What happened Shares of Varonis Systems (NASDAQ: VRNS) rose on Tuesday following a mixed second-quarter report from the data security and analytics company. While subscription revenue soared, overall revenue declined as Varonis transitions away from perpetual licenses. The stock was up about 4.8% at 11:40 a.m. EDT; it was up as much as 15.3% earlier in the day. So what Varonis reported second-quarter revenue of $59.6 million, down 4.1% year over year and about $2.7 million below the average analyst estimate. Subscription revenue was $14.8 million, up from just $1.3 million in the prior-year period, while perpetual license revenue was $11.5 million, down from $32.3 million. Maintenance and services revenue rose 12.7% year over year to $32.3 million. Image source: Getty Images. "Our subscription transition has been both rapid and impressive, as 56% of our license revenues were from subscription products in the second quarter, compared with our guidance of 25%," said Varonis CEO Yaki Faitelson in prepared remarks included in the earnings release. Non-GAAP (adjusted) earnings per share came in at a loss of $0.30, compared to a loss of $0.04 in the prior-year period and $0.02 higher than analysts were expecting. A lower gross profit and higher operating costs pushed down the bottom line. Now what Varonis now expects subscription revenue as a percentage of license revenue to be 45% in 2019, up from previous guidance of 25%. For the third quarter, the company expects revenue of $61.0 million to $62.5 million, along with a non-GAAP loss per share of $0.34 to $0.36. For the full year, Varonis sees revenue of $255.5 million to $259.5 million, and a non-GAAP loss per share of $0.90 to $0.93. Varonis' transition to subscriptions is putting pressure on revenue and earnings, but subscription revenue is growing quickly. That was enough to overshadow a mixed quarter and push the stock higher. 10 stocks we like better than Varonis SystemsWhen investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has quadrupled the market.* David and Tom just revealed what they believe are the ten best stocks for investors to buy right now... and Varonis Systems wasn't one of them! That's right -- they think these 10 stocks are even better buys. See the 10 stocks *Stock Advisor returns as of June 1, 2019 Timothy Green has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Varonis Systems. The Motley Fool has a disclosure policy.Source