Varonis Systems (VRNS, Financial) has expanded its Data Security Platform by integrating with OpenAI’s ChatGPT Enterprise Compliance API. This development aids clients in swiftly identifying uploads of sensitive data, supervising interactions, and averting potential security breaches or compliance issues. ChatGPT Enterprise is renowned for boosting productivity among its 3 million-plus users by delivering increasingly relevant responses as it accesses more data.
With the addition of Varonis, organizations now have an extra robust protection measure against account compromise, insider threats, and misuse that might lead to data leaks or regulatory fines. This integration ensures continual adjustment of access permissions, monitors user interactions, and alerts security teams about unusual or high-risk activities, thereby limiting the flow of sensitive data.
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 $54.27 with a high estimate of $67.00 and a low estimate of $39.11. The average target implies an upside of 9.75% from the current price of $49.45. 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 $49.43, suggesting a downside of 0.04% from the current price of $49.45. 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.
