Slide 1: Varonis Overview Q1 2024
Nv varonis Q Varonis Overview Q1 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 ~2,250 FOUNDED IN 2004 IPO IN 2014 EMPLOYEES WORLDWIDE A leader in data security, fighting a different battle $560.3MM $56.7MM than conventional ANNUAL RECURRING REVENUES Q1 OPERATING CASH FLOW cybersecurity companies. 17% Y/Y GROWTH ~30% $56.4MM SaaS ARR AS % OF TOTAL ARR Q
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: Proven Approach
Proven Approach Find Fix Alert overexposed sensitive data sensitive and stale data alert on unusual data by analyzing data, account automatically, to remediate exposure and automatically activity, and user behavior. current exposure and prevent respond to keep data safe. future exposures.
Slide 7: Secular Trends
Secular Trends AI + Data Growth Hybrid Cloud Cyber Threats The amount of data created in the More than 85% of enterprises By 2025, almost 90% of all world is expected to grow at a adopting a cloud-first strategy are data is expected to require a compound annual growth rate of expected to continue to
Slide 8: 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 9: History of Innovation
History of Innovation Automated Remediation Varonis SaaS for M365, Box, Google Salesforce Protection Proactive Remote Incident Work Google Drive Response Data Security Protection Classification Salesforce Network Policy Box Shield Monitoring Expansion Protection Integration GDPR Data Classification
Slide 10: Data Security Platform Use Cases
Data Security Platform Use Cases
Slide 11: 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 12: 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 13: 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 14: Financial Results: Q1 2024 Highlights
Financial Results: Q1 2024 Highlights
Slide 15: Q1 2024 Highlights
Q1 2024 Highlights $560.3 $478.1 $560.3MM ARR at the end of Q1 grew 17% YoY $404.5 ~30% SaaS ARR as % of Total ARR 13.7% Q1 ARR Contribution Margin $56.4MM Q1 Free Cash Flow Q1 2022 Q1 2023 Q1 2024 ANNUAL RECURRING REVENUES ($MM)
Slide 16: Annual Recurring Revenues
Annual Recurring Revenues Q1 2024 GROWTH YoY 17% $560.3 $543.0 $517.5 $497.0 $478.1 $465.1 $447.8 $426.3 $404.5 Q1 2022 Q2 2022 Q3 2022 Q4 2022 Q1 2023 Q2 2023 Q3 2023 Q4 2023 Q1 2024
Slide 17: SaaS is a headwind to reported revenue, but driving positive business momentum
SaaS is a headwind to reported revenue, but driving positive business momentum $24 $24 • In the first quarter, we had a ~9% headwind to $56 our year-over-year revenue growth rate as a result of having increased SaaS sales in our $81 bookings mix $34 $2 Q1 2023 Q1 2024 SaaS Term License Subscriptions
Slide 18: 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 ($4) $56 ($11) $36 Q1 2023 Q1 2024 Q1 2023 Q1 2024 Non-GAAP Operating Loss SaaS Mix Headwind YTD Free Cash Flow During the quarter as compared to the same quarter last year, we had approximately an 8% headwind to
Slide 19: Q2 & FY 2024 Financial Guidance
Q2 & FY 2024 Financial Guidance Guidance Q2 2024 FY 2024 Annual Recurring Revenues (“ARR”) $622.0MM – $628.0MM YoY growth 15% – 16% Total Revenues $123.0MM – $126.0MM $536.0MM – $546.0MM YoY growth 7% – 9% 7% – 9% Non-GAAP Operating Income (Loss) ($6.0)MM – ($5.0)MM $9.0MM – $14.0MM Non-GAAP Operati
Slide 20: 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 21: Thank you.
Thank you.
Slide 22: 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 23: 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 24: 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 25: Appendix: Reconciliation of GAAP Measures to Non-GAAP
Appendix: Reconciliation of GAAP Measures to Non-GAAP Three Months Ended March 31, 2024 2023 Reconciliation to non-GAAP operating loss: GAAP operating loss ($47,633) ($43,116) Add back: Stock-based compensation expense 32,093 35,811 Payroll tax expenses related to stock-based compensation 4,587 2,23
Slide 26: Appendix: Reconciliation of GAAP Measures to Non-GAAP
Appendix: Reconciliation of GAAP Measures to Non-GAAP Reconciliation to non-GAAP free cash flow: FY 2024 Net cash provided by operating activities $77.0MM – $84.0MM Purchases of property and equipment ($7.0MM) – ($9.0MM) Free cash flow $70.0MM – $75.0MM