Key Points
-
It beat convincingly on both the top and bottom lines in its final quarter of 2025.
-
There were other elements of the earnings report to be concerned with, however.
Varonis Systems (NASDAQ: VRNS) stock dipped notably in price, with its shares ultimately closing the day nearly 11% lower. That was on the back of an earnings report that missed notably on net income guidance. Investors also seemed displeased about a looming acquisition.
A tale of two line items
In its fourth quarter of 2025, Varonis reported total revenue of nearly $173.4 million, up 9% year over year. Net income not in accordance with generally accepted accounting principles (GAAP) very much veered in the other direction for the data security specialist, declining by a steep 53% to $11.1 million ($0.08 per share).
Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Continue »
Person in wheelchair at a workstation with two monitors.
Image source: Getty Images.
On average, analysts tracking the company were modeling $168.5 million on the top line, and $0.03 per share for non-GAAP (adjusted) net income.
The motor of Varonis’ growth during the period was its key software-as-a-service (SaaS) offerings, the revenue for which nearly doubled to more than $142 million.
Separately, Varonis announced that it is acquiring privately held AllTrue.ai for an undisclosed price. This is a business which is, in the acquirer’s words, “an artificial intelligence (AI) trust, risk, and security management (AI TRiSM) company that helps organizations understand and control how AI systems behave across the enterprise.”
A big miss with guidance
Varonis also proffered guidance for its current (first) quarter and the entirety of 2026. For the year, it’s anticipating $722 million to $730 million, with the former number being 16% higher than the 2025 result. Per-share, adjusted net income is anticipated to be $0.06 to $0.10.
But investors are judging software companies harshly these days, particularly those that whiff on guidance — analysts are collectively expecting Varonis to post $0.34 per share in adjusted profitability, although they might be low-balling revenue with an estimate just under $719 million.
I don’t think that guidance miss is the end of the world for Varonis stock. The company operates in a promising niche (again, data security), which meets a need that should only grow in a world inundated with data. I’d be bullish on this company’s stock after the Wednesday sell-off.
Should you buy stock in Varonis Systems right now?
Before you buy stock in Varonis Systems, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Varonis Systems wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004… if you invested $1,000 at the time of our recommendation, you’d have $431,111!* Or when Nvidia made this list on April 15, 2005… if you invested $1,000 at the time of our recommendation, you’d have $1,105,521!*
Now, it’s worth noting Stock Advisor’s total average return is 906% — a market-crushing outperformance compared to 195% for the S&P 500. Don’t miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors.
*Stock Advisor returns as of February 4, 2026.
Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Varonis Systems. The Motley Fool has a disclosure policy.