Q1 2026 Varonis Systems Inc Earnings Call Transcript
Key Points
- Varonis Systems Inc (VRNS) reported a strong start to 2026 with a 27% year-over-year increase in total revenues, reaching $173.1 million.
- SaaS ARR, excluding conversions, increased by 29% year-over-year to $522.6 million, indicating healthy demand across new and existing customers.
- The company raised its full-year guidance for total SaaS ARR growth to 27% to 32%, reflecting confidence in sustained growth.
- Varonis Systems Inc (VRNS) saw significant acceleration in new customer acquisitions, contributing to its strong performance.
- The company is well-positioned to capitalize on the growing need for AI and data security, with its platform offering automated remediation and AI-driven security solutions.
- Free cash flow decreased to $49 million from $65.3 million in the same period last year, partly due to acquisition-related costs.
- Gross margin declined to 77.9% from 80.2% in the first quarter of 2025, indicating potential pressure on profitability.
- Operating loss for the first quarter was $1.4 million, with an operating margin of negative 0.8%, although improved from the previous year.
- The company faces challenges in converting remaining non-SaaS ARR, with $83.7 million still outstanding.
- Varonis Systems Inc (VRNS) is navigating a complex competitive landscape with various point solutions and startups in the data security market.
Greetings, and welcome to the Varonis Systems Inc. First quarter 2026 earnings conference call.
(Operator Instructions) Please note, this conference is being recorded.
I will now turn the conference over to your host, Tim Perz. Please go ahead.
Thank you, operator. Good afternoon. Thank you for joining us today to review Varonis' First Quarter 2026 financial results. With me on the call today are Yaki Faitelson, Chief Executive Officer; and Guy Melamed, 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 second quarter and full year ending December 31, 2026.
Due to a number of factors, actual results may differ materially from those set forth in such statements.
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