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Secureworks Emphasizes XDR Security Business Growth, But…

Wendy Thomas, CEO, Secureworks
Wendy Thomas, incoming CEO, Secureworks

Secureworks is gaining momentum in the XDR (eXtended Detection and Response) security market, but the Top 250 MSSP's business transformation also involves falling top-line revenues.

First, the good news: Secureworks Taegis, an XDR platform, surpassed $100 million in annual recurring revenue (ARR) and ended the second quarter of fiscal 2022 with 700 customers, the MSSP said on September 2, 2021.

Now, the challenge: Overall Secureworks quarterly revenue was $134.2 million, a 3.1 percent decline compared to the corresponding quarter last year. Also, the MSSP had a GAAP net loss of $11.8 million.

New Secureworks CEO Wendy Thomas

The financial results surface amid a planned Secureworks CEO transition to Wendy Thomas from Michael Cote, which is effective September 3, 2021.

In a prepared statement about the quarterly results, Thomas emphasized the XDR momentum. She said:

"We're proud to announce that just two years after launch, Taegis ARR has tripled year over year to surpass $100 million. 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."

To further accelerate the business, Secureworks launched an XDR Technology Alliance Partner Program in June 2021. Shortly thereafter, Secureworks localized the XDR platform for cloud data storage in Europe.

Glass Half Full (But Not Filling Fast Enough)?

Despite those milestones, Wall Street wants even faster growth. SecureWorks stock ($SCWX) fell about 14 percent amid the earnings announcement on Sept 2, 2021.

Joe Panettieri

Joe Panettieri is co-founder & editorial director of MSSP Alert and ChannelE2E, the two leading news & analysis sites for managed service providers in the cybersecurity market.