Slide 1: Varonis Overview Q1 2025
NW varonis Q Varonis Overview Q1 2025
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
Slide 4: Varonis at a Glance
Varonis at a Glance VRNS ~2,500 FOUNDED IN 2004 IPO IN 2014 EMPLOYEES WORLDWIDE The leader in data security, fighting a different battle $664.3MM $68.0MM than conventional ANNUAL RECURRING REVENUES YTD OPERATING CASH FLOW cybersecurity companies. 19% Y/Y GROWTH ~61% $65.3MM SaaS ARR AS % OF TOTAL AR
Slide 5: Proven Technology
Proven Technology DATA DOMAINS VARONIS USES A DIFFERENT APPROACH TO PROTECT DATA Real-time visibility On-prem & Cloud File Storage Sensitivity Automated remediation, labeling, SaaS Apps Permissions & data subject access requests & Email & Configurations Activity Cloud Infrastructure & Proactive, dat
Slide 6: Unified and Automated Data Security Platform
Unified and Automated Data Security Platform REAL TIME CONNECTIVITY
Slide 7: Proven Approach
Proven Approach Find Fix Alert overexposed sensitive data sensitive and stale data on unusual data exposure and by analyzing data, account automatically, to remediate automatically respond to keep activity, and user behavior. current exposure and prevent data safe. future exposures.
Slide 8: Secular Trends
Secular Trends Data Growth AI & Cloud Adoption Cyber Threats The amount of data created in the 90% of organizations will adopt a In 2024 the global average cost world is expected to grow at a hybrid cloud approach through of a data breach was $4.9 compound annual growth rate of 2027 and more than 80
Slide 9: Industry Changes
Industry Changes Board Adoption & Regulation Awareness Standardization Boards of Directors are now A data-centric approach to security is The confluence of notable attacks, required to address cyber risks becoming the standard as the digital media attention, and public outcry and demonstrate appropr
Slide 10: Our SaaS platform enables relentless innovation
Our SaaS platform enables relentless innovation More to come Varonis for Salesforce Varonis for Varonis for GCP Google Workspace Varonis Varonis for SaaS Databricks Varonis for Box Varonis for Automated ServiceNow Varonis Posture for GitHub Management AI classification Varonis Third-Party for Jira A
Slide 11: Expanding our TAM to protect data in more places
Expanding our TAM to protect data in more places + A leader in protecting large data stores in the cloud (e.g. M365) & on-prem + We have expanded into new areas, growing our TAM + Databases – in the cloud and on-prem + SaaS – e.g. Box, Google Drive & Salesforce + IaaS/PaaS – e.g. AWS, Azure, databas
Slide 12: Data Security Platform Use Cases
Data Security Platform Use Cases Data Discovery & Classification Identity protection Accurately discover, classify, and label sensitive data. Detect attacks on AD, Entra ID, and Okta. DSPM Data risk assessment Improve your data security posture automatically. Map data risk and build a path to remedi
Slide 13: First-Mover Advantage
First-Mover Advantage Complexity High-Frequency Iterations Data was stored in fewer places 20 years of battle-testing, refinement, and innovation 2005 Data Volume Discipline Data volumes were much smaller Sales process drove tens of thousands of production installs
Slide 14: Predictable Sales Motion
Predictable Sales Motion Leads Risk Assessment Closing Channel | Marketing Varonis Sales Channel | Varonis Sales • Channel resellers provide • Salesforce performs in-person or • Highly metrics-driven sales introductions to the right virtual risk assessment and builds process buyers and help with clo
Slide 15: Proven Management Team
Proven Management Team Yaki Faitelson Guy Melamed David Bass Jim O’Boyle CEO, President, CFO & COO Executive VP & CTO Vice Chairman – 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 Huma
Slide 16: Financial Results: Q1 2025 Highlights
Financial Results: Q1 2025 Highlights
Slide 17: Q1 2025 Highlights
Q1 2025 Highlights $664.3 $560.3 $664.3MM ARR at the end of Q1 grew 19% YoY $478.1 ~61% SaaS ARR as % of Total ARR 16.7% ARR Contribution Margin $65.3MM YTD Free Cash Flow Q1 2023 Q1 2024 Q1 2025 ANNUAL RECURRING REVENUES ($MM)
Slide 18: Annual Recurring Revenues
Annual Recurring Revenues Q1 2025 GROWTH YoY 19% $664.3 $641.9 $610.0 $584.2 $560.3 $543.0 $517.5 $497.0 $478.1 Q1 2023 Q2 2023 Q3 2023 Q4 2023 Q1 2024 Q2 2024 Q3 2024 Q4 2024 Q1 2025 In millions
Slide 19: SaaS is a headwind to reported revenue
SaaS is a headwind to reported revenue, but driving positive business momentum $16 $24 $31 • In the first quarter, we had a ~1% headwind to our year-over-year revenue growth rate as a $56 result of having increased SaaS sales in our bookings mix $89 $34 Q1 2024 Q1 2025 SaaS Term License Subscription
Slide 20: SaaS is a headwind to reported operating margin
SaaS is a headwind to reported operating margin, but driving positive business momentum $56 $65 ($6) ($11) Q1 2024 Q1 2025 Q1 2024 Q1 2025 Non-GAAP Operating Income SaaS Mix Headwind YTD Free Cash Flow During the quarter as compared to the same quarter last year, we had approximately a 1% headwind t
Slide 21: Q2 & FY 2025 Financial Guidance
Q2 & FY 2025 Financial Guidance Guidance Q2 2025 FY 2025 Annual Recurring Revenues (“ARR”) $742.0MM – $750.0MM YoY growth 16% – 17% Free Cash Flow $120.0MM – $125.0MM Total Revenues $145.0MM – $150.0MM $610.0MM – $625.0MM YoY growth 11% – 15% 11% – 13% Non-GAAP Operating Income (Loss) ($5.0MM) – ($2
Slide 22: Our long-term goal is to build a billion-dollar business
Our long-term goal is to build a billion-dollar business that grows meaningfully with expanding profit and cash flow.
Slide 23: Thank you.
Thank you.
Slide 24: Appendix: Revenue Recognition Example #1
Appendix: Revenue Recognition Example #1 TERM-BASED ON-PREM SUBSCRIPTION SAAS $80k $25k $25k $25k $25k $5k $5k $5k $5k Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 ~80% Upfront / ~20% Ratable 100% Ratable ~85% of deal recognized in Q1 ~25% of deal recognized in Q1 100% of deal recognized in fiscal year 100% of deal reco
Slide 25: Appendix: Revenue Recognition Example #2
Appendix: Revenue Recognition Example #2 TERM-BASED ON-PREM SUBSCRIPTION SAAS $80k $25k $25k $5k $5k $0k Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 ~80% Upfront / ~20% Ratable 100% Ratable ~80% of deal recognized in Q2 <1% of deal recognized in Q2 ~90% of deal recognized in fiscal year ~50% of deal recognized in fisca
Slide 26: Appendix: Revenue Recognition Example #3
Appendix: Revenue Recognition Example #3 TERM-BASED ON-PREM SUBSCRIPTION SAAS $80k $0k Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 ~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 Both scenari
Slide 27: Appendix: Reconciliation of GAAP Measures to Non-GAAP
Appendix: Reconciliation of GAAP Measures to Non-GAAP Three Months Ended March 31, 2025 2024 Reconciliation to non-GAAP operating loss: GAAP operating loss ($43,766) ($47,633) Add back: Stock-based compensation expense 32,255 32,093 Payroll tax expenses related to stock-based compensation 3,067 4,58
Slide 28: Appendix: Reconciliation of GAAP Measures to Non-GAAP
Appendix: Reconciliation of GAAP Measures to Non-GAAP Reconciliation to non-GAAP free cash flow: Three Months Ended March 31, 2025 2024 Net cash provided by operating activities $68,000 $56,723 Purchases of property and equipment ($2,339) ($297) Capitalized internal-use software ($325) — Free cash f