Key Highlights

  • Total revenues were USD 189.5 million versus USD 161.6 million, and SaaS revenues were USD 185.1 million.
  • SaaS ARR was USD 774.6 million, up 42% year over year and up 24% excluding conversions.
  • The GAAP operating loss was USD 47.7 million, and non-GAAP Operating Income was USD 7.6 million versus USD 0.2 million.
  • The pending Proofpoint Acquisition means the company provided no guidance and held no earnings call.

Revenue and SaaS Mix

Varonis Systems, Inc. (NASDAQ:VRNS), a data and AI security company, reported third-quarter 2026 total revenues of USD 189.5 million, compared with USD 161.6 million in the third quarter of 2025. SaaS revenues were USD 185.1 million, compared with USD 125.8 million. Term license subscription revenues were USD 1.2 million, compared with USD 24.8 million, and maintenance and services revenues were USD 3.1 million, compared with USD 10.9 million. The company stated that the vast majority of the declines in term license and maintenance revenues were driven by customers converting to its SaaS platform.

SaaS annual recurring Revenue was USD 774.6 million at the end of the quarter, up 42% year over year, and up 24% year over year excluding conversions.

Analyst estimates were EPS of USD 0.03 against reported EPS of USD 0.09, and revenue of USD 186.7 million against reported revenue of USD 189.5 million.

Profitability, Net Loss and Cash Flow

Gross profit was USD 142.6 million, compared with USD 126.4 million. Research and Development expenses were USD 78.7 million versus USD 62.7 million, sales and Marketing expenses were USD 80.9 million versus USD 74.0 million, and general and administrative expenses were USD 30.7 million versus USD 25.6 million.

The GAAP operating loss was USD 47.7 million, compared with a GAAP operating loss of USD 35.9 million in the third quarter of 2025. Non-GAAP operating income was USD 7.6 million, compared with USD 0.2 million. The net loss was USD 41.6 million, or USD 0.36 per share, compared with USD 29.9 million, or USD 0.26 per share. For the nine months, the net loss was USD 125.3 million, or USD 1.09 per share, versus USD 101.5 million, or USD 0.90 per share, and Gross Profit was USD 409.6 million versus USD 354.7 million.

As of September 30, 2026, the company had USD 937.8 million in cash and cash equivalents, short-term deposits and short-term and long-term marketable securities. During the nine months, it generated USD 108.3 million of cash from operations, compared with USD 122.7 million in the prior-year period. Free Cash Flow was USD 94.8 million versus USD 111.6 million, and adjusted free cash flow was USD 108.2 million versus USD 113.4 million. Stock-based compensation for the nine months was USD 109.5 million versus USD 97.7 million, and Depreciation and amortization was USD 18.0 million versus USD 8.0 million. Amortization of Debt issuance costs is a recurring expense until the convertible senior notes mature in 2029.

Pending Acquisition by Proofpoint

Varonis has entered into a Merger agreement with Proofpoint, Inc., a portfolio company of Thoma Bravo, and Vail Merger Sub, Inc. In light of the pending acquisition, the company did not provide forward-looking guidance or updates to previously issued guidance, and it did not conduct an earnings conference call or webcast for its third-quarter fiscal 2026 results.

Items to Follow

Items to follow are the completion of the Proofpoint transaction, SaaS ARR including conversions, and the nine-month free cash flow.