Varonis Systems (NASDAQ:VRNS) Posts Earnings Results, Beats Estimates By $0.03 EPS

Varonis Systems (NASDAQ:VRNS) announced its earnings results on Tuesday. The technology company reported $0.04 earnings per share for the quarter, beating the consensus estimate of $0.01 by $0.03, FiscalAI reports. The business had revenue of $180.02 million during the quarter, compared to the consensus estimate of $176.83 million. Varonis Systems had a negative net margin of 19.75% and a negative return on equity of 20.27%. The business’s quarterly revenue was up 18.3% compared to the same quarter last year. During the same period in the prior year, the firm earned $0.03 earnings per share. Varonis Systems updated its FY 2026 guidance to 0.140-0.150 EPS and its Q3 2026 guidance to 0.020-0.030 EPS.

Here are the key takeaways from Varonis Systems’ conference call:

• SaaS ARR excluding conversions rose 25% year over year to $598.1 million, while new-logo SaaS ARR grew more than 20%. Management cited strong pipeline momentum, increasing adoption of Atlas, Interceptor and Database Activity Monitoring, and demand for AI and data security.
• Varonis raised its full-year outlook, targeting SaaS ARR of $819 million–$850 million and SaaS ARR growth excluding conversions of 20%–21% at the midpoint. Full-year free cash flow guidance increased by $5 million to $105 million–$110 million.
• Second-quarter revenue increased 18% to $180 million, with SaaS revenue of $171.7 million and a renewal rate above 90%. Non-GAAP operating income improved to $3.7 million, but gross margin declined to 77.7% from 80.6% a year earlier as the company transitions away from its self-hosted platform.
• Several large deals slipped in the final week of the quarter amid media speculation about a potential transaction involving Varonis, although management said some—including a seven-figure deal—closed in July. The company declined to comment on the transaction rumors.
• On-premises-to-SaaS conversions remained difficult to forecast, with management retaining a $50 million–$75 million full-year range; first-half conversions were running near the low end of expectations. Executives emphasized that SaaS ARR excluding conversions is the primary measure of underlying business health.

Varonis Systems Stock Down 4.3%

Varonis Systems stock traded down $2.00 during midday trading on Tuesday, hitting $44.67. The stock had a trading volume of 4,481,597 shares, compared to its average volume of 2,688,265. The business has a fifty day moving average price of $38.64 and a 200 day moving average price of $30.56. Varonis Systems has a 12 month low of $19.70 and a 12 month high of $63.90. The stock has a market cap of $5.13 billion, a P/E ratio of -39.18 and a beta of 0.83. The company has a current ratio of 1.69, a quick ratio of 1.69 and a debt-to-equity ratio of 1.00.

Analysts Set New Price Targets

A number of equities analysts have weighed in on VRNS shares. Barclays upped their price objective on shares of Varonis Systems from $33.00 to $52.00 and gave the company an “overweight” rating in a research report on Monday, July 13th. JPMorgan Chase & Co. boosted their price target on Varonis Systems from $39.00 to $55.00 and gave the stock an “overweight” rating in a research note on Monday. Wedbush reissued an “outperform” rating and issued a $37.00 price target on shares of Varonis Systems in a report on Wednesday, June 24th. TD Cowen raised their price objective on Varonis Systems from $40.00 to $50.00 and gave the company a “buy” rating in a research note on Monday, July 13th. Finally, DA Davidson upped their target price on Varonis Systems from $30.00 to $37.00 and gave the company a “buy” rating in a research report on Wednesday, April 29th. One equities research analyst has rated the stock with a Strong Buy rating, sixteen have given a Buy rating, five have issued a Hold rating and one has issued a Sell rating to the company. According to MarketBeat.com, the company presently has a consensus rating of “Moderate Buy” and an average target price of $46.26.

Trending Headlines about Varonis Systems

Here are the key news stories impacting Varonis Systems this week:

• Positive Sentiment: Q2 earnings and revenue exceeded estimates. Varonis reported adjusted earnings of $0.04 per share versus the $0.01 consensus estimate and $0.03 a year earlier. Revenue rose to $180.02 million, ahead of the $176.83 million analyst forecast. Varonis Announces Second Quarter 2026 Financial Results
• Positive Sentiment: Recurring-revenue growth remained robust. Total SaaS annual recurring revenue reached $726.0 million, up 52% year over year, while SaaS ARR excluding conversions increased 25%. ARR from new customers grew more than 20%, and newer products such as Atlas, Interceptor and Database Activity Monitoring gained momentum. Varonis Systems Q2 Earnings and Revenues Top Estimates
• Positive Sentiment: Management raised the outlook well above earnings expectations. Third-quarter EPS guidance of $0.02-$0.03 compares with the consensus estimate of a $0.04 loss, while full-year EPS guidance of $0.14-$0.15 is well above the projected $0.11 loss. Revenue guidance is also slightly above consensus for both periods.
• Positive Sentiment: JPMorgan raised its price target. JPMorgan increased its target from $39 to $55 and maintained an “overweight” rating, signaling greater confidence in Varonis’s growth and improving profitability.
• Neutral Sentiment: Varonis continues to report a negative net margin and negative return on equity, so sustained execution and progress toward durable profitability remain important for investors.
• Neutral Sentiment: The company’s planned appearances at Black Hat USA and DEF CON could increase visibility for its AI, data-security and threat-detection products, but the events are unlikely to materially affect near-term financial results. Varonis Heads to Black Hat USA 2026 and DEF CON 34

Institutional Investors Weigh In On Varonis Systems

A number of institutional investors have recently made changes to their positions in the company. Benjamin Edwards Inc. boosted its holdings in Varonis Systems by 5.5% in the second quarter. Benjamin Edwards Inc. now owns 6,692 shares of the technology company’s stock worth $340,000 after purchasing an additional 351 shares during the period. Amundi increased its stake in Varonis Systems by 0.7% during the third quarter. Amundi now owns 52,886 shares of the technology company’s stock valued at $3,212,000 after purchasing an additional 387 shares during the last quarter. Osaic Holdings Inc. raised its holdings in shares of Varonis Systems by 10.5% during the second quarter. Osaic Holdings Inc. now owns 4,647 shares of the technology company’s stock worth $234,000 after purchasing an additional 440 shares during the period. Xponance LLC raised its holdings in shares of Varonis Systems by 6.2% during the fourth quarter. Xponance LLC now owns 9,212 shares of the technology company’s stock worth $302,000 after purchasing an additional 539 shares during the period. Finally, Focus Partners Wealth lifted its position in shares of Varonis Systems by 0.5% in the 3rd quarter. Focus Partners Wealth now owns 111,210 shares of the technology company’s stock worth $6,351,000 after buying an additional 546 shares during the last quarter. 95.65% of the stock is currently owned by institutional investors.

About Varonis Systems

Varonis Systems is a cybersecurity firm specializing in the protection and management of unstructured data. The company’s flagship Data Security Platform provides advanced analytics for monitoring file systems, email servers, collaboration platforms and cloud storage. By continuously mapping and analyzing data permissions and user behavior, Varonis enables organizations to detect insider threats, verify compliance and remediate exposed data in real time.

Founded in 2005 and headquartered in New York City, Varonis serves a diverse global customer base across financial services, healthcare, media, manufacturing and government.