SecureWorks Corp. (NASDAQ:SCWX) Q3 2019 Earnings Conference Call Transcript

Dec 06, 2018 • 08:00 am ET


SecureWorks Corp. (NASDAQ:SCWX) Q3 2019 Earnings Conference Call Transcript


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Good morning, and welcome to the SecureWorks Third Quarter Fiscal 2019 Financial Results Conference Call. Following prepared remarks, we'll conduct a questions-and-answer session. (Operator Instructions) At this time, all participants are in a listen-only mode. We are webcasting this call live on the SecureWorks IR website. After the completion of the call, a recording of the call will be made available on the same site.

Now, I will turn the call over to Teri Miller, VP and CAO. You may begin.

Teri Miller

Good morning, everyone and thank you for joining us today to review SecureWorks financial results for the third quarter of fiscal 2019. This call is being recorded. This call is also being broadcast live over the Internet and can be accessed on the IR section of SecureWorks website at The webcast will be archived at the same location for one year.

This morning, SecureWorks issued a press release announcing results for its fiscal quarter ended November 2, 2018. You can access this press release on the IR section of the SecureWorks website.

(Forward-Looking Cautionary Statements)

With us on today's call are Michael Cote, President and CEO of SecureWorks; and Wayne Jackson, CFO. Following their prepared remarks, we will take your questions. We would appreciate you permitting your initial question to two, so that we may allow as many of you to ask question as possible in our allotted time. In the event you have additional questions that are not covered by others, please feel free to re-queue and we will do our best to come back to you. Thank you for your cooperation on this.

Now I'd like to turn the call over to Cote.

Michael Cote

Thank you, Teri, and thank you, everyone for joining us this morning for our third quarter 2019 earnings call. We appreciate your flexibility given the change in our earnings day to allow us to join our fellow Americans and honouring the late President George H.W. Bush. This was another record quarter for Secureworks. Revenue was $133 million which was above our expectations and up 13.5% over prior year.

We improved our operating leverage, generating record quarterly EBITDA of $8.6 million. Cash flow from operations was $15 million, and we reported record non-GAAP earnings per share of $0.06. We delivered strong financial results for the first three quarters of the year putting us on track to generate revenue in excess of a $0.5 billion with positive EBITDA and strong cash flow for the full year. I want to thank the entire Secureworks team for their continued focus executing against our plans and for their dedication to delivering on our customer commitments. International revenue growth was strong again in the third quarter up 51% over the prior year.

Our EMEA business which was recently recognised by Forrester as a leader in the European MSSP market grew 47% year-over-year, while APJ grew 65%. International operations now represent 23% of total revenue. This quarter, the international sales team as well as the North American commercial team continued to