Varonis Systems beats Q4 revenue expectations

Overview

• Data security firm's Q4 revenue rose, beating analyst expectations

• SaaS revenues for Q4 increased significantly due to customer conversions

• Company reported a GAAP operating loss for Q4, wider than last year

Outlook

• Varonis expects Q1 2026 revenue of $164 mln to $166 mln

• Company anticipates full-year 2026 SaaS ARR of $805 mln to $840 mln

• Varonis forecasts Q1 2026 non-GAAP net loss per share of $0.06 to $0.05

Result Drivers

• SAAS GROWTH - Varonis reported a 32% increase in SaaS ARR, excluding conversions, driven by automated value proposition, per CEO Yaki Faitelson

• CUSTOMER CONVERSIONS - Approximately one-third of remaining self-hosted customers converted to SaaS, contributing to revenue growth, per CFO Guy Melamed

• CASH FLOW - Year-to-date cash from operations increased to $147.4 mln from $115.2 mln last year, indicating strong cash generation

Key Details

Analyst Coverage

• The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 17 "strong buy" or "buy", 5 "hold" and no "sell" or "strong sell"

• The average consensus recommendation for the software peer group is "buy"

• Wall Street's median 12-month price target for Varonis Systems Inc is $47.61, about 62.8% above its February 2 closing price of $29.25

• The stock recently traded at 86 times the next 12-month earnings vs. a P/E of 117 three months ago

Press Release: ID:nGNXn1xM3

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