Varonis Q3 Revenue Rises 17.3% to $189.5 Million as SaaS Revenue Grows 47.1%; No Guidance Ahead of Proofpoint Deal

Varonis Systems grew third-quarter revenue 17.3% to $189.5 million as its shift to software-as-a-service accelerated, but the data security company issued no outlook and skipped its earnings call while its pending sale to Proofpoint moves forward.

SaaS revenue rose 47.1% to $185.1 million from $125.8 million a year earlier, according to the results Varonis furnished with an 8-K on Tuesday. SaaS annual recurring revenue reached $774.6 million at the end of September, up 42% from a year earlier and up 24% excluding customers converting from older licenses, the Miami-based company said.

Legacy lines shrink as customers convert

The move to the cloud continued to hollow out Varonis' older revenue streams. Term license subscription revenue fell to $1.2 million from $24.8 million, and maintenance and services revenue dropped to $3.1 million from $10.9 million. The company said the vast majority of both declines came from customers converting to its SaaS platform.

Losses widen on a GAAP basis

GAAP operating loss widened to $47.7 million from $35.9 million a year earlier, as total operating expenses climbed to $190.3 million from $162.4 million. Net loss was $41.6 million, or $0.36 per share, compared with $29.9 million, or $0.26 per share.

Excluding stock-based compensation, related payroll taxes and acquisition-related items, Varonis posted non-GAAP operating income of $7.6 million, up from $0.2 million. Non-GAAP diluted earnings were $0.09 per share, compared with $0.06.

Cash generation

Varonis ended the quarter with $937.8 million in cash, deposits and marketable securities. For the first nine months of 2026, it generated $108.3 million in operating cash flow, down from $122.7 million a year earlier, and $94.8 million in free cash flow, down from $111.6 million. Over the same period, the company spent $135.0 million repurchasing its stock, according to its cash flow statement.

Deal pending, no guidance

Varonis agreed on Oct. 15, 2026, to be acquired by Proofpoint, a portfolio company of private equity firm Thoma Bravo. "In light of the pending acquisition," the company said it will not provide forward-looking guidance or update previously issued guidance, and it will not hold a conference call or webcast for the quarter.

The release did not include comment from management.

By the numbers

• Revenue: $189.5 million, up 17.3%
• SaaS revenue: $185.1 million, up 47.1%
• SaaS ARR: $774.6 million, up 42%
• GAAP net loss per share: $0.36, versus $0.26
• Non-GAAP EPS: $0.09, versus $0.06
• Nine-month free cash flow: $94.8 million

Sources

1. Varonis Systems Form 8-K with third-quarter 2026 earnings release, filed Nov. 3, 2026 (accession 0001171843-26-007078)

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