Slide 1: Varonis Overview Q4 2022
\\ varonis Varonis Overview Q4 2022
Slide 2: Safe Harbor Statement
Safe Harbor Statement This presentation has been prepared by Varonis Systems, Inc. (the “Company”) solely for informational purposes. It is not, and should not be assumed to be, complete. This presentation is not an offer to sell securities, nor is it a solicitation of an offer to buy securities. Th
Slide 3: Company Overview
Company Overview \\ varonis
Slide 4: Varonis at a Glance
Varonis at a Glance Fighting a different battle than conventional cybersecurity companies VRNS $465.1MM $11.9MM FOUNDED IN 2004 ANNUAL RECURRING REVENUES IPO IN 2014 20% Y/Y GROWTH YTD OPERATING CASH FLOW ~2,150 ~10% 18.2% Q4 SaaS MIX* Q4 NON-GAAP EMPLOYEES WORLDWIDE OPERATING MARGIN *SaaS Mix is de
Slide 5: Proven Technology
Proven Technology DATA, APPS, INFRASTRUCTURE ANALYTICS & AUTOMATION USE CASES CLOUD Sensitivity Data Protection Threat Detection & Response Permissions ON-PREM Privacy & Compliance Activity
Slide 6: Proven Approach
Proven Approach Detect Prevent Sustain threats by analyzing data, account disaster by automatically locking down a secure state by automating activity and user behavior. sensitive and stale data, reducing broad authorizations, migrations and access and simplifying permissions. disposition.
Slide 7: Secular Trends
Secular Trends Data Growth Hybrid Cloud Cyber Threats The amount of data created in the More than 85% of enterprises adopting a By 2025, almost 90% of all data is world is expected to grow at a cloud-first strategy are expected to continue expected to require a meaningful compound annual growth rate
Slide 8: Industry Changes
Industry Changes Board Adoption & Awareness Standardization Regulation Boards of Directors are now A data-centric approach to security is The confluence of notable attacks, media required to address cyber risks and becoming the standard as the digital attention, and public outcry has led to demonstr
Slide 9: Data Security Platform
Data Security Platform DatAdvantage Data Classification DatAlert DatAdvantage Cloud Engine • DatAlert • Windows • Google Drive • Windows/SharePoint • Edge • Directory Services • Box • SharePoint Online • SharePoint • Salesforce • OneDrive • • UNIX/Linux Exchange • • Slack GitHub z • • UNIX Policy Pa
Slide 10: History of Innovation
History of Innovation • SharePoint • Directory Services 2006 2009 2011 2008 2010 2012 2005 • Unix/Linux • Exchange
Slide 11: History of Innovation
History of Innovation • SharePoint • OneDrive • SharePoint Online • SharePoint Online • OneDrive • Exchange Online • Unix • Windows 2013 2015 2017 2014 2016 • Analytics • OneDrive • SharePoint Online
Slide 12: History of Innovation
History of Innovation • Google Drive • Jira • Box • AWS • Google Drive • Salesforce • Amazon S3 • Box • Slack • Zoom • Policy Pack • GitHub • Okta 2019 2021 2018 2020 2022 • Azure Active Directory • Federal Policy Pack • Salesforce • Amazon S3
Slide 13: First-Mover Advantage
First-Mover Advantage 2005 Complexity High-Frequency Data was stored in fewer Iterations places 15+ years of battle-testing, refinement, and innovation Data Volume Discipline Data volumes were much Sales process drove tens of smaller thousands of production installs
Slide 14: Predictable Sales Motion
Predictable Sales Motion NURTURING Leads CHANNEL MARKETING Risk Assessment VARONIS SALES Closing Channel resellers provide CHANNEL VARONIS introductions to the right buyers SALES and help with closing Salesforce performs in-person or virtual risk assessment and builds Highly metrics-driven business
Slide 15: Proven Management Team
Proven Management Team Yaki Faitelson Guy Melamed David Bass CEO, President, Jim O’Boyle CFO & COO Executive VP & CTO SVP of Worldwide Sales Co-Founder & Chairman Varonis since 2011 Varonis since 2005 Varonis since 2006 Varonis since 2005 Dana Shahar Gilad Raz Shai Cohen-Golan Dov Gottlieb Chief Hum
Slide 16: Financial Results: Q4 2022 Highlights
Financial Results: Q4 2022 Highlights
Slide 17: Q4 2022 Highlights
Q4 2022 Highlights $465.1 $387.1 $465.1MM ARR at the end of Q4 grew 20% YoY $287.3 ~10% SaaS Mix* $11.9MM YTD Operating Cash Flow 18.2% Non-GAAP Operating Margin Q4 2020 Q4 2021 Q4 2022 *SaaS Mix is defined as new SaaS ARR booked during the quarter divided by new business ARR + upsell ARR ANNUAL REC
Slide 18: Annual Recurring Revenues
Annual Recurring Revenues Q4 2022 GROWTH YoY 20% $465.1 $447.8 $426.3 $404.5 $387.1 $354.2 $328.2 $306.9 $287.3 Q4 2020 Q1 2021 Q2 2021 Q3 2021 Q4 2021 Q1 2022 Q2 2022 Q3 2022 Q4 2022
Slide 19: Greater Individual License Adoption
Greater Individual License Adoption 2020-2022 GROWTH 2020-2022 GROWTH 23% 69% 50% 78% 41% 73% 63% 30% Q4 2020 Q4 2021 Q4 2022 Q4 2020 Q4 2021 Q3 2022 4 OR MORE LICENSES 6 OR MORE LICENSES Percentages reflect customers with 500 employees or more.
Slide 20: Q4 2022 Reconciliation of Revenue and ARR for FX & Russia
Q4 2022 Reconciliation of Revenue and ARR for FX & Russia % Change (in millions) Q4 2022 Q4 2021 Reported Total reported revenues $142.6 $126.6 13% Effect of foreign currency rate fluctuations $3.4 – 3% Exit of Russia business – ($1.8) 1% Total reported ARR $465.1 $387.1 20% Effect of foreign curren
Slide 21: FY 2022 Reconciliation of Revenue for FX & Russia
FY 2022 Reconciliation of Revenue for FX & Russia % Change (in millions) FY 2022 FY 2021 Reported Total reported revenues $473.6 $390.1 21% Effect of foreign currency rate fluctuations $10.0 – 3% Exit of Russia business ($0.5) ($4.4) 1% In addition to reported growth rates prepared in accordance wit
Slide 22: Q1 & FY 2023 Financial Guidance
Q1 & FY 2023 Financial Guidance Guidance Q1 2023 FY 2023 Annual Recurring Revenues (“ARR”) - $513.0MM – $523.0MM YoY growth - 10% – 12% Total Revenues $106.0MM – $108.0MM $519.0MM – $529.0MM YoY growth 10% – 12% 10% – 12% Non-GAAP Operating Income (Loss) ($7.0)MM – ($6.0)MM $36.0MM – $41.0MM Operati
Slide 23: Our long-term goal is to build a billion-dollar business
Our long-term goal is to build a billion-dollar business that grows revenues meaningfully with expanding profit and cash flow.
Slide 24: Thank you
Thank you \\ varRonis
Slide 25: Appendix: Revenue Recognition Example
Appendix: Revenue Recognition Example On-prem Subscription SaaS ~80% Upfront / ~20% Ratable 100% Ratable ~80% of deal recognized in Q4 <1% of deal recognized in Q4 ~80% of deal recognized in fiscal year <1% of deal recognized in fiscal year $80K $0K Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Both scenarios assume $100
Slide 26: Appendix: Reconciliation of GAAP Measures to Non-GAAP
Appendix: Reconciliation of GAAP Measures to Non-GAAP Three Months Ended December 31, Twelve Months Ended December 31, 2022 2021 2022 2021 Reconciliation to non-GAAP operating income: GAAP operating loss ($9,993) ($17,833) ($121,228) ($98,694) Add back: Stock-based compensation expense 34,806 38,110
Slide 27: Appendix: Reconciliation of GAAP Measures to Non-GAAP
Appendix: Reconciliation of GAAP Measures to Non-GAAP Reconciliation to non-GAAP free cash flow: FY 2023 Net cash provided by operating activities $28.0MM – $35.0MM Purchases of property and equipment ($8.0MM) – ($10.0MM) Free cash flow $20.0MM – $25.0MM