Secureworks Reports Third Quarter Fiscal 2022 Results with 193% Taegis™ ARR Growth and Record Gross Margins


ATLANTA, Dec. 2, 2021 /PRNewswire/ — Secureworks (NASDAQ: SCWX), a global leader in cybersecurity, today announced financial results for its third quarter, which ended on October 29, 2021.

Key Highlights

  • Secureworks Taegis grew to $123 million in annual recurring revenue (ARR), an increase of over 20% sequentially and 193% on a year-over-year basis.
  • Ended the third quarter of fiscal 2022 with 800 customers on the Taegis cloud-native security platform.
  • Both GAAP and Non-GAAP gross margins rose to record highs, at 60.4% and 63.6%.
  • Won Frost & Sullivan’s 2021 Best Practices Company of the Year, for the visionary innovation of Taegis XDR and Secureworks’ demonstrated commitment to enabling customers with different needs and maturity levels to benefit from an XDR-powered defense.

“The strength of our Taegis cloud-native security platform is generating strong industry validation and positive customer feedback,” said Wendy Thomas, CEO, Secureworks. “We continue to be encouraged by customer reception to our business model shift and are proud of the expansion we are seeing with Taegis adoption.”

Third Quarter Fiscal 2022 Financial Highlights

  • Taegis revenue grew 161% from the third quarter of fiscal 2021 to $23.9 million.
  • Overall revenue was $133.7 million, a decrease of 5.6% from the third quarter of fiscal 2021, reflective of our continued shift to higher-margin business.
  • GAAP gross margin was 60.4%, compared with 57.9% in the same period last year. Non-GAAP gross margin was 63.6% compared with 60.7% in the third quarter of fiscal 2021.
  • GAAP net loss was $12.9 million, or $0.15 per share, compared with $3.6 million, or $0.04 per share, in the prior year. Non-GAAP net income was $1.2 million, or $0.01 per share, compared with net income of $6.7 million, or $0.08 per share, in the same period last year.
  • Adjusted EBITDA for the quarter was $4.7 million, compared with $11.3 million in the third quarter of fiscal 2021.
  • Ended the third quarter with $205 million in cash and cash equivalents.

“We’re pleased with the continued expansion of our Taegis customer base, resulting in Taegis ARR growth of 193% this quarter,” said Paul Parrish, Chief Financial Officer, Secureworks. “As we actively shift the company to a higher-margin mix of solutions, GAAP subscription gross profit margins are expanding – up this quarter over 300 bps from last year.”

Business and Operational Highlights

  • Recognized as a Leader in the “IDC MarketScape: U.S. Managed Detection and Response Services 2021 Assessment (doc # US48129921, August 2021.)”
  • Recognized as a Leader in the “IDC MarketScape: Worldwide Incident Readiness Services 2021 Assessment (doc # US46741420, November 2021.)”
  • Winner of Security Current’s inaugural CISO Choice Award for Security Analytics recognizing the company for real-world innovation that addresses emerging risks in new and creative ways.
  • Winner of CyberSecurity Breakthrough’s Cloud Based Network Security Solution of the Year award.
  • Released Taegis NGAV next-generation endpoint threat prevention and ManagedXDR Elite to deliver continuous threat hunting with a designated threat hunter.
  • Expanded international operations with new cloud instance in Frankfurt, Germany, for European Union (EU) customers and channel partners.

Financial Outlook

For the fourth quarter of fiscal 2022, the Company expects:

  • Revenue of $128 million to $130 million.
  • GAAP net loss per share of $0.24 to $0.23 and net loss per share performance on a non-GAAP basis of $0.09 to $0.07.

Secureworks is providing the following updated guidance for full fiscal year 2022. The Company expects:

Fiscal Year 2022 Guidance

 

Taegis ARR

At least $155M

Taegis revenue

$90M to $92M

Total revenue

$535M to $537M

GAAP net income

-$51M to -$50M

-$.62 to – $.60 per share

Non-GAAP net income

-$2M to 0

-$.02 to 0 per share

Adjusted EBITDA

$9M to $11M

Cash from operations

$8M to $10M

 

Conference Call Information

As previously announced, the Company will hold a conference call to discuss its third quarter fiscal 2022 results and financial guidance on Dec. 2, 2021, at 8:00 a.m. U.S. ET. A live audio webcast of the conference call and the related supplemental financial information 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.

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 revenue, non-GAAP gross margin, non-GAAP subscription cost of revenue, non-GAAP professional services cost of revenue, non-GAAP gross profit, 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 earnings (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 non-GAAP financial measures to the most directly comparable 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 regarding revenue, GAAP net loss per share, and non-GAAP net loss per share for the fourth quarter of fiscal 2022, and revenue, GAAP net loss, GAAP net loss per share, non-GAAP net loss, non-GAAP net loss per share, Adjusted EBITDA, cash flow from operations, and annual recurring revenue and revenue for its Taegis platform for full year fiscal 2022, 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, among others: 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 reliance on personnel with extensive information security expertise; 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 the Company’s international sales and operations; the effect of Brexit on the Company’s operations; 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 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 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 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; estimates or judgments relating to the Company’s critical accounting policies; the effect of natural disasters, public health issues and other catastrophic events on the Company’s ability to serve its customers, including the coronavirus (COVID-19) pandemic; 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, 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 global cybersecurity leader that protects customer progress with Secureworks® Taegis™, a cloud-native security analytics platform built on 20+ years of real-world threat intelligence and research, improving customers’ ability to detect advanced threats, streamline and collaborate on investigations, and automate the right actions.
www.secureworks.com

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SECUREWORKS CORP.

Condensed Consolidated Statements of Operations and Related Financial Highlights

(in thousands, except per share data and percentages)

(unaudited)

               
 

Three Months Ended

 

Nine Months Ended

 

October 29,
2021

 

October 30,
2020

 

October 29,
2021

 

October 30,
2020

Net revenue:

             

   Subscription

$

102,992

   

$

108,265

   

$

309,488

   

$

320,881

 

   Professional services

30,707

   

33,376

   

97,846

   

100,417

 

      Total net revenue

133,699

   

141,641

   

407,334

   

421,298

 

Cost of revenue:

             

   Subscription

34,888

   

40,051

   

109,423

   

122,506

 

   Professional services

18,002

   

19,562

   

57,157

   

59,916

 

      Total cost of revenue

52,890

   

59,613

   

166,580

   

182,422

 

Gross profit

80,809

   

82,028

   

240,754

   

238,876

 

Operating expenses:

             

   Research and development

32,767

   

27,608

   

91,336

   

75,790

 

   Sales and marketing

35,008

   

34,810

   

106,098

   

107,886

 

   General and administrative

28,404

   

24,508

   

80,447

   

73,824

 

      Total operating expenses

96,179

   

86,926

   

277,881

   

257,500

 

Operating loss

(15,370)

   

(4,898)

   

(37,127)

   

(18,624)

 

Interest and other, net

(762)

   

(79)

   

(2,270)

   

944

 

Loss before income taxes

(16,132)

   

(4,977)

   

(39,397)

   

(17,680)

 

Income tax benefit

(3,269)

   

(1,369)

   

(8,381)

   

(5,309)

 

Net loss

$

(12,863)

   

$

(3,608)

   

$

(31,016)

   

$

(12,371)

 
               

Loss per common share (basic and diluted)

$

(0.15)

   

$

(0.04)

   

$

(0.37)

   

$

(0.15)

 

Weighted-average common shares outstanding
(basic and diluted)

83,297

   

81,474

   

82,754

   

81,276

 
               

Percentage of Total Net Revenue

             

Subscription gross margin

66.1

%

 

63.0

%

 

64.6

%

 

61.8

%

Professional services gross margin

41.4

%

 

41.4

%

 

41.6

%

 

40.3

%

Total gross margin

60.4

%

 

57.9

%

 

59.1

%

 

56.7

%

Research and development

24.5

%

 

19.5

%

 

22.4

%

 

18.0

%

Sales and marketing

26.2

%

 

24.6

%

 

26.0

%

 

25.6

%

General and administrative

21.2

%

 

17.3

%

 

19.7

%

 

17.5

%

Operating expenses

71.9

%

 

61.4

%

 

68.2

%

 

61.1

%

Operating loss

(11.5)

%

 

(3.5)

%

 

(9.1)

%

 

(4.4)

%

Loss before income taxes

(12.1)

%

 

(3.5)

%

 

(9.7)

%

 

(4.2)

%

Net loss

(9.6)

%

 

(2.5)

%

 

(7.6)

%

 

(2.9)

%

Effective tax rate

20.3

%

 

27.5

%

 

21.3

%

 

30.0

%

Note:  Percentage growth rates are calculated based on underlying data in thousands

 

SECUREWORKS CORP.

Condensed Consolidated Statements of Financial Position

(in thousands)

(unaudited)

               
         

October 29,
2021

 

January 29,
2021

Assets:

         

Current assets:

         
 

Cash and cash equivalents

   

$

205,129

   

$

220,300

 
 

Accounts receivable, net

   

95,108

   

108,005

 
 

Inventories, net

   

515

   

560

 
 

Other current assets

   

14,515

   

17,349

 
   

Total current assets

   

315,267

   

346,214

 

Property and equipment, net

   

11,048

   

17,143

 

Operating lease right-of-use assets, net

   

18,979

   

22,330

 

Goodwill

   

426,228

   

425,861

 

Intangible assets, net

   

139,853

   

157,820

 

Other non-current assets

   

79,312

   

75,993

 
   

Total assets

   

$

990,687

   

$

1,045,361

 

Liabilities and Stockholders’ Equity:

         

Current liabilities:

         
 

Accounts payable

   

$

13,063

   

$

16,769

 
 

Accrued and other

   

85,128

   

109,134

 
 

Short-term deferred revenue

   

164,359

   

168,437

 
   

Total current liabilities

   

262,550

   

294,340

 

Long-term deferred revenue

   

5,399

   

9,590

 

Operating lease liabilities, non-current

   

18,461

   

22,461

 

Other non-current liabilities

   

51,946

   

51,189

 
   

Total liabilities

   

338,356

   

377,580

 

Stockholders’ equity

   

652,331

   

667,781

 

Total liabilities and stockholders’ equity

   

$

990,687

   

$

1,045,361

 

 

 

 

SECUREWORKS CORP.

Condensed Consolidated Statements of Cash Flows

(in thousands)

(unaudited)

       
 

Nine Months Ended

 

October 29,
2021

 

October 30,
2020

Cash flows from operating activities:

     

Net loss

$

(31,016)

   

$

(12,371)

 

Adjustments to reconcile net loss to net cash provided by (used in) operating activities:

     

Depreciation and amortization

29,914

   

30,978

 

Amortization of right of use asset

3,081

   

1,577

 

Stock-based compensation expense

23,677

   

17,675

 

Effects of exchange rate changes on monetary assets and liabilities denominated in foreign currencies

2,374

   

(1,190)

 

Income tax benefit

(8,381)

   

(5,309)

 

Other non cash impacts

   

150

 

Provision for credit losses

73

   

1,871

 

Changes in assets and liabilities:

     

Accounts receivable

12,460

   

2,296

 

Net transactions with parent

(6,794)

   

5,586

 

Inventories

45

   

56

 

Other assets

8,107

   

4,514

 

Accounts payable

(3,814)

   

2,668

 

Deferred revenue

(8,830)

   

(4,820)

 

Operating leases, net

(4,266)

   

(2,202)

 

Accrued and other liabilities

(18,403)

   

(13,046)

 

  Net cash (used)/provided by operating activities

(1,773)

   

28,433

 

Cash flows from investing activities:

     

Acquisition of a Business, net of cash

   

(15,081)

 

Software development costs

(4,574)

   

 

Capital expenditures

(1,248)

   

(2,181)

 

Net cash used in investing activities

(5,822)

   

(17,262)

 

Cash flows from financing activities:

     

Payment of taxes for equity awards

(11,710)

   

(4,962)

 

Proceeds from stock option exercises

4,134

   

 

Net cash used in financing activities

(7,576)

   

(4,962)

 
       

Net decrease in cash and cash equivalents

(15,171)

   

6,209

 

Cash and cash equivalents at beginning of the period

220,300

   

181,838

 

Cash and cash equivalents at end of the period

$

205,129

   

$

188,047

 

 

 

Non-GAAP Financial Measures

This press release presents information about the Company’s non-GAAP revenue, non-GAAP gross margin, non-GAAP subscription cost of revenue, non-GAAP professional services cost of revenue, non-GAAP gross profit, 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 earnings (loss) per share and adjusted EBITDA, which are non-GAAP financial measures provided as a supplement to the results provided in accordance with GAAP.  A detailed discussion of the Company’s 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 below. The Company encourages investors to review its GAAP results in conjunction with the presentation of non-GAAP financial measures.

The following is a summary of the items excluded from the most comparable GAAP financial measures to calculate our non-GAAP financial measures:

  • 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 in fiscal 2014 and our acquisition of Delve Laboratories, Inc. in fiscal 2021, all of our 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 each such transaction.
  • Stock-based Compensation Expense. Non-cash stock-based compensation expense relates to both the Dell Technologies and Secureworks equity plans. We exclude such expense when assessing the effectiveness of our operating performance since stock-based compensation does 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.

 

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SECUREWORKS CORP.

Reconciliation of GAAP to Non-GAAP Financial Measures

(in thousands, except per share data)

(unaudited)

               
 

Three Months Ended

 

Nine Months Ended

 

October 29,
2021

 

October 30,
2020

 

October 29,
2021

 

October 30,
2020

GAAP net revenue

$

133,699

   

$

141,641

   

$

407,334

   

$

421,298

 

GAAP subscription cost of revenue

34,888

   

40,051

   

109,423

   

122,506

 

Amortization of intangibles

(4,109)

   

(3,646)

   

(11,972)

   

(10,754)

 

Stock-based compensation expense

(41)

   

(84)

   

(159)

   

(532)

 

Non-GAAP subscription cost of revenue

$

30,738

   

$

36,321

   

$

97,292

   

$

111,220

 

GAAP professional services cost of revenue

$

18,002

   

$

19,562

   

$

57,157

   

$

59,916

 

Stock-based compensation expense

(103)

   

(171)

   

(474)

   

(476)

 

Non-GAAP professional services cost of revenue

$

17,899

   

$

19,391

   

$

56,683

   

$

59,440

 

GAAP gross profit

$

80,809

   

$

82,028

   

$

240,754

   

$

238,876

 

Amortization of intangibles

4,109

   

3,646

   

11,972

   

10,754

 

Stock-based compensation expense

144

   

255

   

633

   

1,008

 

Non-GAAP gross profit

$

85,062

   

$

85,929

   

$

253,359

   

$

250,638

 

GAAP research and development expenses

$

32,767

   

$

27,608

   

$

91,336

   

$

75,790

 

Stock-based compensation expense

(2,268)

   

(793)

   

(4,908)

   

(3,181)

 

Non-GAAP research and development expenses

$

30,499

   

$

26,815

   

$

86,428

   

$

72,609

 

GAAP sales and marketing expenses

$

35,008

   

$

34,810

   

$

106,098

   

$

107,886

 

Stock-based compensation expense

(1,493)

   

(1,072)

   

(3,241)

   

(2,695)

 

Non-GAAP sales and marketing expenses

$

33,515

   

$

33,738

   

$

102,857

   

$

105,191

 

GAAP general and administrative expenses

$

28,404

   

$

24,508

   

$

80,447

   

$

73,824

 

Amortization of intangibles

(3,524)

   

(3,524)

   

(10,571)

   

(10,571)

 

Stock-based compensation expense

(6,157)

   

(3,961)

   

(14,895)

   

(10,791)

 

Non-GAAP general and administrative expenses

$

18,723

   

$

17,023

   

$

54,981

   

$

52,462

 

GAAP operating loss

$

(15,370)

   

$

(4,898)

   

$

(37,127)

   

$

(18,624)

 

Amortization of intangibles

7,633

   

7,170

   

22,543

   

21,325

 

Stock-based compensation expense

10,062

   

6,081

   

23,677

   

17,675

 

Non-GAAP operating income

$

2,325

   

$

8,353

   

$

9,093

   

$

20,376

 

GAAP net loss

$

(12,863)

   

$

(3,608)

   

$

(31,016)

   

$

(12,371)

 

Amortization of intangibles

7,633

   

7,170

   

22,543

   

21,325

 

Stock-based compensation expense

10,062

   

6,081

   

23,677

   

17,675

 

Aggregate adjustment for income taxes

(3,613)

   

(2,917)

   

(9,073)

   

(8,998)

 

Non-GAAP net income

$

1,219

   

$

6,726

   

$

6,131

   

$

17,631

 

GAAP loss per share

$

(0.15)

   

$

(0.04)

   

$

(0.37)

   

$

(0.15)

 

Amortization of intangibles

0.09

   

0.09

   

0.27

   

0.26

 

Stock-based compensation expense

0.12

   

0.08

   

0.28

   

0.22

 

Aggregate adjustment for income taxes

(0.04)

   

(0.04)

   

(0.11)

   

(0.11)

 

Non-GAAP earnings per share *

$

0.01

   

$

0.08

   

$

0.07

   

$

0.22

 

* Sum of reconciling items may differ from total due to rounding of individual components

GAAP net loss

$

(12,863)

   

$

(3,608)

   

$

(31,016)

   

$

(12,371)

 

Interest and other, net

762

   

79

   

2,270

   

(944)

 

Income tax benefit

(3,269)

   

(1,369)

   

(8,381)

   

(5,309)

 

Depreciation and amortization

10,051

   

10,106

   

29,914

   

30,978

 

Stock-based compensation expense

10,062

   

6,081

   

23,677

   

17,675

 

Adjusted EBITDA

$

4,743

   

$

11,289

   

$

16,464

   

$

30,029

 

 

 

 

SECUREWORKS CORP.

Reconciliation of GAAP to Non-GAAP Financial Measures

(in thousands)

(unaudited)

 
       

Three Months Ended

 

Nine Months Ended

Percentage of Total Net Revenue

 

October 29,
2021

 

October 30,
2020

 

October 29,
2021

 

October 30,
2020

GAAP gross margin

 

60.4

%

 

57.9

%

 

59.1

%

 

56.7

%

          Non-GAAP adjustment

 

3.2

%

 

2.8

%

 

3.1

%

 

2.8

%

Non-GAAP gross margin

 

63.6

%

 

60.7

%

 

62.2

%

 

59.5

%

                     

GAAP research and development expenses

 

24.5

%

 

19.5

%

 

22.4

%

 

18.0

%

          Non-GAAP adjustment

 

(1.7)

%

 

(0.6)

%

 

(1.2)

%

 

(0.8)

%

Non-GAAP research and development expenses

 

22.8

%

 

18.9

%

 

21.2

%

 

17.2

%

                     

GAAP sales and marketing expenses

 

26.2

%

 

24.6

%

 

26.0

%

 

25.6

%

          Non-GAAP adjustment

 

(1.1)

%

 

(0.8)

%

 

(0.7)

%

 

(0.6)

%

Non-GAAP sales and marketing expenses

 

25.1

%

 

23.8

%

 

25.3

%

 

25.0

%

                     

GAAP general and administrative expenses

 

21.2

%

 

17.3

%

 

19.7

%

 

17.5

%

          Non-GAAP adjustment

 

(7.2)

%

 

(5.3)

%

 

(6.2)

%

 

(5.0)

%

Non-GAAP general and administrative expenses

 

14.0

%

 

12.0

%

 

13.5

%

 

12.5

%

                     

GAAP operating loss

 

(11.5)

%

 

(3.5)

%

 

(9.1)

%

 

(4.4)

%

          Non-GAAP adjustment

 

13.3

%

 

9.4

%

 

11.3

%

 

9.2

%

Non-GAAP operating income

 

1.8

%

 

5.9

%

 

2.2

%

 

4.8

%

                     

GAAP net loss

 

(9.6)

%

 

(2.5)

%

 

(7.6)

%

 

(2.9)

%

          Non-GAAP adjustment

 

10.5

%

 

7.2

%

 

9.1

%

 

7.1

%

Non-GAAP net income

 

0.9

%

 

4.7

%

 

1.5

%

 

4.2

%

 

 

SECUREWORKS CORP.

Reconciliation of GAAP to Non-GAAP Financial Measures

(in millions, except per share data)

(unaudited)

                 
   

Three Months Ending

 

Fiscal Year Ending

   

January 28, 2022

 

January 28, 2022

   

Low End of
Guidance

 

High End of
Guidance

 

Low End of
Guidance

 

High End of
Guidance

GAAP and non-GAAP net revenue

 

$

128

   

$

130

   

$

535

   

$

537

 
                 

GAAP net loss

 

$

(20)

   

$

(19)

   

$

(51)

   

$

(50)

 

Amortization of intangibles

 

8

   

8

   

30

   

30

 

Stock-based compensation expense

 

10

   

10

   

33

   

33

 

Aggregate adjustment for income taxes

 

(4)

   

(4)

   

(14)

   

(14)

 

Non-GAAP net (loss)*

 

$

(8)

   

$

(6)

   

$

(2)

   

$

0

 
                 

GAAP net loss per share

 

$

(0.24)

   

$

(0.23)

   

$

(0.62)

   

$

(0.60)

 

Amortization of intangibles

 

0.09

   

0.09

   

0.36

   

0.36

 

Stock-based compensation expense

 

0.11

   

0.11

   

0.40

   

0.40

 

Aggregate adjustment for income taxes

 

(0.05)

   

(0.05)

   

(0.17)

   

(0.17)

 

Non-GAAP net (loss) per share*

 

$

(0.09)

   

$

(0.07)

   

$

(0.02)

   

$

0.00

 
                 

GAAP net loss

         

$

(51)

   

$

(50)

 

Interest and other, net

         

3

   

3

 

Income tax benefit

         

(14)

   

(14)

 

Depreciation and amortization

         

39

   

39

 

Stock-based compensation expense

         

33

   

33

 

Adjusted EBITDA*

         

$

9

   

$

11

 
                 

Other Items

               

Effective tax rate

             

22

%

Weighted average shares outstanding (in millions)

             

82.9

 

Cash flow from operations

         

$8 to $10

 

Capital expenditures

             

$7 to $9

 

*   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

 

Related Links :

https://www.secureworks.com

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