Varonis Systems (NASDAQ: VRNS) reported Q3 EPS of $0.06, $0.19 better than the analyst estimate of ($0.13). Revenue for the quarter came in at $76.8 million versus the consensus estimate of $70.17 million.

Financial Summary for the Third Quarter Ended September 30, 2020

• Subscription revenues increased 89% to $44.1 million, or more than 99% of total license revenues, compared with $23.3 million, or 74% of total license revenues, in the third quarter of 2019.
• Maintenance and services revenues were $32.3 million, compared with $34.1 million in the third quarter of 2019.
• Total revenues increased 17% to $76.8 million, compared to $65.6 million in the third quarter of 2019.
• GAAP operating loss was ($16.5) million for the quarter, compared to GAAP operating loss of ($16.0) million in the third quarter of 2019.
• Non-GAAP operating income was $3.1 million for the quarter, compared to non-GAAP operating loss of ($4.7) million in the third quarter of 2019.

"Our third quarter 2020 results demonstrate strong execution by our team, as well as the power of our Data Security Platform. As data continues to grow rapidly and the world becomes increasingly virtual, Varonis is well positioned to address the elevated risks that all companies are facing," said Yaki Faitelson, Varonis CEO. "New and existing customers continue to make larger initial investments in Varonis and consume more licenses over time, underscoring the logic behind our subscription transition and confirming that we are unleashing the potential of our platform. With the subscription transition now complete, 98% of our revenues today are recurring in nature, and the demand for our platform, combined with the power of the subscription model, is accelerating revenue growth and driving increasing operating leverage."

"Lastly, we are excited to announce our agreement to acquire Polyrize, which will expand the Varonis Data Security Platform to cover additional cloud applications and infrastructure. We are focused on a strong close to 2020 as we capitalize on the long-term opportunity in front of us."

GUIDANCE:

Varonis Systems sees Q4 2020 EPS of $0.10-$0.13, versus the consensus of ($0.02). Varonis Systems sees Q4 2020 revenue of $82-85 million, versus the consensus of $79.76 million.

Financial guidance for the fourth quarter 2020 assumes the consummation of the acquisition of Polyrize, for which the Company does not expect material contributions to revenues or to operating income in 2020.

For the fourth quarter of 2020, the Company expects:

• Revenues in the range of $82.0 million to $85.0 million.
• Non-GAAP operating income in the range of $5.0 million to $6.0 million.
• Non-GAAP net income per diluted share in the range of $0.10 to $0.13, based on 35.4 million diluted shares outstanding.

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