SecureWorks Corp. (NASDAQ:SCWX) Q4 2023 Earnings Conference Call March 23, 2023 8:00 AM ET

Company Participants

Kevin Toomey - Vice President, Investor Relations

Wendy Thomas - Chief Executive Officer

Paul Parrish - Chief Financial Officer

Conference Call Participants

Saket Kalia - Barclays

Mike Cikos - Needham

Madeline Brooks - Bank of America

Operator

Good morning everyone. My name is Bruno and I will be your conference operator today. At this time, I would like to welcome everyone to the SecureWorks Fourth Quarter and Full-Year Fiscal 2023 Financial Results. All lines have been placed on mute to prevent any background noise. A supplemental slide presentation to accompany the prepared remarks can be found on the company's website. After the speakers remarks, there will be a question-and-answer session. [Operator Instructions] Thank you.

At this time, I would like to turn the call over to Kevin Toomey, SecureWorks Vice President of Investor Relations. Mr. Toomey, you may begin your conference.

Kevin Toomey

Thanks, everyone, for joining us. With me this morning are Wendy Thomas, our CEO, and Paul Parrish, our CFO. During this call, unless otherwise indicated, we will reference non-GAAP financial measures. You will find the reconciliations between these GAAP and non-GAAP measures in the press release and presentation posted on our website earlier today. Please also note that all growth percentages refer to year-over-year changes unless otherwise specified.

Finally, I'd like to remind you that all statements made during this call that relate to future results and events are forward-looking statements based on current expectations. Actual results and events could differ materially from those projected, due to a number of risks and uncertainties, which are discussed in our press release, web deck and SEC filings. We assume no obligation to update our forward-looking statements.

Now, I'll turn it over to SecureWorks CEO, Wendy Thomas.

Wendy Thomas

Thank you, Kevin. And welcome everyone. SecureWorks continues to deliver strong growth from our Taegis XDR solutions. Taegis revenue grew 120% year-over-year during fiscal 2023 with full-year revenue reaching 188 million. 2,000 Taegis customers are now seeing the benefits of our XDR-based approach to manage detection and response, up 400 from third quarter.

Taegis annual recurring revenue grew 58% year-over-year to 261 million. As an important indication of the acceleration of our business transformation, Taegis ARR now represents over 80% of our total ARR up from 42% of the total at the end of the previous year. And we expect the mix of other MSS ARR to be minimal by year-end, approximately 5% of the total, primarily in Japan.