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On Wednesday, shares of Varonis Systems (NASDAQ:VRNS) maintained a steady course at $45.51 as Cantor Fitzgerald reaffirmed both an Overweight rating and a $60.00 price target for the company. According to InvestingPro data, analyst targets currently range from $39 to $65, reflecting mixed sentiment on the stock’s valuation. The endorsement comes on the heels of Varonis’ impressive first-quarter earnings report, which surpassed expectations on multiple financial metrics.
Varonis Systems reported a robust start to the year, outperforming FactSet consensus estimates in terms of revenue, operating income, annual recurring revenue (ARR), and free cash flow. With impressive gross margins of 83% and revenue growth of 10.4% over the last twelve months, the $5.1 billion market cap company continues to show strong operational execution. The data security and analytics company’s successful quarterly performance was highlighted by its continued shift towards a SaaS-based model, with SaaS customers now representing 61% of the total ARR.
In light of the company’s strong first-quarter results, Varonis has also revised its full-year ARR outlook upwards. The company now anticipates a 16.2% growth in ARR for FY25, striking a confident note despite prevailing economic headwinds. InvestingPro analysis reveals two key insights: while the company isn’t currently profitable, analysts predict profitability this year. Get access to 6 more exclusive ProTips and comprehensive financial analysis with an InvestingPro subscription.
The positive financial outcomes and the upward revision of ARR forecasts reflect Varonis’ resilience and adaptability in a challenging macroeconomic environment. The firm’s steady advancement in its transition to a SaaS model has been a key driver of growth, signaling a robust demand for its data protection solutions.
Investors and market watchers alike can interpret Cantor Fitzgerald’s reiteration of its Overweight rating and price target as a sign of confidence in Varonis’ strategic direction and its potential for sustained growth in the upcoming months.
In other recent news, Varonis Systems reported first-quarter results that exceeded expectations, largely due to strong growth in its SaaS platform. The company announced adjusted earnings of $0.00 per share, surpassing analyst projections of -$0.02, while revenue reached $136.4 million, beating the consensus estimate of $129.92 million. This represents a 19.6% increase compared to the same period last year. SaaS revenues experienced significant growth, increasing to $88.6 million from $34.0 million in the previous year. Annual recurring revenue also grew by 19% year-over-year to $664.3 million, with SaaS ARR making up about 61% of the total. Looking ahead, Varonis anticipates second-quarter revenue between $145.0 million and $150.0 million, slightly below the consensus of $147.8 million. The company raised its full-year 2025 ARR guidance to a range of $742.0 million to $750.0 million, indicating 16% to 17% growth year-over-year. Additionally, Varonis generated $68.0 million in cash from operations and $65.3 million in free cash flow during the quarter, both showing substantial improvements over the previous year.
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