Varonis Withholds New Guidance Amid Pending Proofpoint Acquisition

The Tip Desk · November 4, 2026 · 3 min read

SaaS ARR reached $774.6 million as of September 30, 2026, up 42% from a year earlier, as the company withheld an outlook.

Varonis Systems (VRNS), the data and AI security company, said it would not issue forward-looking guidance or hold an earnings call for the third quarter ended September 30, 2026, citing a pending acquisition by Proofpoint, a Thoma Bravo portfolio company.

The company still reported a full quarter of results. Total revenues were $189.5 million, compared with $161.6 million in the third quarter of 2025. SaaS revenues were $185.1 million, compared with $125.8 million a year earlier. Term license subscription revenues were $1.2 million, and maintenance and services revenues were $3.1 million; the company said the vast majority of the declines in both lines versus a year earlier was driven by customers converting to its SaaS platform.

SaaS ARR was $774.6 million as of September 30, up 42% year-over-year and up 24% year-over-year excluding conversions. That excluding-conversions rate was down from 25% year-over-year at the end of the second quarter, when total SaaS ARR was $726.0 million. Total SaaS ARR had been $683.2 million at the end of the first quarter.

GAAP operating loss was $47.7 million, compared with a $35.9 million GAAP operating loss in the third quarter of 2025. Non-GAAP operating income was $7.6 million, compared with $0.2 million a year earlier. GAAP net loss was $41.6 million, or $0.36 a share, versus a $29.9 million loss, or $0.26 a share, a year earlier. Non-GAAP net income was $11.8 million, or $0.09 a share on a diluted basis, compared with $8.4 million, or $0.06 a share, a year earlier.

Gross profit was $142.6 million. Research and development expense was $78.7 million, sales and marketing was $80.9 million, and general and administrative expense was $30.7 million. Stock-based compensation was $41.2 million in the quarter. Amortization of acquired intangible assets and acquisition-related expenses was $13.6 million.

Cash and cash equivalents, short-term deposits and short-term and long-term marketable securities were $937.8 million as of September 30, compared with $911.5 million at June 30. Deferred revenues were $422.6 million in current liabilities and $16.4 million in long-term liabilities. Convertible senior notes, net, were $453.8 million.

During the nine months ended September 30, 2026, the company generated $108.3 million of cash from operations, compared with $122.7 million in the prior-year period. Free cash flow for the nine months was $94.8 million, compared with $111.6 million a year earlier. Adjusted free cash flow was $108.2 million, compared with $113.4 million. Cash used in financing activities included $135.0 million of common-stock repurchases.

The company said the Merger Agreement is dated October 15, 2026, among Varonis, Proofpoint and Vail Merger Sub. It listed risks that the transaction may not close, that stockholder approval and regulatory clearances may not be obtained, and that the pendency of the deal could affect employees and operations. It also said the transaction may require a termination fee if the agreement is terminated in certain circumstances.

Varonis described itself as securing AI and the data that powers it, with a platform for visibility and control over critical data and managed detection and response. It did not provide an updated outlook for SaaS ARR or revenues after the Proofpoint announcement.