.3 million [22] Business Line Data and Key Metrics Changes - The SaaS business is highlighted as the future of the company, with a record number of conversions from the self-hosted platform contributing approximately $65 million in Q4 [5][20] - The decision to end-of-life the self-hosted platform has led to increased conversions and a focus on maximizing customer retention [8][9] Market Data and Key Metrics Changes - The company is experiencing strong demand from both new and existing customers, particularly in cloud environments, driven by automation and the need for comprehensive data security solutions [10][15] - The SaaS dollar-based net retention rate was 110% at the end of 2025, indicating strong organic growth within the existing customer base [21] Company Strategy and Development Direction - The company aims to transition to a 100% SaaS model by the end of 2026, which is expected to unlock further growth opportunities and improve financial health [6][17] - The acquisition of Altru is intended to enhance the company's ability to secure AI systems and data, reinforcing its data-first strategy [13] Management's Comments on Operating Environment and Future Outlook - Management acknowledges the challenges posed by AI-driven cyber threats and emphasizes the importance of data security in the context of AI adoption [12][72] - The company is optimistic about achieving its 2027 financial targets, despite anticipated headwinds in 2026 due to the end-of-life announcement for the self-hosted platform [24][67] Other Important Information - The company plans to provide more detailed disclosures regarding SaaS ARR growth excluding conversions to help investors understand business drivers [19][28] - The gross margin for Q4 was 80%, down from 84.4% in the previous year, reflecting the impact of the transition strategy [22][23] Q&A Session Summary Question: Clarification on SaaS ARR growth guidance - Analysts expressed confusion regarding the growth rate assumptions, particularly the 18%-20% SaaS ARR growth guidance excluding conversions compared to the exit rate for 2026 [32] - Management emphasized that the focus should be on SaaS ARR growth excluding conversions as the primary growth driver [34] Question: Contribution from new versus existing customers - Analysts inquired about the expected contribution to growth from new customers versus existing ones, and management confirmed a focus on increasing sales to both segments [40][41] Question: Net dollar retention comparison - Questions were raised about the 110% net dollar retention rate and its comparison to prior periods, with management indicating that it reflects strong growth potential within the SaaS customer base [43][44] Question: Headwinds to contribution margin and free cash flow - Analysts sought clarification on the anticipated $30 million-$50 million headwind to contribution margin and free cash flow in 2026, with management explaining it relates to lower expected renewal rates from the non-SaaS business [64][66] Question: AI's impact on security - Analysts asked about the implications of AI on security, with management asserting that AI presents both opportunities and risks, emphasizing the need for robust data security measures [69][72]

Financial Data and Key Metrics Changes - In Q4 2025, total ARR was $745.4 million, reflecting a 16% year-over-year increase [21] - SaaS ARR reached $638.5 million, accounting for 86% of total ARR, with a 32% year-over-year increase when excluding conversions [5][19] - Free cash flow for 2025 was $131.9 million, up from $108.5 million in the previous year [22] - Q4 total revenues were $173.4 million, a 9% increase year-over-year, with SaaS revenues at $142.3 million [22] - Net income for Q4 2025 was $11.1 million, or $0.08 per diluted share, down from $23.9 million, or $0.18 per diluted share in Q4 2024 [24] Business Line Data and Key Metrics Changes - The SaaS business is highlighted as the future of the company, with a record number of conversions from the self-hosted platform [4][5] - Approximately $65 million of non-SaaS ARR was converted in Q4, with expectations of an additional $50 million to $75 million converting by the end of 2026 [8][19] - The company is focusing on upselling existing SaaS customers and acquiring new customers, with a dollar-based net retention rate of 110% for SaaS customers [20][41] Market Data and Key Metrics Changes - The company is experiencing strong demand from both new and existing customers, particularly in cloud environments [9][15] - The acquisition of Altru is expected to enhance the company's ability to secure AI systems and data, addressing emerging risks in the market [12][74] Company Strategy and Development Direction - The company is transitioning to a 100% SaaS model by the end of 2026, which is expected to unlock further growth opportunities [5][17] - The focus is on automation and providing higher customer satisfaction through the SaaS platform, which is seen as a significant competitive advantage [6][10] - The company aims to leverage AI to enhance data security and compliance, positioning itself as a leader in the evolving cybersecurity landscape [10][72] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving 2027 financial targets despite anticipated headwinds in 2026 due to the end-of-life announcement for the self-hosted platform [24][66] - The company believes that the transition to SaaS will lead to a healthier financial profile starting in 2027 [24][66] - Management highlighted the importance of understanding AI's impact on data security and the need for robust guardrails around AI tools [11][72] Other Important Information - The company plans to provide more detailed disclosures regarding SaaS ARR growth excluding conversions on a quarterly basis in 2026 [18][27] - The company expects a lower ARR contribution margin and free cash flow in 2026 due to the end-of-life announcement, estimating a $30 million to $50 million headwind [24][66] Q&A Session Summary Question: Clarification on SaaS growth rate assumptions - Management emphasized that the SaaS ARR growth excluding conversions is the key metric to focus on, guiding for 18%-20% growth in 2026 [33][34] Question: Contribution from new versus existing customers - Management indicated that the focus will shift back to acquiring new customers and upselling existing ones, with expectations for improved net retention rates [40][41] Question: Impact of AI on demand - Management noted that AI is a significant driver of demand, with products like Varonis Copilot contributing to growth [46][47] Question: Changes in sales capacity and strategy - Management confirmed ongoing efforts to enhance sales capacity and productivity, particularly in the federal sector [50][53] Question: Understanding the $30 million-$50 million headwind - Management explained that the headwind is due to lower expected renewal rates from the non-SaaS business, but they remain confident in achieving better margins and cash flow in the future [64][66]

Varonis Overview Q4 2025 Safe Harbor Statement This presentation has been prepared by Varonis Systems, Inc. (the "Company") solely for informational purposes. It is not, and should not be assumed to be, complete. This presentation is not an offer to sell securities, nor is it a solicitation of an offer to buy securities. This presentation is not directed at, or intended for distribution to or use by, any person or entity that is a citizen or resident or located in any locality, state, country or other juris ...

Bragar Eagel & Squire, P.C. Litigation Partner Brandon Walker Encourages Investors Who Suffered Losses In Varonis (VRNS) To Contact Him Directly To Discuss Their Options If you purchased or acquired Varonis’ common stock between February 4, 2025, and October 28, 2025 and would like to discuss your legal rights, call Bragar Eagel & Squire partner Brandon Walker or Melissa Fortunato directly at (212) 355-4648. Click here to participate in the action. NEW YORK, Feb. 03, 2026 (GLOBE NEWSWIRE) -- What’s Happeni ...

Annual recurring revenues increased 16% year-over-year SaaS ARR, excluding conversions increased 32% year-over-year SaaS ARR as a percentage of total ARR was approximately 86% Year-to-date cash from operations generated $147.4 million vs. $115.2 million last year Year-to-date free cash flow generated $131.9 million vs. $108.5 million last year EXHIBIT 99.1 Varonis Announces Fourth Quarter 2025 and Full-Year 2025 Financial Results Total revenues were $173.4 million, compared with $158.5 million in the fourth ...

Core Insights - Varonis Systems, Inc. is acquiring AllTrue.ai to enhance its capabilities in AI Trust, Risk, and Security Management, enabling organizations to adopt AI safely and compliantly at scale [1][4]. Group 1: Acquisition Details - The acquisition of AllTrue.ai will provide Varonis with real-time visibility and security for AI systems, complementing its existing expertise in enterprise data, identities, and access [2][4]. - The combined platform aims to help organizations protect their AI systems and the data they utilize, addressing the new risks associated with AI's autonomous decision-making capabilities [3][5]. Group 2: AI Security Challenges - As AI systems become integral to business processes, the focus of security shifts from merely preventing breaches to ensuring that these autonomous systems act safely and in compliance with policies [5]. - The unpredictability of AI behavior necessitates a comprehensive understanding of the AI systems in use, their actions, and the data they can access [4][5]. Group 3: Benefits of the Combined Platform - The integration of AllTrue.ai's capabilities will allow organizations to gain visibility into all AI systems, including shadow AI, and enforce real-time guardrails to prevent unsafe actions [4][8]. - Organizations will be able to control AI behavior, reduce risks by understanding data access, and provide accountability for governance and compliance [8].

Annual recurring revenues increased 16% year-over-yearSaaS ARR, excluding conversions increased 32% year-over-yearSaaS ARR as a percentage of total ARR was approximately 86%Year-to-date cash from operations generated $147.4 million vs. $115.2 million last yearYear-to-date free cash flow generated $131.9 million vs. $108.5 million last year MIAMI, Feb. 03, 2026 (GLOBE NEWSWIRE) -- Varonis Systems, Inc. (Nasdaq: VRNS), the leader in data security, today announced financial results for the fourth quarter and f ...

NEW YORK, Feb. 03, 2026 (GLOBE NEWSWIRE) -- WHY: Rosen Law Firm, a global investor rights law firm, reminds purchasers of securities of Varonis Systems, Inc. (NASDAQ: VRNS) common stock between February 4, 2025 and October 28, 2025, both dates inclusive (the “Class Period”), of the important March 9, 2026 lead plaintiff deadline. SO WHAT: If you purchased Varonis common stock during the Class Period you may be entitled to compensation without payment of any out of pocket fees or costs through a contingency ...

Core Viewpoint - A class action lawsuit has been filed against Varonis Systems, Inc. on behalf of investors who acquired its securities during the specified class period, highlighting concerns over the company's financial disclosures and performance [1][3]. Company Overview - Varonis Systems, Inc. is a global security company based in Miami, Florida, specializing in software products that utilize AI technologies to detect advanced security threats [2]. Financial Performance - On October 28, 2025, Varonis disclosed a significant miss in annual recurring revenue (ARR) and reduced its guidance for the full fiscal year 2025, attributing this to weaker-than-expected customer renewals and conversions in its subscription business [3]. - The company also announced the end-of-life for its self-hosted solution and a 5% reduction in headcount during the same announcement [3]. Stock Market Reaction - Following the financial disclosure on October 28, 2025, Varonis' stock price plummeted from $63.00 to $32.34 per share, marking a decline of $30.66 per share, or over 48%, in just one day [4].