Q3 2025 Varonis Systems Inc Earnings Call Transcript
Key Points
- Varonis Systems Inc (VRNS) completed its SaaS transition more than two years ahead of schedule, with 76% of total ARR now coming from SaaS.
- ARR increased by 18% year over year to $718.6 million, indicating strong growth in the SaaS segment.
- The company announced the end-of-life for its self-hosted solution by December 31, 2026, which is expected to streamline operations and focus on SaaS.
- Varonis Systems Inc (VRNS) introduced new products like Varonis Interceptor and next-gen Database Activity Monitoring, expanding its total addressable market.
- The company has a strong balance sheet with over $1 billion in liquidity and announced a $150 million share repurchase program, reflecting confidence in its financial health.
- Varonis Systems Inc (VRNS) experienced weaker-than-expected renewals in its federal and non-federal on-prem subscription business, impacting Q3 results.
- The decision to end-of-life the self-hosted solution may lead to increased uncertainty in the remaining on-prem subscription business.
- A 5% reduction in headcount was announced to manage expenses and reallocate resources, indicating cost-cutting measures.
- The on-prem subscription business is dragging on total company ARR growth, masking the strengths of the SaaS business.
- Guidance for the fourth quarter includes additional conservatism due to recent underperformance and the decision to end-of-life the self-hosted solution.
Greetings. Welcome to Varonis Systems' third-quarter 2025 earnings conference call. (Operator Instructions) Please note, this conference is being recorded.
I will now turn the conference over to Tim Perz of Investor Relations. Tim, you may proceed. Thank you.
Thank you, operator. Good afternoon. Thank you for joining us today to review Varonis' third-quarter financial results. With me on the call today are Yaki Faitelson, Chief Executive Officer; and Guy Malamed, Chief Financial Officer and Chief Operating Officer of Varonis. After preliminary remarks, we will 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 fourth quarter and full-year ending December 31st, 2025. Due to a number of factors, actual results may differ materially from those set forth in such statements.
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