Financial Data and Key Metrics Changes - In Q1, Annual Recurring Revenue (ARR) grew 19% year-over-year to $664.3 million, with free cash flow increasing to $65.3 million from $56.4 million in the same period last year [9][22][24] - Total revenues for Q1 were $136.4 million, reflecting a 20% year-over-year increase, despite a 1% headwind due to the increased SaaS sales mix [23][24] - Gross profit was $109.4 million, resulting in a gross margin of 80.2%, down from 83.3% in Q1 2024 [24][25] - The company reported a net income of $700,000, compared to a net loss of $3.7 million in Q1 2024 [25] Business Line Data and Key Metrics Changes - SaaS revenues reached $88.6 million, while term license subscription revenues were $31.5 million, and maintenance and services revenues were $16.4 million, with renewal rates exceeding 90% [23][24] - Maintenance and services revenues declined by 32% year-over-year, primarily due to perpetual maintenance customers converting to the SaaS platform [24] Market Data and Key Metrics Changes - SaaS ARR now represents approximately 61% of total ARR, an increase from 53% in Q4 [21][22] - The company is experiencing strong demand for its SaaS solutions, particularly in securing data across cloud platforms [12][13] Company Strategy and Development Direction - The company is accelerating its SaaS transition, aiming to complete it by the end of the year, driven by strong demand for its SaaS solutions [9][10] - The acquisition of Firal enhances the company's data security platform, allowing for next-generation database activity monitoring and expanding its total addressable market [16][17] - The company is focusing on automating data security and integrating AI tools to enhance customer protection and satisfaction [10][12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving over 20% ARR growth, citing strong customer demand and healthy new customer momentum [21][32] - The macroeconomic environment remains uncertain, but the company is focused on factors within its control and is optimistic about long-term opportunities [50][51] Other Important Information - The company repurchased 1,476,456 shares at an average price of $41.49, totaling $61.3 million [26] - The acquisition of Cyril is expected to add approximately $4 million in operating expenses in 2025, with no immediate impact on ARR or revenue [27][81] Q&A Session Summary Question: Confidence in ARR growth exceeding 20% - Management highlighted strong SaaS NRR trends and customer demand as key factors supporting confidence in achieving over 20% ARR growth [31][32] Question: MDDR adoption and competitive environment - Management noted that MDDR has been the fastest adopted platform, with strong customer interest in data-centric security solutions [36][40] Question: Operating margins and transition dynamics - Management indicated that the trough in operating margins is expected this year, with improvements anticipated as the transition progresses [43][44] Question: Macro impacts on performance - Despite macro uncertainty, management reported strong demand from both new and existing customers, contributing to ARR acceleration [48][51] Question: New logo momentum and customer adoption - Management observed that the MDDR offering and AI tools have simplified the value proposition for new customers, leading to increased adoption [84][85] Question: Gross margin outlook and operating income range - Management explained that gross margin volatility is expected during the transition, with a long-term target of around 80% by 2027 [90][91]

Financial Data and Key Metrics Changes - In Q1 2025, Annual Recurring Revenue (ARR) grew 19% year-over-year to $664.3 million, with SaaS ARR now representing approximately 61% of total ARR, an increase from 53% in Q4 2024 [7][19][20] - Free cash flow for the quarter was $65.3 million, up from $56.4 million in the same period last year [7][20] - Total revenues for Q1 were $136.4 million, reflecting a 20% year-over-year increase [20] - Gross profit was $109.4 million, resulting in a gross margin of 80.2%, down from 83.3% in Q1 2024 [21] - The company reported a net income of $700,000, compared to a net loss of $3.7 million in Q1 2024 [22] Business Line Data and Key Metrics Changes - SaaS revenues reached $88.6 million, while term license subscription revenues were $31.5 million, and maintenance and services revenues were $16.4 million, with renewal rates exceeding 90% [20] - Maintenance and services revenues declined by 32% year-over-year, primarily due to perpetual maintenance customers converting to the SaaS platform [21] Market Data and Key Metrics Changes - The company noted strong customer interest in deploying generative AI tools, which has driven new customer engagement and existing customer conversions to the SaaS platform [8][10] - The acquisition of Firal is expected to enhance the company's data security platform and expand its total addressable market [13][14] Company Strategy and Development Direction - The company is accelerating its SaaS transition, aiming to complete it by the end of 2025, driven by strong demand for its SaaS solutions [6][7] - Varonis is focusing on providing automated data security across various platforms, including cloud data stores, which is seen as a competitive advantage [10][11] - The acquisition of Firal is part of a strategy to unify structured and unstructured data security monitoring, addressing more auditing and compliance use cases [13][14] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to achieve over 20% ARR growth, citing strong SaaS net revenue retention and new customer momentum [19][29] - The management acknowledged macroeconomic uncertainties but emphasized strong demand from both new and existing customers, which contributed to ARR acceleration [48] Other Important Information - The company repurchased 1,476,456 shares at an average price of $41.49, totaling $61.3 million [23] - The updated guidance for 2025 includes an ARR expectation of $742 million to $750 million, representing growth of 16% to 17% [24] Q&A Session Summary Question: What gives confidence that ARR can grow north of 20%? - Management highlighted strong SaaS net revenue retention and customer demand as key factors supporting this confidence [28][29] Question: Can you provide more color around MDDR adoption and the competitive environment? - Management noted that MDDR has been the fastest adopted platform and emphasized the need for a data-centric approach to prevent data breaches [34][37] Question: How far are we from the trough in operating margins? - Management indicated that the trough is expected to occur this year, with improvements anticipated as the transition progresses [41][42] Question: What impacts did the macro environment have in the quarter? - Despite macro uncertainties, management reported strong demand and confidence in the long-term opportunity, leading to raised ARR guidance [48] Question: Can you discuss the recent acquisition in the database activity monitoring space? - Management described the acquisition as a natural extension of their offerings, addressing customer dissatisfaction with incumbents and enhancing their data security capabilities [56][58] Question: How is the company addressing new customer adoption behavior? - Management noted that the simplicity and automation of their offerings have improved their ability to attract new customers [81]

Varonis First Quarter 2025 Financial Results [Financial and Business Highlights](index=1&type=section&id=Financial%20and%20Business%20Highlights) Varonis reported strong Q1 2025 results, driven by SaaS platform transition, with ARR growing 19% to $664.3 million and SaaS ARR reaching 61% of total - The company's Q1 results reflect the momentum of its SaaS platform, with SaaS ARR reaching **61% of total company ARR**. Management attributes growth to tailwinds including MDDR and Generative AI[2](index=2&type=chunk) Q1 2025 Financial Performance vs. Q1 2024 | Metric | Q1 2025 ($) | Q1 2024 ($) | | :--- | :--- | :--- | | Total Revenues | $136.4 million | $114.0 million | | SaaS Revenues | $88.6 million | $34.0 million | | GAAP Operating Loss | ($43.8) million | ($47.6) million | | Non-GAAP Operating Loss | ($6.5) million | ($10.6) million | Q1 2025 Key Performance Indicators | Metric | Value ($) | Change (YoY) | | :--- | :--- | :--- | | Annual Recurring Revenues (ARR) | $664.3 million | +19% | | Cash from Operations (YTD) | $68.0 million | vs. $56.7 million | | Free Cash Flow (YTD) | $65.3 million | vs. $56.4 million | - Key business developments in the quarter include: Acquired Cyral to expand the Varonis Data Security Platform with next-gen Database Activity Monitoring; Launched Varonis for Agentforce to secure the AI layer of the Salesforce platform; Repurchased **1.5 million shares** for a total of **$61.3 million**; Opened new data centers in India to support customer expansion[6](index=6&type=chunk)[7](index=7&type=chunk) [Financial Outlook](index=2&type=section&id=Financial%20Outlook) Varonis provided Q2 and raised full-year 2025 guidance, projecting Q2 revenues of $145.0-$150.0 million and full-year ARR of $742.0-$750.0 million - Despite an uncertain macro environment, the company raised its full-year ARR guidance based on strong Q1 performance and business drivers[2](index=2&type=chunk) Q2 2025 Financial Outlook | Metric | Expected Range ($) | | :--- | :--- | | Revenues | $145.0M - $150.0M (11%-15% YoY Growth) | | Non-GAAP Operating Loss | ($5.0)M - ($2.0)M | | Non-GAAP Net Income per Diluted Share | $0.00 - $0.01 | Full Year 2025 Financial Outlook (Updated) | Metric | Expected Range ($) | | :--- | :--- | | Revenues | $610.0M - $625.0M (11%-13% YoY Growth) | | ARR | $742.0M - $750.0M (16%-17% YoY Growth) | | Non-GAAP Operating Income | $0.5M - $10.5M | | Non-GAAP Net Income per Diluted Share | $0.14 - $0.17 | | Free Cash Flow | $120.0M - $125.0M | [Non-GAAP Financial Measures and Key Performance Indicators](index=2&type=section&id=Non-GAAP%20Financial%20Measures%20and%20Key%20Performance%20Indicators) This section details the company's non-GAAP financial measures and defines key performance indicators like ARR and Free Cash Flow for clearer operational insights - Non-GAAP operating income (loss) is calculated by excluding stock-based compensation expense, related payroll tax expense, and amortization of acquired intangible assets and acquisition-related expenses[11](index=11&type=chunk) - Non-GAAP net income (loss) excludes the same items as non-GAAP operating income, plus foreign exchange gains/losses, amortization of debt issuance costs, and acquisition-related taxes[12](index=12&type=chunk) - Annual Recurring Revenue (ARR) is a key performance indicator defined as the annualized value of active SaaS, term-based subscription license, and maintenance contracts at the end of a period. It is not a forecast of future revenues[19](index=19&type=chunk) - Free cash flow is defined as net cash from operating activities less purchases of property and equipment and capitalized internal-use software. It is considered a useful indicator of liquidity[15](index=15&type=chunk) [Consolidated Financial Statements](index=5&type=section&id=Consolidated%20Financial%20Statements) This section presents the unaudited Condensed Consolidated Statements of Operations, Balance Sheets, and Cash Flows for Q1 2025, offering a GAAP-based financial overview [Condensed Consolidated Statements of Operations](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Total revenues for Q1 2025 increased to **$136.4 million**, driven by SaaS revenue growth, while GAAP operating loss narrowed to **($43.8) million** Condensed Consolidated Statements of Operations (in thousands) | Line Item | Q1 2025 ($) | Q1 2024 ($) | | :--- | :--- | :--- | | **Total revenues** | **$136,423** | **$114,022** | | SaaS | $88,560 | $33,985 | | Term license subscriptions | $31,488 | $55,980 | | Maintenance and services | $16,375 | $24,057 | | Gross profit | $107,405 | $92,673 | | **Operating loss** | **($43,766)** | **($47,633)** | | **Net loss** | **($35,783)** | **($40,490)** | | Net loss per share, basic and diluted | ($0.32) | ($0.37) | - The decline in term license subscription and maintenance revenues was primarily driven by customers converting to the company's SaaS platform[5](index=5&type=chunk) [Condensed Consolidated Balance Sheets](index=7&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of March 31, 2025, total assets were **$1.58 billion** and total liabilities **$1.21 billion**, with **$1.2 billion** in cash and marketable securities Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | March 31, 2025 ($) | December 31, 2024 ($) | | :--- | :--- | :--- | | Cash and cash equivalents | $153,107 | $185,585 | | Total marketable securities | $1,006,226 | $1,002,279 | | **Total assets** | **$1,577,094** | **$1,664,275** | | Total current liabilities | $710,108 | $709,885 | | Total long-term liabilities | $499,243 | $498,734 | | **Total liabilities** | **$1,209,351** | **$1,208,619** | | **Total stockholders' equity** | **$367,743** | **$455,656** | - As of March 31, 2025, the company had **$1.2 billion** in cash and cash equivalents, short-term deposits, and marketable securities[6](index=6&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) For Q1 2025, cash from operations increased to **$68.0 million**, resulting in **$65.3 million** free cash flow, with **$75.5 million** used in financing activities Condensed Consolidated Statements of Cash Flows (in thousands) | Cash Flow Activity | Q1 2025 ($) | Q1 2024 ($) | | :--- | :--- | :--- | | Net cash provided by operating activities | $68,000 | $56,723 | | Net cash used in investing activities | ($25,017) | ($111,966) | | Net cash used in financing activities | ($75,461) | ($28,446) | | **Decrease in cash and cash equivalents** | **($32,478)** | **($83,689)** | - Cash used in financing activities included **$61.3 million** for the repurchase of common stock and **$21.4 million** for taxes paid related to net share settlement of equity awards[33](index=33&type=chunk) [Reconciliation of GAAP to Non-GAAP Measures](index=9&type=section&id=Reconciliation%20of%20GAAP%20to%20Non-GAAP%20Measures) This section provides detailed reconciliations of GAAP to non-GAAP financial measures for Q1 2025 and Q1 2024, including operating loss, net income, and free cash flow Reconciliation of GAAP to Non-GAAP Operating Loss (in thousands) | Line Item | Q1 2025 ($) | Q1 2024 ($) | | :--- | :--- | :--- | | **GAAP operating loss** | **($43,766)** | **($47,633)** | | Stock-based compensation | $32,255 | $32,093 | | Payroll tax related to stock comp. | $3,067 | $4,587 | | Amortization & acquisition expenses | $1,986 | $381 | | **Non-GAAP operating loss** | **($6,458)** | **($10,572)** | Reconciliation of GAAP Net Loss to Non-GAAP Net Income (Loss) (in thousands) | Line Item | Q1 2025 ($) | Q1 2024 ($) | | :--- | :--- | :--- | | **GAAP net loss** | **($35,783)** | **($40,490)** | | Total add-backs | $36,451 | $36,763 | | **Non-GAAP net income (loss)** | **$668** | **($3,727)** | Reconciliation to Free Cash Flow (in thousands) | Line Item | Q1 2025 ($) | Q1 2024 ($) | | :--- | :--- | :--- | | Net cash provided by operating activities | $68,000 | $56,723 | | Purchases of property and equipment | ($2,339) | ($297) | | Capitalized internal-use software | ($325) | — | | **Free cash flow** | **$65,336** | **$56,426** |

Core Insights - Varonis Systems, Inc. reported a 19% year-over-year growth in annual recurring revenues (ARR), reaching $664.3 million as of March 31, 2025 [6][5][2] - The company's SaaS ARR constituted approximately 61% of total ARR, indicating strong adoption of its SaaS platform [2][5] - Year-to-date cash from operations was $68.0 million, up from $56.7 million in the previous year, while free cash flow increased to $65.3 million from $56.4 million [6][5] Financial Performance - Total revenues for the first quarter were $136.4 million, compared to $114.0 million in the same quarter of 2024, reflecting a significant increase [5][24] - SaaS revenues surged to $88.6 million from $34.0 million year-over-year, while term license subscription revenues decreased to $31.5 million from $56.0 million, primarily due to customer transitions to the SaaS model [5][24] - Maintenance and services revenues also declined to $16.4 million from $24.1 million, again attributed to the shift towards SaaS [5][24] Operational Highlights - The company repurchased 1.5 million shares at an average price of $41.49, totaling $61.3 million [6] - Varonis acquired Cyral, enhancing its Data Security Platform with next-generation Database Activity Monitoring capabilities [6] - The launch of Varonis for Agentforce provides critical visibility into the AI layer of the Salesforce platform, facilitating safe AI rollouts [6] Cash Flow and Liquidity - As of March 31, 2025, Varonis had $1.2 billion in cash and cash equivalents, short-term deposits, and marketable securities [6] - The company generated $68.0 million in cash from operations during the first quarter, marking an increase from the previous year's $56.7 million [6][30] - Free cash flow for the quarter was $65.3 million, up from $56.4 million in the prior year [6][30] Future Outlook - Varonis anticipates raising its full-year ARR guidance due to strong SaaS adoption and underlying business drivers, despite a challenging macroeconomic environment [2][5] - The company expects revenues for the full year 2025 to be between $610.0 million and $625.0 million, reflecting year-over-year growth of 11% to 13% [12]

Core Insights - Varonis Systems, Inc. has been recognized with four Global Infosec Awards at the RSA Conference 2025 for its excellence in data security and innovative solutions [1][2][3] Group 1: Awards and Recognition - Varonis won the Innovative Service award for its Managed Data Detection and Response [2] - The Varonis Data Security Platform received the Editor's Choice for Cloud Security, the Market Innovator award for Data-Centric Security, and the Market Innovator award for Data Security Posture Management [2][3] Group 2: Technology and Solutions - The Varonis Data Security Platform is noted for its ability to find, fix, and alert to threats across IaaS, SaaS, and hybrid environments using advanced automation [3] - Varonis emphasizes its role in helping organizations protect data and reduce risk, particularly in the context of AI advancements [3][4] Group 3: Company Philosophy and Approach - Varonis aims to go beyond merely identifying issues by providing automated solutions that help customers avoid breaches and fines, thereby alleviating the workload of security teams [4] - The company focuses on understanding future threats and innovating in ways that mitigate cyber risks [4]

Core Insights - Varonis Systems, Inc. has introduced agentic AI to enhance its Managed Data Detection and Response (MDDR) offering, aiming to provide continuous data defense for customers [1][4] - The integration of AI is a response to the increasing sophistication of automated attacks, allowing Varonis to improve incident triage, investigation, and containment [2][4] - Varonis' agentic AI operates autonomously, enabling human analysts to focus on more complex tasks while improving over time through learning from historical incidents [4] Company Overview - Varonis is recognized as a leader in data security, differentiating itself from traditional cybersecurity firms by focusing on data protection [5][6] - The company offers a cloud-native Data Security Platform that automates various security outcomes, including data classification and insider risk management [6] Customer Engagement - Thousands of organizations globally rely on Varonis for data protection across various environments, including SaaS, IaaS, and hybrid cloud [6] - Varonis emphasizes a proactive approach to data security, ensuring that data is protected first rather than as an afterthought [6]

With Varonis AI Shield, customers have always-on defense to ensure the secure use of AI, including: AI security is data security. AI Shield helps employees use AI without putting data at risk, ensuring only the right people — and agents — have access to data, that use is monitored, and abuse is flagged. The leader in data security continuously prevents unnecessary sensitive data access by AI tools MIAMI and SAN FRANCISCO, April 28, 2025 (GLOBE NEWSWIRE) -- RSA Conference Booth N-5658 – Varonis Systems, Inc. ...

Join Varonis for a mainstage keynote, an expert session, and visit North Hall, booth #5658 to learn how to boost data security with automationMIAMI, April 14, 2025 (GLOBE NEWSWIRE) -- Varonis Systems, Inc. (Nasdaq: VRNS), the leader in data security, released its full event schedule as a Platinum Plus Sponsor of the RSA Conference 2025 taking place April 28 – May 1 in San Francisco. Varonis' highlights include a mainstage keynote on fostering the next generation of leaders using proven principles from gamin ...

Core Viewpoint - Varonis Systems, Inc. will report its first quarter 2025 financial results on May 6, 2025, after the U.S. financial markets close [1] Financial Results Announcement - The financial results will be discussed in a conference call scheduled for May 6, 2025, at 4:30 p.m. ET [1] - Access to the call can be made via a domestic number (877-425-9470) or an international number (201-389-0878) with a conference ID of 13752980 [2] - A replay of the conference call will be available until May 13, 2025, with specific numbers for domestic and international access [2] Company Overview - Varonis is recognized as a leader in data security, focusing on a different approach compared to traditional cybersecurity firms [3] - The company offers a cloud-native Data Security Platform that utilizes AI-powered automation for data discovery, classification, exposure removal, and advanced threat detection [3] - Varonis serves thousands of organizations globally, providing solutions for various security outcomes including data security posture management, data classification, and insider risk management [4]

MIAMI, April 09, 2025 (GLOBE NEWSWIRE) -- Varonis Systems, Inc. (NASDAQ:VRNS), the leader in data security, today announced the winners of its annual Partners in Excellence awards. The program recognizes channel partners who worked tirelessly in 2024 to deliver Varonis' top-ranked Data Security Platform to customers worldwide. Varonis leadership selected the winners based on their accomplishments throughout the year. "Securing critical data is a top priority for our customers, and our mission at Varonis is ...