SecureWorks Corp. (NASDAQ:SCWX) Q2 2023 Earnings Conference Call September 1, 2022 8:00 AM ET

Company Participants

Paul Parrish - Chief Financial Officer

Wendy Thomas - Chief Executive Officer

Conference Call Participants

Mike Cikos - Needham

Hamza Fodderwala - Morgan Stanley

Operator

Hello and welcome to today's SecureWorks Second Quarter Fiscal 2023 Earnings Conference Call. My name is Bailey and I'll be your moderator for today's call. All lines will be muted during the presentation portion of the call with an opportunity for questions-and-answers at the end. [Operator Instructions]

I would now like to pass the conference over to today's host, Paul Parrish, CFO. Please go ahead when you're ready.

Paul Parrish

Thanks everyone for joining us. With me this morning is Wendy Thomas our CEO. 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 Wendy.

Wendy Thomas

Thank you, Paul, and welcome everyone. Our transformation into a leading XDR solution provider with a strong recurring revenue model is accelerating. I'm pleased to report that we crossed the $200 million mark in Taegis ARR in the second quarter. Taegis ARR reached the $100 million milestone 10 quarters after launch. And now just four quarters later, we've doubled to $200 million. Taegis' ARR and customer count numbers continue to put us among the fastest growth rates in the industry with triple-digit growth in both areas, reflecting the addition of 800 customers since 2Q of last year to a total of 1,500 Taegis customers.

In terms of our business model transition, Taegis now represents 56% of our overall subscription ARR and we remain on track for Taegis to be approximately 75% of ARR by the end of this fiscal year.

So why is SecureWorks approach to XDR resonating in the market? Our Taegis platform is unique in four ways; one, superior detection, which means accuracy and speed with complete attack surface visibility and applicability. We ingest more than 486 billion events daily, including events across more than 100 integrations, which we enrich with industry-leading threat intelligence and tens of thousands of expert curated signatures. Across our current customer implementations, 60% of the data we ingest through Taegis comes from sources other than endpoints.