Varonis Systems (NASDAQ: VRNS) reported Q4 EPS of $0.36, $0.07 better than the analyst estimate of $0.29. Revenue for the quarter came in at $73.2 million versus the consensus estimate of $66.28 million.

Financial Outlook

The Company’s financial outlook reflects the adoption of ASC 606, effective January 1, 2018, using the full retrospective method. The Company expects the adoption will have no material impact on its revenues and operating profitability metrics.

Due to the appreciation of the New Israeli Shekel against the U.S. Dollar, the Company expects its operating expenses, mainly those related to research and development, to be negatively impacted by this foreign currency movement in 2018 compared to 2017. For both the first quarter and full year 2018, we expect this impact to be approximately 300 basis points to our non-GAAP operating margin.

For the first quarter of 2018, the Company expects revenues in the range of $49.2 million to $50.0 million, representing 24% to 26% year-over-year growth. The Company anticipates first quarter 2018 non-GAAP operating loss in the range of ($8.6) million to ($8.2) million and non-GAAP net loss per basic and diluted share in the range of ($0.32) to ($0.31), based on a tax provision of $400,000 to $600,000 and 28.3 million basic and diluted shares outstanding. Expectations of non-GAAP operating loss and non-GAAP net loss per basic and diluted share exclude stock-based compensation expense and payroll tax expense related to stock-based compensation.

For the full year 2018, the Company expects revenues in the range of $260.0 million to $264.5 million, representing 21% to 23% year-over-year growth. The Company anticipates full year 2018 non-GAAP operating income of $1.5 million to $4.0 million and non-GAAPnet loss per basic and diluted share in the range of ($0.04) to non-GAAP net income per diluted share of $0.02. This is based on a tax provision of $2.7 million to $3.2 million and 28.6 million basic and diluted shares outstanding and 32.2 million diluted shares outstanding. Expectations of non-GAAP operating income and non-GAAP net income (loss) per basic and diluted share exclude stock-based compensation expense and payroll tax expense related to stock-based compensation.

The tables at the end of this press release include a reconciliation of ASC 605 to ASC 606 for the first quarter 2017 and full year 2017.

Financial Highlights for the Fourth Quarter Ended December 31, 2017

Revenues:

• Total revenues were $73.2 million, up 35% compared with the fourth quarter of 2016.
• License revenues were $46.6 million, up 34% compared with the fourth quarter of 2016.
• Maintenance and services revenues were $26.6 million, up 35% compared with the year-ago period.

Operating Income:

• GAAP operating income was $6.0 million for the quarter, compared to $4.6 million in the fourth quarter of 2016.
• Non-GAAP operating income was $11.7 million for the quarter, compared to $8.1 million in the fourth quarter of 2016.

Net Income:

• GAAP net income was $5.5 million, compared to GAAP net income of $3.5 million in the fourth quarter of 2016.
• GAAP net income per diluted share was $0.18 compared to GAAP net income per diluted share of $0.12 in the fourth quarter of 2016, based on 31.1 million and 29.3 million diluted shares outstanding, respectively.
• Non-GAAP net income was $11.2 million, compared to $7.0 million in the fourth quarter of 2016.
• Non-GAAP net income per diluted share was $0.36, compared to $0.24 in the fourth quarter of 2016, based on 31.1 million and 29.3 million diluted shares outstanding, respectively.
• GAAP and non-GAAP net income for the fourth quarters of 2017 and 2016 included financial income of $0.3 million and financial expense of ($0.7) million, respectively, primarily due to foreign exchange gains and losses.

GUIDANCE:

Varonis Systems sees FY2018 revenue of $260-264 million, versus the consensus of $250.78 million.

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