Quick Summary:
Consolidated Statements of Operations(in thousands, except for share and per share data) Three Months EndedDecember 31, Twelve Months EndedDecember 31, 2024 2023 2024 2023 Unaudited Unaudited Revenues: Term license subscriptions$66,781 $106,184 $254,241 $356,490 SaaS 72,206 22,980 208,781 44,417 Maintenance and services 19,527 24,935 87,928 98,253 Total revenues 158,514 154,099 550,950 499,160 Cost of revenues 26,055 19,347 93,847 71,751 Gross profit 132,459 134,752 457,103 427,409 Operating expenses: Research and development 50,546 48,144 196,765 183,838 Sales and marketing 76,123 70,569 288,769 277,893 General and administrative 23,342 21,283 89,220 82,901 Total operating expenses 150,011 139,996 574,754 544,632 Operating loss (17,552) (5,244) (117,651) (117,223)Financial income, net 7,605 5,433 34,644 30,305 Income (loss) before income taxes (9,947) 189 (83,007) (86,918)Income taxes (3,047) (1,087) (12,758) (13,998) Net loss$(12,994) $(898) $(95,765) $(100,916) Net loss per share of common stock, basic and diluted$(0.12) $(0.01) $(0.86) $(0.92) Weighted average number of shares used in computing net loss per share of common stock, basic and diluted 112,488,376 109,007,859 111,660,541 109,141,894 Stock-based compensation expense for the three and twelve months ended December 31, 2024 and 2023 is included in the Consolidated Statements of Operations as follows (in thousands): Three Months EndedDecember 31, Twelve Months EndedDecember 31, 2024 2023 2024 2023 Unaudited Unaudited Cost of revenues$1,175 $1,275 $5,192 $7,221Research and development 10,709 11,199 41,766 48,679Sales and marketing 10,509 10,186 41,494 48,047General and administrative 10,176 8,983 38,230 35,872 $32,569 $31,643 $126,682 $139,819 Payroll tax expense related to stock-based compensation for the three and twelve months ended December 31, 2024 and 2023 is included in the Consolidated Statements of Operations as follows (in thousands): Three Months EndedDecember 31, Twelve Months EndedDecember 31, 2024 2023 2024 2023 Unaudited Unaudited Cost of revenues$6 $20 $637 $405Research and development 38 133 604 365Sales and marketing 146 152 3,196 1,972General and administrative 16 32 1,181 518 $206 $337 $5,618 $3,260 Amortization of acquired intangibles and acquisition-related expenses for the three and twelve months ended December 31, 2024 and 2023 is included in the Consolidated Statements of Operations as follows (in thousands): Three Months EndedDecember 31, Twelve Months EndedDecember 31, 2024 2023 2024 2023 Unaudited Unaudited Cost of revenues$119 $381 $1,263 $1,525Research and development — 128 — 1,363Sales and marketing — — — —General and administrative — — — — $119 $509 $1,263 $2,888 Varonis Systems, Inc.
Reconciliation of GAAP Measures to non-GAAP(in thousands, except share and per share data) Three Months Ended December 31, Twelve Months EndedDecember 31, 2024 2023 2024 2023 Unaudited UnauditedReconciliation to non-GAAP operating income: GAAP operating loss$(17,552) $(5,244) $(117,651) $(117,223) Add back: Stock-based compensation expense 32,569 31,643 126,682 139,819 Payroll tax expenses related to stock-based compensation 206 337 5,618 3,260 Amortization of acquired intangible assets and acquisition-related expenses 119 509 1,263 2,888 Non-GAAP operating income$15,342 $27,245 $15,912 $28,744 Reconciliation to non-GAAP net income: GAAP net loss$(12,994) $(898) $(95,765) $(100,916) Add back: Stock-based compensation expense 32,569 31,643 126,682 139,819 Payroll tax expenses related to stock-based compensation 206 337 5,618 3,260 Amortization of acquired intangible assets and acquisition-related expenses 119 509 1,263 2,888 Foreign exchange rate differences, net 3,129 2,290 827 (916)Amortization of debt issuance costs 880 381 2,144 1,514 Non-GAAP net income$23,909 $34,262 $40,769 $45,649 GAAP weighted average number of shares used in computing net loss per share of common stock - basic and diluted 112,488,376 109,007,859 111,660,541 109,141,894 Non-GAAP weighted average number of shares used in computing net income per share of common stock - basic 112,488,376 109,007,859 111,660,541 109,141,894 Non-GAAP weighted average number of shares used in computing net income per share of common stock - diluted 135,097,388 126,061,869 130,278,825 126,585,777 GAAP net loss per share of common stock - basic and diluted$(0.12) $(0.01) $(0.86) $(0.92)Non-GAAP net income per share of common stock - basic$0.21 $0.31 $0.37 $0.42 Non-GAAP net income per share of common stock - diluted$0.18 $0.27 $0.31 $0.36 Varonis Systems, Inc.
Consolidated Statements of Cash Flows(in thousands) Twelve Months EndedDecember 31, 2024 2023 Unaudited Cash flows from operating activities: Net loss$(95,765) $(100,916)Adjustments to reconcile net loss to net cash provided by operating activities: Depreciation and amortization 11,126 11,703 Stock-based compensation 126,682 139,819 Amortization of deferred commissions 54,392 53,072 Non-cash operating lease costs 9,526 9,468 Amortization of debt issuance costs 2,144 1,514 Amortization of premium and accretion of discount on marketable securities, net (12,690) (9,354)Acquired in-process research and development 6,653 — Changes in assets and liabilities: Trade receivables (23,716) (33,137)Prepaid expenses and other short-term assets (35,332) (21,459)Deferred commissions (59,820) (53,505)Other long-term assets 347 (577)Trade payables 3,641 (2,290)Accrued expenses and other short-term liabilities 17,317 (5,278)Deferred revenues 110,389 69,882 Other long-term liabilities 306 474 Net cash provided by operating activities 115,200 59,416 Cash flows from investing activities: Proceeds from maturities of marketable securities 308,840 301,350 Proceeds from sales of marketable securities 111,552 — Investment in marketable securities (949,841) (517,948)Proceeds from short-term and long-term deposits 34,795 214,444 Investment in short-term and long-term deposits (24,254) (135,823)Purchase of in-process research and development (6,653) — Purchases of property and equipment (6,694) (5,099)Net cash used in investing activities (532,255) (143,076) Cash flows from financing activities: Proceeds from issuance of convertible senior notes, net of issuance costs 449,635 — Purchases of capped calls (55,522) — Proceeds from employee stock plans 16,082 11,537 Taxes paid related to net share settlement of equity awards (38,295) (21,415)Repurchase of common stock — (43,522)Net cash provided by (used in) financing activities 371,900 (53,400)Decrease in cash and cash equivalents (45,155) (137,060)Cash and cash equivalents at beginning of period 230,740 367,800 Cash and cash equivalents at end of period$185,585 $230,740 Varonis Systems, Inc.
