Q2 2024 Varonis Systems Inc Earnings Call Transcript
Key Points
- ARR grew 18% year-over-year to $584.2 million.
- SaaS ARR now represents approximately 36% of total ARR.
- Generated $67.3 million of free cash flow year-to-date, up from $40 million last year.
- Achieved federal In Process designation, enabling SaaS platform benefits for federal customers.
- Strong new customer additions and healthy conversion activity from existing customers.
- Gross margin decreased to 84.1% from 87.1% year-over-year due to increased SaaS sales and hosting costs.
- Operating expenses increased to $107.5 million, impacting operating income.
- Revenue growth rate faced a 6% headwind due to increased SaaS sales in the booking mix.
- Macro environment remains challenging with elevated levels of bill scrutiny.
- Q4 revenue guidance suggests a deceleration in revenue growth due to more conversions.
Greetings, and welcome to the Varonis Systems, Inc.'s second-quarter 2024 earnings conference call. (Operator Instructions) As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Tim Perz, Investor Relations. Thank you, sir. You may begin.
Thank you, operator. Good afternoon. Thank you for joining us today to review Varonis' second quarter financial results. With me on the call today are Yaki Faitelson, Chief Executive Officer; and Guy Melamed, Chief Financial Officer and Chief Operating Officer of Varonis. After preliminary remarks, we will open the call to a question-and-answer session.
During this call, we may make statements related to our business that would be considered forward-looking statements under federal securities laws, including projections of future operating results for our third quarter and full year ending December 31, 2024. Due to a number of factors, actual results may differ materially from those set forth in such statements.
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