SecureWorks Shares Plunge On Q2 Performance, Slashed FY22 Outlook

Cybersecurity provider SecureWorks Corp SCWX reported a second-quarter FY22 revenue decline of 3.1% year-on-year to $134.2 million, missing the analyst consensus of $134.97 million.
Secureworks Taegis surpassed $100 million in annual recurring revenue (ARR) and ended Q2 with 700 customers. Taegis grew ARR 200% Y/Y and revenue 160% Y/Y.
Segments: Subscription revenue declined 3.6% Y/Y to $102.4 million. Professional Services revenue reduced 1.5% Y/Y to $31.7 million.
The non-GAAP gross margin expanded 140 bps to 61.1%.
Non-GAAP EPS of $0.01 beat the consensus loss of $(0.01).
SecureWorks held $197 million in cash and equivalents and used $13.3 million in operating cash flow during the six months ended July 30.
Outlook: SecureWorks sees Q3 revenue between $132 million - $134 million below the consensus of $135.1 million.
The company sees a non-GAAP EPS loss between $(0.08) - $(0.05) below the consensus loss of $(0.04).
SecureWorks slashed the FY22 revenue outlook from $540 million - $550 million to $535 million - $540 million below the consensus of $545.2 million.
It raised FY22 Taegis' guidance to at least $155 million ARR.
Price Action: SCWX shares traded lower by 12.60% at $19.11 in the market session on the last check Thursday.

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