Varonis Systems, Inc. Citi’s 2026 Global TMT Conference

Guy? Yeah. Varonis started in the data security space, as everybody's familiar with.

And these days, enterprises have data in many, many different places: on-prem, in the cloud, and SaaS applications. And we've been helping them protect that for a long time. And when I say protect it, we find all the important data, lock it down, monitor the heck out of it. And that's kind of the core value there. You talk about the turbocharging. As we've expanded the offering in data security, in the AI security, and email security, it gives the story a lot more, gives us a lot more to talk about. And I would say probably the highlight is people are definitely in the building phase of AI. The agent population is exploding. People are doing much more with AI than they ever have.

In order to get value out of AI, they need to connect it to data. We have seen a lot of stuff in the news about Anthropic and Hugging Face. I think people are realizing that in order to protect data in the age of AI, there is much more control that is needed, understanding what AI they have, where there are risks, where it might be misbehaving, and then what is happening, how is it touching the data? How is that going? What could it do? How do we make sure we are limiting our exposure there? There is a lot more, I think, attention on all these problems, and Varonis is in a unique position to help organizations solve these problems.

Guy- I want to add to that, if I may, just from one of the important items that is worth emphasizing.

We announced a transition to SaaS at the beginning of 2023, and we are really going to be 100% SaaS by the end of this year. This transition has been a very interesting ride, but in terms of the value proposition to our customers, it has been providing automated value to customers in a way they have never received before. I think one of the items that have shifted kind of the way customers think about our product is that in the past, we would give them the solution, but they had to manage it. That was extremely difficult, especially in this environment where the hacking environment is increasing by the day.

With AI today, you do not even need malicious intent from an employee in order to access sensitive information. In the past, they had to try and find where that sensitive data is if they wanted to access it. Today, all they need to do is go into the chat box, and if that is open to everyone who got a salary increase last year, if that information is open to everyone in the company, they will get it within seconds. The whole environment has changed. With our offering, and there are many companies that have gone through similar transitions, many of them had similar offerings on the SaaS and the on-prem, so they could kind of drag that transition for a longer period of time.

Our SaaS offering is in orders of magnitude better than the on-prem subscription offering, which is part of the reason we wanted to rip off the Band-Aid. We announced the end of life on the on-prem subscription, which the date is the end of this year. So when we think of kind of the evolution with our customers and how they see the value now, you do not give them the software and you let them manage it. You basically say, we are talking about outcomes. We will make sure that you do not have a data breach. We will make sure that you do not have any fines. We will make sure that you can utilize your AI in the most efficient way.

When we talk about all of those components, we can talk a little bit more about the Varonis MDDR later if you would like, but basically it changes the whole value proposition and the simplicity of our offering as well.

We completed an acquisition in Q1 of 2026 of Varonis Atlas, which is basically the AI component, and David can talk more about the capabilities and how much value it provides customers. We have seen that starting to pick up in terms of the leading indicators that we are looking at. We saw nice contribution in Q2, but not anywhere close to where we think it could be. When we track the meetings and the conversations that are coming up on this subject with our customers, it is definitely coming up almost in every conversation. Definitely something that we expect will have a larger contribution in the second part of the year. I think the Q2 results were healthy. We actually wanted to do even better than the print that we provided.

We did talk about some of the noise that was impacting, it was not so much the noise itself, it was the timing of when things came out that generated some commotion. The way we started Q3 and the pipeline and some of those deals that we were able to close gave us the confidence not just to look at the full year guidance with the actual beat of the Q2 number, but actually raise on top of that. Some of the deals we were already able to close. We are tracking in a healthy way. Just to keep in mind, we are back-end loaded similar to other enterprise businesses, but we have a good start for the quarter, and we feel good not only with where we are, but also in terms of the pipeline that we have built.