Shares in Secureworks Corp. dropped in regular trading today after the cybersecurity company missed on earnings, revenue and outlook in its latest quarter.

For its fiscal first quarter that ended May 5, Secureworks reported a net loss before costs such as stock compensation of $17.1 million, or 20 cents per share, higher than its loss of $7.6 million, or nine cents per share, in the same quarter of last year. Revenue fell 22%, to $94.4 million. Analysts had expected an earnings per share loss of 16 cents on revenue of $106.76 million.

The company’s subscription revenue fell 18% year-over-year, to $77.3 million, and professional services revenue plunged 36%, to $17.1 million.

Although the headline figures were negative, Secureworks’ Taegis platform saw strong growth in the quarter, with revenue of $62.6 million, up 68% year-over-year. Annual recurring revenue for Taegis rose 49%, to $269 million, now representing 86% of the company’s total ARR.

“Taegis ARR and revenue growth rates remain above the industry average,” Christian Grant, interim chief financial officer at Secureworks, said in the company’s earnings release. “Taegis gross margin is expanding, reaching 70% in the first quarter, as we continue to deliver on our commitment to scaling our cost structure and managing our business toward profitable growth.”

Recent business highlights include the announcement of Secureworks Taegis integration for SentinelOne Singularity Complete, offering enhanced threat prevention, detection and response with visibility across endpoints, identity systems and cloud applications. The company also launched Secureworks OT Detection and Response,  an offering said to reduce business risk and visibility across both the information technology and operation technology landscape.

For its fiscal second quarter of 2024, Secureworks expects an adjusted loss of 15 to 16 cents a share on revenue of $90 million to $92 million. Both were misses, as analysts had expected an adjusted loss of a penny a share on revenue of $95.92 million.

For its full fiscal year, the company expects an adjusted loss of 34 to 43 cents a share on revenue of $380 million to $400 million versus an expected 33 cents and $390.75 million.

Secureworks reported its quarterly earnings and outlook before the beginning of trading and with barely a positive figure to be found, investors reacted as expected. Secureworks closed regular trading at $6.91 per share, down almost 14%.

Image: Secureworks