Slide 1: Varonis Overview Q3 2020
Fighting a different battle than conventional cybersecurity companies Varonis Overview Q3 2020 VARONIS SYSTEMS. PROPRIETARY.
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 SYSTEMS. PROPRIETARY.
Slide 4: Varonis at a Glance
Varonis at a Glance Founded in 2005, IPO in 2014 (Nasdaq: VRNS) Headquartered in New York City with ~1,630 employees worldwide(1) Fighting a different battle than conventional cybersecurity companies Completed transition to subscription-based business model in just over one year $261.1MM 99+% 98+% S
Slide 5: Proven Technology
Proven Technology ENTERPRISE DATA STORES ANALYTICS & AUTOMATION USE CASES AND INFRASTRUCTURE DATA PROTECTION Users & Permissions Groups Windows Office 365 Exchange Content Access COMPLIANCE Classification Activity Unix/Linux SharePoint NAS Perimeter AD Telemetry Telemetry Box Directory Edge Services
Slide 6: Proven Approach
Proven Approach DETECT PREVENT SUSTAIN insider threats by analyzing data, disaster by locking down sensitive and a secure state by automating account activity and user behavior. stale data, reducing broad access and authorizations, migrations and disposition. simplifying permissions. 6 VARONIS SYSTE
Slide 7: Secular Trends
Secular Trends DATA GROWTH HYBRID CLOUD CYBER THREATS The amount of data created in the Through 2020, more than 85% of By 2025, almost 90% of all data will world will grow to 175 Zettabytes (or enterprises adopting a cloud-first require a meaningful level of security, 175 trillion gigabytes) in 2025
Slide 8: Industry Changes
Industry Changes BOARD ADOPTION AND REGULATION AWARENESS STANDARDIZATION Board of Directors are now required A data-centric approach to security The confluence of notable attacks, to address cyber risks and is becoming the standard. Almost media attention, and public outcry demonstrate appropriate a
Slide 9: $20BN+ TAM
$36.3 BN Security Software Addressing $20BN+ Opportunity Across $28.3 BN IT Operations Management IT & Security $16.1 BN Infrastructure Software $20BN+ TAM(1) $5.3 BN (1) Varonis Systems estimates that our total addressable market is approximately Data Integration 20% of these combined markets, with
Slide 10: 6 Product Families and 26 Licenses
6 Product Families and 26 Licenses (common code base) Data Audit & Protection Alerting & User Behavioral Analytics Data Classification Monitor file activity and user behavior, prevent Detect suspicious activity and prevent data Discover where sensitive information is data breaches, and make permissi
Slide 11: Example: DatAdvantage Product Family Has More Than 10 Licenses
Example: DatAdvantage Product Family Has More Than 10 Licenses ON-PREMISES DATA STORES CLOUD DATA STORES REMEDIATION 11 VARONIS SYSTEMS. PROPRIETARY.
Slide 12: History of Innovation
History of Innovation 2006 2009 2011 2013 2015 2017 2019 2005 2008 2010 2012 2014 2016 2018 * in Q3 of 2019, DCE: GDPR Patterns was renamed to DCE: Policy Pack to reflect additional functionality 12 VARONIS SYSTEMS. PROPRIETARY.
Slide 13: Polyrize Acquisition
Polyrize Acquisition Polyrize platform maps and analyzes relationships between users and data across a number of cloud applications and services Cloud Applications Mapped and Analyzed By integrating these capabilities into our platform, the acquisition is expected to: Expand and strengthen the Varon
Slide 14: First-Mover Advantage
First-Mover Advantage 2005 DATA VOLUME COMPLEXITY DISCIPLINE HIGH-FREQUENCY ITERATIONS Data volumes were much smaller Data was stored in fewer places Sales process drove tens of 15 years of battle-testing, refinement, thousands of production installs and innovation 14 VARONIS SYSTEMS. PROPRIETARY.
Slide 15: Predictable Sales Motion
Predictable Sales Motion LEADS Channel resellers provide introductions to the right Channel Marketing buyers and help with closing Sales force performs in-person or virtual risk assessment and builds business case RISK ASSESSMENT Installation takes up to 90 minutes (off-the-shelf Varonis Sales Nurtu
Slide 16: Varonis Risk Assessment
Varonis Risk Assessment (1) Where does my sensitive data live? How much of it is overexposed? What kind of sensitive data do I have? 17 MILLION USING THE (GDPR, PCI, SOX, HIPAA, etc.) AVERAGE NUMBER OF FILES EXPOSED VARONIS DATA TO EVERY EMPLOYEE 87% SECURITY PLATFORM FOUND OVER 1,000 STALE, SENSITI
Slide 17: Proven Management Team
Proven Management Team Yaki Faitelson Guy Melamed David Bass CEO, President, Co-Founder CFO & COO Executive VP & CTO & Chairman Varonis since 2011 Varonis since 2005 Varonis since 2005 Jim O’Boyle Dana Shahar Gilad Raz Sr. VP of Worldwide Sales Chief Human Resources CIO & VP of Technical Varonis sin
Slide 18: Financial Results
Financial Results Q3 2020 Highlights VARONIS SYSTEMS. PROPRIETARY.
Slide 19: Q3 2020 Highlights
Q3 2020 Highlights $261.1 Total revenue growth of 17% included a ($MM) 99% subscription mix, compared to 74% in Q3 2019 $178.9 Annual recurring revenues at the end of Q3 were $261.1 million and grew 46% YoY $117.9 98% of Q3 total revenues were recurring* Acquisition of Polyrize will expand our Q3 20
Slide 20: High-Quality Revenue Base
High-Quality Revenue Base Completed transition to subscription-based business model in just over one year 2% 39% Q4 2018 Q3 2020 61% 98% Non-Recurring Recurring* * Recurring revenues include subscription revenues and maintenance revenues from perpetual licenses and exclude perpetual license revenues
Slide 21: Annual Recurring Revenues (ARR)
Annual Recurring Revenues (ARR) ($MM) $261.1 $235.7 $220.5 $210.5 $178.9 $155.2 $138.7 $130.3 $117.9 Q3 2018 Q4 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q1 2020 Q2 2020 Q3 2020 ARR is the annualized value of active term-based subscription license contracts and maintenance contracts related to perpetual
Slide 22: Subscription Model Driving Greater Individual License Adoption
Subscription Model Driving Greater Individual License Adoption 4 or more Licenses 6 or more Licenses 60% 50% 40% 26% Pre transition 17% 11% Pre transition Q3 2018 Q3 2019 Q3 2020 Q3 2018 Q3 2019 Q3 2020 Percentages reflect customers with 500 employees or more. 22 VARONIS SYSTEMS. PROPRIETARY.
Slide 23: Significant Opportunity to Expand within Existing Customer Base
Significant Opportunity to Expand within Existing Customer Base ATTACH RATES PRODUCT FAMILY Q3 2019 Q3 2020 CHANGE DatAdvantage 100% 100% - DatAlert 53.1% 56.5% + 3.4% Data Classification Engine 52.4% 56.0% + 3.6% DataPrivilege 15.5% 15.6% + 0.1% Data Transport Engine 8.5% 9.8% + 1.3% DatAnswers 2.2
Slide 24: Product Family Adoption
Product Family Adoption 3 or more product families 2 or more product families 77% 75% 72% 48% 43% 39% Q3 2018 Q3 2019 Q3 2020 Percentages reflect total number of customers. 24 VARONIS SYSTEMS. PROPRIETARY.
Slide 25: Q4 2020 Guidance
Q4 2020 Guidance GUIDANCE Q4 2020 Total Revenues $82.0m – $85.0m Non-GAAP Operating Income $5.0m – $6.0m Tax Provision $500k – $700k Interest Expense* ~$850k Diluted Shares Outstanding 35.4m Non-GAAP Net Income per Diluted Share $0.10 – $0.13 * Associated with the Company’s Senior Convertible Notes.
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. VARONIS SYSTEMS. PROPRIETARY.
Slide 27: Thank You
Thank You VARONIS SYSTEMS. PROPRIETARY.