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SecureWorks Corp. (SCWX+0.06%) has submitted its 10-Q filing for the quarterly period ended November 1, 2024.
The filing reports a decrease in total net revenue to $82.7 million from $89.4 million in the same quarter the previous year, primarily due to a decline in professional services revenue and the completed exit from non-strategic Managed Security Services.
Cost of revenue decreased to $26.7 million from $34.6 million, reflecting lower vendor costs and employee-related expenses, contributing to an increase in gross margin to 67.8% from 61.3%.
Operating expenses increased to $78.2 million from $74.0 million, driven by merger-related costs, despite reductions in research and development and sales and marketing expenses.
The company reported an operating loss of $22.2 million, compared to a loss of $19.3 million in the previous year, with net loss increasing to $27.5 million from $14.4 million.
SecureWorks announced a pending merger with Sophos Inc., with the transaction expected to close in early 2025, subject to regulatory approvals and other conditions.
At the effective time of the merger, each share of SecureWorks' common stock will be converted into the right to receive $8.50 in cash.
The company holds $53.1 million in cash and cash equivalents, with no outstanding balance on its $50 million revolving credit facility with Dell.
SecureWorks continues to focus on its Taegis solutions, reporting a 6.0% increase in Taegis subscription revenue to $71.4 million.
The filing also outlines the impact of the company's deconsolidation from Dell's tax group, resulting in a valuation allowance against certain deferred tax assets.
This content was summarized by generative artificial intelligence using public filings retrieved from SEC.gov. The original data was derived from the SecureWorks Corp. quarterly 10-Q report dated December 4, 2024. To report an error, please email earnings@qz.com.