Secureworks (NASDAQ: SCWX), a leading global cybersecurity company that protects organizations in the digitally connected world, announced financial results for its second quarter ended August 2, 2019.
“The future of security operations requires a more agile, scalable, and effective model to address the challenges of today’s dynamic IT landscape and rapidly evolving threats. The ‘SOC of the future’ demands a leap forward in capabilities made possible through software-driven solutions that leverage the speed and scale of machine learning, crowd-sourced threat intelligence and incident response insights to provide visibility across a customer’s environment, real-time collaboration with experts and smarter automation,” said Michael R. Cote, Chief Executive Officer of Secureworks.
“Our business is undergoing an exciting strategic transition as we bring our vision of the ‘SOC of the future’ to life. Our recently launched SaaS based Red Cloak TDR software application and our MDR solution leverage our security operations expertise and 20 year history of understanding the threat. I am encouraged by the positive response in the marketplace and pleased with the improved results this quarter, as we continue to invest in the advancement of our portfolio of software-driven security solutions to drive growth and long-term value,” continued Mr. Cote.
Business and operational developments include:
The Company recently launched Managed Detection and Response (MDR), powered by Red Cloak™, using its cloud-based security analytics platform to deliver threat detection and response with unprecedented speed and accuracy. The actionable insights generated by Red Cloak Threat Detection and Response (TDR), Secureworks’ SaaS product, are now available to organizations that want software-enabled threat hunting, detection and response capabilities, but prefer the turnkey support of an experienced provider.
Second Quarter Fiscal 2020 Financial Results Highlights
Both GAAP and non-GAAP revenue increased 6.1 percent to $136.6 million from $128.8 million in the second quarter of fiscal 2019.
GAAP gross margin was 53.4 percent in the second quarter of fiscal 2020, compared with 51.4 percent in the same period last year. Non-GAAP gross margin was 56.3 percent compared with 54.3 percent in the second quarter of fiscal 2019.
GAAP net loss was $10.3 million, or $0.13 per share, in the second quarter of fiscal 2020, compared with $9.8 million, or $0.12 per share, in the prior year. Non-GAAP net loss was $0.7 million, or $0.01 per share, in the second quarter of fiscal 2020, compared with $0.9 million, or $0.01 per share, in the same prior year period.
Adjusted EBITDA was $1.3 million, compared with $1.0 million in the second quarter of fiscal 2019.
Cash provided by operating activities for the three months ended August 2, 2019 was $16.3 million.
Secureworks ended the second quarter of fiscal 2020 with $117.7 million in cash and cash equivalents.
Monthly recurring revenue as of August 2, 2019 was $36.5 million. The Company’s monthly recurring revenue metric represents the monthly value of its subscription contracts, including operational backlog, as of period end.
Third Quarter and Full Fiscal Year 2020 Guidance
For the third quarter of fiscal 2020, the Company expects:
Revenue of $135 to $137 million on both a GAAP and non-GAAP basis.
GAAP net loss per share of $0.15 to $0.16 and non-GAAP net loss per share of $0.03 to $0.04.
Based on second quarter fiscal 2020 performance and current business trends, the Company has updated its guidance for the full fiscal year 2020. The Company now expects:
GAAP and non-GAAP revenue of $540 to $545 million.
GAAP net loss of $42 to $44 million and $0.52 to $0.55 on a per share basis.
Non-GAAP net loss per share of $0.08 to $0.11.
Adjusted EBITDA of $2 to $5 million.
Cash flow from operations of $30 to $35 million.