Varonis Systems, Inc. (VRNS)

Varonis reported third-quarter 2026 revenue of $189.5 million on 3 November, against $161.6 million a year earlier 12. That is growth of 17.3 percent (computed) 2.

Almost all of it came from subscriptions delivered over the internet, called SaaS: $185.1 million, up from $125.8 million 2. Older licences that customers install themselves fell to $1.2 million from $24.8 million, mostly because customers moved to SaaS 2.

The company still lost money on a GAAP basis, the standard accounting rules 2. Its operating loss was $47.7 million, against $35.9 million a year earlier 2. SaaS annual recurring revenue, the yearly value of live SaaS contracts, was $774.6 million 2.

The bigger news is the sale 3. On 15 October 2026 Varonis agreed to be bought by Proofpoint, a company owned by funds advised by Thoma Bravo, for $49.75 in cash for each share 3.

The companies describe the deal as worth about $6.3 billion, and Varonis expects it to close in the first half of 2027 34. Because of the pending deal, Varonis gave no guidance and held no earnings call 2.

The open questions are the vote of Varonis stockholders and approvals from regulators 3.

Varonis was incorporated in Delaware on 3 November 2004 and began operations on 1 January 2005 7. Co-founder and chief executive Yaki Faitelson told Calcalist the early years were tough, with far less money in cybersecurity than today 6.

The platform began with Windows file shares, the shared folders inside company networks 7. It later grew to cover cloud and software-as-a-service data stores 7. Varonis listed on Nasdaq on 28 February 2014 7.

Revenue grew fast from 2020 to 2022: $292.7 million, $390.1 million, then $473.6 million, with growth of 33 percent in 2021 and 21 percent in 2022 9. Net losses ran at $94.0 million, $116.9 million and $124.5 million over the same years 9.

The company bought Polyrize in October 2020 and launched its first SaaS offering in the second half of 2021 9. On 31 October 2022 it made its flagship Varonis Data Security Platform available as SaaS, where before it was only self-hosted 9.

The shift to SaaS reshaped the revenue lines 7. SaaS revenue went from $44.4 million in 2023 to $208.8 million in 2024 and $462.6 million in 2025, while total revenue rose from $499.2 million to $551.0 million and $623.5 million 7.

Accounting explains why total growth looked slower 7. Varonis books a self-installed term licence when it is delivered, but SaaS revenue is spread evenly across the contract, so each customer who converts lowers revenue in the near term 7.

SaaS was 8.9 percent of revenue in 2023, 37.9 percent in 2024 and 74.2 percent in 2025, while term licences fell from 71.4 percent to 17.6 percent 7.

Varonis raised $460.0 million by selling 2029 convertible notes on 10 September 2024, and the $253.0 million notes it issued in May 2020 were settled by their August 2025 maturity 7.

Faitelson, who worked at NetApp before founding Varonis, said the company also lived through the 2008 financial crisis 6. He said it started with on-premises systems and began moving to the cloud about five years ago 6.

Through the change the renewal rate stayed over 90 percent in 2025, 2024 and 2023, and total revenue still grew about 13 percent in 2025 7. Operating losses were $146.5 million, $117.7 million and $117.2 million in 2025, 2024 and 2023 7.

It then bought Cyral on 17 March 2025, a database monitoring company, and SlashNext on 28 August 2025, an email security company 7. On 6 February 2026 it bought AllTrue.ai, which secures AI agents 8.

The Varonis Data Security Platform

The platform maps where a company keeps sensitive data, who can reach it and how it is used 7. It then removes access that is not needed and flags suspicious behaviour 7.

Its SaaS licence bundles data security posture management, data discovery and classification, least privilege automation, data activity monitoring, data detection and response, and user behaviour analytics 7.

Customers choose what to protect through packages for Microsoft 365, Windows and network storage, a hybrid of both, and cloud environments such as Salesforce, AWS, Azure and Google Cloud 7.

SaaS, term licences and maintenance

The filed segment list has three revenue lines for 2025 7. SaaS brought in $462.6 million, or about 74 percent of revenue 7.

Term licence subscriptions, which customers run on their own servers, were 17.6 percent 7. Maintenance and services were 8.2 percent 7. Varonis has announced the end of life of its self-hosted products on 31 December 2026 7.

Managed detection, database, email and AI add-ons

Its managed data detection and response service, MDDR, offers round the clock monitoring and response backed by service commitments, and runs only on the SaaS platform 7.

Database Activity Monitoring covers on-premises and cloud databases 7. Interceptor blocks phishing and malicious links, and Athena AI lets security teams work in plain language 7.

Varonis Atlas, powered by the AllTrue.ai purchase, gives visibility and control over AI agents, models and the data they reach 8.

Customers and sales

Varonis says customers sit in more than 95 countries, its renewal rate was over 90 percent in 2025, and it sells through channel partners such as resellers 7.

In 2025 about 71 percent of revenue came from the United States, 21 percent from EMEA (Europe, the Middle East and Africa) and 8 percent from the rest of the world 7.

Rivals

The annual report names no rival 7. It says Varonis competes with vendors of data security posture, classification, privacy, identity security and threat detection tools, and with large security platforms 7.

It also says cloud providers and SaaS vendors keep adding native security features, and some competitors may have greater resources 7.

People and places

Varonis had 2,658 employees and contractors at the end of 2025, with 1,139 in the United States, 916 in Israel and 603 elsewhere 7.

Most research and development sits in Herzliya, Israel 7. Support and sales centres are in North Carolina and Cork, Ireland, and most office space is leased 7.

Yaki Faitelson is chief executive and president, and chairman of the board 34. Guy Melamed signs as chief financial officer and chief operating officer 1.

Current problems

On 7 January 2026 Varonis and some officers were named in a putative securities class action in federal court in New York over statements about annual recurring revenue and SaaS conversions 7.

A 17 July 2026 amended complaint extended the class period to 3 February 2026, and the company says the claims are without merit 8. A derivative suit followed on 23 April 2026 8.

The umbrella, in words

The brands are the Varonis Data Security Platform, Athena AI, Interceptor, Database Activity Monitoring, MDDR and Atlas, all sold by Varonis itself 78.

The 10-K says Varonis has sixteen wholly-owned subsidiaries 7. The main operating one is Varonis Systems Ltd. in Israel, and the list includes Cyral, LLC and SlashNext, LLC in Delaware 10.

Varonis owns Cyral and SlashNext outright, having bought their share capital in 2025, and owns AllTrue.ai the same way since February 2026 78.

Its annual report lists no controlled land or mines, only leased offices 7. Proofpoint is not yet its owner, and the companies say they remain separate and independent until closing 4.

Thoma Bravo bought Proofpoint in 2021 in a take-private deal valued at about $12.3 billion, Reuters reported 5.

On control, Faitelson owned about 0.67 percent of the shares on 15 October 2026 and agreed to vote them for the merger 3.

Varonis and Proofpoint say the merger is expected to close in the first half of 2027 3. If it closes, the shares leave Nasdaq and stop being registered with the SEC 3.

Closing needs a majority vote of the voting power of the shares, expiry of the Hart-Scott-Rodino waiting period, and certain foreign approvals 3.

Either side can end the agreement if it has not closed by 15 July 2027, with a three month extension for regulatory approvals 3.

Varonis owes Proofpoint a termination fee of $211.7 million in specified cases, and Proofpoint owes Varonis $423.3 million in others 3.

Faitelson agreed on 15 October 2026 to serve as a non-executive officer for 18 months after closing 3. Proofpoint says it intends to integrate the two companies quickly after closing 4.

The deal is financed by committed equity from Thoma Bravo funds and committed debt, and Ontario Teachers' Pension Plan has agreed to invest in Proofpoint 34.

The joint release says the combined company will serve more than 16,000 enterprises 4. The release says Varonis becomes a private company once the deal closes 4.

The securities suit is still open: defendants' motion to dismiss the amended complaint was due on or before 15 September 2026, under a court order of 4 June 2026 8.

The Calcalist interview records Faitelson saying it is too early to discuss the workforce, and that the intention is to integrate Varonis employees into the broader platform 6.

Varonis said it will not give guidance or update earlier guidance while the deal is pending 2. It plans to end its self-hosted business on 31 December 2026 7.

The 2029 convertible notes are affected, because the merger counts as a make-whole fundamental change under their indenture 3. Faitelson told Calcalist the platform is projected to reach a $1 billion annual revenue run rate next year 6.