• Palo Alto Networks for internal data security.
• Splunk for data security intelligence.
• Proofpoint for internal data protection.

• Varonis Data Security Platform: A unified software platform designed to discover, classify, and protect sensitive data from insider threats and cyberattacks across on-premises and cloud environments.
• Data Protection & Threat Detection: A service of the platform that continuously monitors user and data activity to detect and prevent ransomware, insider threats, and data breaches.
• Data Governance & Compliance: A service of the platform that enables organizations to classify sensitive data, manage access permissions, and ensure adherence to regulatory requirements.
• Cloud Data Security: A service of the platform that extends data protection and governance capabilities to secure data stored in cloud applications and infrastructure like Microsoft 365, AWS, and Azure.

Varonis Systems (symbol: VRNS) sells primarily to other companies, making it a Business-to-Business (B2B) model. Its customers are organizations across a wide range of industries that need to protect their sensitive data from breaches, insider threats, and compliance violations.

Due to the nature of their data security and analytics software, and for reasons of customer privacy and security, Varonis Systems does not publicly disclose the names of its specific major customer companies. This is a common practice among enterprise software and cybersecurity vendors.

Instead of listing specific customer companies, we can describe the *categories* of organizations that constitute their customer base:

• Financial Services: Banks, insurance companies, investment firms, and other financial institutions that handle highly sensitive customer financial data and are subject to strict regulatory compliance (e.g., GDPR, CCPA, PCI DSS, SOX).
• Healthcare: Hospitals, clinics, pharmaceutical companies, and other healthcare providers that manage vast amounts of protected health information (PHI) and must adhere to regulations like HIPAA.
• Government Agencies: Federal, state, and local government entities that store classified or highly sensitive citizen data and are frequent targets for cyberattacks.
• Manufacturing & Retail: Companies in these sectors that possess valuable intellectual property, customer data, and operational information.
• Technology & Media: Organizations that generate, store, and process large volumes of proprietary data, user data, and digital assets.

Varonis serves companies ranging from mid-market enterprises to large, global corporations across these and other sectors, helping them secure their unstructured and semi-structured data wherever it resides.

Amazon.com, Inc. (AMZN)

Microsoft Corporation (MSFT)

Yaki Faitelson, CEO, President, Co-Founder & Chairman of the Board

Yaki Faitelson co-founded Varonis in 2005. Prior to establishing Varonis, he held leadership positions in the global professional services and systems integration divisions of NetVision and NetApp. Faitelson played a key role in the co-development of the MetaData Framework technology, which serves as the foundation for the Varonis Data Security Platform, and he holds numerous patents for permissions visualization, simulation, and data analysis. He has been instrumental in guiding Varonis from a startup to a global leader in cybersecurity, and in 2014, he received EY's Technology Entrepreneur of the Year award.

Guy Melamed, CFO & COO

Guy Melamed joined Varonis in 2011 and is responsible for global operations, executing business strategies, and financial management, including legal, treasury, investor relations, and purchasing. Before joining Varonis, he worked at Ernst & Young as an Audit Manager and at KPMG, where he handled both foreign and domestic public and private companies. Melamed holds both a Bachelor of Arts and a Master of Science in Accounting from Boston College and is a Certified Public Accountant in the U.S. and Israel. He was also a former soccer player for Israel's under-21 national team and the first Israeli to be drafted by a Major League Soccer (MLS) team.

David Bass, Executive VP of Engineering & CTO

David Bass is responsible for all of Varonis' product development and quality assurance. He has been with Varonis since 2005 and is the author of more than twenty Varonis patents. Prior to his tenure at Varonis, he held managerial development positions at NetVision Internet Applications and worked as an independent contractor.

Dana Shahar, Chief Human Resources Officer

Dana Shahar is responsible for all aspects of Human Resources at Varonis, including recruiting, employee relations, leadership, and organizational development. Before joining Varonis, she founded "Intoto Solutions," an HR consulting company providing services to small businesses. Additionally, she served as the Vice President of Human Resources at Radcom for nine years. Shahar holds a Bachelor of Arts degree in Communications and Behavioral Science and a Master of Social Psychology from Bar-Ilan University.

David Gibson, Senior VP of Strategic Programs

David Gibson joined Varonis in 2006. He is responsible for building brand awareness, aligning product innovations with market demand, and driving sales through marketing, communications, and educational initiatives. With over 20 years of technology and marketing experience, Gibson previously worked as a systems engineer for Tripwire and as a network management and security engineer at International Integrated Solutions. He is a Certified Information Systems Security Professional (CISSP).

Varonis Systems (VRNS) faces several key risks as it navigates a dynamic cybersecurity landscape and a significant business model transition.

1. Challenges in SaaS Transition and Revenue Recognition: Varonis is in the process of transitioning from a perpetual software license model to a subscription-based Software-as-a-Service (SaaS) model. While this shift is intended to provide more predictable cash flow and has seen strong SaaS growth, it also introduces near-term financial headwinds. The company has experienced weaker-than-expected renewals in its legacy on-premises business, leading to downward revisions in guidance and impacting overall revenue growth in the short term. Additionally, cloud-based delivery under the SaaS model often entails higher infrastructure costs, which has already contributed to a decline in gross margins.
2. Intense Competition and Rapidly Evolving Cyber Threat Landscape: Varonis operates in a highly competitive and continuously evolving cybersecurity market. The company's success depends on its ability to offer solutions that effectively defend against new and sophisticated cyber threats, including those arising from the widespread adoption of artificial intelligence (AI) technologies. If Varonis's solutions are not effective enough or if they fail to keep pace with the rapid advancements in cyber threats and competitor offerings, demand for its services could decline significantly.
3. Exposure to General Economic Conditions: Varonis's business performance is susceptible to broader economic downturns and fluctuations. Economic uncertainty, prolonged recessions, or other negative economic conditions could lead to reduced spending by customers, lower renewal rates for existing contracts, and lengthened sales cycles. Such a scenario could materially and adversely affect Varonis's business operations, financial condition, and liquidity.

The clear emerging threat to Varonis Systems (VRNS) comes from the continuous expansion and enhancement of native data security, governance, and compliance offerings by major cloud service providers (CSPs), particularly Microsoft.

CSPs like Microsoft, Amazon Web Services (AWS), and Google Cloud are increasingly integrating sophisticated data protection, data loss prevention (DLP), information protection, data governance, and insider risk management capabilities directly into their cloud platforms and suites (e.g., Microsoft Purview, AWS Macie, Google Cloud DLP). These native services often come with tight integration into the CSP ecosystem, potentially offering a more consolidated and cost-effective solution for organizations that primarily leverage a single cloud provider.

While Varonis excels in providing deep visibility and security across heterogeneous, on-premises, and multi-cloud data environments, the ongoing maturation and comprehensive bundling of these security features by CSPs present a competitive pressure. As CSPs continue to invest heavily in their security portfolios, they may reduce the perceived need for specialized third-party vendors for certain data security aspects, particularly for data residing within their respective ecosystems, thereby potentially narrowing Varonis's addressable market or intensifying competition.

Varonis Systems (VRNS) operates in several key addressable markets related to data security and governance. Varonis itself states that its expanded Total Addressable Market (TAM) is $32 billion globally, projected to grow at a Compound Annual Growth Rate (CAGR) of 20% through 2028.

Based on their main products and services, the addressable markets are sized as follows:

• Data Governance: The global data governance market was valued at approximately $4.51 billion in 2024 and is estimated to reach $19.38 billion by 2033, exhibiting a CAGR of 15.69% during 2025-2033. North America held a significant market share of 35.3% in 2024. The U.S. data governance market was valued at $0.74 billion in 2024 and is projected to reach $2.65 billion by 2032.
• Data Security (broader market): The global data security market is estimated at $14.70 billion in 2025 and is set to reach $32.89 billion by 2030, with a CAGR of 17.5%. North America retained a 41.3% revenue share in 2024.
• Insider Risk Management (Insider Threat Protection): The global insider risk management market is estimated to be valued at $3.2 billion in 2025 and is projected to reach $10.3 billion by 2035, registering a CAGR of 12.5%. Another estimate places the global market at $2.4 billion in 2024, expected to reach $3.7 billion by 2030, growing at a CAGR of 7.6%. North America, Asia-Pacific, and Europe are key growth regions for this market. The U.S. market for insider risk management is estimated at $659.4 million in 2024.
• Cloud Security: The global cloud security market was estimated at $36.08 billion in 2024 and is predicted to increase from $40.81 billion in 2025 to approximately $121.04 billion by 2034, expanding at a CAGR of 12.87% from 2025 to 2034. North America dominated this market with a revenue share of 35% in 2024.
• Data-Centric Security: The global data-centric security market was estimated at $4.28 billion in 2022 and is projected to reach $24.01 billion by 2030, growing at a CAGR of 24.2%. North America led this market in 2022 with a 35.2% share.

Here are 3-5 expected drivers of future revenue growth for Varonis Systems (VRNS) over the next 2-3 years:

1. SaaS Transition and Adoption: Varonis Systems is in the process of transitioning its customer base from on-premise solutions to a Software-as-a-Service (SaaS) model. This strategic shift is a primary driver of future revenue growth, with SaaS annual recurring revenue (ARR) already constituting a significant portion of the company's total ARR and projected to grow further. The company aims to complete this transition by the end of 2025, which is expected to lead to more stable and accelerated operating growth rates in the coming years.
2. Expansion of Total Addressable Market (TAM) through Product Innovation: Varonis has been actively expanding its total addressable market by innovating and launching new platforms that cover Infrastructure-as-a-Service (IaaS), Software-as-a-Service (SaaS), Platform-as-a-Service (PaaS), Artificial Intelligence (AI), and Databases. This expansion has reportedly tripled its TAM. Recent product introductions, such as AI identity protection for Salesforce Agentforce and Varonis Interceptor (an AI-driven email security solution), also contribute to this expansion and are expected to drive new customer growth.
3. Increasing Demand for Data Security and Compliance: The growing market demand for robust data security solutions, fueled by secular tailwinds like rapid data growth, accelerating cloud adoption (including hybrid cloud environments), and evolving data-centric compliance regulations, is a significant revenue driver. The increasing global average cost of data breaches further underscores the critical need for advanced data security.
4. Growth in Generative AI Adoption: The widespread adoption of Generative AI technologies and tools like Microsoft Copilot is creating new and complex data security challenges for organizations. This trend is a substantial catalyst for Varonis, as it highlights critical data security issues and drives demand for the company's automated data security solutions.
5. Managed Data Detection and Response (MDDR) Offering: Varonis' Managed Data Detection and Response (MDDR) offering is consistently highlighted as a key driver of growth. This service, along with the simplicity of the SaaS platform, is also contributing to increased new customer acquisition.

Share Repurchases

• Varonis Systems executed share repurchases totaling $56.4 million in 2022 and $43.5 million in 2023 under a $100.0 million program authorized in October 2022, which expired on October 31, 2023.
• On February 10, 2025, the board authorized a new share repurchase program of up to $100.0 million, expected to be completed over the subsequent 12 months.
• On October 28, 2025, an additional share repurchase program of up to $150.0 million of common stock was authorized, with repurchases anticipated to conclude within the next 12 months.

Share Issuance

• In February 2021, Varonis Systems completed a public offering, issuing a total of 2,653,846 shares of common stock at $195.00 per share, resulting in estimated net proceeds of approximately $500.0 million.
• The company received $11.9 million and $11.5 million in proceeds from employee stock plans in 2022 and 2023, respectively.
• Taxes paid related to net share settlement of equity awards amounted to $31.1 million in 2022 and $21.4 million in 2023.

Inbound Investments

• On May 11, 2020, Varonis issued $253.0 million in aggregate principal amount of 2025 Convertible Notes, generating approximately $245.2 million in net proceeds.
• In September 2024, the company issued 1.00% Convertible Senior Notes due 2029.

Outbound Investments

• In October 2020, Varonis acquired Polyrize Security Ltd., integrating its technology to launch DatAdvantage Cloud and Data Classification Cloud licenses.

Capital Expenditures

• Varonis Systems' capital expenditures averaged $8.759 million annually from fiscal years 2020 to 2024.
• Capital expenditures reached a peak of $11.396 million in December 2022 and a low of $5.099 million in December 2023.
• The primary focus of capital expenditures includes hardware, software, office equipment, and leasehold improvements, mainly for existing office spaces.