Varonis Systems, Inc. (VRNS) Securities Class Action Lawsuit Filed [January 8, 2026]

Introduction to Varonis Systems, Inc. (VRNS) Securities Class Action Lawsuit

A federal securities fraud class action has been filed against Varonis Systems, Inc. (NASDAQ: VRNS) for investors who acquired common stock, including NASDAQ: VRNS purchasers between February 4, 2025 and October 28, 2025, under the Securities Exchange Act of 1934. Investors allege the company and its senior executives misrepresented Varonis' ability to convert existing customers in its on-premises subscription business to its SaaS offering while maintaining aggressive 2025 annual recurring revenue (ARR) targets, a key revenue metric in subscription-based businesses. The complaint asserts that, despite repeated confidence and rising outlook on revenue guidance, the company concealed material adverse facts and material misrepresentations about renewal and conversion trends. On October 28, 2025, Varonis disclosed a significant ARR miss and cut full-year projections, citing weaker-than-expected renewals and conversions in both federal and non-federal on-prem subscriptions, including weakness in the federal vertical. The next day, the stock fell 48.67%, from $63.00 to $32.34 per share, a dramatic single-day stock price decline for VRNS securities.

Varonis Systems, Inc. (VRNS) Securities Lawsuit Case Details

Case Name: Molchanov v. Varonis Systems, Inc. et al.
Case No.: 1:26-cv-00117
Jurisdiction: U.S. District Court, Southern District of New York
Filed on: January 7, 2026

Varonis Systems, Inc. (VRNS) Company Profile

Varonis is a global security company that provides software products and services in the cybersecurity software and data security software markets to discover and classify critical data, remediate exposures, and detect advanced threats using AI-powered technologies on a subscription-based business model, offering both on-premises and SaaS solutions via cloud and on-premises deployment models. As of the third quarter of 2025, Varonis reported approximately $718.6 million in ARR (annual recurring revenue), with SaaS representing 76% of total ARR, reflecting the company's SaaS conversion strategy.

Varonis Systems, Inc. (VRNS) Securities Lawsuit Class Period

February 4, 2025 - October 28, 2025, inclusive.

All investors who purchased or otherwise acquired Varonis' common stock or other VRNS securities during the Class Period, are included in this securities class action.

Allegations in the Varonis Systems, Inc. (VRNS) Securities Class Action Lawsuit

The lawsuit targets Varonis Systems, Inc., its Co-Founder/Chairman/CEO/President Yakov Faitelson, and its CFO/COO Guy Melamed, alleging violations of the Securities Exchange Act of 1934. According to the complaint, defendants told investors that Varonis could convert existing on-prem customers in the on-premises subscription business- within the federal vertical and non-federal customer base-to SaaS while meeting ambitious 2025 ARR goals and revenue guidance.

The story begins on February 4, 2025, when Faitelson told investors the company was "well on our way to becoming a SaaS company" and highlighted the benefits expected once the transition was complete during an earnings call, emphasizing its software-as-a-service model. That same day, Melamed said conversions of self-hosted customers were "very strong" because customers saw the value of SaaS and MDDR, and he projected full-year 2025 ARR to $737-$745 million, or 15%-16% growth, presenting this as reliable guidance to the market.

Momentum continued on May 6, 2025. Faitelson said the company converted existing customers "more effectively" in the first quarter due to lessons learned and added investments in the sales team, while Melamed raised full-year ARR guidance to $742-$750 million, or 16%-17% growth, signaling sustained ARR growth.

On July 29, 2025, Faitelson announced FedRAMP Authorization, enabling the company to offer its entire SaaS platform to the federal sector as part of its federal vertical strategy, and described demand as positively inflecting and materially contributing. Melamed again lifted guidance to $748-$754 million, representing 17% growth. Meanwhile, the complaint alleges these upbeat statements concealed material adverse facts about lower-than-expected quarterly conversions and weaker renewals necessary for ARR growth regarding the true state of Varonis' ability to convert its existing customer base and sustain renewals. Investors allege defendants disseminated materially false and misleading statements that created a false impression of reliable revenue projections and artificially inflated the stock price during the class period while confidence in conversion capabilities and ARR targets was overstated.

The Truth Emerges

The picture changed on October 28, 2025, when Varonis reported third-quarter fiscal 2025 results in its earnings announcement, disclosed a significant miss to ARR versus prior projections, and reduced full-year guidance for revenue and ARR. Management admitted that, "In the final weeks of the quarter, we experienced weaker-than-expected renewals in our federal business (the federal vertical) in our non-federal on-prem subscription business, which resulted in Q3 coming below our expectations."

This corrective disclosure contradicted months of confident commentary and consecutive guidance increases that emphasized effective conversions and strengthening demand and attributed the shortfall to renewals and conversions. According to the complaint, the sudden disclosure revealed that conversion capabilities and renewal rates were significantly weaker than previously represented, undermining the portrayed growth trajectory.

Market Reaction

Investors reacted immediately to the corrective disclosure. From a closing price of $63.00 per share on October 28, 2025, Varonis' stock fell to $32.34 per share on October 29, 2025-down $30.66, or 48.67%, reflecting a severe single-day stock price decline in VRNS. The sharp decline followed the company's disclosure of the ARR miss and reduced full-year outlook tied to weaker-than-expected renewals and conversions, consistent with market efficiency where price adjusts to new information.

Next Steps

● The Court will issue its order for lead plaintiff and counsel in the weeks after submissions are due.

● The Court will then consider motion for class certification.

● The Court will later consider a Motion to Dismiss.

Disclaimer: This shareholder alert is for informational purposes only and does not constitute legal advice. Consult a qualified attorney for personalized guidance. No specific outcomes are guaranteed.

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Certification of Plaintiff Pursuant to Federal Securities Laws

I, duly certify and say, as to the claims asserted under the federal securities laws, that:

I have reviewed a complaint filed in the action.
I did not purchase the security that is the subject of this action at the direction of plaintiff's counsel or in order to participate in this action.
I am willing to serve as a representative party on behalf of the class, including providing testimony at deposition and trial, if necessary.
My transaction(s) in Varonis Systems, Inc. which are the subject of this litigation during the class period set forth in the complaint are set forth in the chart attached hereto.
Within the last 3 years,
I have not sought to serve nor have I served as a class representative in any federal securities fraud case. I have sought to serve as a class representative in
I will not accept any payment for serving as a representative party on behalf of the class beyond the Plaintiff's pro rata share of any recovery, except as ordered or approved by the court, including any award for reasonable costs and expenses (including lost wages) directly relating to the representation of the class.

Are you US Citizen?

Yes. I certify under penalty of perjury that the foregoing is true and correct. Executed this No. I certify under penalty of perjury under the laws of the United States of America that the foregoing is true and correct. Executed this

Clear

Signed pursuant to California Civil Code Section 1633.1, et seq. - and the Uniform Electronic Transactions Act as adopted by the various states and territories of the United States.

By your signature above, you confirm that have retained Levi & Korsinsky, LLP to represent you and the shareholder class as a lead plaintiff in the pending class action against Varonis Systems, Inc. This representation will be on a contingency basis, meaning that Levi & Korsinsky will advance all expenses in the litigation and will only seek compensation and/or reimbursement of expenses if the firm obtains a recovery. Regardless of the result, we will never ask you to directly pay for any attorneys’ fees, expenses, or costs. Should we obtain a favorable result, we may ask the court to award us compensation and reimbursement of expenses to be paid by the defendants or as a portion of any class recovery. In exchange for our representation, you agree to cooperate as our client by providing, for example, relevant documents and deposition testimony, if necessary. During the course of this litigation, we may employ and/or work with other law firms, experts, and third-parties to successfully prosecute this action. If you are not appointed as the lead plaintiff or Levi & Korsinsky is not appointed as lead counsel, we will notify you of such decision at which time this representation will end unless otherwise extended by you and the firm. We look forward to working with you towards a successful resolution of this action.

I have reviewed the complaint linked in paragraph 1