Varian Medical Systems (NASDAQ: VRNS) reported Q2 EPS of ($0.56), $0.03 better than the analyst estimate of ($0.59). Revenue for the quarter came in at $54.2 million versus the consensus estimate of $54.05 million.

Financial Summary for the First Quarter Ended March 31, 2020

• Subscription revenues increased 191% to $20.4 million, or 98% of total license revenues, compared with $7.0 million, or 31% of total license revenues, in the first quarter of 2019.
• Maintenance and services revenues were $33.4 million, compared with $33.8 million in the first quarter of 2019.
• Total revenues were $54.2 million, compared to $56.4 million in the first quarter of 2019, primarily reflecting the negative impact of COVID-19 and the substantially higher mix of subscription revenues.
• GAAP operating loss was ($32.7) million for the quarter, compared to GAAP operating loss of ($22.0) million in the first quarter of 2019.
• Non-GAAP operating loss was ($17.4) million for the quarter, compared to non-GAAP operating loss of ($11.1) million in the first quarter of 2019.

"We are operating in unprecedented times, requiring us to plan carefully, act decisively and remain nimble, the same skills that we used to successfully transition Varonis to a subscription model over the last year," said Yaki Faitelson, Varonis CEO. "The disruption that COVID-19 has caused to businesses globally is undeniable. However, at the same time the associated risks to our customers – specifically, the confluence of a distributed workforce, the elevated use of VPNs and unsecured home networks, and hackers seeking to take advantage of firms' vulnerabilities – has heightened interest in our unique capabilities around data protection and threat detection. We have conducted a record number of virtual risk assessments over the last couple months and are pleased with our building pipeline and unprecedented engagement with existing customers. While the current environment remains dynamic, our subscription model, disciplined and flexible approach to expense management, strong balance sheet and healthy cash position leave us well positioned to meet today's challenges, and I remain confident that Varonis will emerge from this stronger than ever."

GUIDANCE:

Varian Medical Systems sees Q3 2020 EPS of ($0.36)-($0.34), versus the consensus of ($0.38). Varian Medical Systems sees Q3 2020 revenue of $56-58 million, versus the consensus of $56.61 million.

For the second quarter of 2020, the Company expects:

• Revenues in the range of $56 million to $58 million.
• Non-GAAP operating loss in the range of ($11.0) million to ($10.0) million.
• Non-GAAP net loss per basic and diluted share in the range of ($0.36) to ($0.34), based on an assumed tax provision of $400,000 to $600,000 and 31.5 million basic and diluted shares outstanding.

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