Why Varonis Systems Stock Is Plummeting Today

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]