[March 27, 2019] |
|
Secureworks Reports Fourth Quarter and Full Year Fiscal 2019 Results and $15 Million Increase to Stock Repurchase Program
Secureworks (NASDAQ: SCWX), a leading global cybersecurity company that
protects organizations in the digitally connected world, today announced
financial results for its fourth quarter and full fiscal year ended
February 1, 2019.
"The fourth quarter marked the end to a year of strong financial results
and the achievement of significant milestones in the advancement of our
strategy to deliver software-driven security solutions," said Michael R.
Cote, Chief Executive Officer of Secureworks.
"The combination of our global threat intelligence, proprietary
technology and multi-vendor approach, creates a powerful network effect,
unique in our industry. The network effect, along with our track record
of continuous innovation, are foundational to our strategy to deliver
security software applications that, along with our managed security
solutions and consulting services, provide customers the best available
defenses," continued Mr. Cote.
Business and operational developments for the fourth quarter of fiscal
2019 include:
-
Secureworks collaborated with Dell to introduce Dell SafeGuard and
Response, a portfolio of next-generation endpoint security solutions
that combines the software, managed security, threat behavioral
analytics and incident response expertise of Secureworks with the
unified endpoint protection platform from CrowdStrike.
-
The Company recently announced the launch of its Orchestration and
Automation solution to help customers speed response and streamline
action to contain and eradicate threats from their environment. The
solution provides open-source, digital playbooks to automate
customer-specific workflows. Using a unified view of a customer's full
environment, a broad set of integrations also adds context to enrich
incident data and automate response activities.
Fourth Quarter Fiscal 2019 Financial Results Highlights
-
GAAP revenue increased 8.1 percent to $130.7 million in the fourth
quarter of fiscal 2019, from $120.9 million in the same period last
year. Non-GAAP revenue increased 8.0 percent to $130.7 million from
$121.1 million in the fourth quarter of fiscal 2018.
-
GAAP gross margin was 53.4 percent in the fourth quarter of 2019,
compared with 50.2 percent in the same period last year. Non-GAAP
gross margin was 56.0 percent compared with 53.3 percent in the fourth
quarter of fiscal 2018.
-
GAAP net loss was $11.8 million, or $0.15 per share, in the fourth
quarter of fiscal 2019, compared with GAAP net income of $22.5
million, or $0.28 per share, in the prior year. Non-GAAP income was
$1.5 million, or $0.02 per share, in the fourth quarter of fiscal
2019, compared with a non-GAAP net loss of $5.3 million, or $0.07 per
share, in the same prior year period.
-
Adjusted EBITDA was $4.8 million, compared with an adjusted EBITDA
loss of $5.7 million in the fourth quarter of fiscal 2018.
-
Cash provided by operating activities for the three months ended
February 1, 2019 was $31.2 million.
-
Secureworks ended the fourth quarter of fiscal 2019 with $129.6
million in cash and cash equivalents.
-
Monthly recurring revenue as of February 1, 2019 increased 2.5 percent
to $36.2 million from $35.3 million as of February 2, 2018. The
Company's monthly recurring revenue metric represents the monthly
value of its subscription contracts, including operational backlog, as
of period end.
Full Year Fiscal 2019 Financial Results Highlights
-
GAAP revenue in fiscal 2019 increased 10.9 percent to $518.7 million
from $467.9 million in fiscal 2018. Non-GAAP revenue increased 10.7
percent to $518.7 million from $468.5 million in fiscal 2018.
-
GAAP gross margin increased to 52.6 percent in fiscal 2019, up from
51.9 percent in the prior year. Non-GAAP gross margin increased to
55.3 percent from 55.1 percent year-over-year.
-
GAAP net loss was $39.1 million, or $0.48 per share in fiscal 2019,
compared with a net loss of $10.4 million, or $0.13 per share last
year. Non-GAAP net income was $1.4 million, or $0.02 per share, in
fiscal 2019, compared to a non-GAAP net loss of $17.4 million, or
$0.22 per share, in fiscal 2018.
-
Adjusted EBITDA was $11.8 million in fiscal 2019, compared with a loss
of $13.4 million in fiscal 2018.
-
Cash provided by operating activities for the fiscal year ended
February 1, 2019 was $57.2 million.
First Quarter and Full Fiscal Year 2020 Guidance
For the first quarter of fiscal 2020, the Company expects:
-
Revenue of $131 to $133 million on both a GAAP and non-GAAP basis.
-
GAAP net loss per share of $0.17 to $0.18 and non-GAAP loss per share
of $0.05 to $0.06.
For the full fiscal year 2020, the Company expects:
-
GAAP and non-GAAP revenue of $565 to $575 million.
-
GAAP net loss of $48 to $51 million and $0.60 to $0.64 on a per share
basis.
-
Non-GAAP loss per share of $0.09 to $0.13.
-
Adjusted EBITDA of $2 to $6 million.
-
Cash flow from operations of $25 to $35 million.
Conference Call Information
As previously announced, the Company will hold a conference call to
discuss its fourth quarter and fiscal 2019 results and outlook for its
first quarter and fiscal year 2020 on March 27, 2019, 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 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 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 earnings (loss) per share for the first quarter of fiscal 2020
and for full year fiscal 2020, net income (loss) and adjusted EBITDA
(loss) for full year fiscal 2020, and cash flow from operations for full
year fiscal 2020, 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 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 effect of Brexit on the
Company's 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 risks associated with cyber attacks or other data
security incidents; 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; 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 1, 2019, 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 close
gaps in security layers with a Defense in Concert that combines
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 of 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.
|
Consolidated Statements of Operations and Related Financial
Highlights
|
(in thousands, except per share data and percentages)
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
Fiscal Year Ended
|
|
|
|
|
|
February 1,
2019
|
|
February 2,
2018*
|
|
February 1,
2019
|
|
February 2,
2018*
|
Net revenue
|
|
$
|
130,710
|
|
|
$
|
120,911
|
|
|
$
|
518,709
|
|
|
$
|
467,930
|
|
Cost of revenue
|
|
60,906
|
|
|
60,253
|
|
|
246,117
|
|
|
225,084
|
|
|
Gross margin
|
|
69,804
|
|
|
60,658
|
|
|
272,592
|
|
|
242,846
|
|
|
Research and development
|
|
21,687
|
|
|
21,491
|
|
|
87,608
|
|
|
80,164
|
|
|
Sales and marketing
|
|
35,854
|
|
|
34,242
|
|
|
141,818
|
|
|
139,937
|
|
|
General and administrative
|
|
22,663
|
|
|
25,288
|
|
|
91,898
|
|
|
92,726
|
|
|
|
Total operating expenses
|
|
80,204
|
|
|
81,021
|
|
|
321,324
|
|
|
312,827
|
|
|
Operating loss
|
|
(10,400
|
)
|
|
(20,363
|
)
|
|
(48,732
|
)
|
|
(69,981
|
)
|
Interest and other, net
|
|
196
|
|
|
(1,782
|
)
|
|
2,778
|
|
|
(2,735
|
)
|
|
Loss before income taxes
|
|
(10,204
|
)
|
|
(22,145
|
)
|
|
(45,954
|
)
|
|
(72,716
|
)
|
Income tax expense (benefit)
|
|
1,574
|
|
|
(44,662
|
)
|
|
(6,853
|
)
|
|
(62,299
|
)
|
|
Net income (loss)
|
|
$
|
(11,778
|
)
|
|
$
|
22,517
|
|
|
$
|
(39,101
|
)
|
|
$
|
(10,417
|
)
|
|
|
|
|
|
|
|
|
|
Net income (loss) per common share (basic)
|
|
$
|
(0.15
|
)
|
|
$
|
0.28
|
|
|
$
|
(0.48
|
)
|
|
$
|
(0.13
|
)
|
|
|
|
|
|
|
|
|
|
Net income (loss) per common share (diluted)
|
|
$
|
(0.15
|
)
|
|
$
|
0.28
|
|
|
$
|
(0.48
|
)
|
|
$
|
(0.13
|
)
|
|
|
|
|
|
|
|
|
|
Weighted-average common sharesoutstanding (basic)
|
|
80,587
|
|
|
80,357
|
|
|
80,710
|
|
|
80,280
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average common shares outstanding (diluted)
|
|
80,587
|
|
|
80,528
|
|
|
80,710
|
|
|
80,280
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Percentage of Total Net Revenue
|
|
|
|
|
|
|
|
|
Gross margin
|
|
53.4
|
%
|
|
50.2
|
%
|
|
52.6
|
%
|
|
51.9
|
%
|
Research and development
|
|
16.6
|
%
|
|
17.8
|
%
|
|
16.9
|
%
|
|
17.1
|
%
|
Sales and marketing
|
|
27.4
|
%
|
|
28.3
|
%
|
|
27.3
|
%
|
|
29.9
|
%
|
General and administrative
|
|
17.3
|
%
|
|
20.9
|
%
|
|
17.7
|
%
|
|
19.8
|
%
|
Operating expenses
|
|
61.4
|
%
|
|
67.0
|
%
|
|
61.9
|
%
|
|
66.9
|
%
|
Operating loss
|
|
(8.0
|
)%
|
|
(16.8
|
)%
|
|
(9.4
|
)%
|
|
(15.0
|
)%
|
Loss before income taxes
|
|
(7.8
|
)%
|
|
(18.3
|
)%
|
|
(8.9
|
)%
|
|
(15.5
|
)%
|
Net income (loss)
|
|
(9.0
|
)%
|
|
18.6
|
%
|
|
(7.5
|
)%
|
|
(2.2
|
)%
|
Effective tax rate
|
|
(15.4
|
)%
|
|
201.7
|
%
|
|
14.9
|
%
|
|
85.7
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
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.
|
Consolidated Statements of Financial Position
|
(in thousands)
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
February 1,
2019
|
|
February 2,
2018*
|
Assets:
|
|
|
|
|
|
Current assets:
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
|
$
|
129,592
|
|
|
$
|
101,539
|
|
Accounts receivable, net
|
|
|
141,344
|
|
|
157,764
|
|
Inventories
|
|
|
468
|
|
|
1,030
|
|
Other current assets
|
|
|
27,604
|
|
|
40,551
|
|
|
Total current assets
|
|
|
299,008
|
|
|
300,884
|
Property and equipment, net
|
|
|
35,978
|
|
|
33,457
|
Goodwill
|
|
|
416,487
|
|
|
416,487
|
Purchased intangible assets, net
|
|
|
206,448
|
|
|
234,184
|
Other non-current assets
|
|
|
78,238
|
|
|
72,069
|
|
|
Total assets
|
|
|
$
|
1,036,159
|
|
|
$
|
1,057,081
|
Liabilities and Stockholders' Equity:
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
|
|
Accounts payable
|
|
|
$
|
16,177
|
|
|
$
|
23,266
|
|
Accrued and other
|
|
|
86,495
|
|
|
81,625
|
|
Deferred revenue
|
|
|
157,865
|
|
|
137,697
|
|
|
Total current liabilities
|
|
|
260,537
|
|
|
242,588
|
Long-term deferred revenue
|
|
|
16,064
|
|
|
14,948
|
Other non-current liabilities
|
|
|
66,851
|
|
|
68,455
|
|
|
Total liabilities
|
|
|
343,452
|
|
|
325,991
|
Stockholders' equity
|
|
|
692,707
|
|
|
731,090
|
Total liabilities and stockholders' equity
|
|
|
$
|
1,036,159
|
|
|
$
|
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.
|
Consolidated Statements of Cash Flows
|
(in thousands)
|
(unaudited)
|
|
|
|
|
|
|
|
Fiscal Year Ended
|
|
|
February 1,
2019
|
|
February 2,
2018*
|
Cash flows from operating activities:
|
|
|
|
|
Net loss
|
|
$
|
(39,101
|
)
|
|
$
|
(10,417
|
)
|
Adjustments to reconcile net loss to net cash provided by (used in)
operating activities:
|
|
|
|
|
Depreciation and amortization
|
|
41,207
|
|
|
42,171
|
|
Stock-based compensation expense
|
|
19,370
|
|
|
13,790
|
|
Effects of exchange rate changes on monetary assets and liabilities
denominated in foreign currencies
|
|
(1,818
|
)
|
|
3,256
|
|
Income tax benefit
|
|
(6,853
|
)
|
|
(62,299
|
)
|
Provision for doubtful accounts
|
|
2,356
|
|
|
3,947
|
|
Changes in assets and liabilities:
|
|
|
|
|
Accounts receivable
|
|
13,750
|
|
|
(48,540
|
)
|
Net transactions with parent
|
|
(1,797
|
)
|
|
11,024
|
|
Inventories
|
|
562
|
|
|
917
|
|
Other assets
|
|
(7,277
|
)
|
|
14,610
|
|
Accounts payable
|
|
(6,117
|
)
|
|
3,302
|
|
Deferred revenue
|
|
20,942
|
|
|
19,560
|
|
Accrued and other liabilities
|
|
21,975
|
|
|
9,466
|
|
Net cash provided by (used in) operating activities
|
|
57,199
|
|
|
787
|
|
Cash flows from investing activities:
|
|
|
|
|
Capital expenditures
|
|
(10,200
|
)
|
|
(13,819
|
)
|
Net cash provided by (used in) investing activities
|
|
(10,200
|
)
|
|
(13,819
|
)
|
Cash flows from financing activities:
|
|
|
|
|
Principal payments on financing arrangement with Dell Financial
Services
|
|
(2,208
|
)
|
|
(800
|
)
|
Taxes paid on vested restricted shares
|
|
(2,207
|
)
|
|
(1,224
|
)
|
Purchases of stock for treasury
|
|
(13,531
|
)
|
|
-
|
|
Payments on financed capital expenditures
|
|
(1,000
|
)
|
|
-
|
|
Net cash provided by (used in) financing activities
|
|
$
|
(18,946
|
)
|
|
$
|
(2,024
|
)
|
Net (decrease) increase in cash and cash equivalents
|
|
28,053
|
|
|
(15,056
|
)
|
Cash and cash equivalents at beginning of the period
|
|
$
|
101,539
|
|
|
$
|
116,595
|
|
Cash and cash equivalents at end of the period
|
|
$
|
129,592
|
|
|
$
|
101,539
|
|
|
|
|
|
|
Supplemental Disclosures of Non-Cash Investing and Financing
Activities:
|
|
|
|
|
Financed capital expenditures
|
|
$
|
373
|
|
|
$
|
1,390
|
|
Income taxes paid
|
|
$
|
1,961
|
|
|
$
|
1,152
|
|
|
|
|
|
|
|
|
|
|
* 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 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. 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.
Impact of Tax Cuts and Jobs Act. The impact of the Tax Cuts and
Jobs Act relates to final tax provision impacts of complying with the
U.S. tax reform that was enacted in December 2017, recorded in fiscal
2019, as well as the provisional tax benefit of $27.0 million that was
recorded in the fourth quarter of fiscal 2018.
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
|
|
Fiscal Year Ended
|
|
|
|
|
February 1,
2019
|
|
February 2,
2018*
|
|
February 1,
2019
|
|
February 2,
2018*
|
GAAP revenue
|
|
$
|
130,710
|
|
|
$
|
120,911
|
|
|
$
|
518,709
|
|
|
$
|
467,930
|
|
|
Impact of purchase accounting
|
|
-
|
|
|
146
|
|
|
-
|
|
|
584
|
|
|
|
Non-GAAP revenue
|
|
$
|
130,710
|
|
|
$
|
121,057
|
|
|
$
|
518,709
|
|
|
$
|
468,514
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP gross margin
|
|
$
|
69,804
|
|
|
$
|
60,658
|
|
|
$
|
272,592
|
|
|
$
|
242,846
|
|
|
Amortization of intangibles
|
|
3,411
|
|
|
3,411
|
|
|
13,642
|
|
|
13,642
|
|
|
Impact of purchase accounting
|
|
-
|
|
|
156
|
|
|
-
|
|
|
624
|
|
|
Stock-based compensation expense
|
|
12
|
|
|
245
|
|
|
780
|
|
|
891
|
|
|
|
Non-GAAP gross margin
|
|
$
|
73,227
|
|
|
$
|
64,470
|
|
|
$
|
287,014
|
|
|
$
|
258,003
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP research and development expenses
|
|
$
|
21,687
|
|
|
$
|
21,491
|
|
|
$
|
87,608
|
|
|
$
|
80,164
|
|
|
Stock-based compensation expense
|
|
(1,163
|
)
|
|
(879
|
)
|
|
(4,133
|
)
|
|
(3,261
|
)
|
|
|
Non-GAAP research and development expenses
|
$
|
20,524
|
|
|
$
|
20,612
|
|
|
$
|
83,475
|
|
|
$
|
76,903
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP sales and marketing expenses
|
|
$
|
35,854
|
|
|
$
|
34,242
|
|
|
$
|
141,818
|
|
|
$
|
139,937
|
|
|
Stock-based compensation expense
|
|
(511
|
)
|
|
(245
|
)
|
|
(2,652
|
)
|
|
(735
|
)
|
|
|
Non-GAAP sales and marketing expenses
|
|
$
|
35,343
|
|
|
$
|
33,997
|
|
|
$
|
139,166
|
|
|
$
|
139,202
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP general and administrative expenses
|
|
$
|
22,663
|
|
|
$
|
25,288
|
|
|
$
|
91,898
|
|
|
$
|
92,726
|
|
|
Amortization of intangibles
|
|
(3,524
|
)
|
|
(3,522
|
)
|
|
(14,094
|
)
|
|
(14,095
|
)
|
|
Impact of purchase accounting
|
|
-
|
|
|
(256
|
)
|
|
-
|
|
|
(1,025
|
)
|
|
Stock-based compensation expense
|
|
(3,209
|
)
|
|
(2,330
|
)
|
|
(11,805
|
)
|
|
(8,903
|
)
|
|
|
Non-GAAP general and administrative expenses
|
$
|
15,930
|
|
|
$
|
19,180
|
|
|
$
|
65,999
|
|
|
$
|
68,703
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP operating income (loss)
|
|
$
|
(10,400
|
)
|
|
$
|
(20,363
|
)
|
|
$
|
(48,732
|
)
|
|
$
|
(69,981
|
)
|
|
Amortization of intangibles
|
|
6,934
|
|
|
6,933
|
|
|
27,736
|
|
|
27,737
|
|
|
Impact of purchase accounting
|
|
-
|
|
|
412
|
|
|
-
|
|
|
1,649
|
|
|
Stock-based compensation expense
|
|
4,895
|
|
|
3,699
|
|
|
19,370
|
|
|
13,790
|
|
|
|
Non-GAAP operating loss
|
|
$
|
1,429
|
|
|
$
|
(9,319
|
)
|
|
$
|
(1,626
|
)
|
|
$
|
(26,805
|
)
|
|
|
|
|
|
|
|
|
|
|
|
GAAP net income (loss)
|
|
$
|
(11,778
|
)
|
|
$
|
22,517
|
|
|
$
|
(39,101
|
)
|
|
$
|
(10,417
|
)
|
|
Amortization of intangibles
|
|
6,934
|
|
|
6,933
|
|
|
27,736
|
|
|
27,737
|
|
|
Impact of purchase accounting
|
|
-
|
|
|
412
|
|
|
-
|
|
|
1,649
|
|
|
Stock-based compensation expense
|
|
4,895
|
|
|
3,699
|
|
|
19,370
|
|
|
13,790
|
|
|
Impact of Tax Cuts and Jobs Act
|
|
4,325
|
|
|
(34,993
|
)
|
|
4,325
|
|
|
(34,993
|
)
|
|
Aggregate adjustment for income taxes
|
|
(2,848
|
)
|
|
(3,876
|
)
|
|
(10,978
|
)
|
|
(15,129
|
)
|
|
|
Non-GAAP net income (loss)
|
|
$
|
1,528
|
|
|
$
|
(5,308
|
)
|
|
$
|
1,352
|
|
|
$
|
(17,363
|
)
|
|
|
|
|
|
|
|
|
|
|
|
GAAP earnings (loss) per share
|
|
$
|
(0.15
|
)
|
|
$
|
0.28
|
|
|
$
|
(0.48
|
)
|
|
$
|
(0.13
|
)
|
|
Amortization of intangibles
|
|
0.08
|
|
|
0.09
|
|
|
0.34
|
|
|
0.35
|
|
|
Impact of purchase accounting
|
|
-
|
|
|
0.01
|
|
|
-
|
|
|
0.02
|
|
|
Stock-based compensation expense
|
|
0.06
|
|
|
0.05
|
|
|
0.24
|
|
|
0.17
|
|
|
Impact of Tax Cuts and Jobs Act
|
|
0.05
|
|
|
(0.44
|
)
|
|
0.05
|
|
|
(0.44
|
)
|
|
Aggregate adjustment for income taxes
|
|
(0.03
|
)
|
|
(0.05
|
)
|
|
(0.13
|
)
|
|
(0.19
|
)
|
|
|
Non-GAAP earnings (loss) per share *
|
|
$
|
0.02
|
|
|
$
|
(0.07
|
)
|
|
$
|
0.02
|
|
|
$
|
(0.22
|
)
|
|
|
|
|
|
|
|
|
|
|
|
* Sum of reconciling items may differ from total due to rounding
of individual components
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP net income (loss)
|
|
$
|
(11,778
|
)
|
|
$
|
22,517
|
|
|
$
|
(39,101
|
)
|
|
$
|
(10,417
|
)
|
|
Interest and other, net
|
|
(196
|
)
|
|
1,782
|
|
|
(2,778
|
)
|
|
2,735
|
|
|
Income tax expense (benefit)
|
|
1,574
|
|
|
(44,662
|
)
|
|
(6,853
|
)
|
|
(62,299
|
)
|
|
Depreciation and amortization
|
|
10,335
|
|
|
10,851
|
|
|
41,207
|
|
|
42,171
|
|
|
Stock-based compensation expense
|
|
4,895
|
|
|
3,698
|
|
|
19,370
|
|
|
13,790
|
|
|
Impact of purchase accounting
|
|
-
|
|
|
146
|
|
|
-
|
|
|
584
|
|
|
|
Adjusted EBITDA
|
|
$
|
4,830
|
|
|
$
|
(5,668
|
)
|
|
$
|
11,845
|
|
|
$
|
(13,436
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
* 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
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
Fiscal Year Ended
|
Percentage of Total Net Revenue
|
|
February 1,
2019
|
|
February 2,
2018*
|
|
February 1,
2019
|
|
February 2,
2018*
|
|
|
|
|
|
|
|
|
|
GAAP gross margin
|
|
53.4
|
%
|
|
50.2
|
%
|
|
52.6
|
%
|
|
51.9
|
%
|
|
Non-GAAP adjustment
|
|
2.6
|
%
|
|
3.1
|
%
|
|
2.7
|
%
|
|
3.2
|
%
|
Non-GAAP gross margin
|
|
56.0
|
%
|
|
53.3
|
%
|
|
55.3
|
%
|
|
55.1
|
%
|
|
|
|
|
|
|
|
|
|
|
|
GAAP research and development expenses
|
|
16.6
|
%
|
|
17.8
|
%
|
|
16.9
|
%
|
|
17.1
|
%
|
|
Non-GAAP adjustment
|
|
(0.9
|
)%
|
|
(0.8
|
)%
|
|
(0.8
|
)%
|
|
(0.7
|
)%
|
Non-GAAP research and development expenses
|
|
15.7
|
%
|
|
17.0
|
%
|
|
16.1
|
%
|
|
16.4
|
%
|
|
|
|
|
|
|
|
|
|
|
|
GAAP sales and marketing expenses
|
|
27.4
|
%
|
|
28.3
|
%
|
|
27.3
|
%
|
|
29.9
|
%
|
|
Non-GAAP adjustment
|
|
(0.4
|
)%
|
|
(0.2
|
)%
|
|
(0.5
|
)%
|
|
(0.2
|
)%
|
Non-GAAP sales and marketing expenses
|
|
27.0
|
%
|
|
28.1
|
%
|
|
26.8
|
%
|
|
29.7
|
%
|
|
|
|
|
|
|
|
|
|
|
|
GAAP general and administrative expenses
|
|
17.3
|
%
|
|
20.9
|
%
|
|
17.7
|
%
|
|
19.8
|
%
|
|
Non-GAAP adjustment
|
|
(5.1
|
)%
|
|
(5.1
|
)%
|
|
(5.0
|
)%
|
|
(5.1
|
)%
|
Non-GAAP general and administrative expenses
|
|
12.2
|
%
|
|
15.8
|
%
|
|
12.7
|
%
|
|
14.7
|
%
|
|
|
|
|
|
|
|
|
|
|
|
GAAP operating income (loss)
|
|
(8.0
|
)%
|
|
(16.8
|
)%
|
|
(9.4
|
)%
|
|
(15.0
|
)%
|
|
Non-GAAP adjustment
|
|
9.1
|
%
|
|
9.1
|
%
|
|
9.1
|
%
|
|
9.3
|
%
|
Non-GAAP operating income (loss)
|
|
1.1
|
%
|
|
(7.7
|
)%
|
|
(0.3
|
)%
|
|
(5.7
|
)%
|
|
|
|
|
|
|
|
|
|
|
|
GAAP net income (loss)
|
|
(9.0
|
)%
|
|
18.6
|
%
|
|
(7.5
|
)%
|
|
(2.2
|
)%
|
|
Non-GAAP adjustment
|
|
10.2
|
%
|
|
(23.0
|
)%
|
|
7.8
|
%
|
|
(1.5
|
)%
|
Non-GAAP net income (loss)
|
|
1.2
|
%
|
|
(4.4
|
)%
|
|
0.3
|
%
|
|
(3.7
|
)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
* 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
May 3, 2019
|
|
|
Fiscal Year Ending
January 31, 2020
|
|
|
|
Low End
of
Guidance
|
|
High End
of
Guidance
|
|
|
Low End
of
Guidance
|
|
High End
of
Guidance
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP revenue
|
|
$
|
131
|
|
|
$
|
133
|
|
|
|
$
|
565
|
|
|
$
|
575
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP net loss per share
|
|
$
|
(0.18
|
)
|
|
$
|
(0.17
|
)
|
|
|
$
|
(0.64
|
)
|
|
$
|
(0.60
|
)
|
|
Amortization of intangibles
|
|
0.09
|
|
|
0.09
|
|
|
|
0.34
|
|
|
0.34
|
|
|
Stock-based compensation expense
|
|
0.07
|
|
|
0.07
|
|
|
|
0.33
|
|
|
0.33
|
|
|
Aggregate adjustment for income taxes
|
|
(0.04
|
)
|
|
(0.04
|
)
|
|
|
(0.16
|
)
|
|
(0.16
|
)
|
|
Non-GAAP net loss per share*
|
|
$
|
(0.06
|
)
|
|
$
|
(0.05
|
)
|
|
|
$
|
(0.13
|
)
|
|
$
|
(0.09
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP net loss
|
|
|
|
|
|
|
$
|
(51
|
)
|
|
$
|
(48
|
)
|
|
Interest and other, net
|
|
|
|
|
|
|
-
|
|
|
-
|
|
|
Income tax benefit
|
|
|
|
|
|
|
(16
|
)
|
|
(15
|
)
|
|
Depreciation and amortization
|
|
|
|
|
|
|
42
|
|
|
42
|
|
|
Stock-based compensation expense
|
|
|
|
|
|
|
27
|
|
|
27
|
|
|
Adjusted EBITDA*
|
|
|
|
|
|
|
$
|
2
|
|
|
$
|
6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other Items
|
|
|
|
|
|
|
|
|
|
|
Effective tax rate
|
|
|
|
|
|
|
|
|
24
|
%
|
|
Weighted average shares outstanding (in millions)
|
|
|
|
|
|
|
|
|
80.5
|
|
|
Cash flows from operations
|
|
|
|
|
|
|
|
|
$25-$35
|
|
Capital expenditures
|
|
|
|
|
|
|
|
|
$12-$14
|
|
|
|
|
|
|
|
|
|
|
|
*
|
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/20190327005185/en/
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