Hot Stock of the Day: SecureWorks Corp. (NASDAQ: SCWX)

Secureworks (SCWX), a leading global cybersecurity company that protects organizations in the digitally connected world, recently declared financial results for its second quarter ended August 3, 2018.

Second Quarter Fiscal 2019 Financial Results Highlights:

  • GAAP revenue increased 10.8 percent to $128.80M in the second quarter of fiscal 2019, from $116.20M in the same period last year. Non-GAAP revenue increased 10.6 percent to $128.80M from $116.40M in the second quarter of fiscal 2018. GAAP gross margin was 51.4 percent in the second quarter of 2019, contrast with 51.9 percent in the same period last year. Non-GAAP gross margin was 54.3 percent contrast with 55.1 percent in the second quarter of fiscal 2018.
  • GAAP net loss was $9.80M, or $0.12 per share, in the second quarter of fiscal 2019, contrast with a GAAP net loss of $10.30M, or $0.13 per share, in the prior year. Non-GAAP net loss was $0.90M, or $0.01 per share, in the second quarter of fiscal 2019, contrast with a non-GAAP net loss of $3.50M, or $0.04 per share, in the same prior year period.
  • Adjusted EBITDA was $1.00M, contrast with an adjusted EBITDA loss of $1.80M in the second quarter of fiscal 2018.
  • Cash offered by operating activities for the three months ended August 3, 2018 was $29.30M.
  • Secureworks ended the second quarter of fiscal 2019 with $103.30M in cash and cash equivalents.
  • Monthly recurring revenue as of August 3, 2018 increased 12.0 percent to $36.20M from $32.30M as of August 4, 2017. The Company’s monthly recurring revenue metric represents the monthly value of its subscription contracts, counting operational backlog, as of period end.

Third Quarter and Full Fiscal Year 2019 Guidance:

For the third quarter of fiscal 2019, the Company anticipates:

  • Revenue of $130 to $131.0M on both a GAAP and non-GAAP basis. GAAP net loss per share of $0.16 to $0.17 and non-GAAP net loss per share of $0.05 to $0.06, counting about $0.02 per share of reorganization costs.

Based on second quarter fiscal 2019 performance and current business trends, the Company has updated its guidance for the full fiscal year 2019. The Company now anticipates:

  • GAAP and non-GAAP revenue of $518 to $520.0M.
  • GAAP net loss of $48 to $50.0M and $0.59 to $0.61 on a per share basis. Non-GAAP net loss per share of $0.15 to $0.17. Adjusted EBITDA loss of $3 to $5.0M.
  • Monthly recurring revenue of $37.0 to $39.00M, at the end of the fourth quarter of fiscal 2019.
  • Cash flow from operations of $35 to $40.0M.

SCWX has the market capitalization of $1.47B and its EPS growth ratio for the past five years was 51.70%. The return on assets ratio of the Company was -2.50% while its return on investment ratio stands at 0.20%. Price to sales ratio was 2.99 while 62.40% of the stock was owned by institutional investors.

Bobbie Collins

Bobbie Collins gives us an insight into the most recent news hitting the Technology Sector in Wall Street. He has been an independent financial adviser for over 10 years in the city and in recent years turned his experience in finance and passion for journalism into a full time role. He performs analysis of Companies and publicizes valuable information for shareholder community. Collins is an accomplished journalist who has a passion for travel. His desire to see the world has taken him to countries around the world and given him the opportunity to report for some of the top news organizations.

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