Class Action Accuses Varonis Systems of Concealing SaaS Transition Failures

Class action challenges Varonis’ handling of SaaS transition

Levi & Korsinsky, LLP announces on Feb. 4, 2026 that it is pursuing a class action securities lawsuit on behalf of investors in Varonis Systems, Inc., alleging the company concealed material problems in converting its installed base to a software-as-a-service model and in maintaining customers on its platform. The complaint covers the period from Feb. 4, 2025 through Oct. 28, 2025 and contends defendants made overwhelmingly positive public statements while hiding adverse facts that materially reduce Varonis’ annual recurring revenue (ARR) growth potential.

The firm ties its allegations to Varonis’ Oct. 28, 2025 disclosure of third-quarter fiscal 2025 results, which it says significantly missed ARR expectations and prompted the company to lower full-year guidance. Varonis attributes the shortfall to weaker-than-expected renewals and conversions in federal and non-federal on-premises subscription business, and simultaneously announces end-of-life for its self-hosted solution and a 5% workforce reduction. The complaint asserts those operational developments expose the previously concealed risks in converting legacy customers to the company’s cloud offering.

The lawsuit underscores a broader industry challenge as data security vendors shift customers from on-premises deployments to cloud-native SaaS services. Plaintiffs argue Varonis’ transition disruptions and renewal headwinds are central to its growth outlook, and they seek to hold company executives accountable for public communications about the pace and success of migration initiatives. The case highlights tensions between enterprise customers — particularly in regulated federal environments — and vendors pushing accelerated cloud adoption, and may prompt renewed scrutiny of how security software firms disclose migration risks and customer retention metrics.

Claims process and firm background

Investors who allege losses during the relevant period may submit claims and have until March 9, 2026 to request appointment as lead plaintiff, Levi & Korsinsky says. Participating class members may share in any recovery without paying out-of-pocket costs or fees; appointment as lead plaintiff is not required to share in a recovery. Interested parties can contact Joseph E. Levi, Esq. at (212) 363-7500 or [email protected] or file via the firm’s online case submission link.

Levi & Korsinsky notes it has recovered hundreds of millions of dollars for shareholders, employs over 70 people and is ranked by ISS for seven consecutive years. The firm reiterates there is no cost or obligation to participate and encourages affected Varonis investors to seek additional information.