Varonis Systems Earnings 2020-09-30

Balance Sheet	Income Statement	Cash Flow
Assets, Equity	Rev, G Profit, Net Income	Ops, Inv, Fin

vrns-20200930

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

____________________

FORM 10-Q

____________________

(Mark One)


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2020


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number: 001-36324

____________________

VARONIS SYSTEMS, INC.

(Exact name of registrant as specified in its charter)

____________________

Delaware

57-1222280

(State or other jurisdiction of
incorporation or organization)

(I.R.S. Employer
Identification No.)

1250 Broadway, 29th Floor

New York

10001

(Address of principal executive offices)

(Zip Code)

(877) 292-8789

(Registrant's telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, par value $0.001 per share	VRNS	The NASDAQ Stock Market LLC

____________________

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities and Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ý Yes ¨ No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). ý Yes ¨ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer	ý	Accelerated filer	¨

Non-accelerated filer	¨	Smaller reporting company	☐

		Emerging growth company	☐

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. ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ☐

Yes ý No

As of October 23, 2020, there were 31,726,906 shares of Common Stock, par value $0.001 per share, outstanding.

TABLE OF CONTENTS


PART I. FINANCIAL INFORMATION			1

Item 1.	Financial Statements	1

Consolidated Balance Sheets as of September 30, 2020 (unaudited) and December 31, 2019			1

Unaudited Consolidated Statements of Operations for the Three and Nine Months Ended September 30, 2020 and 2019			3

Unaudited Consolidated Statements of Comprehensive Loss for the Three and Nine Months Ended September 30, 2020 and 2019			4

Unaudited Consolidated Statements of Changes in Stockholders’ Equity as of September 30, 2020 and 2019			5

Unaudited Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2020 and 2019			7

Notes to Unaudited Consolidated Financial Statements			8

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	23

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	41

Item 4.	Controls and Procedures	42

PART II. OTHER INFORMATION			42

Item 1.	Legal Proceedings	42

Item 1A.	Risk Factors	42

Item 6.	Exhibits	66

SIGNATURES		67

EXHIBIT INDEX		68

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

VARONIS SYSTEMS, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(in thousands, except share data)


	September 30, 2020		December 31, 2019
	(unaudited)
Assets
Current assets:
Cash and cash equivalents	$	231,458	$	68,929
Marketable securities	34,112		41,531
Short-term deposits	60,000		10,000
Trade receivables (net of allowances of $1,283 and $637 at September 30, 2020 and December 31, 2019, respectively)	60,111		75,050
Prepaid expenses and other current assets	15,450		13,047
Total current assets	401,131		208,557

Long-term assets:
Other assets	21,686		18,360
Operating lease right-of-use asset	43,683		55,057
Property and equipment, net	36,019		36,338
Total long-term assets	101,388		109,755
Total assets	$	502,519	$	318,312

Liabilities and stockholders’ equity
Current liabilities:
Trade payables	$	767	$	997
Accrued expenses and other short-term liabilities	66,483		62,607
Deferred revenues	81,192		95,975
Total current liabilities	148,442		159,579

Long-term liabilities:
Convertible senior notes, net	216,791		—
Deferred revenues	3,300		5,460
Operating lease liability	48,377		57,040
Other liabilities	2,689		2,701
Total long-term liabilities	271,157		65,201

Stockholders’ equity:
Share capital
Common stock of $0.001 par value - Authorized: 200,000,000 shares at September 30, 2020 and December 31, 2019; Issued and outstanding: 31,725,314 shares at September 30, 2020 and 30,583,311 shares at December 31, 2019	32		31
Accumulated other comprehensive income (loss)	3,665		(449)
Additional paid-in capital	370,933		310,682
Accumulated deficit	(291,710)		(216,732)
Total stockholders’ equity	82,920		93,532


Total liabilities and stockholders’ equity			$	502,519					$	318,312

The accompanying notes are an integral part of these consolidated financial statements.

VARONIS SYSTEMS, INC. AND SUBSIDIARIES

UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except share and per share data)


	Three Months Ended September 30,						Nine Months Ended September 30,
	2020		2019		2020		2019
Revenues:
Subscriptions	$	44,084	$	23,327	$	98,535	$	45,169
Perpetual licenses	373		8,269		1,001		35,304
Maintenance and services	32,294		34,053		97,956		101,157
Total revenues	76,751		65,649		197,492		181,630

Cost of revenues	11,284		8,768		31,799		25,492

Gross profit	65,467		56,881		165,693		156,138

Operating costs and expenses:
Research and development	24,670		20,400		71,425		58,890
Sales and marketing	45,435		42,117		130,998		125,769
General and administrative	11,814		10,339		34,486		33,461
Total operating expenses	81,919		72,856		236,909		218,120

Operating loss	(16,452)		(15,975)		(71,216)		(61,982)
Financial expenses, net	(2,553)		(482)		(2,945)		(545)

Loss before income taxes	(19,005)		(16,457)		(74,161)		(62,527)
Income taxes	(220)		(530)		(817)		(1,587)

Net loss	$	(19,225)	$	(16,987)	$	(74,978)	$	(64,114)

Net loss per share of common stock, basic and diluted	$	(0.61)	$	(0.56)	$	(2.39)	$	(2.13)

Weighted average number of shares used in computing net loss per share of common stock, basic and diluted	31,614,242		30,380,154		31,336,125		30,167,161

The accompanying notes are an integral part of these consolidated financial statements.

VARONIS SYSTEMS, INC. AND SUBSIDIARIES

UNAUDITED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(in thousands)


	Three Months Ended September 30,						Nine Months Ended September 30,
	2020		2019		2020		2019
Net loss	$	(19,225)	$	(16,987)	$	(74,978)	$	(64,114)

Other comprehensive income:
Unrealized income (loss) on marketable securities, net of tax	(103)		(13)		(57)		37
Income (loss) on marketable securities reclassified into earnings, net of tax	32		4		59		(2)
	(71)		(9)		2		35

Unrealized income (loss) on derivative instruments, net of tax	(1,944)		883		(807)		4,199
Realized income on derivative instruments, net of tax	2,271		—		4,742		—
Loss (income) on derivative instruments reclassified into earnings, net of tax	(127)		(361)		177		170
	200		522		4,112		4,369
Total other comprehensive income	129		513		4,114		4,404

Comprehensive loss	$	(19,096)	$	(16,474)	$	(70,864)	$	(59,710)

The accompanying notes are an integral part of these consolidated financial statements.

VARONIS SYSTEMS, INC. AND SUBSIDIARIES

UNAUDITED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

(in thousands, except share data)


	Common stock			Additional paid-in capital	Accumulated other comprehensive income (loss)	Accumulated deficit	Total stockholders’ equity
	Number	Amount
Balance as of December 31, 2018	29,576,880	30	266,941	(3,633)	(137,968)	125,370
Stock-based compensation expense	—	—	8,961	—	—	8,961
Common stock issued under employee stock plans, net	686,357	—	(4,642)	—	—	(4,642)
Unrealized income on derivative instruments	—	—	—	2,935	—	2,935
Unrealized income on available for sale securities	—	—	—	10	—	10
Net loss	—	—	—	—	(22,639)	(22,639)
Balance as of March 31, 2019	30,263,237	30	271,260	(688)	(160,607)	109,995
Stock-based compensation expense	—	—	14,796	—	—	14,796
Common stock issued under employee stock plans, net	63,790	—	(1,055)	—	—	(1,055)
Unrealized income on derivative instruments	—	—	—	912	—	912
Unrealized income on available for sale securities	—	—	—	34	—	34
Net loss	—	—	—	—	(24,488)	(24,488)
Balance as of June 30, 2019	30,327,027	30	285,001	258	(185,095)	100,194
Stock-based compensation expense	—	—	11,022	—	—	11,022
Common stock issued under employee stock plans, net	155,425	—	3,028	—	—	3,028
Unrealized income on derivative instruments	—	—	—	522	—	522
Unrealized loss on available for sale securities	—	—	—	(9)	—	(9)
Net loss	—	—	—	—	(16,987)	(16,987)
Balance as of September 30, 2019	30,482,452	30	299,051	771	(202,082)	97,770

The accompanying notes are an integral part of these consolidated financial statements.


	Common stock					Additional paid-in capital		Accumulated other comprehensive income		Accumulated deficit		Total stockholders’ equity
	Number	Amount
Balance as of December 31, 2019	30,583,311	$	31	$	310,682	$	(449)	$	(216,732)	$	93,532
Stock-based compensation expense	—	—		12,883		—		—		12,883
Common stock issued under employee stock plans, net	882,959	—		4,316		—		—		4,316
Unrealized income on derivative instruments	—	—		—		545		—		545
Unrealized income on available for sale securities	—	—		—		195		—		195
Net loss	—	—		—		—		(31,430)		(31,430)
Balance as of March 31, 2020	31,466,270	31		327,881		291		(248,162)		80,041
Stock-based compensation expense	—	—		17,623		—		—		17,623
Common stock issued under employee stock plans, net	77,249	1		497		—		—		498
Realized and unrealized income on derivative instruments	—	—		—		3,367		—		3,367
Unrealized loss on available for sale securities	—	—		—		(122)		—		(122)
Purchase of capped calls related to Convertible senior notes	—	—		(29,348)		—		—		(29,348)
Equity component of Convertible senior notes, net	—	—		30,794		—		—		30,794
Net loss	—	—		—		—		(24,323)		(24,323)
Balance as of June 30, 2020	31,543,519	32		347,447		3,536		(272,485)		78,530
Stock-based compensation expense	—	—		18,678		—		—		18,678
Common stock issued under employee stock plans, net	181,795	—		4,808		—		—		4,808
Realized and unrealized income on derivative instruments	—	—		—		200		—		200
Unrealized loss on available for sale securities	—	—		—		(71)		—		(71)
Net loss	—	—		—		—		(19,225)		(19,225)
Balance as of September 30, 2020	31,725,314	32		370,933		3,665		(291,710)		82,920

The accompanying notes are an integral part of these consolidated financial statements.

VARONIS SYSTEMS, INC. AND SUBSIDIARIES

UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)


	Nine Months Ended September 30,
	2020		2019
Cash flows from operating activities:
Net loss	$	(74,978)	$	(64,114)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation	7,319		4,320
Stock-based compensation	49,184		34,779
Amortization of deferred commissions	9,552		10,530
Amortization of operating lease right-of-use asset	7,226		7,009
Amortization of debt discount and issuance costs	2,427		—
Capital loss from sale of fixed assets	—		24

Changes in assets and liabilities:
Trade receivables	14,939		31,357
Prepaid expenses and other current assets	(1,862)		(2,239)
Deferred commissions	(13,172)		(13,401)
Other long-term assets	(250)		50
Trade payables	(379)		379
Accrued expenses and other short-term liabilities	(1,267)		(7,675)
Deferred revenues	(16,943)		(11,749)
Other long-term liabilities	4,708		54
Net cash used in operating activities	(13,496)		(10,676)

Cash flows from investing activities:
Decrease (increase) in short-term deposits	(49,998)		33,474
Decrease (increase) in marketable securities	7,419		(1,627)
Decrease (increase) in long-term deposits	23		(16)
Proceeds from sale of property and equipment	—		10
Purchases of property and equipment	(7,001)		(14,219)
Net cash provided by (used in) investing activities	(49,557)		17,622

Cash flows from financing activities:
Proceeds from issuance of convertible senior notes, net of issuance costs	245,308		—
Purchases of capped calls	(29,348)		—
Proceeds (withholdings) from employee stock plans, net	9,622		(2,669)
Net cash provided by (used in) financing activities	225,582		(2,669)
Increase in cash and cash equivalents	162,529		4,277
Cash and cash equivalents at beginning of period	68,929		48,707
Cash and cash equivalents at end of period	$	231,458	$	52,984

Supplemental disclosure of cash flow information:
Cash paid for income taxes	$	1,308	$	3,566

The accompanying notes are an integral part of these consolidated financial statements.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1: GENERAL


a.			Description of Business:

Varonis Systems, Inc. (“VSI” and together with its subsidiaries, collectively, the “Company”) was incorporated under the laws of the State of Delaware on November 3, 2004 and commenced operations on January 1, 2005.

VSI has ten wholly-owned subsidiaries: Varonis Systems Ltd. (“VSL”) incorporated under the laws of Israel on November 24, 2004; Varonis (UK) Limited (“VSUK”) incorporated under the laws of England on March 14, 2007; Varonis Systems (Deutschland) GmbH (“VSG”) incorporated under the laws of Germany on July 6, 2011; Varonis France SAS (“VSF”) incorporated under the laws of France on February 22, 2012; Varonis Systems Corp. (“VSC”) incorporated under the laws of British Columbia, Canada on February 19, 2013; Varonis Systems (Ireland) Limited ("VIRE") incorporated under the laws of Ireland on November 11, 2016; Varonis Systems (Australia) Pty Ltd (“VAUS”) incorporated under the laws of Victoria, Australia on February 28, 2017; Varonis Systems (Netherlands) B.V. ("VNL") incorporated under the laws of the Netherlands on March 13, 2018; Varonis U.S. Public Sector LLC ("VPS") incorporated under the laws of the State of Delaware on May 14, 2018; and Varonis Systems (Luxemburg) S.à r.l. (“VLUX”) incorporated under the laws of Luxembourg on August 5, 2019.

The Company’s software products and services allow enterprises to manage, analyze and secure enterprise data. 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. Through its products DatAdvantage (including the Automation Engine), DatAlert (including Varonis Edge), DataPrivilege, Data Classification Engine (including Policy Pack and Data Classification Labels), Data Transport Engine and DatAnswers, the software platform allows enterprises to protect sensitive data from insider threats and cyberattacks, and realize the value of their enterprise data in ways that are not resource-intensive and easy to implement.

VSI and VPS market and sell products and services mainly in the United States. VSUK, VSG, VSF, VSC, VIRE, VAUS, VNL and VLUX resell the Company’s products and services mainly in the United Kingdom, Germany, France, Canada, Ireland, Australia, the Netherlands and Belgium and Luxembourg, respectively. The Company primarily sells its products and services to a global network of distributors and Value Added Resellers (VARs), which sell the products to end user customers.


b.			Basis of Presentation:

The accompanying unaudited consolidated interim financial statements have been prepared in accordance with Article 10 of Regulation S-X, “Interim Financial Statements” and the rules and regulations for Form 10-Q of the Securities and Exchange Commission (the “SEC”). Pursuant to those rules and regulations, the Company has condensed or omitted certain information and footnote disclosure it normally includes in its annual consolidated financial statements prepared in accordance with U.S. generally accepted accounting principles (“GAAP”). Certain amounts in prior periods' financial statements have been recast and reclassified to conform to the current year's presentation.

In management’s opinion, the Company has made all adjustments (consisting only of normal, recurring adjustments, except as otherwise indicated) necessary to fairly present its consolidated financial position, results of operations and cash flows. The Company’s interim period operating results do not necessarily indicate the results that may be expected for any other interim period or for the full fiscal year. These financial statements and accompanying notes should be read in conjunction with the 2019 consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for its fiscal year ended December 31, 2019 filed with the SEC on February 11, 2020 (the “2019 Form 10-K”). There have been no changes in the significant accounting policies from those that were disclosed in the audited consolidated financial statements for the fiscal year ended December 31, 2019 included in the 2019 Form 10-K, unless otherwise stated.


c.			Revenue Recognition:

The Company generates revenues in the form of software license fees and related maintenance and services fees. Subscription revenues are comprised of time-based licenses whereby customers use the Company's software with related maintenance (including support and unspecified upgrades and enhancements when and if they are available) for a specified period. Subscriptions are sold on premises and are recognized from sales of subscription licenses to new and existing customers. When products are purchased as a subscription, the associated maintenance is included as part of the subscription revenues. Perpetual licenses have the same functionality as subscriptions and perpetual license revenues consist of the revenues recognized from sales of perpetual licenses to new and existing customers. Maintenance and services primarily consist of fees for maintenance services of perpetual license sales (including support and unspecified upgrades and enhancements when and if they are available) and to a lesser extent professional services which focus on both operationalizing the software and training the Company’s customers to fully leverage the use of its products although the user can benefit from the software without the Company's assistance. The Company sells its products worldwide directly to a network of distributors and VARs, and payment is typically due within 30 to 60 calendar days of the invoice date.

The Company recognizes revenues in accordance with ASC No. 606, “Revenue from Contracts with Customers”. As such, the Company identifies a contract with a customer, identifies the performance obligations in the contract, determines the transaction price, allocates the transaction price to each performance obligation in the contract and recognizes revenues when (or as) the Company satisfies a performance obligation.

Subscription software and perpetual license revenues are recognized at the point of time when the software license has been delivered and the benefit of the asset has transferred. Maintenance associated with subscription licenses is recognized ratably over the term of the agreement and is included as part of the subscription revenues line item.

The Company recognizes revenues from maintenance of perpetual license sales ratably over the term of the underlying maintenance contract. The term of the maintenance contract is usually one year. Renewals of maintenance contracts create new performance obligations that are satisfied over the new term with the revenues recognized ratably over the period.

Revenues from professional services consist mostly of time and material services. The performance obligations are satisfied, and revenues are recognized, when the services are provided or once the service term has expired.

The Company enters into contracts that can include combinations of products and services, which are generally capable of being distinct and accounted for as separate performance obligations. The license is distinct upon delivery as the customer can derive the economic benefit of the software without any professional services, updates or technical support. The Company allocates the transaction price to each performance obligation based on its relative standalone selling price out of the total consideration of the contract. For maintenance, the Company determines the standalone selling prices based on the price at which the Company separately sells a renewal contract. For professional services, the Company determines the standalone selling prices based on the price at which the Company separately sells those services. For software licenses, the Company uses the residual approach to determine the standalone selling prices due to the lack of history of selling software license on a standalone basis and the highly variable sales price.

Trade and other receivables are primarily comprised of trade receivables that are recorded at the invoice amount, net of an allowance for doubtful accounts.

Deferred revenues represent mostly unrecognized fees billed or collected for maintenance and professional services. Deferred revenues are recognized as (or when) the Company performs under the contract. Pursuant to these contracts, customers are not invoiced for subsequent years until the annual renewal occurs. The amount of revenues recognized in the period that was included in the opening deferred revenues balance was $84,630 for the nine months ended September 30, 2020.

The Company does not grant a right of return to its customers, except for one of its resellers. In 2019 and for the nine months ended September 30, 2020, there were no returns from this reseller.

For information regarding disaggregated revenues, please refer to Note 6.


d.			Contract Costs:

The Company pays sales commissions to sales and marketing and certain management personnel based on their attainment of certain predetermined sales goals. Sales commissions earned by its employees are considered incremental and recoverable costs of obtaining a contract with a customer. Sales commissions paid for initial contracts, which are not commensurate with sales commissions paid for renewal contracts, are capitalized and amortized over an expected period of benefit. Based on its technology, customer contracts and other factors, the Company has determined the expected period of benefit to be approximately four years. Sales commissions for renewal contracts are capitalized and then amortized on a straight line basis. Amortization expenses related to these costs are mostly included in sales and marketing expenses in the accompanying consolidated statements of operations.


e.			Derivative Instruments:

The Company’s primary objective for holding derivative instruments is to reduce its exposure to foreign currency rate changes. The Company reduces its exposure by entering into forward foreign exchange contracts with respect to operating expenses that are forecasted to be incurred in currencies other than the U.S. dollar. A majority of the Company’s revenues and operating expenditures are transacted in U.S. dollars. However, certain operating expenditures are incurred in or exposed to other currencies, primarily the New Israeli Shekel (“NIS”).

The Company has established forecasted transaction currency risk management programs to protect against fluctuations in fair value and the volatility of future cash flows caused by changes in exchange rates. The Company’s currency risk management program includes forward foreign exchange contracts designated as cash flow hedges. These forward foreign exchange contracts generally mature within 12 months. In addition, the Company enters into forward contracts to hedge a portion of its monetary items in the balance sheet, such as trade receivables and payables, denominated in Pound Sterling and Euro for short-term periods (the “Fair Value Hedging Program”). The purpose of the Fair Value Hedging Program is to protect the fair value of the monetary assets from foreign exchange rate fluctuations. Gains and losses from derivatives related to the Fair Value Hedging Program are not designated as hedging instruments. The Company does not enter into derivative financial instruments for trading purposes.

Derivative instruments measured at fair value and their classification on the consolidated balance sheets are presented in the following table (in thousands):


	Liabilities as of September 30, 2020 (unaudited)						Assets (liabilities) as of December 31, 2019
	Notional Amount		Fair Value		Notional Amount		Fair Value
Foreign exchange forward contract derivatives in cash flow hedging relationships included in accrued expenses and other short-term liabilities	$	77,369	$	(1,101)	$	84,968	$	(470)
Foreign exchange forward contract derivatives for monetary items included in prepaid expenses and other current assets and accrued expenses and other short-term liabilities	$	15,160	$	(30)	$	26,995	$	5

For the three and nine months ended September 30, 2020, the unaudited consolidated statements of operations reflect a gain of $128 and a loss of $176, respectively, related to the effective portion of the cash flow hedges. For the three and nine months ended September 30, 2019, the unaudited consolidated statements of operations reflect a gain of $361 and a loss of $170, respectively, related to the effective portion of the cash flow hedges. For the three and nine months ended September 30, 2020, the realized gains from these derivatives were $2,271 and $4,742, respectively. The cash flows associated with these derivatives are reflected as cash flows from operating activities in the consolidated statements of cash flows. Effective with our January 1, 2019 adoption of ASU No. 2017-12, ineffectiveness of cash flow hedges is no longer recognized in financial income (expenses), net in the consolidated statement of operations. No material ineffective hedges were recognized for the three and nine months ended September 30, 2020 and 2019 in operating expenses in the consolidated statement of operations.

For the three and nine months ended September 30, 2020, the unaudited consolidated statements of operations reflect a loss of $876 and $244, respectively, in financial income (expenses), net, related to the Fair Value Hedging Program. For the three and nine months ended September 30, 2019, the unaudited consolidated statements of operations reflect gains of $951 and $1,404, respectively, in financial income (expenses), net, related to the Fair Value Hedging Program.


f.			Cash, Cash Equivalents, Marketable Securities and Short-Term Investments:

The Company accounts for investments in marketable securities in accordance with ASC No. 320, “Investments—Debt and Equity Securities” and ASC No. 326, “Financial Instruments—Credit Losses”. The Company considers all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents. Cash and cash equivalents consist of cash on hand, highly liquid investments in money market funds and various deposit accounts.

The Company considers all high quality investments purchased with original maturities at the date of purchase greater than three but less than twelve months to be short-term deposits. Cash equivalents, marketable securities and short-term deposits are classified as available for sale and are, therefore, recorded at fair value on the consolidated balance sheet, with any unrealized gains and losses reported in accumulated other comprehensive income (loss), which is reflected as a separate component of stockholders’ equity in the Company’s consolidated balance sheets, until realized. The Company uses the specific identification method to compute gains and losses on the investments. The amortized cost of securities is adjusted for amortization of premiums and accretion of discounts to maturity. Such amortization and accretion is included as a component of financial income (expenses), net in the consolidated statement of operations. Cash, cash equivalents, marketable securities and short-term deposits consist of the following (in thousands):


	As of September 30, 2020
	(unaudited)
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
Cash and cash equivalents
Money market funds	$	10,658	$	—	$	—	$	10,658
Total	$	10,658	$	—	$	—	$	10,658

Marketable securities
US Treasury securities	$	34,087	$	25	$ *)		$	34,112
Total	$	34,087	$	25	$ *)		$	34,112

Short-term deposits
Term bank deposits	$	60,000	$	—	$	—	$	60,000
Total	$	60,000	$	—	$	—	$	60,000

*) Represents an amount lower than $1


	As of December 31, 2019
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
Cash and cash equivalents
Money market funds	$	4,789	$	—	$	—	$	4,789
Total	$	4,789	$	—

Price	62.03	EPS	-2
Shares	30	P/E	-29
MCap	1,891	P/FCF	-177
Net Debt	-53	EBIT	-60
TEV	1,838	TEV/EBIT	-30
TTM 2019-09-30, in MM, except price, ratios

10-Q	2020-09-30	Filed 2020-10-27
10-Q	2020-06-30	Filed 2020-08-04
10-Q	2020-03-31	Filed 2020-05-05
10-K	2019-12-31	Filed 2020-02-11
10-Q	2019-09-30	Filed 2019-10-30
10-Q	2019-06-30	Filed 2019-07-30
10-Q	2019-03-31	Filed 2019-04-30
10-K	2018-12-31	Filed 2019-02-12
10-Q	2018-09-30	Filed 2018-10-30
10-Q	2018-06-30	Filed 2018-07-31
10-Q	2018-03-31	Filed 2018-05-01
10-K	2017-12-31	Filed 2018-02-13
10-Q	2017-09-30	Filed 2017-11-03
10-Q	2017-06-30	Filed 2017-08-04
10-Q	2017-03-31	Filed 2017-05-05
10-K	2016-12-31	Filed 2017-02-09
10-Q	2016-09-30	Filed 2016-11-04
10-Q	2016-06-30	Filed 2016-08-09
10-Q	2016-03-31	Filed 2016-05-05
10-K	2015-12-31	Filed 2016-02-12
10-Q	2015-09-30	Filed 2015-11-06
10-Q	2015-06-30	Filed 2015-08-07
10-Q	2015-03-31	Filed 2015-05-07
10-K	2014-12-31	Filed 2015-02-19
10-Q	2014-09-30	Filed 2014-11-10
10-Q	2014-06-30	Filed 2014-08-06
10-Q	2014-03-31	Filed 2014-05-08

8-K	2020-10-26	Earnings, Exhibits
8-K	2020-08-03	Earnings, Exhibits
8-K	2020-05-26
8-K	2020-05-06
8-K	2020-05-06
8-K	2020-05-04
8-K	2020-04-06
8-K	2020-02-10
8-K	2019-10-28
8-K	2019-07-29
8-K	2019-06-25
8-K	2019-05-02
8-K	2019-04-29
8-K	2019-02-11
8-K	2018-10-29
8-K	2018-08-27
8-K	2018-07-30
8-K	2018-04-30
8-K	2018-04-26
8-K	2018-02-12
8-K	2018-02-08

EX-31.1	vrnsq32020exh311.htm
EX-31.2	vrnsq32020exh312.htm
EX-32.1	vrnsq32020exh321.htm
EX-32.2	vrnsq32020exh322.htm

VRNS 10Q Quarterly Report

Varonis Systems Earnings 2020-09-30