UPDATE: Varonis Systems (VRNS) Tops Q4 EPS by 20c, Revenues Beat; Offers Q1 & FY19 Revenue Guidance Below Consensus, FY19 EPS Views Below Consensus
Varonis Systems (NASDAQ: VRNS) reported Q4 EPS of $0.54, $0.20 better than the analyst estimate of $0.34. Revenue for the quarter came in at $87.5 million versus the consensus estimate of $87.34 million.
Revenues:
- Total revenues were $87.5 million, up 20% compared with the fourth quarter of 2017.
- License revenues were $53.3 million, up 16% compared with the fourth quarter of 2017.
- Subscription revenues as a percentage of license revenues was approximately 6%, compared with less than 2% in the fourth quarter of 2017.
- Maintenance and services revenues were $34.2 million, up 27% compared with the fourth quarter of 2017.
Net Income:
- GAAP net income was $6.5 million, compared to $6.8 million in the fourth quarter of 2017.
- GAAP net income per diluted share was $0.20, compared to $0.22 in the fourth quarter of 2017, based on 32.5 million and 31.1 million diluted shares outstanding, respectively.
- Non-GAAP net income was $17.5 million, compared to $12.5 million in the fourth quarter of 2017.
- Non-GAAP net income per diluted share was $0.54, compared to $0.40 in the fourth quarter of 2017, based on 32.5 million and 31.1 million diluted shares outstanding, respectively.
Yaki Faitelson, Varonis CEO, said, “2018 was another strong year for Varonis, as total revenues increased 25%. We saw more customers buying more of our licenses, validating that our robust portfolio and our innovation agenda is meeting a wider range of their data security needs. Customers want the benefits of our full platform, and we need to make it easier for them to adopt more of our products more quickly. In order to do so, in 2019 we are transitioning from perpetual licenses to a subscription-based model. We believe this will provide a faster pathway for customers to realize more of the value of our broad platform and for Varonis to capture more of our total addressable market and increase customer lifetime value.”
Guy Melamed, Varonis CFO and COO, added, "The shift to a subscription business model is a critical step on our path toward building a billion dollar business and increasing stockholder value. We learned a great deal from the subscription pilot program we ran in the second half of 2018, and we are now ready to roll it out globally. Subscription will enable our customers to realize more value both right off the bat and over time and will also build a recurring revenue stream for us and our partners. We are excited about this transition, which we believe will allow Varonis to build a stronger business based on continuous innovation with greater long-term visibility, predictability and improved customer lifetime value."
GUIDANCE:
Varonis Systems sees Q1 2019 EPS of ($0.38)-($0.36), versus the consensus of ($0.23). Varonis Systems sees Q1 2019 revenue of $58.5-60 million, versus the consensus of $62.84 million.
Varonis Systems sees FY2019 EPS of $0.04-$0.16, versus the consensus of $0.32. Varonis Systems sees FY2019 revenue of $297-305 million, versus the consensus of $318.47 million.
For earnings history and earnings-related data on Varonis Systems (VRNS) click here.