0001628280-25-047145
SEC filingVaronis completed SaaS transition; SaaS revenue grew 118% YoY while total revenue grew 9.1%, but operating loss widened due to higher costs.
For the three months ended September 30, 2025, total revenue increased 9.1% year-over-year to $161.6 million, driven by a 117.7% surge in SaaS revenue to $125.8 million, which now represents 77.9% of total revenue. Term license subscription revenue declined 63.9% to $24.8 million, and maintenance and services revenue fell 49.1% to $10.9 million, reflecting the strategic shift to SaaS. Gross margin contracted from 83.8% to 78.2% due to a 46.4% increase in cost of revenues, primarily from higher third-party hosting costs and customer success headcount. Operating loss widened to $35.9 million from $23.6 million, as operating expenses grew 9.9%, with research and development up 17.4% and general and administrative up 12.0%, partly due to acquisition-related costs. Net loss was $29.9 million versus $18.3 million in the prior year.
For the nine months ended September 30, 2025, total revenue rose 14.7% to $450.2 million, with SaaS revenue more than doubling to $320.3 million. Gross margin was 78.8%, down from 82.7%. Operating loss increased to $116.3 million from $100.1 million, and net loss to $101.5 million from $82.8 million. Cash provided by operations improved to $122.7 million from $90.9 million.
The company operates as a single segment but discloses revenue by type. SaaS is the primary growth driver, with ARR reaching $718.6 million (up 18% YoY) and SaaS now 76% of total ARR. Term license subscriptions are declining as expected, with the company announcing end of life for that business by December 31, 2026. Maintenance and services revenue is also decreasing as customers convert to SaaS. The renewal rate remained above 90%, though term license renewals underperformed in the final weeks of Q3.
Management expects SaaS revenue to continue growing considerably, while term license and maintenance revenue will decline. The completion of the SaaS transition is a key milestone, and the company will focus on converting remaining term license customers. Investments in research and development and sales and marketing are expected to continue in absolute dollars. The company believes existing cash, marketable securities, and cash flow will fund operations for at least the next 12 months. No specific numerical guidance was provided.
Operating cash flow of $122.7M significantly exceeded the net loss of $101.5M, driven by $97.7M in stock-based compensation and a $46.5M decrease in trade receivables. Deferred revenues grew $50.1M, reflecting strong billings. Capital expenditures of $11.2M (including $2.5M in capitalized software) remained moderate relative to CFO, yielding strong discretionary cash flow. The company deployed $100.0M on share repurchases, funded entirely by operating cash flow and proceeds from employee stock plans. The investing cash outflow of $36.8M was dominated by net marketable securities investments and $123.5M for acquisitions, partly offset by maturities. Overall, cash generation improved markedly with no significant anomalies beyond the acquisition-related investing activity.