Slide 1: Varonis Overview Q4 2020
\\ varonis WI NNOINIS OVERVIEW Q4 2020
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 Founded in 2005, IPO in 2014 Fighting a different battle than conventional (Nasdaq: VRNS) cybersecurity companies Completed transition to subscription-based ~. j 1 ULM Sl phe SEA Se Ale eI business model in just over one year $287.3MM 98% 99% & 110% Total Revenue ARR? Recurring S
Slide 5: Proven Technology
Proven Technology Enterprise Data Stores and Infrastructure Analytics & Automation Use Cases Data Protection O @ © eae Groups Windows Office 36: Exchange at p Content Access Privacy . Classification Activity & Compliance Unix/Linux SharePoint NAS Perimeter AD Telemetry Telemetry . Threat Detection D
Slide 6: Proven Approach
Proven Approach Detect insider threats by analyzing data, account activity and user behavior. Prevent disaster by locking down sensitive and stale data, reducing broad access and simplifying permissions. Sustain a secure state by automating authorizations, migrations and disposition.
Slide 7: Secular Trends
Secular Trends wy Data Growth The amount of data created in the world is expected to grow from 45 Zettabytes in 2019 to 175 Zettabytes (or 175 trillion gigabytes) in 2025.' Cyber Threats By 2025, almost 90% of all data is expected to require a meaningful level of security, but less than half will be
Slide 8: Industry Changes
Industry Changes Board Awareness Board of Directors are now required to address cyber risks and demonstrate appropriate awareness and action. Regulation The confluence of notable attacks, media attention, and public outcry has led to new data-centric regulations in the EU and North America like GDPR
Slide 9: Security Software total addressable market
$43.2 BN Security Software IT Operations Management Infrastructure Software $2 5 B N + Total Addressable Storage Management Market $5.5 BN Data Integration $1.7 BN Cloud Access/Workload Protection Software Market size estimates from Gartner Research. We estimate that our total addressable market is
Slide 10: Product Families and More than Licenses
6 Product Families and More than 25 Licenses VARONIS VARONIS VARONIS DATA CLASSIFICATION DATADVANTAGE DATALERT ENGINE Data Audit & Protection Alerting & User Behavioral Analytics Data Classification Monitor file activity and user behavior, prevent data Detect suspicious activity and prevent data Dis
Slide 11: Example: DatAdvantage Product Family
Example: DatAdvantage Product Family AX | DatAdvantage = 10+ Licenses 8 Ol mises Data Stores ©) Cloud Data Stores O Remediation VARONIS VARONIS VARONIS: DATADVANTAGE\ R DATADVANTAGE\ AUTOMATION ‘WINDOWS ONEDRIVE ENGINE VARONIS VARONIS. DATADVANTAGE\ DATADVANTAGE\ DIRECTORY SERVICES SHAREPOINT ONLINE
Slide 12: History of Innovation
History of Innovation VARONIS: ANY VARONIS DATADVANTAGE\ DATAPRIVILEGE SHAREPOINT VARONIS VARONIS VARONIS, SM DATA CLASSIFICATION ig DATADVANTAGE\ VARONIS DATADVANTAGE ENGINE DIRECTORY SERVICES DATALERT 2006 2009 2011 2013 be bf be bf 2005 2008 2010 2012 VARONIS VARONIS VARONIS DATADVANTAGE\ DATADVA
Slide 13: History of Innovation (continued)
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Slide 14: First-Mover Advantage
First-Mover Advantage .- @ SCS 8B © Data Volume Data volumes were much smaller Complexity Data was stored in fewer places Discipline Sales process drove tens of thousands of production installs High-frequency Iterations 15+ years of battle-testing, refinement, and innovation Nvaronis
Slide 15: Predictable Sales Motion
Predictable Sales Motion @ Channel resellers provide introductions to the right buyers and help with closing @ Sales force performs in-person or virtual risk assessment and builds business case @ Installation takes up to 90 minutes (off-the-shelf product), risk assessment process takes 2-3 weeks ® H
Slide 16: Varonis Risk Assessment
Varonis Risk Assessment @ Where does my sensitive data live? @® What kind of sensitive data do | have? (GDPR, PCI, SOX, HIPAA, etc.) @ How much is exposed internally? @ How much is exposed externally? @ Where are my biggest risks? ( https:/finfo.varonis.com/resource/tt/research-report/forrestertei-s
Slide 17: Proven Management Team
Proven Management Team Yaki Faitelson CEO, President, Co-Founder & Chairman Varonis since 2005 a Guy Melamed CFO &COO Varonis since 2011 David Bass Executive VP & CTO Varonis since 2005 Jim O’Boyle Sr. VP of Worldwide Sales Varonis since 2006 Dana Shahar Chief Human. Resources Officer Varonis since
Slide 18: Financial Results
Financial Results Q4 2020 Highlights
Slide 19: Q4 2020 Highlights
Q4 2020 Highlights $287.3 ® Total revenue growth of 31% YoY @ Annual recurring revenues at the end of Q4 were $287.3 million and grew 37% YoY* $210.5 ® 98% of Q4 total revenues were recurring** @ North America and EMEA year-over-year growth of $130.3 35% and 33%, respectively, provided the momentum
Slide 20: High-Quality Revenue Base
High-Quality Revenue Base Q4 2018 (pre-transiti @ Completed transition Q4 2020 model in just over one year 2% to subscription-based business Non-Recurring Recurring* a 9 61% * Recurring revenues include subscription revenues and maintenance revenues from perpetual licenses and exclude perpetual lice
Slide 21: Q4 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q1 2020 Q2 2020
Q4 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q1 2020 Q2 2020 Q3 2020 Q4 2020
Slide 22: Pre Q4 2018 Q4 2019
Pre Q4 2018 Q4 2019 Q4 2020 Q4 2018 Q4 2019 Q4 2020
Slide 23: FY 2019 vs FY 2020 expenses and operating margin
FY 2019 FY 2020 G&A S&M R&D COGS Operating Margin
Slide 24: Q1 & FY 2021 Financial Guidance
Q1 & FY 2021 Financial Guidance Total Revenues $68.0MM - $69.5MM $357.0MM - $366.0MM YoY growth 26% — 28% 22% — 25% Non-GAAP Operating Income (Loss) ($12.0)MM — ($11.0)MM $0.0MM — $7.5MM Operating Margin (18%) — (16%) 0% — 2% Tax Provision $400K - $600K $2.2MM — $3.2MM Interest Expense** $800K $3.2M
Slide 25: Q1 & FY 2021 Financial Guidance (split-adjusted)
Q1 & FY 2021 Financial Guidance Total Revenues $68.0MM - $69.5MM YoY growth 26% — 28% Non-GAAP Operating Income (Loss) ($12.0)MM — ($11.0)MM Operating Margin (18%) — (16%) Tax Provision $400K - $600K Interest Expense $800K Basic and Diluted Shares Outstanding — adjusted for split 32.1MM x 3 = 96.3M
Slide 26: 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. Nvaronis
Slide 27: Thank you
Thank you \\ varRonis