VRNS

A month has gone by since the last earnings report for Qualys (QLYS). Shares have lost about 6.8% in that time frame, underperforming the S&P 500. But investors have to be wondering, will the recent negative trend continue leading up to its next earnings release, or is Qualys due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts. Qualys reported second-quarter 2026 non-GAAP earnings of $1.98 per share, which rose 17.9% year over year and beat the Zacks Consensus Estimate by 11.24%. Revenues increased 11% to $182.2 million and surpassed the consensus mark of $179 million by 1.8%. Results benefited from stronger partner-led execution and broader adoption of differentiated platform offerings. The net dollar expansion rate improved to 105% from 104% in the preceding quarter, signaling better upsell performance among existing customers. The channel accounted for 54% of total revenues, up from 49% in the year-ago quarter. Channel-partner revenues climbed 22% year over year, while direct revenues remained largely unchanged. The performance reflected Qualys’ continued emphasis on using partners to expand customer reach and support larger platform transactions. International growth also outpaced the domestic business. Revenues outside the United States rose 15% compared with 8% growth in the United States. The geographic revenue mix remained 55% domestic and 45% international. Enterprise TruRisk Management and CyberSecurity Asset Management together represented 12% of last-12-month total bookings, up from 9% a year earlier. The products also contributed 14% of new bookings versus 10% in the prior-year period. Patch Management accounted for 9% of total bookings, up from 7%, and 16% of new bookings. TotalCloud remained at 5% of total bookings. Meanwhile, vulnerability management’s contribution declined to 49% from 54%, indicating a broader mix as customers adopted newer modules. Qualys introduced InstaScan, powered by Agent Insta, to identify exposure findings within minutes of a vulnerability disclosure without requiring another scan. Findings can then move to Agent Val for exploit validation and immediate risk quantification. The company also outlined autonomous remediation capabilities that select patches, controlled deployments or compensating controls based on asset risk. Management said live benchmarking reduced the exposure window from 21 days to minutes and automatically patched 60% of vulnerabilities. TotalAI 2.0 extends visibility across employee AI activity, models, services, code and runtime environments. New capabilities are designed to uncover shadow AI usage and identify AI workloads operating across hybrid and multi-cloud infrastructure. The platform also added posture-management coverage for Anthropic and OpenAI environments. It can evaluate Model Context Protocol tool exploits across more than 50 adversarial scenarios and prioritize AI-related risks through the TruRisk engine. GAAP gross profit rose 12% year over year to $151.9 million, while the gross margin expanded to 83% from 82%. GAAP operating income advanced 20% to $61.9 million, with the operating margin improving to 34% from 31%. Non-GAAP operating income increased 16% to $81.4 million, and the related margin widened to 45% from 43%. Adjusted EBITDA grew 14% to $83.8 million, representing a margin of 46% compared with 45% a year ago. The company ended the second quarter with cash and marketable securities of $703.5 million. Operating cash flow surged 77% year over year to $59.6 million in the second quarter, representing 33% of revenues. Free cash flow totaled $55.9 million, with a margin of 31%. For the first six months of 2026, free cash flow reached $149.5 million, and the margin was 42%. During the quarter, Qualys spent $76.8 million to repurchase 797,000 shares. The company had $229.8 million remaining under its share repurchase authorization at quarter-end. Management increased its full-year 2026 revenue guidance to $732-$738 million from $721-$727 million. The updated range implies growth of 9-10%. Non-GAAP earnings are now projected between $7.74 and $7.88 per share, up from the prior forecast of $7.44-$7.65. For the third quarter, Qualys expects revenues of $185.5-$187.5 million, calling for 9-10% year-over-year growth. Non-GAAP earnings are projected in the range of $1.91-$1.98 per share. Management continues to expect an adjusted EBITDA margin in the mid-40% range and a free cash flow margin in the low-40% range for 2026. In the past month, investors have witnessed a upward trend in fresh estimates. Currently, Qualys has a average Growth Score of C, a grade with the same score on the momentum front. However, the stock was allocated a score of F on the value side, putting it in the lowest quintile for this investment strategy. Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in. Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise Qualys has a Zacks Rank #1 (Strong Buy). We expect an above average return from the stock in the next few months. Qualys is part of the Zacks Security industry. Over the past month, Varonis Systems (VRNS), a stock from the same industry, has gained 7.7%. The company reported its results for the quarter ended June 2026 more than a month ago. Varonis reported revenues of $180.02 million in the last reported quarter, representing a year-over-year change of +18.3%. EPS of $0.04 for the same period compares with $0.03 a year ago. For the current quarter, Varonis is expected to post earnings of $0.02 per share, indicating a change of -66.7% from the year-ago quarter. The Zacks Consensus Estimate remained unchanged over the last 30 days. The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for Varonis. Also, the stock has a VGM Score of D. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Qualys, Inc. (QLYS) : Free Stock Analysis Report Varonis Systems, Inc. (VRNS) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

It has been about a month since the last earnings report for Fortinet (FTNT). Shares have added about 12% in that time frame, outperforming the S&P 500. But investors have to be wondering, will the recent positive trend continue leading up to its next earnings release, or is Fortinet due for a pullback? Well, first let's take a quick look at its latest earnings report in order to get a better handle on the recent catalysts for Fortinet, Inc. before we dive into how investors and analysts have reacted as of late. Fortinet reported second-quarter 2026 non-GAAP earnings per share (EPS) of 90 cents, beating the Zacks Consensus Estimate by 20% and rising 40.6% year over year.Total revenues of $2.05 billion beat the consensus mark by 9.1% and increased 25.6% year over year, driven by strong demand across customer segments, industry verticals, and geographies. Growth was fueled by accelerating investment in securing AI infrastructure, the convergence of firewall, SD-WAN and SASE technologies into the company's newly defined SASE Firewall platform, and continued strength in operational technology (OT) security amid rising regulatory and critical infrastructure requirements.Total deferred revenues (current plus long-term portions combined) came in at $7.68 billion, while the current portion was $3.84 billion as of June 30, 2026.Total billings increased 33.4% year over year to $2.37 billion, led by 34% growth in secure networking, more than 55% growth in OT, 35% growth in Unified SASE and 25% growth in AI-driven security operations. Segment-wise, Product revenues increased 51.9% year over year to $773 million, representing 37.7% of total revenues. The acceleration was driven by strong FortiGate unit growth and higher average selling prices as customers shifted toward higher-performing models, along with customer investments to secure AI workloads and support AI data center buildouts.Service revenues of $1.27 billion grew 13.7% year over year, accounting for 62.3% of total revenues, with growth improving from the prior quarter. The first quarter of 2026 marked the trough for service revenue growth, with a positive trajectory expected going forward as accelerating product revenue feeds through to attached services. Service billings accelerated to 26% growth and total deferred revenues grew 17%. FortiSASE adoption within the large enterprise installed base rose to 90%, with FortiSASE billings growing more than 100% year over year, benefiting from expansion sales, competitive replacements and new large enterprise wins. Total GAAP gross margin was 80.2%, contracting 50 basis points (bps) year over year. Non-GAAP gross margin came in at 80.9%, contracting 70 bps year over year but exceeding the high end of guidance.GAAP operating margin expanded 560 bps year over year to 33.7% in the second quarter. On a non-GAAP basis, operating margin expanded 490 bps to a second quarter record of 38%, reflecting stronger than expected revenue growth, disciplined cost management and growing efficiencies from internal AI initiatives. Fortinet exited the second quarter of 2026 with cash and cash equivalents and short-term investments of $4.07 billion, up from $3.29 billion reported at the end of the first quarter of 2026. Cash flow from operations was $1.04 billion for the second quarter of 2026, up from $451.9 million in the prior year quarter, an increase of 130.9%. Free cash flow of $965.6 million grew 239.9% year over year from $284.1 million in the prior year quarter, reflecting improved linearity, higher billings and strong working capital discipline, representing a free cash flow margin of 47.2%. Adjusted free cash flow reached $995.9 million, up 132.7% year over year, representing a margin of 48.6%.The company repurchased 1.9 million shares of common stock for $146 million during the second quarter, bringing year-to-date repurchases to 12.5 million shares for $973 million, at an average price of approximately $78 per share. The remaining share repurchase authorization stands at approximately $766 million. Fortinet expects third-quarter revenues in the range of $2.01-$2.10 billion. Billings are estimated in the range of $2.25-$2.35 billion. The non-GAAP gross margin is expected in the range of 79-81%, while the non-GAAP operating margin is anticipated between 35-37%. Non-GAAP EPS is projected in the range of 83-87 cents.For 2026, FTNT raised its outlook and now predicts revenues in the range of $8.02-$8.18 billion (up from prior $7.71-$7.87 billion). Service revenues are projected in the range of $5.18 to $5.22 billion. Billings are expected in the range of $9.35-$9.55 billion (up from prior $8.8 to $9.1 billion). The non-GAAP gross margin is expected in the range of 79-81% and the operating margin is projected in the band of 35-37%. Non-GAAP EPS is anticipated to be between $3.41 and $3.47 (up from prior $3.10-$3.16). In the past month, investors have witnessed a upward trend in estimates revision. The consensus estimate has shifted 13.51% due to these changes. Currently, Fortinet has a strong Growth Score of A, though it is lagging a lot on the Momentum Score front with an F. Following the exact same course, the stock has a score of F on the value side, putting it in the bottom 20% quintile for this investment strategy. Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in. Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise Fortinet has a Zacks Rank #1 (Strong Buy). We expect an above average return from the stock in the next few months. Fortinet belongs to the Zacks Security industry. Another stock from the same industry, Varonis Systems (VRNS), has gained 12.2% over the past month. More than a month has passed since the company reported results for the quarter ended June 2026. Varonis reported revenues of $180.02 million in the last reported quarter, representing a year-over-year change of +18.3%. EPS of $0.04 for the same period compares with $0.03 a year ago. For the current quarter, Varonis is expected to post earnings of $0.02 per share, indicating a change of -66.7% from the year-ago quarter. The Zacks Consensus Estimate has changed +4.1% over the last 30 days. The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for Varonis. Also, the stock has a VGM Score of D. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Fortinet, Inc. (FTNT) : Free Stock Analysis Report Varonis Systems, Inc. (VRNS) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

A month has gone by since the last earnings report for Varonis Systems (VRNS). Shares have added about 1.9% in that time frame, underperforming the S&P 500. Will the recent positive trend continue leading up to its next earnings release, or is Varonis due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its latest earnings report in order to get a better handle on the important catalysts. Varonis Systems reported second-quarter 2026 non-GAAP earnings of 4 cents per share, which beat the Zacks Consensus Estimate of 1 cent. VRNS generated revenues of $180 million in the second quarter of 2026, surpassing the Zacks Consensus Estimate by 1.7%. Revenues increased from $152.2 million reported in the year-ago quarter. Varonis beat the Zacks Consensus Estimates in three of the previous four quarters, while missing the same on one occasion, with an average surprise of 146.7%. The quarter's performance was driven by continued SaaS momentum, robust demand for AI and data security offerings, healthy new customer additions and increasing adoption of newer products such as Atlas, Interceptor and Database Activity Monitoring. Varonis' SaaS transition remained the primary growth driver during the quarter. SaaS revenues increased to $171.7 million from $105.9 million in the year-ago quarter, reflecting strong cloud adoption. Legacy revenue streams continued to decline as customers migrated to the SaaS platform. Term license subscription revenues decreased to $4.2 million from $32.4 million a year ago, while maintenance and services revenues fell to $4.1 million from $13.9 million, with the majority of the decline attributable to SaaS conversions. Non-GAAP gross profit was $139.9 million, representing a 77.7% gross margin, compared with 80.6% in the prior-year quarter, reflecting the ongoing revenue mix shift toward SaaS. Non-GAAP operating expenses totaled $136.1 million. The company reported non-GAAP operating income of $3.7 million against a non-GAAP operating loss of $1.9 million in the year-ago quarter. Non-GAAP operating margin improved to 2.1% from negative 1.2% a year earlier. As of June 30, 2026, Varonis held $911.5 million in cash, cash equivalents, short-term deposits and marketable securities. For the first six months of 2026, the company generated $69.1 million in free cash flow compared with $82.7 million in the prior-year period. Adjusted for acquisition-related costs, adjusted free cash flow totaled $81.0 million. Total SaaS ARR reached $726 million, up 52% year over year, while SaaS ARR excluding conversions grew 25% year over year to $598.1 million. Management highlighted strong momentum from AI-driven demand, with SaaS ARR from new customers growing more than 20%. The company also cited growing adoption of newer offerings, including Atlas, Interceptor and Database Activity Monitoring, as organizations increasingly prioritize AI governance, data security and automated risk reduction. Management noted that several large deals slipped into July due to market-related news flow late in the quarter but have since closed, contributing to a strong start to the third quarter and supporting increased confidence in full-year guidance. For the third quarter of 2026, Varonis expects revenues between $185 million and $188 million, suggesting 14-16% year-over-year growth. Non-GAAP operating income is expected to be in the range of $2.5 million to $3.5 million. Non-GAAP earnings per share are projected between 2 cents and 3 cents. SaaS ARR growth, excluding conversions, is expected to be in the range of 22-23% year over year. For full-year 2026, Varonis raised its outlook and now expects revenues between $735 million and $739 million, implying 18-19% year-over-year growth. Total SaaS ARR is projected to be in the range of $819-$850 million. SaaS ARR growth, excluding conversions, is projected to be between 20% and 21% year over year. Free cash flow is expected to be in the band of $105-$110 million. Non-GAAP operating income is projected to be between $11 million and $13 million. Non-GAAP earnings per share are expected to be in the range of 14-15 cents. In the past month, investors have witnessed a upward trend in estimates revision. The consensus estimate has shifted 7.24% due to these changes. At this time, Varonis has a nice Growth Score of B, a score with the same score on the momentum front. However, the stock has a score of F on the value side, putting it in the bottom 20% quintile for value investors. Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in. Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. Interestingly, Varonis has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Varonis Systems, Inc. (VRNS) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Varonis Systems VRNS reported second-quarter 2026 non-GAAP earnings of 4 cents per share, which beat the Zacks Consensus Estimate of 1 cent. VRNS generated revenues of $180 million in the second quarter of 2026, surpassing the Zacks Consensus Estimate by 1.7%. Revenues increased from $152.2 million reported in the year-ago quarter. Varonis beat the Zacks Consensus Estimates in three of the previous four quarters, while missing the same on one occasion, with an average surprise of 146.7%. The quarter's performance was driven by continued SaaS momentum, robust demand for AI and data security offerings, healthy new customer additions and increasing adoption of newer products such as Atlas, Interceptor and Database Activity Monitoring. Varonis Systems, Inc. price-consensus-eps-surprise-chart | Varonis Systems, Inc. Quote Varonis' SaaS transition remained the primary growth driver during the quarter. SaaS revenues increased to $171.7 million from $105.9 million in the year-ago quarter, reflecting strong cloud adoption. Legacy revenue streams continued to decline as customers migrated to the SaaS platform. Term license subscription revenues decreased to $4.2 million from $32.4 million a year ago, while maintenance and services revenues fell to $4.1 million from $13.9 million, with the majority of the decline attributable to SaaS conversions. Non-GAAP gross profit was $139.9 million, representing a 77.7% gross margin, compared with 80.6% in the prior-year quarter, reflecting the ongoing revenue mix shift toward SaaS. Non-GAAP operating expenses totaled $136.1 million. The company reported non-GAAP operating income of $3.7 million against a non-GAAP operating loss of $1.9 million in the year-ago quarter. Non-GAAP operating margin improved to 2.1% from negative 1.2% a year earlier. As of June 30, 2026, Varonis held $911.5 million in cash, cash equivalents, short-term deposits and marketable securities. For the first six months of 2026, the company generated $69.1 million in free cash flow compared with $82.7 million in the prior-year period. Adjusted for acquisition-related costs, adjusted free cash flow totaled $81.0 million. Total SaaS ARR reached $726 million, up 52% year over year, while SaaS ARR excluding conversions grew 25% year over year to $598.1 million. Management highlighted strong momentum from AI-driven demand, with SaaS ARR from new customers growing more than 20%. The company also cited growing adoption of newer offerings, including Atlas, Interceptor and Database Activity Monitoring, as organizations increasingly prioritize AI governance, data security and automated risk reduction. Management noted that several large deals slipped into July due to market-related news flow late in the quarter but have since closed, contributing to a strong start to the third quarter and supporting increased confidence in full-year guidance. For the third quarter of 2026, Varonis expects revenues between $185 million and $188 million, suggesting 14-16% year-over-year growth. Non-GAAP operating income is expected to be in the range of $2.5 million to $3.5 million. Non-GAAP earnings per share are projected between 2 cents and 3 cents. SaaS ARR growth, excluding conversions, is expected to be in the range of 22-23% year over year. For full-year 2026, Varonis raised its outlook and now expects revenues between $735 million and $739 million, implying 18-19% year-over-year growth. Total SaaS ARR is projected to be in the range of $819-$850 million. SaaS ARR growth, excluding conversions, is projected to be between 20% and 21% year over year. Free cash flow is expected to be in the band of $105-$110 million. Non-GAAP operating income is projected to be between $11 million and $13 million. Non-GAAP earnings per share are expected to be in the range of 14-15 cents. Varonis currently carries a Zacks Rank #4 (Sell). Some better stocks in the broader Zacks Computer and Technology sector are Analog Devices ADI, Applied Materials AMAT and Cisco Systems CSCO, each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here. Shares of Analog Devices have rallied 37.1% year to date. The Zacks Consensus Estimate for ADI’s fiscal 2026 earnings is pegged at $12.42 per share, up by 10 cents over the past 30 days, indicating an increase of 59.4% year over year. Shares of Applied Materials have skyrocketed 101.1% year to date. The Zacks Consensus Estimate for AMAT’s fiscal 2026 earnings is pegged at $12.14 per share, up by 4 cents over the past 30 days, indicating a rise of 28.9% year over year. Cisco Systems shares have surged 48.7% year to date. The Zacks Consensus Estimate for CSCO’s fiscal 2026 earnings is pegged at $4.28 per share, unchanged over the past 30 days, indicating an increase of 12.3% year over year. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Varonis Systems, Inc. (VRNS) : Free Stock Analysis Report Analog Devices, Inc. (ADI) : Free Stock Analysis Report Cisco Systems, Inc. (CSCO) : Free Stock Analysis Report Applied Materials, Inc. (AMAT) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

This article first appeared on GuruFocus. SaaS ARR (excluding conversions): Increased 25% year-over-year to $598.1 million. Total SaaS ARR: $726 million. Revenue: Total revenues were $180 million, up 18% year-over-year. Gross Margin: 77.7%, compared to 80.6% in the second quarter of 2025. Operating Income: $3.7 million, with an operating margin of 2.1%. Net Income: $5.3 million, or $0.04 per diluted share. Free Cash Flow: Year-to-date $69.1 million, down from $82.7 million last year. Cash and Equivalents: $911.5 million as of June 30, 2026. Full Year 2026 Guidance: Total SaaS ARR of $819 million to $850 million, revenue of $735 million to $739 million, and free cash flow of $105 million to $110 million. Warning! GuruFocus has detected 3 Warning Signs with VRNS. Is VRNS fairly valued? Test your thesis with our free DCF calculator. Release Date: July 28, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. 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 (NASDAQ: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 (NASDAQ: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. Q: Can you discuss the impact of deals that were pushed out at the end of the second quarter and how it affected net new ARR in Q2? A: Guy Melamed, CFO and COO, explained that while there were positive trends in Q2, some large deals were delayed due to rumors in the news. However, some of these deals, including a seven-figure deal, have since closed in July. The company remains confident in its full-year guidance due to strong new logo ACV growth, increasing adoption of products like Atlas, DAM, and Interceptor, and a healthy pipeline driven by the need to secure AI and data. Q: How is the Mythos news affecting customer conversations and pipeline generation? A: Yakov Faitelson, CEO, noted that Mythos is exposing vulnerabilities, which is driving pipeline growth. Customers are investing in AI and seeking ROI, but the challenge is securely connecting AI agents to data. This has led to increased engagement from CISOs and Chief AI Officers, who recognize the need for secure AI integration to realize productivity gains. Q: Are there any characteristics of new customers in terms of size or product adoption? A: Yakov Faitelson highlighted that new customers are increasingly buying more upfront, including more platforms and AI systems. The need for coverage, automation, and scale in data security is driving this trend, especially as AI agents expose data security issues more readily than human interactions. Q: Can you elaborate on the nature of the slip deals and the confidence in closing them? A: Yakov Faitelson explained that the timing of the rumors was unfortunate, but the company is committed to customer success and innovation. Guy Melamed added that the guidance raise reflects confidence in closing these deals, with some already closed and others expected to close throughout the quarter. Q: How are new products like Atlas, Interceptor, and DAM affecting deal complexity and sales cycles? A: Yakov Faitelson stated that while the primary buyer remains the CISO, the portfolio expansion is not significantly impacting sales cycles. The new products are synergistic with existing offerings, and the company is engaging with Chief AI Officers as well. Guy Melamed noted that sales cycles have not lengthened despite the larger platform being sold. For the complete transcript of the earnings call, please refer to the full earnings call transcript.

SaaS ARR, excluding conversions increased 25% year-over-yearTotal SaaS ARR was $726.0 million, up 52% year-over-year MIAMI, July 28, 2026 (GLOBE NEWSWIRE) -- Varonis Systems, Inc. (Nasdaq: VRNS), the data and AI security leader, today announced financial results for the second quarter ended June 30, 2026. Yaki Faitelson, Varonis CEO, said, “Our Q2 results were highlighted by SaaS ARR excluding conversions growth of 25%, SaaS ARR from new logos growing more than 20% and increasing momentum from our newer products, including Atlas, Interceptor, and Database Activity Monitoring. Organizations are prioritizing data and AI security, and we are uniquely positioned to help customers secure sensitive data, govern AI and automate risk reduction.” Guy Melamed, Varonis CFO & COO, added, “Our performance this quarter was characterized by healthy new logo momentum driven by the need to secure AI and the data powering it. Given the strength we are seeing in the business, the underlying demand drivers and our strong start to July, we are raising our full-year outlook for SaaS ARR excluding conversions growth above the second quarter beat to 21% at the midpoint to $769 million to $775 million which is a $5 million raise over last quarter.” Financial Summary for the Second Quarter Ended June 30, 2026 Total revenues were $180.0 million, compared with $152.2 million in the second quarter of 2025. SaaS revenues were $171.7 million, compared with $105.9 million in the second quarter of 2025. Term license subscription revenues were $4.2 million, compared with $32.4 million in the second quarter of 2025, with the vast majority of the decline driven by customers converting to our SaaS platform. Maintenance and services revenues were $4.1 million, compared with $13.9 million in the second quarter of 2025, with the vast majority of the decline driven by customers converting to our SaaS platform. GAAP operating loss was ($40.6) million, compared to GAAP operating loss of ($36.6) million in the second quarter of 2025. Non-GAAP operating income was $3.7 million, compared to non-GAAP operating loss of ($1.9) million in the second quarter of 2025. 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 six months ended June 30, 2026 and 2025. 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 SaaS ARR, was $726.0 million as of the end of the second quarter, up 52% year-over-year and up 25% year-over-year, excluding conversions. As of June 30, 2026, the Company had $911.5 million in cash and cash equivalents, short-term deposits and short-term and long-term marketable securities. During the six months ended June 30, 2026, the Company generated $80.1 million of cash from operations, compared to $89.3 million generated in the prior year period. During the six months ended June 30, 2026, the Company generated $69.1 million of free cash flow, compared to $82.7 million generated in the prior year period. During the six months ended June 30, 2026, the Company generated $81.0 million of adjusted free cash flow, compared to $84.3 million generated in the prior year period. Announced support for Cursor, the AI-native coding tool, delivering visibility and control across the agentic development lifecycle. Named a Gartner Peer Insights Customers’ Choice for Data Security Posture Management (DSPM). Achieved GovRAMP Authorization to help public sector organizations secure critical data and AI. Deepened integration with Anthropic’s Claude Enterprise and Claude Platform as well as Claude Code and Claude Cowork, enabling security teams to secure and govern the entire Claude enterprise suite with the Varonis Atlas AI Security Platform. An explanation of SaaS 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 and non-GAAP adjusted free cash flow. An explanation of these measures is also included below under the heading "Non-GAAP Financial Measures and Key Performance Indicators." Financial Outlook For the third quarter of 2026, the Company expects: SaaS ARR year-over-year growth of 22% to 23%, excluding conversions. Revenues of $185.0 million to $188.0 million, or year-over-year growth of 14% to 16%. Non-GAAP operating income of $2.5 million to $3.5 million. Non-GAAP net income per diluted share in the range of $0.02 to $0.03, based on 131.1 million diluted shares outstanding. For full year 2026, the Company now expects: SaaS ARR of $819.0 million to $850.0 million, or year-over-year growth of 28% to 33%. SaaS ARR year-over-year growth of 20% to 21%, excluding conversions. Free cash flow of $105.0 million to $110.0 million. Revenues of $735.0 million to $739.0 million, or year-over-year growth of 18% to 19%. Non-GAAP operating income of $11.0 million to $13.0 million. Non-GAAP net income per diluted share in the range of $0.14 to $0.15, based on 131.5 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 WebcastVaronis will host a conference call today, Tuesday, July 28, 2026, at 4:30 p.m. Eastern Time, to discuss the Company's second quarter 2026 financial results. To access this call, dial 877-425-9470 (domestic) or 201-389-0878 (international). The passcode is 13761605. A replay of this conference call will be available through August 11, 2026 at 844-512-2921 (domestic) or 412-317-6671 (international). The replay passcode is 13761605. 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 IndicatorsVaronis 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, (v) amortization of debt issuance costs and (vi) acquisition-related taxes. 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; Amortization of debt issuance costs, which relate to the Company’s convertible senior notes issued in 2020 and 2024, are a non-cash item; and Acquisition-related taxes are unrelated to current operations and neither are comparable to the prior period nor predictive of future results. Free cash flow is calculated as net cash provided by or used in operating activities less purchases of property and equipment and capitalized internal-use software. Adjusted free cash flow is calculated as free cash flow excluding net cash paid for acquisition-related costs. We believe that free cash flow and adjusted free cash flow are useful indicators of liquidity that provide information to management and investors about the amount of cash provided by or used in our operations that, after adjusting for the investments in property and equipment, capitalized internal-use software and acquisition-related costs, 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 and acquisition-related taxes may 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 convertible 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 historical 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), non-GAAP net income (loss), and free cash flow referred to in our “Financial Outlook” is not provided because we do not guide on their most directly comparable GAAP financial measures. As these are forward-looking statements, such reconciliation is not available without unreasonable effort due to the high variability, complexity, uncertainty and difficulty of estimating certain items such as stock-based compensation and currency fluctuations, which have an impact on our consolidated results. The actual amounts of such reconciling items will have a significant impact on the Company’s most directly comparable GAAP financial measures. 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. SaaS ARR is a key performance indicator defined as the annualized value of active SaaS contracts in effect at the end of that period. Similarly, SaaS ARR excluding conversions is the annualized value of active SaaS contracts excluding the impact of conversions. The 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 such contracts is not determined by reference to historical revenues, deferred revenues or any other GAAP financial measure over any period. SaaS 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) secures AI and the data that powers it. The Varonis platform gives organizations automated visibility and control over their critical data wherever it lives and helps ensure safe and trustworthy AI from code to runtime. Backed by 24x7x365 managed detection and response, Varonis gives thousands of organizations worldwide the confidence to adopt AI, reduce data exposure, and stop AI-powered threats. Investor Relations Contact:Tim PerzVaronis Systems, [email protected] News Media Contact:Rachel HuntVaronis Systems, Inc.877-292-8767 (ext. 1598)[email protected]

Get insights on thousands of stocks from the global community of over 7 million individual investors at Simply Wall St. Varonis Systems (VRNS) is back in focus as investors weigh an upcoming earnings release alongside the recent expansion of Varonis Atlas AI security coverage across Anthropic’s full Claude enterprise suite. See our latest analysis for Varonis Systems. At a share price of $46.67, Varonis Systems has seen a 90 day share price return of 83.45% and a year to date share price return of 45.66%, while the 1 year total shareholder return declined 14.23%. This suggests strong recent momentum alongside a weaker longer term experience for some holders. If Varonis’s AI security push has caught your attention, it may be a good moment to scan the broader opportunity set and see how other specialist players stack up through our 34 AI small caps. The recent surge in Varonis Systems puts a spotlight on whether investors are reassessing the underlying AI security business or simply crowding into a hot story. To gauge that balance, the next step is to look closely at valuation. At $46.67, Varonis Systems is trading slightly above the most widely followed fair value estimate of $45.55, so it is worth understanding what assumptions drive that gap. Read the complete narrative. Read the complete narrative. Want to see what is baked into that fair value for Varonis Systems? The narrative leans heavily on sustained SaaS ARR growth, expanding margins and a richer earnings profile over time. Result: Fair Value of $45.55 (OVERVALUED) Have a read of the narrative in full and understand what's behind the forecasts. However, that story for Varonis Systems can be challenged if SaaS transition pressures keep margins under strain, or if larger platforms squeeze its share of data security budgets. Find out about the key risks to this Varonis Systems narrative. The first narrative framed Varonis Systems as about 2.5% overvalued against a fair value of $45.55, yet our DCF model points in the opposite direction. On that measure, VRNS at $46.67 is trading about 32.8% below an estimated future cash flow value of $69.47. That gap is large enough to matter for anyone weighing whether the current price already reflects the AI data security story or still leaves room if cash flows align more closely with the DCF path. The key question is which set of assumptions you find more realistic for Varonis Systems. Look into how the SWS DCF model arrives at its fair value. Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out Varonis Systems for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover 51 high quality undervalued stocks. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity. Mixed signals on Varonis Systems so far? Take a moment to weigh the recent price action against the underlying assumptions, and then stress test the balance of potential upside and downside through the 2 key rewards and 1 important warning sign. Do not stop at Varonis Systems alone. Broaden your watchlist with fresh ideas that match your priorities on value, income and capital preservation using the Simply Wall Street Screener. Target potential mispricing by scanning companies that combine quality fundamentals with attractive valuations through our 51 high quality undervalued stocks. Strengthen your income focus by reviewing businesses that have at least a 5% yield profile in the 8 dividend fortresses. Prioritise capital resilience by filtering for companies with steadier risk characteristics via the 84 resilient stocks with low risk scores. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Companies discussed in this article include VRNS. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email [email protected]

Interested in Varonis Systems, Inc.? Here are five stocks we like better. Varonis exceeded its Q2 2026 guidance, with revenue rising 18% year over year to $180 million and SaaS ARR excluding conversions increasing 25% to $598.1 million. Net income grew to $5.3 million, while the SaaS renewal rate exceeded 90%. Demand is growing for Varonis’ data- and AI-security offerings, particularly Atlas, Interceptor and Database Activity Monitoring. Management said AI adoption is increasing customer requirements for controls over sensitive data, models and agents. The company raised its full-year outlook, targeting 20%–21% growth in SaaS ARR excluding conversions, revenue of $735 million–$739 million and free cash flow of $105 million–$110 million. Cybersecurity Market Set to Double: This ETF Offers Exposure Varonis Systems (NASDAQ:VRNS) reported second-quarter 2026 results that exceeded the company’s guidance range, as management cited continued demand for data security and AI security capabilities, growth in new-customer activity, and rising adoption of newer products. SaaS annual recurring revenue, excluding conversions from the company’s self-hosted platform, rose 25% year over year to $598.1 million. Total SaaS ARR, including conversions, was $726 million. Chief Executive Officer Yaki Faitelson said SaaS ARR from new logos grew more than 20% during the quarter. → Volatility Is Back and These 3 Market Tollbooths Are Best Positioned to Profit 3 Mid-Cap Stocks Turning Heads in AI, Automation, & Cybersecurity Management said several large deals slipped late in the quarter amid media rumors regarding a potential transaction involving the company. Varonis declined to discuss the speculation further, but said it had closed some of the delayed transactions in July, including a seven-figure deal. Chief Financial Officer and Chief Operating Officer Guy Melamed said the third quarter had begun strongly and the company retained a healthy pipeline for the second half of the year. Total revenue increased 18% year over year to $180 million in the second quarter. SaaS revenue was $171.7 million, while term license subscription revenue totaled $4.2 million and maintenance and services revenue was $4.1 million. The company’s SaaS renewal rate exceeded 90%. → This Tiny AI Supplier Could Be More Important Than the Chipmakers 2 stocks that under-promised and over-delivered on their earnings On a non-GAAP basis, gross profit was $139.9 million, representing a 77.7% gross margin, compared with 80.6% in the prior-year quarter. Operating income was $3.7 million, or a 2.1% operating margin, compared with an operating loss of $1.9 million a year earlier. Net income was $5.3 million, or $0.04 per diluted share, compared with $3.8 million, or $0.03 per diluted share, in the second quarter of 2025. Financial income was approximately $7 million, primarily driven by interest income on cash, deposits and marketable securities. → 2 Stocks Built to Thrive If Inflation Refuses to Fade For the first six months of 2026, Varonis generated $69.1 million in free cash flow, compared with $82.7 million a year earlier. Melamed said the decline reflected the previously disclosed headwind associated with the end-of-life announcement for the company’s on-premise platform, as well as approximately $11.9 million in acquisition-related costs. Excluding those acquisition-related costs, year-to-date free cash flow would have been about $81 million, he said. As of June 30, Varonis had $911.5 million in cash equivalents, short-term deposits and marketable securities. Faitelson said the growing adoption of AI is increasing the value and risk associated with enterprise data. He argued that organizations need to understand where sensitive data resides, who or what can access it, and whether access is appropriate as AI models and agents are connected to data environments. “AI security and data security cannot be treated as separate problems,” Faitelson said, describing automation as central to managing AI-driven risk. He said customers are seeking controls around AI models, agents and pipelines, including insight into the data they can access, the permissions they inherit and whether their activity is normal. The company highlighted growing momentum for Atlas, Interceptor and Database Activity Monitoring, or DAM. Management said Atlas had been sold for roughly three and a half months and was appearing frequently in customer conversations. Melamed said the company was “pleasantly surprised” by Atlas’ contribution in the second quarter, though it expects a more meaningful contribution in the second half. Varonis said customers are increasingly buying more of its platform upfront and connecting it to more AI systems. Management said the primary buyer remains the chief information security officer, though chief AI officers are increasingly involved in conversations. A healthcare organization with more than 40,000 employees became a customer after seeking guardrails for more than 100 AI projects and automated remediation of overexposed HIPAA and personally identifiable information data. A financial services customer expanded its Varonis deployment following a vendor-consolidation review, adding Atlas Complete, Interceptor DAM, and coverage for infrastructure-as-a-service environments, Salesforce and Microsoft 365. Management said DAM is aimed at both new and existing customers, including opportunities to replace incumbent products from Imperva and IBM Guardium. Interceptor has primarily been sold into Varonis’ existing customer base alongside the company’s MDDR offering, according to Melamed. For the third quarter, Varonis forecast SaaS ARR growth of 22% to 23%, excluding conversions; revenue of $185 million to $188 million; non-GAAP operating income of $2.5 million to $3.5 million; and non-GAAP earnings of $0.02 to $0.03 per diluted share. For full-year 2026, the company raised its outlook for SaaS ARR excluding conversions to growth of 20% to 21%. It expects total SaaS ARR of $819 million to $850 million, representing growth of 28% to 33%, and said its implied SaaS ARR excluding conversions outlook is $769 million to $775 million, a $5 million increase from its prior forecast. Varonis also lifted its full-year free-cash-flow forecast by $5 million to $105 million to $110 million. The company projected full-year revenue of $735 million to $739 million, up 18% to 19%; non-GAAP operating income of $11 million to $13 million; and non-GAAP earnings per diluted share of $0.14 to $0.15. Melamed said the company expects sales productivity to continue improving as it moves upmarket and sells a broader platform. He also said Varonis did not assume a positive contribution from the federal vertical in its third-quarter outlook, describing that part of the business as de-risked in the guidance. Varonis Systems is a cybersecurity firm specializing in the protection and management of unstructured data. The company's flagship Data Security Platform provides advanced analytics for monitoring file systems, email servers, collaboration platforms and cloud storage. By continuously mapping and analyzing data permissions and user behavior, Varonis enables organizations to detect insider threats, verify compliance and remediate exposed data in real time. Founded in 2005 and headquartered in New York City, Varonis serves a diverse global customer base across financial services, healthcare, media, manufacturing and government. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "Varonis Systems Q2 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for July 2026.