Note: EPS may not be comparable

SecureWorks Corp. (NASDAQ: SCWX) reported Q4 EPS of ($0.12), $0.04 worse than the analyst estimate of ($0.08). Revenue for the quarter came in at $120.65 million versus the consensus estimate of $117.69 million.

Fourth Quarter Fiscal 2018 Financial Results Highlights

• Revenue increased 1.4 percent to $120.7 million in the fourth quarter of fiscal 2018, from $118.9 million in the same period last year. Non-GAAP revenue increased 1.4 percent to $120.8 million from $119.2 million in the fourth quarter of fiscal 2017.
  • Excluding the additional week of operations in the fourth quarter of fiscal 2017, revenue increased 9.7 percent, and non-GAAP revenue increased 9.6 percent over the fourth quarter of fiscal 2017.
• Gross margin was 49.7 percent in the fourth quarter of 2018, down from 52.7 percent in the same period last year. Non-GAAP gross margin was 52.8 percent compared with 55.8 percent in the fourth quarter of fiscal 2017.
• Operating loss was $26.1 million compared with $12.1 million in the fourth quarter of fiscal 2017; non-GAAP operating loss was $15.1 million compared to $2.1 million in the fourth quarter of last year.
• Net income was $9.9 million, or $0.12 per share, including a one-time income tax benefit of $27.0 million, or $0.34 per share, related to the impact of tax law changes. Net loss was $6.8 million, or $0.09 per share, in the fourth quarter of fiscal 2017. Non-GAAP net loss was $9.9 million, or $0.12 per share, compared with a non-GAAP net loss of $1.6 million, or $0.02 per share, in the fourth quarter of fiscal 2017.
• Adjusted EBITDA loss was $11.4 million, compared to adjusted EBITDA of $0.8 million in the fourth quarter of fiscal 2017.
• Cash provided by operating activities for the three months ended February 2, 2018 was $4.0 million.
• Secureworks ended the fiscal year with $101.5 million in cash and cash equivalents.
• Monthly recurring revenue as of February 2, 2018 increased 11.7 percent to $35.3 million from $31.6 million as of February 3, 2017. The Company’s monthly recurring revenue metric represents the monthly value of its subscription contracts, including operational backlog, as of period end.

First Quarter and Full Fiscal Year 2019 Guidance

Secureworks provides guidance based on current market conditions and expectations. The guidance ranges provided below reflect the impact of adopting the new accounting standards ASC 606 and ASC 340-40, effective in the first quarter of fiscal 2019, using the full retrospective transition method. The Company has posted certain historical, unaudited information related to the impact of adopting these standards on the investor section of its website.

For the first quarter of fiscal 2019, the Company expects:

• Revenue to be in the range of $122 to $123 million on both a GAAP and non-GAAP basis.
• Net loss per share to be in the range of $0.16 to $0.17 and non-GAAP net loss per share to be in the range of $0.06 to $0.07.

For the full fiscal year 2019, the Company expects:

• GAAP and non-GAAP revenue to be in the range of $512 to $516 million.
• Net loss to be in the range of $47 to $50 million and $0.58 to $0.62 on a per share basis.
• Non-GAAP net loss per share to be in the range of $0.16 to $0.20.
• Adjusted EBITDA loss to be in the range of $4 to $8 million.
• Monthly recurring revenue to be in the range of $38.0 to $39.0 million at the end of the fourth quarter of fiscal 2019.
• Capital expenditures to be in the range of $16 to $17 million.

For earnings history and earnings-related data on SecureWorks Corp. (SCWX) click here.