Varonis(US:VRNS)2024-10-31 20:18Revenue Growth - As of September 30, 2024, total revenues were $392.4 million, a 14% increase compared to $345.1 million for the same period in 2023[127] - SaaS revenues for the three months ended September 30, 2024, were $57.8 million, up from $13.7 million in the same period of 2023, representing a significant growth[127] - Annual Recurring Revenues (ARR) increased by 18% year-over-year, reaching $610.0 million as of September 30, 2024, compared to $517.5 million in 2023[131] - Total revenues for the three months ended September 30, 2024, increased by 21.1% to $148.1 million compared to $122.3 million for the same period in 2023[156] - SaaS revenues surged by 321% from $13.7 million in Q3 2023 to $57.8 million in Q3 2024, driven by new customer acquisitions and high renewal rates[156] - SaaS revenues surged by 537.1% from $21.4 million in 2023 to $136.6 million in 2024, driven by new customer acquisitions and existing customer conversions[174] Customer Retention and Transition - The renewal rate for the nine months ended September 30, 2024, remained over 90%, reflecting strong customer retention[124] - The company plans to transition to a predominantly SaaS delivery model over the next several years, which may lead to revenue recognition accounting treatment headwinds[121] - SaaS as a percentage of total ARR was approximately 43% as of September 30, 2024, with expectations for this percentage to increase as the company transitions to a predominantly SaaS delivery model[132] Financial Performance - For the nine months ended September 30, 2024, operating losses were $100.1 million, compared to $112.0 million for the same period in 2023[127] - The net loss for the nine months ended September 30, 2024, was $100.0 million, compared to a net loss of $87.1 million in 2023[168] - Financial income, net improved by 18.7% to $10.2 million, driven by higher interest income and foreign currency gains[165] - Financial income, net, increased by 8.7% to $27.0 million, attributed to higher interest income[180] Operating Expenses - Operating expenses totaled $147.7 million in Q3 2024, a 10.2% increase from $134.1 million in Q3 2023[160] - Research and development expenses increased by 19.3% to $53.5 million, primarily due to higher costs associated with acquired in-process research and development[160] - Sales and marketing expenses rose by 4.0% to $71.4 million, reflecting increased investments in marketing and sales efforts[162] - General and administrative expenses increased by 10.7% to $22.9 million, mainly due to higher salaries and benefits from increased headcount[163] - Operating expenses increased by 5.0% to $424.7 million in 2024, with research and development expenses rising by 7.8% to $146.2 million[176] Cash Flow and Investments - Cash provided by operating activities was $90.9 million for the nine months ended September 30, 2024, compared to $49.0 million in 2023[183] - For the nine months ended September 30, 2024, net cash used in investing activities was $412.8 million, primarily due to net investments of $419.7 million in marketable securities[189] - For the nine months ended September 30, 2023, net cash used in investing activities was $253.4 million, primarily due to net investments of $302.8 million in marketable securities[190] - For the nine months ended September 30, 2024, net cash provided by financing activities was $373.4 million, mainly from $450.1 million of net proceeds from the issuance of convertible senior notes[191] Market and Economic Conditions - The company continues to face macroeconomic challenges, including inflation and interest rate increases, which have affected customer buying patterns[125] - Approximately 78% of revenues for the three months ended September 30, 2024, were derived from North America, with 19% from EMEA[125] - Approximately 20% of the company's revenues for the three months ended September 30, 2024, were earned in non-U.S. dollar denominated currencies[205] Assets and Liabilities - The company held $879.0 million in cash and cash equivalents as of September 30, 2024, sufficient to fund operations for at least the next 12 months[183] - The company held cash and cash equivalents, short-term marketable securities, and short-term deposits of $879.0 million as of September 30, 2024[208] - The company has obligations related to unrecognized tax benefit liabilities totaling $28.5 million[196] - As of September 30, 2024, the company had aggregate minimum rental commitments under non-cancelable leases totaling $60.5 million[196] - The company issued $460.0 million aggregate principal amount of 2029 Notes on September 10, 2024, with net proceeds of approximately $449.6 million[194]