Varonis Systems (NASDAQ:VRNS) Issues Quarterly Earnings Results, Beats Expectations By $0.03 EPS

Posted by Geri Gentry on Jul 29th, 2026

Varonis Systems (NASDAQ:VRNS – Get Free Report) posted its quarterly earnings results on Tuesday. The technology company reported $0.04 EPS for the quarter, topping analysts’ consensus estimates of $0.01 by $0.03, FiscalAI reports. Varonis Systems had a negative return on equity of 20.27% and a negative net margin of 19.75%.The company had revenue of $180.02 million for the quarter, compared to analysts’ expectations of $176.83 million. During the same period in the previous year, the firm earned $0.03 EPS. The firm’s revenue was up 18.3% compared to the same quarter last year. Varonis Systems updated its FY 2026 guidance to 0.140-0.150 EPS and its Q3 2026 guidance to 0.020-0.030 EPS.

Here are the key takeaways from Varonis Systems’ conference call:

SaaS ARR excluding conversions rose 25% year over year to $598.1 million, while new-logo SaaS ARR grew more than 20%. Management cited strong pipeline momentum, increasing adoption of Atlas, Interceptor and Database Activity Monitoring, and demand for AI and data security.
Varonis raised its full-year outlook, targeting SaaS ARR of $819 million–$850 million and SaaS ARR growth excluding conversions of 20%–21% at the midpoint. Full-year free cash flow guidance increased by $5 million to $105 million–$110 million.
Second-quarter revenue increased 18% to $180 million, with SaaS revenue of $171.7 million and a renewal rate above 90%. Non-GAAP operating income improved to $3.7 million, but gross margin declined to 77.7% from 80.6% a year earlier as the company transitions away from its self-hosted platform.
Several large deals slipped in the final week of the quarter amid media speculation about a potential transaction involving Varonis, although management said some—including a seven-figure deal—closed in July. The company declined to comment on the transaction rumors.
On-premises-to-SaaS conversions remained difficult to forecast, with management retaining a $50 million–$75 million full-year range; first-half conversions were running near the low end of expectations. Executives emphasized that SaaS ARR excluding conversions is the primary measure of underlying business health.

Varonis Systems Stock Down 4.3%

Shares of VRNS opened at $44.67 on Wednesday. The company has a debt-to-equity ratio of 1.00, a current ratio of 1.69 and a quick ratio of 1.69. The stock has a market capitalization of $5.13 billion, a price-to-earnings ratio of -39.18 and a beta of 0.83. Varonis Systems has a 1 year low of $19.70 and a 1 year high of $63.90. The business’s 50 day simple moving average is $38.64 and its 200-day simple moving average is $30.56.

Institutional Investors Weigh In On Varonis Systems

Several large investors have recently bought and sold shares of VRNS. Dynamic Technology Lab Private Ltd bought a new position in Varonis Systems during the first quarter valued at $233,000. Caxton Associates LLP purchased a new position in shares of Varonis Systems in the 1st quarter worth $200,000. UBS AM A Distinct Business Unit of UBS Asset Management Americas LLC grew its stake in shares of Varonis Systems by 11.7% in the 1st quarter. UBS AM A Distinct Business Unit of UBS Asset Management Americas LLC now owns 619,257 shares of the technology company’s stock worth $25,049,000 after buying an additional 64,636 shares in the last quarter. Russell Investments Group Ltd. increased its holdings in shares of Varonis Systems by 2.8% in the 2nd quarter. Russell Investments Group Ltd. now owns 22,811 shares of the technology company’s stock worth $1,158,000 after buying an additional 628 shares during the last quarter. Finally, Invesco Ltd. increased its holdings in shares of Varonis Systems by 8.6% in the 2nd quarter. Invesco Ltd. now owns 96,536 shares of the technology company’s stock worth $4,899,000 after buying an additional 7,618 shares during the last quarter. Institutional investors own 95.65% of the company’s stock.

Wall Street Analyst Weigh In

VRNS has been the topic of several recent analyst reports. Wedbush reiterated an “outperform” rating and set a $37.00 price objective on shares of Varonis Systems in a research report on Wednesday, June 24th. Citigroup restated an “overweight” rating on shares of Varonis Systems in a research report on Friday. Royal Bank Of Canada raised their target price on shares of Varonis Systems from $30.00 to $36.00 and gave the company an “outperform” rating in a research note on Wednesday, April 29th. Barclays lifted their price target on shares of Varonis Systems from $33.00 to $52.00 and gave the company an “overweight” rating in a report on Monday, July 13th. Finally, Rosenblatt Securities began coverage on shares of Varonis Systems in a research note on Tuesday, May 12th. They issued a “buy” rating and a $40.00 price target on the stock. One analyst has rated the stock with a Strong Buy rating, sixteen have assigned a Buy rating, five have assigned a Hold rating and one has issued a Sell rating to the company’s stock. According to data from MarketBeat, the company has a consensus rating of “Moderate Buy” and an average target price of $46.26.

Read Our Latest Stock Analysis on VRNS

Key Stories Impacting Varonis Systems

Here are the key news stories impacting Varonis Systems this week:

Positive Sentiment: JPMorgan raised its price target to $55 from $39 and maintained an Overweight rating, implying further upside from recent trading levels and signaling increased confidence in Varonis’ growth prospects. JPMorgan Chase & Co. Boosts Varonis Systems Price Target to $55.00
Positive Sentiment: Q2 revenue rose 18.3% year over year to $180.0 million, exceeding the $176.8 million analyst estimate, while adjusted EPS of $0.04 topped the $0.01 consensus. EPS also improved from $0.03 in the year-ago quarter. Varonis Announces Second Quarter 2026 Financial Results
Positive Sentiment: SaaS annual recurring revenue excluding conversions increased 25% year over year, while total SaaS ARR reached $726 million, up 52%. Management also cited growth in new logos and momentum in Atlas, Interceptor and Database Activity Monitoring.
Positive Sentiment: Management’s Q3 and full-year 2026 forecasts exceeded consensus EPS expectations. Q3 EPS is projected at $0.02-$0.03 versus an anticipated loss of $0.04, while full-year EPS is forecast at $0.14-$0.15 versus consensus for a $0.11 loss. Full-year revenue guidance of $735 million-$739 million was broadly in line with estimates.
Neutral Sentiment: The earnings call provided additional commentary on SaaS adoption, newer products and the company’s data- and AI-security strategy, but investors will likely look for sustained growth as Varonis continues its transition toward a SaaS model. Varonis Q2 2026 Earnings Call Transcript
Negative Sentiment: The stock declined following the earnings release despite the beats, indicating that elevated investor expectations may have outweighed the strong quarterly figures and guidance. Varonis also remains unprofitable on a reported basis, with a negative net margin and return on equity.

About Varonis Systems

(Get Free Report)

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.