Varonis Announces Third Quarter 2024 Financial Results
Varonis Systems (VRNS) reported strong Q3 2024 results with total revenues of $148.1 million, up from $122.3 million in Q3 2023. SaaS revenues significantly increased to $57.8 million from $13.7 million year-over-year. The company's Annual Recurring Revenue (ARR) grew 18% to $610.0 million, with SaaS ARR representing 43% of total ARR. Despite a GAAP operating loss of ($23.6) million, non-GAAP operating income improved to $9.1 million. Year-to-date cash from operations reached $90.9 million, with free cash flow of $88.6 million. The company raised its full-year 2024 guidance, expecting revenues between $554.4-$559.4 million.
Varonis Systems (VRNS) ha riportato risultati solidi per il terzo trimestre del 2024, con entrate totali di $148,1 milioni, in aumento rispetto ai $122,3 milioni del terzo trimestre del 2023. Le entrate SaaS sono aumentate significativamente a $57,8 milioni rispetto ai $13,7 milioni dell'anno precedente. Il Ricavi Ricorrenti Annuali (ARR) dell'azienda è cresciuto del 18% a $610,0 milioni, con l'ARR SaaS che rappresenta il 43% del totale ARR. Nonostante una perdita operativa GAAP di ($23,6) milioni, il reddito operativo non GAAP è migliorato a $9,1 milioni. Da inizio anno, i contanti generati dalle operazioni hanno raggiunto i $90,9 milioni, con un flusso di cassa libero di $88,6 milioni. L'azienda ha rivisto al rialzo le previsioni per l'intero anno 2024, aspettandosi entrate tra $554,4 e $559,4 milioni.
Varonis Systems (VRNS) reportó resultados sólidos para el tercer trimestre de 2024, con ingresos totales de $148,1 millones, un aumento desde $122,3 millones en el tercer trimestre de 2023. Los ingresos por SaaS aumentaron significativamente a $57,8 millones desde $13,7 millones en comparación con el año anterior. Los Ingresos Recurrentes Anuales (ARR) de la compañía crecieron un 18% a $610,0 millones, con el ARR SaaS representando el 43% del total de ARR. A pesar de una pérdida operativa GAAP de ($23,6) millones, el ingreso operativo no GAAP mejoró a $9,1 millones. Hasta la fecha, el flujo de efectivo de las operaciones alcanzó $90,9 millones, con un flujo de caja libre de $88,6 millones. La empresa ha elevado su guía para todo el año 2024, esperando ingresos entre $554,4 y $559,4 millones.
Varonis Systems (VRNS)는 2024년 3분기에 총 수익 $148.1 백만을 보고하며, 작년 3분기의 $122.3 백만에서 증가했습니다. SaaS 수익은 전년 대비 $57.8 백만으로 $13.7 백만에서 크게 증가했습니다. 회사의 연간 반복 수익 (ARR)은 18% 성장하여 $610.0 백만에 달하며, SaaS ARR은 총 ARR의 43%를 차지합니다. GAAP 운영 손실이 ($23.6) 백만인 반면, 비 GAAP 운영 수익은 $9.1 백만으로 개선되었습니다. 연초에 운영에서 발생한 현금은 $90.9 백만에 도달했으며, 자유 현금 흐름은 $88.6 백만입니다. 이 회사는 2024년 전체 연도 수익을 $554.4에서 $559.4 백만 사이로 예상하며 가이던스를 상향 조정했습니다.
Varonis Systems (VRNS) a rapporté des résultats solides pour le troisième trimestre 2024, avec des revenus totaux de $148,1 millions, contre $122,3 millions au troisième trimestre 2023. Les revenus SaaS ont considérablement augmenté pour atteindre $57,8 millions, contre $13,7 millions l'année précédente. Le Revenu Annuel Récurrent (ARR) de l'entreprise a augmenté de 18 % pour atteindre $610,0 millions, l'ARR SaaS représentant 43 % de l'ARR total. Malgré une perte d'exploitation selon les normes GAAP de ($23,6) millions, le revenu d'exploitation non GAAP s'est amélioré pour atteindre $9,1 millions. Depuis le début de l'année, les flux de trésorerie provenant des opérations ont atteint $90,9 millions, avec un flux de trésorerie libre de $88,6 millions. L'entreprise a relevé ses prévisions pour l'ensemble de l'année 2024, prévoyant des revenus compris entre $554,4 et $559,4 millions.
Varonis Systems (VRNS) veröffentlichte starke Ergebnisse für das 3. Quartal 2024 mit Gesamterlösen von $148,1 Millionen, ein Anstieg von $122,3 Millionen im 3. Quartal 2023. Die SaaS-Erlöse stiegen erheblich auf $57,8 Millionen von $13,7 Millionen im Jahresvergleich. Der Jährliche Wiederkehrende Umsatz (ARR) des Unternehmens wuchs um 18% auf $610,0 Millionen, wobei SaaS ARR 43% des gesamten ARR ausmacht. Trotz eines GAAP-Betriebsverlusts von ($23,6) Millionen verbesserte sich das operative Ergebnis ohne GAAP auf $9,1 Millionen. Der Cashflow aus dem operativen Geschäft erreichte bis heute $90,9 Millionen, mit einem freien Cashflow von $88,6 Millionen. Das Unternehmen hat seine Prognose für das gesamte Jahr 2024 angehoben und erwartet Einnahmen zwischen $554,4 und $559,4 Millionen.
- SaaS revenues increased dramatically from $13.7M to $57.8M YoY
- ARR grew 18% YoY to $610.0M
- Year-to-date cash from operations nearly doubled to $90.9M from $49.0M
- Free cash flow increased to $88.6M from $46.0M YoY
- Non-GAAP operating income improved to $9.1M from $4.9M YoY
- Raised $394.1M through convertible senior notes offering
- GAAP operating loss of $23.6M
- Term license subscription revenues declined to $68.8M from $84.0M YoY
- Maintenance and services revenues decreased to $21.5M from $24.6M YoY
Insights
The Q3 results demonstrate strong financial execution with notable highlights: ARR growth of
Cash generation metrics are particularly impressive, with year-to-date operating cash flow of
The Q4 guidance suggests continued momentum with revenue growth of
Varonis's strategic pivot to SaaS and cloud-first security solutions is yielding strong results. The rapid adoption of their SaaS platform indicates market validation of their cloud strategy and positions them well in the competitive data security landscape. The introduction of AI-powered discovery and classification capabilities shows commitment to innovation and maintaining technological leadership.
The integration with SentinelOne and Microsoft Defender for Endpoint expands their ecosystem reach and enhances their value proposition in endpoint security. The expanded Salesforce security offering with automated remediation addresses growing cloud security needs. These developments strengthen Varonis's competitive position in the enterprise security market and support sustained growth.
Annual recurring revenues grew
SaaS ARR as a percentage of total ARR was approximately
Year-to-date cash from operations generated
Year-to-date free cash flow generated
NEW YORK, Oct. 29, 2024 (GLOBE NEWSWIRE) -- Varonis Systems, Inc. (Nasdaq: VRNS), a leader in data security, today announced financial results for the third quarter ended September 30, 2024.
Yaki Faitelson, Varonis CEO, said, "We are encouraged by the many tailwinds that are contributing to the strong growth in our business, and our third quarter results reflect the continued strong adoption of our SaaS platform and positive momentum from our Managed Data Detection and Response offering.”
Guy Melamed, Varonis CFO & COO, added, “The robust demand for Varonis SaaS from both new and existing customers is evident with
Financial Summary for the Third Quarter Ended September 30, 2024
- Total revenues were
$148.1 million , compared with$122.3 million in the third quarter of 2023. - SaaS revenues were
$57.8 million , compared with$13.7 million in the third quarter of 2023. - Term license subscription revenues were
$68.8 million , compared with$84.0 million in the third quarter of 2023. - Maintenance and services revenues were
$21.5 million , compared with$24.6 million in the third quarter of 2023. - GAAP operating loss was (
$23.6) million , compared to GAAP operating loss of ($29.1) million in the third quarter of 2023. - Non-GAAP operating income was
$9.1 million , compared to non-GAAP operating income of$4.9 million in the third quarter of 2023.
The tables at the end of this press release include a reconciliation of GAAP operating income (loss) to non-GAAP operating income (loss) and GAAP net income (loss) to non-GAAP net income (loss) for the three and nine months ended September 30, 2024 and 2023. An explanation of these measures is included below under the heading "Non-GAAP Financial Measures and Key Performance Indicators."
Key Performance Indicators and Recent Business Highlights
- Annual recurring revenues, or ARR, was
$610.0 million as of the end of the third quarter, up18% year-over-year. - As of September 30, 2024, the Company had
$1.2 billion in cash and cash equivalents, short-term deposits and short-term and long-term marketable securities. - During the nine months ended September 30, 2024, the Company generated
$90.9 million of cash from operations, compared to$49.0 million generated in the prior year period. - During the nine months ended September 30, 2024, the Company generated
$88.6 million of free cash flow, compared to$46.0 million generated in the prior year period. - Raised net proceeds of
$394.1 million through an offering of1.00% Convertible Senior Notes due 2029. - Announced new AI-powered data discovery and classification capabilities that enhance our industry-leading data classification technology.
- Integrated the Varonis platform with SentinelOne and Microsoft Defender for Endpoint, expanding visibility to customers' endpoints and enabling end-to-end threat detection and response.
- Expanded Salesforce security offering with new automated remediation capabilities.
An explanation of ARR is included below under the heading "Non-GAAP Financial Measures and Key Performance Indicators." In addition, the tables at the end of this press release include a reconciliation of net cash provided by operating activities to non-GAAP free cash flow. An explanation of this measure is also included below under the heading "Non-GAAP Financial Measures and Key Performance Indicators."
Financial Outlook
For the fourth quarter of 2024, the Company expects:
- Revenues of
$162.0 million to$167.0 million , or year-over-year growth of5% to8% . - Non-GAAP operating income of
$20.0 million to$22.0 million . - Non-GAAP net income per diluted share in the range of
$0.13 t o$0.14 , based on 135.0 million diluted shares outstanding.
For full year 2024, the Company now expects:
- ARR of
$635.0 million to$639.0 million , or year-over-year growth of17% to18% . - Free cash flow of
$95.0 million to$100.0 million . - Revenues of
$554.4 million to$559.4 million , or year-over-year growth of11% to12% . - Non-GAAP operating income of
$20.6 million to$22.6 million . - Non-GAAP net income per diluted share in the range of
$0.26 t o$0.27 , based on 134.9 million diluted shares outstanding.
Actual results may differ materially from the Company’s Financial Outlook as a result of, among other things, the factors described below under “Forward-Looking Statements”.
Conference Call and Webcast
Varonis will host a conference call today, Tuesday, October 29, 2024, at 4:30 p.m. Eastern Time, to discuss the Company's third quarter 2024 financial results. To access this call, dial 877-425-9470 (domestic) or 201-389-0878 (international). The passcode is 13749435. A replay of this conference call will be available through November 5, 2024 at 844-512-2921 (domestic) or 412-317-6671 (international). The replay passcode is 13749435. A live webcast of this conference call will be available on the "Investors" page of the Company's website (www.varonis.com), and a replay will be archived on the website as well.
Non-GAAP Financial Measures and Key Performance Indicators
Varonis believes that the use of non-GAAP operating income (loss) and non-GAAP net income (loss) is helpful to our investors. These measures, which the Company refers to as our non-GAAP financial measures, are not prepared in accordance with GAAP.
Non-GAAP operating income (loss) is calculated as operating income (loss) excluding (i) stock-based compensation expense, (ii) payroll tax expense related to stock-based compensation, and (iii) amortization of acquired intangible assets and acquisition-related expenses.
Non-GAAP net income (loss) is calculated as net income (loss) excluding (i) stock-based compensation expense, (ii) payroll tax expense related to stock-based compensation, (iii) amortization of acquired intangible assets and acquisition-related expenses, (iv) foreign exchange gains (losses) which include exchange rate differences on lease contracts as a result of the implementation of ASC 842 and (v) amortization of debt issuance costs.
The Company believes that the exclusion of these expenses provides a more meaningful comparison of our operational performance from period to period and offers investors and management greater visibility to the underlying performance of our business. Specifically:
- Stock-based compensation expenses utilize varying available valuation methodologies, subjective assumptions and a variety of equity instruments that can impact a company's non-cash expenses;
- Payroll taxes are tied to the exercise or vesting of underlying equity awards and the price of our common stock at the time of vesting or exercise, factors which may vary from period to period;
- Acquired intangible assets are valued at the time of acquisition and are amortized over an estimated useful life after the acquisition, and acquisition-related expenses are unrelated to current operations and neither are comparable to the prior period nor predictive of future results;
- The Company incurs foreign exchange gains or losses from the revaluation of its significant operating lease liabilities in foreign currencies as well as other assets and liabilities denominated in non-U.S. dollars, which may vary from period to period; and
- Amortization of debt issuance costs, which relate to the Company’s convertible senior notes issued in 2020 and 2024, are a non-cash item.
Free cash flow is calculated as net cash provided by or used in operating activities less purchases of property and equipment. We believe that free cash flow is a useful indicator of liquidity that provides information to management and investors about the amount of cash provided by or used in our operations that, after the investments in property and equipment, can be used for strategic initiatives.
Each of our non-GAAP financial measures is an important tool for financial and operational decision making and for evaluating our own operating results over different periods of time. The non-GAAP financial measures do not represent our financial performance under U.S. GAAP and should not be considered as alternatives to operating income (loss) or net income (loss) or any other performance measures derived in accordance with GAAP. Non-GAAP financial measures may not provide information that is directly comparable to that provided by other companies in our industry, as other companies in our industry may calculate non-GAAP financial results differently, particularly related to non-recurring, unusual items. In addition, there are limitations in using non-GAAP financial measures because the non-GAAP financial measures are not prepared in accordance with GAAP, and exclude expenses that may have a material impact on our reported financial results. Further, stock-based compensation expense and payroll tax expense related to stock-based compensation have been, and will continue to be for the foreseeable future, significant recurring expenses in our business and an important part of the compensation provided to our employees. Also, the amortization of intangible assets are expected recurring expenses over the estimated useful life of the underlying intangible asset and acquisition-related expenses will be incurred to the extent acquisitions are made in the future. Additionally, foreign exchange rates may fluctuate from one period to another, and the Company does not estimate movements in foreign currencies. Finally, the amortization of debt issuance costs are expected recurring expenses until the maturity of the senior notes in 2029.
The presentation of non-GAAP financial information is not meant to be considered in isolation or as a substitute for the directly comparable financial measures prepared in accordance with GAAP. Varonis urges investors to review the reconciliation of our non-GAAP financial measures to the comparable GAAP financial measures included below, and not to rely on any single financial measures to evaluate our business.
A reconciliation for non-GAAP operating income (loss) and non-GAAP net income (loss) referred to in our “Financial Outlook” is not provided because, as forward-looking statements, such reconciliation is not available without unreasonable effort due to the high variability, complexity, and difficulty of estimating certain items such as charges to stock-based compensation expense and currency fluctuations which could have an impact on our consolidated results. The Company believes the information provided is useful to investors because it can be considered in the context of the Company’s historical disclosures of this measure.
ARR is a key performance indicator defined as the annualized value of active term-based subscription license contracts, SaaS contracts, and maintenance contracts in effect at the end of that period. Subscription license contracts, SaaS contracts, and maintenance contracts are annualized by dividing the total contract value by the number of days in the term and multiplying the result by 365. The annualized value of contracts is a legal and contractual determination made by assessing the contractual terms with our customers. The annualized value of maintenance contracts is not determined by reference to historical revenues, deferred revenues or any other GAAP financial measure over any period. ARR is not a forecast of future revenues, which can be impacted by contract start and end dates and renewal rates.
Forward-Looking Statements
This press release contains, and statements made during the above referenced conference call will contain, "forward-looking" statements, which are subject to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, including regarding the Company's growth rate and its expectations regarding future revenues, operating income or loss or earnings or loss per share. These statements are not guarantees of future performance but are based on management's expectations as of the date of this press release and assumptions that are inherently subject to uncertainties, risks and changes in circumstances that are difficult to predict. Forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause actual results, performance or achievements to be materially different from any future results, performance or achievements. Important factors that could cause actual results to differ materially from those expressed or implied by these forward-looking statements include the following: the impact of potential information technology, cybersecurity or data security breaches; risks associated with anticipated growth in Varonis’ addressable market; general economic and industry conditions, such as foreign currency exchange rate fluctuations and expenditure trends for data and cybersecurity solutions; Varonis’ ability to predict the timing and rate of subscription renewals and their impact on the Company’s future revenues and operating results; risks associated with international operations; the impact of global conflicts on the budgets of our clients and on economic conditions generally; competitive factors, including increased sales cycle time, changes in the competitive environment, pricing changes and increased competition; the risk that Varonis may not be able to attract or retain employees, including sales personnel and engineers; Varonis’ ability to build and expand its direct sales efforts and reseller distribution channels; risks associated with the closing of large transactions, including Varonis’ ability to close large transactions consistently on a quarterly basis; new product introductions and Varonis’ ability to develop and deliver innovative products; Varonis’ ability to provide high-quality service and support offerings; the expansion of cloud-delivered services; and risks associated with our convertible notes and capped-call transactions. These and other important risk factors are described more fully in Varonis’ reports and other documents filed with the Securities and Exchange Commission and could cause actual results to vary from expectations. All information provided in this press release and in the conference call is as of the date hereof, and Varonis undertakes no duty to update or revise this information, whether as a result of new information, new developments or otherwise, except as required by law.
About Varonis
Varonis (Nasdaq: VRNS) is a leader in data security, fighting a different battle than conventional cybersecurity companies. Our cloud-native Data Security Platform continuously discovers and classifies critical data, removes exposures, and detects advanced threats with AI-powered automation.
Thousands of organizations worldwide trust Varonis to defend their data wherever it lives — across SaaS, IaaS, and hybrid cloud environments. Customers use Varonis to automate a wide range of security outcomes, including data security posture management (DSPM), data classification, data access governance (DAG), data detection and response (DDR), data loss prevention (DLP), and insider risk management.
Varonis protects data first, not last. Learn more at www.varonis.com.
Investor Relations Contact:
Tim Perz
Varonis Systems, Inc.
646-640-2112
investors@varonis.com
News Media Contact:
Rachel Hunt
Varonis Systems, Inc.
877-292-8767 (ext. 1598)
pr@varonis.com
| Varonis Systems, Inc. | |||||||||||||||
| Condensed Consolidated Statements of Operations | |||||||||||||||
| (in thousands, except for share and per share data) | |||||||||||||||
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
| 2024 | 2023 | 2024 | 2023 | ||||||||||||
| Unaudited | Unaudited | ||||||||||||||
| Revenues: | |||||||||||||||
| Term license subscriptions | $ | 68,751 | $ | 83,963 | $ | 187,460 | $ | 250,306 | |||||||
| SaaS | 57,805 | 13,716 | 136,575 | 21,437 | |||||||||||
| Maintenance and services | 21,512 | 24,629 | 68,401 | 73,318 | |||||||||||
| Total revenues | 148,068 | 122,308 | 392,436 | 345,061 | |||||||||||
| Cost of revenues | 24,007 | 17,381 | 67,792 | 52,404 | |||||||||||
| Gross profit | 124,061 | 104,927 | 324,644 | 292,657 | |||||||||||
| Operating expenses: | |||||||||||||||
| Research and development | 53,459 | 44,818 | 146,219 | 135,694 | |||||||||||
| Sales and marketing | 71,378 | 68,610 | 212,646 | 207,324 | |||||||||||
| General and administrative | 22,864 | 20,646 | 65,878 | 61,618 | |||||||||||
| Total operating expenses | 147,701 | 134,074 | 424,743 | 404,636 | |||||||||||
| Operating loss | (23,640 | ) | (29,147 | ) | (100,099 | ) | (111,979 | ) | |||||||
| Financial income, net | 10,245 | 8,634 | 27,039 | 24,872 | |||||||||||
| Loss before income taxes | (13,395 | ) | (20,513 | ) | (73,060 | ) | (87,107 | ) | |||||||
| Income taxes | (4,938 | ) | (2,504 | ) | (9,711 | ) | (12,911 | ) | |||||||
| Net loss | $ | (18,333 | ) | $ | (23,017 | ) | $ | (82,771 | ) | $ | (100,018 | ) | |||
| Net loss per share of common stock, basic and diluted | $ | (0.16 | ) | $ | (0.21 | ) | $ | (0.74 | ) | $ | (0.92 | ) | |||
| Weighted average number of shares used in computing net loss per share of common stock, basic and diluted | 112,268,210 | 109,429,722 | 111,382,582 | 109,187,063 | |||||||||||
| Stock-based compensation expense for the three and nine months ended September 30, 2024 and 2023 is included in the Condensed Consolidated Statements of Operations as follows (in thousands): | |||||||||||
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||
| 2024 | 2023 | 2024 | 2023 | ||||||||
| Unaudited | Unaudited | ||||||||||
| Cost of revenues | $ | 1,357 | $ | 1,416 | $ | 4,017 | $ | 5,946 | |||
| Research and development | 10,442 | 11,323 | 31,057 | 37,480 | |||||||
| Sales and marketing | 9,860 | 11,201 | 30,985 | 37,861 | |||||||
| General and administrative | 10,272 | 9,040 | 28,054 | 26,889 | |||||||
| $ | 31,931 | $ | 32,980 | $ | 94,113 | $ | 108,176 | ||||
| Payroll tax expense related to stock-based compensation for the three and nine months ended September 30, 2024 and 2023 is included in the Condensed Consolidated Statements of Operations as follows (in thousands): | |||||||||||
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||
| 2024 | 2023 | 2024 | 2023 | ||||||||
| Unaudited | Unaudited | ||||||||||
| Cost of revenues | $ | 15 | $ | 24 | $ | 631 | $ | 385 | |||
| Research and development | 187 | 75 | 566 | 232 | |||||||
| Sales and marketing | 150 | 122 | 3,050 | 1,820 | |||||||
| General and administrative | 49 | 18 | 1,165 | 486 | |||||||
| $ | 401 | $ | 239 | $ | 5,412 | $ | 2,923 | ||||
| Amortization of acquired intangibles and acquisition-related expenses for the three and nine months ended September 30, 2024 and 2023 is included in the Condensed Consolidated Statements of Operations as follows (in thousands): | |||||||||||
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||
| 2024 | 2023 | 2024 | 2023 | ||||||||
| Unaudited | Unaudited | ||||||||||
| Cost of revenues | $ | 381 | $ | 382 | $ | 1,143 | $ | 1,144 | |||
| Research and development | — | 412 | — | 1,235 | |||||||
| Sales and marketing | — | — | — | — | |||||||
| General and administrative | — | — | — | — | |||||||
| $ | 381 | $ | 794 | $ | 1,143 | $ | 2,379 | ||||
| Varonis Systems, Inc. | |||||||
| Condensed Consolidated Balance Sheets | |||||||
| (in thousands) | |||||||
| September 30, 2024 | December 31, 2023 | ||||||
| Unaudited | |||||||
| Assets | |||||||
| Current assets: | |||||||
| Cash and cash equivalents | $ | 282,218 | $ | 230,740 | |||
| Marketable securities | 562,568 | 253,175 | |||||
| Short-term deposits | 34,174 | 49,800 | |||||
| Trade receivables, net | 119,203 | 169,116 | |||||
| Prepaid expenses and other short-term assets | 76,206 | 64,326 | |||||
| Total current assets | 1,074,369 | 767,157 | |||||
| Long-term assets: | |||||||
| Long-term marketable securities | 332,329 | 211,063 | |||||
| Operating lease right-of-use assets | 45,390 | 51,838 | |||||
| Property and equipment, net | 28,908 | 33,964 | |||||
| Intangible assets, net | 119 | 1,263 | |||||
| Goodwill | 23,135 | 23,135 | |||||
| Other assets | 16,904 | 15,490 | |||||
| Total long-term assets | 446,785 | 336,753 | |||||
| Total assets | $ | 1,521,154 | $ | 1,103,910 | |||
| Liabilities and stockholders’ equity | |||||||
| Current liabilities: | |||||||
| Trade payables | $ | 1,489 | $ | 672 | |||
| Accrued expenses and other short-term liabilities | 123,256 | 125,057 | |||||
| Convertible senior notes, net | 251,625 | — | |||||
| Deferred revenues | 217,605 | 181,049 | |||||
| Total current liabilities | 593,975 | 306,778 | |||||
| Long-term liabilities: | |||||||
| Convertible senior notes, net | 449,759 | 250,477 | |||||
| Operating lease liabilities | 43,654 | 51,313 | |||||
| Deferred revenues | 1,530 | 886 | |||||
| Other liabilities | 3,676 | 4,808 | |||||
| Total long-term liabilities | 498,619 | 307,484 | |||||
| Stockholders’ equity: | |||||||
| Share capital | |||||||
| Common stock | 112 | 109 | |||||
| Accumulated other comprehensive loss | (4,381 | ) | (8,649 | ) | |||
| Additional paid-in capital | 1,159,990 | 1,142,578 | |||||
| Accumulated deficit | (727,161 | ) | (644,390 | ) | |||
| Total stockholders’ equity | 428,560 | 489,648 | |||||
| Total liabilities and stockholders’ equity | $ | 1,521,154 | $ | 1,103,910 | |||
| Varonis Systems, Inc. | |||||||
| Condensed Consolidated Statements of Cash Flows | |||||||
| (in thousands) | |||||||
| Nine Months Ended September 30, | |||||||
| 2024 | 2023 | ||||||
| Unaudited | |||||||
| Cash flows from operating activities: | |||||||
| Net loss | $ | (82,771 | ) | $ | (100,018 | ) | |
| Adjustments to reconcile net loss to net cash provided by operating activities: | |||||||
| Depreciation and amortization | 8,543 | 8,736 | |||||
| Stock-based compensation | 94,113 | 108,176 | |||||
| Amortization of deferred commissions | 19,906 | 17,547 | |||||
| Non-cash operating lease costs | 7,050 | 7,087 | |||||
| Amortization of debt issuance costs | 1,264 | 1,133 | |||||
| Amortization of premium and accretion of discount on marketable securities | (11,288 | ) | (5,557 | ) | |||
| Acquired in-process research and development | 6,653 | — | |||||
| Changes in assets and liabilities: | |||||||
| Trade receivables | 49,913 | 24,895 | |||||
| Prepaid expenses and other short-term assets | (10,889 | ) | (11,118 | ) | |||
| Deferred commissions | (23,846 | ) | (18,338 | ) | |||
| Other long-term assets | (129 | ) | (963 | ) | |||
| Trade payables | 817 | (1,634 | ) | ||||
| Accrued expenses and other short-term liabilities | (5,882 | ) | (17,652 | ) | |||
| Deferred revenues | 37,200 | 33,555 | |||||
| Other long-term liabilities | 272 | 3,120 | |||||
| Net cash provided by operating activities | 90,926 | 48,969 | |||||
| Cash flows from investing activities: | |||||||
| Proceeds from maturities of marketable securities | 157,100 | 28,850 | |||||
| Investment in marketable securities | (576,753 | ) | (331,651 | ) | |||
| Proceeds from short-term and long-term deposits | 25,038 | 170,925 | |||||
| Investment in short-term and long-term deposits | (9,233 | ) | (118,605 | ) | |||
| Purchase of in-process research and development | (6,653 | ) | — | ||||
| Purchases of property and equipment | (2,342 | ) | (2,945 | ) | |||
| Net cash used in investing activities | (412,843 | ) | (253,426 | ) | |||
| Cash flows from financing activities: | |||||||
| Proceeds from issuance of convertible senior notes, net of issuance costs | 450,099 | — | |||||
| Purchases of capped calls | (55,522 | ) | — | ||||
| Proceeds from employee stock plans | 16,082 | 11,346 | |||||
| Taxes paid related to net share settlement of equity awards | (37,264 | ) | (19,971 | ) | |||
| Repurchase of common stock | — | (43,522 | ) | ||||
| Net cash provided by (used in) financing activities | 373,395 | (52,147 | ) | ||||
| Increase (decrease) in cash and cash equivalents | 51,478 | (256,604 | ) | ||||
| Cash and cash equivalents at beginning of period | 230,740 | 367,800 | |||||
| Cash and cash equivalents at end of period | $ | 282,218 | $ | 111,196 | |||
| Varonis Systems, Inc. | |||||||||||||||
| Reconciliation of GAAP Measures to non-GAAP | |||||||||||||||
| (in thousands, except share and per share data) | |||||||||||||||
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
| 2024 | 2023 | 2024 | 2023 | ||||||||||||
| Unaudited | Unaudited | ||||||||||||||
| Reconciliation to non-GAAP operating income: | |||||||||||||||
| GAAP operating loss | $ | (23,640 | ) | $ | (29,147 | ) | $ | (100,099 | ) | $ | (111,979 | ) | |||
| Add back: | |||||||||||||||
| Stock-based compensation expense | 31,931 | 32,980 | 94,113 | 108,176 | |||||||||||
| Payroll tax expenses related to stock-based compensation | 401 | 239 | 5,412 | 2,923 | |||||||||||
| Amortization of acquired intangible assets and acquisition-related expenses | 381 | 794 | 1,143 | 2,379 | |||||||||||
| Non-GAAP operating income | $ | 9,073 | $ | 4,866 | $ | 569 | $ | 1,499 | |||||||
| Reconciliation to non-GAAP net income: | |||||||||||||||
| GAAP net loss | $ | (18,333 | ) | $ | (23,017 | ) | $ | (82,771 | ) | $ | (100,018 | ) | |||
| Add back: | |||||||||||||||
| Stock-based compensation expense | 31,931 | 32,980 | 94,113 | 108,176 | |||||||||||
| Payroll tax expenses related to stock-based compensation | 401 | 239 | 5,412 | 2,923 | |||||||||||
| Amortization of acquired intangible assets and acquisition-related expenses | 381 | 794 | 1,143 | 2,379 | |||||||||||
| Foreign exchange rate differences, net | (1,052 | ) | (1,002 | ) | (2,302 | ) | (3,206 | ) | |||||||
| Amortization of debt issuance costs | 496 | 379 | 1,264 | 1,133 | |||||||||||
| Non-GAAP net income | $ | 13,824 | $ | 10,373 | $ | 16,859 | $ | 11,387 | |||||||
| GAAP weighted average number of shares used in computing net loss per share of common stock - basic and diluted | 112,268,210 | 109,429,722 | 111,382,582 | 109,187,063 | |||||||||||
| Non-GAAP weighted average number of shares used in computing net income per share of common stock - basic | 112,268,210 | 109,429,722 | 111,382,582 | 109,187,063 | |||||||||||
| Non-GAAP weighted average number of shares used in computing net income per share of common stock - diluted | 134,713,048 | 126,748,606 | 134,821,002 | 126,777,843 | |||||||||||
| GAAP net loss per share of common stock - basic and diluted | $ | (0.16 | ) | $ | (0.21 | ) | $ | (0.74 | ) | $ | (0.92 | ) | |||
| Non-GAAP net income per share of common stock - basic | $ | 0.12 | $ | 0.09 | $ | 0.15 | $ | 0.10 | |||||||
| Non-GAAP net income per share of common stock - diluted | $ | 0.10 | $ | 0.08 | $ | 0.13 | $ | 0.09 | |||||||
| Varonis Systems, Inc. | |||||||
| Reconciliation of GAAP Measures to non-GAAP | |||||||
| (in millions) | |||||||
| Nine Months Ended September 30, | |||||||
| 2024 | 2023 | ||||||
| Unaudited | |||||||
| Reconciliation to non-GAAP free cash flow: | |||||||
| Net cash provided by operating activities | $ | 90.9 | $ | 49.0 | |||
| Purchases of property and equipment | (2.3 | ) | (3.0 | ) | |||
| Free cash flow | $ | 88.6 | $ | 46.0 | |||
| Varonis Systems, Inc. | |||||||
| Reconciliation of GAAP Measures to non-GAAP | |||||||
| (in millions) | |||||||
| Twelve Months Ended December 31, 2024 | |||||||
| Low | High | ||||||
| Reconciliation to non-GAAP free cash flow: | |||||||
| Net cash provided by operating activities | $ | 100.0 | $ | 107.0 | |||
| Purchases of property and equipment | (5.0 | ) | (7.0 | ) | |||
| Free cash flow | $ | 95.0 | $ | 100.0 | |||
FAQ
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