Core Viewpoint - The recent sell-off in Varonis Systems (VRNS) stock does not necessarily indicate that it is a "discount" or an attractive investment opportunity, despite having a solid product and credible free cash flow (FCF) [1] Group 1: Company Analysis - Varonis Systems has a strong product offering and credible free cash flow, but there are significant challenges regarding operating leverage that need to be addressed [1] Group 2: Market Context - The article emphasizes the importance of not jumping to conclusions about stock attractiveness based solely on price drops, highlighting the need for deeper analysis of operational efficiency and market conditions [1]

Core Viewpoint - The Law Offices of Frank R. Cruz is investigating Varonis Systems, Inc. for potential violations of federal securities laws on behalf of investors who may have incurred losses [1] Investigation Details - The investigation is focused on Varonis Systems, Inc. following the release of its third quarter 2025 financial results on October 28, 2025 [1]

Company Performance - Advent Technologies Holdings, Inc. (NASDAQ:ADN) experienced a price drop to $1.065, marking a 60.70% decrease, indicating challenges in the fuel cell and hydrogen technology markets [1][7] - Fiserv, Inc. (NASDAQ:FI) saw its price fall to $72.59, a 42.46% decrease, reflecting potential challenges within the fintech sector and competitive pressures [2][7] - Stride, Inc. (NYSE:LRN) witnessed a sharp price decrease to $75.07, translating to a 51.10% drop, possibly due to concerns over growth prospects and operational challenges [3] - Quhuo Limited (NASDAQ:QH) faced a dramatic decline to $1.78, a decrease of 78.06%, which may indicate market apprehensions about regulatory challenges or operational inefficiencies [4][7] - Varonis Systems, Inc. (NASDAQ:VRNS) saw its price decrease to $34.58, marking a 45.11% fall, reflecting concerns over cybersecurity market competition and shifts in enterprise spending [5] Market Trends - The significant price movements among these companies highlight the importance of monitoring market trends, company-specific news, and broader economic indicators [6]

Revenue Growth - As of September 30, 2025, the company's Annual Recurring Revenue (ARR) was $718.6 million, an increase of 18% compared to $610.0 million in the same period of 2024[127]. - SaaS revenues for the three months ended September 30, 2025, were $125.8 million, up from $57.8 million in the same period of 2024, representing a significant growth[125]. - Total revenues for the nine months ended September 30, 2025, were $450.2 million, a 15% increase from $392.4 million in the same period of 2024[123]. - SaaS accounted for approximately 76% of total ARR as of September 30, 2025, marking the completion of the transition to a SaaS delivery model[129]. - For the three months ended September 30, 2025, SaaS revenues represented 77.9% of total revenues, compared to 39.0% in the same period of 2024[138]. - Total revenues for the three months ended September 30, 2025, increased by 9.1% to $161.6 million compared to $148.1 million in the same period of 2024[154]. - SaaS revenues surged by 117.7% from $57.8 million in Q3 2024 to $125.8 million in Q3 2025, driven by new customer acquisitions and existing customer conversions[154]. - SaaS revenues surged by 134.5% from $136.6 million in 2024 to $320.3 million in 2025, representing 71.1% of total revenues[166]. Customer Metrics - The renewal rate for the nine months ended September 30, 2025, remained over 90%, although the term license subscription business underperformed in the last quarter[136]. - Approximately 73% of revenues for the three months ended September 30, 2025, were derived from the United States, with 19% from EMEA and 8% from the rest of the world[123]. Financial Performance - Gross profit for Q3 2025 was $126.4 million, resulting in a gross margin of 78.2%, down from 83.8% in Q3 2024[152][156]. - Operating expenses increased by 9.9% to $162.4 million in Q3 2025, with research and development expenses rising by 17.4% to $62.7 million[157]. - The net loss for Q3 2025 was $29.9 million, compared to a net loss of $18.3 million in Q3 2024[152]. - Operating loss for the nine months ended September 30, 2025, was $116.3 million, compared to a loss of $100.1 million in 2024[163]. - Total operating expenses increased by 10.9% to $471.0 million, driven by higher research and development costs, which rose by 18.4% to $173.2 million[168]. - Net loss for the nine months ended September 30, 2025, was $101.5 million, compared to a net loss of $82.8 million in 2024[163]. Cash Flow and Liquidity - Net cash provided by operating activities was $122.7 million for the nine months ended September 30, 2025, compared to $90.9 million in 2024[174]. - Cash and cash equivalents, along with short-term marketable securities, totaled $707.9 million as of September 30, 2025, sufficient to fund operations for at least the next 12 months[174]. - Financial income, net decreased by 8.6% to $24.7 million, primarily due to foreign currency losses and higher interest expenses[172]. - A $49.9 million decrease in accounts receivable contributed to cash inflows, resulting in a DSO of 69 days for the three months and 73 days for the nine months ended September 30, 2024[177]. Investments and Financing - The company issued $460.0 million in convertible senior notes on September 10, 2024, with net proceeds of approximately $449.6 million after costs[184]. - For the nine months ended September 30, 2024, net cash provided by financing activities was $373.4 million, mainly from $450.1 million in net proceeds from convertible senior notes issuance[183]. - The company has authorized a share repurchase program of up to $150.0 million in October 2025, which will expire in 12 months[188]. Acquisitions and Strategic Moves - The company completed the acquisition of SlashNext, Inc. on August 28, 2025, enhancing its capabilities in AI-native email security[131]. Operating Commitments - The company has minimum rental commitments under non-cancelable leases totaling $93.3 million as of September 30, 2025[189]. - The company does not have any off-balance sheet arrangements as of September 30, 2025[190].

Core Insights - Varonis Systems, Inc. specializes in data security and analytics, focusing on protecting enterprise data from insider threats and cyberattacks [1] - Truist Financial has set a price target of $50 for Varonis, indicating a potential upside of approximately 51.28% from its current price of $33.05 [2][6] Financial Performance - Varonis reported third-quarter earnings of $0.06 per share, an improvement from $0.01 per share in the previous year, matching the Zacks Consensus Estimate [3] - Total revenues for Varonis increased by 9.1% year over year to $161.58 million, although this was 2.71% below the Zacks Consensus Estimate [3][6] - The company has a market capitalization of approximately $3.87 billion and a trading volume of 18,010,273 shares on NASDAQ [5] Revenue Growth - A notable highlight for Varonis is the 117.7% year-over-year increase in SaaS revenues, which has helped mitigate declines in other segments [4][6] - The strong performance in SaaS offerings and the Managed Data Detection & Response platform has been a key driver of the company's overall performance [4] Consistency in Performance - Despite missing revenue estimates this quarter, Varonis has consistently surpassed Zacks Consensus Estimates in the past four quarters, achieving an average surprise of 92.86% [5][6]

Core Insights - Varonis Systems' stock experienced a significant decline, dropping 47.4% during trading on Wednesday, following the release of its third-quarter results [1][3] - The company's Q3 report showed mixed results, with adjusted earnings per share of $0.06, slightly exceeding Wall Street estimates, but sales of $161.6 million fell short by approximately $4.6 million [3][7] - Forward guidance for Q4 and annual-recurring-revenue (ARR) projections were lowered, leading to investor concerns and rapid sell-off of the stock [1][5] Financial Performance - Varonis reported non-GAAP earnings per share of $0.06 for Q3, beating the average Wall Street estimate by $0.01 [3] - Total revenue growth for the quarter was approximately 9%, which was below expectations, despite SaaS revenue more than doubling to $125.8 million [3][5] - The company is guiding for Q4 sales between $165 million and $171 million, which is below the average analyst estimate of $170.8 million [4] Future Outlook - Varonis has revised its full-year ARR forecast down from a range of $748 million to $754 million to a new range of $730 million to $738 million [5] - The company expects to maintain an ARR mix of 83% for its SaaS offerings, but there are indications of spending cannibalization and potential client attrition [5][7] - Adjusted earnings per share for Q4 are projected to be between $0.02 and $0.04, aligning with the average analyst estimate of $0.03 [4]

Core Insights - Varonis Systems, Inc. announced its third-quarter financial results on October 28, 2025, and reduced its full-year ARR guidance due to underperformance in its on-prem subscription business [1] - Following the announcement, Varonis' stock price experienced a decline [1] Company Performance - The reduction in full-year ARR guidance was attributed to the underperformance of the on-prem subscription business in the final weeks of the third quarter [1] - The investigation by Holzer & Holzer, LLC focuses on whether Varonis complied with federal securities laws in light of the recent financial disclosures [1] Legal Context - Holzer & Holzer, LLC is a law firm that specializes in representing shareholders and investors in securities litigation, including class action and derivative litigation [3] - The firm has a history of recovering significant amounts for shareholders affected by corporate misconduct [3]

Core Viewpoint - Varonis Systems Inc reported disappointing third-quarter revenue and provided fourth-quarter guidance that fell below market expectations [1][2] Financial Performance - The company reported quarterly earnings of 6 cents per share, meeting analyst consensus estimates [1] - Quarterly sales were $161.577 million, missing the analyst consensus estimate of $166.149 million [1] Fourth-Quarter Guidance - Varonis expects adjusted EPS for the fourth quarter to be between 2 cents and 4 cents, compared to market estimates of 5 cents [2] - The company anticipates sales of $165.00 million to $171.00 million, versus projections of $170.129 million [2] Market Reaction - Following the earnings announcement, Varonis Systems shares fell by 45.2%, trading at $34.53 [3] Analyst Ratings and Price Targets - Needham analyst Mike Cikos maintained a Buy rating but lowered the price target from $70 to $55 [6] - Barclays analyst Saket Kalia maintained an Overweight rating and reduced the price target from $70 to $50 [6] - Piper Sandler analyst Rob Owens kept a Neutral rating and cut the price target from $50 to $45 [6] - Cantor Fitzgerald analyst Jonathan Ruykhaver maintained an Overweight rating and lowered the price target from $70 to $60 [6] - Susquehanna analyst Shyam Patil maintained a Positive rating and reduced the price target from $65 to $50 [6] - Truist Securities analyst Junaid Siddiqui reiterated a Buy rating and slashed the price target from $70 to $50 [6] - UBS analyst Roger Boyd maintained a Buy rating and lowered the price target from $70 to $60 [6] Business Insights - CEO Yaki Faitelson noted healthy demand for the company's SaaS platform, which now constitutes 76% of total company ARR [3] - The adoption of the SaaS platform is driven by automated outcomes and customer interest in AI initiatives and cloud data security [3] - However, the company experienced lower renewals in the Federal vertical and non-Federal on-prem subscription business towards the end of the quarter, leading to a revenue shortfall [3]

Core Insights - Varonis Systems (VRNS) reported quarterly earnings of $0.06 per share, matching the Zacks Consensus Estimate, compared to earnings of $0.01 per share a year ago [1][9] - The company posted revenues of $161.58 million for Q3 2025, missing the Zacks Consensus Estimate by 2.71%, and reflecting a year-over-year increase from $148.07 million [1][9] - Varonis has consistently beaten Zacks Consensus Estimates in the previous four quarters, with an average surprise of 92.86% [1] Revenue Breakdown - SaaS revenues, which account for 77.9% of total revenues, increased by 117.7% year over year to $125.8 million [3] - Term license subscriptions, making up 15.4% of total revenues, decreased by 63.9% to $24.8 million [3] - Maintenance and services, representing 9.1% of total revenues, declined by 49.1% to $10.9 million [3] Geographic Performance - The United States contributed 72.7% of total revenues, increasing by 11.9% year over year to $114.4 million [4] - EMEA accounted for 20.8% of revenues, reflecting a 4.4% increase to $31.8 million [4] - Revenues from the rest of the world made up 6.5% of total revenues, growing by 14.4% year over year to $11.8 million [4] Margin and Operating Income - Varonis' gross margin contracted by 260 basis points to 83%, impacted by the transition to a SaaS business model [5] - The company reported a non-GAAP operating income of $1.61 million, down from $9.1 million in the same quarter last year [5] - The non-GAAP operating margin for Q3 2025 was 1%, compared to 6.1% in the year-ago quarter [5] Financial Position - As of September 30, 2025, Varonis had $1.1 billion in cash and equivalents, up from $807.4 million as of June 30, 2025 [6] - The company generated $122.7 million in operating cash flow and reported free cash flow of $111.6 million in the first three months of 2025 [6]

Core Insights - Premarket trading is showing notable activity with significant price movements indicating potential trading opportunities before the market opens [1] Premarket Gainers - Cambium Networks Corporation (CMBM) has seen a remarkable increase of 306%, trading at $2.51 [3] - Teradyne, Inc. (TER) is up 21%, currently priced at $176.00 [3] - Bloom Energy Corporation (BE) has risen by 18%, trading at $134.50 [3] - Jamf Holding Corp. (JAMF) is up 15%, with a price of $12.85 [3] - CSG Systems International, Inc. (CSGS) has increased by 14%, trading at $79.00 [3] - Olympic Steel, Inc. (ZEUS) is also up 14%, currently priced at $34.20 [3] - Beta Bionics, Inc. (BBNX) has risen by 12%, trading at $27.20 [3] - Sonim Technologies, Inc. (SONM) is up 10%, currently priced at $12.49 [3] - Canadian Solar Inc. (CSIQ) has increased by 9%, trading at $16.67 [3] - Interlink Electronics, Inc. (LINK) is also up 9%, currently priced at $6.85 [3] Premarket Losers - Stride, Inc. (LRN) has experienced a significant decline of 41%, trading at $89.44 [4] - Varonis Systems, Inc. (VRNS) is down 29%, currently priced at $44.71 [4] - Akebia Therapeutics, Inc. (AKBA) has decreased by 26%, trading at $2.26 [4] - Avantor, Inc. (AVTR) is down 17%, currently priced at $12.40 [4] - GlucoTrack, Inc. (GCTK) has seen a decline of 13%, trading at $6.29 [4] - Tigo Energy, Inc. (TYGO) is down 13%, currently priced at $2.20 [4] - Generac Holdings Inc. (GNRC) has decreased by 9%, trading at $172.00 [4] - Polar Power, Inc. (POLA) is down 8%, currently priced at $3.71 [4] - Caesars Entertainment, Inc. (CZR) has seen a decline of 7%, trading at $20.50 [4] - Anteris Technologies Global Corp. (AVR) is also down 7%, currently priced at $4.46 [4]