Varonis Systems (VRNS, Financial) has achieved a significant milestone by securing the Federal Risk and Authorization Management Program (FedRAMP) Authorization for its cloud-native Data Security Platform. This accomplishment sets Varonis apart as the first in its category to meet these stringent federal standards, underscoring its dedication to delivering top-tier data security solutions for federal agencies and public-sector clients across the country.
This FedRAMP certification positions Varonis as a leading choice for organizations that aim to minimize risk exposure and enhance threat response capabilities while preventing data breaches. With this new authorization, Varonis ensures that its platform aligns with high-level security protocols, benefiting public-sector customers and private enterprises requiring stringent security measures. The platform promises to deliver swift value and automation, reinforcing Varonis' commitment to innovation in data protection.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 20 analysts, the average target price for Varonis Systems Inc (VRNS, Financial) is $55.61 with a high estimate of $85.00 and a low estimate of $39.21. The average target implies an upside of 20.06% from the current price of $46.32. More detailed estimate data can be found on the Varonis Systems Inc (VRNS) Forecast page.
Based on the consensus recommendation from 22 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 $48.77, suggesting a upside of 5.29% from the current price of $46.32. 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: May 06, 2025
- ARR (Annual Recurring Revenue): Grew 19% to $664.3 million.
- SaaS ARR: Represents approximately 61% of total ARR, or $403.9 million.
- Free Cash Flow: $65.3 million, up from $56.4 million in the same period last year.
- Total Revenue: $136.4 million, up 20% year-over-year.
- Gross Margin: 80.2%, compared to 83.3% in the first quarter of 2024.
- Operating Loss: $6.5 million, with an operating margin of negative 4.7%.
- Net Income: $0.7 million, or $0.00 per diluted share.
- Cash and Equivalents: $1.2 billion as of March 31, 2025.
- Share Repurchase: 1,476,456 shares repurchased at an average price of $41.49, totaling $61.3 million.
- Q2 2025 Revenue Guidance: $145 million to $150 million.
- Full Year 2025 ARR Guidance: $742 million to $750 million.
- Full Year 2025 Revenue Guidance: $610 million to $625 million.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Varonis Systems Inc (VRNS, Financial) reported a 19% year-over-year growth in Annual Recurring Revenue (ARR), reaching $664.3 million.
- The company successfully accelerated its transition to a SaaS model, with SaaS ARR now representing approximately 61% of total ARR.
- Varonis Systems Inc (VRNS) generated $65.3 million in free cash flow during the first quarter, up from $56.4 million in the same period last year.
- The company reported strong contributions from both new and existing customers, driving overall business momentum.
- Varonis Systems Inc (VRNS) raised its full-year ARR guidance, reflecting confidence in its business outlook and growing customer demand.
Negative Points
- The transition to a SaaS model has introduced volatility in revenue recognition, impacting the income statement and creating a messy financial outlook for 2025.
- Operating expenses increased, resulting in a first-quarter operating loss of $6.5 million, with an operating margin of negative 4.7%.
- The company experienced a 32% year-over-year decline in maintenance and services revenues, primarily due to perpetual maintenance customers converting to SaaS.
- Gross margin decreased to 80.2% from 83.3% in the first quarter of 2024, reflecting the impact of the SaaS transition.
- Despite the positive momentum, the macroeconomic environment remains uncertain, which could impact future performance.
