NEW YORK and LAS VEGAS, Aug. 07, 2024 (GLOBE NEWSWIRE) -- Black Hat USA 2024 Booth #1250 – Varonis Systems, Inc. (NASDAQ:VRNS), a leader in data security, today announced new integrations with SentinelOne and Microsoft Defender for Endpoint. Now, Varonis' Managed Data Detection and Response (MDDR) analysts can stop attacks faster and conduct more conclusive investigations. By integrating with leading EDR providers, Varonis expands its visibility to customers' endpoints. The new integrations provide customer ...

NEW YORK, Aug. 06, 2024 (GLOBE NEWSWIRE) -- Varonis Systems, Inc. (Nasdaq: VRNS), a leader in data security, today announced powerful new AI capabilities that enhance its industry-leading data classification engine. Using novel machine learning techniques, Varonis can automatically discover, understand, and classify customers' unique data better than ever. Without accurate and complete data classification, it's impossible to prioritize risk, remediate exposures, or enforce downstream security controls. With ...

NEW YORK, Aug. 06, 2024 (GLOBE NEWSWIRE) -- Varonis Systems, Inc. (Nasdaq: VRNS), a leader in data security, today announced powerful new AI capabilities that enhance its industry-leading data classification engine. Using novel machine learning techniques, Varonis can automatically discover, understand, and classify customers' unique data better than ever. Without accurate and complete data classification, it's impossible to prioritize risk, remediate exposures, or enforce downstream security controls. With ...

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PART I. FINANCIAL INFORMATION [Financial Statements](index=4&type=section&id=Item%201.%20Financial%20Statements) The company presents its unaudited condensed consolidated financial statements for the period ended June 30, 2024 [Condensed Consolidated Financial Statements](index=4&type=section&id=Condensed%20Consolidated%20Financial%20Statements) Condensed Consolidated Balance Sheet Data (in thousands) | | June 30, 2024 (unaudited) | December 31, 2023 | | :--- | :--- | :--- | | **Total Current Assets** | $816,144 | $767,157 | | **Total Assets** | $1,094,815 | $1,103,910 | | **Total Current Liabilities** | $334,453 | $306,778 | | **Total Liabilities** | $636,209 | $614,262 | | **Total Stockholders' Equity** | $458,606 | $489,648 | | **Total Liabilities and Stockholders' Equity** | $1,094,815 | $1,103,910 | Condensed Consolidated Statements of Operations Data (in thousands) | | Three Months Ended June 30 | Six Months Ended June 30 | | :--- | :--- | :--- | | | **2024** | **2023** | **2024** | **2023** | | **Total Revenues** | $130,346 | $115,418 | $244,368 | $222,753 | | **Gross Profit** | $107,910 | $98,032 | $200,583 | $187,730 | | **Operating Loss** | $(28,826) | $(39,716) | $(76,459) | $(82,832) | | **Net Loss** | $(23,948) | $(38,697) | $(64,438) | $(77,001) | | **Net Loss Per Share (basic and diluted)** | $(0.21) | $(0.35) | $(0.58) | $(0.71) | Condensed Consolidated Statements of Cash Flows Data (in thousands) | | Six Months Ended June 30, 2024 | Six Months Ended June 30, 2023 | | :--- | :--- | :--- | | **Net cash provided by operating activities** | $68,447 | $42,636 | | **Net cash provided by (used in) investing activities** | $(116,968) | $9,909 | | **Net cash used in financing activities** | $(26,816) | $(21,149) | | **Increase (decrease) in cash and cash equivalents** | $(75,337) | $31,396 | [Notes to Unaudited Condensed Consolidated Financial Statements](index=12&type=section&id=Notes%20to%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) This section details significant accounting policies, including revenue recognition, fair value measurements, and specifics on debt and equity - The company's Varonis Data Security Platform enables enterprises to protect data against cyberattacks[109](index=109&type=chunk)[110](index=110&type=chunk) - Revenue recognition policies differ by product type: **SaaS revenue is recognized ratably** over the contract period, while on-premises term licenses are **recognized at the point of delivery**[112](index=112&type=chunk)[113](index=113&type=chunk)[114](index=114&type=chunk) - As of June 30, 2024, remaining performance obligations (RPO) totaled **$514,669 thousand**, with approximately **53% expected to be recognized as revenue over the next 12 months**[116](index=116&type=chunk) - The company has **$253.0 million** in aggregate principal of 1.25% Convertible Senior Notes due 2025, with a net carrying amount of **$251.2 million** as of June 30, 2024[57](index=57&type=chunk)[181](index=181&type=chunk)[186](index=186&type=chunk) Revenues by Geographic Location (in thousands) | Region | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | North America | $95,566 | $181,722 | | EMEA | $29,070 | $53,223 | | Rest of World | $5,710 | $9,423 | | **Total** | **$130,346** | **$244,368** | [Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A)](index=27&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the strategic transition to a SaaS model, which drives ARR growth but creates near-term revenue headwinds [Business Overview and SaaS Transition](index=27&type=section&id=Business%20Overview%20and%20SaaS%20Transition) - The company is strategically transitioning to a predominantly **SaaS delivery model** to offer quicker deployment, faster time-to-value, and enhanced automation[217](index=217&type=chunk)[239](index=239&type=chunk) - This transition is expected to **negatively impact reported revenues in the short term** due to the ratable revenue recognition for SaaS contracts[218](index=218&type=chunk) [Key Performance Indicators](index=29&type=section&id=Key%20Performance%20Indicators) Annual Recurring Revenues (ARR) Growth | Date | ARR | Growth YoY | | :--- | :--- | :--- | | June 30, 2023 | $497.0 million | - | | June 30, 2024 | $584.2 million | 18% | - As of June 30, 2024, **SaaS constituted approximately 36% of total ARR**, and this percentage is expected to increase as the transition to a SaaS model continues[273](index=273&type=chunk) - Remaining Performance Obligations (RPO) were **$514.7 million** as of June 30, 2024, and are expected to increase as the company transitions to a predominantly SaaS-based model[225](index=225&type=chunk) [Results of Operations](index=32&type=section&id=Results%20of%20Operations) Revenue Comparison for Three Months Ended June 30 (in thousands) | Revenue Type | 2024 | 2023 | % Change | | :--- | :--- | :--- | :--- | | Term license subscriptions | $62,729 | $85,437 | (26.6)% | | SaaS | $44,785 | $5,653 | 692.2% | | Maintenance and services | $22,832 | $24,328 | (6.1)% | | **Total revenues** | **$130,346** | **$115,418** | **12.9%** | Revenue Comparison for Six Months Ended June 30 (in thousands) | Revenue Type | 2024 | 2023 | % Change | | :--- | :--- | :--- | :--- | | Term license subscriptions | $118,709 | $166,343 | (28.6)% | | SaaS | $78,770 | $7,721 | 920.2% | | Maintenance and services | $46,889 | $48,689 | (3.7)% | | **Total revenues** | **$244,368** | **$222,753** | **9.7%** | - The increase in cost of revenues for Q2 2024 was primarily due to a **$3.1 million increase in salaries** and a **$1.9 million increase in third-party hosting costs** associated with the SaaS transition[259](index=259&type=chunk) [Liquidity and Capital Resources](index=39&type=section&id=Liquidity%20and%20Capital%20Resources) - As of June 30, 2024, the company held **$627.3 million** in cash, cash equivalents, and short-term securities, which management believes is sufficient to fund operations for at least 12 months[328](index=328&type=chunk) Cash Flow Summary for Six Months Ended June 30 (in thousands) | Cash Flow Activity | 2024 | 2023 | | :--- | :--- | :--- | | Net cash provided by operating activities | $68,447 | $42,636 | | Net cash provided by (used in) investing activities | $(116,968) | $9,909 | | Net cash used in financing activities | $(26,816) | $(21,149) | [Quantitative and Qualitative Disclosures About Market Risk](index=43&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company's primary market risks stem from foreign currency exchange rate fluctuations and interest rate changes - The company is exposed to **foreign currency risk** as revenues and expenses are denominated in currencies like the Euro, Pound Sterling, and New Israeli Shekel[339](index=339&type=chunk)[367](index=367&type=chunk) - The company has **interest rate risk** related to its cash portfolio and the fair value of its **$253.0 million in fixed-rate convertible notes**[315](index=315&type=chunk)[341](index=341&type=chunk) [Controls and Procedures](index=44&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of June 30, 2024, with no material changes to internal controls - The CEO and CFO concluded that the company's **disclosure controls and procedures were effective** as of the end of the period covered by the report[317](index=317&type=chunk) - There were **no material changes in internal control over financial reporting** during the quarter that materially affected, or are reasonably likely to materially affect, these controls[343](index=343&type=chunk) PART II. OTHER INFORMATION [Risk Factors](index=44&type=section&id=Item%201A.%20Risk%20Factors) The company identifies significant risks related to its SaaS transition, competition, cybersecurity, international operations, and stock volatility [Risks Related to the Industry and Operations](index=45&type=section&id=Risks%20Related%20to%20the%20Industry%20and%20Operations) - The business depends on the continued growth of the data security market and is vulnerable to **prolonged economic downturns** that could reduce customer IT spending[345](index=345&type=chunk)[375](index=375&type=chunk) - The strategic shift to a **SaaS delivery model introduces risks**, including potential revenue fluctuations and higher-than-forecasted hosting and sales costs[361](index=361&type=chunk)[362](index=362&type=chunk)[420](index=420&type=chunk) - The company faces **increasing competition** and could face significant pressure if a more established company were to target its market[349](index=349&type=chunk)[381](index=381&type=chunk)[382](index=382&type=chunk) - As a cybersecurity company, it is an attractive target for cyberattacks, and a **security breach could expose the company to significant liability and reputational harm**[357](index=357&type=chunk)[358](index=358&type=chunk)[387](index=387&type=chunk) [Risks Related to Technology and Human Capital](index=57&type=section&id=Risks%20Related%20to%20Technology%20and%20Human%20Capital) - The company's success depends on its ability to **continually innovate** and improve its complex technology in a rapidly evolving market[1](index=1&type=chunk)[474](index=474&type=chunk) - The business relies heavily on customer satisfaction and renewals, with the **renewal rate continuing to be over 90%** for the six months ended June 30, 2024[3](index=3&type=chunk) - The company is dependent on its co-founder and CEO and faces **intense competition for attracting and retaining highly skilled personnel**, especially in Israel[9](index=9&type=chunk)[472](index=472&type=chunk)[473](index=473&type=chunk) - The use of **open-source software and generative AI exposes the company to risks** such as license compliance issues, litigation, and potential release of proprietary code[47](index=47&type=chunk)[48](index=48&type=chunk)[84](index=84&type=chunk) [Risks Related to International Operations and Tax](index=61&type=section&id=Risks%20Related%20to%20International%20Operations%20and%20Tax) - The company's principal R&D facility in Israel exposes it to **significant risks from regional armed conflicts and political instability**, including the ongoing war[20](index=20&type=chunk)[496](index=496&type=chunk) - The company's ability to utilize its **$103.8 million in federal Net Operating Loss (NOL) carryforwards** could be limited by ownership change rules or failure to generate future taxable income[23](index=23&type=chunk)[24](index=24&type=chunk) - The TCJA requirement to **capitalize and amortize R&E expenses** could significantly increase tax expenses and decrease cash flows once NOLs are fully utilized[16](index=16&type=chunk)[28](index=28&type=chunk) [Risks Related to Debt and Stock Ownership](index=63&type=section&id=Risks%20Related%20to%20Debt%20and%20Stock%20Ownership) - The company has approximately **$253.0 million in outstanding 2025 Convertible Senior Notes**, which constitutes substantial indebtedness that may decrease business flexibility[56](index=56&type=chunk)[57](index=57&type=chunk) - In connection with the notes, the company entered into **Capped Call Transactions** to reduce potential dilution, which exposes it to counterparty credit risk[36](index=36&type=chunk)[38](index=38&type=chunk) - The company's **stock price has been and is likely to continue to be volatile**, subject to fluctuations from operating results and market conditions[22](index=22&type=chunk)[40](index=40&type=chunk)[485](index=485&type=chunk) - **Anti-takeover provisions** in the company's charter documents and Delaware law could discourage or prevent an acquisition[42](index=42&type=chunk)[462](index=462&type=chunk)[501](index=501&type=chunk) [Exhibits](index=69&type=section&id=Item%206.%20Exhibits) This section lists key exhibits filed with the report, including the 2023 Omnibus Equity Incentive Plan and CEO/CFO certifications - Key exhibits filed with this report include the **Amended and Restated Varonis Systems, Inc. 2023 Omnibus Equity Incentive Plan**[495](index=495&type=chunk) - **Certifications by the Chief Executive Officer and Chief Financial Officer** pursuant to the Sarbanes-Oxley Act of 2002 are included as exhibits[34](index=34&type=chunk)[53](index=53&type=chunk)

Varonis Systems VRNS reported better-than-expected second-quarter financial results and raised its FY24 guidance on Monday. Varonis raised its FY24 revenue guidance from $536 million – $546 million to $544 million – $552 million. The company boosted adjusted earnings outlook from 13 cents-16 cents per share to 22 cents-24 cents per share. Varonis Systems shares gained 0.1% to close at $48.49 on Monday. Read Next: Varonis Systems reported quarterly earnings of 5 cents per share which beat the analyst consens ...

Varonis Systems, Inc. (NASDAQ:VRNS) Q2 2024 Earnings Conference Call July 29, 2024 4:30 PM ET Company Participants Tim Perz - Director of Investor Relations Yaki Faitelson - Chief Executive Officer, President, Co-Founder & Chairman Guy Melamed - Chief Financial Officer & Chief Operating Officer Conference Call Participants Saket Kalia - Barclays Brian Essex - JPMorgan Joel Fishbein - Truist Securities Matt Hedberg - RBC Capital Markets Fatima Boolani - Citi Shaul Eyal - TD Cowen Andrew Nowinski - Wells Farg ...

This quarterly report represents an earnings surprise of 350%. A quarter ago, it was expected that this datamanagement software company would post a loss of $0.09 per share when it actually produced a loss of $0.03, delivering a surprise of 66.67%. Varonis, which belongs to the Zacks Security industry, posted revenues of $130.35 million for the quarter ended June 2024, surpassing the Zacks Consensus Estimate by 4.27%. This compares to year-ago revenues of $115.42 million. The company has topped consensus re ...

Revenue Growth and Performance - Annual recurring revenues (ARR) grew 18% year-over-year to $584.2 million as of the end of the second quarter[8] - The company expects full-year 2024 revenues of $140.0 million to $143.0 million, representing year-over-year growth of 14% to 17%[19] - Total revenues for the three months ended June 30, 2024, were $130.346 million, compared to $115.418 million in the same period in 2023, representing a 12.9% increase[26] - SaaS revenues for the six months ended June 30, 2024, were $78.770 million, a significant increase from $7.721 million in the same period in 2023[28] - Total revenues for the quarter were $130.3 million, compared to $115.4 million in the same quarter of the previous year[46] - SaaS revenues increased significantly to $44.8 million from $5.7 million in the second quarter of 2023[46] - Revenues are forecasted to be $544.0 million to $552.0 million, with a year-over-year growth of 9% to 11%[43] SaaS ARR and Expectations - SaaS ARR as a percentage of total ARR was approximately 36% at the end of Q2 2024[4] - The company raised its full-year SaaS ARR expectations to 48%[8] - ARR is projected to be $629.0 million to $635.0 million, representing a year-over-year growth of 16% to 17%[43] Cash Flow and Financial Position - Year-to-date cash from operations generated $68.4 million, compared to $42.6 million in the prior year period[8] - Year-to-date free cash flow generated $67.3 million, compared to $40.0 million in the prior year period[8] - The company had $790.3 million in cash and cash equivalents, short-term deposits, and marketable securities as of June 30, 2024[8] - Non-GAAP free cash flow for the six months ended June 30, 2024, was $67.3 million, compared to $40.0 million in the same period in 2023[34] - Free cash flow is expected to range between $80.0 million to $85.0 million[43] - Total current assets as of June 30, 2024, were $816.1 million, compared to $767.2 million as of December 31, 2023[42] Operating and Net Loss - Operating loss for the six months ended June 30, 2024, was $(76.5) million, compared to $(82.8) million in the prior year period[6] - Net loss for the six months ended June 30, 2024, was $(64.4) million, compared to $(77.0) million in the prior year period[6] - GAAP net loss for the six months ended June 30, 2024, was $(64.438) million, compared to $(77.001) million in the same period in 2023[33] - GAAP net loss per share of common stock for the six months ended June 30, 2024, was $(0.58), compared to $(0.71) in the same period in 2023[41] - GAAP operating loss improved to ($28.8) million from ($39.7) million in the second quarter of 2023[46] Non-GAAP Metrics - Non-GAAP net income per diluted share is expected to be in the range of $0.07 to $0.08 for full-year 2024[19] - Non-GAAP operating income for the three months ended June 30, 2024, was $2.068 million, compared to $0.913 million in the same period in 2023[40] - Non-GAAP net income for the three months ended June 30, 2024, was $6.762 million, compared to $1.090 million in the same period in 2023[41] - Non-GAAP operating income is anticipated to be $18.0 million to $21.0 million[43] - Non-GAAP net income per diluted share is estimated to be in the range of $0.22 to $0.24, based on 128.1 million diluted shares outstanding[43] - Non-GAAP operating income rose to $2.1 million from $0.9 million in the second quarter of 2023[46] Liabilities and Deferred Revenues - Deferred revenues as of June 30, 2024, were $208.907 million, compared to $181.049 million as of June 30, 2023[32] - Total current liabilities as of June 30, 2024, were $334.453 million, compared to $306.778 million as of June 30, 2023[32] Stock-Based Compensation - Stock-based compensation expense for the six months ended June 30, 2024, was $62.182 million, compared to $75.195 million in the same period in 2023[40]

Meet Varonis in Person: Join Varonis at booth #1250 to learn how Varonis' cloud-native Data Security Platform enables organizations to strengthen their data security posture and reduce their blast radius. Hear how Varonis identifies and mitigates threats, safeguards sensitive data, and uses automation to ensure compliance with privacy regulations. Thousands of organizations worldwide trust Varonis to defend their data wherever it lives — across SaaS, IaaS, and hybrid cloud environments. Customers use Varoni ...