This Cybersecurity Stock Down 40% Drew a $128 Million Institutional Bet. Is It a Buy?
Key Points
Tremblant Capital Group increased its Varonis Systems stake by 3,058,524 shares in the fourth quarter; the estimated trade value was $128.40 million based on quarterly average pricing.
Meanwhile, the quarter-end position value rose by $89.19 million, reflecting both share purchases and stock price changes during the period.
The fund held 3,509,649 shares valued at $115.12 million at quarter's end.
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On February 17, 2026, Tremblant Capital Group disclosed a buy of Varonis Systems (NASDAQ:VRNS), adding 3,058,524 shares in a trade estimated at $128.40 million based on quarterly average pricing.
What happened
According to a SEC filing dated February 17, 2026, Tremblant Capital Group acquired 3,058,524 additional shares of Varonis Systems. The estimated transaction value, based on the mean unadjusted closing price for the quarter ended December 31, 2025, was approximately $128.40 million. At quarter end, the fund’s stake in Varonis Systems was valued at $115.12 million, with the net position change—driven by both trading activity and stock price movements—totaling $89.19 million.
What else to know
- This was a buy, resulting in Varonis Systems representing 2.94% of Tremblant Capital Group’s 13F reportable assets as of December 31, 2025.
- Top five fund holdings after the filing:
- NYSE: SPOT: $140.21 million (3.6% of AUM)
- NASDAQ: DASH: $134.97 million (3.4% of AUM)
- NYSE: TKO: $133.90 million (3.4% of AUM)
- NYSE: QTWO: $130.88 million (3.3% of AUM)
- NASDAQ: WING: $117.59 million (3.0% of AUM)
- As of February 17, 2026, shares of Varonis Systems were priced at $25.32, down about 40% over the past year and significantly lagging the S&P 500’s roughly 20% gain in the same period.
Company overview
| Metric | Value |
|---|---|
| Market Capitalization | $2.99 billion |
| Revenue (TTM) | $623.53 million |
| Net Income (TTM) | ($129.32 million) |
| Price (as of market close 2/17/26) | $25.32 |
Company Snapshot
- Varonis Systems provides data security software solutions, including DatAdvantage, DatAlert, Data Classification Engine, DataPrivilege, Data Transport Engine, and DatAnswers.
- The company provides software products and services for enterprise data management and security, generating revenue from licensing, maintenance, and support services.
- It serves IT, security, and business personnel across enterprises in North America, EMEA, and internationally, focusing on organizations with sensitive and regulated data.
Varonis Systems, Inc. is a leading provider of software for securing, managing, and analyzing enterprise data both on-premises and in the cloud. The company leverages advanced analytics and automation to help organizations protect sensitive files, emails, and intellectual property from internal and external threats. With a global customer base and a focus on data-centric security, Varonis positions itself as a strategic partner for enterprises seeking robust data governance and compliance solutions.
What this transaction means for investors
Cybersecurity investors tend to look for companies that can scale recurring revenue even when near-term profitability looks messy, and that dynamic is especially true in the shift from legacy software licensing to subscription-based platforms, where revenue visibility and long-term margins often matter more than quarterly earnings.
Varonis sits right in the middle of that transition, and it’s been especially tough for the firm. The company’s stock crashed nearly 50% in one day after the firm lowered full-year guidance and disclosed a slower-than-advertised shift to SaaS in October. The unfolding was staggering, but taking a step back, there are reasons why an investor would step in amid the turmoil.
The company ultimately generated about $623.5 million in revenue in 2025, up 13% year over year, while continuing its push toward a fully SaaS model. Annual recurring revenue reached roughly $745 million, up 16% year over year, while SaaS ARR climbed to about $638.5 million and now represents roughly 86% of the company’s total recurring revenue base.
So the transition has caused headaches in the short term, but an improving backdrop may be why Tremblant stepped in.
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Jonathan Ponciano has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends DoorDash, Q2, Spotify Technology, and Varonis Systems. The Motley Fool recommends TKO Group Holdings and Wingstop. The Motley Fool has a disclosure policy.
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