Varonis(US:VRNS)2025-10-29 20:29Revenue 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].