SecureWorks (SCWX) Q2 2025 earnings summary

Executive summary

• Taegis revenue grew 7.2% year-over-year to $71.3 million, with total ARR up 5% to $290 million and ARPC rising 14% to $150,000.

• Total revenue was $82.2 million, reflecting a strategic wind-down of legacy MSS business and focus on Taegis platform.

• Adjusted EBITDA turned positive at $1.0 million, a significant improvement from a $10.3 million loss last year.

• GAAP net loss narrowed to $14.7 million ($0.17/share), improved from $32.4 million ($0.38/share) year-over-year; non-GAAP net loss was $0.4 million ($0.00/share).

• The company completed its transition to higher-margin Taegis solutions, received multiple industry awards, and expanded its global partner ecosystem.

Financial highlights

• Taegis subscription revenue was $71.3 million, up 7.2% year-over-year; total revenue was $82.2 million.

• Non-GAAP Taegis gross margin reached 74.3% (up 360 bps); overall non-GAAP gross margin was 69.2% (up 680 bps year-over-year).

• Adjusted EBITDA was $1.0 million (1.2% margin), up from a $10.3 million loss (-11.1%) year-over-year.

• Non-GAAP operating income was $0.4 million (0.5% margin), compared to a loss of $11.3 million (-12.1%) last year.

• Cash and cash equivalents were $47.6 million at quarter end, with no debt and an undrawn $50 million credit facility.

Outlook and guidance

• Q3 FY25 guidance: revenue of $80–$82 million, adjusted EBITDA of $0–$2 million, non-GAAP EPS of ($0.01)–$0.01.

• FY25 guidance: ARR of $300 million+, total revenue of $328–$335 million, adjusted EBITDA of $6–$12 million, non-GAAP EPS of $0.03–$0.09, and cash from operations between ($2 million) and $8 million.

• Management expects cost savings and improved margins from the completed transition to Taegis.