Second Quarter Fiscal 2019 Highlights
- Revenue grew 10.8 percent over fiscal
2018 to $128.8 million, including 50 percent growth year-over-year
internationally.
- Monthly recurring revenue increased 12
percent year-over-year to $36.2 million.
- Net loss of $0.12 per share and
non-GAAP net loss per share of $0.01 were better than expectations
and Adjusted EBITDA was $1.0 million.
- Cash flow provided by operating
activities was $29.3 million.
Secureworks (NASDAQ: SCWX), a leading global cybersecurity
company that protects organizations in the digitally connected
world, today announced financial results for its second quarter
ended August 3, 2018.
“The global demand for cybersecurity solutions has never been
greater and as a recognized industry leader, we continue to bring
technology-led solutions that leverage our unique threat
intelligence to provide measureable outcomes to help protect our
clients,” said Michael R. Cote, Chief Executive Officer of
Secureworks.
“We had a strong second quarter, finishing with MRR growth of
12% and improving operating leverage, as we continue to gain sales
momentum. I am pleased with our progress and remain excited about
the significant opportunity for further growth and productivity
gains as we continue to execute against our objectives,” continued
Mr. Cote.
Business and operational developments for the second quarter of
fiscal 2019 include:
- Total value of closed deals in the
second quarter increased 37 percent year over year and the total
value of closed deals greater than $1 million increased 30 percent
over the second quarter of fiscal 2018.
- The Company was recently recognized by
the respected industry analyst firm Forrester.
- The Forrester Wave™: Global Managed
Security Services (MSSPs), Q3 20181 report recognized Secureworks
as a leader, based on a comprehensive set of evaluation criteria,
including current offerings, strategy and market presence.
- Forrester’s Now Tech: Managed Detection
and Response (MDR) Services, Q2 20182 report recognized Secureworks
as one of only two large providers with full forensics
capabilities.
- International revenue increased 50
percent year over year, including 53 percent in Japan. The Company
was recently recognized as a leader in the IDC MarketScape:
Asia/Pacific Threat Lifecycle Services 2018 Vendor
Assessment3.
- The Company recently launched its Red
CloakTM Partner Program, working with industry leading solution
providers, making the Company’s proprietary brand of behavioral
analytics and high-fidelity visibility more broadly available in
the marketplace. This collaboration will generate the necessary
level of telemetry to apply Red Cloak analytics effectively,
regardless of which endpoint detection and response solution exists
within the client environment.
____________________1 The Forrester Wave™: Global Managed
Security Services Providers (MSSPs), Q3 2018, Forrester Research,
Inc., August 20, 20182 Now Tech: Managed Detection And Response
(MDR) Services, Q2 2018, Forrester Research, Inc., April 26, 20183
IDC MarketScape: Asia/Pacific Threat Lifecycle Services 2018 Vendor
Assessment, July 2018, IDC #AP43699718
Second Quarter Fiscal 2019 Financial Results
Highlights
- GAAP revenue increased 10.8 percent to
$128.8 million in the second quarter of fiscal 2019, from
$116.2 million in the same period last year. Non-GAAP revenue
increased 10.6 percent to $128.8 million from $116.4 million
in the second quarter of fiscal 2018.
- GAAP gross margin was 51.4 percent in
the second quarter of 2019, compared with 51.9 percent in the same
period last year. Non-GAAP gross margin was 54.3 percent compared
with 55.1 percent in the second quarter of fiscal 2018.
- GAAP net loss was $9.8 million, or
$0.12 per share, in the second quarter of fiscal 2019, compared
with a GAAP net loss of $10.3 million, or $0.13 per share, in the
prior year. Non-GAAP net loss was $0.9 million, or $0.01 per share,
in the second quarter of fiscal 2019, compared with a non-GAAP net
loss of $3.5 million, or $0.04 per share, in the same prior
year period.
- Adjusted EBITDA was $1.0 million,
compared with an adjusted EBITDA loss of $1.8 million in the second
quarter of fiscal 2018.
- Cash provided by operating activities
for the three months ended August 3, 2018 was $29.3 million.
- Secureworks ended the second quarter of
fiscal 2019 with $103.3 million in cash and cash equivalents.
- Monthly recurring revenue as of August
3, 2018 increased 12.0 percent to $36.2 million from
$32.3 million as of August 4, 2017. 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 2019 Guidance
For the third quarter of fiscal 2019, the Company expects:
- Revenue of $130 to $131 million on both
a GAAP and non-GAAP basis.
- GAAP net loss per share of $0.16 to
$0.17 and non-GAAP net loss per share of $0.05 to $0.06, including
approximately $0.02 per share of reorganization costs.
Based on second quarter fiscal 2019 performance and current
business trends, the Company has updated its guidance for the full
fiscal year 2019. The Company now expects:
- GAAP and non-GAAP revenue of $518 to
$520 million.
- GAAP net loss of $48 to $50 million and
$0.59 to $0.61 on a per share basis.
- Non-GAAP net loss per share of $0.15 to
$0.17.
- Adjusted EBITDA loss of $3 to $5
million.
- Monthly recurring revenue of $37.0 to
$39.0 million, at the end of the fourth quarter of fiscal
2019.
- Cash flow from operations of $35 to $40
million.
Conference Call Information
As previously announced, the Company will hold a conference call
to discuss its fiscal 2019 second quarter and outlook for its third
quarter and fiscal year 2019 on September 5, 2018, at 8:00 a.m. ET.
A live audio webcast of the conference call and the supplemental
financial information referred to above will be accessible on the
Company’s website at http://investors.secureworks.com. The webcast and
supplemental information will be archived at the same location for
one year.
Non-GAAP Financial Measures
The press release presents information about the Company’s
non-GAAP revenue, non-GAAP gross margin, non-GAAP research and
development expenses, non-GAAP sales and marketing expenses,
non-GAAP general and administrative expenses, non-GAAP operating
loss, non-GAAP net loss, non-GAAP net loss per share and adjusted
EBITDA, which are non-GAAP financial measures provided as a
supplement to the results provided in accordance with accounting
principles generally accepted in the United States of America
(“GAAP”). A reconciliation of each of the foregoing historical and
forward-looking non-GAAP financial measures to the most directly
comparable historical and forward-looking GAAP financial measure is
provided below for each of the fiscal periods indicated.
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,” “will” 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 concerning its GAAP and non-GAAP revenue and GAAP and
non-GAAP net loss per share for the third quarter of fiscal 2019
and for full year fiscal 2019, net loss and adjusted EBITDA loss
for full year fiscal 2019, capital expenditures and effective tax
rate for full year fiscal 2019, weighted average shares outstanding
during the third quarter of fiscal 2019 and full year fiscal 2019,
monthly recurring revenue at the end of the fourth quarter of
fiscal 2019, and cash flow from operations for full year fiscal
2019, 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,
including those relating to: 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 rapidly evolving market in which
the Company operates; the Company’s reliance on personnel with
extensive information security expertise; fluctuations in the
Company’s quarterly results and other operating measures; intense
competition in the Company’s markets; the Company’s ability to
attract new clients, retain existing clients and increase its
annual contract values; the Company’s reliance on its largest
client and on clients 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; the Company’s service level agreements with clients
requiring credits for service failures or inadequacies; the
Company’s ability to continue expansion of its sales force; the
Company’s long and unpredictable sales cycles; risks associated
with the Company’s international sales and operations; 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
ability of the Company’s solutions to interoperate with its
clients’ IT infrastructure; the Company’s ability to use
third-party technologies; the effect of evolving information
security 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 Company’s recognition of revenue ratably over the
terms of its managed security and threat intelligence contracts;
the effect of timing differences between the expensing of sales
commissions paid to the Company’s strategic and distribution
partners and the recognition of associated revenues; estimates or
judgments relating to the Company’s critical accounting policies;
the Company’s exposure to fluctuations in currency exchange rates;
the effect of governmental export or import controls on the
Company’s business; the Company’s compliance with the Foreign
Corrupt Practices Act and similar laws; the Company’s ability to
maintain effective disclosure controls and procedures; the effect
of natural disasters and other catastrophic events on the Company’s
ability to serve its clients; the Company’s reliance on patents to
protect its intellectual property rights; the Company’s ability to
protect, maintain or enforce its non-patented intellectual property
rights and proprietary information; claims by third parties of
infringement of their proprietary technology by the Company; the
Company’s use of open source technology; and risks related to the
Company’s relationship with Dell Technologies Inc. and Dell Inc.
and control of the Company by Dell Technologies Inc.
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
for the fiscal year ended February 2, 2018, 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 as a result
of circumstances or events that arise after the date the statements
are made, new information or otherwise.
About Secureworks
Secureworks® (NASDAQ: SCWX) is a leading global cybersecurity
company that protects organizations in the digitally connected
world. We combine visibility from thousands of clients, machine
learning and automation from our industry-leading Secureworks
Counter Threat Platform™, and actionable insights from our team of
elite researchers, analysts and consultants to create a powerful
network effect that provides increasingly strong protection for our
clients. By aggregating and analyzing data from any source,
anywhere, we prevent security breaches, detect malicious activity
in real time, respond rapidly, and predict emerging threats. We
offer our clients a cyber-defense that is Collectively Smarter.
Exponentially Safer.™ www.secureworks.com
(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 3,
2018
August 4,
2017*
August 3,
2018
August 4,
2017*
Net revenue $ 128,778 $ 116,240 $ 254,939 $ 229,918 Cost of revenue
62,548 55,907 123,078 109,520
Gross margin 66,230 60,333 131,861
120,398 Research and development 22,453 19,693 44,807 39,172
Sales and marketing 35,521 35,433 71,191 71,611 General and
administrative 22,419 21,138 47,616
44,542 Total operating expenses 80,393 76,264
163,614 155,325 Operating loss (14,163 )
(15,931 ) (31,753 ) (34,927 ) Interest and other, net 1,003
(420 ) 1,508 (1,069 ) Loss before income taxes
(13,160 ) (16,351 ) (30,245 ) (35,996 ) Income tax benefit (3,391 )
(6,080 ) (6,657 ) (12,448 ) Net loss $ (9,769 ) $ (10,271 )
$ (23,588 ) $ (23,548 ) Net loss per common share
(basic and diluted) $ (0.12 ) $ (0.13 ) $ (0.29 ) $ (0.29 )
Weighted-average common shares outstanding
(basic and diluted)
80,839 80,353 80,680 80,205
Percentage of
Total Net Revenue
Gross margin 51.4 % 51.9 % 51.7 % 52.4 % Research and development
17.4 % 16.9 % 17.6 % 17.0 % Sales and marketing 27.6 % 30.5 % 27.9
% 31.1 % General and administrative 17.4 % 18.2 % 18.7 % 19.4 %
Operating expenses 62.4 % 65.6 % 64.2 % 67.6 % Operating loss (11.0
)% (13.7 )% (12.5 )% (15.2 )% Loss before income taxes (10.2 )%
(14.1 )% (11.9 )% (15.7 )% Net loss (7.6 )% (8.8 )% (9.3 )% (10.2
)% Effective tax rate 25.8 % 37.2 % 22.0 % 34.6 % Note:
Percentage growth rates are calculated based on underlying data in
thousands
* Certain prior period amounts have been
adjusted as a result of the adoption of the accounting standard for
revenue recognition set forth in ASC 606.
SECUREWORKS CORP. Condensed Consolidated
Statements of Financial Position (in thousands) (unaudited)
August 3,
2018
February 2,
2018*
Assets:
Current assets: Cash and cash equivalents $ 103,316 $ 101,539
Accounts receivable, net 133,344 157,764 Inventories, net 623 1,030
Other current assets 40,814 40,551 Total current assets
278,097 300,884 Property and equipment, net 32,611 33,457 Goodwill
416,487 416,487 Purchased intangible assets, net 220,316 234,184
Other non-current assets 79,638 72,069 Total assets $
1,027,149 $ 1,057,081
Liabilities and
Stockholders' Equity:
Current liabilities: Accounts payable $ 21,417 $ 23,266 Accrued and
other 65,321 81,625 Short-term deferred revenue 151,828
137,697 Total current liabilities 238,566 242,588 Long-term
deferred revenue 13,435 14,948 Other non-current liabilities 62,878
68,455 Total liabilities 314,879 325,991 Stockholders'
equity 712,270 731,090 Total liabilities and stockholders'
equity $ 1,027,149 $ 1,057,081
* Certain prior period amounts have been
adjusted as a result of the adoption of the accounting standard for
revenue recognition set forth in ASC 606.
SECUREWORKS CORP. Condensed Consolidated
Statements of Cash Flows (in thousands) (unaudited)
Six Months Ended August 3, 2018
August 4, 2017* Cash flows from operating activities: Net
loss $ (23,588 ) $ (23,548 ) Adjustments to reconcile net loss to
net cash provided by (used in) operating activities Depreciation
and amortization 20,512 20,666 Stock-based compensation expense
9,642 7,158 Effects of exchange rate changes on monetary assets and
liabilities denominated in foreign currencies (1,275 ) 1,449 Income
tax benefit (6,657 ) (12,448 ) Provision for doubtful accounts
1,571 2,591 Changes in assets and liabilities: Accounts receivable
22,542 (12,491 ) Due to/from parent (1,334 ) 7,653 Inventories 407
778 Other assets (5,162 ) (4,014 ) Accounts payable (1,392 ) 428
Deferred revenue 12,240 13,617 Accrued and other liabilities
(16,620 ) (10,254 ) Net cash provided by (used in) operating
activities 10,886 (8,415 ) Cash flows from investing activities:
Capital expenditures (5,366 ) (8,376 ) Net cash provided by (used
in) investing activities (5,366 ) (8,376 ) Cash flows from
financing activities: Principal payments on financing arrangement
with Dell Financial Services (1,104 ) (800 ) Taxes paid on vested
restricted shares (2,139 ) (1,224 ) Other financing activities (500
) — Net cash provided by (used in) financing activities
(3,743 ) (2,024 ) Net increase (decrease) in cash and cash
equivalents 1,777 (18,815 ) Cash and cash equivalents at beginning
of the period 101,539 116,595 Cash and cash
equivalents at end of the period $ 103,316 $ 97,780
* Certain prior period amounts have been
adjusted as a result of the adoption of the accounting standard for
revenue recognition set forth in ASC 606.
Non-GAAP Financial Measures
This press release presents information about the Company’s
non-GAAP revenue, non-GAAP gross margin, non-GAAP research and
development expenses, non-GAAP sales and marketing expenses,
non-GAAP general and administrative expenses, non-GAAP operating
loss, non-GAAP net loss, non-GAAP net loss per share and adjusted
EBITDA, which are non-GAAP financial measures provided as a
supplement to the results provided in accordance with GAAP. The
Company believes these non-GAAP financial measures provide useful
information to help evaluate its operating results by facilitating
an enhanced understanding of its operating performance and enabling
more meaningful period-to-period comparisons. There are limitations
to the use of the non-GAAP financial measures presented in the
press release. These non-GAAP financial measures may not be
comparable to similarly titled measures of other companies. Other
companies, including companies in Secureworks’ industry, may
calculate non-GAAP financial measures differently than the Company
does, limiting the usefulness of those measures for comparative
purposes.
A reconciliation of each non-GAAP financial measure to the most
directly comparable GAAP financial measure is provided below for
each of the periods indicated. Investors are encouraged to review
the reconciliations in conjunction with the presentation of the
non-GAAP financial measures for each of the periods presented. In
future fiscal periods, the Company may exclude such items and may
incur income and expenses similar to these excluded items.
Accordingly, the exclusion of these items and other similar items
in this non-GAAP presentation should not be interpreted as implying
that these items are non-recurring, infrequent or unusual.
The Company excludes the following items from one or more of its
non-GAAP financial measures:
Impact of purchase accounting. The impact of purchase accounting
consists primarily of purchase accounting adjustments related to a
change in the basis of deferred revenue for the acquisition of Dell
Inc. (“Dell”) by Dell Technologies Inc. in fiscal 2014.
Amortization of intangible assets. Amortization of intangible
assets consists of amortization of customer relationships and
acquired technology. In connection with the acquisition of Dell by
Dell Technologies Inc. in fiscal 2014, all of the Company’s
tangible and intangible assets and liabilities were accounted for
and recognized at fair value on the transaction date. Accordingly,
amortization of intangible assets consists of amortization
associated with intangible assets recognized in connection with
this transaction.
Stock-based compensation. Non-cash stock-based compensation
relates to awards under both the Dell Technologies Inc. and
Secureworks equity plans. We exclude such expenses when assessing
the effectiveness of our operating performance since they do not
necessarily correlate with the underlying operating performance of
the business.
Aggregate adjustment for income taxes. The aggregate adjustment
for income taxes is the estimated combined income tax effect for
the adjustments mentioned above. The tax effects are determined
based on the tax jurisdictions where the above items were
incurred.
As the excluded items can have a material impact on earnings,
management compensates for this limitation by relying primarily on
GAAP results and using non-GAAP financial measures supplementally.
The non-GAAP financial measures are not meant to be considered as
indicators of performance in isolation from or as a substitute for
revenue, gross margin, research and development expenses, sales and
marketing expenses, general and administrative expenses, operating
loss or net loss prepared in accordance with GAAP, and should be
read only in conjunction with financial information presented on a
GAAP basis.
(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 3,
2018
August 4,
2017*
August 3,
2018
August 4,
2017*
GAAP revenue $ 128,778 $ 116,240 $ 254,939 $ 229,918 Impact of
purchase accounting — 146 — 292
Non-GAAP revenue $ 128,778 $ 116,386 $ 254,939
$ 230,210 GAAP gross margin $ 66,230 $ 60,333 $
131,861 $ 120,398 Amortization of intangibles 3,411 3,411 6,821
6,821 Impact of purchase accounting — 156 — 312 Stock-based
compensation expense 275 217 544 441
Non-GAAP gross margin $ 69,916 $ 64,117 $ 139,226
$ 127,972 GAAP research and development
expenses $ 22,453 $ 19,693 $ 44,807 $ 39,172 Stock-based
compensation expense (1,006 ) (759 ) (2,037 ) (1,573 ) Non-GAAP
research and development expenses $ 21,447 $ 18,934 $
42,770 $ 37,599 GAAP sales and marketing
expenses $ 35,521 $ 35,433 $ 71,191 $ 71,611 Stock-based
compensation expense (720 ) (411 ) (1,341 ) (625 ) Non-GAAP sales
and marketing expenses $ 34,801 $ 35,022 $ 69,850
$ 70,986 GAAP general and administrative
expenses $ 22,419 $ 21,138 $ 47,616 $ 44,542 Amortization of
intangibles (3,523 ) (3,523 ) (7,047 ) (7,047 ) Impact of purchase
accounting — (256 ) — (512 ) Stock-based compensation expense
(2,911 ) (2,143 ) (5,720 ) (4,519 ) Non-GAAP general and
administrative expenses $ 15,985 $ 15,216 $ 34,849
$ 32,464 GAAP operating loss $ (14,163 ) $
(15,931 ) $ (31,753 ) $ (34,927 ) Amortization of intangibles 6,934
6,934 13,868 13,868 Impact of purchase accounting — 412 — 824
Stock-based compensation expense 4,912 3,530 9,642
7,158 Non-GAAP operating loss $ (2,317 ) $ (5,055 ) $
(8,243 ) $ (13,077 ) GAAP net loss $ (9,769 ) $ (10,271 ) $
(23,588 ) $ (23,548 ) Amortization of intangibles 6,934 6,934
13,868 13,868 Impact of purchase accounting — 412 — 824 Stock-based
compensation expense 4,912 3,530 9,642 7,158 Aggregate adjustment
for income taxes (2,938 ) (4,122 ) (5,329 ) (7,356 ) Non-GAAP net
loss $ (861 ) $ (3,517 ) $ (5,407 ) $ (9,054 ) GAAP net loss
per share $ (0.12 ) $ (0.13 ) $ (0.29 ) $ (0.29 ) Amortization of
intangibles 0.09 0.09 0.17 0.17 Impact of purchase accounting —
0.01 — 0.01 Stock-based compensation expense 0.06 0.04 0.12 0.09
Aggregate adjustment for income taxes (0.04 ) (0.05 ) (0.07 ) (0.09
) Non-GAAP net loss per share * $ (0.01 ) $ (0.04 ) $ (0.07 ) $
(0.11 ) * Sum of reconciling items may differ from total due
to rounding of individual components GAAP net loss $ (9,769 ) $
(10,271 ) $ (23,588 ) $ (23,548 ) Interest and other, net (1,003 )
420 (1,508 ) 1,069 Income tax benefit (3,391 ) (6,080 ) (6,657 )
(12,448 ) Depreciation and amortization 10,225 10,405 20,512 20,666
Stock-based compensation expense 4,912 3,530 9,642 7,158 Impact of
purchase accounting — 146 — 292
Adjusted EBITDA $ 974 $ (1,850 ) $ (1,599 ) $ (6,811 )
* Certain prior period amounts have been
adjusted as a result of the adoption of the accounting standard for
revenue recognition set forth in ASC 606.
SECUREWORKS CORP. Reconciliation of GAAP to
Non-GAAP Financial Measures (in thousands) (unaudited)
Three
Months Ended Six Months Ended
Percentage of
Total Net Revenue
August 3,
2018
August 4,
2017*
August 3,
2018
August 4,
2017*
GAAP gross margin 51.4 % 51.9 % 51.7 % 52.4 % Non-GAAP
adjustment 2.9 % 3.2 % 2.9 % 3.2 % Non-GAAP gross margin 54.3 %
55.1 % 54.6 % 55.6 % GAAP research and development expenses
17.4 % 16.9 % 17.6 % 17.0 % Non-GAAP adjustment (0.7 )% (0.6 )%
(0.8 )% (0.7 )% Non-GAAP research and development expenses 16.7 %
16.3 % 16.8 % 16.3 % GAAP sales and marketing expenses 27.6
% 30.5 % 27.9 % 31.1 % Non-GAAP adjustment (0.6 )% (0.4 )% (0.5 )%
(0.3 )% Non-GAAP sales and marketing expenses 27.0 % 30.1 % 27.4 %
30.8 % GAAP general and administrative expenses 17.4 % 18.2
% 18.7 % 19.4 % Non-GAAP adjustment (5.0 )% (5.1 )% (5.0 )% (5.3 )%
Non-GAAP general and administrative expenses 12.4 % 13.1 % 13.7 %
14.1 % GAAP operating loss (11.0 )% (13.7 )% (12.5 )% (15.2
)% Non-GAAP adjustment 9.2 % 9.4 % 9.3 % 9.5 % Non-GAAP operating
loss (1.8 )% (4.3 )% (3.2 )% (5.7 )% GAAP net loss (7.6 )%
(8.8 )% (9.3 )% (10.2 )% Non-GAAP adjustment 6.9 % 5.8 % 7.2 % 6.3
% Non-GAAP net loss (0.7 )% (3.0 )% (2.1 )% (3.9 )%
* Certain prior period amounts have been
adjusted as a result of the adoption of the accounting standard for
revenue recognition set forth in ASC 606.
SECUREWORKS CORP. Reconciliation of GAAP to
Non-GAAP Financial Measures (in millions, except per share data)
(unaudited)
Three Months Ending
November 2, 2018
Fiscal Year Ending
February 1, 2019
Low End of
Guidance
High End of
Guidance
Low End of
Guidance
High End of
Guidance
GAAP revenue $ 130 $ 131 $ 518 $ 520 Impact of purchase
accounting — — — — Non-GAAP revenue $
130 $ 131 $ 518 $ 520 GAAP net
loss per share $ (0.17 ) $ (0.16 ) $ (0.61 ) $ (0.59 ) Amortization
of intangibles 0.09 0.09 0.34 0.34 Stock-based compensation expense
0.06 0.06 0.24 0.24 Aggregate adjustment for income taxes (0.03 )
(0.03 ) (0.14 ) (0.14 ) Non-GAAP net loss per share* $ (0.06 ) $
(0.05 ) $ (0.17 ) $ (0.15 ) GAAP net loss $ (50 ) $ (48 )
Interest and other, net (1 ) (1 ) Income tax benefit (15 ) (14 )
Depreciation and amortization 41 41 Stock-based compensation
expense 19 19 Adjusted EBITDA* $ (5 ) $ (3 )
Other Items Effective tax rate 22 % Weighted average shares
outstanding (in millions) 80.9 Cash flow from operations $35-$40
Capital expenditures $16-$17 Monthly recurring revenue (MRR)
$37-$39
* Sum of reconciling items may differ from
total due to rounding of individual components
Sum of quarterly guidance may differ from
full year guidance due to rounding
View source
version on businesswire.com: https://www.businesswire.com/news/home/20180905005253/en/
SecureworksInvestor
Inquiries:Teri Miller, 678-268-4389VP, Chief Accounting
Officertemiller@secureworks.comorMedia Inquiries:Doreen Kelly Ruyak,
202-744-9767Corporate Communicationspress@secureworks.com
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