Proofpoint had indeed been watching Varonis closely.
For months, rumors of a potential takeover had been circulating. There is now a deal in place, valued at $6.3 billion in cash.
Proofpoint aims to close the transaction in the first quarter of 2027. Until then, the two companies will continue to operate independently, without sharing customer data, the company says. Beyond that, the path forward is much less clear. Officially, no product-related decisions have been made. The messaging generally sticks to the promise of a “unified experience,” a familiar refrain in software mergers and acquisitions.
Governing access to data…
Varonis was founded in 2004, two years after Proofpoint. Headquartered in the United States, the company nonetheless employs more than a third of its workforce in Israel, the homeland of its two founders. Specifically, Yaki Fatelson and Ohad Korkus. The former is still involved and serves as CEO. The latter, a former CTO, left the company a few years ago.
The core of Varonis’ offering (Data Security Platform) combines DSPM with data access governance. Its technology—translated into a portfolio of around a hundred U.S. patents—is built on continuous metadata analysis. A GenAI layer has been grafted onto it for investigation, response and reporting. Commercially, the suite is offered in four packages targeting four different environment types:
- Microsoft 365
- Windows/CIFS and NAS shares
- Hybrid (M365 + Windows & NAS)
- Cloud (SaaS and IaaS)
… in the wake of the DSPM building block
Varonis began its shift to SaaS in 2021-2022. It set December 31, 2026 as the end of life for its on-premises products.
In 2023, SaaS represented 9% of its revenue. The share rose to 38% in 2024. It reached 74% in 2025. That year, revenue grew by 13% to $623.5 million. Yet net income did not follow suit. Twelve years after its IPO, Varonis has still not posted a profitable year. It does, however, carry more cash than debt, the latter composed entirely of convertible bonds maturing in 2029.
Proofpoint already possesses a DSPM backbone, built through the acquisition of Normalyze (2024). Varonis will broaden its scope, complementing the AI governance modules—also partly born from acquisitions. Notably including Acuvity in early 2026.
