Slide 1: Varonis Overview
Fighting a different battle than conventional cybersecurity companies. Varonis Overview October, 2018 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: Yaki Faitelson
Yaki Faitelson CEO, President, Co-Founder and Chairman VARONIS SYSTEMS. PROPRIETARY.
Slide 4: Varonis Facts
Varonis Facts (Nasdaq: VRNS) 28% GROWTH Total Revenues | FYE December ($MM) 30% $183 Started operations in 2005 GROWTH 215 Fighting a different battle than conventional $142 $88 cybersecurity companies 166 95 $68 Approximately 6,350 Customers, from SMB to Fortune 50 127 73 101 35% of revenues outsid
Slide 5: Proven Technology
Proven Technology ENTERPRISE DATA STORES USE CASES Data Access Governance Unix/Linux Metadata Collection Activity Monitoring Security Analytics Windows Office 365 Directory Services Data Classification Reporting/User Interface/Alerting Workflow Data Management Sharepoint Exchange Perimeter Devices A
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 SY
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 163 Zettabytes (or enterprises adopting a cloud-first require a meaningful level of security, 151 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 a standard. Almost media attention, and public outcry demonstrate appropriate awa
Slide 9: $15BN TAM
$23.6BN Security Software Addressing $15BN Opportunity $23.3BN IT Operations Management Across IT & Security $15.2BN Storage Management $15BN TAM(1) $4.5BN (1) Varonis Systems estimates that our total addressable market is approximately Data Integration 20% of these combined markets. $10.0BN Infrast
Slide 10: Large Untapped Market
Large Untapped Market ~50,000 COMPANIES IN NORTH AMERICA & EUROPE WITH MORE THAN 1,000 EMPLOYEES (1) ~120,000 `COMPANIES WORLDWIDE WITH MORE THAN 1,000 EMPLOYEES (1) ~740,000 COMPANIES IN EUROPE WITH MORE THAN 20 EMPLOYEES (2) ~635,000 COMPANIES IN THE UNITED STATES WITH MORE THAN 20 EMPLOYEES (3) (
Slide 11: 6 Product Families and Over 20 Licenses
6 Product Families and Over 20 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 per
Slide 12: Example: DatAdvantage Product Family Has Many Licenses
Example: DatAdvantage Product Family Has Many Licenses ON-PREMISES DATA STORES CLOUD DATA STORES REMEDIATION Note: In Q1 2018, DatAlert, along with Varonis Edge, was reclassified as a new product family. 12 VARONIS SYSTEMS. PROPRIETARY.
Slide 13: History of Innovation
History of Innovation 2006 2009 2011 2013 2015 2017 2008 2010 2012 2014 2016 2018 2005 13 VARONIS SYSTEMS. PROPRIETARY.
Slide 14: Significant Cross-Sell Opportunity
Significant Cross-Sell Opportunity $8.8 DataPrivilege Data Transport Engine Edge Automation Engine $6.2 Data Classification Engine Automation Engine Data Classification Engine DatAlert DatAlert DatAdvantage for Directory Services DatAdvantage for Exchange DatAdvantage for Exchange Online Online $2.7
Slide 15: 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 Over 10 years of battle-testing, thousands of production installs refinement, and innovation 15 VARONIS SYSTEMS. PROPRIETA
Slide 16: Predictable Sales Motion
Predictable Sales Motion LEADS Channel resellers provide introductions to the right Channel Marketing buyers and help with closing Sales force performs risk assessment and builds business case RISK ASSESSMENT Installation takes up to 90 minutes (off-the-shelf Varonis Sales Nurturing product), risk a
Slide 17: Varonis Risk Assessment
Varonis Risk Assessment (1) Where does my sensitive data live? How much of it is over exposed? 34% “ What kind of sensitive data do I have? The Varonis Data (GDPR, PCI, SOX, HIPAA, etc.) OF USER ACCOUNTS ARE ENABLED BUT Risk Assessment helped us identify our INACTIVE 41% at risk sensitive and classi
Slide 18: Trusted by Customers Worldwide Across Key Verticals
Trusted by Customers Worldwide Across Key Verticals FINANCE PUBLIC SECTOR MEDIA & RETAIL & ENTERPRISE HEALTHCARE EDUCATION ENTERTAINMENT 18 VARONIS SYSTEMS. PROPRIETARY.
Slide 19: Proven Management Team
Proven Management Team Yaki Faitelson Guy Melamed David Bass CEO, President, Co-Founder & Chairman CFO & COO Executive VP & CTO Varonis since 2005 Varonis since 2011 Varonis since 2005 Jim O’Boyle Dana Shahar Gilad Raz Sr. VP of Worldwide Sales Chief Human Resources Officer CIO & VP of Technical Ser
Slide 20: Guy Melamed
Guy Melamed Chief Financial Officer Chief Operating Officer gmelamed@varonis.com VARONIS SYSTEMS. PROPRIETARY.
Slide 21: Financial Highlights
Financial Highlights SUCCESSFUL LAND STRONG REVENUES HIGH CUSTOMER & EXPAND MODEL GROWTH SATISFACTION Perpetual license - High Volume low ASP Targeting larger customers with high Consistently high renewal rate >90% long-term value High predictability for renewals and license As of September 30, 2018
Slide 22: Strong Revenue Growth
Strong Revenue Growth Total Revenues | FYE December ($MM) 28% 30% GROWTH GROWTH $183 Maintenance and Services Revenues 215 Licenses Revenues $142 166 $88 95 127 $68 73 101 56 75 43 53 120 $94 31 40 93 $74 22 14 71 58 43 25 32 2011 2012 2013 2014 2015 2016 2017 Q1-Q3 2017 Q1-Q3 2018 22 VARONIS SYSTEM
Slide 23: Quarter-Over-Quarter Growth Is Strong
Quarter-Over-Quarter Growth Is Strong Quarterly Revenues | FYE December ($MM) Q1 Q2 Q3 Q4 73 67 Maintenance and Services Revenues 62 License Revenues 27 54 55 53 49 31 29 44 41 20 40 40 24 28 22 34 16 30 31 29 17 19 22 26 12 25 23 14 46 17 13 17 10 11 36 35 13 33 27 29 28 9 25 23 22 22 18 16 17 14 1
Slide 24: Strong Customer Growth
Strong Customer Growth 6,350 6,200 Targeting customers with 1,000 or more employees with larger potential Customer Lifetime Value 6,000 5,850 5,550 5,350 5,150 5,000 4,650 4,500 4,250 4,050 3,700 3,550 3,300 3,150 2,850 2,650 2,500 2,350 2,050 1,950 1,800 1,700 1,500 1,400 1,300 1,200 1,100 1,000 90
Slide 25: R&D Investments Are Paying Off
R&D Investments Are Paying Off 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 permissions breaches across dis
Slide 26: Significant Upsells and Cross-sells
Significant Upsells and Cross-sells Customers Who Have Purchased 2 or More and 3 or More Product Families | % of Total Customers 3+ Product Families 2+ Product Families 72% 69% 68% 65% 57% 39% 36% 34% 29% 21% 2015 2016 2017 Q3 2017 Q3 2018 26 VARONIS SYSTEMS. PROPRIETARY.
Slide 27: Existing Customers Spend More
Existing Customers Spend More License and Associated First Year Maintenance Revenues from Existing Customers (%) 53% 49% 46% 42% 37% 36% 34% 26% 20% 2011 2012 2013 2014 2015 2016 2017 Q3 2017 Q3 2018 27 VARONIS SYSTEMS. PROPRIETARY.
Slide 28: Investments Show Strong Returns
Investments Show Strong Returns Operating Cash Flow | ($MM) 18 16.4 16.3 13 10.8 8 7.3 Positive Operating Cash Flow 3 0.1M - 1.7M 2010 2011 2012 2013 2014 2015 2016 2017 Q1-Q3 2017 Q1-Q3 2018 -2 (2.7) (7.1) -7 28 VARONIS SYSTEMS. PROPRIETARY.
Slide 29: Annual Operating Margin Is Improving
Annual Operating Margin Is Improving 120% COGS 8.5% R&D S&M 9% 100% G&A 9% Operating Margin 9% 23% 3.5% 3.5% 80% 20% 20% 0.7% 60% -1.5% 66% 40% 60% 58% -6.5% 20% -8.6% 11% 10% 10% 0% -11.5% 2015 2016 2017 * Percentages are presented on a non-GAAP basis 29 VARONIS SYSTEMS. PROPRIETARY.
Slide 30: Q1-Q3 Operating Margin Is Improving
Q1-Q3 Operating Margin Is Improving COGS R&D S&M 10% 10% 10% G&A Operating Margin 22% 21% 24% -3.1% -4.1% 65% 62% 60% -7.4% 11% 11% 10% Q1-Q3'16 Q1-Q3'17 Q1-Q3'18 * Percentages are presented on a non-GAAP basis 30 VARONIS SYSTEMS. PROPRIETARY.
Slide 31: Solid Balance Sheet
Solid Balance Sheet (USD in Thousands) As of Sept 30, 2018 As of Dec 31, 2017 Cash, Cash Equivalents & Short-Term Investments $158,082 $136,557 Working Capital 103,892 109,918 Total Assets 245,879 245,638 Deferred Revenues, Current and Long-Term 78,918 80,101 Total Stockholders’ Equity 110,061 114,6
Slide 32: We plan to achieve our goal of building a billion dollar business
We plan to achieve our goal of building a billion dollar business that grows revenues meaningfully with expanding profit and cash flow. VARONIS SYSTEMS. PROPRIETARY.
Slide 33: Thank You
Thank You VARONIS SYSTEMS. PROPRIETARY.