07-05-2025
Varonis (NASDAQ:VRNS) Surprises With Q1 Sales
Data protection and security software company Varonis (NASDAQ:VRNS) reported revenue ahead of Wall Street's expectations in Q1 CY2025, with sales up 19.6% year on year to $136.4 million. The company expects next quarter's revenue to be around $147.5 million, close to analysts' estimates. Its non-GAAP profit of $0.01 per share was significantly above analysts' consensus estimates.
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Varonis (VRNS) Q1 CY2025 Highlights:
Revenue: $136.4 million vs analyst estimates of $133.4 million (19.6% year-on-year growth, 2.3% beat)
Adjusted EPS: $0.01 vs analyst estimates of -$0.05 (significant beat)
Adjusted Operating Income: -$6.5 million vs analyst estimates of -$11.98 million (-4.8% margin, 45.7% beat)
The company reconfirmed its revenue guidance for the full year of $617.5 million at the midpoint
Management raised its full-year Adjusted EPS guidance to $0.16 at the midpoint, a 3.3% increase
Operating Margin: -32.1%, up from -41.8% in the same quarter last year
Free Cash Flow Margin: 47.9%, up from 12.6% in the previous quarter
Annual Recurring Revenue: $664.3 million at quarter end, up 18.6% year on year
Billings: $142.4 million at quarter end, up 21.1% year on year
Market Capitalization: $4.91 billion
Yaki Faitelson, Varonis CEO, said, "Our first quarter results reflect the momentum of our SaaS platform as well as the many tailwinds that are contributing to the growth in our business, including MDDR and Generative AI. Our solution has never been more relevant, and we look forward to completing our SaaS transition this year which will unlock many more benefits for our customers and our company as we execute on our significant market opportunity.'
Company Overview
Founded by a duo of former Israeli Defense Forces cyber warfare engineers, Varonis (NASDAQ:VRNS) offers software-as-service that helps customers protect data from cyber threats and gain visibility into how enterprise data is being used.
Sales Growth
A company's long-term sales performance can indicate its overall quality. Any business can experience short-term success, but top-performing ones enjoy sustained growth for years. Over the last three years, Varonis grew its sales at a 11.7% compounded annual growth rate. Although this growth is acceptable on an absolute basis, it fell short of our standards for the software sector, which enjoys a number of secular tailwinds.
Varonis Quarterly Revenue
This quarter, Varonis reported year-on-year revenue growth of 19.6%, and its $136.4 million of revenue exceeded Wall Street's estimates by 2.3%. Company management is currently guiding for a 13.2% year-on-year increase in sales next quarter.
