Shares in cybersecurity firm Secureworks Corp. plunged in regular trading today after the company missed most analyst expectations in its second-quarter earnings report.

For the quarter ending July 31, Secureworks reported revenue of $134.2 million, down 3.1% from the second quarter of last year. Profit before costs such as stock compensation came in at $900,000 or 1 cent per share compared to $8.4 million or 10 cents per share in the same period of last year.

Analysts had been expecting revenue of $134.97 million on an adjusted loss of one cent per share.

Highlights in the quarter included Secureworks Taegis, the company’s cloud-native extended detection and response service surpassing $100 million in annual recurring revenue and ending the quarter with 700 customers. Taegis ARR grew 200% year-over-year and 39% over the first quarter. Guidance for the full fiscal year 2022 for Taegis has been raised to $155 million ARR.

“We’re proud to announce that just two years after launch, Taegis ARR has tripled year over year to surpass $100 million,” Wendy Thomas, president and incoming chief executive officer of Secureworks, said in a statement. “Providing customers with access to the detection and response capabilities, best practices and threat research used by our experts in an easy-to-use XDR solution is resonating.”

For its third quarter, Secureworks predicted revenue of  $132 million to $134 million and an adjusted loss per share of between five  and eight cents. Analysts had been expecting a loss of four cents a share on $153.1 million in revenue.

For the full 2022 fiscal year, the company predicted revenue of between $540 million and $540 million, down from its previous guidance of $540 million to $550 million. This was also below the consensus figure of $545.2 million.

In an investor call, Thomas explained that the revised guidance is the result of a shift by the company away from legacy systems to its Taegis cloud platform. “Our guidance for this year reflects the pace at which we’ll be exiting those as well our guidance for next year which we haven’t given yet. But we are moving to do that, obviously, as quickly as possible and will be, as I said, really substantially complete by the end of next year.”

Most companies release their earnings report after regular trading, but this wasn’t the case with SecureWorks, which released their earnings before regular trading. As such, Secureworks was exposed to regular trading versus after-hours trading and investors were not happy with the figures.

Shareworks’ share price plunged almost 15%. That plunge was on a day that Nasdaq hit a new record high.

Image: Secureworks