SecureWorks : Q1 FY21 Performance Review Presentation

Q1 FY21 Performance Review

June 4, 2020

Disclaimers

Non-GAAP Financial MeasuresSpecial Note on Forward Looking Statements

This presentation includes information about SecureWorks Corp.'s non-GAAP revenue, non-GAAP gross margin, non-GAAP research and development expenses, non-GAAP sales and marketing expenses, non-GAAP general and administrative expenses, non-GAAP operating income (loss), non-GAAP net income (loss), adjusted EBITDA, and non-GAAP net income per share, which are not measurements of financial performance prepared in accordance with U.S. generally accepted accounting principles. We have provided a reconciliation of the non-GAAP measures to the most directly comparable GAAP measures in the slides captioned "Reconciliation of non-GAAP to GAAP Financial Measures."

Statements in this material that relate to future results and events are forward-looking statements and are based on SecureWorks Corp.'s current expectations. These forward-looking statements include but are not limited to SecureWorks Corp.'s current expectations regarding GAAP revenue, non-GAAP revenue, GAAP net loss per share and non-GAAP net income per share for the second quarter of fiscal year 2021. In some cases, you can identify these statements by such forward-looking words as "anticipate," "believe," "could," "estimate," "expect," "intend," "confidence," "may," "plan," "potential," "should," "will" and "would," or similar expressions. Actual results and events in future periods may differ materially from those expressed or implied by these forward-looking statements because of a number of risks, uncertainties and other factors, including those discussed in

SecureWorks Corp.'s periodic reports filed with the Securities and

Exchange Commission. These forward-looking statements speak only as of the date of this presentation. SecureWorks Corp. assumes no obligation to update its forward-looking statements.

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Q1 FY21	Q1 FY20	Change
Revenue	141.2	132.8	6.3%

GM % of Revenue

55.4%

52.7%

270 bps

R&D	24.1	22.6	6.3%
S&M	37.5	38.2	-1.9%
G&A	27.5	23.6	16.4%
Operating Expenses *	89.0	84.5	5.4%
OpEx % of Revenue	63.1%	63.6%	-50 bps
Operating Loss	(10.8)	(14.5)	-25.6%
OpLoss % of Revenue	-7.6%	-10.9%	330 bps
Interest & Other (Net)	1.0	0.3	270.5%
I&O % of Revenue	0.7%	0.2%	50 bps
Income Tax	(2.2)	(5.9)	-62.3%
Effective Tax Rate	23%	42%
Net Loss	(7.5)	(8.3)	-8.9%
NL % of Revenue	-5.3%	-6.2%	90 bps

* Sum of individual items may differ from total due to rounding of individual components

Q1 FY21	Q1 FY20	Change
Revenue	141.2	132.8	6.3%

GM % of Revenue

58.1%

55.5%

260 bps

R&D	22.8	21.5	6.1%
S&M	36.7	37.4	-1.9%
G&A	20.5	17.4	17.7%
Operating Expenses	80.0	76.3	4.8%
OpEx % of Revenue	56.7%	57.4%	-70bps
Operating Income (Loss)	2.1	(2.6)	-180.2%
OpInc (Loss) % of Revenue	1.5%	-2.0%	350 bps
Net Income	2.5	(1.9)	-234.2%
NI % of Revenue	1.8%	-1.4%	320 bps

Adj. EBITDA

Adj. EBITDA % of Revenue

5.6

0.8

592.7%

4.0%

0.6%

340 bps

May 1, 2020	May 3, 2019
GAAP Revenue	$141,181	$132,842

Non-GAAP Revenue

Three Months Ended

GAAP Gross Margin

$141,181

$132,842

$78,272

$70,001

Amortizations of Intangibles

Stock-Based Compensation Expense

Gross Non-GAAP Gross Margin

GAAP Research and Development Expense

Stock-Based Compensation Expense

3,460 335 $82,087

3,410 260 $73,671

$24,073

$22,642

(1,291)

(1,176)

Non-GAAP Research and Development Expenses

GAAP Sales and Marketing Expenses

Stock-Based Compensations Expense

$22,782 $21,466

$37,452 $38,193

(741)

(781)

Non-GAAP Sales and Marketing Expenses

GAAP General and Administrative Expenses

Amortization of Intangibles

Stock-Based Compensation Expense

$36,711 $37,412

$27,516 $23,638

(3,524) (3,524)

(3,500) (2,699)

Non-GAAP General and Administrative Expenses

$20,492

17,415