Condensed Consolidated Statements of Operations(in thousands, except for share and per share data) Three Months EndedMarch 31, 2025 2024 UnauditedRevenues: SaaS$ 88,560 $ 33,985 Term license subscriptions 31,488 55,980 Maintenance and services 16,375 24,057 Total revenues 136,423 114,022 Cost of revenues 29,018 21,349 Gross profit 107,405 92,673 Operating expenses: Research and development 54,210 47,827 Sales and marketing 72,763 71,227 General and administrative 24,198 21,252 Total operating expenses 151,171 140,306 Operating loss (43,766) (47,633)Financial income, net 11,951 8,545 Loss before income taxes (31,815) (39,088)Income taxes (3,968) (1,402) Net loss$ (35,783) $ (40,490) Net loss per share of common stock, basic and diluted$ (0.32) $ (0.37) Weighted average number of shares used in computing net loss per share of common stock, basic and diluted 112,651,178 109,990,177 Stock-based compensation expense for the three months ended March 31, 2025 and 2024 is included in the Condensed Consolidated Statements of Operations as follows (in thousands): Three Months EndedMarch 31, 2025 2024 UnauditedCost of revenues$ 1,504 $ 1,362Research and development 10,576 11,759Sales and marketing 10,476 10,470General and administrative 9,699 8,502 $ 32,255 $ 32,093 Payroll tax expense related to stock-based compensation for the three months ended March 31, 2025 and 2024 is included in the Condensed Consolidated Statements of Operations as follows (in thousands): Three Months EndedMarch 31, 2025 2024 UnauditedCost of revenues$ 490 $ 607Research and development 237 313Sales and marketing 1,917 2,854General and administrative 423 813 $ 3,067 $ 4,587 Amortization of acquired intangibles and acquisition-related expenses for the three months ended March 31, 2025 and 2024 is included in the Condensed Consolidated Statements of Operations as follows (in thousands): Three Months EndedMarch 31, 2025 2024 UnauditedCost of revenues$ 26 $ 381Research and development 1,357 —Sales and marketing — —General and administrative 603 — $ 1,986 $ 381 Varonis Systems, Inc.
Condensed Consolidated Statements of Cash Flows(in thousands) Three Months EndedMarch 31, 2025 2024 Unaudited Cash flows from operating activities: Net loss$ (35,783) $ (40,490)Adjustments to reconcile net loss to net cash provided by operating activities: Depreciation and amortization 2,419 2,909 Stock-based compensation 32,255 32,093 Amortization of deferred commissions 11,353 11,181 Non-cash operating lease costs 2,476 2,394 Amortization of debt issuance costs 887 383 Amortization of premium and accretion of discount on marketable securities, net 99 (3,743) Changes in assets and liabilities: Trade receivables 65,129 68,675 Prepaid expenses and other short-term assets 11,077 4,951 Deferred commissions (13,603) (10,608)Other long-term assets 12 (136)Trade payables 1,961 2,227 Accrued expenses and other short-term liabilities (16,728) (16,840)Deferred revenues 5,988 3,554 Other long-term liabilities 458 173 Net cash provided by operating activities 68,000 56,723 Cash flows from investing activities: Proceeds from maturities of marketable securities 56,000 15,100 Investment in marketable securities (57,654) (131,482)Proceeds from short-term and long-term deposits 34,174 6,299 Investment in short-term and long-term deposits (36,289) (1,586)Acquisition, net of cash acquired (18,584) — Purchases of property and equipment (2,339) (297)Capitalized internal-use software (325) — Net cash used in investing activities (25,017) (111,966) Cash flows from financing activities: Proceeds from employee stock plans 7,163 6,414 Taxes paid related to net share settlement of equity awards (21,360) (34,860)Repurchase of common stock (61,264) — Net cash used in financing activities (75,461) (28,446)Decrease in cash and cash equivalents (32,478) (83,689)Cash and cash equivalents at beginning of period 185,585 230,740 Cash and cash equivalents at end of period$ 153,107 $ 147,051 Varonis Systems, Inc.
Specifically: Stock-based compensation expenses utilize varying available valuation methodologies, subjective assumptions and a variety of equity instruments that can impact a company's non-cash expenses;Payroll taxes are tied to the exercise or vesting of underlying equity awards and the price of our common stock at the time of vesting or exercise, factors which may vary from period to period;Acquired intangible assets are valued at the time of acquisition and are amortized over an estimated useful life after the acquisition, and acquisition-related expenses are unrelated to current operations and neither are comparable to the prior period nor predictive of future results;The Company incurs foreign exchange gains or losses from the revaluation of its significant operating lease liabilities in foreign currencies as well as other assets and liabilities denominated in non-U.S.dollars, which may vary from period to period;Amortization of debt issuance costs, which relate to the Company’s convertible senior notes issued in 2020 and 2024, are a non-cash item; andAcquisition-related taxes are unrelated to current operations and neither are comparable to the prior period nor predictive of future results.
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