Varonis Systems, Inc. (VRNS) Hit with Securities Class Action Amid Renewal and ARR Concerns That Drove Shares Down 48% - Hagens Berman

LOS ANGELES, Jan. 15, 2026 (GLOBE NEWSWIRE) -- A securities class action lawsuit has been filed against Varonis Systems, Inc. (NASDAQ: VRNS) and certain of its executives seeking to represent investors who purchased or otherwise acquired Varonis common stock between February 4, 2025 and October 28, 2025.

The lawsuit follows the company’s October 28 revelation of weaker than expected renewals and conversions within its existing customer base from its on-premises (“on-prem”) subscription business to its software-as-a-service (SaaS) business, as well as the related significant downward revisions to its annual recurring revenue (ARR) metric, which together drove the price of Varonis shares down over 48% the next day.

The news and severe market reaction have prompted national shareholder rights firm Hagens Berman to investigate the lawsuit’s claims that Varonis misled investors in violation of the federal securities laws. The firm urges investors who suffered substantial losses to submit your losses now.

The Varonis Systems, Inc. (VRNS) Securities Class Action:

The complaint alleges that global security company Varonis has assured investors that many existing customers would be converting from on-prem to SaaS, “we are well on our way to becoming a SaaS company[,]” that it would “accelerate [its] SaaS transition and enable [us] to realize the benefit of SaaS” well in advance of its initial plan, that it has a “massive opportunity to increase the ARR from our existing customer base[,]” and that gross customer retention and renewal rate are “all very strong.”

The lawsuit alleges that Varonis provided these and other overwhelmingly positive statements while failing to disclose crucial information to investors about the true state of its ability to convert its existing on-prem customers to SaaS. The complaint alleges that Varonis was not equipped to convince its on-prem users to become SaaS users. The complaint also alleges that, in contrast to the “massive opportunity to increase ARR,” Varonis’ inability to convert significantly and adversely affected its ARR growth potential.

According to the complaint, investors learned the truth on October 28, 2025. That day, Varonis reported its Q3 2025 financial results, which significantly missed its own and consensus estimates, and the company reduced its Q4 revenue and 2025 ARR guidance to well below its own and consensus estimates.

Varonis blamed the miss and reduction on weaker renewals in its federal and non-federal on-prem business.

The market severely reacted to the news, sending the price of Varonis shares crashing about 48%, which wiped out roughly $3.8 billion of its market capitalization the next day.

“We are looking into whether Varonis may have intentionally misrepresented its ability to secure renewals and convert customers to SaaS,” said Reed Kathrein, the Hagens Berman partner leading the firm’s investigation of the alleged claims in the pending suit.

If you invested in Varonis and have substantial losses, or have knowledge that may assist the firm’s investigation, submit your losses now »

If you’d like more information and answers to frequently asked questions about the Varonis case and our investigation, read more »

Whistleblowers: Persons with non-public information regarding Varonis should consider their options to help in the investigation or take advantage of the SEC Whistleblower program. Under the new program, whistleblowers who provide original information may receive rewards totaling up to 30 percent of any successful recovery made by the SEC. For more information, call Reed Kathrein at 844-916-0895 or email VRNS@hbsslaw.com.

About Hagens Berman
Hagens Berman is a global plaintiffs’ rights complex litigation firm focusing on corporate accountability. The firm is home to a robust practice and represents investors as well as whistleblowers, workers, consumers and others in cases achieving real results for those harmed by corporate negligence and other wrongdoings. Hagens Berman’s team has secured more than $2.9 billion in this area of law. More about the firm and its successes can be found at hbsslaw.com. Follow the firm for updates and news at @ClassActionLaw. 

Contact: 
Reed Kathrein, 844-916-0895

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