SecureWorks Expects Path To Profitability In FY25, Clocks 10% Revenue Decline In Q4

SecureWorks Corp SCWX reported a fourth-quarter FY23 revenue decline of 9.8% year-on-year to $115.34 million, beating the consensus of $109.62 million.
SecureWorks Taegis posted $261 million in annual recurring revenue (ARR) and added 400 customers. Taegis ARR grew 58% Y/Y and revenue 106% Y/Y.
Segments: Subscription revenue declined 8% Y/Y to $91.5 million. Professional Services revenue decreased by 16.2% Y/Y to $23.8 million.
The non-GAAP gross margin was flattish at 63.9%.
Non-GAAP EPS loss of $(0.17) beat the consensus loss of $(0.27).
SecureWorks held $143.5 million in cash and equivalents.
"We reached several important milestones at year end fiscal 2023, as Taegis ARR exceeded $260 million with 2,000 customers now on our XDR platform," said Paul Parrish, Chief Financial Officer, SecureWorks.
"With our transformation nearly complete, we expect to be at near break-even in the fourth quarter of FY24, with a path to EBITDA profitability in the following fiscal year."
Outlook: SecureWorks sees Q1 FY24 revenue of $96 million - $98 million and Q1 non-GAAP EPS loss of $(0.33) - $(0.31).
SecureWorks sees FY24 revenue of $380 million - $400 million and FY24 non-GAAP EPS loss of $(0.35) - $(0.26).
Price Action: SCWX shares are trading higher by 4.59% at $8.43 on the last check Thursday.

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