VRNS Federal Sector Collapse: Hagens Berman Investigating Varonis (VRNS) Over Alleged SaaS Transition Failure and Undisclosed Renewal Softness in Securities Class Action

Core Viewpoint - A securities class action lawsuit has been filed against Varonis Systems, Inc. and its executives, with a lead plaintiff deadline approaching on March 9, 2026, focusing on allegations of concealed issues in the company's transition to a Software-as-a-Service (SaaS) model [1][4]. Group 1: Allegations and Lawsuit Details - The lawsuit claims that Varonis executives failed to disclose significant renewal challenges in its Federal vertical and legacy on-premises business while promoting a smooth transition to SaaS [2][5]. - Following a disclosure on October 28, 2025, regarding difficulties in converting existing customers to the SaaS model, Varonis reported a 63.9% year-over-year decline in term license revenue and reduced its Annual Recurring Revenue (ARR) outlook, leading to a 48% drop in stock price, equating to a loss of approximately $3.8 billion in market value [3][9]. Group 2: Company Performance and Market Reaction - The lawsuit highlights a discrepancy between Varonis's optimistic statements about its SaaS transition and the actual struggles faced in its Federal renewal cycle and on-premises subscription business [5][9]. - After the Q3 performance miss, Varonis significantly reduced its Q4 revenue and full-year ARR guidance, which contributed to the sharp decline in stock value from $63.00 to $32.34 in a single day [9].