Opportunities for Varonis Systems Investors: Lead a Class Action Against Securities Misleading

Investor Alert: Varonis Systems Class Action

In a pressing update for investors of Varonis Systems, Inc. (NASDAQ: VRNS), a prominent national shareholder rights law firm, Hagens Berman, has issued a clear warning regarding an impending class action lawsuit. This legal action responds to concerns over substantial financial losses experienced by shareholders due to alleged misleading statements made by the company’s leadership.

Understanding the Class Action

The class action encompasses investors who purchased shares of Varonis between February 4, 2025, and October 28, 2025. The heart of the case revolves around accusations that Varonis executives misrepresented the firm’s capacity to transition its existing legacy customers to their new Software-as-a-Service (SaaS) model. Despite optimistic claims of a smooth conversion leading to increased annual recurring revenue (ARR), the October 2025 revelations painted a starkly different picture.

On October 28, 2025, Varonis disclosed a shocking 63.9% decline in term license subscription revenues year-over-year, leading to an immediate drop in stock prices by nearly 48%. This drastic navigation led to a market cap loss of approximately $3.8 billion, which has left many investors reeling from the financial aftermath.

As noted by Reed Kathrein, the partner overseeing the investigation, the firm believes that the evidence suggests Varonis portrayed an overly optimistic view of its SaaS transition, while failing to address critical issues stemming from its legacy business model.

The Allegations in Detail

The allegations against Varonis Systems encompass several key points:

1. Misrepresentation of Transition Potential: Varonis reportedly made bold claims about the majority of their legacy customers transitioning to SaaS, while failing to succeed in convincing them at the required pace.
2. Inaccurate Communication Regarding Performance: There were statements indicating strong retention rates and growth expectations that were contradicted by later performance metrics.
3. Guidance Reductions: Following poor performance in Q3 2025, the company significantly lowered its Q4 revenue estimates, further unsettling investors.
4. Dramatic Stock Price Collapse: After the revelation of these issues, Varonis shares plummeted from $63.00 to $32.34 in a single trading day.

Next Steps for Investors

For investors who suffered significant losses during this period, Hagens Berman encourages them to step forward. A deadline to lead the class action is set for March 9, 2026, meaning potential plaintiffs must act swiftly to ensure their voices are heard. Hagens Berman specializes in complex litigation and has a proven history of advocating for shareholders in similar situations.

To participate, investors are urged to visit the Hagens Berman website or contact their legal office directly. The firm is also facilitating anonymous reporting by whistleblowers who may have inside knowledge related to Varonis's operations before the market crash.

Conclusion

The unfolding events around Varonis Systems serve as a cautionary tale of investors grappling with the ramifications of corporate misrepresentation. For those affected, taking swift legal action could provide a pathway to reclaiming losses. As investigations continue, it remains essential for Varonis shareholders to remain informed and proactive in pursuing their rights in this ongoing saga.

For further details regarding the class action, you can visit Hagens Berman's VRNS Case page.