Varonis Systems (VRNS)

“the expectation is that a big part of the churn on the on-prem side will be related to Q3 because if you remember, that's the quarter with the largest federal and state and government.”

“This assumes 131.1 million diluted shares outstanding.”

“For the second quarter of 2026, we expect SaaS ARR growth of 24% to 25%, excluding conversions, total revenues of $175 million to $178 million, representing growth of 15% to 17% non-GAAP operating loss of negative $1 million to breakeven and non-GAAP net income per diluted share in the range of $0.00 to $0.01.”

“it's the upside ability and the conversations that give us the confidence to actually see that happen in Q2, Q3 and Q4.”

“we remain on track to achieving the full year free cash flow guidance, and we want to emphasize that and highlight that.”

“We stand with that number and feel good about our ability to get to the conversions.”

“We remain on track to achieve our full year free cash flow guidance.”

“we're expected to finish the year just under $850 million”

“I expect that to be the case in 2026 as well.”

“the expectation was that a lot of the conversions would actually happen in Q4 towards the end of the year.”

“the conversations and the pipeline that we're seeing is definitely giving us the encouragement and the expectation that we would see AllTrue contribute more throughout the remainder of the year.”

“that's worked really well in Q1, and we expect that to continue in the year ahead.”

“we believe we can sustain this level of growth as a fully SaaS company.”

“Free cash flow of $100 million to $105 million, total revenues of $731 million to $737 million, representing growth of 17% to 18%; non-GAAP operating income of $7 million to $9 million, non-GAAP net income per diluted share in the range of $0.11 to $0.12.”

“This represents SaaS ARR growth of 20% to 21%, excluding conversions.”

“For the full year 2026, we now expect total SaaS ARR of $814 million to $845 million, representing growth of 27% to 32%.”

“We look forward to continuing our momentum and ending the year as a fully SaaS company, which will unlock many more benefits as we capture our growing market opportunity, and we believe in the path to achieving our 2027 financial targets.”

“No. We don't expect any material change there.”

“So I think when you look at the actual performance of Q4, the fact that we were able to convert such a large portion had to do with the end-of-life announcement and the urgency that that generated within our customer base. And the expectation for 2026 is within those ranges of $50 to $75 million.”

“We believe that with the fact that reps won't have to focus on the conversion the way they focused on conversions in 2025, they can go back to selling to new customers and selling to existing customers. And we have so much more to sell, so our expectation is that the SaaS NRR can increase.”

“Our assumption is that we won't have any non-SaaS ARR at the end of the year.”

“So basically, 2026 is going to be equal ARR.”

“As a reminder, we expect this to have a $30 million to $50 million headwind on free cash flow and ARR contribution margin in 2026.”

“While this announcement negatively impacts 2026 ARR contribution margin and free cash flow by $30 to $50 million based on our guidance, we believe it will allow us to show a healthier financial profile beginning in 2027 due to the removal of our lower renewal self-hosted customer base.”

“In 2026, we expect a lower ARR contribution margin and lower free cash flow due to the impact of the end-of-life announcement.”

“We expect our reps to put significantly more focus on new business and SaaS customers.”

“We converted approximately $65 million or one-third of our remaining non-SaaS ARR in the quarter and believe that between $50 to $75 million of the remaining self-hosted customers will convert by the end of the year.”

“We are also taking thoughtful and prudent steps to manage expenses across the business, which includes a 5% reduction in headcount in order to reallocate our resources where we see the highest return on investment.”

“We believe in our ability to grow 20-plus percent with our SaaS business really due to the momentum we're seeing with new customers and the strong NRR we see with our existing SaaS customers.”

“So I think when we talked about growing 20-plus percent, we feel very confident with our ability to grow 20-plus percent on the SaaS business.”

“Non-GAAP net income per diluted share in the range of $0.12 to $0.13.”

“Non-GAAP operating loss of negative $8.2 million to negative $5.2 million.”

“Free cash flow of $120 million to $125 million.”

“That's part of the reason that we announced the end of life being at the end of next year. We want to have this on-prem subscription business in a confined time frame to be able to -- to be 100% SaaS and show all the benefits that the platform has to our customers and all the leverage and financial benefits that it can generate for the company.”

“We expect that this demand will continue to be the growth driver of our business going forward.”

“Now that we have completed our SaaS transition, we are now announcing the end of life of our self-hosted solution as of December 31, 2026.”

“Free cash flow of $120 million to $125 million, total revenues of $616 million to $628 million, representing growth of 12% and to 14%.”

“For the full year 2025, we now expect ARR of $748 million to $754 million, representing growth of 17%.”

“As we are getting closer to the completion of our SaaS transition, we expect the positive trend of maintenance and services revenues to continue to decline.”

“Our gross margin continues to track ahead of our expectations, and we feel very confident in our long-term target set at our Investor Day.”

“We believe that this additional time spent on upselling existing customers, combined with a healthy new customer momentum that we are continuing to see will allow us to drive towards our goal of growing ARR more than 20%.”

“So when you combine all of these and these results and kind of the underlying drivers in our business is what gives us the confidence to raise our ARR guidance by that $5 million and increase our SaaS mix to 80% for the full year kind of despite the uncertainty that we see in the macro environment.”

“Last quarter, we announced that we will accelerate our SaaS transition and our Q1 results prove that we are well on track to complete it by the end of the year.”

“So we are very happy with kind of the progress of the FedRAMP certification. It's really as progressing as planned”

“Non-GAAP operating income of $0.5 million to $10.5 million, non-GAAP net income per diluted share in the range of $0.14 to $0.17.”

“Total revenues of $610 million to $625 million, representing growth of 11% to 13%.”

“Free cash flow of $120 million to $125 million.”

“This shows us that SaaS customers are coming back and buying more which combined with a healthy new customer momentum that we are seeing gives us confidence that we can return to more than 20% ARR growth.”

“When we did our Investor Day in 2023, we gave out like a five-year model and we put in our gross margin expectation which was at the end of 2027 to be in that range of the 80%.”

“As we sit here today, the assumption is $240 million of SaaS ARR in 2025, a meaningful increase versus the $215 million that we had in 2024”

“We expect these investments, coupled with sustained new logo momentum, will also enable us to continue to grow ARR at healthy levels this year despite the conversions taking more time and effort to do.”

“we believe that as we complete the transition, we're better set up not only to provide value to our customers but also to go to those customers once we show them the value and sell them additional licenses, which we believe can increase the NRR.”

“As a reminder, we set a long-term target of 20% ARR contribution margins by 2027 at our investor day in March 2023 and ended 2024 at 16.6%, so we are well ahead of that plan.”

“We look forward to completing our SaaS transition in 2025, which we believe will better position the company to accelerate growth and show continued free cash flow improvement on our way to our $1 billion ARR target.”

“The leverage of our model allows us to continue to show margin improvement, while making strategic investments to reaccelerate our top-line growth back to 20-plus-percent and capture the larger opportunity that we see developing.”

“we believe our sales efficiency and ability to drive growth from our base will actually accelerate post-transition once our reps are able to focus on upsell and cross-sell rather than converting self-hosted customers.”

“There is the regular seasonality within the business where Q4 is the largest quarter of the year, and we expect that to be the same this year.”

“We have decided to make changes to the management team of our federal business and believe those changes, coupled with our expectations for FedRAMP authorization next year, will better position us to capture that market opportunity going forward.”

“non-GAAP net income per diluted share in the range of $0.26 to $0.27.”

“non-GAAP operating income of $20.6 million to $22.6 million; non-GAAP net income per diluted share in the range of $0.26 to $0.27.”

“non-GAAP net income per diluted share in the range of $0.13 to $0.14.”

“We expect that the ramp-up of this phase will not be linear and momentum should grow each quarter, with SaaS conversions showing further acceleration in dollar terms in 2025 and 2026.”

“And we've also said that we expect over time to have renewal rates increase with a SaaS offering.”

“We expect to see the leverage even further coming in the years ahead.”

“We expect that the ramp-up to this phase will not be linear and momentum should grow in each quarter, with further acceleration in dollar terms in 2025 and 2026.”

“As we look ahead of the rest of this year, we're excited to begin Phase 2 in earnest in the second half of 2024, which will be focused on converting our installed base of on-prem subscription customers to our SaaS platform.”

“total revenues of $536 million to $546 million, representing growth of 7% to 9%.”

“Free cash flow of $70 million to $75 million, total revenues of $536 million to $546 million, representing growth of 7% to 9%.”

“the continued momentum of Varonis SaaS furthers our confidence in completing the transition in 2026, 1 year earlier than our initial time line.”

“As a reminder, we expect that the ramp-up of this phase will not be linear and momentum should grow in each quarter and further accelerate in 2025 and 2026.”

“we're expecting customers to convert at a higher pace than we saw in 2023.”

“We believe that we will see those trends that I've talked about, kind of work in our favour over the year.”

“Going forward, we expect the vast majority of new customers to purchase our SaaS offering.”

“We expect that the ramp-up of this phase will not be linear and anticipate growing momentum in each quarter of 2024 and further accelerating in 2025 and 2026.”

“When we laid out kind of the plan in March of 2023, we talked about the transition lasting five years, we're bringing that one year shorter and we're very happy about that. We're not actually not changing that $1 billion target, and that's still at 2027”

“We feel extremely confident about kind of the guidance that we provided during the Investor Day in March of 2023, about a 20% ARR contribution margin by 2027.”

“we do expect to have FedRAMP for next year's cycle, which can become a significant opportunity for us.”

“non-GAAP net income per diluted share in the range of $0.31 to $0.33.”

“non-GAAP operating income of $26.5 million to $28.5 million; non-GAAP net income per diluted share in the range of $0.31 to $0.33.”

“Free cash flow of $40 million to $45 million, which includes $8 million to $10 million of headwinds related to the TCJA capitalization of R&D provision;”

“As we look to our revenue guidance for the fourth quarter, we're now assuming that approximately $12 million of existing customers' renewals will convert to SaaS in Q4, which is up from $10 million previously.”

“We expect these longer deal cycles to continue, along with the associated budgetary scrutiny, and our updated guidance takes this into consideration.”

“The sustained momentum that we saw from our SaaS transition this quarter coupled with our faster pace of innovation gets us closer to achieving our $1 billion ARR target and delivering meaningful stakeholder value.”

“We're -- when you look at kind of the fact that we're only very early in the transition, we're seeing a lot of benefits, and we think we can see more benefits going forward.”

“As we look out into remainder of the year, we expect some of the pressure from this dynamic to ease because more of the pipeline expected to close in the second half has started as SaaS rather than as on-prem deployments.”

“We expect these longer deal cycles to continue along with budgetary scrutiny and our updated guidance already takes this and more into consideration.”

“In Q3 we are assuming $8 million of existing customer conversions that will serve as a headwind to revenue and $10 million in Q4, which is higher than Q2 but consistent with the pipeline we have.”

“Our full-year guidance now assumes a SaaS mix of new business and upsell ARR of 50% up from 35% previously, and we expect Q3’s SaaS mix to be 45%.”

“We did see many of those deals convert to SaaS within the quarter, and we expect that to continue.”

“And we believe in several quarters, we are going to narrow everything and also, we'll be able to do frictionless migration.”

“Free cash flow of $20 million to $25 million, which includes a $6 million to $8 million headwind related to the TCJA capitalization of R&D provision.”

“We expect longer deal cycles to continue as a result of ongoing budgetary scrutiny, and our updated guidance already takes this and more into consideration.”

“And SaaS help us to innovate faster and support our customers more easily, which we expect to benefit our margin profile as we scale.”

“Second, our new customer launch be largely driven by platform selling approach and a 25% to 30% pricing uplift, which is justified by the product's lower total cost of ownership as compared to our on-premise subscription offering.”

“First, we expect SaaS will result in a shorter sales cycle, risk assessments, the core of our go-to-market motion are expected to be quicker and easier to deploy because customer infrastructure requirements are greatly reduced.”

“our first quarter and full year guidance now assumes a 15% SaaS mix of new business and upsell ARR, up from 5% previously.”

“Free cash flow of $20 million to $25 million, which includes the $6 million to $8 million headwind related to the TCJA capitalization of R&D provisions.”

“For the full year of 2023, we expect ARR of $513 million to $523 million, representing year-over-year growth of 10% to 12%.”

“And that's why we're also giving our free cash flow expectation for 2023, which shows meaningful improvement compared to what we expect to finish in 2022.”

“Just to add for DataAdvantage Cloud, the expectation for the year is still $5 million ARR. That hasn't changed.”

“We haven't changed the long-term view for EMEA and federal, but as we look at our Q4 guidance, we want to take a prudent approach, and we expect economic conditions to worsen in Europe and that longer sales cycles and lower close rates may impact our U.S. business as well.”

“non-GAAP net income per diluted share in the range of $0.14 to $0.15.”

“non-GAAP operating income of $25.5 million to $27.5 million; and non-GAAP net income per diluted share in the range of $0.14 to $0.15.”

“For the fourth quarter of 2022 and full year 2022, this headwind is expected to be 50 basis points and 200 basis points, respectively.”

“This also assumes a 5% SaaS mix of sales from new licenses in the first half of 2023.”

“The headcount reduction and other cost saving initiatives that Yaki mentioned should result in approximately $7 million of savings during the fourth quarter, as reflected in our updated guidance.”

“we expect that this will also help the renewal rates as customers get greater value from our products”

“First, risk assessments, the core of our sales motion, are expected to be quicker to deploy, which once our salesforce gets past the initial ramp-up phase and is fully trained on the new selling motion, should help shortening of sales-cycles;”

“Because of Q3 results and expectations that these headwinds will persist in Q4, we are adjusting our full year ARR guidance specifically our updated guidance assumes that the economic condition continues to deteriorate in EMEA and that this also begins to moderately affect our U.S. business.”

“gives us confidence that we will be a rule of 40 company as we exit the transition.”

“ARR of $484 million to $489 million, representing year-over-year growth of 25% to 26%”

“For the full year 2022, we expect: ARR of $484 million to $489 million, representing year-over-year growth of 25% to 26%; total revenues of $485 million to $490 million, representing growth of 24% to 26%; non-GAAP operating income of $32.5 million to $36.5 million; and non-GAAP net income per diluted share in the range of $0.19 to $0.22.”

“For both the third quarter of 2022 and full year 2022, this headwind is expected to be 200 basis points.”

“Nevertheless, we are pleased with customer conversations and the pace of selling which improved sequentially in Q2 as we continue building pipeline for the second half of the year and beyond and we are still on pace for the $5 million ARR expectations we guided for at the beginning of the year.”

“We remain focused on two things: executing against the enormous market opportunity before us and closing in on our $1 billion ARR target.”

“So when we look at the pipeline and when we look at the conversations and when we look at the activity, we feel very good about our ability to continue to grow kind of the European business.”

“For the full year, we are assuming zero contribution from the region, and consequently the impact to our original revenue and ARR expectations will be in the $4 million to $5 million dollar range.”

“we expect ARR of $484 million to $489 million, representing year-over-year growth of 25% to 26%”

“For the full year 2022, we expect ARR of $484 million to $489 million, representing year-over-year growth of 25% to 26%; total revenues of $485 million to $490 million, representing growth of 24% to 26%; non-GAAP operating income of $27 million to $30 million dollars; and non-GAAP net income per diluted share in the range of $0.16 to $0.18.”

“I think that's a great question. And our assumption for travel is that it will pick up in 2020, gradually increasing quarter-over-quarter. But in total, it still will be below the pre-pandemic levels.”

“So I think kind of in our view for 2022, we expect those numbers to continue in the same range.”

“Therefore, the margin impact shouldn't be significant in 2022.”

“And this assumes approximately $2.5 million of revenue from DA Cloud.”

“On a constant currency basis, the midpoint of our guidance shows expansion of approximately 120 basis points year-over-year.”

“We believe we have a clear path to our $1 billion ARR target.”

“So we believe that they can do very well in the next year, but the growth was primarily driven by the enterprise.”

“We'll not see material contribution this year, but the customer conversations are very positive.”

“And we do not expect this momentum to slow down.”

“We now expect non-GAAP operating income of $19.5 million to $21.5 million and non-GAAP net income per diluted share in the range of $0.10 to $0.11.”

“We expect non-GAAP operating income of $3.5 million to $4.5 million, and non-GAAP net income per diluted share in the range of $0.01 to $0.02.”

“We have a great team, like Yaki said, and we believe that that percentage can be higher.”

“Correct. We are not selling any new for perpetual licenses.”

“We expect it to go down single digits, yes.”