Varonis Systems Inc (VRNS) Reports Q3 2023 Financial Results
Varonis Systems Inc (NASDAQ:VRNS) reported a 16% YoY growth in annual recurring revenues in Q3 2023.
The company generated $49.0 million in cash from operations year-to-date, compared to $8.4 million in the same period last year.
Subscription revenues were $97.7 million, compared with $96.1 million in Q3 2022.
The GAAP operating loss was ($29.1) million, compared to a loss of ($25.6) million in Q3 2022.
Varonis Systems Inc (NASDAQ:VRNS) released its Q3 2023 financial results on October 30, 2023. The data security leader reported a 16% year-over-year (YoY) growth in annual recurring revenues (ARR), with a 59% SaaS mix of new business and upsell ARR in the third quarter.
Financial Performance
Varonis Systems Inc (NASDAQ:VRNS) reported total revenues of $122.3 million, compared to $123.3 million in Q3 2022. Subscription revenues were $97.7 million, compared to $96.1 million in the same period last year. Maintenance and services revenues were $24.6 million, compared to $27.3 million in Q3 2022. The GAAP operating loss was ($29.1) million, compared to a loss of ($25.6) million in Q3 2022. Non-GAAP operating income was $4.9 million, compared to $9.8 million in Q3 2022.
Yaki Faitelson, Varonis CEO, said, "Our third quarter results reflect the continued healthy adoption of Varonis SaaS, and approximately 15% of total company ARR now comes from SaaS. The progress of our transition, coupled with our faster pace of innovation gets us closer to achieving our $1 billion ARR target and delivering meaningful stakeholder value."
Key Performance Indicators and Recent Business Highlights
As of the end of Q3 2023, the company's ARR were $517.5 million, up 16% YoY. The company had $731.5 million in cash and cash equivalents, short-term deposits, and marketable securities. During the nine months ended September 30, 2023, the company generated $49.0 million of cash from operations, compared to $8.4 million generated in the prior year period. The company also generated $46.0 million of free cash flow, compared to $0.8 million generated in the prior year period.
Financial Outlook
For the full year ended 2023, the company expects SaaS to represent 55% of new business and upsell ARR, up from the previous expectation of 50%. For Q4 2023, the company expects revenues of $150.0 million to $154.0 million, or YoY growth of 5% to 8%. Non-GAAP operating income is expected to be $25.0 million to $27.0 million. Non-GAAP net income per diluted share is expected to be in the range of $0.22 to $0.24, based on 126.1 million diluted shares outstanding.
For the full year 2023, the company now expects ARR of $535.0 million to $539.0 million, or YoY growth of 15% to 16%. Free cash flow is expected to be $40.0 million to $45.0 million. Revenues are expected to be $495.0 million to $499.0 million, or YoY growth of 5%. Non-GAAP operating income is expected to be $26.5 million to $28.5 million. Non-GAAP net income per diluted share is expected to be in the range of $0.31 to $0.33, based on 126.6 million diluted shares outstanding.
Explore the complete 8-K earnings release (here) from Varonis Systems Inc for further details.
This article first appeared on GuruFocus.
