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  • 3 December 2021 09:07

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

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

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 USD$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 USD$23.9 million.

- Overall revenue was USD$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 USD$12.9 million, or USD$0.15 per share, compared with USD$3.6 million, or USD$0.04 per share, in the prior year. Non-GAAP net income was USD$1.2 million, or USD$0.01 per share, compared with net income of USD$6.7 million, or USD$0.08 per share, in the same period last year.

- Adjusted EBITDA for the quarter was USD$4.7 million, compared with USD$11.3 million in the third quarter of fiscal 2021.

- Ended the third quarter with USD$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:

- Recognised as a Leader in the "IDC MarketScape: U.S. Managed Detection and Response Services 2021 Assessment (doc # US48129921, August 2021.)"

- Recognised 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 recognising 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.

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

- Revenue of USD$128 million to USD$130 million.

- GAAP net loss per share of USD$0.24 to USD$0.23 and net loss per share performance on a non-GAAP basis of USD$0.09 to USD$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 USD$155M

Taegis revenue USD$90M to USD$92M

Total revenue - USD$535M to USD$537M

GAAP net income - USD$51M to - USD$50M

- USD$.62 to - USD$.60 per share

Non-GAAP net income - USD$2M to 0

- USD$.02 to 0 per share

Adjusted EBITDA USD$9M to USD$11M

Cash from operations USD$8M to USD$10M

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.

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