MeritValue

VARONIS SYSTEMS INC

VRNSdata completeness 88%14 fiscal years on file

Data notes: no data for concept 'totalDebt'

The thesis, from the filings

VARONIS SYSTEMS INC earns about -35% on invested capital, below its ~9% cost of capital, but has diluted owners by 9% over 5 years — no moat visible in the numbers. The estimate methods put fair value between $18.6 and $20.03 a share.Whether it’s worth owning at today’s price is the last question — and yours to answer, below.

i. The business — what you’d actually own
FigureFY 2021FY 2022FY 2023FY 2024FY 2025
Revenue$390.1M1$473.6M2$499.2M3$551M3$623.5M3
Net income−$116.9M4−$124.5M5−$100.9M6−$95.8M6−$129.3M6
Operating cash flow$7.18M7$11.9M8$59.4M9$115.2M9$147.4M9
Capital expenditure$10.5M10$11.4M11$5.1M12$6.69M12$12.6M12
Free cash flow (derived)−$3.31M7$475,0008$54.3M9$108.5M9$134.8M9
Total debt—————
Cash & equivalents$805.8M13$367.8M14$230.7M15$185.6M16$202.5M16
Diluted shares105.3M109.3M109.1M111.7M114.4M

Superscripts are receipts. Each links to the SEC filing the number came from (full list at the bottom).

ii. Your slice — ownership made literal
If you owned
shares
Net assets behind them
$52.32
your share of equity
Profit it earned you last year
−$11.3
Free cash flow it threw off
$11.78
Debt you’d be carrying
—

10 shares is a claim on $52.32 of net worth that earned you −$11.3 and generated $11.78 of cash last year.

iii. Is this a good business?
Moat signal · return on invested capital
-35% avg · 5y
FY21 —FY22 -65%FY23 -27%FY24 -24%FY25 -23%

It earned about -35% on invested capital against a ~9% cost of capital — below the cost of funding. The numbers show no moat.

seeing a moat in the numbers →
Management signal · capital allocation
+9% shares · 5y

Share count is up 9% over 5 years — owners have been diluted. Worth asking what they got for it.

reading capital allocation →

Signals, not verdicts — read from the filings above. Numbers don’t prove a moat; they show its footprint. You decide.

iv. What it’s worth — engine v0.1.0

The 2 estimate methods that apply put fair value between $18.6 and $20.03 a share. They rest on different assumptions, so where they diverge is the story.

DCF · Growth Exit 10Y
$20.03
assumptions (10)
  • riskFreeRate4.7%
  • equityRiskPremium5.0%
  • beta100.0%
  • equityWeight85.0%
  • costOfDebtSpread1.5%
  • taxRate21.0%
  • terminalGrowth2.5%
  • projectionYears10
  • fcfGrowth5.0%
  • fcfBase$108.5M
DCF · Growth Exit 5Y
$18.6
assumptions (10)
  • riskFreeRate4.7%
  • equityRiskPremium5.0%
  • beta100.0%
  • equityWeight85.0%
  • costOfDebtSpread1.5%
  • taxRate21.0%
  • terminalGrowth2.5%
  • projectionYears5
  • fcfGrowth5.0%
  • fcfBase$108.5M
Earnings Power Value
not applicable
normalized (5y-median) earnings non-positive — EPV undefined
Graham Number
not applicable
diluted EPS missing or non-positive — Graham Number undefined

Different models answer different questions — which to trust when →

v. The price question — last, on purpose
Is today’s price fair?
See live price ↗
Type a price. The ledger answers.
Or set your own belief
FCF growth, next 5 years5.0%
Discount rate (WACC)8.93%
Terminal growth2.5%
At your growth, a share is worth $18.6
The three cases
Bear0.0%$15.32
Base5.0%$18.6
Bull10.0%$22.52

Bear/base/bull growth = 0% / filed history / history + 5pp. Type a price to see the return each case implies.

Default growth 5.0%= this company’s own filed history (median-to-median FCF CAGR, clamped 0–20%). Your adjustments are recorded anonymously. They become the “what do owners actually believe” dataset.

Sources — the receipts
  1. 10-K · period ending 2021-12-31 · accession 0001628280-24-003498 (RevenueFromContractWithCustomerIncludingAssessedTax)
  2. 10-K · period ending 2022-12-31 · accession 0001628280-25-004187 (RevenueFromContractWithCustomerIncludingAssessedTax)
  3. 10-K · period ending 2023-12-31 · accession 0001628280-26-005450 (RevenueFromContractWithCustomerIncludingAssessedTax)
  4. 10-K · period ending 2021-12-31 · accession 0001628280-24-003498 (NetIncomeLoss)
  5. 10-K · period ending 2022-12-31 · accession 0001628280-25-004187 (NetIncomeLoss)
  6. 10-K · period ending 2023-12-31 · accession 0001628280-26-005450 (NetIncomeLoss)
  7. 10-K · period ending 2021-12-31 · accession 0001628280-24-003498 (NetCashProvidedByUsedInOperatingActivities)
  8. 10-K · period ending 2022-12-31 · accession 0001628280-25-004187 (NetCashProvidedByUsedInOperatingActivities)
  9. 10-K · period ending 2023-12-31 · accession 0001628280-26-005450 (NetCashProvidedByUsedInOperatingActivities)
  10. 10-K · period ending 2021-12-31 · accession 0001628280-24-003498 (PaymentsToAcquirePropertyPlantAndEquipment)
  11. 10-K · period ending 2022-12-31 · accession 0001628280-25-004187 (PaymentsToAcquirePropertyPlantAndEquipment)
  12. 10-K · period ending 2023-12-31 · accession 0001628280-26-005450 (PaymentsToAcquirePropertyPlantAndEquipment)
  13. 10-K · period ending 2021-12-31 · accession 0001628280-23-002580 (CashAndCashEquivalentsAtCarryingValue)
  14. 10-K · period ending 2022-12-31 · accession 0001628280-24-003498 (CashAndCashEquivalentsAtCarryingValue)
  15. 10-K · period ending 2023-12-31 · accession 0001628280-25-004187 (CashAndCashEquivalentsAtCarryingValue)
  16. 10-K · period ending 2024-12-31 · accession 0001628280-26-005450 (CashAndCashEquivalentsAtCarryingValue)