SecureWorks Reports 11.6% Decline in Net Revenue, Improved Gross Profit and Operating Expenses in Q2 2025

SecureWorks Corp. reported its financial results for the second quarter and first half of fiscal 2025, ending August 2, 2024. The company experienced a decline in net revenue, with total revenue for the three months at $82.2 million, down 11.6% from $93.0 million in the same period last year. For the six months, revenue decreased to $167.8 million from $187.4 million, reflecting a 10.4% decline. The decrease was attributed to a drop in professional services revenue, which fell by 32.5% in Q2 and 26.9% in the first half.

Despite the revenue decline, SecureWorks reported an increase in gross profit, which rose to $54.7 million for the three months ended August 2, 2024, compared to $52.9 million in the prior year, marking a 3.5% increase. For the six months, gross profit increased to $112.5 million, up 7.6% from $104.5 million. The gross margin for subscription services improved significantly, reaching 70.5% for Q2, up from 60.8% a year earlier.

Operating expenses decreased substantially, with total operating expenses for Q2 at $67.9 million, down 27.9% from $94.1 million in the previous year. This reduction was driven by lower research and development (R&D) and sales and marketing expenses, which fell by 19.2% and 21.5%, respectively. The company reported an operating loss of $13.1 million for Q2, a significant improvement from a loss of $41.2 million in the same quarter last year. For the first half, the operating loss was $23.8 million, down from $77.5 million.

SecureWorks' net loss for Q2 was $14.7 million, a 54.5% reduction from the $32.4 million loss reported in Q2 2023. The net loss for the first half was $50.8 million, down from $63.3 million. The company’s adjusted EBITDA also showed improvement, with a positive $988,000 for Q2 compared to a negative $10.3 million in the prior year.

As of August 2, 2024, SecureWorks had $47.6 million in cash and cash equivalents, down from $68.7 million at the beginning of the period. The company has not drawn on its $50 million revolving credit facility with Dell Technologies, which remains available for general corporate purposes.

Strategically, SecureWorks is focusing on its Taegis security platform, which is expected to enhance operating margins over time. The company has also initiated a reorganization plan aimed at aligning investments with strategic priorities, incurring approximately $1.5 million in related expenses during the reporting period.