SCWX stock is moving higher on December 5, 2019, after the company reported a revenue beat.

Secureworks reports Q3 EPS 1c, consensus (3c). The company reports Q3 revenue of 141.33M, versus the consensus estimate of $136.05M.

“In the world of accelerating digital transformation and complex technology ecosystems, effective security programs require a more agile and scalable model. Our model goes beyond prevention alone, to leverage the powerful combination of machine and human intelligence and the community. As a global leader in the security industry, we are proud to partner with other leading security and technology companies to deliver solutions to the market that work in concert to increase the speed of detection and effectiveness of response to reduce risk,” said Michael Cote, CEO of Secureworks.

“Revenue, gross margin, adjusted EBITDA and cash flow were strong again in the third quarter and exceeded our expectations. We continue to invest in our security analytics platform and SaaS-based offerings and, as we finish the year, we remain focused on building upon our progress, driving our business transformation and bringing our vision of the future of security to life,” continued Mr. Cote.

Business and operational developments include:

  • Red Cloak™ Threat Detection and Response (TDR) was launched in November as part of an expanded Dell Safeguard and Response portfolio of offerings, adding the power of advanced security detection and response capabilities to Dell’s endpoint products. TDR is being sold in combination with VMware Carbon Black’s endpoint and next generation anti-virus products. TDR applies world-class analytics and threat intelligence that extends beyond the endpoint to a customer’s network and cloud environment. Managed Detection and Response (MDR) is also now available to Dell customers through the Dell Safeguard and Response portfolio of offerings.
  • As customers accelerate the pace of cloud adoptions, Secureworks has partnered with Microsoft to extend our advanced detection and response capabilities to Microsoft ATP and O365 customers via our TDR application. Through this partnership, Secureworks’ TDR software will provide Microsoft customers full visibility into their technology landscape, helping them rid their environment of hard to detect threats, without the need to deploy another agent.

Third Quarter Fiscal 2020 Financial Results Highlights

  • Both GAAP and non-GAAP revenue increased 6.2 percent to $141.3 million from $133.1 million in the third quarter of fiscal 2019.
  • GAAP gross margin was 56.4 percent in the third quarter of fiscal 2020, compared with 53.3 percent in the same period last year. Non-GAAP gross margin was 59.2 percent compared with 56.0 percent in the third quarter of fiscal 2019.
  • GAAP net loss was $7.9 million, or $0.10 per share, in the third quarter of fiscal 2020, compared with $3.7 million, or $0.05 per share, in the prior year. Non-GAAP net income was $0.8 million, or $0.01 per share, in the third quarter of fiscal 2020, compared with $5.2 million, or $0.06 per share, in the same prior year period.
  • Adjusted EBITDA was $5.8 million, compared with $8.6 million in the third quarter of fiscal 2019.
  • Cash provided by operating activities for the three months ended November 1, 2019 was $22.6 million.
  • Secureworks ended the third quarter of fiscal 2020 with $138.8 million in cash and cash equivalents.
  • Monthly recurring revenue as of November 1, 2019 was $36.9 million. The Company’s monthly recurring revenue metric represents the monthly value of its subscription contracts, including operational backlog, as of period end.
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