#United States #New York #Faruqi & Faruqi #securities litigation #Varonis Systems

Overview of Varonis Systems Investigation

Faruqi & Faruqi, LLP, a prominent law firm specializing in securities litigation, has initiated an investigation into Varonis Systems, Inc. This inquiry is prompted by concerns about the company’s alleged misleading statements that could have misled investors regarding its performance and business outlook. Investors who purchased securities of Varonis between February 4, 2025, and October 28, 2025, are particularly urged to pay attention to this case.

Allegations Against Varonis Systems

The investigation centers on accusations that Varonis and its executives violated federal securities laws by disseminating positive but misleading statements concerning the company's actual performance metrics. Specifically, it has been reported that the firm failed to disclose critical information about its inability to effectively convert its existing customer base to its Software-as-a-Service (SaaS) offerings. This lack of transparency is said to have led to inflated stock prices, causing significant financial losses for investors once the truth surfaced.

Important Investor Information

In response to these allegations, Varonis publicly announced its financial results for the third quarter of fiscal 2025, which indicated disappointing performance with lower-than-expected Annual Recurring Revenue (ARR) growth. The announcement came after two previous quarters of raised guidance, leading investors to believe in a more favorable outlook than was warranted. The drastic reduction in revenue expectations was particularly striking, as it highlighted the company's struggles with renewing subscriptions in both federal and non-federal segments. Furthermore, Varonis has made significant operational changes, including a 5% workforce reduction and the phasing out of its self-hosted solutions.

Impact on Stock Prices

On the day Varonis released its troubling financial results, the company's stock price plummeted by nearly 49%—from a closing price of $63.00 per share to just $32.34 the following day. This dramatic drop underscores the potential seriousness of the allegations and the financial ramifications for investors who acted on the company's previous assurances of growth.

Next Steps for Affected Investors

Investors who suffered losses due to these events may seek to join the federal securities class action against Varonis. Faruqi & Faruqi emphasizes the deadline of March 9, 2026, for seeking the role of lead plaintiff in this litigation. Those impacted are encouraged to contact James (Josh) Wilson, a partner at the firm, directly to discuss their options and potential legal rights in relation to this claims process.

Additionally, any individuals with knowledge of Varonis’s dealings—such as whistleblowers, former employees, and shareholders—are invited to reach out to the firm for further assistance and to share information that might aid in the ongoing investigation.

Conclusion

The situation regarding Varonis Systems and the inquiries by Faruqi & Faruqi serve as a crucial reminder of the importance of transparency and accountability in corporate communications. As this case unfolds, investors should remain vigilant and informed about their rights and the legal avenues available to them to seek reparation for any financial damages incurred. For more detailed information or to get involved with the potential class action, affected individuals can visit the Faruqi & Faruqi website or directly contact the firm.