Q2 2026 Varonis Systems Inc Earnings Call Transcript
Key Points
- SaaS ARR, excluding conversions, increased 25% year-over-year to $598.1 million, indicating strong growth in the company's core business.
- Varonis Systems Inc (VRNS) raised its full-year guidance for SaaS ARR and free cash flow, reflecting confidence in future performance.
- New logo growth was robust, with SaaS ARR from new logos growing more than 20% in the quarter.
- The company is seeing increasing adoption of newer products like Atlas, Interceptor, and Database Activity Monitoring, which are expanding its market reach.
- Varonis Systems Inc (VRNS) has a strong pipeline driven by the need to secure AI and data, which is expected to support future growth.
- Some large deals slipped at the end of the quarter due to rumors in the news, impacting Q2 performance.
- Free cash flow for the year-to-date was down from the same period last year, reflecting headwinds from the end-of-life announcement of the on-prem platform.
- Gross margin decreased to 77.7% from 80.6% in the same quarter last year, indicating potential cost pressures.
- The company is still in the process of educating customers and partners about new products like Atlas, which may delay their full revenue potential.
- There is uncertainty around the conversion of on-prem customers to SaaS, with the company not updating its conversion guidance throughout the year.
Greetings, and welcome to the Varonis Systems Inc second quarter 2026 earnings conference call. (Operator Instructions) As a reminder, this conference is being recorded.
It is now my pleasure to introduce your host, Tim Perz, Investor Relations. Thank you. You may begin.
Thank you, Operator. Good afternoon, and thank you for joining us today to review Varonis's second quarter 2026 financial results. With me on the call today are Yakov Faitelson, Chief Executive Officer; and Guy Melamed, Chief Financial Officer and Chief Operating Officer of Varonis. After preliminary remarks, we'll open the call to a question-and-answer session.
During this call, we may make statements related to our business that would be considered forward looking statements under Federal Securities Laws, including projections of future operating results for our third quarter and full year ending December 31, 2026.
Due to a number of factors, actual results may differ materially from those set forth in
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