Class action alleges Varonis Systems overstated SaaS migration and ARR growth

Class action accuses Varonis of overstating SaaS progress

Allegations focus on company statements about customer migration and ARR

Varonis Systems faces consolidated securities claims after two U.S. law firms notify investors of lawsuits alleging the cybersecurity data management company misled the market about its transition to a software-as-a-service (SaaS) platform. The complaints, tied to purchases of Varonis securities between Feb. 4, 2025 and Oct. 28, 2025, assert the company promoted overly optimistic expectations about converting existing customers to its SaaS offering and thereby overstated prospects for annual recurring revenue (ARR) growth.

Plaintiffs contend Varonis knew it was struggling to persuade customers to migrate but publicly represented stronger operational progress and financial outlooks than warranted. When the market allegedly learns the truth, the complaints say, investors suffer losses. The actions cite Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and SEC Rule 10b-5, alleging misstatements and omissions regarding the company’s migration pace and revenue trajectory.

The suits seek to represent shareholders who purchased VRNS during the specified period and ask courts to remedy losses related to the alleged misrepresentations. Varonis does not comment in the notices, and the litigation remains in its early stages as firms seek plaintiffs and potential lead counsel to advance claims and coordinate discovery and litigation strategy.

Law firms push for lead plaintiff role, set March 9 filing deadline

The Schall Law Firm and DJS Law Group each issue notices inviting eligible investors to contact them before a March 9, 2026 deadline to discuss potential claims and, in DJS’s notice, to seek appointment as lead plaintiff. Both firms describe free consultations and caution that their announcements may constitute attorney advertising under applicable ethics rules.

Notices remind prospective class members that the class is not yet certified, so absent investors are not represented by counsel until a court certifies the class. Firms advise shareholders to preserve transaction records and act promptly if they wish to preserve potential rights, noting that lead plaintiff appointments, document review, and any recovery will follow federal securities litigation procedures.