Varonis Systems, Inc. (NASDAQ:VRNS) Q4 2023 Earnings Call Transcript

Yaki Faitelson: It is a different contract in terms of different security review. With this transition though, there are just so many moving parts. I will tell you that, that in terms of the value proposition, it’s completely different. I think that the common ground is the logo. It just fits order of magnitude in terms of the automation, the way it works. The overall platform is a fraction of the support ticket, the self-hosted versus the SaaS. And sitting here today, I will tell you that it’s so far moving much faster than we anticipated, but it’s — you need to do it with great, great attention to details. There are just so many things to do in order to make sure that it will work right that you will cater to the customers. It just it’s — you need a daily focus on it. Just — you have laser focus on the way you’re doing it.

Guy Melamed: And just to touch on kind of the new customer adds. I think it’s still early, but SaaS does open up kind of opportunity for us to new markets and new customers that we haven’t been able to sell to before. As you look at kind of the ASP, they’re higher when we sell to our — the new customers through SaaS offering, which is very healthy. And I think that as you look at kind of the years ahead, the SaaS offering will allow us to continue to take advantage and generate additional fuel that will support the growth of this business in the years ahead.

Rob Owens: All right. Thanks for the color.

Guy Melamed: Thank you.

Operator: Thank you. Our final question comes from the line of Josh Tilton with Wolfe Research. Please proceed with your question.

Unidentified Analyst: Hey, guys. This is Patrick on for Josh. Just a quick clarification one for me. With the transition time line being moved up a year, does that change the way we should think about the path to the 2027 long-term targets provided at the Analyst Day? And are you all now targeting Rule of 40 exiting the transition now in 2026? And what should the composition of that look like? Thanks.

Guy Melamed: When we laid out kind of the plan in March of 2023, we talked about the transition lasting five years, we’re bringing that one year shorter and we’re very happy about that. We’re not actually not changing that $1 billion target, and that’s still at 2027, but I think we’re extremely excited to reduce these the whole transition period and cut it by one year to four years. So the rest is kind of staying intact

Unidentified Analyst: Great. Thanks.

Operator: Thank you. There are no further questions at this time. And I would like to turn the floor back over to Tim Perz for closing comments.

Tim Perz: Thanks for the interest in Varonis. We look forward to meeting with all of you at the conferences this quarter.

Operator: This concludes today’s teleconference. You may disconnect your lines at this time. Thank you for your participation.