On February 4, 2026, D.A. Davidson raised its price target on Varonis Systems to $30, implying a potential upside of roughly 26.7%. This upgrade follows the firm’s recognition of Varonis’s leadership in data security and strong execution in transitioning customers to subscription models. The recommendation underscores confidence in the company’s competitive positioning against peers such as Palo Alto Networks and CrowdStrike, and notes that Varonis has outperformed consensus estimates on both top and bottom lines.

In the fourth quarter, Varonis reported earnings per share of $0.08, beating consensus estimates by 166.7%. Revenues reached $173.37 million, topping expectations by 2.9% and representing a 9.4% year-over-year increase from $158.5 million. Non-GAAP net income declined 53% to $11.1 million due to elevated R&D and sales investments, yet gross margins expanded by 150 basis points to 72.4%, reflecting improved efficiency in its cloud and on-premises offerings.

Subscription revenues accounted for over 82% of quarterly sales, surging 97.1% year over year. Total annual recurring revenue climbed to $745.4 million, up 16.1%, as enterprise adoption of automated data security and AI-powered analytics accelerated. Varonis’s ARR retention rate exceeded 120%, and net new ARR additions in the quarter reached $35 million, signaling strong customer renewals and upsell activity.

Varonis’s recent agreement to acquire AI security specialist AllTrue.ai for approximately $150 million is expected to bolster its AI TRiSM capabilities and open new cross-sell opportunities. Management raised full-year guidance to EPS of $0.06–$0.10 and revenue between $722 million and $730 million, exceeding street forecasts of negative earnings and signaling confidence in continued SaaS tailwinds and cloud adoption trends.