Varonis Systems, Inc. reported its financial results for the second quarter and first half of 2026, revealing a total revenue of $180.0 million for the three months ended June 30, 2026, an increase of 18% from $152.2 million in the same period last year. For the first half of 2026, total revenues reached $353.1 million, up 22% from $288.6 million in the first half of 2025. The company's SaaS revenue, a key growth driver, surged by 62% year-over-year to $171.7 million for the second quarter and by 71% to $332.8 million for the first half. Despite this growth, Varonis reported a net loss of $46.8 million for the second quarter, compared to a loss of $35.8 million in the prior year, and a net loss of $83.7 million for the first half, up from $71.6 million.
The company's financial performance reflects significant changes in its revenue composition, with SaaS revenues now constituting 95.4% of total revenues for the second quarter, compared to 69.6% a year earlier. This shift is attributed to Varonis's strategic transition to a SaaS delivery model, which is expected to enhance recurring revenue stability. However, the company also experienced a decline in term license subscriptions, which fell by 87% in the second quarter, and maintenance and services revenues, which decreased by 70.2%. The transition has led to an increase in operating expenses, which rose to $176.1 million in the second quarter, up from $157.5 million in the same period last year.
In terms of operational developments, Varonis completed the acquisition of AllTrue.ai on February 6, 2026, enhancing its capabilities in AI system security. This acquisition is part of a broader strategy to integrate advanced technologies into its platform, which also includes previous acquisitions like SlashNext. The company has announced the end-of-life for its self-hosted business effective December 31, 2026, which is expected to increase variability in revenue as it transitions remaining customers to its SaaS offerings.
As of June 30, 2026, Varonis reported a total of $1.65 billion in assets, down from $1.79 billion at the end of 2025. The company’s cash and cash equivalents increased to $233.6 million, while marketable securities decreased significantly to $426.5 million from $681.2 million. The company’s remaining performance obligations stood at $1.08 billion, indicating a strong pipeline of future revenue. Varonis's SaaS annual recurring revenue (ARR) reached $726.0 million, a 52% increase year-over-year, reflecting the ongoing demand for its data security solutions.
Looking ahead, Varonis remains optimistic about its growth trajectory, emphasizing the importance of its SaaS model in driving future revenues. The company anticipates continued expansion in both domestic and international markets, despite facing challenges such as budgetary tightening among customers and increased scrutiny on enterprise spending. Varonis's management believes that its strategic focus on data security and AI system protection positions it well to capitalize on the growing demand for these services in the evolving digital landscape.
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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