Varonis Systems (VRNS) Tops Q3 EPS by 20c, Revenues Beat; Offers 4Q EPS/Revenue Guidance Above Consensus

Varonis Systems (NASDAQ: VRNS) reported Q3 EPS of ($0.15), $0.20 better than the analyst estimate of ($0.35). Revenue for the quarter came in at $66.57 million versus the consensus estimate of $56.99 million.

Financial Summary for the Second Quarter Ended June 30, 2020

• Subscription revenues increased 130% to $34.1 million, or more than 99% of total license revenues, compared with $14.8 million, or 56% of total license revenues, in the second quarter of 2019.
• Maintenance and services revenues were $32.2 million, compared with $33.3 million in the second quarter of 2019.
• Total revenues increased 12% to $66.6 million, compared to $59.6 million in the second quarter of 2019, despite the substantially higher mix of subscription revenues.
• GAAP operating loss was ($22.1) million for the quarter, compared to GAAP operating loss of ($24.0) million in the second quarter of 2019.
• Non-GAAP operating loss was ($4.0) million for the quarter, compared to non-GAAP operating loss of ($8.9) million in the second quarter of 2019.

"Varonis had a strong second quarter, with annual recurring revenue growth of 52% year-over-year," said Yaki Faitelson, Varonis CEO. "The new world of highly distributed workforces has exposed the elevated risks of the work-from-home environment, and Varonis is in a unique position to address them. For companies around the world, data is more exposed between on-prem and cloud stores, hackers are more sophisticated, and threats from insiders are growing. Both new and existing customers understand that our Data Security Platform has the power to address these problems, and they continue to invest in our solutions. We are encouraged by what we see in the market and are focused on executing against the opportunity in front of us."

Guy Melamed, Varonis CFO and COO, said, "We saw healthy customer purchasing patterns in the second quarter, and it is clear that Varonis has never been in a stronger financial position. Nearly 100% of our second quarter license revenues were from subscriptions, and 98% of our total revenues are recurring in nature, providing better visibility into future revenue streams. While we are closely monitoring the current environment, our strong second quarter results give us the confidence to gradually resume investments in the business for 2020, while planning for margin improvements and greater cash flow generation in the future."

GUIDANCE:

Varonis Systems sees Q4 2020 EPS of ($0.14)-($0.11), versus the consensus of ($0.16). Varonis Systems sees Q4 2020 revenue of $68-71 million, versus the consensus of $65.57 million.

For the third quarter of 2020, the Company expects:

• Revenues in the range of $68.0 million to $71.0 million.
• Non-GAAP operating loss in the range of ($3.0) million to ($2.0) million.
• Non-GAAP net loss per basic and diluted share in the range of ($0.14) to ($0.11), based on 31.6 million basic and diluted shares outstanding.

For earnings history and earnings-related data on Varonis Systems (VRNS) click here.

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