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Varonis Securities Class Action Investigation by Hagens Berman

In a recent announcement, national shareholder rights law firm Hagens Berman is alerting investors of Varonis Systems, Inc. (NASDAQ: VRNS) about impending legal actions related to the company’s alleged failures in its transition to a Software-as-a-Service (SaaS) model. Shareholders are encouraged to take action before the lead plaintiff deadline on March 9, 2026.

Overview of Allegations

The firm is rigorously examining claims that Varonis executives may have concealed substantial weaknesses in renewal rates associated with their traditional on-premises business and within their Federal vertical. While pitching a smooth transition to a SaaS platform, reports suggest that the reality was starkly different. The litigation stems from a disclosure made by Varonis on October 28, 2025, indicating that their transformation to a SaaS model was not progressing as anticipated. This announcement revealed a staggering 63.9% year-over-year decline in term license revenue and led to a dramatic cut in Annual Recurring Revenue (ARR) forecasts, triggering a singular drop in stock price by 48%. This decline wiped out an estimated $3.8 billion in market capitalization for Varonis.

Details of the Investigation

Reed Kathrein, the leading partner in this investigation, emphasized the striking contrast between the company's public claims of being on track towards a successful SaaS future and the reality of extremely weak renewals. The pending class action lawsuit will scrutinize whether Varonis misrepresented its ability to migrate existing customers from their on-premise platforms to the new SaaS solutions. Varonis touted that many existing clients would transition efficiently, asserting they were, 'well on our way' to becoming a true SaaS company.

However, the allegations posit that Varonis was inadequately positioned to facilitate the speed of these conversions, leaving investors misled about the company’s growth potential.

The Federal Vertical and On-Premises Challenges

The litigation also points to a significant downturn in Varonis's Federal vertical, where weaker renewals compounded the struggles of its existing on-prem business. The October 2025 report highlighted failures in meeting earlier projections regarding customer retention and renewal rates.

These developments led to a drastic reduction in revenue guidance, further compounding investor losses and raising serious questions about Varonis’s financial governance and transparency.

The Stock Market Reaction

On the heels of these revelations, Varonis's stock plummeted from $63.00 to $32.34 within a single day, leading to notable dismay among stakeholders. This shocking drop arose directly after the company’s admission regarding the struggles surrounding their SaaS transition, leaving investors advocating for accountability and transparency from Varonis.

Next Steps for Investors

Hagens Berman is actively seeking to represent shareholders who purchased Varonis shares between February 4, 2025, and October 28, 2025, who now face profound losses. If you are an investor affected by these developments, it is advisable to contact the firm promptly for legal guidance. The lead plaintiff deadline is set for March 9, 2026, and investors have the opportunity to monitor ongoing updates regarding the investigation and any potential class-action plans.

For those interested in submitting information related to the investigation or who may have non-public details concerning Varonis, the firm encourages reaching out to discuss whistleblower protections that could apply.

About Hagens Berman

Hagens Berman is recognized for its commitment to corporate accountability, focusing on complex litigation on behalf of investors. Having secured over $2.9 billion for their clients in past settlements, they continue to advocate for justice against corporate malfeasance. Investors are urged to stay connected for additional insights and developments related to this case by following the firm’s updates.

For more information, you can visit the Hagens Berman case page dedicated to Varonis or contact Reed Kathrein for any inquiries regarding the ongoing investigation.

Contact Information:

- Reed Kathrein

- Phone: 844-916-0895

- Email: [email protected]

This investigation serves as a critical reminder of the importance of transparency and accountability within corporate disclosures, especially as companies navigate transformative business models like SaaS.