Fri, Jun 7, 8:14 PM (136 days ago)
SecureWorks Corp.'s Q1 fiscal 2025 results show a mixed financial performance. Total net revenue decreased by 9.3% year-over-year to $85.7 million, driven by a 6.5% decline in subscription revenue and a 21.6% drop in professional services revenue. The company’s focus on transitioning to higher-margin Taegis solutions is evident, with Taegis subscription revenue increasing by 10.4%, while Managed Security Services revenue dropped significantly by 78.5%. Cost of revenue decreased by 34.8%, resulting in an improved gross profit of $57.8 million, up 11.9%. Operating expenses also fell by 22.2% to $68.4 million, due to reductions in R&D, sales and marketing, and G&A expenses. Despite these cost savings, the company reported an operating loss of $10.7 million, a 70.7% improvement from the previous year. However, net loss increased by 16.5% to $36.1 million, primarily due to a significant income tax expense resulting from the deconsolidation from Dell Technologies' tax group. Cash and cash equivalents stood at $47.0 million, with no outstanding balance on its $50 million revolving credit facility. The company expects its recent reorganization to yield cost savings and improve operating margins over time.