Secureworks Announces Fourth Quarter and Full Year Fiscal 2024 Results
- Taegis™ annual recurring revenue (ARR) grew to $285 million, a 9% increase YoY.
- Taegis fourth quarter revenue grew by 15% YoY to $68.9 million.
- GAAP gross margin and non-GAAP gross margin for Taegis continued to expand, reaching 70.8% and 73.1% respectively in Q4.
- Secureworks exceeded adjusted EBITDA guidance in Q4, delivering $3.8 million with a margin of 4.3%.
- Total revenue for Q4 was $89.2 million, with Taegis revenue at $68.9 million.
- The company ended Q4 with $68.7 million in cash and cash equivalents.
- For FY 2024, total revenue was $365.9 million, with Taegis revenue at $265.3 million.
- Secureworks launched AI-powered Threat Score to enhance security analyst productivity.
- Received Frost & Sullivan Competitive Strategy Leadership Award in the Global XDR Industry.
- Provided intelligence and insights in combating LockBit ransomware intrusions.
- Guidance for FY 2025 includes revenue of $325M to $335M and adjusted EBITDA of $4M to $12M.
- Total revenue for FY 2024 decreased compared to FY 2023 due to the wind-down of Other MSS business.
- GAAP net loss was $86.0 million in FY 2024, compared to $114.5 million in FY 2023.
- Adjusted EBITDA loss for FY 2024 was $27.8 million, compared to $59.0 million in FY 2023.
Insights
The reported financial results by Secureworks indicate a strategic shift within the company, as evidenced by the wind-down of its Other MSS business and the focus on the growth of its Taegis platform. The increase in annual recurring revenue (ARR) by 9% year-over-year and a 15% growth in fourth-quarter revenue for Taegis are positive signs of customer adoption and market confidence in the company's core offerings. The expansion of both GAAP and non-GAAP gross margins suggests improving operational efficiency and product mix optimization, which are critical for long-term profitability.
Secureworks' achievement of exceeding its adjusted EBITDA guidance for the fourth quarter is a strong indicator of financial discipline and operational execution. This outperformance, combined with the guidance for breakeven to modest non-GAAP net income in fiscal 2025, may signal to investors a potential turning point towards sustainable profitability. However, the decline in total revenue for both the fourth quarter and the full fiscal year, largely attributed to the strategic wind-down, requires careful monitoring to ensure that the growth in Taegis can offset this reduction. The company's cash position and lack of borrowings provide financial stability, but the projected cash flow from operations suggests potential variability in liquidity.
The cybersecurity landscape is rapidly evolving and Secureworks' focus on its Taegis platform aligns with the industry's shift towards cloud-based security solutions and extended detection and response (XDR) capabilities. The company's AI-powered Threat Score and its role in disrupting the LockBit ransomware operation highlight its commitment to innovation and public-private collaboration in cyber defense. These operational highlights can enhance the company's market positioning and reputation, potentially leading to increased market share.
Recognition by Frost & Sullivan and the Globee® Awards further validates Secureworks' competitive differentiation and strategy execution within the cybersecurity industry. The continuous innovation in AI and the expansion of the Global MSSP Partner Program are strategic moves that can drive customer engagement and retention. However, the competitive landscape in cybersecurity is fierce and Secureworks will need to maintain its pace of innovation and strategic partnerships to stay ahead.
From an investment perspective, Secureworks' financial results and operational highlights present a mixed picture. The growth in Taegis ARR and the positive adjusted EBITDA are encouraging signs for investors looking for growth and profitability signals. The company's forward-looking guidance, projecting an increase in total ARR to $300 million or greater and a non-GAAP net income of up to $7 million, provides a positive outlook for fiscal 2025.
However, investors must weigh these projections against the backdrop of the overall revenue decline due to the wind-down of the Other MSS business. The transition towards a more focused product offering may lead to short-term revenue impacts but could result in a stronger, more streamlined business model in the long term. The lack of specific reconciliations for forward-looking non-GAAP financial measures indicates some uncertainty and warrants a cautious approach to these projections. Investors should consider the company's strategic direction, market positioning and operational execution when evaluating the potential impact on the stock performance.
Key Highlights
- Taegis™ annual recurring revenue (ARR) grew to
$285 million 9% on a year-over-year basis. - Taegis fourth quarter revenue grew
15% year-over-year to$68.9 million - Taegis GAAP gross margin and non-GAAP gross margin continued to expand in the fourth quarter, reaching
70.8% and73.1% , respectively. - Secureworks exceeded its guidance for adjusted EBITDA in the fourth quarter, delivering
$3.8 million 4.3% .
"As the open security platform of choice, Taegis integrates with existing investments to reduce risk and avoid the damage inflicted by cyber breaches. With ransomware proliferating and dwell times below 24 hours, never has our mission been more critical or relevant to customers. I'm particularly proud of our team's recent contribution of intelligence and insights gained from four years of combating LockBit in support of the law enforcement disruption of the world's most prolific ransomware operation," said Wendy Thomas, CEO, Secureworks. "Taegis sees more, detects better and responds faster. Our continuous innovations in AI means that customers and partners globally are benefiting from our platform's powerful capabilities in cyber defense to drive better security outcomes and realize greater efficiencies in their security operations. That success drives our growth."
"Our fourth quarter results demonstrated how our unique cloud architecture creates a win-win situation, fueling the delivery of the best security outcomes for our customers with spend predictability, while contributing to our expanding margins," said Alpana Wegner, Chief Financial Officer, Secureworks. "We exceeded our commitment for breakeven adjusted EBITDA in the fourth quarter, which marks an important milestone and gives us confidence in our EBITDA guidance for the full year fiscal 2025."
Fourth Quarter and Fiscal 2024 Financial Highlights
- Total revenue for the fourth quarter was
$89.2 million $115.3 million - Taegis revenue for the fourth quarter was
$68.9 million $60.2 million - GAAP gross profit was
$58.5 million $68.9 million $60.7 million $73.7 million - GAAP gross profit specific to Taegis was
$48.8 million $40.6 million $50.4 million $41.7 million - GAAP gross margin for the fourth quarter was
65.6% , compared with59.7% in the same period last year. Non-GAAP gross margin was68.1% , compared with63.9% in the fourth quarter of fiscal 2023. - GAAP Taegis gross margin was
70.8% for the quarter, compared with67.5% in the same period last year. Non-GAAP Taegis gross margin was73.1% , compared with69.2% in the fourth quarter of fiscal 2023. - GAAP net loss was
$8.3 million $0.10 $40.0 million $0.47 $6.6 million $0.08 $14.3 million $0.17 - Adjusted EBITDA for the quarter was
$3.8 million $19.7 million - The company ended the fourth quarter with
$68.7 million
Full Year Fiscal 2024 Financial Highlights
- Total revenue for fiscal year 2024 was
$365.9 million $463.5 million - Taegis revenue for fiscal 2024 was
$265.3 million $188.1 million - GAAP gross profit was
$217.8 million $272.4 million $234.5 million $291.6 million - GAAP gross profit specific to Taegis was
$184.6 million $124.0 million $190.1 million $127.7 million - GAAP gross margin for fiscal 2024 was
59.5% , compared with58.8% in the same period last year. Non-GAAP gross margin was64.1% , compared with62.9% in fiscal 2023. - GAAP Taegis gross margin was
69.6% for fiscal 2024, compared with65.9% in the same period last year. Non-GAAP Taegis gross margin was71.7% , compared with67.9% in fiscal 2023. - GAAP net loss was
$86.0 million $1.00 $114.5 million $1.36 $19.1 million $0.22 $46.9 million $0.56 - Adjusted EBITDA loss for fiscal 2024 was
$27.8 million $59.0 million
Business and Operational Highlights
- Launched our AI-powered Threat Score to silence alert noise and increase security analyst productivity by over
100% . - Supported the recent law enforcement operation to disrupt LockBit, the world's most prolific ransomware operation, by providing intelligence and insights gained from 4 years of combating LockBit ransomware intrusions, further underscoring our role in critical public/private partnerships in cyber defense.
- Expanded our Global MSSP Partner Program with the addition of Happiest Minds providing Managed Detection and Response (MDR) services powered by our Taegis™ XDR platform.
- Received the Frost & Sullivan Competitive Strategy Leadership Award in the Global XDR Industry, recognizing our strategy effectiveness and execution, competitive differentiation, and customer experience.
- Named to CRN Security 100, recognizing our commitment to working hand in hand with our partners to protect businesses from cyber threats.
- Recognized as a Gold Globee winner in the Extended Detection and Response and Managed Detection and Response Categories of the 2024 Globee® Awards for cybersecurity.
Financial Outlook
For the first quarter of fiscal 2025, the Company expects:
- Revenue of
$83 million $85 million - Adjusted EBITDA of
$0 $2 million - Non-GAAP net loss per share of (
$0.01 $0.01
Secureworks is providing the following guidance for full fiscal year 2025. The Company expects:
Fiscal Year 2025 Guidance | |
Total ARR | |
Total revenue | |
Non-GAAP net income | |
Adjusted EBITDA | |
Cash from operations | ( |
The Company has not reconciled its forward-looking non-GAAP financial measures to their most directly comparable GAAP measures because certain items are out of our control or cannot be reasonably predicted. Accordingly, reconciliations for forward-looking non-GAAP financial measures are not available without unreasonable efforts.
Conference Call Information
As previously announced, the Company will hold a conference call to discuss its fourth quarter and full year fiscal 2024 results and financial guidance on March 14, 2024, at 8:00 a.m.
Operating Metrics
The Company defines annual recurring revenue (ARR) as the value of its subscription contracts as of a particular date. Because the Company uses recurring revenue as a leading indicator of future annual revenue, it includes operational backlog. Operational backlog is defined as the recurring revenue associated with pending contracts, which are contracts that have been sold but for which the service period has not yet commenced.
Non-GAAP Financial Measures
This press release presents information about the Company's non-GAAP subscription cost of revenue, non-GAAP professional services cost of revenue, non-GAAP Taegis Subscription Solutions cost of revenue, non-GAAP Managed Security Services cost of revenue, non-GAAP gross profit, non-GAAP subscription gross profit, non-GAAP professional services gross profit non-GAAP Taegis Subscription Solutions gross profit, non-GAAP Managed Security Services gross profit, non-GAAP operating expenses, non-GAAP operating margin, non-GAAP research and development expenses, non-GAAP sales and marketing expenses, non-GAAP general and administrative expenses, non-GAAP operating income (loss), non-GAAP net income (loss), non-GAAP net earnings (loss) per share, adjusted EBITDA, weighted average common shares outstanding - diluted (non-GAAP), non-GAAP gross margin, non-GAAP Taegis Subscription Solutions gross margin, non-GAAP Managed Security Services gross margin, non-GAAP subscription gross margin, and non-GAAP professional services gross margin, which are non-GAAP financial measures provided as a supplement to the results provided in accordance with accounting principles generally accepted in
Non-GAAP Net Income (Loss) and Non-GAAP Net Income (Loss) per share
The Company defines non-GAAP net loss and non-GAAP net loss on a per share basis as GAAP net loss excluding amortization of intangibles, stock-based compensation expense, reorganization and other related charges, and the aggregate adjustments for income taxes.
Special Note Regarding Forward-Looking Statements
This press release contains "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. In some cases, you can identify these statements by such forward-looking words as "anticipate," "believe," "confidence," "could," "estimate," "expect," "guidance," "intend," "may," "plan," "potential," "outlook," "should," and "would," or similar words or expressions that refer to future events or outcomes. Such forward-looking statements include, but are not limited to, the statements in this press release with respect to the Company's expectations regarding revenue, GAAP net income (loss), non-GAAP net income (loss), GAAP net earnings (loss) per share, non-GAAP net earnings (loss) per share, and adjusted EBITDA for the first quarter of fiscal 2025, and total annual recurring revenue ("ARR"), total revenue, GAAP net income (loss), GAAP net earnings (loss) per share, non-GAAP net income (loss), non-GAAP net earnings (loss) per share, weighted average common shares outstanding - diluted (non-GAAP), adjusted EBITDA, capital expenditures, and cash from operations for full year fiscal 2025, all of which reflect the Company's current analysis of existing trends and information. These forward-looking statements represent the Company's judgment only as of the date of this press release.
Actual results and events in future periods may differ materially from those expressed or implied by these forward-looking statements because of risks, uncertainties and other factors that include, but are not limited to, the following: the Company's ability to achieve or maintain profitability; the Company's ability to enhance its existing solutions and technologies and to develop or acquire new solutions and technologies; the Company's ability to navigate economic conditions, geopolitical uncertainty and financial market volatility; the Company's reliance on personnel with extensive information security expertise; the Company's ability to successfully implement its strategic plan to realign and optimize its investments with its priorities; intense competition in the Company's markets; the Company's ability to attract new customers, retain existing customers and increase its annual contract values; the Company's reliance on customers in the financial services industry; the Company's ability to manage its growth effectively; the Company's ability to maintain high-quality client service and support functions; terms of the Company's service level agreements with customers that require credits for service failures or inadequacies; the Company's recognition of revenue ratably over the terms of its Taegis SaaS applications and managed security services contracts; the Company's long and unpredictable sales cycles; risks associated with expansion of the Company's international sales and operations; the risks associated with proposed or currently enacted tax statutes, including, but not limited to, Internal Revenue Code Section 174; the Company's exposure to fluctuations in currency exchange rates or inflation; the effect of new governmental export or import controls on the Company's business or any international sanctions compliance program applicable to the Company; the Company's ability to expand its key distribution relationships; the Company's technology alliance partnerships; real or perceived defects, errors or vulnerabilities in the Company's solutions or the failure of its solutions to prevent a security breach; the risks associated with cyber-attacks or other data security incidents; the risks associated with our development, use and adoption of artificial intelligence; the ability of the Company's solutions to interoperate with its customers' IT infrastructure; the Company's ability to use third-party technologies; the effect of evolving information security, cybersecurity and data privacy laws and regulations on the Company's business; the Company's ability to maintain and enhance its brand; risks associated with the Company's acquisition of other businesses; the effect of natural disasters, public health issues, geopolitical conflict and other catastrophic events on the Company's ability to serve its customers, including the Ukrainian/Russian conflict and the conflict between
This list of risks, uncertainties and other factors is not complete. The Company discusses these matters more fully, as well as certain risk factors that could affect the Company's business, financial condition, results of operations and prospects, under the caption "Risk Factors" in the Company's annual report on Form 10-K, as well as in the Company's other SEC filings.
Any or all forward-looking statements the Company makes may turn out to be wrong and can be affected by inaccurate assumptions the Company might make or by known or unknown risks, uncertainties and other factors, including those identified in this press release. Accordingly, you should not place undue reliance on the forward-looking statements made in this press release, which speak only as of its date. The Company does not undertake to update, and expressly disclaims any obligation to update, any of its forward-looking statements, whether resulting from circumstances or events that arise after the date the statements are made, new information or otherwise.
About Secureworks
Secureworks (NASDAQ: SCWX) is a global cybersecurity leader that secures human progress with Secureworks® Taegis™, a SaaS-based, open XDR platform built on 20+ years of real-world detection data, security operations expertise, and threat intelligence and research. Taegis is embedded in the security operations of 3,900 organizations around the world who use its advanced, AI-driven capabilities to detect advanced threats, streamline and collaborate on investigations, and automate the right actions. www.secureworks.com
(Tables Follow)
SECUREWORKS CORP. | |||||||
Consolidated Statements of Operations | |||||||
(in thousands) | |||||||
(unaudited) | |||||||
Three Months Ended | Twelve Months Ended | ||||||
February 2, | February 3, | February 2, | February 3, | ||||
Net revenue: | |||||||
Subscription | $ 75,260 | $ 91,522 | |||||
Professional services | 13,894 | 23,814 | 61,323 | 100,027 | |||
Total net revenue | 89,154 | 115,336 | 365,879 | 463,475 | |||
Cost of revenue: | |||||||
Subscription | 22,744 | 32,532 | 109,833 | 131,554 | |||
Professional services | 7,918 | 13,931 | 38,287 | 59,503 | |||
Total cost of revenue | 30,662 | 46,463 | 148,120 | 191,057 | |||
Gross profit | 58,492 | 68,873 | 217,759 | 272,418 | |||
Operating expenses: | |||||||
Research and development | 25,230 | 37,553 | 110,996 | 139,785 | |||
Sales and marketing | 25,509 | 42,072 | 118,351 | 163,637 | |||
General and administrative | 20,039 | 27,195 | 83,233 | 101,554 | |||
Reorganization and other related charges | 2,913 | 15,471 | 17,145 | 15,471 | |||
Total operating expenses | 73,691 | 122,291 | 329,725 | 420,447 | |||
Operating loss | (15,199) | (53,418) | (111,966) | (148,029) | |||
Interest and other, net | (856) | 2,475 | (2,554) | 1,248 | |||
Loss before income taxes | (16,055) | (50,943) | (114,520) | (146,781) | |||
Income tax benefit | (7,763) | (10,907) | (28,478) | (32,282) | |||
Net loss | $ (8,292) | $ (40,036) | $ (86,042) | $ (114,499) | |||
Net loss per common share (basic and diluted) | $ (0.10) | $ (0.47) | $ (1.00) | $ (1.36) | |||
Weighted-average common shares outstanding (basic and diluted) | 86,364 | 84,701 | 86,049 | 84,389 | |||
SECUREWORKS CORP. | |||||||
Consolidated Statements of Financial Position | |||||||
(in thousands) | |||||||
(unaudited) | |||||||
February 2, | February 3, | ||||||
Assets: | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ 68,655 | $ 143,517 | |||||
Accounts receivable, net | 54,266 | 72,627 | |||||
Inventories | 727 | 620 | |||||
Other current assets | 13,777 | 17,526 | |||||
Total current assets | 137,425 | 234,290 | |||||
Property and equipment, net | 2,149 | 4,632 | |||||
Goodwill | 425,472 | 425,519 | |||||
Operating lease right-of-use assets, net | 5,069 | 9,256 | |||||
Intangible assets, net | 83,235 | 106,208 | |||||
Other non-current assets | 71,429 | 60,965 | |||||
Total assets | $ 724,779 | $ 840,870 | |||||
Liabilities and Stockholders' Equity: | |||||||
Current liabilities: | |||||||
Accounts payable | $ 8,974 | $ 18,847 | |||||
Accrued and other | 61,895 | 81,566 | |||||
Deferred revenue | 131,245 | 145,170 | |||||
Total current liabilities | 202,114 | 245,583 | |||||
Long-term deferred revenue | 5,706 | 11,162 | |||||
Operating lease liabilities, non-current | 7,803 | 12,141 | |||||
Other non-current liabilities | 7,831 | 14,023 | |||||
Total liabilities | 223,454 | 282,909 | |||||
Stockholders' equity | 501,325 | 557,961 | |||||
Total liabilities and stockholders' equity | $ 724,779 | $ 840,870 | |||||
SECUREWORKS CORP. | ||||
Consolidated Statements of Cash Flows | ||||
(in thousands) | ||||
(unaudited) | ||||
Twelve Months Ended | ||||
February 2, | February 3, | |||
Cash flows from operating activities: | ||||
Net loss | $ (86,042) | $ (114,499) | ||
Adjustments to reconcile net loss to net cash used in operating activities: | ||||
Depreciation and amortization | 31,893 | 36,668 | ||
Amortization of right of use asset | 2,024 | 3,800 | ||
Reorganization and other related charges | 3,272 | 6,112 | ||
Amortization of costs capitalized to obtain revenue contracts | 17,133 | 18,203 | ||
Amortization of costs capitalized to fulfill revenue contracts | 3,232 | 4,773 | ||
Stock-based compensation expense | 35,104 | 36,855 | ||
Income tax benefit | (28,478) | (32,282) | ||
Provision for credit losses | (282) | (524) | ||
Changes in assets and liabilities: | ||||
Accounts receivable | 17,952 | 11,247 | ||
Net transactions with Dell | 5,708 | (1,278) | ||
Inventories | (107) | (115) | ||
Other assets | 371 | 24,055 | ||
Accounts payable | (9,685) | 4,050 | ||
Deferred revenue | (17,151) | (16,912) | ||
Operating leases, net | (4,553) | (5,465) | ||
Accrued and other liabilities | (29,550) | (33,433) | ||
Net cash used in operating activities | (59,159) | (58,745) | ||
Cash flows from investing activities: | ||||
Capital expenditures | (1,180) | (2,307) | ||
Software development costs | (5,243) | (3,704) | ||
Net cash used in investing activities | (6,423) | (6,011) | ||
Cash flows from financing activities: | ||||
Taxes paid on vested restricted shares | (6,163) | (8,887) | ||
Net cash used in financing activities | (6,163) | (8,887) | ||
Effect of exchange rate changes on cash and cash equivalents | (3,117) | (3,495) | ||
Net decrease in cash and cash equivalents | (74,862) | (77,138) | ||
Cash and cash equivalents at beginning of the period | 143,517 | 220,655 | ||
Cash and cash equivalents at end of the period | $ 68,655 | $ 143,517 | ||
Non-GAAP Financial Measures
This press release presents information about the Company's non-GAAP subscription cost of revenue, non-GAAP professional services cost of revenue, non-GAAP Taegis Subscription Solutions cost of revenue, non-GAAP Managed Security Services cost of revenue, non-GAAP gross profit, non-GAAP subscription gross profit, non-GAAP professional services gross profit, non-GAAP Taegis Subscription Solutions gross profit, non-GAAP Managed Security Services gross profit, non-GAAP operating expenses, non-GAAP research and development expenses, non-GAAP sales and marketing expenses, non-GAAP general and administrative expenses, non-GAAP operating income (loss), non-GAAP net income (loss), non-GAAP net earnings (loss) per share, adjusted EBITDA, weighted average common shares outstanding - diluted (non-GAAP), non-GAAP gross margin, non-GAAP Taegis Subscription Solutions gross margin, non-GAAP Managed Security Services gross margin, non-GAAP subscription gross margin and non-GAAP professional services gross margin, which are non-GAAP financial measures provided as a supplement to the results provided in accordance with GAAP. A detailed discussion of our reasons for including these non-GAAP financial measures, the limitations associated with these measures, the items excluded from these measures, and our reason for excluding those items are presented in "Management's Discussion and Analysis of Financial Condition and Results of Operations — Non-GAAP Financial Measures" in our periodic reports filed with the SEC. The Company encourages investors to review the non-GAAP discussion in these reports in conjunction with the presentation of non-GAAP financial measures.
(Tables Follow)
SECUREWORKS CORP. | ||||||||
Revenue Components and Reconciliation of GAAP to Non-GAAP Financial Measures | ||||||||
(in thousands, except per share data) | ||||||||
(unaudited) | ||||||||
Three Months Ended | Twelve Months Ended | |||||||
February 2, | February 3, | February 2, | February 3, | |||||
Revenue: | ||||||||
Managed Security Services | $ 68,930 | $ 60,172 | $ 265,298 | $ 188,085 | ||||
Taegis Subscription Revenue | 6,330 | 31,350 | 39,258 | 175,363 | ||||
Subscription Revenue | 75,260 | 91,522 | 304,556 | 363,448 | ||||
Professional Services Revenue | 13,894 | 23,814 | 61,323 | 100,027 | ||||
Total revenue | $ 89,154 | $ 115,336 | $ 365,879 | $ 463,475 | ||||
GAAP Taegis Subscription Solutions cost of revenue | $ 20,162 | $ 19,568 | $ 80,737 | $ 64,118 | ||||
Amortization of intangibles | (1,320) | (973) | (4,724) | (3,492) | ||||
Stock-based compensation expense | (274) | (89) | (835) | (277) | ||||
Non-GAAP Taegis Subscription Solutions cost of revenue | $ 18,568 | $ 18,506 | $ 75,178 | $ 60,349 | ||||
Non-GAAP Taegis Subscription Solutions cost of revenue as a % of | 26.9 % | 30.8 % | 28.3 % | 32.1 % | ||||
GAAP Managed Security Services cost of revenue | $ 2,582 | $ 12,964 | $ 29,096 | $ 67,436 | ||||
Amortization of intangibles | — | (3,409) | (9,397) | (13,641) | ||||
Stock-based compensation expense | (56) | (96) | (216) | (365) | ||||
Non-GAAP Managed Security Services cost of revenue | $ 2,526 | $ 9,459 | $ 19,483 | $ 53,430 | ||||
Non-GAAP Managed Security Services cost of revenue as a % of | 39.9 % | 30.2 % | 49.6 % | 30.5 % | ||||
GAAP subscription cost of revenue | $ 22,744 | $ 32,532 | $ 109,833 | $ 131,554 | ||||
Amortization of intangibles | (1,320) | (4,382) | (14,121) | (17,133) | ||||
Stock-based compensation expense | (330) | (185) | (1,051) | (642) | ||||
Non-GAAP subscription cost of revenue | $ 21,094 | $ 27,965 | $ 94,661 | $ 113,779 | ||||
Non-GAAP subscription cost of revenue as a % of subscription | 28.0 % | 30.6 % | 31.1 % | 31.3 % | ||||
GAAP professional services cost of revenue | $ 7,918 | $ 13,931 | $ 38,287 | $ 59,503 | ||||
Stock-based compensation expense | (536) | (303) | (1,527) | (1,358) | ||||
Non-GAAP professional services cost of revenue | $ 7,382 | $ 13,628 | $ 36,760 | $ 58,145 | ||||
Non-GAAP professional services cost of revenue as a % of | 53.1 % | 57.2 % | 59.9 % | 58.1 % | ||||
GAAP gross profit | $ 58,492 | $ 68,873 | $ 217,759 | $ 272,418 | ||||
Amortization of intangibles | 1,320 | 4,382 | 14,121 | 17,133 | ||||
Stock-based compensation expense | 865 | 488 | 2,578 | 2,000 | ||||
Non-GAAP gross profit | $ 60,677 | $ 73,743 | $ 234,458 | $ 291,551 | ||||
Non-GAAP gross margin | 68.1 % | 63.9 % | 64.1 % | 62.9 % | ||||
GAAP Taegis Subscription Solutions gross profit | $ 48,768 | $ 40,604 | $ 184,561 | $ 123,967 | ||||
Amortization of intangibles | 1,320 | 973 | 4,724 | 3,492 | ||||
Stock-based compensation expense | 274 | 89 | 835 | 277 | ||||
Non-GAAP Taegis Subscription Solutions gross profit | $ 50,362 | $ 41,666 | $ 190,120 | $ 127,736 | ||||
Non-GAAP Taegis Subscription Solutions gross margin | 73.1 % | 69.2 % | 71.7 % | 67.9 % | ||||
GAAP research and development expenses | $ 25,230 | $ 37,553 | $ 110,996 | $ 139,785 | ||||
Stock-based compensation expense | (3,548) | (3,129) | (12,625) | (11,589) | ||||
Non-GAAP research and development expenses | $ 21,682 | $ 34,424 | $ 98,371 | $ 128,196 | ||||
Non-GAAP research and development expenses as a % of revenue | 24.3 % | 29.8 % | 26.9 % | 27.7 % | ||||
GAAP sales and marketing expenses | $ 25,509 | $ 42,072 | $ 118,351 | $ 163,637 | ||||
Stock-based compensation expense | (1,392) | (1,672) | (4,166) | (6,568) | ||||
Non-GAAP sales and marketing expenses | $ 24,117 | $ 40,400 | $ 114,185 | $ 157,069 | ||||
Non-GAAP sales and marketing expenses as a % of revenue | 27.1 % | 35.0 % | 31.2 % | 33.9 % | ||||
GAAP general and administrative expenses | $ 20,039 | $ 27,195 | $ 83,233 | $ 101,554 | ||||
Amortization of intangibles | (3,523) | (3,523) | (14,094) | (14,094) | ||||
Stock-based compensation expense | (4,447) | (4,062) | (15,735) | (16,698) | ||||
Non-GAAP general and administrative expenses | $ 12,069 | $ 19,610 | $ 53,404 | $ 70,762 | ||||
Non-GAAP general and administrative expenses as a % of revenue | 13.5 % | 17.0 % | 14.6 % | 15.3 % | ||||
GAAP operating loss | $ (15,199) | $ (53,418) | $ (111,966) | $ (148,029) | ||||
Amortization of intangibles | 4,844 | 7,906 | 28,216 | 31,228 | ||||
Stock-based compensation expense | 10,252 | 9,351 | 35,104 | 36,855 | ||||
Reorganization and other related charges | 2,913 | 15,471 | 17,145 | 15,471 | ||||
Non-GAAP operating (loss)/income | $ 2,810 | $ (20,690) | $ (31,501) | $ (64,475) | ||||
Non-GAAP operating margin | 3.2 % | (17.9) % | (8.6) % | (13.9) % | ||||
GAAP net loss | $ (8,292) | $ (40,036) | $ (86,042) | $ (114,499) | ||||
Amortization of intangibles | 4,844 | 7,906 | 28,216 | 31,228 | ||||
Stock-based compensation expense | 10,252 | 9,351 | 35,104 | 36,855 | ||||
Reorganization and other related charges | 2,913 | 15,471 | 17,145 | 15,471 | ||||
Aggregate adjustment for income taxes | (3,073) | (6,967) | (13,542) | (15,941) | ||||
Non-GAAP net (loss)/income | $ 6,644 | $ (14,275) | $ (19,119) | $ (46,886) | ||||
Non-GAAP net (loss)/income as a % of revenue | 7.5 % | (12.4) % | (5.2) % | (10.1) % | ||||
GAAP net loss per share | $ (0.10) | $ (0.47) | $ (1.00) | $ (1.36) | ||||
Amortization of intangibles | 0.06 | 0.09 | 0.33 | 0.37 | ||||
Stock-based compensation expense | 0.12 | 0.11 | 0.41 | 0.44 | ||||
Reorganization and other related charges | 0.03 | 0.18 | 0.20 | 0.18 | ||||
Aggregate adjustment for income taxes | (0.04) | (0.08) | (0.16) | (0.19) | ||||
Non-GAAP net (loss)/earnings per share * | $ 0.08 | $ (0.17) | $ (0.22) | $ (0.56) | ||||
* Sum of reconciling items may differ from total due to rounding of individual components | ||||||||
GAAP net loss | $ (8,292) | $ (40,036) | $ (86,042) | $ (114,499) | ||||
Interest and other, net | 856 | (2,475) | 2,554 | (1,248) | ||||
Income tax benefit | (7,763) | (10,907) | (28,478) | (32,282) | ||||
Depreciation and amortization | 5,865 | 8,940 | 31,893 | 36,668 | ||||
Stock-based compensation expense | 10,252 | 9,351 | 35,104 | 36,855 | ||||
Reorganization and other related charges | 2,913 | 15,471 | 17,145 | 15,471 | ||||
Adjusted EBITDA | $ 3,831 | $ (19,656) | $ (27,824) | $ (59,035) | ||||
Adjusted EBITDA as a % of revenue | 4.3 % | (17.0) % | (7.6) % | (12.7) % | ||||
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SOURCE Secureworks, Inc.
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