SecureWorks Corp. (NASDAQ:SCWX) Q2 2020 Earnings Conference Call Transcript

Sep 05, 2019 • 08:00 am ET

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SecureWorks Corp. (NASDAQ:SCWX) Q2 2020 Earnings Conference Call Transcript

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Presentation
Executive
Teri L Miller

initial questions to two so that we may allow as many of you to ask questions as possible in our allotted time. In the event, you have additional questions that are not covered by others, please feel free to requeue and we will do our best to come back to you. Thank you for your cooperation on this.

Now, I would like to turn the call over to Mr. Cote.

Executive
Michael R. Cote

Thank you, Teri, and thank you, everyone for joining us this morning for our second quarter 2020 earnings call. In the second quarter, we achieved revenue of $137 million, exceeding the high end of our guidance. Gross margin of 56.3% of revenue, which expanded 200 basis points from last year and EBITDA of $1 million and net loss per share of $0.01, both of which also topped our expectations for the quarter.

We also saw improvements in the quarter and several aspects of our go-to market activities. The annual value of sales contracts closed during the quarter or ACV improved across all markets as compared with Q1. Our revenue retention rate was 99%, we grew the sales pipeline and increased our pipeline conversion rate compared with Q1. We have a growing pipeline for our new TDR software application and Dell Safeguard and Response deals ramp nicely during the second quarter.

I am pleased with the results for the quarter, as they represent a good step in the right direction. Although, our go-to market efforts remain an area of focus and an opportunity for improved execution. As we've highlighted on prior calls, our business is undergoing an exciting strategic transition as we bring our vision of the future of security operations to life through software driven solutions.

We view the stock of the future as a more agile, scalable and effective model for security operations that addresses the challenges of today's dynamic IT landscape and rapidly evolving threats. This new approach in combating security threats demands a leap forward and capabilities made possible by leveraging the following. The speed and scale of machine learning, deep learning and cloud computing to analyze data from the extended IT ecosystem for greater visibility, real time collaboration with experts and smarter, more effective automation.

Crowd-sourced threat intelligence and incident response insights to enrich this spectrum of data for faster and more reliable advanced threat detection and remediation and integrated analytics, empowering security analysts to be more effective and productive, unencumbered by disconnected point solutions, false positives and dead end investigations. Red Cloak Threat Detection and Response or TDR was launched at the end of Q1 is our first cloud native patent pending software app built on our security analytics platform. This was an important milestone in the execution of our strategy and the first key building block that enables the stock of the future to become a reality. Our TDR software app is differentiated by an integrated set of detectors that are enriched by our threat intelligence and network effect, automated response actions and collaborative