# Varonis Systems, Inc. (VRNS) Q2 2025 Financial Results Summary
**Release Date:** July 29, 2025
Varonis Systems, Inc. (Nasdaq: VRNS), a leading provider of data security solutions, reported its financial results for the second quarter ended June 30, 2025. Below is a summary of key metrics and operational highlights from the report.
### Key Financial Metrics
– **Annual Recurring Revenue (ARR):**
– Increased by **19%** year-over-year.
– SaaS ARR constituted approximately **69%** of total ARR.
– **Cash Flow:**
– Year-to-date cash from operations: **$89.3 million**, up from **$68.4 million** in the same period last year (a growth of **30%**).
– Year-to-date free cash flow reached **$82.7 million**, compared to **$67.3 million** last year (an increase of **23%**).
### Revenue Breakdown (Q2 2025 vs. Q2 2024)
– **Total Revenues:**
– **$152.2 million** vs. **$130.3 million** in the prior year (a growth of **17%**).
– **Revenue Composition:**
– **SaaS Revenue:**
– **$105.9 million** vs. **$44.8 million** (up **136%**).
– **Term License Subscriptions:**
– **$32.4 million** vs. **$62.7 million** (down **48%**).
– **Maintenance and Services:**
– **$13.9 million** vs. **$22.8 million** (down **39%**).
### Cost and Profitability
– **Cost of Revenues:**
– Increased to **$31.2 million** from **$22.4 million** (up **39%**).
– **Gross Profit:**
– **$120.9 million**, an increase from **$107.9 million** (up **12%**).
– **Total Operating Expenses:**
– Rose to **$157.5 million** from **$136.7 million** (an increase of **15%**).
– Specific increases:
– **Research and Development:** **$56.2 million** vs. **$44.9 million** (up **25%**).
– **Sales and Marketing:** **$76.6 million** vs. **$70.0 million** (up **9%**).
– **General and Administrative:** **$24.6 million** vs. **$21.8 million** (up **13%**).
– **Operating Loss:**
– **$36.6 million**, compared to an operating loss of **$28.8 million** last year (a greater loss of **27%**).
– **Net Loss:**
– **$35.8 million**, versus **$23.9 million** (an increase in loss of **50%**).
– **Net Loss Per Share:** **$0.32** compared to **$0.21** last year.
### Shareholder Returns
– Varonis announced a stock repurchase plan, executing a **$100 million** share repurchase during the period.
### Financial Outlook
– **For Q3 2025:** The company anticipates continued growth in ARR along with a shift in its SaaS mix expectation increased to **82%** from the previous estimate of **80%**.
– **For Full Year 2025:** Varonis has raised its full-year ARR guidance based on evidenced momentum.
### Conference Call Information
– Varonis hosted a conference call on July 29, 2025, at 4:30 p.m. ET to discuss these results and provided insights into their growth strategy and market dynamics.
### Conclusion
Varonis is experiencing significant growth in its SaaS offerings and operational cash flow, reflecting increased demand for data security solutions. While the company continues to invest heavily in R&D and marketing, this has led to a wider operating and net loss. The announced share repurchase indicates confidence in long-term value, even as Varonis navigates the challenges of the current market landscape.
### Condensed Consolidated Statements of Operations
**(in thousands, except for share and per share data)**
| Three Months Ended | Six Months Ended | |||
|---|---|---|---|---|
| Varonis Systems, Inc. | June 30, 2025 | 2024 | June 30, 2025 | 2024 |
| Revenues: | ||||
| SaaS | $ 105,895 | $ 44,785 | $ 194,455 | $ 78,770 |
| Term license subscriptions | 32,374 | 62,729 | 63,862 | 118,709 |
| Maintenance and services | 13,894 | 22,832 | 30,269 | 46,889 |
| Total revenues | 152,163 | 130,346 | 288,586 | 244,368 |
| Cost of revenues | 31,249 | 22,436 | 60,267 | 43,785 |
| Gross profit | 120,914 | 107,910 | 228,319 | 200,583 |
| Operating expenses: | ||||
| Research and development | 56,247 | 44,933 | 110,457 | 92,760 |
| Sales and marketing | 76,578 | 70,041 | 149,341 | 141,268 |
| General and administrative | 24,641 | 21,762 | 48,839 | 43,014 |
| Total operating expenses | 157,466 | 136,736 | 308,637 | 277,042 |
| Operating loss | (36,552) | (28,826) | (80,318) | (76,459) |
| Financial income, net | 4,967 | 8,249 | 16,918 | 16,794 |
| Loss before income taxes | (31,585) | (20,577) | (63,400) | (59,665) |
| Income taxes | (4,239) | (3,371) | (8,207) | (4,773) |
| Net loss | $ (35,824) | $ (23,948) | $ (71,607) | $ (64,438) |
| Net loss per share of common stock, basic and diluted | $ (0.32) | $ (0.21) | $ (0.64) | $ (0.58) |
| Weighted average number of shares used in computing net loss per share of common stock, basic and diluted | 112,054,715 | 111,885,305 | 112,347,961 | 110,934,149 |
—
### Condensed Consolidated Balance Sheets
**(in thousands)**
| Varonis Systems, Inc. | June 30, 2025 | December 31, 2024 | ||
|---|---|---|---|---|
| Current assets: | ||||
| Cash and cash equivalents | $ 199,231 | $ 185,585 | ||
| Marketable securities | 571,630 | 343,383 | ||
| Short-term deposits | 36,587 | 39,450 | ||
| Trade receivables, net | 149,703 | 192,832 | ||
| Prepaid expenses and other short-term | 111,212 | 116,824 | ||
| assets | ||||
| Total current assets | 1,068,363 | 878,074 | ||
| Long-term assets: | ||||
| Long-term marketable securities | 364,203 | 658,896 | ||
| Operating lease right-of-use assets | 41,743 | 45,593 | ||
| Property and equipment, net | 33,088 | 30,795 | ||
| Intangible assets, net | 5,844 | — | ||
| Goodwill | 39,750 | 23,135 | ||
| Other assets | 62,021 | 27,782 | ||
| Total long-term assets | 546,649 | 786,201 | ||
| Total assets | $ 1,615,012 | $ 1,664,275 | ||
| Liabilities and stockholders’ equity | ||||
| Current liabilities: | ||||
| Trade payables | $ 7,115 | $ 4,313 | ||
| Accrued expenses and other short-term | 190,344 | 164,930 | ||
| liabilities | ||||
| Convertible senior notes, net | 251,148 | 250,529 | ||
| Deferred revenues | 322,791 | 290,113 | ||
| Total current liabilities | 771,398 | 709,885 | ||
| Long-term liabilities: | ||||
| Convertible senior notes, net | 451,247 | 450,243 | ||
| Operating lease liabilities | 39,865 | 42,789 | ||
| Deferred revenues | 108 | 2,211 | ||
| Other liabilities | 10,895 | 3,491 | ||
| Total long-term liabilities | 502,115 | 498,734 | ||
| Stockholders’ equity: | ||||
| Share capital | ||||
| Common stock | 112 | 113 | ||
| Accumulated other comprehensive income | 14,497 | 2,676 | ||
| Additional paid-in capital | 1,138,652 | 1,193,022 | ||
| Accumulated deficit | (811,762) | (740,155) | ||
| Total stockholders’ equity | 341,499 | 455,656 | ||
| Total liabilities and stockholders’ | $ 1,615,012 | $ 1,664,275 | ||
| equity |
