Varonis Stock Sank 49% on Earnings, but One Fund Still Boosted Its Bet to $11 Million
Key Points
Kopion Asset Management bought 152,121 additional shares of Varonis Systems in the fourth quarter; the estimated transaction value was approximately $6.39 million based on quarterly average pricing.
The quarter-end value of the Varonis Systems position rose by $552,718, reflecting both the share addition and stock price movement.
At quarter-end, Kopion held 331,969 shares of Varonis Systems valued at $10.89 million.
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On Monday, Kopion Asset Management, LLC disclosed in an SEC filing that it increased its stake in Varonis Systems (NASDAQ:VRNS) by 152,121 shares, an estimated $6.39 million transaction based on quarterly average pricing.
What Happened
According to an SEC filing released Monday, Kopion Asset Management, LLC increased its position in Varonis Systems (NASDAQ:VRNS) by 152,121 shares as of December 31. The estimated value of the purchase was approximately $6.39 million, calculated using the period's average closing price. The quarter-end value of the position rose by $552,718, a figure that includes both the share increase and changes in Varonis Systems’ stock price over the period.
What Else to Know
The buy lifted the Varonis Systems position to 7.79% of Kopion’s 13F reportable assets under management.
Top holdings after the filing:
- NASDAQ: NICE: $12.03 million (8.6% of AUM)
- NYSE: FTI: $11.09 million (7.9% of AUM)
- NASDAQ: TRUP: $10.98 million (7.8% of AUM)
- NASDAQ: VRNS: $10.89 million (7.8% of AUM)
- NASDAQ: MGNI: $9.97 million (7.1% of AUM)
As of Friday, VRNS shares were priced at $32.04, down 27.7% over the past year, underperforming the S&P 500 by 44.5 percentage points.
Company Overview
| Metric | Value |
|---|---|
| Revenue (TTM) | $608.68 million |
| Net Income (TTM) | ($114.54 million) |
| Price (as of Friday) | $32.04 |
| One-year price change | (27.7%) |
Company Snapshot
- Varonis System provides data security, analytics, and management software for enterprise data protection across on-premises and cloud environments, including products such as DatAdvantage, DatAlert, Data Classification Engine, and DataPrivilege.
- The company operates a software licensing and subscription model, generating revenue through product sales, maintenance, and support services delivered via a network of distributors and resellers.
- It targets IT, security, and business personnel at large enterprises in North America, EMEA, and internationally.
Varonis Systems, Inc. is a technology company specializing in data security and analytics solutions for enterprise customers. The company leverages advanced software to help organizations manage, monitor, and secure sensitive data across complex IT environments. With a focus on protecting intellectual property and regulated information, Varonis delivers actionable intelligence and automation to mitigate risk and ensure compliance. Its comprehensive product suite and global reach position it as a leading provider in the data security software segment.
What this transaction means for investors
Varonis just suffered a brutal reset after reporting third-quarter results that rattled investors, sending shares down roughly 49% in a single session. The selloff followed softer-than-expected renewals in federal and on-prem subscriptions and a sharp cut to near-term guidance. Management now sees fourth-quarter revenue of $165 million to $171 million and full-year ARR of $730 million to $738 million, even as annual recurring revenue still grew 18% year over year to $718.6 million.
That combination explains the volatility. The business is clearly transitioning, with SaaS now representing roughly three-quarters of ARR, but the cash flow profile and visibility remain uneven. The board’s decision to authorize a $150 million share repurchase suggests confidence, yet it also highlights how compressed the valuation became after the collapse.
Within Kopion’s portfolio, Varonis now sits alongside other growth-oriented software and tech names, making this look less like a one-off gamble and more like a willingness to absorb short-term pain for a longer runway.
Glossary
13F reportable assets: Assets that institutional investment managers must disclose quarterly to the SEC, showing their holdings in U.S. publicly traded securities.
AUM (Assets Under Management): The total market value of investments managed on behalf of clients by a fund or firm.
Quarter-end position: The number of shares or value of a holding at the end of a fiscal quarter.
Distributors and resellers: Third-party companies that sell a firm's products or services to customers, often expanding market reach.
Subscription model: A business approach where customers pay recurring fees for ongoing access to a product or service.
Maintenance and support services: Ongoing technical assistance and updates provided to customers after the initial product sale.
EMEA: Geographic business region covering Europe, the Middle East, and Africa.
TTM: The 12-month period ending with the most recent quarterly report.
Actionable intelligence: Information analyzed and presented to enable immediate decision-making or response.
Compliance: Adhering to laws, regulations, or standards relevant to a business or industry.
Data Classification Engine: Software that automatically identifies and categorizes data based on sensitivity or regulatory requirements.
Quarterly average pricing: The average price of a security over a specific quarter, often used to estimate transaction values.
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Jonathan Ponciano has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Nice, Trupanion, and Varonis Systems. The Motley Fool recommends Magnite and Tennant. The Motley Fool has a disclosure policy.
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