Varonis Systems, under the ticker VRNS, has announced the integration of agenticAI into its Managed Data Detection and Response (MDDR) solution. This innovative AI technology operates autonomously, executing a range of authorized actions to expedite tasks such as triage, investigation, and containment. It efficiently prioritizes incidents, subsequently directing them to an analyst from the Varonis MDDR team for further analysis.
The integration of agenticAI bolsters the company’s commitment to protecting data by combining a top-notch team of human analysts with highly efficient AI technology. This strategic move aims to enhance the protection of client data from potential threats by ensuring a robust and round-the-clock security framework.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 19 analysts, the average target price for Varonis Systems Inc (VRNS, Financial) is $53.54 with a high estimate of $67.00 and a low estimate of $39.21. The average target implies an upside of 26.84% from the current price of $42.21. More detailed estimate data can be found on the Varonis Systems Inc (VRNS) Forecast page.
Based on the consensus recommendation from 21 brokerage firms, Varonis Systems Inc's (VRNS, Financial) average brokerage recommendation is currently 2.1, indicating "Outperform" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for Varonis Systems Inc (VRNS, Financial) in one year is $51.56, suggesting a upside of 22.15% from the current price of $42.21. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the Varonis Systems Inc (VRNS) Summary page.
VRNS Key Business Developments
Release Date: February 04, 2025
- Annual Recurring Revenue (ARR): $641.9 million, up 18% year over year.
- SaaS ARR: Approximately $340 million, representing 53% of total company ARR.
- Free Cash Flow: $108.5 million, compared to $54.3 million last year.
- Total Revenue (Q4 2024): $158.5 million, up 3% year over year.
- Gross Margin (Q4 2024): 84.4%, compared to 88.5% in Q4 2023.
- Operating Margin (Q4 2024): 9.7%, compared to 17.7% in Q4 2023.
- Net Income (Q4 2024): $23.9 million or $0.18 per diluted share.
- Cash and Equivalents: $1.2 billion as of December 31, 2024.
- Total Revenue (Full Year 2024): $551 million, up 10% year over year.
- Operating Margin (Full Year 2024): 2.9%, compared to 5.8% in 2023.
- Guidance for 2025 Revenue: $610 million to $625 million, representing growth of 11% to 13%.
- Guidance for 2025 ARR: $737 million to $745 million, representing growth of 15% to 16%.
- Guidance for 2025 Free Cash Flow: $120 million to $125 million.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Varonis Systems Inc (VRNS, Financial) added over $200 million of SaaS ARR in 2024, ending the year with approximately $340 million of SaaS ARR, representing 53% of total company ARR.
- The company achieved a significant milestone by generating $108.5 million of free cash flow in 2024, doubling from $54.3 million in the previous year.
- Varonis Systems Inc (VRNS) plans to complete its SaaS transition by the end of 2025, a year earlier than previously expected, which is anticipated to enhance customer retention and upsell opportunities.
- The introduction of MDDR has been the fastest adopted new product in the company's history, driving meaningful new business and existing customer conversions.
- New customer ARR grew approximately 50% year over year, driven by the simplicity of the SaaS platform and increased demand for AI-related solutions like Copilot.
Negative Points
- The transition to SaaS is currently diluting growth rates due to the time and resource-intensive nature of converting existing customers from self-hosted solutions.
- Despite healthy conversion activity, the focus on transitioning existing customers to SaaS has temporarily impacted sales efficiency and ARR growth.
- The company's operating margin decreased to 9.7% in Q4 2024 from 17.7% in the same period last year, partly due to the increased SaaS sales mix.
- Varonis Systems Inc (VRNS) experienced a revenue headwind of approximately 18% in Q4 2024 due to the shift from upfront recognition of on-prem subscription products to ratable recognition of SaaS sales.
- The transition to SaaS requires significant legal and procurement work, which can be a challenge for both the company and its customers.
