Tremblant Capital’s $128M Bet on Varonis Systems Amid Cybersecurity Stock Volatility

Despite a 40% decline in its stock price over the past year, Varonis Systems (NASDAQ: VRNS) has attracted a significant investment from Tremblant Capital Group, signaling potential confidence in the data security firm’s long-term prospects. This move comes as Varonis navigates a transition from traditional software licensing to a subscription-based model.

Tremblant Capital’s Investment

On February 17, 2026, Tremblant Capital Group disclosed the purchase of 3,058,524 shares of Varonis Systems, valued at approximately $128.40 million based on quarterly average pricing. This acquisition increased Tremblant’s stake in Varonis to 2.94% of its 13F reportable assets as of December 31, 2025. At quarter end, the fund’s stake in Varonis Systems was valued at $115.12 million, with the net position change totaling $89.19 million.

Varonis Systems: Company Overview

Varonis Systems provides data security software solutions, including DatAdvantage, DatAlert, Data Classification Engine, DataPrivilege, Data Transport Engine and DatAnswers. The company serves IT, security, and business personnel across enterprises in North America, EMEA, and internationally, focusing on organizations with sensitive and regulated data.

As of February 17, 2026, Varonis had a market capitalization of $2.99 billion and reported revenue of $623.53 million for the trailing twelve months. Yet, the company currently has a net loss of $129.32 million.

Recent Performance and Market Context

Varonis shares were trading at $25.32 as of February 17, 2026, representing a 40% decrease over the past year, significantly underperforming the S&P 500’s approximately 20% gain during the same period.

The company experienced a significant stock drop in October 2025 after lowering its full-year guidance and reporting a slower-than-expected transition to a Software-as-a-Service (SaaS) model.

Transition to SaaS and Revenue Growth

Despite the challenges, Varonis has demonstrated revenue growth, generating approximately $623.5 million in revenue in 2025, a 13% increase year-over-year. Annual recurring revenue (ARR) reached roughly $745 million, up 16% year-over-year, with SaaS ARR climbing to about $638.5 million, now representing approximately 86% of the company’s total recurring revenue base.

Other Institutional Activity

Hood River Capital Management exited its entire stake of 1,908,011 shares in Varonis Systems during Q4 2025, selling approximately $109.65 million worth of stock.

Tremblant Capital Group’s Top Holdings (as of December 31, 2025)

• NYSE: SPOT: $140.21 million (3.6% of AUM)
• NASDAQ: DASH: $134.97 million (3.4% of AUM)
• NYSE: TKO: $133.90 million (3.4% of AUM)
• NYSE: QTWO: $130.88 million (3.3% of AUM)
• NASDAQ: WING: $117.59 million (3.0% of AUM)

Analyst Outlook

Wells Fargo initiated coverage of Varonis with an Overweight rating and a $28 price target on March 2, 2026.

As of March 11, 2026, Varonis (VRNS) stock is priced at $24.28.