| Factor | Score | Distribution | Value | Avg | Rank |
|---|---|---|---|---|---|
Valuation | 19 | — | 17.6x | Bottom tier | |
Growth | 74 | 15.6% | 7.1% | Top tier | |
Quality | 40 | -15.2% | 4.5% | Bottom tier | |
Safety | 41 | — | 2.6x | Around median | |
Capital Return | 73 | — | 2.15% | Top tier | |
Momentum | 69 | -23.0% | 2.3% | Top tier | |
Sentiment | 81 | 15 | 3 | Top tier |
Estimates — analyst targets and a simplified DCF, not investment advice.
Ten ratios that matter, each compared against its sector median and average — so you can see whether a number is rich or cheap relative to peers in the same sector.
Varonis Systems provides a data and AI security platform that helps organizations discover sensitive data, control access permissions, monitor behavior, and automatically remediate exposure across cloud environments, software-as-a-service applications, and data stores. The company is expanding through Atlas Complete, Atlas Interceptor, and database activity monitoring, alongside coverage for AWS, Azure, Databricks, Snowflake, Microsoft 365, Salesforce, and NVIDIA; its revenue comes primarily from software-as-a-service subscriptions, with smaller contributions from term subscription licenses and maintenance and services.
In Q2 fiscal 2026, total revenue increased 18% year over year to $180 million, comprising $171.7 million from software as a service, $4.2 million from term subscription licenses, and $4.1 million from maintenance and services; software as a service therefore represented approximately 95% of revenue. Adjusted gross profit was $139.9 million, with a gross margin of 77.7%, compared with 80.6% in Q2 fiscal 2025, while adjusted operating income was $3.7 million, with a margin of 2.1%, compared with an operating loss of $1.9 million and a negative margin of 1.2%.
Adjusted net income in Q2 fiscal 2026 was approximately $5.3 million, or $0.04 per diluted share, compared with $3.8 million and $0.03 per share in the comparable quarter. Software-as-a-service annual recurring revenue excluding conversions increased 25% to $598.1 million, while the total including conversions reached $726 million, with a renewal rate above 90% and new-customer annual recurring revenue growth of more than 20%.
Automated analysis for informational purposes only — not investment advice.
The analyst consensus is “Buy,” with an average target of $49 and a wide range of $37 to $58; the average is approximately 23% below the 52-week range high of $63.9, while the highest target is close to that high. No usable price-to-earnings ratio is available, making the valuation more dependent on sustaining annual recurring revenue growth above 20% and improving profitability, weighed against the risks of gross margin contraction, expected growth deceleration, and volatility within the 52-week range of $19.7 to $63.9.
Figures in the text are as of 2026-08-30; the live price is shown at the top of the page.
Total revenue increased 18% to $180 million, while software-as-a-service annual recurring revenue excluding conversions grew 25% to $598.1 million. New-customer annual recurring revenue grew by more than 20%, alongside increased adoption of Atlas, Interceptor, and database activity monitoring. The software-as-a-service subscription renewal rate also exceeded 90%, combining new-customer expansion with retention of the subscription base.
The platform focuses on discovering sensitive data, reducing broad permissions, and monitoring how models and agents access enterprise data. In Q2 fiscal 2026, a healthcare organization with more than 40,000 employees purchased Varonis solutions to secure more than 100 AI projects and remediate exposure of HIPAA data and personally identifiable information. Management said on July 28, 2026 that customers are purchasing more platforms upfront and connecting them to more AI systems.
Atlas had been available for sale for approximately three and a half months at the time of the July 28, 2026 call, yet management said its contribution in Q2 fiscal 2026 exceeded its initial expectations. Interceptor targets upselling to the customer base in combination with MDDR, while database activity monitoring serves new and existing customers and targets a market that management estimated at approximately $1 billion. The company expects a more significant contribution from Atlas in the second half of fiscal 2026, but it did not provide a separate revenue figure for any of these products.
For Q3 fiscal 2026, the company expects revenue of $185–188 million, representing growth of 14%–16%, and adjusted operating income of $2.5–3.5 million. For fiscal 2026, it expects revenue of $735–739 million, total software-as-a-service annual recurring revenue of $819–850 million, and free cash flow of $105–110 million. It also expects software-as-a-service annual recurring revenue excluding conversions of $769–775 million, representing growth of 20%–21%, after raising the range by $5 million.
Adjusted gross margin declined from 80.6% in Q2 fiscal 2025 to 77.7% in Q2 fiscal 2026, while the annual recurring revenue contribution margin fell from 16.5% to 13.3%. For the six months ended June 30, 2026, free cash flow declined to $69.1 million from $82.7 million, including $11.9 million in acquisition-related costs. In addition, $59.3 million of non-software-as-a-service annual recurring revenue remained, keeping conversion execution and the wind-down of the self-hosted platform as factors affecting results.
Liquidity, short-term investments, and marketable securities totaled $911.5 million as of June 30, 2026 and generated approximately $7 million in financial income in Q2 fiscal 2026. The analyst consensus is “Buy,” with an average target of $49 within a range of $37 to $58, compared with a 52-week range high of $63.9. No usable price-to-earnings ratio is available, so the valuation rationale depends on the company's ability to achieve its fiscal 2026 guidance of 20%–21% growth in software-as-a-service annual recurring revenue excluding conversions and improve its margins as the transition progresses.
