Revenue grew from $130.3M in 2Q24 to $189.5M in 3Q26 while gross margin held at 75.3% and operating margin remained negative at -25.2%, suggesting that opex growth has so far outpaced operating leverage.
Varonis Systems, Inc. (VRNS) annual income statement — 15-year revenue, gross profit & net income history
| Metric | TTM | Dec'25 | Dec'24 | Dec'23 | Dec'22 | Dec'21 | Dec'20 | Dec'19 | Dec'18 | Dec'17 | Dec'16 | Dec'15 | Dec'14 | Dec'13 | Dec'12 | Dec'11 |
|---|
| Sales/Revenue | 715.98M | 623.53M | 550.95M | 499.16M | 473.63M | 390.13M | 292.69M | 254.19M | 270.29M | 217.36M | 164.46M | 127.21M | 101.35M | 74.62M | 53.41M | 39.78M |
| Revenue Growth % | 17.63% | 13.17% | 10.38% | 5.39% | 21.4% | 33.29% | 15.15% | -5.96% | 24.35% | 32.17% | 29.28% | 25.52% | 35.83% | 39.7% | 34.27% | - |
| Cost of Goods Sold | 169.53M | 130.09M | 93.85M | 71.75M | 69.84M | 59.4M | 44.26M | 35.14M | 27.68M | 20.87M | 15.84M | 12.02M | 9.91M | 6.48M | 4.93M | 3.52M |
| COGS % of Revenue | - | 20.86% | 17.03% | 14.37% | 14.74% | 15.23% | 15.12% | 13.83% | 10.24% | 9.6% | 9.63% | 9.45% | 9.78% | 8.68% | 9.23% | 8.86% |
| Gross Profit | 546.45M | 493.44M | 457.1M | 427.41M | 403.8M | 330.74M | 248.43M | 219.05M | 242.6M | 196.49M | 148.61M | 115.19M | 91.44M | 68.14M | 48.48M | 36.26M |
| Gross Margin % | 76.32% | 79.14% | 82.97% | 85.63% | 85.26% | 84.77% | 84.88% | 86.17% | 89.76% | 90.4% | 90.37% | 90.55% | 90.22% | 91.32% | 90.77% | 91.14% |
| Gross Profit Growth % | - | 7.95% | 6.95% | 5.85% | 22.09% | 33.13% | 13.41% | -9.71% | 23.47% | 32.22% | 29.01% | 25.98% | 34.19% | 40.55% | 33.73% | - |
| Operating Expenses | 709.54M | 638.07M | 563.91M | 558.89M | 521.21M | 438.33M | 326.84M | 295.03M | 271.74M | 208.09M | 164.31M | 134.26M | 108.75M | 73.98M | 50.04M | 39.66M |
| OpEx % of Revenue | - | 102.33% | 102.35% | 111.97% | 110.04% | 112.35% | 111.67% | 116.07% | 100.54% | 95.74% | 99.91% | 105.55% | 107.3% | 99.15% | 93.68% | 99.7% |
| Selling, General & Admin | 422.07M | 400.26M | 367.15M | 375.05M | 343.33M | 300.45M | 227.48M | 214.27M | 201.77M | 160.73M | 127.65M | 102.47M | 80.66M | 53.01M | 35M | 26.61M |
| SG&A % of Revenue | - | 64.19% | 66.64% | 75.14% | 72.49% | 77.01% | 77.72% | 84.29% | 74.65% | 73.94% | 77.62% | 80.55% | 79.59% | 71.05% | 65.53% | 66.89% |
| Research & Development | 286.39M | 237.81M | 196.76M | 183.84M | 177.88M | 137.88M | 99.36M | 80.76M | 69.97M | 47.37M | 36.66M | 31.79M | 28.09M | 20.97M | 15.03M | 13.05M |
| R&D % of Revenue | - | 38.14% | 35.71% | 36.83% | 37.56% | 35.34% | 33.95% | 31.77% | 25.89% | 21.79% | 22.29% | 24.99% | 27.71% | 28.11% | 28.15% | 32.8% |
| Other Operating Expenses | 1000K | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Operating Income | -163.09M | -146.51M | -106.81M | -131.48M | -117.41M | -107.59M | -78.42M | -75.99M | -29.14M | -13.42M | -15.69M | -19.07M | -17.31M | -5.84M | -1.55M | -3.4M |
| Operating Margin % | -22.78% | -23.5% | -19.39% | -26.34% | -24.79% | -27.58% | -26.79% | -29.89% | -10.78% | -6.17% | -9.54% | -14.99% | -17.08% | -7.83% | -2.91% | -8.55% |
| Operating Income Growth % | - | -37.17% | 18.76% | -11.98% | -9.12% | -37.21% | -3.2% | -160.81% | -117.12% | 14.5% | 17.72% | -10.2% | -196.12% | -276.13% | 54.33% | - |
| EBITDA | -140.79M | -134.21M | -95.68M | -119.78M | -95.93M | -88.47M | -59.51M | -60.64M | -24.98M | -10.09M | -13.51M | -17.46M | -16.02M | -5.05M | -1.09M | -2.95M |
| EBITDA Margin % | -19.66% | -21.52% | -17.37% | -24% | -20.25% | -22.68% | -20.33% | -23.86% | -9.24% | -4.64% | -8.22% | -13.72% | -15.81% | -6.77% | -2.04% | -7.42% |
| EBITDA Growth % | -17.49% | -40.26% | 20.11% | -24.86% | -8.43% | -48.67% | 1.87% | -142.78% | -147.54% | 25.33% | 22.6% | -8.96% | -217.35% | -363.64% | 63.08% | - |
| D&A (Non-Cash Add-back) | 22.3M | 12.31M | 11.13M | 11.7M | 21.48M | 19.12M | 18.9M | 15.34M | 4.16M | 3.33M | 2.18M | 1.61M | 1.28M | 796K | 465K | 453K |
| EBIT | -143.98M | -116.32M | -74.7M | -82.25M | -103.52M | -99.27M | -80.61M | -76.17M | -27.97M | -10.87M | -16.43M | -20.6M | -18.71M | -6.97M | -4.51M | -2.91M |
| Net Interest Income | 9.15M | 37.04M | 34.74M | 29.9M | 3.12M | -11.4M | -4.61M | 1.83M | 1.55M | 562K | 371K | 330K | -123K | -113K | 11K | -604K |
| Interest Income | 9.92M | 49.95M | 43.05M | 34.56M | 10.41M | 164K | 674K | 2.03M | 1.74M | 747K | 520K | 330K | 188K | 36K | 97K | 62K |
| Interest Expense | 763K | 12.9M | 8.3M | 4.66M | 7.29M | 11.57M | 5.29M | 205K | 195K | 185K | 149K | 0 | 311K | 149K | 86K | 666K |
| Other Income/Expense | 18.34M | 30.19M | 23.8M | 44.56M | 6.59M | -3.24M | -7.48M | -389K | 970K | 2.36M | -885K | -1.52M | -1.71M | -1.27M | -3.04M | -171K |
| Pretax Income | -144.75M | -116.32M | -83.01M | -86.92M | -110.81M | -110.84M | -85.9M | -76.38M | -28.16M | -11.23M | -16.58M | -20.6M | -19.02M | -7.12M | -4.6M | -3.57M |
| Pretax Margin % | -20.22% | -18.66% | -15.07% | -17.41% | -23.4% | -28.41% | -29.35% | -30.05% | -10.42% | -5.17% | -10.08% | -16.19% | -18.77% | -9.54% | -8.61% | -8.98% |
| Income Tax | -2.49M | 13M | 12.76M | 14M | 13.7M | 6.02M | 8.11M | 2.39M | 413K | 2.79M | 1.13M | 686K | 376K | 356K | 247K | 224K |
| Effective Tax Rate % | 1.72% | -11.18% | -15.37% | -16.1% | -12.37% | -5.43% | -9.44% | -3.13% | -1.47% | -24.81% | -6.82% | -3.33% | -1.98% | -5% | -5.37% | -6.27% |
| Net Income | -153.09M | -129.32M | -95.77M | -100.92M | -124.52M | -116.86M | -94.01M | -78.76M | -28.58M | -13.84M | -17.71M | -21.28M | -19.4M | -7.47M | -4.85M | -3.8M |
| Net Margin % | -21.38% | -20.74% | -17.38% | -20.22% | -26.29% | -29.95% | -32.12% | -30.99% | -10.57% | -6.37% | -10.77% | -16.73% | -19.14% | -10.02% | -9.07% | -9.55% |
| Net Income Growth % | -33.65% | -35.04% | 5.1% | 18.95% | -6.55% | -24.31% | -19.36% | -175.61% | -106.43% | 21.83% | 16.79% | -9.72% | -159.5% | -54.25% | -27.59% | - |
| Net Income (Continuing) | -142.26M | -129.32M | -95.77M | -100.92M | -124.52M | -116.86M | -94.01M | -78.76M | -28.58M | -13.84M | -17.71M | -21.28M | -19.4M | -7.47M | -4.85M | -3.8M |
| Discontinued Operations | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Minority Interest | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| EPS (Diluted) | -1.33 | -1.13 | -0.86 | -0.92 | -1.14 | -1.11 | -1.00 | -0.87 | -0.33 | -0.17 | -0.22 | -0.28 | -0.30 | -0.10 | -0.09 | -0.07 |
| EPS Growth % | -29.41% | -31.4% | 6.52% | 19.3% | -2.7% | -11% | -14.94% | -163.64% | -94.12% | 22.73% | 21.43% | 6.67% | -200% | -17.37% | -27.54% | - |
| EPS (Basic) | - | -1.13 | -0.86 | -0.92 | -1.14 | -1.11 | -1.00 | -0.87 | -0.33 | -0.17 | -0.22 | -0.28 | -0.30 | -0.10 | -0.09 | -0.07 |
| Diluted Shares Outstanding | 115M | 129.17M | 111.66M | 109.14M | 109.28M | 105.31M | 94.34M | 90.77M | 87.06M | 82.4M | 79.22M | 75.6M | 63.73M | 71.51M | 56.89M | 56.89M |
| Basic Shares Outstanding | 115M | 129.17M | 111.66M | 109.14M | 109.28M | 105.31M | 94.34M | 90.77M | 87.06M | 82.4M | 79.22M | 75.6M | 63.73M | 71.51M | 56.89M | 56.89M |
| Dividend Payout Ratio | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - |
Quick answers to the most common questions about buying VRNS stock.
For fiscal year 2025, Varonis Systems, Inc. (VRNS) reported total revenue of $623.5M. This represents a 1467.5% increase compared to $39.8M in 2011.
Varonis Systems, Inc. (VRNS) reported a net loss of $129.3M for the fiscal year ending 2025.
Varonis Systems, Inc. (VRNS) reported an operating income of $-146.5M, resulting in an operating profit margin of -23.5%. This margin reflects the operational efficiency of the business before interest and taxes.
Varonis Systems, Inc. (VRNS) generated $493.4M in gross profit for the year, representing a gross profit margin of 79.1%. This demonstrates the company's core pricing power and production efficiency.
Key Metrics
Top Statement Risk
Persistent GAAP operating losses
Metrics are mathematically derived from official filings.
Top-Line Growth Re-Accelerating Within Subscription Transition
According to reported quarterly figures, Varonis revenue climbed from $130.3M in 2Q24 to $189.5M in 3Q26, with year-over-year growth of 17.3% in the latest quarter, a rate that suggests the subscription shift is gaining meaningful traction after a slower 2025 stretch.
The reported growth rate has moved between roughly 9% and 27% over the period, which indicates the top line is responsive to the SaaS transition but not yet on a smooth trajectory. Because GAAP revenue lags bookings under ratable recognition, the current figures may understate underlying demand, so investors should weigh ARR and deferred revenue trends alongside reported revenue. Sustained growth above the mid-teens would support the thesis that recurring revenue is compounding faster than legacy maintenance declines.
Gross Margin Holds While Operating Margin Stays Negative
Based on reported figures, gross margin has held in a 75% to 84% band, with the latest quarter at 75.3%, a level that indicates core delivery economics remain strong even as operating margin sits at -25.2%.
The compression from roughly 83% gross margin in 2024 to the mid-70s in 2026 may reflect a mix shift toward SaaS, where hosting and delivery costs weigh more heavily on cost of revenue. The gap between gross and operating margin is driven primarily by R&D and SG&A intensity, suggesting the business is not yet operating at scale efficiency. Margin recovery likely depends on whether SaaS gross margins stabilize and whether sales spending as a share of revenue begins to decline.
Operating Expenses Growing Alongside Revenue
As reported in the income statement, SG&A rose from $94.9M to $111.6M across the period while revenue grew faster in percentage terms, yet operating losses widened to -$47.7M in the latest quarter, indicating limited operating leverage so far.
Operating income has not scaled with gross profit, which expanded from roughly $108M to $143M over the same window, implying that spending growth has absorbed most incremental gross profit. This pattern is consistent with a company continuing to invest heavily in go-to-market capacity during the transition. Investors should monitor whether SG&A growth decelerates below revenue growth, as that would be the first clear sign of operating leverage emerging.
Net Losses Driven by Operating Spend and Stock Compensation
Based on reported figures, net income remained negative in every recent quarter, with stock-based compensation of $41.2M in the latest period representing roughly 22% of revenue, a level that materially affects the reported earnings picture.
Because SBC is a large non-cash expense, GAAP losses overstate the cash burn to some degree, but the magnitude of SBC also raises questions about dilution and the true economic cost of employee compensation. The EPS trend has been volatile, with some quarters showing growth from already-negative bases, which makes year-over-year comparisons less informative. Earnings quality should be judged on the path to GAAP breakeven rather than on any single period.
Persistent Losses Challenge the Growth Narrative
The strongest counter-view is that with operating margin at -23.5% and ROE at -24.5%, revenue growth has not translated into profitability, and the raised guidance may not be enough to alter the near-term earnings trajectory.
Short-side analysts would likely argue that the SaaS transition has extended the period of GAAP losses without a clear timeline to breakeven, and that competitive pressure from emerging DSPM vendors could force additional R&D or pricing concessions. Continued negative free cash flow conversion, if it persists, would raise questions about whether the current valuation rests more on ARR expectations than on demonstrated earnings power. Investors should weigh these risks against the company's sustained gross margin profile before drawing firm conclusions.