Opportunities for Varonis Investors Amid Class Action Lawsuit Over Losses

Varonis Systems Faces Class Action Lawsuit

Recently, a securities class action lawsuit was initiated against Varonis Systems, Inc., listed on NASDAQ under the ticker VRNS, alleging that the company and some of its executives provided misleading information to investors. This unfolding situation appeals to those who purchased Varonis common stock during a specified period between February 4, 2025, and October 28, 2025.

Background of the Lawsuit

On October 28, 2025, Varonis disclosed disappointing financial results, revealing that the anticipated transition from their on-premises subscription model to Software-as-a-Service (SaaS) had not gone as well as expected. The company reported weaker than anticipated renewals and conversions among its existing customers, coupled with significant downward adjustments to its annual recurring revenue (ARR) forecast. As a result, shares plummeted more than 48% the following day, erasing approximately $3.8 billion from Varonis’ market cap.

Law firm Hagens Berman Sobol Shapiro LLP, representing the aggrieved investors, is spearheading the lawsuit. It claims that Varonis made overly optimistic statements regarding their SaaS transition, assuring investors that they were progressing swiftly towards becoming a SaaS-focused company. Investors were informed about a "massive opportunity to increase ARR" from their existing customer base, all while failing to disclose vital information regarding their actual capability to convert those on-prem users to SaaS.

Allegations Against Varonis

The central allegation of the lawsuit emphasizes that Varonis misrepresented its customer retention rates and ability to transition clients to their SaaS offerings. According to the claims, the firm's assertions about growth and retention were misleading and did not reflect the company's struggles during the conversion process. This gap between the company's public statements and its actual performance is what left investors exposed to unexpected losses.

Following these revelations, the price drop triggered by the news has led to significant concerns about the integrity of the company’s communications with investors. According to Reed Kathrein, a partner at Hagens Berman overseeing the investigation, the law firm is looking into whether Varonis intentionally misrepresented its performance and customer migration successes.

Class Action Details

Investors affected by this sharp decline have until March 9, 2026, to seek lead plaintiff status in the lawsuit, which seeks to hold Varonis accountable under federal securities laws. Individuals who believe they have substantial losses are encouraged to act promptly to protect their interests. In addition, the firm is open to information that may assist in building the case.

In an effort to motivate potential whistleblowers, the firm highlights the SEC Whistleblower Program. Whistleblowers can qualify for rewards of up to 30 percent of any successful recovery made by the SEC if they provide original information that contributes to a successful outcome.

For comprehensive information regarding the Varonis case or for frequent updates, interested individuals can visit Hagens Berman’s website or reach out directly to their contact extremities specified in the announcement.

Conclusion

The unfolding situation surrounding Varonis Systems brings to light essential issues concerning investor rights and corporate accountability. With significant financial losses at stake, investors who have been misled deserve the opportunity to seek redress through the ongoing class action lawsuit. It's imperative for affected shareholders to remain informed and pursue avenues for asserting their rights during this critical period.