ATLANTA, March 14, 2024 -- Secureworks (NASDAQ: SCWX), a global leader in cybersecurity, today announced financial results for its fourth quarter and full year fiscal 2024, which ended on February 2, 2024.


www.secureworks.com

Key Highlights



  • Taegis™ annual recurring revenue (ARR) grew to $285 million, an increase of 9% on a year-over-year basis.

  • Taegis fourth quarter revenue grew 15% year-over-year to $68.9 million.

  • Taegis GAAP gross margin and non-GAAP gross margin continued to expand in the fourth quarter, reaching 70.8% and 73.1%, respectively.

  • Secureworks exceeded its guidance for adjusted EBITDA in the fourth quarter, delivering $3.8 million, representing a margin of 4.3%.


"As the open security platform of choice, Taegis integrates with existing investments to reduce risk and avoid the damage inflicted by cyber breaches. With ransomware proliferating and dwell times below 24 hours, never has our mission been more critical or relevant to customers. I'm particularly proud of our team's recent contribution of intelligence and insights gained from four years of combating LockBit in support of the law enforcement disruption of the world's most prolific ransomware operation," said Wendy Thomas, CEO, Secureworks. "Taegis sees more, detects better and responds faster. Our continuous innovations in AI means that customers and partners globally are benefiting from our platform's powerful capabilities in cyber defense to drive better security outcomes and realize greater efficiencies in their security operations. That success drives our growth."


"Our fourth quarter results demonstrated how our unique cloud architecture creates a win-win situation, fueling the delivery of the best security outcomes for our customers with spend predictability, while contributing to our expanding margins," said Alpana Wegner, Chief Financial Officer, Secureworks. "We exceeded our commitment for breakeven adjusted EBITDA in the fourth quarter, which marks an important milestone and gives us confidence in our EBITDA guidance for the full year fiscal 2025."


Fourth Quarter and Fiscal 2024 Financial Highlights



  • Total revenue for the fourth quarter was $89.2 million, compared to $115.3 million in the fourth quarter of fiscal 2023, reflecting the strategic wind-down of our Other MSS business.

  • Taegis revenue for the fourth quarter was $68.9 million, compared to $60.2 million in the fourth quarter of fiscal 2023.

  • GAAP gross profit was $58.5 million, compared with $68.9 million in the fourth quarter of fiscal 2023. Non-GAAP gross profit was $60.7 million, compared with $73.7 million during the same period last year.

  • GAAP gross profit specific to Taegis was $48.8 million, compared with $40.6 million in the fourth quarter of fiscal 2023. Non-GAAP Taegis gross profit was $50.4 million, compared with $41.7 million during the same period last year.

  • GAAP gross margin for the fourth quarter was 65.6%, compared with 59.7% in the same period last year. Non-GAAP gross margin was 68.1%, compared with 63.9% in the fourth quarter of fiscal 2023.

  • GAAP Taegis gross margin was 70.8% for the quarter, compared with 67.5% in the same period last year. Non-GAAP Taegis gross margin was 73.1%, compared with 69.2% in the fourth quarter of fiscal 2023.

  • GAAP net loss was $8.3 million for the fourth quarter, or $0.10 per share, compared with GAAP net loss of $40.0 million, or $0.47 per share, in the same period last year. Non-GAAP net income was $6.6 million, or $0.08 per share, compared with non-GAAP net loss of $14.3 million, or $0.17 per share, in the same period last year.

  • Adjusted EBITDA for the quarter was $3.8 million, compared with adjusted EBITDA loss of $19.7 million in the fourth quarter of fiscal 2023.

  • The company ended the fourth quarter with $68.7 million in cash and cash equivalents and no borrowings on its credit facility.


Full Year Fiscal 2024 Financial Highlights



  • Total revenue for fiscal year 2024 was $365.9 million, compared to $463.5 million in fiscal 2023, reflecting the strategic wind-down of our Other MSS business.

  • Taegis revenue for fiscal 2024 was $265.3 million, compared to $188.1 million in fiscal 2023.

  • GAAP gross profit was $217.8 million, compared with $272.4 million in fiscal 2023. Non-GAAP gross profit was $234.5 million, compared with $291.6 million during the same period last year.

  • GAAP gross profit specific to Taegis was $184.6 million, compared with $124.0 million in fiscal 2023. Non-GAAP Taegis gross profit was $190.1 million, compared with $127.7 million during the same period last year.

  • GAAP gross margin for fiscal 2024 was 59.5%, compared with 58.8% in the same period last year. Non-GAAP gross margin was 64.1%, compared with 62.9% in fiscal 2023.

  • GAAP Taegis gross margin was 69.6% for fiscal 2024, compared with 65.9% in the same period last year. Non-GAAP Taegis gross margin was 71.7%, compared with 67.9% in fiscal 2023.

  • GAAP net loss was $86.0 million in fiscal 2024, or $1.00 per share, compared with GAAP net loss of $114.5 million, or $1.36 per share, in the same period last year. Non-GAAP net loss was $19.1 million, or $0.22 per share, compared with non-GAAP net loss of $46.9 million, or $0.56 per share, in the same period last year.

  • Adjusted EBITDA loss for fiscal 2024 was $27.8 million, compared with adjusted EBITDA loss of $59.0 million in fiscal 2023.


Business and Operational Highlights



  • Launched our AI-powered Threat Score to silence alert noise and increase security analyst productivity by over 100%.

  • Supported the recent law enforcement operation to disrupt LockBit, the world's most prolific ransomware operation, by providing intelligence and insights gained from 4 years of combating LockBit ransomware intrusions, further underscoring our role in critical public/private partnerships in cyber defense.

  • Expanded our Global MSSP Partner Program with the addition of Happiest Minds providing Managed Detection and Response (MDR) services powered by our Taegis™ XDR platform.

  • Received the Frost & Sullivan Competitive Strategy Leadership Award in the Global XDR Industry, recognizing our strategy effectiveness and execution, competitive differentiation, and customer experience.

  • Named to CRN Security 100, recognizing our commitment to working hand in hand with our partners to protect businesses from cyber threats.

  • Recognized as a Gold Globee winner in the Extended Detection and Response and Managed Detection and Response Categories of the 2024 Globee® Awards for cybersecurity.


Financial Outlook


For the first quarter of fiscal 2025, the Company expects:



  • Revenue of $83 million to $85 million.

  • Adjusted EBITDA of $0 to $2 million.

  • Non-GAAP net loss per share of ($0.01) to non-GAAP net earnings per share of $0.01.


Secureworks is providing the following guidance for full fiscal year 2025. The Company expects:

















Fiscal Year 2025 Guidance


 

Total ARR


$300M or Greater


Total revenue


$325M to $335M


Non-GAAP net income


$0M to $7M


 

$0.00 to $0.08 per share


Adjusted EBITDA


$4M to $12M


Cash from operations


($2M) to $8M




The Company has not reconciled its forward-looking non-GAAP financial measures to their most directly comparable GAAP measures because certain items are out of our control or cannot be reasonably predicted. Accordingly, reconciliations for forward-looking non-GAAP financial measures are not available without unreasonable efforts.


Conference Call Information


As previously announced, the Company will hold a conference call to discuss its fourth quarter and full year fiscal 2024 results and financial guidance on March 14, 2024, 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 https://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 subscription cost of revenue, non-GAAP professional services cost of revenue, non-GAAP Taegis Subscription Solutions cost of revenue, non-GAAP Managed Security Services cost of revenue, non-GAAP gross profit, non-GAAP subscription gross profit, non-GAAP professional services gross profit non-GAAP Taegis Subscription Solutions gross profit, non-GAAP Managed Security Services gross profit, non-GAAP operating expenses, non-GAAP operating 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 net earnings (loss) per share, adjusted EBITDA, weighted average common shares outstanding - diluted (non-GAAP), non-GAAP gross margin, non-GAAP Taegis Subscription Solutions gross margin, non-GAAP Managed Security Services gross margin, non-GAAP subscription gross margin, and non-GAAP professional services gross margin, 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 presented.


Non-GAAP Net Income (Loss) and Non-GAAP Net Income (Loss) per share


The Company defines non-GAAP net loss and non-GAAP net loss on a per share basis as GAAP net loss excluding amortization of intangibles, stock-based compensation expense, reorganization and other related charges, and the aggregate adjustments for income taxes.


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," 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 income (loss), non-GAAP net income (loss), GAAP net earnings (loss) per share, non-GAAP net earnings (loss) per share, and adjusted EBITDA for the first quarter of fiscal 2025, and total annual recurring revenue ("ARR"), total revenue, GAAP net income (loss), GAAP net earnings (loss) per share, non-GAAP net income (loss), non-GAAP net earnings (loss) per share, weighted average common shares outstanding - diluted (non-GAAP), adjusted EBITDA, capital expenditures, and cash from operations for full year fiscal 2025, 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 that include, but are not limited to, the following: 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 ability to navigate economic conditions, geopolitical uncertainty and financial market volatility; the Company's reliance on personnel with extensive information security expertise; the Company's ability to successfully implement its strategic plan to realign and optimize its investments with its priorities; 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 expansion of the Company's international sales and operations; the risks associated with proposed or currently enacted tax statutes, including, but not limited to, Internal Revenue Code Section 174; the Company's exposure to fluctuations in currency exchange rates or inflation; the effect of new governmental export or import controls on the Company's business or any international sanctions compliance program applicable to the Company; 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 risks associated with our development, use and adoption of artificial intelligence; 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, cybersecurity 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 effect of natural disasters, public health issues, geopolitical conflict and other catastrophic events on the Company's ability to serve its customers, including the Ukrainian/Russian conflict and the conflict between Israel and Hamas; 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; risks related to the Company's relationship with Dell Technologies Inc. and Dell Inc. and control of the Company by Dell Technologies Inc., which include, but are not limited to, the effects of a deconsolidation of the Company as a part of the Dell Technologies Inc. affiliated tax group; and risks related to the volatility of the price of the Company's Class A common stock. 


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 resulting from 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 secures human progress with Secureworks® Taegis™, a SaaS-based, open XDR platform built on 20+ years of real-world detection data, security operations expertise, and threat intelligence and research. Taegis is embedded in the security operations of 3,900 organizations around the world who use its advanced, AI-driven capabilities to detect advanced threats, streamline and collaborate on investigations, and automate the right actions. www.secureworks.com


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SECUREWORKS CORP.


Consolidated Statements of Operations


(in thousands)


(unaudited)


               
 

Three Months Ended


 

Twelve Months Ended


 

February 2,
2024


 

February 3,
2023


 

February 2,
2024


 

February 3,
2023


Net revenue:


             

   Subscription


$   75,260


 

$   91,522


 

$ 304,556


 

$ 363,448


   Professional services


13,894


 

23,814


 

61,323


 

100,027


      Total net revenue


89,154


 

115,336


 

365,879


 

463,475


Cost of revenue:


             

   Subscription


22,744


 

32,532


 

109,833


 

131,554


   Professional services


7,918


 

13,931


 

38,287


 

59,503


      Total cost of revenue


30,662


 

46,463


 

148,120


 

191,057


Gross profit


58,492


 

68,873


 

217,759


 

272,418


Operating expenses:


             

   Research and development


25,230


 

37,553


 

110,996


 

139,785


   Sales and marketing


25,509


 

42,072


 

118,351


 

163,637


   General and administrative


20,039


 

27,195


 

83,233


 

101,554


 Reorganization and other related charges


2,913


 

15,471


 

17,145


 

15,471


      Total operating expenses


73,691


 

122,291


 

329,725


 

420,447


Operating loss


(15,199)


 

(53,418)


 

(111,966)


 

(148,029)


Interest and other, net


(856)


 

2,475


 

(2,554)


 

1,248


Loss before income taxes


(16,055)


 

(50,943)


 

(114,520)


 

(146,781)


Income tax benefit


(7,763)


 

(10,907)


 

(28,478)


 

(32,282)


Net loss


$    (8,292)


 

$  (40,036)


 

$  (86,042)


 

$  (114,499)


               

Net loss per common share (basic and diluted)


$      (0.10)


 

$      (0.47)


 

$      (1.00)


 

$      (1.36)


Weighted-average common shares outstanding (basic and diluted)


86,364


 

84,701


 

86,049


 

84,389


               


 




























































































































































































SECUREWORKS CORP.


Consolidated Statements of Financial Position


(in thousands)


(unaudited)


               
         

February 2,
2024


 

February 3,
2023


Assets:


         

Current assets:


         
 

Cash and cash equivalents


   

$         68,655


 

$       143,517


 

Accounts receivable, net


   

54,266


 

72,627


 

Inventories


   

727


 

620


 

Other current assets


   

13,777


 

17,526


   

Total current assets


   

137,425


 

234,290


Property and equipment, net


   

2,149


 

4,632


Goodwill


   

425,472


 

425,519


Operating lease right-of-use assets, net


   

5,069


 

9,256


Intangible assets, net


   

83,235


 

106,208


Other non-current assets


   

71,429


 

60,965


   

Total assets


   

$       724,779


 

$       840,870


Liabilities and Stockholders' Equity:


         

Current liabilities:


         
 

Accounts payable


   

$           8,974


 

$         18,847


 

Accrued and other


   

61,895


 

81,566


 

Deferred revenue


   

131,245


 

145,170


   

Total current liabilities


   

202,114


 

245,583


Long-term deferred revenue


   

5,706


 

11,162


Operating lease liabilities, non-current


   

7,803


 

12,141


Other non-current liabilities


   

7,831


 

14,023


   

Total liabilities


   

223,454


 

282,909


Stockholders' equity


   

501,325


 

557,961


Total liabilities and stockholders' equity     


   

$       724,779


 

$       840,870




 




















































































































































































SECUREWORKS CORP.


Consolidated Statements of Cash Flows


(in thousands)


(unaudited)


         
   

Twelve Months Ended


   

February 2,
2024


 

February 3,
2023


Cash flows from operating activities:


       

Net loss


 

$       (86,042)


 

$     (114,499)


Adjustments to reconcile net loss to net cash used in operating activities:


       

Depreciation and amortization


 

31,893


 

36,668


Amortization of right of use asset


 

2,024


 

3,800


Reorganization and other related charges


 

3,272


 

6,112


Amortization of costs capitalized to obtain revenue contracts


 

17,133


 

18,203


Amortization of costs capitalized to fulfill revenue contracts


 

3,232


 

4,773


Stock-based compensation expense


 

35,104


 

36,855


Income tax benefit


 

(28,478)


 

(32,282)


Provision for credit losses


 

(282)


 

(524)


Changes in assets and liabilities:


       

Accounts receivable


 

17,952


 

11,247


Net transactions with Dell


 

5,708


 

(1,278)


Inventories


 

(107)


 

(115)


Other assets


 

371


 

24,055


Accounts payable


 

(9,685)


 

4,050


Deferred revenue


 

(17,151)


 

(16,912)


Operating leases, net


 

(4,553)


 

(5,465)


Accrued and other liabilities


 

(29,550)


 

(33,433)


  Net cash used in operating activities


 

(59,159)


 

(58,745)


Cash flows from investing activities:


       

Capital expenditures


 

(1,180)


 

(2,307)


Software development costs


 

(5,243)


 

(3,704)


Net cash used in investing activities


 

(6,423)


 

(6,011)


Cash flows from financing activities:


       

Taxes paid on vested restricted shares


 

(6,163)


 

(8,887)


Net cash used in financing activities


 

(6,163)


 

(8,887)


Effect of exchange rate changes on cash and cash equivalents


 

(3,117)


 

(3,495)


Net decrease in cash and cash equivalents


 

(74,862)


 

(77,138)


Cash and cash equivalents at beginning of the period


 

143,517


 

220,655


Cash and cash equivalents at end of the period


 

$         68,655


 

$       143,517




Non-GAAP Financial Measures


This press release presents information about the Company's non-GAAP subscription cost of revenue, non-GAAP professional services cost of revenue, non-GAAP Taegis Subscription Solutions cost of revenue, non-GAAP Managed Security Services cost of revenue, non-GAAP gross profit, non-GAAP subscription gross profit, non-GAAP professional services gross profit, non-GAAP Taegis Subscription Solutions gross profit, non-GAAP Managed Security Services gross profit, non-GAAP operating expenses, 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 net earnings (loss) per share, adjusted EBITDA, weighted average common shares outstanding - diluted (non-GAAP), non-GAAP gross margin, non-GAAP Taegis Subscription Solutions gross margin, non-GAAP Managed Security Services gross margin, non-GAAP subscription gross margin and non-GAAP professional services gross margin, which are non-GAAP financial measures provided as a supplement to the results provided in accordance with GAAP. A detailed discussion of our 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 in "Management's Discussion and Analysis of Financial Condition and Results of Operations — Non-GAAP Financial Measures" in our periodic reports filed with the SEC. The Company encourages investors to review the non-GAAP discussion in these reports in conjunction with the presentation of non-GAAP financial measures. 


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SECUREWORKS CORP.


Revenue Components and Reconciliation of GAAP to Non-GAAP Financial Measures


(in thousands, except per share data)


(unaudited)


   

Three Months Ended


 

Twelve Months Ended


   

February 2,
2024


 

February 3,
2023


 

February 2,
2024


 

February 3,
2023


Revenue:


               

Taegis Subscription Solutions


 

$      68,930


 

$      60,172


 

$    265,298


 

$    188,085


Managed Security Services


 

6,330


 

31,350


 

39,258


 

175,363


Subscription Revenue


 

75,260


 

91,522


 

304,556


 

363,448


Professional Services Revenue


 

13,894


 

23,814


 

61,323


 

100,027


Total revenue


 

$      89,154


 

$    115,336


 

$    365,879


 

$    463,475


                 

GAAP Taegis Subscription Solutions cost of revenue


 

$      20,162


 

$      19,568


 

$      80,737


 

$      64,118


Amortization of intangibles


 

(1,320)


 

(973)


 

(4,724)


 

(3,492)


Stock-based compensation expense


 

(274)


 

(89)


 

(835)


 

(277)


Non-GAAP Taegis Subscription Solutions cost of revenue


 

$      18,568


 

$      18,506


 

$      75,178


 

$      60,349


Non-GAAP Taegis Subscription Solutions cost of revenue as a % of
Taegis Subscription Solutions revenue


 

26.9 %


 

30.8 %


 

28.3 %


 

32.1 %


                 

GAAP Managed Security Services cost of revenue


 

$        2,582


 

$      12,964


 

$      29,096


 

$      67,436


Amortization of intangibles


 


 

(3,409)


 

(9,397)


 

(13,641)


Stock-based compensation expense


 

(56)


 

(96)


 

(216)


 

(365)


Non-GAAP Managed Security Services cost of revenue


 

$        2,526


 

$        9,459


 

$      19,483


 

$      53,430


Non-GAAP Managed Security Services cost of revenue as a % of
Managed Security Services revenue


 

39.9 %


 

30.2 %


 

49.6 %


 

30.5 %


                 

GAAP subscription cost of revenue


 

$      22,744


 

$      32,532


 

$    109,833


 

$    131,554


Amortization of intangibles


 

(1,320)


 

(4,382)


 

(14,121)


 

(17,133)


Stock-based compensation expense


 

(330)


 

(185)


 

(1,051)


 

(642)


Non-GAAP subscription cost of revenue


 

$      21,094


 

$      27,965


 

$      94,661


 

$    113,779


Non-GAAP subscription cost of revenue as a % of subscription
revenue


 

28.0 %


 

30.6 %


 

31.1 %


 

31.3 %


                 

GAAP professional services cost of revenue


 

$        7,918


 

$      13,931


 

$      38,287


 

$      59,503


Stock-based compensation expense


 

(536)


 

(303)


 

(1,527)


 

(1,358)


Non-GAAP professional services cost of revenue


 

$        7,382


 

$      13,628


 

$      36,760


 

$      58,145


Non-GAAP professional services cost of revenue as a % of
professional services revenue


 

53.1 %


 

57.2 %


 

59.9 %


 

58.1 %


                 

GAAP gross profit


 

$      58,492


 

$      68,873


 

$    217,759


 

$    272,418


Amortization of intangibles


 

1,320


 

4,382


 

14,121


 

17,133


Stock-based compensation expense


 

865


 

488


 

2,578


 

2,000


Non-GAAP gross profit


 

$      60,677


 

$      73,743


 

$    234,458


 

$    291,551


Non-GAAP gross margin


 

68.1 %


 

63.9 %


 

64.1 %


 

62.9 %


                 

GAAP Taegis Subscription Solutions gross profit


 

$      48,768


 

$      40,604


 

$    184,561


 

$    123,967


Amortization of intangibles


 

1,320


 

973


 

4,724


 

3,492


Stock-based compensation expense


 

274


 

89


 

835


 

277


Non-GAAP Taegis Subscription Solutions gross profit


 

$      50,362


 

$      41,666


 

$    190,120


 

$    127,736


Non-GAAP Taegis Subscription Solutions gross margin


 

73.1 %


 

69.2 %


 

71.7 %


 

67.9 %


                 

GAAP research and development expenses


 

$      25,230


 

$      37,553


 

$    110,996


 

$    139,785


Stock-based compensation expense


 

(3,548)


 

(3,129)


 

(12,625)


 

(11,589)


Non-GAAP research and development expenses


 

$      21,682


 

$      34,424


 

$      98,371


 

$    128,196


Non-GAAP research and development expenses as a % of revenue


 

24.3 %


 

29.8 %


 

26.9 %


 

27.7 %


                 

GAAP sales and marketing expenses


 

$      25,509


 

$      42,072


 

$    118,351


 

$    163,637


Stock-based compensation expense


 

(1,392)


 

(1,672)


 

(4,166)


 

(6,568)


Non-GAAP sales and marketing expenses


 

$      24,117


 

$      40,400


 

$    114,185


 

$    157,069


Non-GAAP sales and marketing expenses as a % of revenue


 

27.1 %


 

35.0 %


 

31.2 %


 

33.9 %


                 

GAAP general and administrative expenses


 

$      20,039


 

$      27,195


 

$      83,233


 

$    101,554


Amortization of intangibles


 

(3,523)


 

(3,523)


 

(14,094)


 

(14,094)


Stock-based compensation expense


 

(4,447)


 

(4,062)


 

(15,735)


 

(16,698)


Non-GAAP general and administrative expenses


 

$      12,069


 

$      19,610


 

$      53,404


 

$      70,762


Non-GAAP general and administrative expenses as a % of revenue


 

13.5 %


 

17.0 %


 

14.6 %


 

15.3 %


                 

GAAP operating loss


 

$    (15,199)


 

$    (53,418)


 

$  (111,966)


 

$  (148,029)


Amortization of intangibles


 

4,844


 

7,906


 

28,216


 

31,228


Stock-based compensation expense


 

10,252


 

9,351


 

35,104


 

36,855


Reorganization and other related charges


 

2,913


 

15,471


 

17,145


 

15,471


Non-GAAP operating (loss)/income


 

$        2,810


 

$    (20,690)


 

$    (31,501)


 

$    (64,475)


Non-GAAP operating margin


 

3.2 %


 

(17.9) %


 

(8.6) %


 

(13.9) %


                 

GAAP net loss


 

$      (8,292)


 

$    (40,036)


 

$    (86,042)


 

$  (114,499)


Amortization of intangibles


 

4,844


 

7,906


 

28,216


 

31,228


Stock-based compensation expense


 

10,252


 

9,351


 

35,104


 

36,855


Reorganization and other related charges


 

2,913


 

15,471


 

17,145


 

15,471


Aggregate adjustment for income taxes


 

(3,073)


 

(6,967)


 

(13,542)


 

(15,941)


Non-GAAP net (loss)/income


 

$        6,644


 

$    (14,275)


 

$    (19,119)


 

$    (46,886)


Non-GAAP net (loss)/income as a % of revenue


 

7.5 %


 

(12.4) %


 

(5.2) %


 

(10.1) %


                 

GAAP net loss per share


 

$        (0.10)


 

$        (0.47)


 

$        (1.00)


 

$        (1.36)


Amortization of intangibles


 

0.06


 

0.09


 

0.33


 

0.37


Stock-based compensation expense


 

0.12


 

0.11


 

0.41


 

0.44


Reorganization and other related charges


 

0.03


 

0.18


 

0.20


 

0.18


Aggregate adjustment for income taxes


 

(0.04)


 

(0.08)


 

(0.16)


 

(0.19)


Non-GAAP net (loss)/earnings per share *


 

$          0.08


 

$        (0.17)


 

$        (0.22)


 

$        (0.56)


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


                 

GAAP net loss


 

$      (8,292)


 

$    (40,036)


 

$    (86,042)


 

$  (114,499)


Interest and other, net


 

856


 

(2,475)


 

2,554


 

(1,248)


Income tax benefit


 

(7,763)


 

(10,907)


 

(28,478)


 

(32,282)


Depreciation and amortization


 

5,865


 

8,940


 

31,893


 

36,668


Stock-based compensation expense


 

10,252


 

9,351


 

35,104


 

36,855


Reorganization and other related charges


 

2,913


 

15,471


 

17,145


 

15,471


Adjusted EBITDA


 

$        3,831


 

$    (19,656)


 

$    (27,824)


 

$    (59,035)


Adjusted EBITDA as a % of revenue


 

4.3 %


 

(17.0) %


 

(7.6) %


 

(12.7) %




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