Faruqi & Faruqi Investigates Varonis Systems: Investors Encouraged to Act
On January 14, 2026, Faruqi & Faruqi, LLP, a prominent national securities law firm, announced that it is investigating potential claims against Varonis Systems, Inc. (NASDAQ: VRNS). This inquiry comes in light of recent developments that have adversely impacted investors between February 4, 2025, and October 28, 2025. Investors are reminded of the approaching March 9, 2026, deadline to seek lead plaintiff status in a federal class action against the company.
Details of the Investigation
The complaint alleges that Varonis and its executives breached federal securities laws by issuing false and misleading statements. These statements concealed critical facts about the firm’s capability to maintain and convert its existing customer base. Specifically, the company struggled to persuade users to transition to its SaaS platform, resulting in a diminished annual recurring revenue (ARR) growth outlook.
This lack of transparency is said to have led investors to purchase Varonis’ shares at artificially inflated prices. Following the third quarter financial results announcement on October 28, 2025, which significantly missed ARR expectations, Varonis’ stock price experienced a dramatic decline.
Financial Impact and Stock Performance
On the date of the earnings report, Varonis disclosed a severe downturn in quarterly performance and reduced its full-year projections. The company attributed this poor performance to lower than anticipated renewals and conversions in their on-premises subscription services.
- Closing price on October 28, 2025: $63.00 per share
- Price on October 29, 2025: $32.34 per share
- Decline in stock price: 48.67% in one day
Additionally, Varonis announced the termination of its self-hosted solution and implemented a 5% workforce reduction in response to its financial challenges.
Class Action and Investor Rights
The class action lawsuit empowers investors with similar claims to seek justice. The court will designate a lead plaintiff, who will represent the interests of all affected investors. Participants in this action can opt to serve as lead plaintiff or choose to remain passive class members, with their eligibility for recovery unaffected by their participation choice.
Faruqi & Faruqi encourages all individuals with insight into Varonis’ practices—including whistleblowers and former employees—to reach out as their information may prove beneficial to the case.
Contact Information
Investors who acquired Varonis securities can seek guidance on their legal options by contacting Joshua Wilson, a partner at Faruqi & Faruqi, at 877-247-4292 or 212-983-9330 (Ext. 1310). For additional details regarding the ongoing investigation and the class action, visit Faruqi & Faruqi’s website.