Varonis Systems, Inc. (VRNS) SEC Filings & Earnings Calls

Regulatory and shareholder approval risk; deal may not close

“subject to customary closing conditions, including approval by Varonis shareholders and receipt of regulatory approvals” · word for word

History of losses and uncertainty of future profitability

“We have incurred net losses in each year since our inception, including a net loss of $83.7 million for the six months ended June 30, 2026 and net losses of $129.3 million and $95.8 million in each of the years ended December 31, 2025 and 2024, respectively.” · word for word

End-of-life of self-hosted business may cause revenue decline

“Further, we plan to end-of-life our self-hosted business as of December 31, 2026, which we expect to increase the uncertainty with our remaining term license customers going forward. This may result in a decline in revenues and cause revenues to be more difficult to predict for a period of time.” · word for word

Increased competition in data security market

“Increased competition could result in us failing to attract customers or maintain licenses at the same rate. It could also lead to price cuts, alternative pricing structures or the introduction of products available for free or a nominal price, reduced gross margins, longer sales cycles, lower renewal rates and loss of market share.” · word for word

Dependence on channel partners

“We rely on channel partners, such as distribution partners and resellers, to sell the Varonis Data Security Platform. In 2025 and for the six months ended June 30, 2026, our channel partners fulfilled substantially all of our sales, and we expect that sales to channel partners will continue to account for substantially all of our revenues for the foreseeable” · word for word

Foreign currency exposure

“A strengthening of the U.S. dollar relative to foreign currencies may increase the local‑currency cost of our software and renewals for customers outside the United States and may adversely affect demand, pricing, renewal rates and revenue growth.” · word for word

Conversion of term license customers to SaaS may continue to pressure term license and maintenance revenue.

“Term license subscription revenues were $4.2 million, compared with $32.4 million in the second quarter of 2025, with the vast majority of the decline driven by customers converting to our SaaS platform.” · word for word

Potential dilution from equity incentive plan share increase.

“approved an increase in the number of shares... available for issuance under the... 2023 Omnibus Equity Incentive Plan”

History of losses and uncertainty of future profitability

“We have incurred net losses in each year since our inception, including a net loss of $36.9 million for the three months ended March 31, 2026 and net losses of $129.3 million and $95.8 million in each of the years ended December 31, 2025 and 2024, respectively.” · word for word

End-of-life of self-hosted business may cause revenue decline

“we plan to end-of-life our self-hosted business as of December 31, 2026, which we expect to increase the uncertainty with our remaining term license customers going forward. This may result in a decline in revenues and cause revenues to be more difficult to predict for a period of time.” · word for word

Intensifying competition in data security market

“As a result, the market is attracting investment from both established players and emerging innovators, which is driving increased awareness for the need to secure data, increasing the size of the data security market and intensifying the competitive landscape.” · word for word

Foreign currency exposure

“A strengthening of the U.S. dollar relative to foreign currencies may increase the local‑currency cost of our software and renewals for customers outside the United States and may adversely affect demand, pricing, renewal rates and revenue growth.” · word for word

Tariff-related economic uncertainty

“In addition, the imposition of tariffs, such as those implemented by the United States or other countries in 2025, may materially impact business performance for companies operating around the world and may cause budgetary tightening and longer sales cycles for companies in those impacted countries.” · word for word

Free cash flow declined YoY despite revenue growth; operating cash flow also down.

“Free cash flow $49.0M vs $65.3M prior year; operating cash flow $55.0M vs $68.0M.”

SaaS Transition Execution Risk

“Company announced end-of-life for self-hosted model; transition to 100% SaaS by end of 2026.”

Margin Target Miss

“Q4 2025 TTM Margin actual $118M vs target $128M, resulting in 0% payout for that metric.”

High indebtedness from $460M convertible notes

“As of December 31, 2025, we have $460.0 million outstanding aggregate principal amount of the 2029 Notes.” · word for word

Geopolitical risk from Israel operations

“Our principal research and development facility, which also houses a portion of our support and general and administrative teams, is located in Israel.” · word for word

Stock volatility and securities class action

“A significant decline in our stock price has and could in the future subject us to securities class action litigation, such as the purported class action litigation filed against us and certain of our executive officers in January 2026” · word for word

GAAP operating loss widened due to SaaS transition costs

“GAAP operating loss $(30.3)M vs $(17.6)M; Non-GAAP operating income declined”

Term license and maintenance revenues declining as customers convert to SaaS

“Term license subscription revenues $21.0M vs $66.8M; Maintenance and services $10.1M vs $19.5M”

Term License Business Decline

“For the three months ended September 30, 2025, our term license subscription business underperformed relative to past periods, which resulted in weaker renewals in the final weeks of the quarter.” · word for word

End of Life Uncertainty

“We expect this to result in increased uncertainty with our remaining term license customers going forward and for revenue variations to persist as we seek to convert these remaining customers to SaaS.” · word for word

Gross Margin Pressure

“Total gross margin 78.2% for Q3 2025 vs 83.8% for Q3 2024”

Operating Loss Expansion

“Operating loss $35,934 for the three months ended September 30, 2025 vs $23,640 for the three months ended September 30, 2024”

Renewal risk: lower renewals in Federal and on-prem subscription business led to guidance cut.

“In the final weeks of the quarter, we experienced lower renewals in the Federal vertical and in our non-Federal on-prem subscription business.” · word for word

Transition risk: end-of-life of self-hosted solution may further impact on-prem renewals.

“To account for this recent change as well as our decision to end of life our self-hosted solution, we have assumed an even lower renewal rate in our on-prem subscription business for the fourth quarter.” · word for word