scwx-20210311
0001468666false00014686662021-03-112021-03-11

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 8-K

CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

 Date of Report (Date of earliest event reported):      March 11, 2021

SecureWorks Corp.
(Exact name of registrant as specified in its charter)
Delaware
001-3774827-0463349
(State or other jurisdiction of incorporation)
(Commission File Number)
(I.R.S. Employer Identification No.)
One Concourse Parkway NE
Suite 500
Atlanta,
Georgia
30328
(Address of principal executive offices)
(Zip Code)

Registrant’s telephone number, including area code: (404) 327-6339
Not Applicable
(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Class A Common Stock, SCWXThe NASDAQ Stock Market LLC
par value $0.01 per share(NASDAQ Global Select Market)

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.




Item 2.02    Results of Operations and Financial Condition.

On March 11, 2021, SecureWorks Corp. (the “Company”) issued a press release announcing its financial results for its fiscal quarter and fiscal year ended January 29, 2021. A copy of the press release is furnished as Exhibit 99.1 to this report.

In accordance with General Instruction B.2 to Form 8-K, the information contained in this report, including Exhibit 99.1 hereto, is being “furnished” with the Securities and Exchange Commission and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities under such section. Furthermore, such information shall not be deemed to be incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, unless specifically identified as being incorporated therein by reference.

Item 9.01    Financial Statements and Exhibits.

(d)    Exhibits. The following document is herewith furnished as an exhibit to this report:
Exhibit No.Exhibit Description
99.1
104Cover Page Interactive Data File (the cover page XBRL tags are embedded within the Inline XBRL document, which is contained in Exhibit 101).


2



SIGNATURES


Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Date:March 11, 2021SecureWorks Corp.
 By: /s/ Paul M. Parrish
Paul M. Parrish
Chief Financial Officer
(Duly Authorized Officer)

3
Document


Exhibit 99.1
https://cdn.kscope.io/b7dcff893fe8a25eaca147e5d3f64860-sw_logo-black1.jpg

Secureworks Reports Fourth Quarter and Full Year Fiscal 2021 Results

ATLANTA, Ga, Mar.11, 2021 - Secureworks (NASDAQ: SCWX), a global leader in cybersecurity, today announced financial results for its fourth quarter and full fiscal year which ended on January 29, 2021.

Key Highlights
Nearly 400 customers on cloud-native Secureworks Taegis™ platform, resulting in annual recurring revenue (ARR) growth for the product of 266 percent since the beginning of the fiscal year, 31 percent from the third quarter to fourth quarter of fiscal year 2021, to end fiscal year 2021 at $55 million.
Secureworks Taegis revenue totaled $32.1 million for fiscal year 2021.
Issuing Secureworks Taegis guidance of at least $150 million ARR by end of fiscal year 2022 and Taegis revenue of $90 to $100 million for fiscal year 2022.
Both GAAP and Non-GAAP full fiscal year 2021 gross margin up 6 percent over prior year.
Ended the fourth quarter with a record $220.3 million in cash and cash equivalents.
“The ability to outpace the adversary at scale requires an integrated, open analytics platform that empowers the community to collectively defend against threats,” said Michael R. Cote, chief executive officer, Secureworks. “Nearly 400 customers around the world are now realizing the transformative power of that community through our cloud-native Taegis security analytics platform.”

Financial Summary
“We are pleased with the momentum in our Taegis platform, with over 266% annual growth in ARR for the product of $55 million, up from $15 million since the start of the fiscal year,” said Paul Parrish, chief financial officer, Secureworks. “Further, we’re excited about the future opportunity and see Taegis ARR growth continuing to accelerate.”

Fourth Quarter Fiscal 2021
For the fourth quarter of fiscal 2021, GAAP revenue decreased 1.6 percent to $139.7 million from $142.0 million in the fourth quarter of fiscal 2020.
GAAP gross margin was 57.2 percent in the fourth quarter of fiscal 2021, compared with 54.4 percent in the same period last year. Non-GAAP gross margin was 60.2 percent compared with 57.0 percent in the fourth quarter of fiscal 2020.
GAAP net loss was $9.5 million, or $0.12 per share, in the fourth quarter of fiscal 2021, compared with $5.2 million, or $0.06 per share, in the prior year. Non-GAAP net income was $0.3 million, or breakeven per share, in the fourth quarter of fiscal 2021, compared with $1.9 million, or $0.02 per share, in the same prior year period.
Adjusted EBITDA for the quarter was $3.2 million, compared with $2.3 million in the fourth quarter of fiscal 2020.




Full Year Fiscal 2021
GAAP revenue in fiscal 2021 increased 1.5 percent to $561.0 million from $552.8 million in fiscal 2020.
GAAP gross margin was 56.8 percent in fiscal 2021, up from 54.3 percent in the prior year. Non-GAAP gross margin increased to 59.7 percent from 57.0 percent year-over-year.
GAAP net loss was $21.9 million, or $0.27 per share, in fiscal 2021, compared with a GAAP net loss of $31.7 million, or $0.39 per share, last year.
Non-GAAP net income was $17.9 million, or $0.22 per share, in fiscal 2021, compared to non-GAAP net income of $0.2 million, or $0.01 per share, in fiscal 2020.
Adjusted EBITDA was $33.2 million, compared with $10.3 million in fiscal 2020.
Cash provided by operating activities for fiscal 2021 was $60.7 million.

Business and Operational Highlights
During the fourth quarter of fiscal 2021, Secureworks unveiled threat detection and response security analytics improvements to Secureworks Taegis XDR (Extended Detection and Response) addressing customers’ need for a compelling SIEM alternative.
Secureworks Taegis XDR customers experience benefits of nearly $3.6 million over three years and ROI of 413% according to a commissioned Total Economic Impact study conducted by Forrester Consulting.
Secureworks recently introduced a new MSSP track within the Secureworks Global Partner Program, leveraging the Company’s 20+ years of experience as a leading MSSP, enabling partners to deliver services on the cloud-native Secureworks Taegis platform, strengthening the security community and creating additional revenue streams.

Financial Outlook
For the first quarter of fiscal 2022, the Company expects:
Revenue of $134 to $136 million.
GAAP net loss per share of $0.16 to $0.17 and non-GAAP net loss per share of $0.02 to $0.04.
For the full fiscal year 2022, the Company expects:
Revenue of $535 to $545 million, reflecting our shift toward partner-delivered services as we scale our MSSP program.
GAAP net loss of $63 to $71 million and $0.76 to $0.86 on a per share basis.
Non-GAAP net loss of $18 to $26 million and $0.22 to $0.31 on a per share basis, primarily reflecting incremental investments in both R&D to extend the Taegis platform and in sales and marketing related to the expansion of our Partner Program and promotion of Taegis.
Adjusted EBITDA to be $13 to $23 million negative for the full year.
Cash flow from operations to range from breakeven to a $10 million use of cash.
Taegis ARR of at least $150 million at the end of fiscal year 2022, which translates to Taegis revenue of $90 to $100 million for fiscal year 2022, as we ramp new customer acquisition and accelerate the transition of existing customers looking to benefit from the additional capabilities offered by the new platform.



Conference Call Information
As previously announced, the Company will hold a conference call to discuss its fourth quarter and full year 2021 results and financial guidance on Mar. 11, 2021, 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 http://investors.secureworks.com. The webcast and supplemental information will be archived at the same location for one year.

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 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 non-GAAP financial measures to the most directly comparable 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 regarding revenue, GAAP net loss per share, and non-GAAP net loss per share for the first quarter of fiscal 2022, and revenue, GAAP net loss, GAAP net loss per share, non-GAAP net loss, non-GAAP net loss per share, Adjusted EBITDA, cash flow from operations, and annual recurring revenue and revenue for its Taegis platform for full year fiscal 2022, 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, among others: 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 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 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 effect of adverse legislative or regulatory tax changes or unfavorable outcomes in tax audits and other tax compliance matters; 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 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, public health issues and other catastrophic events on the Company’s ability to serve its customers, including the coronavirus (COVID-19) pandemic; 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, 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 global cybersecurity leader that protects customer progress with Secureworks® Taegis™, a cloud-native security analytics platform built on 20+ years of real-world threat intelligence and research, improving customers’ ability to detect advanced threats, streamline and collaborate on investigations, and automate the right actions.
www.secureworks.com

Contact Information
Investor Inquiries:
Richie Downum 
Investor Relations Director 
404-235-1021 
rdownum@secureworks.com
Media Inquiries:
Derek Delano
Corporate Communications
617-335-9516
press@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 EndedTwelve Months Ended
January 29, 2021January 31, 2020January 29, 2021January 31, 2020
Net revenue$139,736 $141,986 $561,034 $552,765 
Cost of revenue59,745 64,792 242,167 252,796 
Gross margin79,991 77,194 318,867 299,969 
Research and development29,218 23,364 105,008 94,964 
Sales and marketing37,048 40,708 144,934 157,674 
General and administrative27,936 25,643 101,760 99,505 
Total operating expenses94,202 89,715 351,702 352,143 
Operating loss(14,211)(12,521)(32,835)(52,174)
Interest and other, net90 (111)1,034 850 
Loss before income taxes(14,121)(12,632)(31,801)(51,324)
Income tax expense (benefit)(4,590)(7,404)(9,899)(19,658)
Net income (loss)$(9,531)$(5,228)$(21,902)$(31,666)
Net income (loss) per common share (basic)$(0.12)$(0.06)$(0.27)$(0.39)
Net income (loss) per common share (diluted)$(0.12)$(0.06)$(0.27)$(0.39)
Weighted-average common shares
outstanding (basic)81,602 80,591 81,358 80,563 
Weighted-average common shares
outstanding (diluted)81,602 80,591 81,358 80,563 
Percentage of Total Net Revenue
Gross margin57.2 %54.4 %56.8 %54.3 %
Research and development20.9 %16.5 %18.7 %17.2 %
Sales and marketing26.5 %28.7 %25.8 %28.5 %
General and administrative20.0 %18.1 %18.1 %18.0 %
Operating expenses67.4 %63.2 %62.7 %63.7 %
Operating loss(10.2)%(8.8)%(5.9)%(9.4)%
Loss before income taxes(10.1)%(8.9)%(5.7)%(9.3)%
Net income (loss)(6.8)%(3.7)%(3.9)%(5.7)%
Effective tax rate32.5 %58.6 %31.1 %38.3 %
Note: Percentage growth rates are calculated based on underlying data in thousands






SECUREWORKS CORP.
Consolidated Statements of Financial Position
(in thousands)
(unaudited)
January 29, 2021January 31, 2020
Assets:
Current assets:
Cash and cash equivalents$220,300 $181,838 
Accounts receivable, net108,005 111,798 
Inventories560 746 
Other current assets17,349 27,449 
Total current assets346,214 321,831 
Property and equipment, net17,143 27,606 
Goodwill425,861 416,487 
Operating lease right-of-use assets, net22,330 23,463 
Intangible assets, net157,820 180,052 
Other non-current assets75,993 78,592 
Total assets$1,045,361 $1,048,031 
Liabilities and Stockholders' Equity:
Current liabilities:
Accounts payable$16,769 $18,690 
Accrued and other109,134 98,855 
Deferred revenue168,437 175,847 
Total current liabilities294,340 293,392 
Long-term deferred revenue9,590 12,690 
Operating lease liabilities, non-current22,461 24,669 
Other non-current liabilities51,189 50,400 
Total liabilities377,580 381,151 
Stockholders' equity667,781 666,880 
Total liabilities and stockholders' equity$1,045,361 $1,048,031 





SECUREWORKS CORP.
Consolidated Statements of Cash Flows
(in thousands)
(unaudited)
Twelve Months Ended
January 29, 2021January 31, 2020
Cash flows from operating activities:
Net loss$(21,902)$(31,666)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization41,614 42,932 
Stock-based compensation expense24,414 19,548 
Effects of exchange rate changes on monetary assets and liabilities denominated in foreign currencies(1,485)270 
Income tax benefit(9,899)(19,658)
Other non cash impacts392 1,830 
Provision for doubtful accounts1,810 3,099 
Changes in assets and liabilities:
Accounts receivable2,557 26,789 
Net transactions with parent11,788 (12,483)
Inventories186 (278)
Other assets18,659 13,293 
Accounts payable(1,527)7,008 
Deferred revenue(9,759)14,463 
Accrued and other current liabilities3,741 13,692 
Net cash provided by operating activities60,589 78,839 
Cash flows from investing activities:
Capital expenditures(3,005)(12,590)
Acquisition of Subsidiary, net of cash (15,081)— 
Net cash used in investing activities(18,086)(12,590)
Cash flows from financing activities:
Proceeds from stock option exercises1,469 1,327 
Taxes paid on vested restricted shares(5,510)(8,453)
Purchases of stock for treasury— (6,377)
Payments on financed capital expenditures— (500)
Net cash used in financing activities(4,041)(14,003)
Net increase in cash and cash equivalents38,462 52,246 
Cash and cash equivalents at beginning of the period181,838 129,592 
Cash and cash equivalents at end of the period220,300 181,838 
Supplemental Disclosures of Cash Flow Information:
Financed capital expenditures$— $724 
Income taxes paid1,933 1,746 




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. A detailed discussion of the Company’s 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 below. The Company encourages investors to review its GAAP results in conjunction with the presentation of non-GAAP financial measures.

The following is a summary of the items excluded from the most comparable GAAP financial measures to calculate our non-GAAP financial measures:
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 in fiscal 2014, all of our 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 Expense. Non-cash stock-based compensation expense relates to both the Dell Technologies and Secureworks equity plans. We exclude such expense when assessing the effectiveness of our operating performance since stock-based compensation does 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, as recorded in fiscal 2020 and fiscal 2019, as well as the provisional tax benefit of $27.0 million that was recorded in the fourth quarter of fiscal 2018. For additional information, see “Notes to Consolidated Financial Statements—Note 12—Income and Other Taxes” in our consolidated financial statements included in this report.
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.


(Tables Follow)

















SECUREWORKS CORP.
Reconciliation of GAAP to Non-GAAP Financial Measures
(in thousands, except per share data)
(unaudited)
Three Months EndedTwelve Months Ended
January 29, 2021January 31, 2020January 29, 2021January 31, 2020
GAAP revenue$139,736 $141,986 $561,034 $552,765 
Non-GAAP revenue$139,736 $141,986 $561,034 $552,765 
GAAP gross margin$79,991 $77,194 $318,867 $299,969 
Amortization of intangibles3,833 3,560 14,587 14,089 
Stock-based compensation expense338 197 1,346 1,206 
Non-GAAP gross margin$84,162 $80,951 $334,800 $315,264 
GAAP research and development expenses$29,218 $23,364 $105,008 $94,964 
Stock-based compensation expense(1,229)(1,123)(4,410)(4,280)
Non-GAAP research and development expenses$27,989 $22,241 $100,598 $90,684 
GAAP sales and marketing expenses$37,048 $40,708 $144,934 $157,674 
Stock-based compensation expense(981)695 (3,676)(1,694)
Non-GAAP sales and marketing expenses$36,067 $41,403 $141,258 $155,980 
GAAP general and administrative expenses$27,936 $25,643 $101,760 $99,505 
Amortization of intangibles(3,524)(3,524)(14,094)(14,094)
Stock-based compensation expense(4,190)(3,305)(14,982)(12,368)
Non-GAAP general and administrative expenses$20,222 $18,814 $72,684 $73,043 
GAAP operating income (loss)$(14,211)$(12,521)$(32,835)$(52,174)
Amortization of intangibles7,357 7,083 28,682 28,183 
Stock-based compensation expense6,739 3,931 24,414 19,548 
Non-GAAP operating income (loss)$(115)$(1,507)$20,261 $(4,443)
GAAP net income (loss)$(9,531)$(5,228)$(21,902)$(31,666)
Amortization of intangibles7,357 7,083 28,682 28,183 
Stock-based compensation expense6,739 3,931 24,414 19,548 
Impact of Tax Cuts and Jobs Act— (1,191)— (1,191)
Aggregate adjustment for income taxes(4,269)(2,691)(13,267)(14,688)
Non-GAAP net income$296 $1,904 $17,927 $186 
GAAP earnings (loss) per share$(0.12)$(0.06)$(0.27)$(0.39)
Amortization of intangibles0.09 0.09 0.35 0.35 
Stock-based compensation expense0.08 0.05 0.30 0.24 
Impact of Tax Cuts and Jobs Act— (0.01)— (0.01)
Aggregate adjustment for income taxes(0.05)(0.03)(0.16)(0.18)
Non-GAAP earnings per share *$— $0.02 $0.22 $— 
* Sum of reconciling items may differ from total due to rounding of individual components
GAAP net income (loss)$(9,531)$(5,228)$(21,902)$(31,666)
Interest and other, net(90)111 (1,034)(850)
Income tax expense (benefit)(4,590)(7,404)(9,899)(19,658)
Depreciation and amortization10,636 10,915 41,614 42,932 
Stock-based compensation expense6,739 3,931 24,414 19,548 
Adjusted EBITDA$3,164 $2,325 $33,193 $10,306 



SECUREWORKS CORP.
Reconciliation of GAAP to Non-GAAP Financial Measures
(unaudited)
Three Months EndedTwelve Months Ended
Percentage of Total Net RevenueJanuary 29, 2021January 31, 2020January 29, 2021January 31, 2020
GAAP gross margin57.2 %54.4 %56.8 %54.3 %
Non-GAAP adjustment3.0 %2.6 %2.9 %2.7 %
Non-GAAP gross margin60.2 %57.0 %59.7 %57.0 %
GAAP research and development expenses20.9 %16.5 %18.7 %17.2 %
Non-GAAP adjustment(0.9)%(0.8)%(0.8)%(0.8)%
Non-GAAP research and development expenses20.0 %15.7 %17.9 %16.4 %
GAAP sales and marketing expenses26.5 %28.7 %25.8 %28.5 %
Non-GAAP adjustment(0.7)%0.5 %(0.6)%(0.3)%
Non-GAAP sales and marketing expenses25.8 %29.2 %25.2 %28.2 %
GAAP general and administrative expenses20.0 %18.1 %18.1 %18.0 %
Non-GAAP adjustment(5.5)%(4.8)%(5.1)%(4.8)%
Non-GAAP general and administrative expenses14.5 %13.3 %13.0 %13.2 %
GAAP operating income (loss)(10.2)%(8.8)%(5.9)%(9.4)%
Non-GAAP adjustment10.1 %7.7 %9.5 %8.6 %
Non-GAAP operating income (loss)(0.1)%(1.1)%3.6 %(0.8)%
GAAP net income (loss)(6.8)%(3.7)%(3.9)%(5.7)%
Non-GAAP adjustment7.0 %5.0 %7.1 %5.7 %
Non-GAAP net income (loss)0.2 %1.3 %3.2 %— %






SECUREWORKS CORP.
Reconciliation of GAAP to Non-GAAP Financial Measures
(in millions, except per share data)
(unaudited)
Three Months EndingFiscal Year Ending
April 30, 2021January 28, 2022
Low End of GuidanceHigh End of GuidanceLow End of GuidanceHigh End of Guidance
GAAP and non-GAAP revenue$134 $136 $535 $545 
GAAP net loss$(14)$(13)$(71)$(63)
Amortization of intangibles29 29 
Stock-based compensation expense30 30 
Aggregate adjustment for income taxes(3)(3)(14)(14)
Non-GAAP net (loss)*$(3)$(2)$(26)$(18)
GAAP net loss per share$(0.17)$(0.16)$(0.86)$(0.76)
Amortization of intangibles0.09 0.09 0.35 0.35 
Stock-based compensation expense0.08 0.08 0.37 0.37 
Aggregate adjustment for income taxes(0.03)(0.03)(0.17)(0.17)
Non-GAAP net (loss) per share*$(0.04)$(0.02)$(0.31)$(0.22)
GAAP net loss$(71)$(63)
Interest and other, net(1)(1)
Income tax benefit(20)(18)
Depreciation and amortization38 38 
Stock-based compensation expense30 30 
Adjusted EBITDA*$(23)$(13)
Other Items
Effective tax rate22 %
Weighted average shares outstanding (in millions)82.1
Cash flow from operationsBreakeven to $(10)
Capital expenditures$3 - $4

* 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