Good morning, and welcome to the 2026 annual meeting of the stockholder for Varonis Systems. The time now is 9:00 A.M. Eastern Time. Thank you for joining us today. I'm Yaki Faitelson, Chief Executive Officer, President, and Chairman of the Board of Directors of Varonis. This is a virtual meeting conducted via live audio webcast. At this time, I call the meeting to order. With me today via telephone conference, our member of the Board of Directors and Gil Senderowicz, a Partner at Kost Forer Gabbay & Kasierer, a member of Ernst & Young Global Limited, Varonis's independent registered public accounting firm. Also joining us is John Holloway, a representative of American Election Services, who will serve as our Inspector of Election.
Guy Melamed, our Chief Financial Officer and Chief Operating Officer, Dov Gottlieb, our Vice President and General Counsel and Corporate Secretary, and Tim Perz, our Vice President of Investor Relations. We will conduct the formal part of the meeting, and once the votes have been taken and the polls are closed, the tabulated votes will be reported. I will then provide an update on the business of Varonis, and we will try to answer appropriate questions that are submitted from stockholders during the time allotted in accordance with the rules of the meeting. Our independent auditors will also be available to answer the appropriate questions. Please submit your questions during the meeting in the field provided on your virtual meeting screen.
The polls for each matter upon which stockholders will vote at this meeting opened at 9:00 A.M. Eastern Time and will remain open until an announcement that the polls are closed. Any stockholder who has not yet voted or whom would like to change previously submitted vote may utilize the web portal to do so now. At this time, Dov Gottlieb will give a report regarding the presence of a quorum to conduct business at this meeting and briefly review the procedure that will follow during today's meeting.
Thank you, Yaki. The board of directors has designated April 6th, 2026 as the record date for this meeting. As of the record date, there were 114,814,150 shares of common stock entitled to vote at this meeting. The board of directors has appointed John Holloway of American Election Services as Inspector of Elections to tabulate the votes at today's meeting, and he has sworn the inspector's oath. The oath will be filed within the records of the company. Mr. Holloway has provided a certified list of stockholders of record as of the record date, and it is available for inspection during and after this meeting. Formal notice of the annual meeting and proxy materials were made available on April 17th, 2026, to each stockholder of record as of the record date. The affidavit of mailing and the certified list of stockholders will be filed within the records of the company.
I have received a preliminary report from the Inspector of Elections showing that at today's meeting, the holders of at least 100,196,120 shares, which is more than 87% of shares entitled to vote, are present in person or by proxy, and therefore, a quorum is present to conduct business. After presentation of all of the agenda items, the chairman will open the meeting for questions. Only validated stockholders will be able to ask questions in the designated field on the web portal. In order to ensure that the business of the meeting proceeds in an orderly fashion and that stockholders who wish to speak have a fair opportunity to do so, questions should be limited to the agenda items being considered. Also, as a courtesy to all stockholders, we ask that you limit yourself to one question. The chairman will read questions submitted from validated stockholders aloud before answering.
If appropriate, the chairman will refer questions to others for a response. The preliminary count indicates that a quorum is present and the meeting is duly convened and open for business.
We have four items of business to address today. Information about each item, including the vote necessary to approve the item, is also contained in the proxy statement. The first item of business is the election of four Class 3 directors. The Board of Directors has nominated Yaki Faitelson, Thomas F. Mendoza, Avrohom J. Kess, and Ohad Korkus for election to the Board of Directors, each for the terms expiring at the 2029 annual meeting and until their successors have been duly elected and qualified. No other nominations were received in accordance with the advance notice requirement in the company's bylaws. Therefore, all nominations are closed. The Board of Directors has recommended a vote in favor of each of these nominees. The second item of business is an advisory vote to approve the company's executive compensation in 2025 as disclosed in the proxy statement.
The board of directors has recommended a vote in favor of this proposal. The third item of business is the ratification of the appointment of Kost Forer Gabbay & Kasierer, a member of Ernst & Young Global Limited, as Varonis' independent registered public accounting firm for the fiscal year ending December 31, 2026. The board of directors has recommended a vote in favor of this proposal. The fourth item of business is the approval of additional shares for issuance under the company Amended and Restated 2025 Omnibus Equity Incentive Plan. The board of directors has recommended a vote in favor of this proposal. This concludes the introduction of all the proposals to be presented at this meeting. If you have not voted, or if you want to change your vote, you may do so now online. The polls are now closed at 9:07 A.M. Eastern Time.
The Inspector of Election has completed the tabulation of the preliminary voting results. Dov, will you please provide the preliminary results?
The report of the voting on the proposals presented at this meeting is as follows. Each of the director nominees has been elected to the board. The advisory vote on the company's executive compensation in 2025 has been approved. The selection of Kost Forer Gabbay & Kasierer, member of Ernst & Young Global Limited, as the company's independent registered public accounting firm for the fiscal year ending December 31, 2026 has been ratified, and the additional shares for issuance under the company's Amended and Restated 2025 Omnibus Equity Incentive Plan have been approved. Final vote results will be filed in a Form 8-K, by no later than four business days from today.
I hereby declare, subject to the final tabulation of the vote, that Yaki Faitelson, Thomas F. Mendoza, Avrohom J. Kess, and Ohad Korkus have been elected as directors. The advisory vote of the company's executive compensation in 2025, as disclosed in the proxy statement, has been approved. The selection of Kost Forer Gabbay & Kasierer as the company's independent registered public accounting firm for the fiscal year ending December 31, 2026 has been ratified. The additional shares for issuance under the company's Amended and Restated 2025 Omnibus Equity Incentive Plan has been approved. A list of stockholders, the notice of annual meeting and proxy statement, and the final report of the Inspector of Elections will be filed with the records of the company. I will now provide a brief update on the business of our company.
In 2025, Varonis completed its transition to a SaaS delivery model and finished the year with 86% of total ARR coming from SaaS. This progress enabled the announcement of the end of life of our self-hosted platform. Our fully automated SaaS platform allows us to help our customers better avoid data breaches, compliance fines, and safely enable the use of AI. We continue to innovate to provide more coverage and automation and expand our platform both organically and inorganically. We finished the year with a number of key highlights, including SaaS ARR of $638.5 million as of the end of Q4. SaaS ARR growth excluding conversions of 32%, operating cash flow of $147.4 million, and free cash flow of $131.9 million.
We are proud of our accomplishment this year, and we are excited about the many additional benefits our customers and stockholders will realize as we capitalize on the many tailwinds in our business and continue to secure customer data and AI systems with automated outcomes. We will now entertain questions that have been provided from stockholders via the web portal. No questions have been provided by stockholders this year. Thank you for the interest in the company. At this time, I want to thank all of you for attending today's meeting and for your continued support. I now declare the meeting adjourned.
Goodbye.
Ladies and gentlemen, that does conclude today's webcast. Please, you may now disconnect. Have a great day.