Varonis Systems, Inc. — Earnings Quality Grade F
VRNS · Technology
Major red flags
Screening Summary
Management Signals
Financial Trends
Revenue & Net Income ($B)
Margins (%)
18-Point Screening
Revenue Quality
DSO increased by 14 days
AR outpaced revenue for 2 consecutive years
Revenue 13.2%, CFFO 28.0%. Cash follows revenue
Expense Quality
No material inventory
CapEx growth 16.3% vs revenue 13.2%. Normal
SG&A/Gross Profit = 81.4%, exceeds 70%
Gross margin 78.8%, change -4.1pp. Stable
Cash Flow Quality
CFFO < Net Income for 3 consecutive years
FCF $0.1B, FCF/NI = -1.02
Accruals ratio = -15.4%. Low accruals
Cash $0.9B covers debt $0.5B
Balance Sheet Health
Goodwill+Intangibles $0.2B = 25% of equity. Manageable
Interest coverage = -22.3x (<2x). Financial stress
Other assets grew 116.6% vs revenue 13.2%
No write-off data
Acquisition Risk
FCF after acquisitions positive
Goodwill+Intangibles surged 557% YoY
Manipulation Score
M-Score = -3.09 (< -2.22). Unlikely manipulator
Portfolio monitoring
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Beneish M-Score
Altman Z-Score
Generated from public financial data using forensic accounting frameworks. Not investment advice. Data: Yahoo Finance · 2026-04-25