(Mark One)
|
|
|
|
|
|
þ
|
|
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 |
For the fiscal year ended February 3, 2017
|
||
or
|
||
o
|
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
|
For the transition period from
to
|
Delaware
|
|
56-2015395
|
(State or other jurisdiction of
incorporation or organization)
|
|
(I.R.S. Employer
Identification No.)
|
Title of each class
|
|
Name of each exchange on which registered
|
Class A Common Stock, par value $0.01 per share
|
|
The NASDAQ Stock Market LLC
(NASDAQ Global Select Market)
|
Large accelerated filer
¨
|
|
Accelerated filer
¨
|
Non-accelerated filer
þ
(Do not check if a smaller reporting company)
|
|
Smaller reporting company
¨
|
TABLE OF CONTENTS
|
|||||
|
|
|
|
|
|
|
|
|
|
|
PAGE
|
|
|
|
|
|
|
|
|
|
|
||
|
|
|
|||
|
|
|
|||
|
|
|
|||
|
|
|
|||
|
|
|
|||
|
|
|
|||
|
|
|
|
||
|
|
|
|||
|
|
|
|||
|
|
|
|||
|
|
|
|||
|
|
|
|||
|
|
|
|||
|
|
|
|||
|
|
|
|||
|
|
|
|
||
|
|
|
|||
|
|
|
|||
|
|
|
|||
|
|
|
|||
|
|
|
|||
|
|
|
|
||
|
|
|
|||
|
|
|
|||
|
|||||
|
•
|
fortify their cyber defenses to prevent security breaches,
|
•
|
detect malicious activity,
|
•
|
prioritize and respond rapidly to security breaches, and
|
•
|
predict emerging threats.
|
▪
|
Managed security
, through which we provide our clients global visibility and insight into malicious activity in their network environments and enable them to detect and remediate threats effectively.
|
▪
|
Threat intelligence
, through which we provide early warnings of vulnerabilities and threats and provide actionable security intelligence intended to address these problems.
|
▪
|
Security and risk consulting
, through which we advise our clients on a variety of information security and risk-related matters, such as how to design and build strategic security programs, assess and test security capabilities and meet regulatory compliance requirements.
|
▪
|
Incident response
, through which we help our clients rapidly analyze, contain and remediate security breaches to minimize the duration and impact.
|
•
|
Counter Threat Appliance.
Our Counter Threat Appliance performs several of the important functions of the Counter Threat Platform. The Counter Threat Appliance is a physical or virtual appliance deployed in a client’s data center, branch office or cloud environment, or our own data center. This technology supports a wide range of security and network devices, applications and endpoints to collect information on the client environment, perform analytics and report to our counter threat operations centers. The Counter Threat Appliance establishes secure non-intrusive communications to transmit data back to our data centers, where the Counter Threat Platform enriches data with our intelligence based on our intimate knowledge of threats and client specific intelligence to detect security incidents.
|
•
|
Foresee.
Foresee, our behavioral and self-learning technology, identifies malicious events through the use of machine learning algorithms to determine the probability and confidence that a particular event or a collection of events is malicious. Foresee learns which events are malicious or non-malicious based on ongoing feedback from our certified security analysts and applies machine-learning analysis techniques for the discovery of previously unknown threats.
|
•
|
Multi-Purpose Logic Engine.
Our Multi-Purpose Logic Engine is an analytics engine that leverages our broad visibility into the global threat environment and applied intelligence from the Counter Threat Unit to identify security incidents of interest. The engine intelligently analyzes billions of events into actionable information, providing valuable context to our security analysts to help inform their analysis of the security incidents and shorten the client’s response time.
|
•
|
Very Large Database.
Our Very Large Database efficiently and cost-effectively collects, correlates, analyzes and stores billions of structured and unstructured data elements, which help us to identify new security threats, provide valuable context to our security analysts and clients and enable Counter Threat Unit researchers to perform historical threat analysis.
|
•
|
Threat Intelligence Management System, or TIMS.
We manage structured and unstructured data in TIMS. TIMS collects, correlates and analyzes billions of data points to catalogue threat actors and generate threat indicators applied to the Counter Threat Platform and across our solutions. The data points are sourced from our managed security solutions, malware, social media, honeypots (or traps set to detect or counteract attempts at unauthorized use of information systems), open source intelligence, hunting and incident response engagements, strategic relationships and priority research.
|
•
|
Catalog for Artifact and Signal Extraction, or CASE.
CASE is a repository and a set of tools for the dynamic analysis of malware to catalogue its behaviors and generate threat indicators. CASE feeds threat indicators identified from the analysis of malware into TIMS.
|
•
|
Attacker Database.
Our Counter Threat Unit research team maintains a patented process for generating a proprietary Attacker Database that contains machine readable threat intelligence we apply to the Counter Threat Platform, iSensor, Red Cloak and third-party security controls.
|
•
|
Portal.
Powered by integrated intelligence and analytics tools, the portal delivers near real time information to client executives, managers and security professionals and provides insights that help clients make better security decisions. It also facilitates near real time communication between clients and our security analysts, measures the effectiveness of a client’s security profile using asset-based and risk-weighted analyses, supports regulatory compliance requirements, links threat intelligence from our Counter Threat Unit and enables a visualization of point-in-time, comparative and historical security trends across multiple security metrics. Our portal is accessible via web and mobile applications as well as via client applications that leverage our application programming interfaces.
|
•
|
Threat Analysis Platform
. We present threat information to our certified security analysts in a graphical user interface. This interface supports the delivery of high-quality security analysis of threats targeting or occurring within a client’s environment. Visualization enables our security analysts to detect patterns and to determine in near real time relationships of security incidents within a client environment and across our entire client base. Our security analysts have access to all data collected from client environments and human readable threat intelligence from our Counter Threat Unit to provide them with the context necessary to inform their analysis and to help them determine whether they should communicate information about a security incident to a client.
|
•
|
Ticket Management.
Our ticket management system is based on Information Technology Infrastructure Library principles and delivers security monitoring and device management solutions to clients. A sophisticated and configurable workflow provides incident, change and problem management in a leveraged-service delivery model to enable our counter threat operations centers to handle a higher volume of work with consistent quality.
|
•
|
Management and Monitoring Tools.
In order to effectively manage and monitor our infrastructure at client sites and our data centers, we rely on a suite of purpose-built software applications to facilitate the full lifecycle management of all software and configuration deployments and updates, efficient management and troubleshooting, and monitoring of the health and availability of devices.
|
•
|
iSensor
. Many of our clients use our proprietary network intrusion detection and prevention appliance, the iSensor. The iSensor eliminates malicious inbound and outbound traffic in near real time by performing in-line deep packet inspection (which is an examination of packet data as the data pass through the device for signs of malware, intrusions or other threats) and applying countermeasures from the Counter Threat Unit.
|
•
|
Red Cloak
. Red Cloak, our endpoint threat detection software, allows us to apply our threat intelligence and advanced analytics to the endpoint to reduce the amount of time required to detect a compromise of security and reduce the effort required to respond. Red Cloak also allows us to develop strategic countermeasures that interdict tactics used by threat actors.
|
•
|
Third-Party Technologies
. Our intelligence-driven information security solutions are designed to monitor alerts, logs and other messages across multiple stages of the threat lifecycle. In deploying these solutions, we integrate a wide array of proprietary and third-party security products. Our technology supports firewalls from market-leading vendors, including Cisco Systems, Inc., Palo Alto Networks, Inc., Check Point Software Technologies Ltd., Juniper Networks, Inc., Fortinet, Inc. and SonicWall. In addition, we also support intrusion prevention systems from vendors such as Intel Corp. (McAfee), and web application firewalls from vendors such as Imperva, Inc., F5 Networks, Inc. and Citrix Systems, Inc.
|
•
|
Qualys – vulnerability management
|
•
|
Kenna Security – vulnerability management
|
•
|
Cisco (Sourcefire) – network security
|
•
|
Lastline – malware detection and protection
|
•
|
TIBCO (LogLogic) – log management
|
•
|
Bit9 (Carbon Black) – endpoint security
|
•
|
Managed Vulnerability Scanning
. A vulnerability scan is designed to alert an organization to potential exposures and vulnerabilities in its network. As part of our solution, we perform internal and external scan audits across network devices, servers, databases and other assets in on-premises and cloud environments.
|
•
|
Managed Web Application Scanning.
Applications that deliver services via the web are the lifeblood of business-to-business and business-to-consumer e-commerce. A vulnerability scan can alert an organization to potential exposures and weaknesses in these web-based applications before a threat actor exploits those weaknesses. Our managed web application scanning solution performs deep and accurate scans of web applications that are hosted on client premises or in cloud environments. These scans search for vulnerabilities specific to the web protocols that are foundational to web applications. Our solution also supports the ability to log into web applications and discover vulnerabilities that may lie behind the login page.
|
▪
|
global telecommunications and network services providers such as AT&T Inc., BT Group PLC, Verizon Communications Inc. and NTT Communications Corp.;
|
▪
|
providers of specialized or niche IT security products and services such as FireEye, Inc., Palo Alto Networks, Inc. and Symantec Corporation;
|
▪
|
diversified technology companies such as Cisco Systems, Inc., Hewlett Packard Enterprise Company, International Business Machines Corporation and Intel Corporation; and
|
▪
|
regional information security services providers that compete in the small and medium-sized businesses market with some of the features present in our information security solutions.
|
▪
|
global visibility into the threat landscape;
|
▪
|
ability to generate actionable intelligence based on historical data and emerging threats;
|
▪
|
ability to apply threat intelligence from our Counter Threat Unit to our Counter Threat Platform and security controls;
|
▪
|
scalability and overall performance of platform technologies;
|
▪
|
ability to integrate with, monitor and manage a variety of third-party products;
|
▪
|
ability to provide a flexible deployment option to cater to specific client needs;
|
▪
|
ability to attract and retain high-quality professional staff with information security expertise;
|
▪
|
brand awareness and reputation;
|
▪
|
strength of sales and marketing efforts;
|
▪
|
cost effectiveness;
|
▪
|
client service and support; and
|
▪
|
breadth and richness of threat intelligence, including history of data collection and diversity and geographic scope of clients.
|
Name
|
|
Age
|
|
Position
|
|
|
|
|
|
Michael R. Cote
|
|
56
|
|
President and Chief Executive Officer
|
R. Wayne Jackson
|
|
59
|
|
Chief Financial Officer
|
▪
|
the establishment by organizations of increasingly complex IT networks that often include a combination of on-premise, cloud and hybrid environments;
|
▪
|
the rapid growth of smart phones, tablets and other mobile devices and the “bring your own device” trend in enterprises;
|
▪
|
action by hackers and other threat actors seeking to compromise secure systems;
|
▪
|
evolving computer hardware and software standards and capabilities;
|
▪
|
changing client requirements for information technology; and
|
▪
|
introductions of new products and services or enhancements to existing products and services by our competitors.
|
▪
|
delays in introducing new, enhanced or modified solutions that address and respond to innovations in computer technology and client requirements;
|
▪
|
defects, errors or failures in any of our solutions;
|
▪
|
any inability by us to integrate our solutions with the security and network technologies used by our current and prospective clients;
|
▪
|
any failure by us to anticipate, address and respond to new and increasingly sophisticated security threats or techniques used by hackers and other threat actors;
|
▪
|
negative publicity about the performance or effectiveness of our solutions; and
|
▪
|
disruptions or delays in the availability and delivery of our solutions.
|
▪
|
our ability to increase sales to existing clients and to renew contracts with our clients;
|
▪
|
delays in deployment of solutions under our client contracts;
|
▪
|
our ability to attract new clients;
|
▪
|
interruptions or service outages in our data centers and other technical infrastructure, other technical difficulties or security breaches;
|
▪
|
client budgeting cycles, seasonal buying patterns and purchasing practices;
|
▪
|
changes in our pricing policies or those of our competitors;
|
▪
|
fluctuations in the demand for our information security solutions and in the growth rate of the information security market generally;
|
▪
|
the level of awareness of IT security threats and the market adoption of information security solutions;
|
▪
|
the timing of the recognition of revenue and related expenses;
|
▪
|
our ability to expand our direct sales force and our strategic and distribution relationships;
|
▪
|
our ability to develop in a timely manner new and enhanced information security solutions and technologies that meet client needs;
|
▪
|
our ability to retain, hire and train key personnel, including sales personnel, security analysts and members of our security research team;
|
▪
|
fluctuations in available cash flow from prepayments for our solutions;
|
▪
|
changes in the competitive dynamics of our market, including the launch of new products and services by our competitors;
|
▪
|
the effectiveness and efficiency of in-house information security solutions;
|
▪
|
our ability to control costs, including our operating and capital expenses;
|
▪
|
our ability to keep our proprietary technologies current;
|
▪
|
any failure of or technical issues affecting a significant number of our appliances or software;
|
▪
|
adverse litigation judgments, settlements or other litigation-related costs;
|
▪
|
costs related to the acquisition of businesses, talent, technologies or intellectual property, including potentially significant amortization costs and possible write-downs;
|
▪
|
stock-based compensation expenses associated with attracting and retaining personnel; and
|
▪
|
general economic conditions, geopolitical events and natural catastrophes.
|
•
|
the time, resources and expense required for localization of our solutions, including translation of our Internet-based portal interface into additional foreign languages, provision of client support in foreign languages and creation of localized agreements;
|
•
|
the burdens of complying with a wide variety of international laws, regulations and legal standards, including local data privacy laws, local consumer protection laws that could regulate permitted pricing and promotion practices, and restrictions on the use, import or export of encryption technologies;
|
•
|
longer accounts receivable payment cycles and difficulties in collecting accounts receivable;
|
•
|
fluctuations in foreign currency exchange rates;
|
•
|
tariffs and trade barriers and other regulatory or contractual limitations on our ability to sell or develop our solutions in some international markets;
|
•
|
difficulties in managing and staffing international operations;
|
•
|
compliance with U.S. laws that apply to foreign operations, including the Foreign Corrupt Practices Act, or FCPA, the Trading with the Enemy Act and regulations of the Office of Foreign Assets Control;
|
•
|
potentially adverse tax consequences and compliance costs resulting from the complexities of international value added tax systems, restrictions on the repatriation of earnings and overlap of different tax regimes;
|
•
|
reduced or varied protection of intellectual property rights in some countries that could expose us to increased risk of infringement of our patents; and
|
•
|
political, social and economic instability abroad, terrorist attacks and security concerns in general.
|
•
|
expenditure of significant financial and development resources in efforts to analyze, correct, eliminate or work around the cause of any related vulnerabilities;
|
•
|
loss of existing or potential clients or channel partners;
|
•
|
delayed or lost revenue;
|
•
|
extension of service credits to affected clients, which would reduce our revenue;
|
•
|
failure to attain or retain market acceptance; and
|
•
|
litigation, regulatory inquiries or investigations that may be costly and harm our reputation.
|
•
|
involve our entry into geographic or business markets in which we have little or no experience;
|
•
|
create difficulties in retaining the clients of any acquired business;
|
•
|
result in a delay or reduction of client sales for both us and the company we acquire because of client uncertainty about the continuity and effectiveness of solutions offered by either company; and
|
•
|
disrupt our existing business by diverting resources and significant management attention that otherwise would be focused on development of our existing business.
|
•
|
expose us to unexpected liabilities;
|
•
|
require us to incur charges and substantial indebtedness or liabilities;
|
•
|
have adverse tax consequences;
|
•
|
result in acquired in-process research and development expenses, or in the future require the amortization, write-down or impairment of amounts related to deferred compensation, goodwill and other intangible assets; or
|
•
|
fail to generate a financial return sufficient to offset acquisition costs.
|
•
|
the election and removal of our directors;
|
•
|
amendments to our certificate of incorporation;
|
•
|
determinations with respect to mergers, business combinations, dispositions of assets or other extraordinary corporate transactions; and
|
•
|
agreements that may adversely affect us.
|
•
|
actual or anticipated variations in our quarterly or annual results of operations;
|
•
|
tax, employee benefit, indemnification and other matters arising from our changed relationship with Dell;
|
•
|
employee retention and recruiting;
|
•
|
business combinations involving us;
|
•
|
our ability to engage in activities with certain channel, technology or other marketing partners;
|
•
|
sales or dispositions by Dell Technologies of all or any portion of its beneficial ownership interest in us;
|
•
|
the nature, quality and pricing of services Dell has agreed to provide us;
|
•
|
business opportunities that may be attractive to both Dell and us;
|
•
|
Dell’s ability to use and sublicense patents that we have licensed to Dell under a patent license agreement; and
|
•
|
product or technology development or marketing activities that may require consent of Dell or Dell Technologies.
|
•
|
engaging in the same or similar activities or lines of business as those in which we are engaged;
|
•
|
doing business with any of our clients, customers or vendors; or
|
•
|
employing, or otherwise engaging or soliciting for such purpose, any of our officers, directors or employees.
|
•
|
announcements of new products, services or technologies, commercial relationships, acquisitions or other events by us or our competitors;
|
•
|
changes in how customers perceive the effectiveness of our solutions in protecting against advanced cyber attacks;
|
•
|
actual or anticipated variations in our quarterly or annual results of operations;
|
•
|
changes in our financial guidance or estimates by securities analysts;
|
•
|
price and volume fluctuations in the overall stock market from time to time;
|
•
|
significant volatility in the market price and trading volume of technology companies in general and of companies in the information security industry in particular;
|
•
|
actual or anticipated changes in the expectations of investors or securities analysts;
|
•
|
fluctuations in the trading volume of our shares or the size of the trading market for our shares held by non-affiliates;
|
•
|
litigation involving us, our industry, or both, including disputes or other developments relating to our ability to patent our processes and technologies and protect our other proprietary rights;
|
•
|
regulatory developments in the United States and foreign jurisdictions in which we operate;
|
•
|
general economic and political factors, including market conditions in our industry or the industries of our clients;
|
•
|
major catastrophic events;
|
•
|
sales of large blocks of our Class A common stock; and
|
•
|
additions or departures of key employees.
|
•
|
a board of directors having a majority of independent directors;
|
•
|
a nominating committee composed entirely of independent directors that nominates candidates for election to the board of directors, or recommend such candidates for nomination by the board of directors; and
|
•
|
a compensation committee composed entirely of independent directors that approves the compensation payable to the company’s chief executive officer and other executive officers.
|
•
|
provide that our Class B common stock is entitled to ten votes per share, while our Class A common stock is entitled to one vote per share, enabling Dell Technologies, as the beneficial owner of all outstanding shares of our Class B common stock, to control the outcome of all matters submitted to a vote of our stockholders, including the election of directors;
|
•
|
provide for the classification of the board of directors into three classes, with approximately one-third of the directors to be elected each year;
|
•
|
limit the number of directors constituting the entire board of directors to a maximum of 15 directors, subject to the rights of the holders of any outstanding series of preferred stock, and provide that the authorized number of directors at any time will be fixed exclusively by a resolution adopted by the affirmative vote of the authorized number of directors (without regard to vacancies);
|
•
|
provide that, at such time (if any) as the Dell Technologies Entities beneficially own capital stock representing less than 40% in voting power of the capital stock entitled to vote generally on the election of directors, any newly-created directorship and any vacancy on the board of directors may be filled only by the affirmative vote of a majority of the remaining directors then in office;
|
•
|
provide that, at such time (if any) as the Dell Technologies Entities beneficially own capital stock representing less than 50% in voting power of the capital stock entitled to vote generally on the election of directors, directors may be removed only for cause and only by the affirmative vote of the holders of at least a majority in voting power of all outstanding shares of capital stock, voting together as a single class;
|
•
|
provide that a special meeting of stockholders may be called only by our chairman of the board, a majority of the directors then in office or, so long as Dell Technologies Entities beneficially own capital stock representing at least 40% in voting power of the capital stock entitled to vote generally on the election of directors, Dell Technologies;
|
•
|
provide that, at such time (if any) as the Dell Technologies Entities beneficially own capital stock representing less than 50% in voting power of the capital stock entitled to vote generally on the election of directors, any action required or permitted to be taken by our stockholders at any annual or special meeting may not be effected by a written consent in lieu of a meeting unless such action and the taking of such action by written consent have been approved in advance by our board of directors;
|
•
|
establish advance notice procedures for stockholders to make nominations of candidates for election as directors or to present any other business for consideration at any annual or special stockholder meeting; and
|
•
|
provide authority for the board of directors without stockholder approval to authorize the issuance of up to 200,000,000 shares of preferred stock, in one or more series, with terms and conditions, and having rights, privileges and preferences, to be determined by the board of directors.
|
•
|
any derivative action or proceeding brought on our behalf;
|
•
|
any action asserting a claim of breach of a fiduciary duty owed by, or other wrongdoing by, any of our directors, officers or other employees, or stockholders to us or our stockholders;
|
•
|
any action asserting a claim arising pursuant to any provision of the Delaware General Corporation Law or as to which the Delaware General Corporation Law confers jurisdiction on the Court of Chancery of the State of Delaware; and
|
•
|
any action asserting a claim governed by the internal affairs doctrine.
|
•
|
provide an exemption from the auditor attestation requirement in the assessment of our internal control over financial reporting under the Sarbanes-Oxley Act of 2002, or the Sarbanes-Oxley Act;
|
•
|
permit us to include reduced disclosure regarding executive compensation in our SEC filings; and
|
•
|
provide an exemption from the requirement to hold a non-binding advisory vote on executive compensation and stockholder approval of any golden parachute arrangements not previously approved.
|
Fiscal Year
|
|
|
|
High
|
|
Low
|
||||
2017
|
|
First Quarter (from April 22, 2016)
|
|
$
|
14.60
|
|
|
$
|
13.10
|
|
|
|
Second Quarter
|
|
16.23
|
|
|
11.96
|
|
||
|
|
Third Quarter
|
|
15.80
|
|
|
11.04
|
|
||
|
|
Fourth Quarter
|
|
12.82
|
|
|
10.15
|
|
|
|
Base Period
|
||||||||||||||||||
|
|
April 22, 2016
|
|
July 1, 2016
|
|
September 12, 2016
|
|
November 23, 2016
|
|
February 3, 2017
|
||||||||||
SecureWorks
|
|
$
|
100.00
|
|
|
$
|
100.00
|
|
|
$
|
95.71
|
|
|
$
|
89.36
|
|
|
$
|
75.64
|
|
NASDAQ Composite
|
|
$
|
100.00
|
|
|
$
|
99.11
|
|
|
$
|
106.23
|
|
|
$
|
109.67
|
|
|
$
|
115.50
|
|
PureFunds ISE Cyber Security ETF
|
|
$
|
100.00
|
|
|
$
|
101.05
|
|
|
$
|
114.81
|
|
|
$
|
116.25
|
|
|
$
|
121.21
|
|
|
|
Fiscal Year Ended
|
||||||||||
|
|
February 3, 2017
|
|
January 29, 2016
|
|
January 30, 2015
|
||||||
|
|
(in thousands, except per share data)
|
||||||||||
Results of Operations:
|
|
|
|
|
|
|
||||||
Net revenue
|
|
$
|
429,502
|
|
|
$
|
339,522
|
|
|
$
|
262,130
|
|
Gross margin
|
|
$
|
216,903
|
|
|
$
|
155,713
|
|
|
$
|
117,284
|
|
Operating expenses
|
|
$
|
282,856
|
|
|
$
|
261,721
|
|
|
$
|
178,377
|
|
Operating loss
|
|
$
|
(65,953
|
)
|
|
$
|
(106,008
|
)
|
|
$
|
(61,093
|
)
|
Net loss
|
|
$
|
(38,213
|
)
|
|
$
|
(72,381
|
)
|
|
$
|
(38,490
|
)
|
Share and Per Share Data
|
|
|
|
|
|
|
||||||
Net loss per share - basic and diluted
|
|
$
|
(0.49
|
)
|
|
$
|
(1.03
|
)
|
|
$
|
(0.55
|
)
|
Weighted average shares outstanding - basic and diluted
|
|
77,635
|
|
|
70,000
|
|
|
70,000
|
|
|
|
February 3, 2017
|
|
January 30, 2016
|
|
January 30, 2015
|
||||||
|
|
(in thousands)
|
||||||||||
Balance Sheet:
|
|
|
|
|
|
|
||||||
Cash and cash equivalents
|
|
$
|
116,595
|
|
|
$
|
33,422
|
|
|
$
|
6,669
|
|
Accounts receivable
|
|
$
|
113,546
|
|
|
$
|
116,357
|
|
|
$
|
70,907
|
|
Total assets
|
|
$
|
999,300
|
|
|
$
|
917,785
|
|
|
$
|
862,737
|
|
Short-term deferred revenue
|
|
$
|
119,909
|
|
|
$
|
109,467
|
|
|
$
|
82,188
|
|
Short-term convertible notes
|
|
$
|
—
|
|
|
$
|
27,993
|
|
|
$
|
—
|
|
Long-term deferred revenue
|
|
$
|
14,752
|
|
|
$
|
18,352
|
|
|
$
|
11,040
|
|
Total stockholder's equity
|
|
$
|
691,424
|
|
|
$
|
588,456
|
|
|
$
|
606,926
|
|
•
|
fortify their cyber defenses to prevent security breaches,
|
•
|
detect malicious activity,
|
•
|
prioritize and respond rapidly to security breaches, and
|
•
|
predict emerging threats.
|
•
|
maintain and extend our technology leadership,
|
•
|
expand and diversify our client base,
|
•
|
deepen our existing client relationships, and
|
•
|
attract and retain top talent
|
|
February 3, 2017
|
|
January 29, 2016
|
|
January 30, 2015
|
||||||
Client base
|
4,400
|
|
|
4,200
|
|
|
3,800
|
|
|||
Monthly recurring revenue (in millions)
|
$
|
31.6
|
|
|
$
|
28.6
|
|
|
$
|
22.7
|
|
Revenue retention rate
|
98
|
%
|
|
108
|
%
|
|
96
|
%
|
•
|
Impact of Purchase Accounting.
The impact of purchase accounting consists primarily of purchase accounting adjustments related to a change in the basis of deferred revenue related to the acquisition of Dell by Dell Technologies in fiscal 2014.
|
•
|
Amortization of Intangible Assets.
Amortization of intangible assets consists of amortization of customer relationships and acquired technology. In connection with the acquisition of Dell by Dell Technologies in fiscal 2014, all of our tangible and intangible assets and liabilities were accounted for and recognized at fair value on the transaction date. Accordingly, amortization of intangible assets consists of amortization associated with intangible assets recognized in connection with this transaction.
|
•
|
Stock-based Compensation.
Non-cash stock-based compensation relates to both the Dell Technologies and SecureWorks equity plans. We exclude such expenses when assessing the effectiveness of our operating performance since stock-based compensation does not necessarily correlate with the underlying operating performance of the business.
|
•
|
Other.
Other include professional fees incurred by us in connection with our IPO and amounts expensed in the settlement of a legal matter. We are excluding these expenses for the purpose of calculating the non-GAAP financial measures presented below because we believe these items are outside our ordinary course of business and do not contribute to a meaningful evaluation of our current operating performance or comparisons to our past operating performance.
|
•
|
Aggregate Adjustment for Income Taxes.
The aggregate adjustment for income taxes is the estimated combined income tax effect for the adjustments mentioned above. The tax effects are determined based on the tax jurisdictions where the above items were incurred.
|
|
Fiscal Year Ended
|
||||||||||
|
February 3, 2017
|
|
January 29, 2016
|
|
January 30, 2015
|
||||||
|
|
|
|
||||||||
GAAP revenue
|
$
|
429,502
|
|
|
$
|
339,522
|
|
|
$
|
262,130
|
|
Impact of purchase accounting
|
884
|
|
|
2,769
|
|
|
12,741
|
|
|||
Non-GAAP revenue
|
$
|
430,386
|
|
|
$
|
342,291
|
|
|
$
|
274,871
|
|
|
|
|
|
|
|
||||||
GAAP gross margin
|
$
|
216,903
|
|
|
$
|
155,713
|
|
|
$
|
117,284
|
|
Amortization of intangibles
|
13,642
|
|
|
13,640
|
|
|
13,642
|
|
|||
Impact of purchase accounting
|
1,160
|
|
|
2,932
|
|
|
12,903
|
|
|||
Stock-based compensation expense
|
462
|
|
|
—
|
|
|
—
|
|
|||
Other
|
—
|
|
|
4,868
|
|
|
—
|
|
|||
Non-GAAP gross margin
|
$
|
232,167
|
|
|
$
|
177,153
|
|
|
$
|
143,829
|
|
|
|
|
|
|
|
||||||
GAAP research and development expenses
|
$
|
71,030
|
|
|
$
|
69,598
|
|
|
$
|
45,092
|
|
Stock-based compensation expense
|
(2,033
|
)
|
|
(277
|
)
|
|
(259
|
)
|
|||
Non-GAAP research and development expenses
|
$
|
68,997
|
|
|
$
|
69,321
|
|
|
$
|
44,833
|
|
|
|
|
|
|
|
||||||
GAAP sales and marketing expenses
|
$
|
124,950
|
|
|
$
|
111,978
|
|
|
$
|
85,046
|
|
Stock-based compensation expense
|
(1,068
|
)
|
|
—
|
|
|
—
|
|
|||
Non-GAAP sales and marketing expenses
|
$
|
123,882
|
|
|
$
|
111,978
|
|
|
$
|
85,046
|
|
|
|
|
|
|
|
||||||
GAAP general and administrative expenses
|
$
|
86,876
|
|
|
$
|
80,145
|
|
|
$
|
48,239
|
|
Amortization of intangibles
|
(14,094
|
)
|
|
(14,660
|
)
|
|
(16,168
|
)
|
Impact of purchase accounting
|
(886
|
)
|
|
(916
|
)
|
|
(916
|
)
|
|||
Stock-based compensation expense
|
(5,320
|
)
|
|
(564
|
)
|
|
(526
|
)
|
|||
Other
|
(1,164
|
)
|
|
(8,917
|
)
|
|
—
|
|
|||
Non-GAAP general and administrative expenses
|
$
|
65,412
|
|
|
$
|
55,088
|
|
|
$
|
30,629
|
|
|
|
|
|
|
|
||||||
GAAP operating loss
|
$
|
(65,953
|
)
|
|
$
|
(106,008
|
)
|
|
$
|
(61,093
|
)
|
Amortization of intangibles
|
27,736
|
|
|
28,299
|
|
|
29,810
|
|
|||
Impact of purchase accounting
|
2,046
|
|
|
3,848
|
|
|
13,819
|
|
|||
Stock-based compensation expense
|
8,883
|
|
|
841
|
|
|
785
|
|
|||
Other
|
1,164
|
|
|
13,786
|
|
|
—
|
|
|||
Non-GAAP operating loss
|
$
|
(26,124
|
)
|
|
$
|
(59,234
|
)
|
|
$
|
(16,679
|
)
|
|
|
|
|
|
|
||||||
GAAP net loss
|
$
|
(38,213
|
)
|
|
$
|
(72,381
|
)
|
|
$
|
(38,490
|
)
|
Amortization of intangibles
|
27,736
|
|
|
28,299
|
|
|
29,810
|
|
|||
Impact of purchase accounting
|
2,046
|
|
|
3,848
|
|
|
13,819
|
|
|||
Stock-based compensation expense
|
8,883
|
|
|
841
|
|
|
785
|
|
|||
Other
|
1,164
|
|
|
13,786
|
|
|
—
|
|
|||
Aggregate adjustment for income taxes
|
(16,113
|
)
|
|
(17,508
|
)
|
|
(16,780
|
)
|
|||
Non-GAAP net loss
|
$
|
(14,497
|
)
|
|
$
|
(43,115
|
)
|
|
$
|
(10,856
|
)
|
|
|
|
|
|
|
||||||
GAAP net loss per share
|
$
|
(0.49
|
)
|
|
$
|
(1.03
|
)
|
|
$
|
(0.55
|
)
|
Amortization of intangibles
|
0.36
|
|
|
0.40
|
|
|
0.43
|
|
|||
Impact of purchase accounting
|
0.03
|
|
|
0.05
|
|
|
0.20
|
|
|||
Stock-based compensation expense
|
0.11
|
|
|
0.01
|
|
|
0.01
|
|
|||
Other
|
0.01
|
|
|
0.20
|
|
|
—
|
|
|||
Aggregate adjustment for income taxes
|
(0.21
|
)
|
|
(0.25
|
)
|
|
(0.25
|
)
|
|||
Non-GAAP net loss per share *
|
$
|
(0.19
|
)
|
|
$
|
(0.62
|
)
|
|
$
|
(0.16
|
)
|
* Sum of reconciling items may differ from total due to rounding of individual components
|
|||||||||||
|
|
|
|
|
|
||||||
GAAP net loss
|
$
|
(38,213
|
)
|
|
$
|
(72,381
|
)
|
|
$
|
(38,490
|
)
|
Interest and other, net
|
(2,476
|
)
|
|
6,569
|
|
|
142
|
|
|||
Income tax benefit
|
(25,264
|
)
|
|
(40,196
|
)
|
|
(22,745
|
)
|
|||
Depreciation and amortization
|
39,425
|
|
|
40,638
|
|
|
41,425
|
|
|||
Stock-based compensation expense
|
8,883
|
|
|
841
|
|
|
785
|
|
|||
Impact of purchase accounting
|
884
|
|
|
2,769
|
|
|
12,741
|
|
|||
Other
|
1,164
|
|
|
13,786
|
|
|
—
|
|
|||
Adjusted EBITDA
|
$
|
(15,597
|
)
|
|
$
|
(47,974
|
)
|
|
$
|
(6,142
|
)
|
▪
|
Research and Development, or R&D, Expenses.
Research and development expenses include compensation and related expenses for the continued development of our solutions offerings, including a portion of expenses related to our threat research team, which focuses on the identification of system vulnerabilities, data forensics and malware analysis, and product management. R&D expenses also encompass expenses related to the development of prototypes of new solutions offerings and allocated overhead. Our solutions offerings have generally been developed internally. We operate in a competitive and highly technical industry. Therefore, to maintain and extend our technology leadership, we intend to continue to invest in our R&D efforts by hiring more personnel to enhance our existing security solutions and to add complementary solutions.
|
•
|
Sales and Marketing, or S&M, Expenses.
Sales and marketing expenses include wages and benefits, sales commissions and related expenses for our S&M personnel, travel and entertainment, marketing and advertising programs (including lead generation), client advocacy events, and other brand-building expenses, as well as allocated overhead.
|
▪
|
General and Administrative, or G&A, Expenses.
General and administrative expenses include primarily the costs of human resources and recruiting, finance and accounting, legal support, management information and information security systems, facilities management, corporate development and other administrative functions, offset by allocations of information technology and facilities costs to other functions.
|
|
|
Fiscal Year Ended
|
|||||||||||||||
|
|
February 3, 2017
|
|
|
|
January 29, 2016
|
|||||||||||
|
|
$
|
|
% of
Revenue |
|
%
Change |
|
$
|
|
% of
Revenue |
|||||||
|
|
(in thousands, except percentages)
|
|||||||||||||||
Net revenue
|
|
$
|
429,502
|
|
|
100.0
|
%
|
|
26.5
|
%
|
|
$
|
339,522
|
|
|
100.0
|
%
|
Cost of revenue
|
|
$
|
212,599
|
|
|
49.5
|
%
|
|
15.7
|
%
|
|
$
|
183,809
|
|
|
54.1
|
%
|
Total gross margin
|
|
$
|
216,903
|
|
|
50.5
|
%
|
|
39.3
|
%
|
|
$
|
155,713
|
|
|
45.9
|
%
|
Operating expenses
|
|
$
|
282,856
|
|
|
65.9
|
%
|
|
8.1
|
%
|
|
$
|
261,721
|
|
|
77.1
|
%
|
Operating loss
|
|
$
|
(65,953
|
)
|
|
(15.4
|
)%
|
|
(37.8
|
)%
|
|
$
|
(106,008
|
)
|
|
(31.2
|
)%
|
Net loss
|
|
$
|
(38,213
|
)
|
|
(8.9
|
)%
|
|
(47.2
|
)%
|
|
$
|
(72,381
|
)
|
|
(21.3
|
)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Other Financial Information
(1)
|
|
|
|
|
|
|
|
|
|
|
|||||||
Non-GAAP revenue
|
|
$
|
430,386
|
|
|
100.0
|
%
|
|
25.7
|
%
|
|
$
|
342,291
|
|
|
100.0
|
%
|
Non-GAAP gross margin
|
|
$
|
232,167
|
|
|
53.9
|
%
|
|
31.1
|
%
|
|
$
|
177,153
|
|
|
51.8
|
%
|
Non-GAAP operating expenses
|
|
$
|
258,291
|
|
|
60.0
|
%
|
|
9.3
|
%
|
|
$
|
236,387
|
|
|
69.1
|
%
|
Non-GAAP operating loss
|
|
$
|
(26,124
|
)
|
|
(6.1
|
)%
|
|
(55.9
|
)%
|
|
$
|
(59,234
|
)
|
|
(17.3
|
)%
|
Non-GAAP net loss
|
|
$
|
(14,497
|
)
|
|
(3.4
|
)%
|
|
(66.4
|
)%
|
|
$
|
(43,115
|
)
|
|
(12.6
|
)%
|
Adjusted EBITDA
|
|
$
|
(15,597
|
)
|
|
(3.6
|
)%
|
|
(67.5
|
)%
|
|
$
|
(47,974
|
)
|
|
(14.0
|
)%
|
(1)
|
See "Non-GAAP Financial Measures" and "Reconciliation of Non-GAAP Financial Measures" for more information about these non-GAAP financial measures, including our reasons for including the measures, material limitations with respect to the usefulness of the measures, and a reconciliation of each non-GAAP financial measure to the most directly comparable GAAP financial measure. Non-GAAP financial measures as a percentage of revenue are calculated based on non-GAAP revenue.
|
|
Fiscal Years Ended
|
|||||||||||||||
|
February 3, 2017
|
|
|
|
January 29, 2016
|
|||||||||||
|
Dollars
|
|
% of
Revenue
|
|
%
Change
|
|
Dollars
|
|
% of
Revenue
|
|||||||
|
(in thousands, except percentages)
|
|||||||||||||||
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Research and development
|
$
|
71,030
|
|
|
16.5
|
%
|
|
2.1
|
%
|
|
$
|
69,598
|
|
|
20.5
|
%
|
Sales and marketing
|
124,950
|
|
|
29.1
|
%
|
|
11.6
|
%
|
|
111,978
|
|
|
33.0
|
%
|
||
General and administrative
|
86,876
|
|
|
20.2
|
%
|
|
8.4
|
%
|
|
80,145
|
|
|
23.6
|
%
|
||
Total operating expenses
|
$
|
282,856
|
|
|
65.9
|
%
|
|
8.1
|
%
|
|
$
|
261,721
|
|
|
77.1
|
%
|
|
|
|
|
|
|
|
|
|
|
|||||||
Other Financial Information
|
|
|
|
|
|
|
|
|
|
|||||||
Non-GAAP research and development
|
$
|
68,997
|
|
|
16.0
|
%
|
|
(0.5
|
)%
|
|
$
|
69,321
|
|
|
20.3
|
%
|
Non-GAAP sales and marketing
|
123,882
|
|
|
28.8
|
%
|
|
10.6
|
%
|
|
111,978
|
|
|
32.7
|
%
|
||
Non-GAAP general and administrative
|
65,412
|
|
|
15.2
|
%
|
|
18.7
|
%
|
|
55,088
|
|
|
16.1
|
%
|
||
Non-GAAP operating expenses
(1)
|
$
|
258,291
|
|
|
60.0
|
%
|
|
9.3
|
%
|
|
$
|
236,387
|
|
|
69.1
|
%
|
(1)
|
See “"Non-GAAP Financial Measures" and "Reconciliation of Non-GAAP Financial Measures” for a reconciliation of each non-GAAP financial measure to the most directly comparable GAAP financial measure.
|
|
|
Fiscal Year Ended
|
|||||||||||||||
|
|
January 29, 2016
|
|
|
|
January 30, 2015
|
|||||||||||
|
|
$
|
|
% of
Revenue |
|
%
Change |
|
$
|
|
% of
Revenue |
|||||||
|
|
(in thousands, except percentages)
|
|||||||||||||||
Net revenue
|
|
$
|
339,522
|
|
|
100.0
|
%
|
|
29.5
|
%
|
|
$
|
262,130
|
|
|
100.0
|
%
|
Cost of revenue
|
|
$
|
183,809
|
|
|
54.1
|
%
|
|
26.9
|
%
|
|
$
|
144,846
|
|
|
55.3
|
%
|
Total gross margin
|
|
$
|
155,713
|
|
|
45.9
|
%
|
|
32.8
|
%
|
|
$
|
117,284
|
|
|
44.7
|
%
|
Operating expenses
|
|
$
|
261,721
|
|
|
77.1
|
%
|
|
46.7
|
%
|
|
$
|
178,377
|
|
|
68.0
|
%
|
Operating loss
|
|
$
|
(106,008
|
)
|
|
(31.2
|
)%
|
|
73.5
|
%
|
|
$
|
(61,093
|
)
|
|
(23.3
|
)%
|
Net loss
|
|
$
|
(72,381
|
)
|
|
(21.3
|
)%
|
|
88.1
|
%
|
|
$
|
(38,490
|
)
|
|
(14.7
|
)%
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Other Financial Information
(1)
|
|
|
|
|
|
|
|
|
|
|
|||||||
Non-GAAP revenue
|
|
$
|
342,291
|
|
|
100.0
|
%
|
|
24.5
|
%
|
|
$
|
274,871
|
|
|
100.0
|
%
|
Non-GAAP gross margin
|
|
$
|
177,153
|
|
|
51.8
|
%
|
|
23.2
|
%
|
|
$
|
143,829
|
|
|
52.3
|
%
|
Non-GAAP operating expenses
|
|
$
|
236,387
|
|
|
69.1
|
%
|
|
47.3
|
%
|
|
$
|
160,508
|
|
|
58.4
|
%
|
Non-GAAP operating loss
|
|
$
|
(59,234
|
)
|
|
(17.3
|
)%
|
|
255.1
|
%
|
|
$
|
(16,679
|
)
|
|
(6.1
|
)%
|
Non-GAAP net loss
|
|
$
|
(43,115
|
)
|
|
(12.6
|
)%
|
|
297.2
|
%
|
|
$
|
(10,856
|
)
|
|
(3.9
|
)%
|
Adjusted EBITDA
|
|
$
|
(47,974
|
)
|
|
(14.0
|
)%
|
|
681.1
|
%
|
|
$
|
(6,142
|
)
|
|
(2.2
|
)%
|
(1)
|
See "Non-GAAP Financial Measures" and "Reconciliation of Non-GAAP Financial Measures" for reconciliation of each non-GAAP financial measure to the most directly comparable GAAP financial measure. Non-GAAP financial measures as a percentage of revenue are calculated based on non-GAAP revenue.
|
|
Fiscal Years Ended
|
|||||||||||||||
|
January 29, 2016
|
|
|
|
January 30, 2015
|
|||||||||||
|
Dollars
|
|
% of
Revenue
|
|
%
Change
|
|
Dollars
|
|
% of
Revenue
|
|||||||
|
(in thousands, except percentages)
|
|||||||||||||||
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Research and development
|
$
|
69,598
|
|
|
20.5
|
%
|
|
54.3
|
%
|
|
$
|
45,092
|
|
|
17.2
|
%
|
Sales and marketing
|
111,978
|
|
|
33.0
|
%
|
|
31.7
|
%
|
|
85,046
|
|
|
32.4
|
%
|
||
General and administrative
|
80,145
|
|
|
23.6
|
%
|
|
66.1
|
%
|
|
48,239
|
|
|
18.4
|
%
|
||
Total operating expenses
|
$
|
261,721
|
|
|
77.1
|
%
|
|
46.7
|
%
|
|
$
|
178,377
|
|
|
68.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|||||||
Other Financial Information
|
|
|
|
|
|
|
|
|
|
|||||||
Non-GAAP research and development
|
$
|
69,321
|
|
|
20.3
|
%
|
|
54.6
|
%
|
|
$
|
44,833
|
|
|
16.3
|
%
|
Non-GAAP sales and marketing
|
111,978
|
|
|
32.7
|
%
|
|
31.7
|
%
|
|
85,046
|
|
|
30.9
|
%
|
||
Non-GAAP general and administrative
|
55,088
|
|
|
16.1
|
%
|
|
79.9
|
%
|
|
30,629
|
|
|
11.1
|
%
|
||
Non-GAAP operating expenses
(1)
|
$
|
236,387
|
|
|
69.1
|
%
|
|
47.3
|
%
|
|
$
|
160,508
|
|
|
58.4
|
%
|
(1)
|
See “"Non-GAAP Financial Measures" and "Reconciliation of Non-GAAP Financial Measures” for a reconciliation of each non-GAAP financial measure to the most directly comparable GAAP financial measure.
|
|
February 3,
2017 |
|
January 29,
2016 |
||||
|
(in thousands)
|
||||||
|
|
|
|
|
|||
Cash and cash equivalents
|
$
|
116,595
|
|
|
$
|
33,422
|
|
Accounts receivable, net
|
$
|
113,546
|
|
|
$
|
116,357
|
|
|
|
Fiscal Years Ended
|
||||||
|
|
February 3,
2017 |
|
January 29,
2016 |
||||
|
|
(in thousands)
|
||||||
Net change in cash from:
|
|
|
|
|
|
|
||
Operating activities
|
|
$
|
(6,838
|
)
|
|
$
|
(9,843
|
)
|
Investing activities
|
|
(19,361
|
)
|
|
(9,023
|
)
|
||
Financing activities
|
|
109,372
|
|
|
45,619
|
|
||
Change in cash and cash equivalents
|
|
$
|
83,173
|
|
|
$
|
26,753
|
|
•
|
Operating Activities
—
Cash used by operating activities totaled
$6.8 million
and
$9.8 million
for fiscal
2017
and fiscal
2016
, respectively. Operating cash flows benefited from a lower net loss and an increase in stock-based compensation, but were offset to a large extent by the effects of operating as a stand-alone company and the settlement of our net payable to Dell existing at the beginning of the year as discussed below.
|
•
|
Investing Activities
—
Cash used in investing activities totaled
$19.4 million
and
$9.0 million
for fiscal
2017
and fiscal
2016
, respectively. For the periods presented, investing activities consisted of capital expenditures for property and equipment to support our data center and facility infrastructure. In addition, fiscal 2017 includes investments in network upgrades, development of our software defined data center and implementation of a new and upgraded back office systems and platforms to facilitate our expected growth.
|
•
|
Financing Activities
— Cash flows from financing activities totaled
$109.4 million
and
$45.6 million
for fiscal
2017
and fiscal
2016
, respectively. Financing activities for fiscal
2017
included
$99.6 million
in net cash proceeds from our IPO and a
$10.0 million
capital contribution by Dell in March 2016. Financing activities for fiscal
2016
consisted of cash transfers from Dell of approximately
$24.4 million
and
$22.5 million
in cash proceeds from our sale of convertible notes.
|
|
|
Fiscal Years Ended
|
||||||
|
|
January 29,
2016 |
|
January 30,
2015 |
||||
|
|
(in thousands)
|
||||||
Net change in cash from:
|
|
|
|
|
|
|
||
Operating activities
|
|
$
|
(9,843
|
)
|
|
$
|
2,232
|
|
Investing activities
|
|
(9,023
|
)
|
|
(9,542
|
)
|
||
Financing activities
|
|
45,619
|
|
|
11,553
|
|
||
Change in cash and cash equivalents
|
|
$
|
26,753
|
|
|
$
|
4,243
|
|
•
|
Operating Activities
—
Cash used in operating activities totaled $9.8 million during fiscal 2016, compared to cash generated from operating activities of $2.2 million during fiscal 2015. The decline in operating cash flows in fiscal 2016 from fiscal 2015 was primarily attributable to a greater net loss during fiscal 2016, adjusted for non-cash items.
|
•
|
Investing Activities
—
Cash used in investing activities totaled $9.0 million and $9.5 million during fiscal 2016 and fiscal 2015, respectively. For the periods presented, investing activities consisted of capital expenditures for property and equipment to support data center and facility infrastructure.
|
•
|
Financing Activities
— Cash flows provided by financing activities totaled $45.6 million and $11.6 million during fiscal 2016 and fiscal 2015, respectively. Financing activities for fiscal 2016 included $22.5 million in cash proceeds from our sale of the convertible notes and $24.4 million in cash transfers from Dell. Financing activities in fiscal 2015 consisted entirely of cash transfers from Dell.
|
|
|
Payments Due by Fiscal Year
|
||||||||||||||
(in thousands)
|
|
Less than 1 year
|
1-3 years
|
3-5 years
|
Thereafter
|
Total
|
||||||||||
Operating leases
|
|
$
|
4,536
|
|
$
|
8,027
|
|
$
|
2,179
|
|
$
|
246
|
|
$
|
14,988
|
|
Purchase obligations
|
|
9,346
|
|
2,451
|
|
739
|
|
—
|
|
12,536
|
|
|||||
Credit facilities and other
(1)
|
|
1,923
|
|
1,123
|
|
—
|
|
—
|
|
3,046
|
|
|||||
Total
|
|
$
|
15,805
|
|
$
|
11,601
|
|
$
|
2,918
|
|
$
|
246
|
|
$
|
30,570
|
|
(1)
|
Other reflects purchase obligations of annual maintenance services for hardware systems for internal use from a related party. See also "Notes to Consolidated Financial Statements—Note 10—Related Party Transactions" in our consolidated financial statements included in this report.
|
▪
|
the item has value to the client on a stand-alone basis; and
|
▪
|
if the arrangement includes a general right of return relative to the delivered item and delivery or performance of the undelivered item is considered probable and substantially in our control.
|
Audited Consolidated Financial Statements of SecureWorks Corp.
|
|
Page
|
|
|
Report of Independent Registered Public Accounting Firm
|
|
|
|
Consolidated Statements of Financial Position as of February 3, 2017 and January 29, 2016
|
|
|
|
Consolidated Statements of Operations for the fiscal years ended February 3, 2017, January 29, 2016, and January 30, 2015
|
|
|
|
Consolidated Statements of Comprehensive Loss for the fiscal years ended February 3, 2017, January 29, 2016, and January 30, 2015
|
|
|
|
Consolidated Statements of Cash Flows fiscal years ended February 3, 2017, January 29, 2016, and January 30, 2015
|
|
|
|
Consolidated Statements of Stockholder's Equity fiscal years ended February 3, 2017, January 29, 2016, and January 30, 2015
|
|
|
|
Notes to Consolidated Financial Statements
|
|
|
|
Schedule II - Valuation and Qualifying Accounts
|
|
|
February 3,
2017 |
|
January 29,
2016 |
||||
|
|
|
|
||||
ASSETS
|
|||||||
Current assets:
|
|
|
|
|
|||
Cash and cash equivalents
|
$
|
116,595
|
|
|
$
|
33,422
|
|
Accounts receivable, net
|
113,546
|
|
|
116,357
|
|
||
Inventories, net
|
1,947
|
|
|
3,549
|
|
||
Other current assets
|
51,947
|
|
|
26,211
|
|
||
Total current assets
|
284,035
|
|
|
179,539
|
|
||
Property and equipment, net
|
31,153
|
|
|
22,766
|
|
||
Goodwill
|
416,487
|
|
|
416,487
|
|
||
Purchased intangible assets, net
|
261,921
|
|
|
289,657
|
|
||
Other non-current assets
|
5,704
|
|
|
9,336
|
|
||
Total assets
|
$
|
999,300
|
|
|
$
|
917,785
|
|
|
|||||||
LIABILITIES AND STOCKHOLDERS' EQUITY
|
|||||||
Current liabilities:
|
|
|
|
||||
Accounts payable
|
$
|
24,119
|
|
|
$
|
22,126
|
|
Accrued and other
|
59,704
|
|
|
60,407
|
|
||
Short-term deferred revenue
|
119,909
|
|
|
109,467
|
|
||
Short-term debt
|
—
|
|
|
27,993
|
|
||
Total current liabilities
|
203,732
|
|
|
219,993
|
|
||
Long-term deferred revenue
|
14,752
|
|
|
18,352
|
|
||
Other non-current liabilities
|
89,392
|
|
|
90,984
|
|
||
Total liabilities
|
307,876
|
|
|
329,329
|
|
||
Commitments and contingencies (Note 6)
|
|
|
|
|
|
||
Stockholders' equity:
|
|
|
|
||||
Preferred stock - $0.01 par value: 200,000 shares authorized; 0 shares issued
|
—
|
|
|
—
|
|
||
Common stock - Class A of $.01 par value: 2,500,000 shares authorized; 10,566 issued and outstanding
|
107
|
|
|
—
|
|
||
Common stock - Class B of $.01 par value: 500,000 shares authorized; 70,000 shares issued and outstanding
|
700
|
|
|
700
|
|
||
Additional paid in capital
|
854,907
|
|
|
711,923
|
|
||
Accumulated deficit
|
(160,859
|
)
|
|
(122,646
|
)
|
||
Accumulated other comprehensive loss
|
(3,431
|
)
|
|
(1,521
|
)
|
||
Total stockholders' equity
|
691,424
|
|
|
588,456
|
|
||
Total liabilities and stockholders' equity
|
$
|
999,300
|
|
|
$
|
917,785
|
|
|
Fiscal Years Ended
|
||||||||||
|
February 3, 2017
|
|
January 29, 2016
|
|
January 30, 2015
|
||||||
|
|
|
|
|
|
|
|
||||
Net revenue
|
$
|
429,502
|
|
|
$
|
339,522
|
|
|
$
|
262,130
|
|
Cost of revenue
|
212,599
|
|
|
183,809
|
|
|
144,846
|
|
|||
Gross margin
|
216,903
|
|
|
155,713
|
|
|
117,284
|
|
|||
Research and development
|
71,030
|
|
|
69,598
|
|
|
45,092
|
|
|||
Sales and marketing
|
124,950
|
|
|
111,978
|
|
|
85,046
|
|
|||
General and administrative
|
86,876
|
|
|
80,145
|
|
|
48,239
|
|
|||
Total operating expenses
|
282,856
|
|
|
261,721
|
|
|
178,377
|
|
|||
Operating loss
|
(65,953
|
)
|
|
(106,008
|
)
|
|
(61,093
|
)
|
|||
Interest and other, net
|
2,476
|
|
|
(6,569
|
)
|
|
(142
|
)
|
|||
Loss before income taxes
|
(63,477
|
)
|
|
(112,577
|
)
|
|
(61,235
|
)
|
|||
Income tax benefit
|
(25,264
|
)
|
|
(40,196
|
)
|
|
(22,745
|
)
|
|||
Net loss
|
$
|
(38,213
|
)
|
|
$
|
(72,381
|
)
|
|
$
|
(38,490
|
)
|
|
|
|
|
|
|
||||||
Net loss per common share (basic and diluted)
|
$
|
(0.49
|
)
|
|
$
|
(1.03
|
)
|
|
$
|
(0.55
|
)
|
Weighted-average common shares outstanding (basic and diluted)
|
77,635
|
|
|
70,000
|
|
|
70,000
|
|
|||
|
|
|
|
|
|
|
Fiscal Years Ended
|
||||||||||
|
February 3, 2017
|
|
January 29, 2016
|
|
January 30, 2015
|
||||||
Net loss
|
$
|
(38,213
|
)
|
|
$
|
(72,381
|
)
|
|
$
|
(38,490
|
)
|
Foreign currency translation adjustments, net of zero tax
|
(1,910
|
)
|
|
(1,496
|
)
|
|
124
|
|
|||
Comprehensive loss
|
$
|
(40,123
|
)
|
|
$
|
(73,877
|
)
|
|
$
|
(38,366
|
)
|
|
Fiscal Years Ended
|
||||||||||
|
February 3, 2017
|
|
January 29, 2016
|
|
January 30, 2015
|
||||||
Cash flows from operating activities:
|
|
|
|
|
|
||||||
Net loss
|
$
|
(38,213
|
)
|
|
$
|
(72,381
|
)
|
|
$
|
(38,490
|
)
|
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
|
|
|
|
|
|
||||||
Depreciation and amortization
|
39,425
|
|
|
40,638
|
|
|
41,425
|
|
|||
Change in fair value of convertible notes
|
132
|
|
|
5,493
|
|
|
—
|
|
|||
Stock-based compensation expense
|
8,883
|
|
|
841
|
|
|
785
|
|
|||
Effects of exchange rate changes on monetary assets and liabilities denominated in foreign currencies
|
(2,239
|
)
|
|
836
|
|
|
137
|
|
|||
Income tax benefit
|
(25,264
|
)
|
|
(40,196
|
)
|
|
(22,745
|
)
|
|||
Other non cash impacts
|
—
|
|
|
4,792
|
|
|
7,202
|
|
|||
Excess tax benefit from share-based payment
|
(221
|
)
|
|
—
|
|
|
—
|
|
|||
Provision for doubtful accounts
|
2,613
|
|
|
4,661
|
|
|
768
|
|
|||
Changes in assets and liabilities:
|
|
|
|
|
|
||||||
Accounts receivable
|
956
|
|
|
(52,443
|
)
|
|
(24,527
|
)
|
|||
Due to / from parent
|
(15,582
|
)
|
|
21,691
|
|
|
—
|
|
|||
Inventories
|
1,610
|
|
|
(1,179
|
)
|
|
(1,389
|
)
|
|||
Other assets
|
(139
|
)
|
|
(10,065
|
)
|
|
(3,856
|
)
|
|||
Accounts payable
|
2,041
|
|
|
2,311
|
|
|
5,570
|
|
|||
Deferred revenue
|
7,185
|
|
|
34,591
|
|
|
34,275
|
|
|||
Accrued and other liabilities
|
11,975
|
|
|
50,567
|
|
|
3,077
|
|
|||
Net cash provided by (used in) operating activities
|
(6,838
|
)
|
|
(9,843
|
)
|
|
2,232
|
|
|||
Cash flows from investing activities:
|
|
|
|
|
|
|
|
||||
Capital expenditures
|
(19,361
|
)
|
|
(9,023
|
)
|
|
(9,542
|
)
|
|||
Net cash used in investing activities
|
(19,361
|
)
|
|
(9,023
|
)
|
|
(9,542
|
)
|
|||
Cash flows from financing activities:
|
|
|
|
|
|
|
|
||||
Proceeds from initial public offering, net
|
99,604
|
|
|
—
|
|
|
—
|
|
|||
Capital contribution from parent, net
|
9,547
|
|
|
—
|
|
|
—
|
|
|||
Excess tax benefit from share-based payment
|
221
|
|
|
—
|
|
|
—
|
|
|||
Transfers from parent, net
|
—
|
|
|
24,383
|
|
|
11,553
|
|
|||
Payment of deferred offering costs
|
—
|
|
|
(1,264
|
)
|
|
—
|
|
|||
Issuance of convertible notes
|
—
|
|
|
22,500
|
|
|
—
|
|
|||
Net cash provided by financing activities
|
109,372
|
|
|
45,619
|
|
|
11,553
|
|
|||
Net increase in cash and cash equivalents
|
83,173
|
|
|
26,753
|
|
|
4,243
|
|
|||
Cash and cash equivalents at beginning of the period
|
33,422
|
|
|
6,669
|
|
|
2,426
|
|
|||
Cash and cash equivalents at end of the period
|
$
|
116,595
|
|
|
$
|
33,422
|
|
|
$
|
6,669
|
|
|
|
|
|
|
|
||||||
Supplemental Disclosures of Non-Cash Investing and Financing Activities:
|
|
|
|
|
|
||||||
Conversion of convertible notes to common stock
|
$
|
28,125
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Financed capital expenditures
|
$
|
800
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Income taxes paid
|
$
|
910
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
Common Stock - Class A
|
|
Common Stock - Class B
|
|
|
|
|
|
|
|
|
||||||||||||||||||
|
Outstanding Shares
|
|
Amount
|
|
Outstanding Shares
|
|
Amount
|
|
Additional Paid in Capital
|
|
Accumulated Deficit
|
|
Accumulated Other Comprehensive (Loss) Income
|
|
Total Stockholders' Equity
|
||||||||||||||
Balances, January 31, 2014
|
—
|
|
|
—
|
|
|
70,000
|
|
|
700
|
|
|
$
|
641,552
|
|
|
$
|
(11,775
|
)
|
|
$
|
(149
|
)
|
|
$
|
630,328
|
|
||
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(38,490
|
)
|
|
—
|
|
|
(38,490
|
)
|
||||||
Other comprehensive loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
124
|
|
|
124
|
|
||||||
Capital contribution from parent, net
|
|
|
|
|
|
|
|
|
14,179
|
|
|
|
|
|
|
14,179
|
|
||||||||||||
Stock-based compensation
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
785
|
|
|
—
|
|
|
—
|
|
|
785
|
|
||||||
Balances, January 30, 2015
|
—
|
|
|
—
|
|
|
70,000
|
|
|
700
|
|
|
$
|
656,516
|
|
|
$
|
(50,265
|
)
|
|
$
|
(25
|
)
|
|
$
|
606,926
|
|
||
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(72,381
|
)
|
|
—
|
|
|
(72,381
|
)
|
||||||
Other comprehensive loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,496
|
)
|
|
(1,496
|
)
|
||||||
Capital contribution from parent, net
|
|
|
|
|
|
|
|
|
54,566
|
|
|
|
|
|
|
54,566
|
|
||||||||||||
Stock-based compensation
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
841
|
|
|
—
|
|
|
—
|
|
|
841
|
|
||||||
Balances, January 29, 2016
|
—
|
|
|
—
|
|
|
70,000
|
|
|
700
|
|
|
$
|
711,923
|
|
|
$
|
(122,646
|
)
|
|
$
|
(1,521
|
)
|
|
$
|
588,456
|
|
||
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
|
(38,213
|
)
|
|
—
|
|
|
(38,213
|
)
|
|||||||
Other comprehensive loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,910
|
)
|
|
(1,910
|
)
|
||||||
Issuance of common stock in connection with initial public offering, net of offering costs
|
8,000
|
|
|
80
|
|
|
—
|
|
|
—
|
|
|
96,246
|
|
|
—
|
|
|
—
|
|
|
96,326
|
|
||||||
Conversion of convertible notes to common stock in connection with initial public offering
|
2,009
|
|
|
20
|
|
|
—
|
|
|
—
|
|
|
28,105
|
|
|
—
|
|
|
—
|
|
|
28,125
|
|
||||||
Restricted Stock
|
557
|
|
|
6
|
|
|
—
|
|
|
—
|
|
|
(17
|
)
|
|
—
|
|
|
—
|
|
|
(11
|
)
|
||||||
Capital contribution from parent, net
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
9,547
|
|
|
—
|
|
|
—
|
|
|
9,547
|
|
||||||
Stock-based compensation
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
8,883
|
|
|
—
|
|
|
—
|
|
|
8,883
|
|
||||||
Excess tax benefit from share-based payment
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
—
|
|
|
$
|
221
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
221
|
|
Balances, February 3, 2017
|
10,566
|
|
|
$
|
106
|
|
|
70,000
|
|
|
$
|
700
|
|
|
$
|
854,908
|
|
|
$
|
(160,859
|
)
|
|
$
|
(3,431
|
)
|
|
$
|
691,424
|
|
▪
|
the item has value to the client on a stand-alone basis; and
|
▪
|
if the arrangement includes a general right of return relative to the delivered item, delivery or performance of the undelivered item is considered probable and substantially in the Company’s control.
|
|
Fiscal Year Ended January 29, 2016
|
|
Fiscal Year Ended January 30, 2015
|
||||||||||||||||||||||
|
|
|
As
|
|
|
|
As
|
|
As
|
|
|
|
As
|
||||||||||||
|
|
|
Reported
|
|
Reclassification
|
|
Reclassified
|
|
Reported
|
|
Reclassification
|
|
Reclassified
|
||||||||||||
Statements of Operations Data:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Selling, general and administrative
|
$
|
211,974
|
|
|
$
|
(211,974
|
)
|
|
—
|
|
|
$
|
146,324
|
|
|
$
|
(146,324
|
)
|
|
—
|
|
||||
Research and development
|
49,747
|
|
|
19,851
|
|
|
69,598
|
|
|
32,053
|
|
|
13,039
|
|
|
45,092
|
|
||||||||
Sales and marketing
|
—
|
|
|
111,978
|
|
|
111,978
|
|
|
—
|
|
|
85,046
|
|
|
85,046
|
|
||||||||
General and administrative
|
—
|
|
|
80,145
|
|
|
80,145
|
|
|
—
|
|
|
48,239
|
|
|
48,239
|
|
||||||||
|
Total operating expenses
|
$
|
261,721
|
|
|
$
|
—
|
|
|
$
|
261,721
|
|
|
$
|
178,377
|
|
|
$
|
—
|
|
|
$
|
178,377
|
|
|
|
Fiscal Years Ended
|
||||||||||
|
|
February 3, 2017
|
|
January 29, 2016
|
|
January 30, 2015
|
||||||
Numerator:
|
|
|
|
|
|
|
||||||
Net loss
|
|
$
|
(38,213
|
)
|
|
$
|
(72,381
|
)
|
|
$
|
(38,490
|
)
|
Denominator:
|
|
|
|
|
|
|
||||||
Weighted-average number of shares outstanding:
|
|
|
|
|
|
|
||||||
Basic and Diluted
|
|
77,635
|
|
|
70,000
|
|
|
70,000
|
|
|||
Loss per common share:
|
|
|
|
|
|
|
||||||
Basic and Diluted
|
|
$
|
(0.49
|
)
|
|
$
|
(1.03
|
)
|
|
$
|
(0.55
|
)
|
|
|
|
|
|
|
|
||||||
Weighted-average anti-dilutive stock options, non-vested restricted stock and restricted stock units
|
|
3,806
|
|
|
—
|
|
|
—
|
|
|
|
February 3, 2017
|
|
January 29, 2016
|
||||||||||||||||||||
|
|
Gross
|
|
Accumulated
Amortization
|
|
Net
|
|
Gross
|
|
Accumulated
Amortization
|
|
Net
|
||||||||||||
|
|
(in thousands)
|
||||||||||||||||||||||
Customer relationships
|
|
$
|
189,518
|
|
|
$
|
(48,963
|
)
|
|
$
|
140,555
|
|
|
$
|
189,518
|
|
|
$
|
(34,869
|
)
|
|
$
|
154,649
|
|
Technology
|
|
135,584
|
|
|
(44,336
|
)
|
|
91,248
|
|
|
135,584
|
|
|
(30,694
|
)
|
|
104,890
|
|
||||||
Finite-lived intangible assets
|
|
325,102
|
|
|
(93,299
|
)
|
|
231,803
|
|
|
325,102
|
|
|
(65,563
|
)
|
|
259,539
|
|
||||||
Trade name
|
|
30,118
|
|
|
—
|
|
|
30,118
|
|
|
30,118
|
|
|
—
|
|
|
30,118
|
|
||||||
Total intangible assets
|
|
$
|
355,220
|
|
|
$
|
(93,299
|
)
|
|
$
|
261,921
|
|
|
$
|
355,220
|
|
|
$
|
(65,563
|
)
|
|
$
|
289,657
|
|
Fiscal Years
|
(in thousands)
|
||
2018
|
$
|
27,736
|
|
2019
|
27,736
|
|
|
2020
|
27,736
|
|
|
2021
|
27,736
|
|
|
2022
|
27,736
|
|
|
Thereafter
|
93,123
|
|
|
Total
|
$
|
231,803
|
|
|
|
Payments Due For
|
||||||||||||||
|
|
Operating
|
|
Purchase
|
|
Credit Facilities
|
|
|
||||||||
Fiscal Years Ending
|
|
Leases
|
|
Obligations
|
|
and Other
(1)
|
|
Total
|
||||||||
2018
|
|
$
|
4,536
|
|
|
$
|
9,346
|
|
|
$
|
1,923
|
|
|
$
|
15,805
|
|
2019
|
|
4,268
|
|
|
1,371
|
|
|
1,123
|
|
|
6,762
|
|
||||
2020
|
|
3,759
|
|
|
1,080
|
|
|
—
|
|
|
4,839
|
|
||||
2021
|
|
1,241
|
|
|
739
|
|
|
—
|
|
|
1,980
|
|
||||
2022
|
|
938
|
|
|
—
|
|
|
—
|
|
|
938
|
|
||||
2023 and beyond
|
|
246
|
|
|
—
|
|
|
—
|
|
|
246
|
|
||||
Total
|
|
$
|
14,988
|
|
|
$
|
12,536
|
|
|
$
|
3,046
|
|
|
$
|
30,570
|
|
(1)
|
Reflects purchase obligations of annual maintenance services for hardware systems for internal use from a related party. See also "Note 10—Related Party Transactions."
|
|
|
Fiscal Year Ended
|
|
|
February 3, 2017
|
|
|
|
Expected life
|
|
6.3 years
|
Risk-free interest rate
|
|
1.68%
|
Volatility
|
|
44.74%
|
Dividend yield
|
|
—%
|
Expected forfeiture rate
|
|
6.12%
|
Weighted-average grant-date fair value
|
|
$6.15
|
|
|||||||||||||||||
|
Number
of
Options
|
|
Weighted-
Average Exercise Price Per Share |
|
Weighted-
Average Contractual Life (years) |
|
Weighted-Average Grant date Fair Value Per Share
|
|
Aggregate Intrinsic Value
|
||||||||
|
|
|
|
|
|
|
|
|
(in thousands)
|
||||||||
Balance, January 29, 2016
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
Granted
|
2,960,419
|
|
|
$
|
14.00
|
|
|
8.77
|
|
|
$
|
6.15
|
|
|
$
|
—
|
|
Exercised
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
|
|
—
|
|
|||
Canceled, expired or forfeited
|
(382,252
|
)
|
|
$
|
14.00
|
|
|
—
|
|
|
$
|
6.34
|
|
|
—
|
|
|
Balance, February 3, 2017
|
2,578,167
|
|
|
$
|
14.00
|
|
|
9.22
|
|
|
$
|
6.12
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Options expected to vest, February 3, 2017
|
2,414,550
|
|
|
$
|
14.00
|
|
|
9.22
|
|
|
$
|
6.11
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Options exercisable, February 3, 2017
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
Number
of
Shares
|
|
Weighted-
Average
Grant Date
Fair Value Per Share
|
|
Weighted-
Average Contractual Life (years) |
|
Aggregate Intrinsic Value
|
||||||
|
|
|
|
|
|
|
(in thousands)
|
||||||
Balance, January 29, 2016
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
—
|
|
Granted
|
2,460,594
|
|
|
$
|
13.28
|
|
|
1.71
|
|
|
$
|
26,058
|
|
Vested
|
(2,143
|
)
|
|
$
|
14.00
|
|
|
—
|
|
|
—
|
|
|
Forfeited
|
(215,965
|
)
|
|
$
|
14.00
|
|
|
—
|
|
|
—
|
|
|
Converted
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||
Balance, February 3, 2017
|
2,242,486
|
|
|
$
|
13.21
|
|
|
1.88
|
|
|
$
|
23,748
|
|
|
|
|
|
|
|
|
|
||||||
Restricted stock and restricted stock units expected to vest, February 3, 2017
|
2,050,166
|
|
|
$
|
13.22
|
|
|
2.05
|
|
|
$
|
21,711
|
|
|
|
Fiscal Years Ended
|
||||||||||
|
|
February 3,
2017 |
|
January 29,
2016 |
|
January 30,
2015 |
||||||
|
|
(in thousands)
|
||||||||||
Cost of revenue
|
|
$
|
462
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Research and development
|
|
2,033
|
|
|
277
|
|
|
259
|
|
|||
Sales and marketing
|
|
1,068
|
|
|
—
|
|
|
—
|
|
|||
General and administrative
|
|
5,320
|
|
|
564
|
|
|
526
|
|
|||
Total stock-based compensation expense
|
|
$
|
8,883
|
|
|
$
|
841
|
|
|
$
|
785
|
|
|
|
Fiscal Years Ended
|
||||||||||
|
|
February 3, 2017
|
|
January 29, 2016
|
|
January 30, 2015
|
||||||
|
|
|
|
|
|
|
||||||
Loss before income taxes
|
|
$
|
(63,477
|
)
|
|
$
|
(112,577
|
)
|
|
$
|
(61,235
|
)
|
Income tax benefit
|
|
$
|
(25,264
|
)
|
|
$
|
(40,196
|
)
|
|
$
|
(22,745
|
)
|
Effective tax rate
|
|
39.8
|
%
|
|
35.7
|
%
|
|
37.1
|
%
|
|
Fiscal Year Ended
|
|||||||
|
February 3, 2017
|
|
January 29, 2016
|
|
January 30, 2015
|
|||
|
|
|||||||
U.S. federal statutory rate
|
35.0
|
%
|
|
35.0
|
%
|
|
35.0
|
%
|
Foreign income taxed at different rates
|
(0.3
|
)
|
|
(0.9
|
)
|
|
(0.7
|
)
|
State income taxes, net of federal tax benefit
|
3.2
|
|
|
1.9
|
|
|
2.8
|
|
Research and development credits
|
3.1
|
|
|
0.5
|
|
|
—
|
|
Nondeductible/nontaxable items
|
(1.2
|
)
|
|
(0.8
|
)
|
|
—
|
|
Total
|
39.8
|
%
|
|
35.7
|
%
|
|
37.1
|
%
|
|
Fiscal Years Ended
|
||||||||||
|
February 3, 2017
|
|
January 29, 2016
|
|
January 30, 2015
|
||||||
|
(in thousands)
|
||||||||||
Current:
|
|
|
|
|
|
|
|
||||
Federal
|
$
|
(22,470
|
)
|
|
$
|
(12,519
|
)
|
|
$
|
(7,552
|
)
|
State/Local
|
657
|
|
|
(1,517
|
)
|
|
(585
|
)
|
|||
Foreign
|
1,379
|
|
|
(1,366
|
)
|
|
(383
|
)
|
|||
Current
|
(20,434
|
)
|
|
(15,402
|
)
|
|
(8,520
|
)
|
|||
Deferred:
|
|
|
|
|
|
|
|||||
Federal
|
(3,620
|
)
|
|
(24,472
|
)
|
|
(12,970
|
)
|
|||
State/Local
|
(471
|
)
|
|
330
|
|
|
(1,172
|
)
|
|||
Foreign
|
(739
|
)
|
|
(652
|
)
|
|
(83
|
)
|
|||
Deferred
|
(4,830
|
)
|
|
(24,794
|
)
|
|
(14,225
|
)
|
|||
Income tax benefit
|
$
|
(25,264
|
)
|
|
$
|
(40,196
|
)
|
|
$
|
(22,745
|
)
|
|
Fiscal Years Ended
|
||||||||||
|
February 3, 2017
|
|
January 29, 2016
|
|
January 30, 2015
|
||||||
|
(in thousands)
|
||||||||||
Domestic
|
$
|
(64,542
|
)
|
|
$
|
(103,061
|
)
|
|
$
|
(58,641
|
)
|
Foreign
|
1,065
|
|
|
(9,516
|
)
|
|
(2,594
|
)
|
|||
Loss before income taxes
|
$
|
(63,477
|
)
|
|
$
|
(112,577
|
)
|
|
$
|
(61,235
|
)
|
|
February 3, 2017
|
|
January 29, 2016
|
||||
|
(in thousands)
|
||||||
Deferred tax assets:
|
|
|
|
|
|||
Deferred revenue
|
$
|
6,232
|
|
|
$
|
5,231
|
|
Provision for doubtful accounts
|
2,377
|
|
|
874
|
|
||
Credit carryforwards
|
—
|
|
|
480
|
|
||
Loss carryforwards
|
2,806
|
|
|
18,509
|
|
||
Stock-based and deferred compensation
|
9,568
|
|
|
6,443
|
|
||
Deferred tax assets
|
20,983
|
|
|
31,537
|
|
||
Valuation allowance
|
(2,806
|
)
|
|
(2,438
|
)
|
||
Deferred tax assets, net of valuation allowance
|
18,177
|
|
|
29,099
|
|
||
Deferred tax liabilities:
|
|
|
|
||||
Property and equipment
|
(1,367
|
)
|
|
(192
|
)
|
||
Purchased intangible assets
|
(97,836
|
)
|
|
(107,901
|
)
|
||
Operating and compensation related accruals
|
(3,933
|
)
|
|
(7,855
|
)
|
||
Other
|
(29
|
)
|
|
(732
|
)
|
||
Deferred tax liabilities
|
(103,165
|
)
|
|
(116,680
|
)
|
||
Net deferred tax liabilities
|
$
|
(84,988
|
)
|
|
$
|
(87,581
|
)
|
|
|
|
|
|
|
|
||||
|
|
|
|
Consolidated
|
||||||
|
|
|
|
February 3, 2017
|
|
January 29, 2016
|
||||
|
|
|
|
(in thousands)
|
||||||
Accounts receivable, net:
|
|
|
|
|
||||||
|
Gross accounts receivable
|
|
$
|
119,678
|
|
|
$
|
120,841
|
|
|
|
Allowance for doubtful accounts
|
|
(6,132
|
)
|
|
(4,484
|
)
|
|||
|
|
Total
|
|
$
|
113,546
|
|
|
$
|
116,357
|
|
Other current assets:
|
|
|
|
|
||||||
|
Income tax receivable
|
|
25,091
|
|
|
—
|
|
|||
|
Prepaid maintenance and support agreements
|
|
16,107
|
|
|
17,736
|
|
|||
|
Prepaid other
|
|
10,749
|
|
|
8,475
|
|
|||
|
|
Total
|
|
$
|
51,947
|
|
|
$
|
26,211
|
|
Property and equipment, net
|
|
|
|
|
||||||
|
Computer equipment
|
|
$
|
47,407
|
|
|
$
|
29,001
|
|
|
|
Leasehold improvements
|
|
16,986
|
|
|
15,470
|
|
|||
|
Other equipment
|
|
1,358
|
|
|
966
|
|
|||
|
|
Total property and equipment
|
|
65,751
|
|
|
45,437
|
|
||
|
Accumulated depreciation
|
|
$
|
(34,598
|
)
|
|
$
|
(22,671
|
)
|
|
|
|
Total
|
|
$
|
31,153
|
|
|
$
|
22,766
|
|
Other noncurrent assets
|
|
|
|
|
||||||
|
Prepaid maintenance agreements
|
|
2,304
|
|
|
1,700
|
|
|||
|
Deferred tax asset
|
|
1,503
|
|
|
709
|
|
|||
|
Deferred IPO costs
|
|
—
|
|
|
4,329
|
|
|||
|
Other
|
|
1,897
|
|
|
2,598
|
|
|||
|
|
Total
|
|
$
|
5,704
|
|
|
$
|
9,336
|
|
Accrued and other current liabilities
|
|
|
|
|
||||||
|
Compensation
|
|
$
|
36,803
|
|
|
$
|
29,439
|
|
|
|
Intercompany payable, net
|
|
9,052
|
|
|
21,691
|
|
|||
|
Other
|
|
13,849
|
|
|
9,277
|
|
|||
|
|
Total
|
|
$
|
59,704
|
|
|
$
|
60,407
|
|
Other non-current liabilities
|
|
|
|
|
||||||
|
Deferred tax liabilities
|
|
$
|
86,491
|
|
|
$
|
88,290
|
|
|
|
Intercompany payable, net
|
|
1,100
|
|
|
—
|
|
|||
|
Other
|
|
1,801
|
|
|
2,694
|
|
|||
|
|
Total
|
|
$
|
89,392
|
|
|
$
|
90,984
|
|
|
|
|
|
Fiscal Year Ended
|
||||||||||
|
|
|
|
February 3, 2017
|
|
|
January 29, 2016
|
|
|
January 30, 2015
|
||||
Net revenue
|
|
|
|
|
|
|
||||||||
|
United States
|
|
$
|
374,254
|
|
|
$
|
298,984
|
|
|
$
|
230,309
|
|
|
|
Foreign Countries
|
|
55,248
|
|
|
40,538
|
|
|
31,821
|
|
||||
|
|
Total
|
|
$
|
429,502
|
|
|
$
|
339,522
|
|
|
$
|
262,130
|
|
|
|
|
|
February 3, 2017
|
|
|
January 29, 2016
|
|
||
Property and equipment, net
|
|
|
|
|
||||||
|
United States
|
|
$
|
26,916
|
|
|
$
|
20,453
|
|
|
|
Foreign Countries
|
|
4,237
|
|
|
2,313
|
|
|||
|
|
Total
|
|
$
|
31,153
|
|
|
$
|
22,766
|
|
|
|
February 3, 2017
|
January 29, 2016
|
||||
|
|
(in thousands)
|
|||||
Intercompany receivable
|
|
$
|
1,680
|
|
$
|
19,496
|
|
Intercompany payable
|
|
(11,832
|
)
|
(41,187
|
)
|
||
Net intercompany payable (in accrued and other)
|
|
$
|
(10,152
|
)
|
$
|
(21,691
|
)
|
|
|
|
|
||||
Accounts receivable from clients under reseller agreements with Dell (in accounts receivable, net)
|
|
$
|
16,658
|
|
$
|
15,552
|
|
|
|
|
|
||||
Net operating loss tax sharing receivable under agreement with Dell (in other current assets at February 3, 2017 and other non-current liabilities at January 29, 2016)
|
|
$
|
25,091
|
|
$
|
18,509
|
|
|
|
|
Fiscal Year 2017
|
||||||||||||||
|
|
|
First
|
|
Second
|
|
Third
|
|
Fourth
|
||||||||
|
|
|
Quarter
|
|
Quarter
|
|
Quarter
|
|
Quarter
|
||||||||
|
|
|
|
|
|
|
|
|
|
||||||||
Net revenue
|
|
$
|
99,793
|
|
|
$
|
103,653
|
|
|
$
|
107,108
|
|
|
$
|
118,948
|
|
|
Gross margin
|
|
$
|
49,944
|
|
|
$
|
50,746
|
|
|
$
|
53,471
|
|
|
$
|
62,742
|
|
|
Net loss
|
|
$
|
(11,627
|
)
|
|
$
|
(12,051
|
)
|
|
$
|
(7,718
|
)
|
|
$
|
(6,817
|
)
|
|
Net loss per common share (basic and diluted)
(1)
|
|
$
|
(0.17
|
)
|
|
$
|
(0.15
|
)
|
|
$
|
(0.10
|
)
|
|
$
|
(0.09
|
)
|
|
Weighted-average common shares outstanding (basic and diluted
|
|
70,330
|
|
|
80,009
|
|
|
80,009
|
|
|
80,009
|
|
|
|
|
Fiscal Year 2016
|
||||||||||||||
|
|
|
First
|
|
Second
|
|
Third
|
|
Fourth
|
||||||||
|
|
|
Quarter
|
|
Quarter
|
|
Quarter
|
|
Quarter
|
||||||||
|
|
|
|
|
|
|
|
|
|
||||||||
Net revenue
|
|
$
|
77,399
|
|
|
$
|
79,855
|
|
|
$
|
88,187
|
|
|
$
|
94,081
|
|
|
Gross margin
|
|
$
|
33,403
|
|
|
$
|
35,138
|
|
|
$
|
42,722
|
|
|
$
|
44,450
|
|
|
Net loss
|
|
$
|
(17,830
|
)
|
|
$
|
(21,124
|
)
|
|
$
|
(18,528
|
)
|
|
$
|
(14,899
|
)
|
|
Net loss per common share (basic and diluted)
(1)
|
|
$
|
(0.25
|
)
|
|
$
|
(0.30
|
)
|
|
$
|
(0.26
|
)
|
|
$
|
(0.21
|
)
|
|
Weighted-average common shares outstanding (basic and diluted)
|
|
70,000
|
|
|
70,000
|
|
|
70,000
|
|
|
70,000
|
|
(1)
|
Basic and diluted net loss per common share are computed independently for each of the quarters presented. Therefore, the sum of the quarterly basic and diluted net loss per common share amounts may not equal the annual basic and diluted net loss per common share amounts.
|
|
|
|
|
Research and Development
|
|
Sale and Marketing
|
|
General and Administrative
|
|
Total Operating Expense
|
||||||||
Fiscal Year 2017
|
|
|
|
|
||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||
Three months ended
|
|
|
|
|
|
|
|
|
||||||||||
|
April 29, 2016
|
|
|
|
|
|
|
|
|
|||||||||
|
|
As stated
|
|
$
|
13,596
|
|
|
$
|
27,496
|
|
|
$
|
27,852
|
|
|
$
|
68,944
|
|
|
|
Reclassification
|
4,001
|
|
|
2,766
|
|
|
(6,767
|
)
|
|
—
|
|
|||||
|
|
As reclassified
|
|
$
|
17,597
|
|
|
$
|
30,262
|
|
|
$
|
21,085
|
|
|
$
|
68,944
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
July 29, 2016
|
|
|
|
|
|
|
|
|
|||||||||
|
|
As stated
|
|
$
|
12,848
|
|
|
$
|
28,639
|
|
|
$
|
29,306
|
|
|
$
|
70,793
|
|
|
|
Reclassification
|
4,525
|
|
|
3,181
|
|
|
(7,706
|
)
|
|
—
|
|
|||||
|
|
As reclassified
|
|
$
|
17,373
|
|
|
$
|
31,820
|
|
|
$
|
21,600
|
|
|
$
|
70,793
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
October 28, 2016
|
|
|
|
|
|
|
|
|
|||||||||
|
|
As stated
|
|
$
|
12,181
|
|
|
$
|
26,424
|
|
|
$
|
29,709
|
|
|
$
|
68,314
|
|
|
|
Reclassification
|
4,782
|
|
|
3,301
|
|
|
(8,083
|
)
|
|
—
|
|
|||||
|
|
As reclassified
|
|
$
|
16,963
|
|
|
$
|
29,725
|
|
|
$
|
21,626
|
|
|
$
|
68,314
|
|
|
|
|
|
Research and
|
|
Sales and
|
|
General and
|
|
Total Operating
|
||||||||
Fiscal Year 2016
|
|
Development
|
|
Marketing
|
|
Administrative
|
|
Expense
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||
Three months ended
|
|
|
|
|
|
|
|
|
||||||||||
|
May 1, 2015
|
|
|
|
|
|
|
|
|
|||||||||
|
|
As stated
|
|
$
|
11,830
|
|
|
$
|
22,119
|
|
|
$
|
25,784
|
|
|
$
|
59,733
|
|
|
|
Reclassification
|
5,100
|
|
|
2,057
|
|
|
(7,157
|
)
|
|
—
|
|
|||||
|
|
As reclassified
|
|
$
|
16,930
|
|
|
$
|
24,176
|
|
|
$
|
18,627
|
|
|
$
|
59,733
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
July 31, 2015
|
|
|
|
|
|
|
|
|
|||||||||
|
|
As stated
|
|
$
|
12,643
|
|
|
$
|
26,696
|
|
|
$
|
28,148
|
|
|
$
|
67,487
|
|
|
|
Reclassification
|
4,941
|
|
|
2,514
|
|
|
(7,455
|
)
|
|
—
|
|
|||||
|
|
As reclassified
|
|
$
|
17,584
|
|
|
$
|
29,210
|
|
|
$
|
20,693
|
|
|
$
|
67,487
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
October 30, 2015
|
|
|
|
|
|
|
|
|
|||||||||
|
|
As stated
|
|
$
|
12,230
|
|
|
$
|
27,109
|
|
|
$
|
28,228
|
|
|
$
|
67,567
|
|
|
|
Reclassification
|
4,757
|
|
|
2,526
|
|
|
(7,283
|
)
|
|
—
|
|
|||||
|
|
As reclassified
|
|
$
|
16,987
|
|
|
$
|
29,635
|
|
|
$
|
20,945
|
|
|
$
|
67,567
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
January 29, 2016
|
|
|
|
|
|
|
|
|
|||||||||
|
|
As stated
(1)
|
|
$
|
13,045
|
|
|
$
|
—
|
|
|
$
|
53,889
|
|
|
$
|
66,934
|
|
|
|
Reclassification
|
5,052
|
|
|
28,957
|
|
|
(34,009
|
)
|
|
—
|
|
|||||
|
|
As reclassified
|
|
$
|
18,097
|
|
|
$
|
28,957
|
|
|
$
|
19,880
|
|
|
$
|
66,934
|
|
(1)
|
As disclosed in the Company's registration statement on Form S-1/A filed April 11, 2016 in connection with the IPO. Prior to the filing of the Company's Quarterly Report on Form 10-Q for the period ended April 29, 2016, the Company presented sales and marketing expense on a combined basis with general and administrative expense.
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
|
|
Balance at
|
|
Charged to
|
|
|
|
Balance at
|
||||||||
|
|
|
|
Beginning
|
|
Income
|
|
Charged to
|
|
End of
|
||||||||
Fiscal Year
|
|
Description
|
|
of Period
|
|
Statement
|
|
Allowance
|
|
Period
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||
Trade Receivables:
|
|
|
|
|
|
|
|
|
|
|
||||||||
2017
|
|
Allowance for doubtful accounts
|
|
$
|
4,484
|
|
|
$
|
2,613
|
|
|
$
|
(965
|
)
|
|
$
|
6,132
|
|
2016
|
|
Allowance for doubtful accounts
|
|
$
|
1,059
|
|
|
$
|
4,661
|
|
|
$
|
(1,236
|
)
|
|
$
|
4,484
|
|
2015
|
|
Allowance for doubtful accounts
|
|
$
|
539
|
|
|
$
|
768
|
|
|
$
|
(248
|
)
|
|
$
|
1,059
|
|
Michael R. Cote
President and Chief Executive Officer
SecureWorks Corp.
|
Mark J. Hawkins
Chief Financial Officer and Executive Vice President
Salesforce.com, Inc.
|
Michael S. Dell
Chairman and Chief Executive Officer
Dell Technologies Inc.
|
William R. McDermott
Chief Executive Officer
SAP SE
|
Egon Durban
Managing Partner
Silver Lake Partners
|
Yagyensh C. (Buno) Pati
Partner
Centerview Capital Technology
|
Pamela Daley
Retired Senior Vice President and
Senior Advisor to the Chairman
of General Electric Company
|
James M. Whitehurst
President and Chief Executive Officer
Red Hat, Inc.
|
(1)
|
Financial Statements
: The following financial statements are filed as a part of this report under “Part II — Item 8 Financial Statements and Supplementary Data”:
|
Report of Independent Registered Public Accounting Firm
|
|
Consolidated Statements of Financial Position as of February 3, 2017 and January 29, 2016
|
|
Consolidated Statements of Operations for the fiscal years ended February 3, 2017, January 29, 2016, and January 30, 2015
|
|
Consolidated Statements of Comprehensive Loss for the fiscal years ended February 3, 2017, January 29, 2016, and January 30, 2015
|
|
Consolidated Statements of Cash Flows fiscal years ended February 3, 2017, January 29, 2016, and January 30, 2015
|
|
Consolidated Statements of Stockholder's Equity fiscal years ended February 3, 2017, January 29, 2016, and January 30, 2015
|
|
Notes to Consolidated Financial Statements
|
|
Schedule II - Valuation and Qualifying Accounts
|
|
(2)
|
Financial Statement Schedules
: The following financial statement schedule is included following the Notes to the Consolidated Financial Statements under “Part II — Item 8 — Financial Statements and Supplementary Data”:
|
(3)
|
Exhibits
: See Index to Exhibits immediately following the signature page to this report.
|
|
SecureWorks Corp.
|
|
|
|
|
|
By:
|
/s/ Michael R. Cote
|
|
|
Michael R. Cote
|
|
|
Chief Executive Officer
|
|
|
(Duly Authorized Officer)
|
|
|
|
|
|
SIGNATURE
|
|
TITLE
|
|
DATE
|
|
|
|
|
|
/s/ Michael R. Cote
|
|
President, Chief Executive Officer and Director
|
|
March 29, 2017
|
Michael R. Cote
|
|
(Principal Executive Officer)
|
|
|
|
|
|
|
|
/s/ R. Wayne Jackson
|
|
Chief Financial Officer
|
|
March 29, 2017
|
R. Wayne Jackson
|
|
(Principal Financial Officer)
|
|
|
|
|
|
|
|
/s/ Henry C. Lyon
|
|
Chief Accounting Officer
|
|
March 29, 2017
|
Henry C. Lyon
|
|
(Principal Accounting Officer)
|
|
|
|
|
|
|
|
/s/ Michael S. Dell
|
|
Chairman of the Board of Directors
|
|
March 29, 2017
|
Michael S. Dell
|
|
|
|
|
|
|
|
|
|
/s/ Egon Durban
|
|
Director
|
|
March 29, 2017
|
Egon Durban
|
|
|
|
|
|
|
|
|
|
/s/ Pamela Daley
|
|
Director
|
|
March 29, 2017
|
Pamela Daley
|
|
|
|
|
|
|
|
|
|
/s/ Buno Pati
|
|
Director
|
|
March 29, 2017
|
Buno Pati
|
|
|
|
|
|
|
|
|
|
/s/ Mark J. Hawkins
|
|
Director
|
|
March 29, 2017
|
Mark J. Hawkins
|
|
|
|
|
|
|
|
|
|
/s/ William R. McDermott
|
|
Director
|
|
March 29, 2017
|
William R. McDermott
|
|
|
|
|
|
|
|
|
|
/s/ James M. Whitehurst
|
|
Director
|
|
March 29, 2017
|
James M. Whitehurst
|
|
|
|
|
|
|
|
|
|
EXHIBIT INDEX - Continued
|
||
Exhibit No.
|
|
Description
|
10.14
|
|
Note Purchase Agreement, dated as of June 30, 2015 and amended on July 31, 2015, among the Company, Dell Technologies Inc. and the Investors party thereto (incorporated by reference to Exhibit 10.21 to the Form S-1) (Registration No. 333-208596).
|
10.15
|
|
Office Lease between Teachers Concourse, LLC and SecureWorks, Inc., dated as of April 20, 2012, as amended (incorporated by reference to Exhibit 10.23 to the Form S-1) (Registration No. 333-208596).
|
10.16
|
|
Unconditional Guaranty of Payment and Performance, entered into on April 20, 2012, by Dell Inc. in favor of Teachers Concourse, LLC (incorporated by reference to Exhibit 10.24 to the Form S-1) (Registration No. 333-208596).
|
10.17
|
|
Sublease Agreement between Dell International Services SRL and SecureWorks Europe SRL, dated as of June 22, 2015, as amended (incorporated by reference to Exhibit 10.26 to the Form S-1) (Registration No. 333-208596).
|
10.18
|
|
Lease Deed between Dell International Services India Private Limited and SecureWorks India Private Limited, dated as of August 8, 2015 (incorporated by reference to Exhibit 10.27 to the Form S-1) (Registration No. 333-208596).
|
10.19*
|
|
Dell Technologies Inc. 2013 Stock Incentive Plan (incorporated by reference to Exhibit 10.18 to the Form S-1) (Registration No. 333-208596).
|
10.20*
|
|
Dell Inc. 2012 Long-Term Incentive Plan (incorporated by reference to Exhibit 10.1 of Dell Inc.'s Current Report on Form 8-K filed with the Commission on July 19, 2012) (Commission File No. 000-17017).
|
10.21*
|
|
Form of Indemnification Agreement between the Company and each director and executive officer of the Company (incorporated by reference to Exhibit 10.20 to the Form S-1) (Registration No. 333-208596).
|
10.22*
|
|
SecureWorks Corp. 2016 Long-Term Incentive Plan (incorporated by reference to Exhibit 4.4 to the Form S-8) (Registration No. 333-210866).
|
10.23*
|
|
Form of Nonqualified Stock Option Agreement for Executives under SecureWorks Corp. 2016 Long-Term Incentive Plan (incorporated by reference to Exhibit 10.13 to the Form S-1) (Registration No. 333-208596).
|
10.24*
|
|
Form of Nonqualified Stock Option Agreement for Directors under SecureWorks Corp. 2016 Long-Term Incentive Plan (incorporated by reference to Exhibit 10.13.1 to Amendment No. 1 to the Form S-1 filed with the Commission on March 22, 2016) (Registration No. 333-208596).
|
10.25*
|
|
Form of Restricted Stock Unit Agreement for Executives under SecureWorks Corp. 2016 Long-Term Incentive Plan (incorporated by reference to Exhibit 10.14 to the Form S-1) (Registration No. 333-208596).
|
10.26*
|
|
Form of Restricted Stock Unit Agreement for Directors under SecureWorks Corp. 2016 Long-Term Incentive Plan (incorporated by reference to Exhibit 10.14.1 to Amendment No. 1 to the Form S-1 filed with the Commission on March 22, 2016) (Registration No. 333-208596).
|
10.27*
|
|
Form of Restricted Stock Agreement for Executives under SecureWorks Corp. 2016 Long-Term Incentive Plan (incorporated by reference to Exhibit 10.15 to the Form S-1) (Registration No. 333-208596).
|
10.28*
|
|
SecureWorks Corp. Amended and Restated Severance Pay Plan for Executive Employees (incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K filed with the Commission on September 6, 2016) (Commission File No. 001-37748).
|
10.29*
|
|
Form of Non-Employee Director Compensation Policy (incorporated by reference to Exhibit 10.12 to the Form S-1) (Registration No. 333-208596).
|
10.30*
|
|
SecureWorks Corp. Form of Protection of Sensitive Information, Noncompetition and Nonsolicitation Agreement (incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K filed with the Commission on December 7, 2016) (Commission File No. 001-37748).
|
10.31*
|
|
Form of Performance-Based Restricted Stock Agreement for Executives under the SecureWorks Corp. 2016 Long-Term Incentive Plan (incorporated by reference to the Company's Current Report on Form 8-K filed with the Commission on March 10, 2017) (Commission File No. 001-37748).
|
10.32*
|
|
Form of Performance Stock Unit Agreement for Executives under the SecureWorks Corp. 2016 Long-Term Incentive Plan (incorporated by reference to the Company's Current Report on Form 8-K filed with the Commission on March 10, 2017) (Commission File No. 001-37748).
|
10.33*††
|
|
Amended and Restated SecureWorks Corp. Incentive Bonus Plan
|
10.34††
|
|
First Amendment to Revolving Credit Agreement, dated as of March 28, 2017, between SecureWorks, Inc. and Dell USA L.P.
|
21.1††
|
|
Subsidiaries of SecureWorks Corp.
|
23.1††
|
|
Consent of PricewaterhouseCoopers LLP, independent registered public accounting firm of SecureWorks Corp.
|
|
|
|
|
Exhibit 10.33
|
|
|
|
|
Exhibit 10.34
|
(i)
|
This Amendment No. 1, duly executed and delivered by the Borrower and the Lender;
|
(ii)
|
Copies of all licenses, consents, authorizations and approvals of, and notices to and filings and registrations with, any Governmental Authority (including all foreign exchange approvals), and of all third-party consents and approvals, necessary in connection with the making and performance by the Borrower of this Amendment No. 1 (and the Credit Agreement as amended hereby) and the transactions contemplated thereby; and
|
(iii)
|
Copies of the resolutions of the Board of Directors of the Borrower authorizing the entry into and performance by it of this Amendment No. 1 (and the Credit Agreement as amended hereby).
|
(i)
|
Except as expressly set forth herein, this Amendment No. 1 shall not alter, modify, amend or in any way affect any of the terms, conditions, obligations, covenants or agreements contained in the Credit Agreement or any other document contemplated thereby, all of which are ratified and affirmed in all respects and shall continue in full force and effect.
|
(ii)
|
Nothing herein shall be deemed to entitle the Borrower or any other Person to a consent to, or a waiver, amendment, modification or other change of, any of the terms, conditions, obligations, covenants or agreements contained in the Credit Agreement (other than the amendments to the Credit Agreement expressly set forth in this Amendment No. 1) or any other document contemplated thereby in similar or different circumstances.
|
|
BORROWER
|
|
|
|
|
|
|
|
SECUREWORKS, INC.
|
|
|
|
|
|
|
|
By:
|
/s/ Wayne Jackson
|
|
|
Name: Wayne Jackson
|
|
|
|
Title: Chief Financial Officer
|
|
|
|
|
|
|
|
LENDER
|
|
|
|
|
|
|
|
DELL USA L.P.
|
|
|
|
|
|
|
|
By:
|
/s/ Janet B. Wright
|
|
|
Name: Janet B. Wright
|
|
|
|
Title: Senior Vice President and Assistant Secretary
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Exhibit 21.1
|
|
|
Jurisdiction of Incorporation
|
Name of Subsidiary
|
|
or Organization
|
SecureWorks, Inc.
|
|
Georgia
|
SecureWorks Australia Pty. Ltd.
|
|
Australia
|
SecureWorks Europe Limited
|
|
United Kingdom
|
SecureWorks Europe S.R.L.
|
|
Romania
|
SecureWorks India Private Limited
|
|
India
|
SecureWorks Japan K.K.
|
|
Japan
|
SecureWorks SAS
|
|
France
|
|
|
|
|
Exhibit 23.1
|
1.
|
I have reviewed this annual report on Form 10-K of SecureWorks Corp.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(c)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
March 29, 2017
|
|
/s/ Michael R. Cote
|
|
|
Michael R. Cote
|
|
|
President and Chief Executive Officer
|
1.
|
I have reviewed this annual report on Form 10-K of SecureWorks Corp.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(c)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
March 29, 2017
|
|
/s/ R. Wayne Jackson
|
|
|
R. Wayne Jackson
|
|
|
Chief Financial Officer
|
1.
|
The annual report on Form 10-K of the Company for the fiscal year ended
February 3, 2017
fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
2.
|
The information contained in such annual report on Form 10-K fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
Date:
|
March 29, 2017
|
|
/s/ Michael R. Cote
|
|
|
|
Michael R. Cote
|
|
|
|
President and Chief Executive Officer
|
Date:
|
March 29, 2017
|
|
/s/ R. Wayne Jackson
|
|
|
|
R. Wayne Jackson
|
|
|
|
Chief Financial Officer
|