Varonis Q3 Earnings Match Estimates, Revenues Increase Y/Y

Varonis Systems VRNS came out with quarterly earnings of six cents per share, in line with the Zacks Consensus Estimate. This compares with earnings of a penny per share a year ago.

VRNS posted revenues of $161.58 million for the quarter ended September 2025, missing the Zacks Consensus Estimate by 2.71%. This compares with year-ago revenues of $148.07 million.

Varonis beat the Zacks Consensus Estimates in each of the previous four quarters, with an average surprise of 92.86%.

Varonis’ modest performance in the third quarter of 2025 can be attributed to a balance of momentum in SaaS offerings and the Managed Data Detection & Response platform, while it navigates the global macroeconomic uncertainty.

Varonis’ Q3 2025 Details

Coming to Varonis’ business segments, revenues from SaaS (77.9% of total revenues) increased 117.7% year over year to $125.8 million. Term license subscriptions (15.4% of total revenues) decreased 63.9% to $24.8 million. Maintenance and services (9.1% of total revenues) declined 49.1% to $10.9 million.

By geography, the United States accounted for 72.7% of the total revenues, which increased 11.9% year over year to $114.4 million. The EMEA accounted for 20.8% of third-quarter revenues, which reflects an increase of 4.4% to $31.8 million. Revenues from the rest of the world accounted for 6.5% of the total revenues, which grew 14.4% year over year to $11.8 million.

Varonis’ gross margin contracted 260 basis points to 83%, reflecting the negative impact from the ongoing transition to the SaaS business model. Varonis posted a non-GAAP operating income of $1.61 million compared with the year-ago quarter’s operating income of $9.1 million. The non-GAAP operating margin for the third quarter of 2025 was 1% compared with the year-ago quarter’s 6.1%.

VRNS’ Balance Sheet & Cash Flow

As of Sept. 30, 2025, Varonis had $1.1 billion in cash, cash equivalents, marketable securities and short-term deposits, up from $807.4 million as of June 30, 2025.

The company generated $122.7 million in operating cash flow and reported free cash flow of $111.6million in the first three months of 2025.

VRNS’ Zacks Rank and Stocks to Consider

Currently, VRNS carries a Zacks Rank #4 (Sell).

Impinj PI, Credo Technology Group CRDO and Amphenol APH are some better-ranked stocks that investors can consider in the Zacks Computer and Technology sector. Impinj, Credo Technology Group and Amphenol sport a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for Impinj’s full-year 2025 earnings is pegged at $1.98 per share, revised upward by four cents over the past 30 days and suggesing a year-over-year decline of 6.2%. Impinj shares have soared 63.7% year to date.

The consensus estimate for Credo Technology Group’s fiscal 2026 earnings has been revised upward by a cent over the past 30 days to $2.04 per share, suggesting an increase of 191.4% year over year. Credo Technology Group shares have rallied 133.9% year to date.

The Zacks Consensus Estimate for Amphenol’s full-year 2025 earnings has been revised upward to $3.22 per share from $3.03 per share over the past seven days, reflecting 70.4% year-over-year growth. Amphenol shares have risen 95.7% year to date.

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This article originally published on Zacks Investment Research (zacks.com).

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