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Stockholders' Equity | 3 Months Ended
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Mar. 31, 2023
Stockholders' Equity Note [Abstract] |
Stockholders' Equity | STOCKHOLDERS’ EQUITY a. Stock plans: On December 30, 2005, the Company’s board of directors adopted the Varonis Systems, Inc. 2005 Stock Plan (the “2005 Plan”). As of December 31, 2013, the Company had reserved 14,139,957 shares of common stock available for issuance to employees, directors, officers and consultants of the Company and its subsidiaries. The awards generally vest over four years. No awards were granted under the 2005 Plan subsequent to December 31, 2013, and no further awards will be granted under the 2005 Plan. On November 14, 2013, the Company’s board of directors adopted the Varonis Systems, Inc. 2013 Omnibus Equity Incentive Plan (the “2013 Plan”) which was subsequently approved by the Company’s stockholders. The Company initially reserved 5,713,899 shares of common stock for issuance under the 2013 Plan to employees, directors, officers and consultants of the Company and its subsidiaries. The number of shares of common stock available for issuance under the 2013 Plan was increased on January 1, 2016 and has been, and will be, increased on each January 1 thereafter by four percent (4%) of the number of shares of common stock issued and outstanding on each December 31 immediately prior to the date of increase (rounded down to the nearest whole share), but the amount of each increase will be limited to the number of shares of common stock necessary to bring the total number of shares of Common Stock available for grant and issuance under the 2013 Plan to five percent (5%) of the number of shares of common stock issued and outstanding on each December 31. Since January 1, 2016, the share reserve under the 2013 Plan has been automatically increased by an aggregate of 27,579,672 shares. Awards granted under the 2013 Plan generally vest over four years. Any award that is forfeited or canceled before expiration becomes available for future grants under the 2013 Plan. On October 22, 2020, and as part of the Polyrize Security Ltd. ("Polyrize") acquisition, the Company’s board of directors approved the assumption of a certain portion of Polyrize Options pursuant to the terms and conditions of the Polyrize 2019 Share Incentive (“Polyrize Plan”). A summary of employees’ stock options activities during the three months ended March 31, 2023 is as follows:
| Three Months Ended March 31, 2023 (unaudited)
| Number |  | Weighted average exercise price |  | Aggregate intrinsic value (in thousands) |  | Weighted average remaining contractual life (years)
Options outstanding as of January 1, 2023 | 691,573 |  |  | $ | 7.533 |  |  | $ | 11,347 |  |  | 1.901
Granted | — |  |  | $ | — |  |  |  |  |
Exercised | (39,371) |  |  | $ | 6.518 |  |  |  |  |
Forfeited and expired | (2,100) |  |  | $ | 7.192 |  |  |  |  |
Options outstanding as of March 31, 2023 | 650,102 |  |  | $ | 7.596 |  |  | $ | 11,971 |  |  | 1.727
Options exercisable as of March 31, 2023 | 645,311 |  |  | $ | 7.610 |  |  | $ | 11,874 |  |  | 1.689
The aggregate intrinsic value in the table above represents the total intrinsic value that would have been received by the option holders had all option holders exercised their options on the last date of the period. Total intrinsic value of options exercised for the three months ended March 31, 2023 was $776. As of March 31, 2023, there was $136 of total unrecognized compensation cost related to non-vested share-based compensation arrangements granted under the 2005 Plan, 2013 Plan and Polyrize Plan. This cost is expected to be recognized over a weighted-average period of approximately 0.916 years. b. The options outstanding as of March 31, 2023 (unaudited) have been separated into ranges of exercise price as follows:
Range of exercise price |  | Options outstanding as of March 31, 2023 |  | Weighted average remaining contractual life (years) |  | Weighted average exercise price of options outstanding |  | Options exercisable as of March 31, 2023 |  | Weighted average remaining contractual life (years) |  | Weighted average exercise price of options exercisable
$ | 4.157 |  |  | — |  | 5.682 |  | 88,384 |  |  | 3.702 |  |  | $ | 5.565 |  |  | 83,593 |  |  | 3.520 |  |  | $ | 5.558 |
$ | 6.503 |  |  | — |  | 8.077 |  | 423,016 |  |  | 1.299 |  |  | $ | 7.111 |  |  | 423,016 |  |  | 1.299 |  |  | $ | 7.111 |
|  | $9.960 |  |  |  | 120,180 |  |  | 1.896 |  |  | $ | 9.960 |  |  | 120,180 |  |  | 1.896 |  |  | $ | 9.960 |
|  | $13.287 |  |  |  | 18,522 |  |  | 0.975 |  |  | $ | 13.287 |  |  | 18,522 |  |  | 0.975 |  |  | $ | 13.287 |
|  |  |  |  |  | 650,102 |  |  | 1.727 |  |  | $ | 7.596 |  |  | 645,311 |  |  | 1.689 |  |  | $ | 7.610 |
c. | Options issued to consultants:
The Company’s outstanding options granted to consultants for services as of March 31, 2023 (unaudited) were as follows:
| Number of options outstanding and exercisable as of March 31, 2023 |  | Range of exercise price per share |  | Exercisable through
August 2013 - February 2016 | 22,650 |  |  | $ | 5.623 |  |  | — |  | $ | 13.287 |  |  | August 2023 - February 2026
d. | Restricted stock units ("RSUs") and performance stock units ("PSUs"):
A summary of RSUs and PSUs for employees, consultants and non-employee directors of the Company for the three months ended March 31, 2023 (unaudited) is as follows:
| Number of shares underlying outstanding RSUs and PSUs |  | Weighted- average grant date fair value
Unvested balance - January 1, 2023 | 8,340,732 |  |  | $ | 41.82 |
Granted | 3,476,735 |  |  | $ | 28.49 |
Vested | (2,547,676) |  |  | $ | 38.44 |
Forfeited | (380,627) |  |  | $ | 42.25 |
Unvested balance – March 31, 2023 | 8,889,164 |  |  | $ | 37.59 |
As of March 31, 2023, there was $293,507 of total unrecognized compensation cost related to employees and non-employees unvested restricted stock units and performance stock units which is expected to be recognized over a weighted-average period of 2.945 years.
e. | 2015 Employee Stock Purchase Plan:
On May 5, 2015, the Company’s stockholders approved the Varonis Systems, Inc. 2015 Employee Stock Purchase Plan (the “ESPP”), which the Company’s board of directors had adopted on March 19, 2015. The ESPP became effective as of June 30, 2015. The ESPP allows eligible employees to purchase shares of the Company’s common stock at a discount through payroll deductions of up to 15% of their eligible compensation, at not less than 85% of the fair market value of the Company’s common stock on the first day or last trading day in the offering period, subject to any plan limitations. The Company initially reserved 1,500,000 shares of common stock for issuance under the ESPP. The number of shares available for issuance under the ESPP was increased on January 1, 2016 and has been, and will be, increased each January 1 thereafter, by an amount equal to the lesser of (i) one percent (1%) of the number of shares of common stock issued and outstanding on each December 31 immediately prior to the date of increase, except that the amount of each such increase will be limited to the number of shares of common stock necessary to bring the total number of shares of common stock available for issuance under the ESPP to two percent (2%) of the number of shares of common stock issued and outstanding on each such December 31, or (ii) 1,200,000 shares of common stock. Since January 1, 2016, the share reserve under the ESPP has been automatically increased by an aggregate of 3,402,705 shares. The ESPP will continue in effect until the earlier of (i) the date when no shares of common stock are available for issuance thereunder or (ii) June 30, 2025; unless terminated prior thereto by the Company’s board of directors or compensation committee, each of which has the right to terminate the ESPP at any time.
f. | Stock-based compensation expense for employees and consultants:
The Company recognized stock-based compensation expense in the consolidated statements of operations as follows (in thousands):
| Three Months Ended March 31, |  |
| 2023 |  | 2022 |  |  |  |
| (unaudited) |  |
Cost of revenues | $ | 2,500 |  |  | $ | 3,087 |  |  |  |  |
Research and development | 12,523 |  |  | 12,600 |  |  |  |  |
Sales and marketing | 12,762 |  |  | 13,096 |  |  |  |  |
General and administrative | 8,026 |  |  | 7,215 |  |  |  |  |
Total | $ | 35,811 |  |  | $ | 35,998 |  |  |  |  |
g. | Share Repurchase Program:
In October 2022, the Company's board of directors authorized a share repurchase program of up to $100,000 of the Company’s common stock (the “Share Repurchase Program”). Under the Share Repurchase Program, the Company is authorized to repurchase shares through open market purchases, privately-negotiated transactions or otherwise in accordance with applicable federal securities laws, including through Rule 10b5-1 trading plans and under Rule 10b-18 of the Exchange Act. The Share Repurchase Program will expire on October 31, 2023. The number of shares to be purchased and the timing of purchases will be based on the Company's trading windows, available liquidity, and general business and market conditions. The Company has repurchased and subsequently retired 3,014,446 shares under its Share Repurchase Program, for a total of $58,964. At March 31, 2023, the Company had $41,036 of capacity remaining under its Share Repurchase Program.

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