SecureWorks (SCWX), a leading cybersecurity solutions provider, Wednesday said its second-quarter net loss narrowed, helped by strong revenue growth. The better than expected results and strong guidance for the third quarter triggered a stock rally in the premarket.
On an adjusted basis, the Atlanta, Georgia-based company reported a net loss of $0.09 million or $0.01 per share for the second quarter, compared to a loss of $3.5 million or $0.04 per share a year earlier. Analysts were looking for a wider loss. Reported loss was $0.12 per share, compared to a loss of $0.13 per share in the second quarter of 2018.
Revenues moved up 10.8% year-over-year to $128.8 million during the three-month period when monthly recurring revenue rose by 12%.
The better than expected results and strong guidance for the third quarter triggered a stock rally in the premarket
“I am pleased with our progress and remain excited about the significant opportunity for further growth and productivity gains as we continue to execute against our objectives,” said CEO Michael Cote.
For the third quarter, the company expects revenues in the range of $130 million to $131 million and sees a net loss of $0.16-$0.17 per share. On an adjusted basis, the estimated loss is between $0.05 per share and $0.06 per share.
Revenues are estimated to be between $518 million and $520 million for the whole of 2019 when the bottom-line is expected to remain in the negative territory, with a loss ranging from $0.59 per share to $0.61 per share. Full-year adjusted loss is forecast between $0.15 per share and $0.17 per share.
SecureWorks has registered operating loss continuously in the recent quarters as muted revenue growth squeezed margins. Increasing competition, especially from startups, has also put pressure on margins.
Over the past twelve months, the company’s shares gained more than 12%, hitting a two-year high in July. The stock, which closed the last trading session down 9%, gained about 4% in premarket trading Wednesday following the earnings report.