How Investors May Respond To Varonis Systems (VRNS) Earnings Miss and New Securities Investigation

• Earlier in 2025, Varonis Systems reported third-quarter results that fell short of revenue forecasts, highlighting a sharp drop in term license subscription revenues and specific weakness in its on-premises subscription business.
• Soon after these disclosures, law firm Kaplan Fox & Kilsheimer LLP launched a securities law investigation into Varonis, underscoring investor concern about how the company communicated its performance and business transition challenges.
• We’ll now explore how the revenue shortfall and pressure on the on-premises subscription segment may influence Varonis Systems’ broader investment narrative.

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Varonis Systems Investment Narrative Recap

To own Varonis Systems, you need to believe its data security platform and SaaS shift can outweigh current execution issues and ongoing losses. The latest revenue miss and sharp drop in term license subscriptions directly pressure that thesis in the near term, since the most important short term catalyst is proof that its business transition can support stable, predictable growth. At the same time, the biggest risk now is that prolonged weakness in on premises subscriptions undermines confidence in that transition altogether.

Against this backdrop, Varonis’ December 2025 announcement of an integration with AWS Security Hub stands out, because it reinforces the core catalyst of deeper cloud adoption and broader platform coverage. While this integration helps extend Varonis’ reach across cloud environments and supports its SaaS centric story, investors may still weigh it against the immediate concerns raised by the third quarter revenue shortfall and the resulting securities law investigation.

Yet behind these growth ambitions, the pressure on on premises revenue and associated legal scrutiny is something investors should be aware of...

Read the full narrative on Varonis Systems (it's free!)

Varonis Systems’ narrative projects $911.4 million revenue and $119.3 million earnings by 2028. This requires 15.3% yearly revenue growth and an earnings increase of about $222 million from -$102.9 million today.

Uncover how Varonis Systems' forecasts yield a $52.63 fair value, a 58% upside to its current price.

Exploring Other Perspectives

Three fair value estimates from the Simply Wall St Community cluster between US$52.63 and US$70, highlighting how far opinions can stretch above the current share price. You should weigh those views against the risk that Varonis’ SaaS transition and recent revenue miss keep GAAP growth and profitability under pressure for longer, which could meaningfully affect how the story plays out.

Explore 3 other fair value estimates on Varonis Systems - why the stock might be worth just $52.63!

Build Your Own Varonis Systems Narrative

Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• A great starting point for your Varonis Systems research is our analysis highlighting 3 key rewards and 1 important warning sign that could impact your investment decision.
• Our free Varonis Systems research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate Varonis Systems' overall financial health at a glance.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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