Secureworks Announces Second Quarter Fiscal 2025 Results
Secureworks (NASDAQ: SCWX) reported its Q2 fiscal 2025 results, highlighting 7% year-over-year growth in Taegis revenue to $71.2 million. Total ARR increased by 5% to $290 million. The company saw improvements in Taegis GAAP and non-GAAP gross margins, reaching 71.8% and 74.3% respectively. Despite a GAAP net loss of $14.7 million, Secureworks achieved a positive adjusted EBITDA of $1.0 million, marking a significant improvement from the previous year. The company introduced new solutions, including Taegis IDR for identity threat detection and Taegis ManagedXDR Plus. Secureworks updated its fiscal 2025 guidance, projecting total revenue between $328M to $335M and adjusted EBITDA of $6M to $12M.
Secureworks (NASDAQ: SCWX) ha riportato i risultati del secondo trimestre fiscale 2025, evidenziando una Crescita del 7% rispetto all'anno precedente nel fatturato di Taegis, che ha raggiunto 71,2 milioni di dollari. L'ARR totale è aumentato del 5% a 290 milioni di dollari. L'azienda ha registrato miglioramenti nei margini lordi GAAP e non-GAAP di Taegis, raggiungendo rispettivamente 71,8% e 74,3%. Nonostante una perdita netta GAAP di 14,7 milioni di dollari, Secureworks ha ottenuto un EBITDA rettificato positivo di 1,0 milione di dollari, segnando un miglioramento significativo rispetto all'anno precedente. L'azienda ha introdotto nuove soluzioni, inclusi Taegis IDR per la rilevazione delle minacce all'identità e Taegis ManagedXDR Plus. Secureworks ha aggiornato le previsioni fiscali per il 2025, prevedendo un fatturato totale compreso tra 328 milioni e 335 milioni di dollari e un EBITDA rettificato di 6 milioni a 12 milioni di dollari.
Secureworks (NASDAQ: SCWX) reportó sus resultados del segundo trimestre fiscal 2025, destacando un crecimiento del 7% interanual en ingresos de Taegis, alcanzando 71,2 millones de dólares. El ARR total aumentó un 5% hasta 290 millones de dólares. La empresa observó mejoras en los márgenes brutos GAAP y no-GAAP de Taegis, alcanzando 71,8% y 74,3% respectivamente. A pesar de una pérdida neta GAAP de 14,7 millones de dólares, Secureworks logró un EBITDA ajustado positivo de 1,0 millón de dólares, marcando una mejora significativa respecto al año anterior. La empresa introdujo nuevas soluciones, incluyendo Taegis IDR para la detección de amenazas de identidad y Taegis ManagedXDR Plus. Secureworks actualizó su guía fiscal 2025, proyectando ingresos totales entre 328 millones y 335 millones de dólares y un EBITDA ajustado de 6 millones a 12 millones de dólares.
Secureworks (NASDAQ: SCWX)는 2025 회계연도 2분기 실적을 발표하며 Taegis 매출이 전년 대비 7% 성장하여 7120만 달러에 달했다고 밝혔습니다. 총 ARR은 5% 증가하여 2억 9000만 달러에 이르렀습니다. 회사는 Taegis GAAP 및 비GAAP 총 마진에서 개선을 이루어 각각 71.8% 및 74.3%에 도달했습니다. GAAP 순손실 1470만 달러에도 불구하고, Secureworks는 조정된 EBITDA 100만 달러를 기록하여 전년 대비 큰 개선을 이루었습니다. 회사는 신원을 위협 탐지하기 위한 Taegis IDR 및 Taegis ManagedXDR Plus를 포함한 새로운 솔루션을 도입했습니다. Secureworks는 2025 회계 연도 안내를 업데이트하여 총 수익을 3억 2800만 달러에서 3억 3500만 달러 사이로 예상하고, 조정된 EBITDA는 600만 달러에서 1200만 달러로 전망했습니다.
Secureworks (NASDAQ: SCWX) a publié ses résultats du deuxième trimestre de l'année fiscale 2025, mettant en évidence une croissance de 7% par rapport à l'année précédente dans les revenus de Taegis, atteignant 71,2 millions de dollars. Le chiffre d'affaires récurrent annuel total a augmenté de 5% pour atteindre 290 millions de dollars. L'entreprise a constaté des améliorations des marges brutes GAAP et non-GAAP de Taegis, atteignant respectivement 71,8% et 74,3%. Malgré une perte nette GAAP de 14,7 millions de dollars, Secureworks a réalisé un EBITDA ajusté positif de 1,0 million de dollars, marquant une amélioration significative par rapport à l'année précédente. L'entreprise a introduit de nouvelles solutions, dont Taegis IDR pour la détection de menaces identitaires et Taegis ManagedXDR Plus. Secureworks a mis à jour ses prévisions pour l'année fiscale 2025, projetant un chiffre d'affaires total compris entre 328 millions et 335 millions de dollars et un EBITDA ajusté de 6 millions à 12 millions de dollars.
Secureworks (NASDAQ: SCWX) hat seine Ergebnisse für das zweite Quartal des Geschäftsjahres 2025 veröffentlicht und ein Wachstum von 7% im Vergleich zum Vorjahr im Taegis-Umsatz auf 71,2 Millionen US-Dollar hervorgehoben. Der gesamte ARR stieg um 5% auf 290 Millionen US-Dollar. Das Unternehmen verzeichnete Verbesserungen der GAAP- und non-GAAP-Bruttomargen von Taegis, die jeweils 71,8% und 74,3% erreichten. Trotz eines GAAP-Nettoverlusts von 14,7 Millionen US-Dollar erreichte Secureworks ein positives bereinigtes EBITDA von 1,0 Millionen US-Dollar, was eine signifikante Verbesserung im Vergleich zum Vorjahr darstellt. Das Unternehmen führte neue Lösungen ein, darunter Taegis IDR zur Erkennung von Identitätsbedrohungen und Taegis ManagedXDR Plus. Secureworks aktualisierte seine Prognose für das Geschäftsjahr 2025 und rechnet mit einem Gesamtumsatz zwischen 328 Millionen und 335 Millionen US-Dollar sowie einem bereinigten EBITDA von 6 Millionen bis 12 Millionen US-Dollar.
- Taegis revenue grew 7% year-over-year to $71.2 million
- Total ARR increased 5% year-over-year to $290 million
- Taegis GAAP gross margin improved to 71.8% from 68.8% last year
- Taegis non-GAAP gross margin increased to 74.3% from 70.7% last year
- Adjusted EBITDA turned positive at $1.0 million, compared to a loss of $10.3 million last year
- Launched new products: Taegis IDR and Taegis ManagedXDR Plus
- Updated FY2025 guidance projects total revenue of $328M to $335M
- Total revenue decreased to $82.2 million from $93.0 million in Q2 FY2024
- GAAP net loss of $14.7 million, or $0.17 per share
- Non-GAAP net loss of $0.4 million, or $0.00 per share
- Cash and cash equivalents decreased to $47.6 million
Insights
Secureworks' Q2 FY2025 results paint a mixed picture. The company's focus on its Taegis platform is showing progress, with
The bright spot is Taegis' gross margin expansion, reaching
While Secureworks narrowed its GAAP net loss, the non-GAAP net loss of $0.4 million indicates the company is still struggling to achieve consistent profitability. The updated guidance for FY2025, projecting non-GAAP net income of
Secureworks' introduction of Taegis IDR and ManagedXDR Plus demonstrates a strategic focus on AI-driven solutions and premium services. These offerings address critical market needs in identity threat detection and regulatory compliance, potentially strengthening Secureworks' competitive position.
The expansion of the Global MSSP Partner Program with Coretelligent is a positive move, as it could broaden Secureworks' market reach. However, the modest
Industry recognitions, such as the Golden Bridge Award for AI in Cybersecurity Innovation, validate Secureworks' technological capabilities. Yet, the company must translate these accolades into accelerated revenue growth and market share gains to truly capitalize on its innovations in the competitive cybersecurity landscape.
Key Highlights
- Taegis™ second quarter revenue grew
7% year-over-year to$71.2 million - Total annual recurring revenue (ARR) grew to
$290 million , an increase of5% on a year-over-year basis. - Taegis GAAP gross margin and non-GAAP gross margin continued to expand year-over-year in the second quarter, reaching
71.8% and74.3% , respectively.
"In a world where we rely on technology, comprehensive cyber resilience is more top of mind than ever, and our open, AI-powered platform has proven itself to be the shield that keeps companies safely up and running. This quarter we continued to innovate and invest in the extensibility of Taegis, with the launch of Taegis Identity Threat Detection and Response enabling organizations to proactively combat identity threats," said Wendy Thomas, CEO, Secureworks. "The acceleration of security value to our customers through new solutions remains a cornerstone of our growth strategy."
"Our second quarter results demonstrate the sustainability of our Taegis gross margin expansion, reflecting further efficiencies gained from our ongoing use of automation, AI, and scalable cloud architecture, giving us confidence in our continued positive adjusted EBITDA trajectory," said Alpana Wegner, Chief Financial Officer, Secureworks. "We're pleased with the traction with our channel partners and the extension of our core capabilities into adjacent security coverage."
Second Quarter Fiscal 2025 Financial Highlights
- Taegis revenue for the second quarter was
$71 $66 - Total revenue for the second quarter was
$82 $93 - GAAP gross profit specific to Taegis was
$51 $45 $52 $47 - GAAP gross profit was
$54 $52 $56 $58 - GAAP Taegis gross margin was
71.8% for the quarter, compared with68.8% in the same period last year. Non-GAAP Taegis gross margin was74.3% , compared with70.7% in the second quarter of fiscal 2024. - GAAP gross margin for the second quarter was
66.6% , compared with56.9% in the same period last year. Non-GAAP gross margin was69.2% , compared with62.4% in the second quarter of fiscal 2024. - GAAP net loss was
$14 $0.17 $32 $0.38 - Non-GAAP net loss was
$0 $0.00 $8 $0.10 - Adjusted EBITDA for the quarter was
$1 $10 1.2% . - The company ended the second quarter with
$47
Business and Operational Highlights
- Introduced new Identity Threat Detection and Response (ITDR) solution, Taegis IDR, specifically designed to proactively close security gaps by leveraging advanced AI and machine learning to automatically detect, prioritize and respond to identity-based threats across an organization's environment and the dark web.
- Launched Taegis ManagedXDR Plus to provide a more premium, personalized experience, enabling companies to increase vigilance, improve cyber resiliency, and leverage strategic guidance to comply with rapidly expanding regulatory requirements.
- Expanded our Global MSSP Partner Program with the addition of Coretelligent, a premier provider of IT and technology solutions, providing Managed Detection and Response (MDR) services powered by our Taegis XDR platform.
- Won Gold in the 16th Annual 2024 Golden Bridge Awards® in the category of AI in Cybersecurity Innovation.
- Recognized as Best Network Security Solution in the 2024 Tech Ascension Awards.
- Named a Finalist in CRN's 2024 Tech Innovator Awards for MDR.
Financial Outlook
For the third quarter of fiscal 2025, the Company expects:
- Revenue of
$80 million $82 million - Adjusted EBITDA of
$0 $2 million - Non-GAAP net earnings per share of (
$0.01 $0.01
Secureworks is providing the following updated 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 | ( |
Guidance for non-GAAP financial measures excludes amortization of intangibles, stock-based compensation expense, reorganization and other related charges, and the effects of non-GAAP income tax expense (benefit). 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 effort.
Conference Call Information
As previously announced, the Company will hold a conference call to discuss its second quarter fiscal 2025 results and financial guidance on September 5, 2024, at 8:00 a.m., Eastern time. A live audio webcast of the conference call and the related supplemental financial information will be accessible on the Company's website at https://investors.secureworks.com. The webcast and supplemental information will be archived at the same location.
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 thousands of 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.
Operating Metrics
We believe that annual recurring revenue (ARR) is a key operating metric that is useful to measure our business because it is driven by our ability to acquire new subscriptions and expand relationships with existing customers. The Company defines 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.
Explanation of Non-GAAP Financial Measures
In addition to determining results in accordance with
The Company believes that these non-GAAP financial measures provide useful information about our financial performance by enhancing the overall understanding of our past performance and future outlook, while allowing for increased transparency with respect to important metrics used by management for financial and operational decision-making. Investors are encouraged to review the related GAAP financial measures and the reconciliation of each of these non-GAAP financial measures to each of their most directly comparable GAAP financial measures, while not relying on any single financial measure to evaluate the Company's business.
Reconciliations of non-GAAP financial measures to the most directly comparable GAAP financial measures are included in the financial tables accompanying this press release for each of the fiscal periods presented. As presented in the "Reconciliation of GAAP to Non-GAAP Financial Measures" table below, each of the non-GAAP financial measures excludes one or more of the following items:
"Amortization of Intangible Assets" consists of amortization associated with software development costs capitalized and acquired customer relationships and technology. In connection with the acquisition of Dell by Dell Technologies in fiscal 2014 and our acquisition of Delve Laboratories Inc. in fiscal 2021, our tangible and intangible assets and liabilities associated with customer relationships and technology were accounted for and recognized at fair value on the related transaction date.
"Stock-based Compensation Expense" means non-cash, stock-based compensation expense related to the Company's equity plan. We exclude such expenses when assessing the effectiveness of our operating performance since stock-based compensation does not necessarily correlate with the underlying operating performance of the business.
"Reorganization and Other Related Charges" means expenses associated with the Company's plan to align its investments more closely with its strategic priorities, as described in further detail in the Company's Form 10-K for fiscal year ended February 2, 2024 as well as in other filings made with the
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. 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: achieving or maintaining profitability; enhancing our existing solutions and technologies and developing or acquiring new solutions and technologies; navigating economic conditions, geopolitical uncertainty and financial market volatility; relying on personnel with extensive information security expertise; successfully implementing our strategic plan to realign and optimize its investments with its priorities; intense competition in the Company's markets; attracting new customers, retaining existing customers and increasing annual contract values; relying on customers in the financial services industry; managing our growth effectively; maintaining high-quality client service and support functions; the terms of our service level agreements with customers that require credits for service failures or inadequacies; recognizing revenue ratably over the terms of our Taegis security solutions and managed security services contracts; long and unpredictable sales cycles; the 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; our exposure to fluctuations in currency exchange rates or inflation; the effect of new governmental export or import controls on our business or any international sanctions compliance program applicable to us; expanding our key distribution relationships and technology alliance partnerships; real or perceived defects, errors or vulnerabilities in our solutions or the failure of our 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 our solutions to interoperate with our customers' IT infrastructure; our ability to use third-party technologies; the impact of evolving information security, cybersecurity and data privacy laws and regulations on our business; maintaining and enhancing our brand; the risks associated with our acquisition of other businesses; the effect of natural disasters, public health issues, geopolitical conflict and other catastrophic events on our ability to serve 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.
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, non-GAAP net earnings per share, and adjusted EBITDA for the third quarter of fiscal 2025, and total annual recurring revenue ("ARR"), total revenue, non-GAAP net income, non-GAAP net earnings per share, adjusted EBITDA, and cash from operations for full year fiscal 2025, all of which reflect the Company's current analysis of existing trends and information.
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. These forward-looking statements represent the Company's judgment only as of the date of this press release. 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.
(Tables follow)
SECUREWORKS CORP. | |||||||
Condensed Consolidated Statements of Operations and Related Financial Highlights | |||||||
(in thousands, except per share data and percentages) | |||||||
(unaudited) | |||||||
Three Months Ended | Six Months Ended | ||||||
August 2, | August 4, | August 2, | August 4, | ||||
Revenue: | |||||||
Subscription | $ 71,292 | $ 76,825 | $ 143,513 | $ 154,084 | |||
Professional services | 10,890 | 16,141 | 24,321 | 33,277 | |||
Total revenue | 82,182 | 92,966 | 167,834 | 187,361 | |||
Cost of revenue: | |||||||
Subscription | 21,066 | 30,084 | 41,882 | 61,103 | |||
Professional services | 6,379 | 9,973 | 13,439 | 21,740 | |||
Total cost of revenue | 27,445 | 40,057 | 55,321 | 82,843 | |||
Gross profit | 54,737 | 52,909 | 112,513 | 104,518 | |||
Operating expenses: | |||||||
Research and development | 22,804 | 28,236 | 47,352 | 59,408 | |||
Sales and marketing | 24,512 | 31,237 | 48,413 | 65,763 | |||
General and administrative | 20,552 | 20,366 | 39,070 | 42,629 | |||
Reorganization and other related charges | — | 14,232 | 1,476 | 14,232 | |||
Total operating expenses | 67,868 | 94,071 | 136,311 | 182,032 | |||
Operating loss | (13,131) | (41,162) | (23,798) | (77,514) | |||
Interest and other (expense) income, net | (874) | (636) | (78) | (2,382) | |||
Loss before income taxes | (14,005) | (41,798) | (23,876) | (79,896) | |||
Income tax expense (benefit) | 724 | (9,439) | 26,929 | (16,567) | |||
Net loss | $ (14,729) | $ (32,359) | $ (50,805) | $ (63,329) | |||
Loss per common share (basic and diluted) | $ (0.17) | $ (0.38) | $ (0.58) | $ (0.74) | |||
Weighted-average common shares outstanding (basic and diluted) | 88,540 | 86,121 | 88,026 | 85,776 | |||
SECUREWORKS CORP. | |||||||
Condensed Consolidated Statements of Financial Position | |||||||
(in thousands) | |||||||
(unaudited) | |||||||
August 2, | February 2, | ||||||
Assets: | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ 47,628 | $ 68,655 | |||||
Accounts receivable, net | 50,695 | 54,266 | |||||
Other current assets | 16,603 | 15,218 | |||||
Total current assets | 114,926 | 138,139 | |||||
Property and equipment, net | 1,629 | 2,149 | |||||
Operating lease right-of-use assets, net | 4,069 | 5,069 | |||||
Goodwill | 425,156 | 425,472 | |||||
Intangible assets, net | 76,304 | 83,235 | |||||
Other non-current assets | 43,399 | 70,715 | |||||
Total assets | $ 665,483 | $ 724,779 | |||||
Liabilities and Stockholders' Equity: | |||||||
Current liabilities: | |||||||
Accounts payable | $ 8,697 | $ 8,974 | |||||
Accrued and other current liabilities | 47,894 | 61,895 | |||||
Short-term deferred revenue | 125,103 | 131,245 | |||||
Total current liabilities | 181,694 | 202,114 | |||||
Long-term deferred revenue | 8,164 | 5,706 | |||||
Operating lease liabilities, non-current | 5,830 | 7,803 | |||||
Other non-current liabilities | 9,402 | 7,831 | |||||
Total liabilities | 205,090 | 223,454 | |||||
Total stockholders' equity | 460,393 | 501,325 | |||||
Total liabilities and stockholders' equity | $ 665,483 | $ 724,779 | |||||
SECUREWORKS CORP. | ||||
Condensed Consolidated Statements of Cash Flows | ||||
(in thousands) | ||||
(unaudited) | ||||
Six Months Ended | ||||
August 2, 2024 | August 4, 2023 | |||
Cash flows from operating activities: | ||||
Net loss | $ (50,805) | $ (63,329) | ||
Adjustments to reconcile net loss to net cash used in operating activities: | ||||
Depreciation and amortization | 11,414 | 17,961 | ||
Amortization of right of use asset | 835 | 1,303 | ||
Reorganization and other related charges | — | 3,272 | ||
Amortization of costs capitalized to obtain revenue contracts | 7,559 | 8,820 | ||
Amortization of costs capitalized to fulfill revenue contracts | — | 1,805 | ||
Stock-based compensation expense | 17,541 | 14,890 | ||
Impact of income tax provision | 24,980 | (16,567) | ||
Provision for credit losses | 313 | (132) | ||
Changes in assets and liabilities: | ||||
Accounts receivable | 3,160 | 15,802 | ||
Net transactions with Dell | (2,418) | 1,942 | ||
Other assets | (5,033) | (5,627) | ||
Accounts payable | (242) | (7,921) | ||
Deferred revenue | (3,456) | (12,154) | ||
Operating leases, net | (2,418) | (2,254) | ||
Accrued and other liabilities | (10,238) | (25,201) | ||
Net cash used in operating activities | (8,808) | (67,390) | ||
Cash flows from investing activities: | ||||
Capital expenditures | (1,024) | (524) | ||
Software development costs | (2,970) | (2,416) | ||
Net cash used in investing activities | (3,994) | (2,940) | ||
Cash flows from financing activities: | ||||
Taxes paid on vested restricted shares | (7,010) | (5,711) | ||
Net cash used in financing activities | (7,010) | (5,711) | ||
Effect of exchange rate changes on cash and cash equivalents | (1,215) | (2,577) | ||
Net decrease in cash and cash equivalents | (21,027) | (78,618) | ||
Cash and cash equivalents at beginning of the period | 68,655 | 143,517 | ||
Cash and cash equivalents at end of the period | $ 47,628 | $ 64,899 | ||
Non-GAAP Financial Measures
In addition to determining results in accordance with GAAP, this press release presents information about the Company's non-GAAP gross profit, non-GAAP Taegis Subscription Solutions gross profit, non-GAAP Managed Security Services gross profit, non-GAAP operating income (loss), non-GAAP operating margin, non-GAAP net income (loss), non-GAAP net income (loss) before income taxes, non-GAAP earnings (loss) per share before income taxes, non-GAAP income tax expense (benefit), non-GAAP net earnings (loss) per share, , non-GAAP gross margin, non-GAAP Taegis Subscription Solutions gross margin, Managed Security Services gross margin, weighted-average shares used in computing non-GAAP earnings (loss) per share, diluted, and adjusted EBITDA, which are non-GAAP financial measures provided as a supplement to the GAAP results . 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 reasons for excluding these 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 information presented in these reports in conjunction with, and as a supplement to, the presentation of GAAP financial measures.
(Tables Follow)
SECUREWORKS CORP. | |||||||
Reconciliation of GAAP to Non-GAAP Financial Measures | |||||||
(in thousands, except per share data) | |||||||
(unaudited) | |||||||
Three Months Ended | Six Months Ended | ||||||
August 2, | August 4, | August 2, | August 4, | ||||
Revenue: | |||||||
Taegis Subscription Solutions | $ 71,199 | $ 66,426 | $ 140,274 | $ 129,022 | |||
Managed Security Services | 93 | 10,399 | 3,239 | 25,062 | |||
Total Subscription revenue | 71,292 | 76,825 | 143,513 | 154,084 | |||
Professional services | 10,890 | 16,141 | 24,321 | 33,277 | |||
Total revenue | $ 82,182 | $ 92,966 | $ 167,834 | $ 187,361 | |||
GAAP gross profit | $ 54,737 | $ 52,909 | $ 112,513 | $ 104,518 | |||
Amortization of intangibles | 1,433 | 4,537 | 2,853 | 9,017 | |||
Stock-based compensation expense | 683 | 531 | 1,370 | 1,002 | |||
Non-GAAP gross profit | $ 56,853 | $ 57,977 | $ 116,736 | $ 114,537 | |||
Non-GAAP gross margin | 69.2 % | 62.4 % | 69.6 % | 61.1 % | |||
GAAP Taegis Subscription Solutions gross profit | $ 51,150 | $ 45,686 | $ 100,794 | $ 88,374 | |||
Amortization of intangibles | 1,433 | 1,127 | 2,853 | 2,196 | |||
Stock-based compensation expense | 351 | 169 | 617 | 248 | |||
Non-GAAP Taegis Subscription Solutions gross profit | $ 52,934 | $ 46,982 | $ 104,264 | $ 90,818 | |||
Non-GAAP Taegis Subscription Solutions gross margin | 74.3 % | 70.7 % | 74.3 % | 70.4 % | |||
GAAP Managed Security Services gross profit | $ (924) | $ 1,055 | $ 837 | $ 4,607 | |||
Amortization of intangibles | — | 3,410 | — | 6,821 | |||
Stock-based compensation expense | — | 40 | 48 | 107 | |||
Non-GAAP Managed Security Services gross profit | $ (924) | $ 4,505 | $ 885 | $ 11,535 | |||
Non-GAAP Managed Security Services gross margin | (993.5) % | 43.3 % | 27.3 % | 46.0 % | |||
GAAP operating loss | $ (13,131) | $ (41,162) | $ (23,798) | $ (77,514) | |||
Amortization of intangibles1 | 4,957 | 8,060 | 9,900 | 16,064 | |||
Stock-based compensation expense2 | 8,572 | 7,620 | 17,541 | 14,890 | |||
Reorganization and other related charges | — | 14,232 | 1,476 | 14,232 | |||
Non-GAAP operating income (loss) | $ 398 | $ (11,250) | $ 5,119 | $ (32,328) | |||
Non-GAAP operating margin | 0.5 % | (12.1) % | 3.1 % | (17.3) % | |||
GAAP net loss | $ (14,729) | $ (32,359) | $ (50,805) | $ (63,329) | |||
Income tax expense (benefit) | 724 | (9,439) | 26,929 | (16,567) | |||
Amortization of intangibles1 | 4,957 | 8,060 | 9,900 | 16,064 | |||
Stock-based compensation expense2 | 8,572 | 7,620 | 17,541 | 14,890 | |||
Reorganization and other related charges | — | 14,232 | 1,476 | 14,232 | |||
Non-GAAP net income (loss) before income taxes | (476) | (11,886) | 5,041 | (34,710) | |||
Non-GAAP income tax expense (benefit)3 | (111) | (3,266) | 1,185 | (8,954) | |||
Non-GAAP net income (loss) | $ (365) | $ (8,620) | $ 3,856 | $ (25,756) | |||
Non-GAAP net income (loss) as a % of revenue | (0.4) % | (9.3) % | 2.3 % | (13.7) % | |||
GAAP loss per share | $ (0.17) | $ (0.38) | $ (0.58) | $ (0.74) | |||
Income tax expense (benefit) | 0.01 | (0.11) | 0.31 | (0.19) | |||
Amortization of intangibles | 0.06 | 0.10 | 0.11 | 0.19 | |||
Stock-based compensation expense | 0.10 | 0.08 | 0.20 | 0.17 | |||
Reorganization and other related charges | — | 0.17 | 0.02 | 0.17 | |||
Non-GAAP earnings (loss) per share before income taxes | 0.00 | (0.13) | 0.06 | (0.40) | |||
Non-GAAP income tax expense (benefit) | 0.00 | (0.03) | 0.01 | (0.10) | |||
Non-GAAP earnings (loss) per share* | $ 0.00 | $ (0.10) | $ 0.04 | $ (0.30) | |||
Weighted-average shares used in computing non-GAAP earnings (loss) per share, diluted | 88,540 | 86,121 | 90,028 | 85,776 | |||
* Sum of reconciling items may differ from total due to rounding of individual components | |||||||
GAAP net loss | $ (14,729) | $ (32,359) | $ (50,805) | $ (63,329) | |||
Interest and other, net | 874 | 636 | 78 | 2,382 | |||
Income tax expense (benefit) | 724 | (9,439) | 26,929 | (16,567) | |||
Depreciation and amortization | 5,547 | 8,981 | 11,414 | 17,961 | |||
Stock-based compensation expense2 | 8,572 | 7,620 | 17,541 | 14,890 | |||
Reorganization and other related charges | — | 14,232 | 1,476 | 14,232 | |||
Adjusted EBITDA | $ 988 | $ (10,329) | $ 6,633 | $ (30,431) | |||
Adjusted EBITDA as a % of revenue | 1.2 % | (11.1) % | 4.0 % | (16.2) % | |||
1 Includes amortization of intangibles as follows: | |||||||
Cost of revenue | $ 1,433 | $ 4,537 | $ 2,853 | $ 9,017 | |||
General and administrative | 3,524 | 3,523 | 7,047 | 7,047 | |||
2 Includes stock-based compensation expense as follows: | |||||||
Cost of revenue | $ 683 | $ 531 | $ 1,370 | $ 1,002 | |||
Research and development | 2,769 | 2,681 | 6,148 | 5,283 | |||
Sales and marketing | 1,476 | 1,097 | 2,662 | 1,938 | |||
General and administrative | 3,644 | 3,311 | 7,361 | 6,667 | |||
3 In periods in which the Company has non-GAAP income before tax, the non-GAAP income tax expense is based on the Company's estimated blended tax rate. In periods the Company has non-GAAP loss before tax, the non-GAAP income tax benefit is based on GAAP tax benefit. | |||||||
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SOURCE Secureworks, Inc.
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