<SEC-DOCUMENT>0001171843-19-004934.txt : 20190729
<SEC-HEADER>0001171843-19-004934.hdr.sgml : 20190729
<ACCEPTANCE-DATETIME>20190729160815
ACCESSION NUMBER:		0001171843-19-004934
CONFORMED SUBMISSION TYPE:	8-K
PUBLIC DOCUMENT COUNT:		2
CONFORMED PERIOD OF REPORT:	20190729
ITEM INFORMATION:		Results of Operations and Financial Condition
ITEM INFORMATION:		Financial Statements and Exhibits
FILED AS OF DATE:		20190729
DATE AS OF CHANGE:		20190729

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			VARONIS SYSTEMS INC
		CENTRAL INDEX KEY:			0001361113
		STANDARD INDUSTRIAL CLASSIFICATION:	SERVICES-PREPACKAGED SOFTWARE [7372]
		IRS NUMBER:				571222280
		STATE OF INCORPORATION:			DE
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		8-K
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	001-36324
		FILM NUMBER:		19981257

	BUSINESS ADDRESS:	
		STREET 1:		1250 BROADWAY, 31ST FLOOR
		CITY:			NEW YORK
		STATE:			NY
		ZIP:			10001
		BUSINESS PHONE:		877-292-8767

	MAIL ADDRESS:	
		STREET 1:		1250 BROADWAY, 31ST FLOOR
		CITY:			NEW YORK
		STATE:			NY
		ZIP:			10001
</SEC-HEADER>
<DOCUMENT>
<TYPE>8-K
<SEQUENCE>1
<FILENAME>f8k_072919.htm
<DESCRIPTION>FORM 8-K
<TEXT>
<html><head><title></title></head><body><div style="margin-top: 3pt; margin-bottom: 12pt;"><div style="font-size: 1pt; border-top: Black 2.5pt solid; border-bottom: Black 1.1pt solid; width: 100%;"><font style="font-size: 10pt;">&#160;</font></div></div><p style="text-align: center;"><font style="font-size: 14pt;"><strong>UNITED STATES</strong><br /><strong>SECURITIES AND EXCHANGE COMMISSION</strong><br /><strong>Washington, D.C. 20549</strong><br />_____________________</font></p><p style="text-transform: uppercase; text-align: center;"><font style="font-size: 14pt;"><strong>Form 8-K</strong><br />_____________________</font></p><p style="text-align: center;"><font style="font-size: 12pt;"><strong>CURRENT REPORT</strong></font></p><p style="text-align: center;"><font style="font-size: 12pt;"><strong>Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934</strong></font></p><p align="center"><font style="font-size: 10pt;">Date of Report (Date of earliest event Reported): <!--July 29, 2019-->July 29, 2019 &#160;</font></p><p align="center"><font style="font-size: 12pt;"><strong>VARONIS SYSTEMS, INC.</strong></font><br /><font style="font-size: 10pt;">(Exact Name of Registrant as Specified in Charter)</font></p><table style="width: 100%;" border="0" cellspacing="0" cellpadding="0"><tr valign="top"><td align="center" width="33%"><font style="font-size: 10pt;"><strong>Delaware</strong></font></td><td align="center" width="34%"><font style="font-size: 10pt;"><strong>001-36324</strong></font></td><td align="center" width="33%"><font style="font-size: 10pt;"><strong>57-1222280</strong></font></td></tr><tr valign="top"><td align="center" width="33%"><font style="font-size: 10pt;">(State or Other Jurisdiction of Incorporation)</font></td><td align="center" width="34%"><font style="font-size: 10pt;">(Commission File Number)</font></td><td align="center" width="33%"><font style="font-size: 10pt;">(I.R.S. Employer Identification Number)</font></td></tr></table><p><font style="font-size: 10pt;">&#160;</font></p><table style="width: 100%;" border="0" cellspacing="0" cellpadding="0"><tr valign="bottom"><td align="center" width="50%"><font style="font-size: 10pt;"><strong>1250 Broadway, 29th Floor, New York, NY 10001</strong><!----></font></td></tr><tr valign="top"><td align="center" width="50%"><font style="font-size: 10pt;">(Address of Principal Executive Offices) (Zip Code)</font></td></tr></table><p align="center"><font style="font-size: 10pt;"><strong>(877) 292-8767</strong><br />(Registrant's telephone number, including area code)</font></p><p align="center"><font style="font-size: 10pt;"><strong>N/A</strong><br />(Former name or former address, if changed since last report)</font></p><table style="width: 100%;" border="0" cellspacing="0" cellpadding="0"><tr valign="top"><td colspan="3"><font style="font-size: 10pt;">Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:<br /><br /></font></td></tr><tr valign="top"><td width="21"><font style="font-size: 10pt;">&#160;</font></td><td width="40"><font style="font-size: 10pt;">[ &#160; ]</font></td><td nowrap="nowrap"><font style="font-size: 10pt;">&#160;&#160;Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)</font></td></tr><tr valign="top"><td width="21"><font style="font-size: 10pt;">&#160;</font></td><td width="40"><font style="font-size: 10pt;">[ &#160; ]</font></td><td nowrap="nowrap"><font style="font-size: 10pt;">&#160;&#160;Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)</font></td></tr><tr valign="top"><td width="21"><font style="font-size: 10pt;">&#160;</font></td><td width="40"><font style="font-size: 10pt;">[ &#160; ]</font></td><td nowrap="nowrap"><font style="font-size: 10pt;">&#160;&#160;Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))</font></td></tr><tr valign="top"><td width="21"><font style="font-size: 10pt;">&#160;</font></td><td width="40"><font style="font-size: 10pt;">[ &#160; ]</font></td><td nowrap="nowrap"><font style="font-size: 10pt;">&#160;&#160;Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))</font></td></tr></table><p style="font-size: 10pt; margin: 0pt;">&#160;</p><p style="font-size: 10pt; margin: 0pt;">Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR &sect;230.405) or Rule&#160;12b-2&#160;of the Securities Exchange Act of 1934 (17 CFR&#160;&sect;240.12b-2).&#160;Emerging growth company [&#160;&#160; ]</p><p style="font-size: 10pt; margin: 0pt;">&#160;</p><p style="font-size: 10pt; margin: 0pt;">If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. [&#160;&#160; ]</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0;">&#160;</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0;">Securities registered pursuant to Section 12(b) of the Act:</p><p style="font-size: 10pt; margin: 0pt;">&#160;</p><table style="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse;" cellspacing="0" cellpadding="0"><tr style="vertical-align: top;"><td style="width: 40%; border: Black 1pt solid; text-align: center;"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt;">Title of each class</font></td><td style="width: 20%; border-top: Black 1pt solid; border-right: Black 1pt solid; border-bottom: Black 1pt solid; text-align: center;"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt;">Trading Symbol(s)</font></td><td style="width: 40%; border-top: Black 1pt solid; border-right: Black 1pt solid; border-bottom: Black 1pt solid; text-align: center;"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt;">Name of each exchange on which registered</font></td></tr><tr style="vertical-align: top;"><td style="border-right: Black 1pt solid; border-bottom: Black 1pt solid; border-left: Black 1pt solid; text-align: center;"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt;">Common Stock, par value $0.001 per share</font></td><td style="border-right: Black 1pt solid; border-bottom: Black 1pt solid; text-align: center;"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt;">VRNS</font></td><td style="border-right: Black 1pt solid; border-bottom: Black 1pt solid; text-align: center;"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt;">The NASDAQ Stock Market LLC</font></td></tr></table><div style="margin-top: 12pt; margin-bottom: 3pt;"><div style="font-size: 1pt; border-top: Black 1.1pt solid; border-bottom: Black 2.5pt solid; width: 100%;"><font style="font-size: 10pt;">&#160;</font></div>&#160;</div><hr style="page-break-after: always;" noshade="noshade" /><p><font style="font-size: 10pt;">  <strong>  </strong></font></p><p><font style="font-size: 10pt;"><strong>Item 2.02. Results of Operations and Financial Condition.</strong></font></p><p><font style="font-size: 10pt;">
 <p style="margin-left:0in; margin-right:0in;"><font style="color:black; font-size:10pt;">On July 29, 2019, Varonis Systems, Inc. (&#8220;Varonis&#8221;) issued a press release announcing its financial results for the quarter ended June 30, 2019.&#160; A copy of the press release dated July 29, 2019, reporting Second Quarter 2019 Financial Results is furnished as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated herein by reference.</font></p>     <p style="margin-left:0in; margin-right:0in;"><font style="color:black; font-size:10pt;">The information in this Current Report on Form 8-K and the exhibit attached hereto shall not be deemed &#8220;filed&#8221; for purposes of Section&#160;18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, regardless of any general incorporation language in such filing, except as shall be expressly set forth by specific reference in such a filing.</font></p> </font></p><p><font style="font-size: 10pt;"><strong>  </strong></font></p><p><font style="font-size: 10pt;"><strong>Item 9.01. Financial Statements and Exhibits.</strong></font></p><p><font style="font-size: 10pt;">
 <p>&#160; &#160; &#160; (d) Exhibits</p> <table style="border-collapse:collapse !important;;border-collapse: collapse; "><tr><td style="vertical-align: bottom ; "><font style="font-size:10pt;"><u>Exhibit No.</u></font></td><td class="hugin"><font style="font-size:10pt;">&#160;</font></td><td style="vertical-align: bottom ; "><font style="font-size:10pt;"><u>Description</u></font></td></tr><tr><td class="hugin"><font style="font-size:10pt;"><font style="font-size:10pt;"><a href="exh_991.htm" rel="nofollow">99.1</a></font></font></td><td class="hugin"><font style="font-size:10pt;">&#160;</font></td><td class="hugin"><font style="font-size:10pt;"><font style="font-size:10pt;"><a href="exh_991.htm" rel="nofollow">Press Release dated July 29, 2019, reporting Second Quarter 2019 Financial Results</a></font> </font></td></tr></table></font></p><p><font style="font-size: 10pt;"></font></p><p><font style="font-size: 10pt;"></font></p><hr style="page-break-after: always;" noshade="noshade" /><p align="center"><font style="font-size: 10pt;"><strong>SIGNATURE</strong></font></p><p><font style="font-size: 10pt;">Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.</font></p><table style="width: 100%;" border="0" cellspacing="0" cellpadding="0"><tr valign="top"><td valign="top" width="49%"><font style="font-size: 10pt;">&#160;</font></td><td style="font-size: 12pt;" colspan="2" valign="top"><font style="font-size: 10pt;"><strong>VARONIS SYSTEMS, INC.</strong></font></td></tr><tr valign="top"><td width="49%"><font style="font-size: 10pt;">&#160;</font></td><td width="2%"><font style="font-size: 10pt;">&#160;</font></td><td width="49%"><font style="font-size: 10pt;">&#160;</font></td></tr><tr valign="top"><td width="49%"><font style="font-size: 10pt;">&#160;</font></td><td width="2%"><font style="font-size: 10pt;">&#160;</font></td><td width="49%"><font style="font-size: 10pt;"></font></td></tr><tr valign="top"><td width="49%"><font style="font-size: 10pt;">Date: July 29, 2019</font></td><td width="2%"><font style="font-size: 10pt;">By:&#160;</font></td><td style="text-decoration: underline;" width="49%"><font style="font-size: 10pt;">/s/ Yakov Faitelson&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</font></td></tr><tr valign="top"><td width="49%"><font style="font-size: 10pt;">&#160;</font></td><td width="2%"><font style="font-size: 10pt;">&#160;</font></td><td width="49%"><font style="font-size: 10pt;">Yakov Faitelson</font></td></tr><tr valign="top"><td width="49%"><font style="font-size: 10pt;">&#160;</font></td><td width="2%"><font style="font-size: 10pt;">&#160;</font></td><td width="49%"><font style="font-size: 10pt;">Chief Executive Officer and President</font></td></tr><tr valign="top"><td width="49%"><font style="font-size: 10pt;">&#160;</font></td><td width="2%"><font style="font-size: 10pt;">&#160;</font></td><td width="49%"><font style="font-size: 10pt;"></font></td></tr></table><p>
 <hr noshade="noshade" style="page-break-after: always;" />  <p align="center"><font style="font-size:10pt;"><strong>EXHIBIT INDEX</strong></font></p>  <p align="center" style="text-align: center;"><font style="font-size:10pt;">&#160;</font></p> <table style="border-collapse:collapse !important;;border-collapse: collapse; "><tr><td style="vertical-align: bottom ; "><font style="font-size:10pt;"><u>Exhibit No.</u></font></td><td class="hugin"><font style="font-size:10pt;">&#160;</font></td><td style="vertical-align: bottom ; "><font style="font-size:10pt;"><u>Description</u></font></td></tr><tr><td class="hugin"><font style="font-size:10pt;"><font style="font-size:10pt;"><a href="exh_991.htm" rel="nofollow">99.1</a></font></font></td><td class="hugin"><font style="font-size:10pt;">&#160;</font></td><td class="hugin"><font style="font-size:10pt;"><font style="font-size:10pt;"><a href="exh_991.htm" rel="nofollow">Press Release dated July 29, 2019, reporting Second Quarter 2019 Financial Results</a></font> </font></td></tr></table></p></body></html>
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.1
<SEQUENCE>2
<FILENAME>exh_991.htm
<DESCRIPTION>PRESS RELEASE
<TEXT>
<!DOCTYPE HTML PUBLIC "-//W3C//DTD HTML 4.0 Transitional//EN"><html lang="en-US"><head><title>EdgarFiling</title><meta content="text/html; charset=windows-1252" ><meta name="GENERATOR" content="MSHTML 8.00.7601.18094" ></head><body bgcolor="#ffffff"><p style="text-align: right;"><strong>EXHIBIT 99.1</strong></p><p style="text-align: center;"><font style="font-size: 14pt;"><strong>Varonis Announces Second Quarter 2019 Financial Results</strong></font></p><p style="text-align: center;"><strong></strong></p><p>
 <p align="center">Subscription revenues represent 56% of second quarter license revenues<br >Company is raising full year 2019 subscription mix guidance from 25% to 45%</p>  <p>NEW YORK, July  29, 2019  (GLOBE NEWSWIRE) -- Varonis Systems, Inc.&#160;(Nasdaq: VRNS), a pioneer in data security and analytics, today announced results for the second quarter ended June&#160;30, 2019.</p>  <p>Yaki Faitelson, Varonis CEO, said, &#8220;Our subscription transition has been both rapid and impressive, as 56% of our license revenues were from subscription products in the second quarter, compared with our guidance of 25%. We saw strong subscription adoption from customers globally, with the subscription percentage for both North America and EMEA in line with the reported mix. We are raising our expectations for our full year 2019 subscription mix and remain focused on this rapid transition, delivering greater long-term value to our customers and enabling us to strengthen our business with greater visibility and predictability."</p>  <p>Guy Melamed, Varonis CFO and COO, added, "Our second quarter results continue to validate our strategy to unleash the potential of our platform with the subscription mix beating expectations. Consistent with the previous quarter, had the mix been in line with our initial expectations, revenues would have comfortably exceeded the high end of our guidance range.&#160; We believe that moving to a subscription-based license model has been a significant differentiator for our business and is increasing the long-term value for our stockholders. We now expect that 45% of our 2019 license revenues will be subscription, up from our prior guidance of 25%."</p>  <p><strong>Financial Summary for the Second Quarter Ended June&#160;30, 2019</strong></p>  <ul><li>Subscription revenues were $14.8 million and as a percentage of license revenues were 56%, compared with $1.3 million or 4% in the second quarter of 2018.</li><li>Maintenance and services revenues were $33.3 million, up 16% compared with the second quarter of 2018.</li><li>Total revenues were $59.6 million, down 4% compared with the second quarter of 2018, due to our accelerated transition to a subscription-based model and higher than guided second quarter subscription revenue mix.</li><li>Second quarter subscription and maintenance from perpetual license revenues were 78% of total revenues, compared to 45% of second quarter 2018 total revenues, and grew 65% over the prior-year period.</li><li>GAAP operating loss was ($24.0) million for the quarter, compared to ($11.3) million in the second quarter of 2018.</li><li>Non-GAAP operating loss was ($8.9) million for the quarter, compared to ($1.0) million in the second quarter of 2018.</li><li>As of June&#160;30, 2019, the Company had $146.3 million in cash and cash equivalents, marketable securities and short-term deposits.</li><li>During the six months ended June&#160;30, 2019, the Company generated $3.0 million of cash from operations, compared to $20.4 million in the prior-year period.</li></ul>  <p>The tables at the end of this press release include a reconciliation of GAAP to non-GAAP loss from operations and net loss for the three and six months ended June&#160;30, 2019 and 2018. An explanation of these measures is also included below under the heading "Non-GAAP Financial Measures."</p>  <p><strong>Key Performance Indicators and Recent Business Highlights</strong></p>  <ul><li>Annualized recurring revenues, defined as the annualized value of active term-based subscription license contracts and maintenance contracts related to perpetual licenses in effect at the end of each period, were $155.2 million at the end of the second quarter, up 39% over the prior-year period.</li><li>Generated 51% of license and first year maintenance revenues from existing customers and 49% from new customers in the second quarter of 2019, compared to 42% and 58%, respectively, in the prior-year period.</li><li>Added 162 new customers during the second quarter of 2019 compared with 227 in the prior-year period.</li><li>For the second quarter of 2019, total revenues in North America increased 4% over the prior-year period to $40.0 million, total revenues from EMEA decreased 18% over the prior-year period to $17.6 million, and total revenues from Rest of World were $2.1 million.</li><li>As of June&#160;30, 2019, 74% of customers had purchased two or more product families, and 42% had purchased three or more product families, up from 71% and 38%, respectively, as of June&#160;30, 2018.</li><li>Introduced new California Consumer Privacy Act classification capabilities to automatically discover and classify CCPA affected data.</li></ul>  <p><strong>Financial Outlook</strong></p>  <p>This financial outlook reflects the Company's current expectations for 2019. The Company is significantly increasing the full year outlook for the percentage of subscription revenues out of license revenues from 25% to 45%.</p>  <p>For the third quarter of 2019, the Company expects revenues in the range of $61.0 million to $62.5 million. The Company expects that third quarter subscription revenues will be approximately 55% of license revenues. The Company anticipates third quarter 2019 non-GAAP operating loss in the range of ($10.5) million to ($9.5) million and non-GAAP net loss per basic and diluted share in the range of ($0.36) to ($0.34), based on a tax provision of $500,000 to $700,000 and 30.4 million basic and diluted shares outstanding. Expectations of non-GAAP operating loss per basic and diluted share exclude stock-based compensation expense and payroll tax expense related to stock-based compensation. Expectations of non-GAAP net loss per basic and diluted share exclude stock-based compensation expense, payroll tax expense related to stock-based compensation and foreign exchange gains or losses.</p>  <p>For the full year 2019, the Company now expects revenues in the range of $255.5 million to $259.5 million. The Company now expects that full year subscription revenues will be approximately 45% of license revenues. The Company anticipates full year 2019 non-GAAP operating loss of ($27.0) million to ($25.0) million and non-GAAP net loss per diluted share in the range of ($0.93) to ($0.90). This is based on a tax provision of $2.2 million to $3.2 million and 30.2 million basic and diluted shares outstanding. Expectations of non-GAAP operating loss per basic and diluted share exclude stock-based compensation expense and payroll tax expense related to stock-based compensation. Expectations of non-GAAP net loss per basic and diluted share exclude stock-based compensation expense, payroll tax expense related to stock-based compensation and foreign exchange gains or losses.</p>  <p><strong>Conference Call and Webcast</strong></p>  <p>Varonis will host a conference call today, July 29, 2019, at 5:00 p.m., Eastern Time, to discuss the Company's second quarter 2019 financial results, current financial guidance and other corporate developments.&#160; To access this call, dial 877-425-9470 (domestic) or 201-389-0878 (international).&#160; The passcode is 13691860. A replay of this conference call will be available through August 5, 2019 at 844-512-2921 (domestic) or 412-317-6671 (international).&#160; The replay passcode is 13691860.&#160; A live webcast of this conference call will be available on the "Investors" page of the Company's website (www.varonis.com), and a replay will be archived on the website as well.</p>  <p><strong>Non-GAAP and Other Financial Measures</strong></p>  <p>Varonis believes that the use of non-GAAP operating income (loss) and non-GAAP net income (loss) is helpful to our investors. These measures, which the Company refers to as our non-GAAP financial measures, are not prepared in accordance with GAAP.</p>  <p>For the three and six months ended June&#160;30, 2019 and 2018, non-GAAP operating loss is calculated as operating loss excluding (i) stock-based compensation expense and (ii) payroll tax expense related to stock-based compensation.</p>  <p>For the three and six months ended June&#160;30, 2019 and 2018, non-GAAP net loss is calculated as net loss excluding (i) stock-based compensation expense, (ii) payroll tax expense related to stock-based compensation and (iii) foreign exchange gains (losses) on assets and liabilities denominated in non U.S. dollars, which for 2019 include exchange rate differences on lease contracts as a result of the implementation of ASC 842, effective as of January 1, 2019.</p>  <p>Because of varying available valuation methodologies, subjective assumptions and the variety of equity instruments that can impact a company's non-cash expense, the Company believes that providing non-GAAP financial measures that exclude stock-based compensation expense allow for more meaningful comparisons between our operating results from period to period. In addition, the Company excludes payroll tax expense related to stock-based compensation expense because, without excluding these tax expenses, investors would not see the full effect that excluding stock-based compensation expense had on our operating results. These expenses 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, which factors may vary from period to period independent of the operating performance of our business. Similar to stock-based compensation expense, the Company believes excluding this payroll tax expense provides investors and management with greater visibility to the underlying performance of our business operations and facilitates comparison with other periods as well as the results of other companies. Also, as the Company has significant operating lease liabilities in foreign currencies, the Company incurs foreign exchange gains or losses from the revaluation of these liabilities as well as other assets and liabilities denominated in non U.S. dollars. These gains and losses may vary from period to period and do not reflect the true financial performance of the Company.</p>  <p>Each of our non-GAAP financial measures is an important tool for financial and operational decision making and for evaluating our own operating results over different periods of time. The non-GAAP financial data are not measures of our financial performance under U.S. GAAP and should not be considered as alternatives to operating income (loss) or net income (loss) or any other performance measures derived in accordance with GAAP. Non-GAAP financial measures may not provide information that is directly comparable to that provided by other companies in our industry, as other companies in our industry may calculate non-GAAP financial results differently, particularly related to non-recurring, unusual items. In addition, there are limitations in using non-GAAP financial measures because the non-GAAP financial measures are not prepared in accordance with GAAP, may be different from non-GAAP financial measures used by other companies and exclude expenses that may have a material impact on our reported financial results. Further, stock-based compensation expense and payroll tax expense related to stock-based compensation have been, and will continue to be for the foreseeable future, significant recurring expenses in our business and an important part of the compensation provided to our employees. Finally, foreign exchange rates may fluctuate from one period to another, and the Company does not estimate movements in foreign currencies.</p>  <p>The presentation of non-GAAP financial information is not meant to be considered in isolation or as a substitute for the directly comparable financial measures prepared in accordance with GAAP. Varonis urges investors to review the reconciliation of our non-GAAP financial measures to the comparable GAAP financial measures included below, and not to rely on any single financial measures to evaluate our business.</p>  <p><strong>Forward-Looking Statements</strong></p>  <p>This press release contains, and statements made during the above referenced conference call will contain, "forward-looking" statements, which are subject to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, including regarding the Company's growth rate and its expectations regarding future revenues, operating income or loss or earnings or loss per share. These statements are not guarantees of future performance but are based on management's expectations as of the date of this press release and assumptions that are inherently subject to uncertainties, risks and changes in circumstances that are difficult to predict. Forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause actual results, performance or achievements to be materially different from any future results, performance or achievements. Important factors that could cause actual results to differ materially from those expressed or implied by these forward-looking statements include the following: risks associated with anticipated growth in Varonis' addressable market; competitive factors, including increased sales cycle time, changes in the competitive environment, pricing changes, transition in sales from perpetual licenses to a more subscription-based model and increased competition; the risk that Varonis may not be able to attract or retain employees, including sales personnel and engineers; Varonis' ability to build and expand its direct sales efforts and reseller distribution channels; general economic and industry conditions, including expenditure trends for data and cyber security solutions; risks associated with the closing of large transactions, including Varonis' ability to close large transactions consistently on a quarterly basis; new product introductions and Varonis' ability to develop and deliver innovative products; risks associated with international operations; and Varonis' ability to provide high-quality service and support offerings. These and other important risk factors are described more fully in Varonis' reports and other documents filed with the Securities and Exchange Commission and could cause actual results to vary from expectations. All information provided in this press release and in the conference call is as of the date hereof, and Varonis undertakes no duty to update or revise this information, whether as a result of new information, new developments or otherwise, except as required by law.</p>  <p><em>To find out more about Varonis, visit&#160;www.varonis.com</em></p>  <p><strong>About Varonis</strong></p>  <p>Varonis&#160;is a pioneer in data security and analytics, fighting a different battle than conventional cybersecurity companies. Varonis focuses on protecting enterprise data: sensitive files and emails; confidential customer, patient and employee data; financial records; strategic and product plans; and other intellectual property. The Varonis Data Security Platform detects insider threats and cyberattacks by analyzing data, account activity and user behavior; prevents and limits disaster by locking down sensitive and stale data; and efficiently sustains a secure state with automation. With a focus on data security, Varonis serves a variety of use cases, including governance, compliance, classification and threat analytics. 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">&#160;</td><td style="vertical-align: bottom ; ">&#160;</td><td colspan="3" style="vertical-align: bottom ; ">&#160;</td><td style="vertical-align: bottom ; ">&#160;</td><td colspan="3" style="vertical-align: bottom ; ">&#160;</td><td style="vertical-align: bottom ; ">&#160;</td><td colspan="3" style="vertical-align: bottom ; ">&#160;</td></tr><tr><td style="vertical-align: bottom ; ">GAAP net loss</td><td style="vertical-align: bottom ; ">$</td><td style="text-align: right ;  vertical-align: middle; vertical-align: bottom ; ">(24,488</td><td style="vertical-align: bottom ; ">)</td><td style="vertical-align: bottom ; ">&#160;</td><td style="vertical-align: bottom ; ">$</td><td style="text-align: right ;  vertical-align: middle; vertical-align: bottom ; ">(12,683</td><td style="vertical-align: bottom ; ">)</td><td style="vertical-align: bottom ; ">&#160;</td><td style="vertical-align: bottom ; ">$</td><td style="text-align: right ;  vertical-align: middle; vertical-align: bottom ; ">(47,127</td><td style="vertical-align: bottom ; 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text-align: right ;  vertical-align: middle; vertical-align: bottom ; ">(1.57</td><td style="border-bottom: double black 3pt ; vertical-align: bottom ; ">)</td><td style="vertical-align: bottom ; ">&#160;</td><td style="border-bottom: double black 3pt ; vertical-align: bottom ; ">$</td><td style="border-bottom: double black 3pt ; text-align: right ;  vertical-align: middle; vertical-align: bottom ; ">(0.97</td><td style="border-bottom: double black 3pt ; vertical-align: bottom ; ">)</td></tr></table> <p>(*) Exchange rate differences for the three and six months ended June 30, 2019 include exchange rate differences on lease contracts of (461) and (1,043), respectively, as a result of the implementation of ASC 842, effective as of January 1, 2019, as well as other assets and liabilities denominated in non U.S. dollars.</p> </p><p>Investor Relations Contact:<br >James Arestia<br >Varonis Systems, Inc.<br >646-640-2149<br >jarestia@varonis.com<br ><br >News Media Contacts:<br >Rachel Hunt<br >Varonis Systems, Inc.<br >877-292-8767 (ext. 4247)<br >rhunt@varonis.com<br ><br >Mia Damiano<br >Merritt Group<br >703-390-1502<br >damiano@merrittgrp.com</p></body></html>
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</SEC-DOCUMENT>
