Varonis Systems Faces Class Action Lawsuit Over Securities Fraud
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 1h ago
0mins
Should l Buy VRNS?
Source: PRnewswire
- Class Action Notification: Levi & Korsinsky, LLP has initiated a class action lawsuit against Varonis Systems, Inc. to recover losses for investors affected by alleged securities fraud between February 4, 2025, and October 28, 2025, highlighting serious concerns regarding the company's integrity.
- Financial Performance Miss: Varonis reported disappointing third-quarter results for 2025, significantly missing its Annual Recurring Revenue (ARR) targets and lowering its full-year guidance, indicating struggles with customer renewals and conversions that have shaken investor confidence.
- Stock Price Plunge: Following the release of its poor financial results, Varonis' stock price plummeted from $63.00 per share on October 28, 2025, to $32.34 on October 29, representing a staggering 48.67% drop in just one day, reflecting severe investor concerns about the company's future.
- Layoffs and Product Termination: The company announced the discontinuation of its self-hosted solution and a 5% workforce reduction, raising further doubts about the sustainability of its business model and potentially impacting its long-term growth prospects.
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Analyst Views on VRNS
Wall Street analysts forecast VRNS stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for VRNS is 52.18 USD with a low forecast of 37.00 USD and a high forecast of 80.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
18 Analyst Rating
14 Buy
4 Hold
0 Sell
Strong Buy
Current: 26.530
Low
37.00
Averages
52.18
High
80.00
Current: 26.530
Low
37.00
Averages
52.18
High
80.00
About VRNS
Varonis Systems, Inc. is a data security company. The Company’s cloud-native data security platform discovers and classifies critical data, removes exposures, and detects advanced threats with artificial intelligence (AI)-powered automation. Varonis software enables enterprises of all sizes and industries to protect data stored in the cloud and on-premises, including sensitive files, emails and databases; confidential personal data belonging to customers, patients and employees; financial records; source code, strategic and product plans; and other intellectual property. Its SaaS product portfolio includes two product lines: its flagship Varonis Data Security Platform, which protects Microsoft 365, Windows file shares, Active Directory, Edge devices (VPN, DNS, proxy), UNIX/Linux and hybrid NAS storage, and DatAdvantage Cloud, which protects IaaS environments and SaaS applications, such as Salesforce, AWS, Azure, Google Cloud, Google Workspace, Databricks, ServiceNow, and others.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
Varonis Systems Q4 2025 Earnings Highlights
- SaaS Business Growth: Varonis reported a Q4 2025 SaaS ARR of $638.5 million, constituting 86% of total ARR, with a year-over-year increase of 32%, indicating strong market demand and customer conversion capabilities during its transition.
- Strategic Transition Decision: The company plans to fully phase out its self-hosted platform by the end of 2026, expecting to convert between $50 million to $75 million of ARR to SaaS, which will further solidify its leadership in the cloud security market.
- Acquisition of AllTrue: Varonis acquired AI security firm AllTrue to enhance its ability to address emerging AI risks and extend its platform to secure all AI systems and their data, demonstrating foresight in technological innovation and market adaptability.
- 2026 Outlook: The company projects total SaaS ARR of $805 million to $840 million for 2026, representing a growth rate of 26% to 32%, alongside expected free cash flow of $100 million to $105 million, reflecting confidence in future growth despite challenges from its non-SaaS business.
See More
Varonis Systems Faces Class Action Lawsuit Over Securities Fraud
- Class Action Notification: Levi & Korsinsky, LLP has initiated a class action lawsuit against Varonis Systems, Inc. to recover losses for investors affected by alleged securities fraud between February 4, 2025, and October 28, 2025, highlighting serious concerns regarding the company's integrity.
- Financial Performance Miss: Varonis reported disappointing third-quarter results for 2025, significantly missing its Annual Recurring Revenue (ARR) targets and lowering its full-year guidance, indicating struggles with customer renewals and conversions that have shaken investor confidence.
- Stock Price Plunge: Following the release of its poor financial results, Varonis' stock price plummeted from $63.00 per share on October 28, 2025, to $32.34 on October 29, representing a staggering 48.67% drop in just one day, reflecting severe investor concerns about the company's future.
- Layoffs and Product Termination: The company announced the discontinuation of its self-hosted solution and a 5% workforce reduction, raising further doubts about the sustainability of its business model and potentially impacting its long-term growth prospects.
See More
Faruqi & Faruqi Investigates Varonis Securities Litigation
- Legal Investigation: Faruq & Faruqi LLP is investigating potential claims against Varonis Systems, Inc. due to misleading statements made between February 4, 2025, and October 28, 2025, which may have led investors to purchase securities at artificially inflated prices, resulting in significant losses.
- Financial Performance Decline: Varonis reported third-quarter results on October 28, 2025, revealing a significant miss in annual recurring revenue (ARR) and lowering its full-year guidance, reflecting weak customer renewals and conversions that directly impacted market confidence in the company.
- Stock Price Plunge: Following the unfavorable earnings report, Varonis's stock price plummeted from $63.00 per share on October 28, 2025, to $32.34 per share on October 29, 2025, marking a decline of approximately 48.67%, which inflicted severe financial damage on investors.
- Investor Rights Protection: Faruq & Faruqi reminds investors that March 9 is the deadline to apply for lead plaintiff status in the federal securities class action, encouraging affected investors to contact the firm to discuss their legal rights and options.
See More
Software Sector Faces Worst Drawdown in a Decade
- Severe Market Drawdown: The iShares Expanded Tech-Software Sector ETF (NYSE:IGV) has fallen for seven consecutive sessions, resulting in a 16% drop, marking the worst performance since the COVID panic in 2020, indicating immense pressure on the software sector.
- Widespread Negative Returns: Year to date, 100 out of 110 constituents in the software sector have posted negative returns, with over 20 stocks down more than 30%, reflecting growing concerns about the sustainability of software business models.
- Deteriorating Technical Indicators: A striking 97 of the IGV ETF's constituents are trading below their 200-day moving average, highlighting a broad breakdown in technical momentum, while the 14-day RSI has plummeted to 16, the lowest since September 2001, indicating extreme market pessimism.
- Pressure from Business Model Shifts: Macro strategists have noted that the rise of AI tools is replacing expensive SaaS platforms, leading to pricing pressures, slower renewals, and declining customer retention, prompting investors to rethink growth and value in the AI era.
See More
VRNS Investors Alerted to Class Action Deadline
- Lawsuit Notice: Hagens Berman law firm is alerting investors in Varonis Systems, Inc. (NASDAQ:VRNS) about the March 9, 2026, lead plaintiff deadline for a pending securities class action lawsuit against the company and its executives, urging investors to submit their losses before this date.
- Performance Decline: The lawsuit alleges that Varonis executives misled the market regarding the company's transition to a Software-as-a-Service (SaaS) platform, resulting in a staggering 63.9% year-over-year decline in annual recurring revenue (ARR) disclosed on October 28, 2025, which triggered a 48% stock crash and wiped out $3.8 billion in market capitalization.
- Investor Losses: Hagens Berman is calling on investors who purchased VRNS shares between February 4, 2025, and October 28, 2025, to contact them promptly to report their losses, indicating significant risks associated with the company's transition strategy.
- Whistleblower Program: The firm encourages individuals with non-public information about Varonis to consider utilizing the SEC Whistleblower program, where providing original information may yield rewards of up to 30% of any successful recovery, further advancing the investigation into Varonis.
See More
Varonis Systems Shares Drop 19% Despite Q4 Earnings Beat
- Significant Stock Drop: Varonis Systems' shares fell approximately 19% despite a Q4 earnings beat, indicating market concerns over the uncertainty surrounding non-SaaS annual recurring revenue, which could impact future cash flows.
- Analyst Rating Adjustments: Needham maintained a Buy rating on Varonis but lowered the price target from $55 to $30, reflecting a cautious outlook on the company's future performance, particularly regarding non-SaaS ARR conversions.
- Key Financial Metrics: Varonis reported a SaaS Net Revenue Retention of about 110% for 2025, with SaaS ARR (excluding conversions) growing 32% year-over-year; however, analysts noted that churn in non-SaaS ARR could create unexpected headwinds for 2026 free cash flow.
- Uncertain Market Outlook: Citi kept its Neutral/High Risk rating on Varonis and cut the price target to $28 from $37; while 2025 new logo SaaS performance exceeded expectations, total ARR growth slowed to 16% and NNARR declined to -16%, indicating weak fundamentals.
See More
Varonis Systems Q4 2025 Earnings Highlights
- SaaS Business Growth: Varonis reported a Q4 2025 SaaS ARR of $638.5 million, constituting 86% of total ARR, with a year-over-year increase of 32%, indicating strong market demand and customer conversion capabilities during its transition.
- Strategic Transition Decision: The company plans to fully phase out its self-hosted platform by the end of 2026, expecting to convert between $50 million to $75 million of ARR to SaaS, which will further solidify its leadership in the cloud security market.
- Acquisition of AllTrue: Varonis acquired AI security firm AllTrue to enhance its ability to address emerging AI risks and extend its platform to secure all AI systems and their data, demonstrating foresight in technological innovation and market adaptability.
- 2026 Outlook: The company projects total SaaS ARR of $805 million to $840 million for 2026, representing a growth rate of 26% to 32%, alongside expected free cash flow of $100 million to $105 million, reflecting confidence in future growth despite challenges from its non-SaaS business.
See More
Varonis Systems Faces Class Action Lawsuit Over Securities Fraud
- Class Action Notification: Levi & Korsinsky, LLP has initiated a class action lawsuit against Varonis Systems, Inc. to recover losses for investors affected by alleged securities fraud between February 4, 2025, and October 28, 2025, highlighting serious concerns regarding the company's integrity.
- Financial Performance Miss: Varonis reported disappointing third-quarter results for 2025, significantly missing its Annual Recurring Revenue (ARR) targets and lowering its full-year guidance, indicating struggles with customer renewals and conversions that have shaken investor confidence.
- Stock Price Plunge: Following the release of its poor financial results, Varonis' stock price plummeted from $63.00 per share on October 28, 2025, to $32.34 on October 29, representing a staggering 48.67% drop in just one day, reflecting severe investor concerns about the company's future.
- Layoffs and Product Termination: The company announced the discontinuation of its self-hosted solution and a 5% workforce reduction, raising further doubts about the sustainability of its business model and potentially impacting its long-term growth prospects.
See More
Faruqi & Faruqi Investigates Varonis Securities Litigation
- Legal Investigation: Faruq & Faruqi LLP is investigating potential claims against Varonis Systems, Inc. due to misleading statements made between February 4, 2025, and October 28, 2025, which may have led investors to purchase securities at artificially inflated prices, resulting in significant losses.
- Financial Performance Decline: Varonis reported third-quarter results on October 28, 2025, revealing a significant miss in annual recurring revenue (ARR) and lowering its full-year guidance, reflecting weak customer renewals and conversions that directly impacted market confidence in the company.
- Stock Price Plunge: Following the unfavorable earnings report, Varonis's stock price plummeted from $63.00 per share on October 28, 2025, to $32.34 per share on October 29, 2025, marking a decline of approximately 48.67%, which inflicted severe financial damage on investors.
- Investor Rights Protection: Faruq & Faruqi reminds investors that March 9 is the deadline to apply for lead plaintiff status in the federal securities class action, encouraging affected investors to contact the firm to discuss their legal rights and options.
See More
Software Sector Faces Worst Drawdown in a Decade
- Severe Market Drawdown: The iShares Expanded Tech-Software Sector ETF (NYSE:IGV) has fallen for seven consecutive sessions, resulting in a 16% drop, marking the worst performance since the COVID panic in 2020, indicating immense pressure on the software sector.
- Widespread Negative Returns: Year to date, 100 out of 110 constituents in the software sector have posted negative returns, with over 20 stocks down more than 30%, reflecting growing concerns about the sustainability of software business models.
- Deteriorating Technical Indicators: A striking 97 of the IGV ETF's constituents are trading below their 200-day moving average, highlighting a broad breakdown in technical momentum, while the 14-day RSI has plummeted to 16, the lowest since September 2001, indicating extreme market pessimism.
- Pressure from Business Model Shifts: Macro strategists have noted that the rise of AI tools is replacing expensive SaaS platforms, leading to pricing pressures, slower renewals, and declining customer retention, prompting investors to rethink growth and value in the AI era.
See More
VRNS Investors Alerted to Class Action Deadline
- Lawsuit Notice: Hagens Berman law firm is alerting investors in Varonis Systems, Inc. (NASDAQ:VRNS) about the March 9, 2026, lead plaintiff deadline for a pending securities class action lawsuit against the company and its executives, urging investors to submit their losses before this date.
- Performance Decline: The lawsuit alleges that Varonis executives misled the market regarding the company's transition to a Software-as-a-Service (SaaS) platform, resulting in a staggering 63.9% year-over-year decline in annual recurring revenue (ARR) disclosed on October 28, 2025, which triggered a 48% stock crash and wiped out $3.8 billion in market capitalization.
- Investor Losses: Hagens Berman is calling on investors who purchased VRNS shares between February 4, 2025, and October 28, 2025, to contact them promptly to report their losses, indicating significant risks associated with the company's transition strategy.
- Whistleblower Program: The firm encourages individuals with non-public information about Varonis to consider utilizing the SEC Whistleblower program, where providing original information may yield rewards of up to 30% of any successful recovery, further advancing the investigation into Varonis.
See More
Varonis Systems Shares Drop 19% Despite Q4 Earnings Beat
- Significant Stock Drop: Varonis Systems' shares fell approximately 19% despite a Q4 earnings beat, indicating market concerns over the uncertainty surrounding non-SaaS annual recurring revenue, which could impact future cash flows.
- Analyst Rating Adjustments: Needham maintained a Buy rating on Varonis but lowered the price target from $55 to $30, reflecting a cautious outlook on the company's future performance, particularly regarding non-SaaS ARR conversions.
- Key Financial Metrics: Varonis reported a SaaS Net Revenue Retention of about 110% for 2025, with SaaS ARR (excluding conversions) growing 32% year-over-year; however, analysts noted that churn in non-SaaS ARR could create unexpected headwinds for 2026 free cash flow.
- Uncertain Market Outlook: Citi kept its Neutral/High Risk rating on Varonis and cut the price target to $28 from $37; while 2025 new logo SaaS performance exceeded expectations, total ARR growth slowed to 16% and NNARR declined to -16%, indicating weak fundamentals.
See More
