Varonis Systems, Inc. reported a total revenue of $173.1 million for the first quarter of 2026, marking a 27% increase from $136.4 million in the same period of 2025. The growth was primarily driven by a significant rise in Software as a Service (SaaS) revenues, which surged 82% to $161.1 million, up from $88.6 million year-over-year. This increase reflects the company's strategic transition to a SaaS delivery model, which has been a focal point of its business strategy. However, the company also experienced a decline in term license subscriptions and maintenance services, which fell to $6.9 million and $5.2 million, respectively, as existing customers converted to the SaaS model.
Despite the revenue growth, Varonis reported an operating loss of $44.5 million for the quarter, slightly higher than the $43.8 million loss recorded in the prior year. The net loss for the period was $36.9 million, compared to a loss of $35.8 million in the same quarter of 2025. The increase in operating expenses, which rose to $176.0 million from $151.2 million, was attributed to higher costs in research and development, sales and marketing, and general administrative expenses. The company’s gross profit margin also decreased to 76% from 78.7%, reflecting the increased costs associated with its SaaS transition.
In terms of operational metrics, Varonis reported a SaaS Annual Recurring Revenue (ARR) of $683.2 million as of March 31, 2026, a 69% increase from $405.2 million a year earlier. The company’s SaaS renewal rate remained strong at over 90%. Varonis also noted a remaining performance obligation of $1.1 billion, indicating contracted revenues that have yet to be recognized. The company continues to focus on expanding its customer base and enhancing its product offerings, particularly in the realm of AI system security, following its acquisition of AllTrue.ai in February 2026.
Geographically, approximately 71% of Varonis's revenues were derived from the United States, with 21% from Europe, the Middle East, and Africa (EMEA), and 8% from the rest of the world. The company is actively pursuing growth in both domestic and international markets, although it acknowledges challenges related to economic conditions and customer spending patterns. As of March 31, 2026, Varonis had cash and cash equivalents totaling $179.3 million, down from $202.5 million at the end of 2025, alongside marketable securities of $681.2 million.
Looking ahead, Varonis anticipates continued growth in its SaaS revenues and overall business, driven by the increasing demand for data security solutions in the context of AI adoption. The company is committed to its transition away from self-hosted solutions, which it expects to complete by the end of 2026, positioning itself for a more sustainable and recurring revenue model.
About VARONIS SYSTEMS INC
Varonis Systems, Inc. provides data security software that helps organizations protect, monitor, and manage enterprise data across on-premises and cloud environments. Its platform automates risk detection, access control, compliance, and threat response, leveraging proprietary metadata analysis and AI capabilities. Serving diverse industries worldwide, Varonis focuses on large enterprises to prevent data breaches, ensure regulatory compliance, and address growing data security challenges through scalable, integrated solutions.
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