Varonis told investors the future was bright. A smooth transition to SaaS. Stronger renewals. Growing recurring revenue. Executives said customers loved the move. They said conversions were strong. They even raised guidance again and again.

From February 2025 through the summer, Varonis promised annual recurring revenue growth in the mid-teens. They claimed on-prem customers were lining up to switch. Especially federal customers. But behind the scenes, that story was cracking. Conversions were stalling. Renewals were weaker than expected. And many customers just were not buying into the SaaS push.

Then, in October 2025, the truth finally came out. Varonis missed its revenue targets. Slashed guidance. Announced layoffs. And admitted its on-prem business was falling apart. The stock collapsed about 48% in a single day. Investors were stunned. Confidence vanished. Now, more shareholders are joining the lawsuit.