Varonis Systems Inc at Cowen Technology, Media & Telecom Conference Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Shaul Eyal - Cowen and Company, LLC - Analyst : Got it, got it. And it would appear that customers, especially over the course of the past two years, customers of all sizes, so not just SMBs, but also high-end enterprises -- I think specifically, if we go back and look at your first quarter results, you outlined like a big toy company and a media company -- all of them adopting Varonis' solution. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JUNE 02, 2022 / 7:20PM, VRNS.OQ - Varonis Systems Inc at Cowen Technology, Media & Telecom Conference

Question: Shaul Eyal - Cowen and Company, LLC - Analyst : If I recall correctly from prior sessions and conversations, it's -- you guys go into a POC with an organization, doesn't matter the size, you tell them, okay, give us like an hour, two hours, kind of just hook us into your system and we'll let you know how bad your files are, your systems are.

Question: Shaul Eyal - Cowen and Company, LLC - Analyst : Can you maybe talk to us about that, how easy it is to quickly see what's going on?

Question: Shaul Eyal - Cowen and Company, LLC - Analyst : So that's the definition of automating the entire process? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JUNE 02, 2022 / 7:20PM, VRNS.OQ - Varonis Systems Inc at Cowen Technology, Media & Telecom Conference

Question: Shaul Eyal - Cowen and Company, LLC - Analyst : Yeah, that's the major advantage. Because many companies would tell you, you have a problem, now you go solve it yourself.

Question: Shaul Eyal - Cowen and Company, LLC - Analyst : You come with a different proposition.

Question: Shaul Eyal - Cowen and Company, LLC - Analyst : Yeah, and, without a doubt, great drivers for the foreseeable future. DA Cloud, without a doubt, appears to be on the right path. You addressed it on your recent conference call amongst some other [time]. So maybe just a word about, I think -- and still we're absolutely early innings. So what is it that you're seeing from DA Cloud? What is it that your customers are telling you about DA Cloud?

Question: Shaul Eyal - Cowen and Company, LLC - Analyst : Got it. You've mentioned before, very limited competitive environment. And in that context -- and I know this is something that we talked about in the past, displacements versus greenfield. So are you displacing anyone? Because I think, actually, you've created a new market category when you started several -- more than a decade ago.

Question: Shaul Eyal - Cowen and Company, LLC - Analyst : Got it, got it. And I know you touched on kind of the competitive. Again, just kind of putting that to rest, but CrowdStrike indicated some sort of a module in data security. I know it doesn't touch on what you guys do. Companies -- privates like Big Idea, you don't see them right now (multiple speakers).

Question: Shaul Eyal - Cowen and Company, LLC - Analyst : Got it. I would even say that. SailPoint, in the process of being removed from the market. And they have like a small product competing with you on the file front. I think that could be, longer term, like a good opportunity to displace some of their customers. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JUNE 02, 2022 / 7:20PM, VRNS.OQ - Varonis Systems Inc at Cowen Technology, Media & Telecom Conference

Question: Shaul Eyal - Cowen and Company, LLC - Analyst : That is SailPoint, yes.

Question: Shaul Eyal - Cowen and Company, LLC - Analyst : Yeah, yeah, for sure, for sure. Great progress. If we step back and look at the first-quarter results with the patterns -- the purchase patterns by customers expanding their purchasing with you guys, they were going for four licenses, five, six licenses. So like really great, great, great performance that we have seen, like even from a year-on-year perspective, really continued acceleration. This is pretty much the breadth of the platform that you're providing your customers with or kind of just new use cases. So what is it that is pushing and accelerating these adoption rates that we've been seeing?

Question: Shaul Eyal - Cowen and Company, LLC - Analyst : Yeah, the fastest.

Question: Shaul Eyal - Cowen and Company, LLC - Analyst : It's much easier. Yeah, the heavy lifting was done. That's it.

Question: Shaul Eyal - Cowen and Company, LLC - Analyst : Nice, nice. But I think right now, Yaki, I think, all in all, you have with Polyrize, 40? How many --

Question: Shaul Eyal - Cowen and Company, LLC - Analyst : Just under 40, yeah. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JUNE 02, 2022 / 7:20PM, VRNS.OQ - Varonis Systems Inc at Cowen Technology, Media & Telecom Conference

Question: Shaul Eyal - Cowen and Company, LLC - Analyst : Yeah, yeah. Yaki, one of the topics we've been discussing during the conference, it doesn't matter what the sector is, but hiring plans in light of what might be a cooling off, the moderating economy. What's your thinking about it? Clearly, you're in a completely different shape -- (inaudible), balance sheet, growth, ARR -- that plays to your advantage. But what's the current thinking second half this year and maybe 2023?

Question: Shaul Eyal - Cowen and Company, LLC - Analyst : In a measured way.

Question: Shaul Eyal - Cowen and Company, LLC - Analyst : Got it. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JUNE 02, 2022 / 7:20PM, VRNS.OQ - Varonis Systems Inc at Cowen Technology, Media & Telecom Conference

Question: Shaul Eyal - Cowen and Company, LLC - Analyst : Got it, got it. And you touched on Europe and EMEA. You've mentioned that, Yaki. So regardless of Russia -- we write that off for the time being -- actually, I think you've indicated some good momentum, interest, pipeline coming out of EMEA in the recent quarter.

Question: Shaul Eyal - Cowen and Company, LLC - Analyst : And maybe even to add on top of that, Jamie, I think $25 million -- close to $25 million of cash flow in the quarter, which I think was --

Question: Shaul Eyal - Cowen and Company, LLC - Analyst : -- highest. Record, yeah. Absolutely. So this is kind of the way to think about you guys balancing growth and profitability.

Question: Shaul Eyal - Cowen and Company, LLC - Analyst : Yeah. And it's the same buying metrics, same drivers, or there's (multiple speakers)

Question: Shaul Eyal - Cowen and Company, LLC - Analyst : Right, right. Questions from the audience before we proceed? Unidentified Participant (inaudible - microphone inaccessible)

Question: Shaul Eyal - Cowen and Company, LLC - Analyst : Yaki, Jamie, we're out of time. Thank you so much for that. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JUNE 02, 2022 / 7:20PM, VRNS.OQ - Varonis Systems Inc at Cowen Technology, Media & Telecom Conference

Question: Shaul Eyal - Cowen and Company, LLC - Analyst : It's great. Keep up the great job.