Slide 1: Varonis Overview Q4 2024
Wvaronis Q Varonis Overview Q4 2024
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 ~2,400 FOUNDED IN 2004 IPO IN 2014 EMPLOYEES WORLDWIDE A leader in data security, fighting a different battle $641.9MM $115.2MM than conventional ANNUAL RECURRING REVENUES 2024 OPERATING CASH FLOW cybersecurity companies. 18% Y/Y GROWTH ~53% $108.5MM SaaS ARR AS % OF TOTAL A
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
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: Q4 & FY 2024 Highlights
Financial Results: Q4 & FY 2024 Highlights
Slide 17: Q4 & Full-year 2024 Highlights
Q4 & Full-year 2024 Highlights $641.9 $543.0 $641.9MM ARR at the end of Q4 grew 18% YoY $465.1 ~53% SaaS ARR as % of Total ARR 16.6% Q4 ARR Contribution Margin $108.5MM 2024 Free Cash Flow Q4 2022 Q4 2023 Q4 2024 ANNUAL RECURRING REVENUES ($MM)
Slide 18: Annual Recurring Revenues
Annual Recurring Revenues Q4 2024 GROWTH YoY 18% $641.9 $610.0 $584.2 $560.3 $543.0 $517.5 $497.0 $478.1 $465.1 Q4 2022 Q1 2023 Q2 2023 Q3 2023 Q4 2023 Q1 2024 Q2 2024 Q3 2024 Q4 2024
Slide 19: SaaS is a headwind to reported revenue, but driving positive business momentum
SaaS is a headwind to reported revenue, but driving positive business momentum $20 $25 $67 • In the fourth quarter, we had an ~18% headwind to our year-over-year revenue growth rate as a $106 result of having increased SaaS sales in our bookings mix $72 $23 Q4 2023 Q4 2024 SaaS Term License Subscrip
Slide 20: SaaS is a headwind to reported operating margin, but driving positive business momentum
SaaS is a headwind to reported operating margin, but driving positive business momentum $27 $109 $15 $54 Q4 2023 Q4 2024 Q4 2023 Q4 2024 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 an 13% headwind t
Slide 21: SaaS is a headwind to reported revenue, but driving positive business momentum
SaaS is a headwind to reported revenue, but driving positive business momentum $88 $98 • In 2024, we had a ~10% headwind to our year- $254 over-year revenue growth rate as a result of having increased SaaS sales in our bookings mix $356 $209 $44 FY 2023 FY 2024 SaaS Term License Subscriptions Mainte
Slide 22: SaaS is a headwind to reported operating margin, but driving positive business momentum
SaaS is a headwind to reported operating margin, but driving positive business momentum $109 $29 $54 $16 FY 2023 FY 2024 FY 2023 FY 2024 Non-GAAP Operating Income SaaS Mix Headwind YTD Free Cash Flow During the fiscal year as compared to the previous year, we had approximately an 8% headwind to our
Slide 23: Q1 & FY 2025 Financial Guidance
Q1 & FY 2025 Financial Guidance Guidance Q1 2025 FY 2025 Annual Recurring Revenues (“ARR”) $737.0MM – $745.0MM YoY growth 15% – 16% Free Cash Flow $120.0MM – $125.0MM Total Revenues $130.0MM – $135.0MM $610.0MM – $625.0MM YoY growth 14% – 18% 11% – 13% Non-GAAP Operating Income (Loss) ($14.0MM) – ($
Slide 24: 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 25: Thank you.
Thank you.
Slide 26: 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 27: 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 28: 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 29: Appendix: Reconciliation of GAAP Measures to Non-GAAP
Appendix: Reconciliation of GAAP Measures to Non-GAAP Three Months Ended Twelve Months Ended December 31, December 31, 2024 2023 2024 2023 Reconciliation to non-GAAP operating income: GAAP operating loss ($17,552) ($5,244) ($117,651) ($117,223) Add back: Stock-based compensation expense 32,569 31,64
Slide 30: Appendix: Reconciliation of GAAP Measures to Non-GAAP
Appendix: Reconciliation of GAAP Measures to Non-GAAP Reconciliation to non-GAAP free cash flow: YTD FY 2024 Net cash provided by operating activities $115.2MM Purchases of property and equipment ($6.7MM) Free cash flow $108.5MM Reconciliation to non-GAAP free cash flow: FY 2025 Guidance Net cash pr