Secureworks, a global leader in cybersecurity, has announced its financial results for the third quarter of fiscal 2025. The key highlights include a 6% year-over-year growth in Taegis third-quarter revenue to $71.4 million and a 4% increase in total annual recurring revenue (ARR) to $288.8 million. The GAAP gross margin for Taegis reached 72% and the non-GAAP gross margin reached 75%, both showing an expansion year-over-year.
In terms of financial highlights, the Taegis revenue for the third quarter increased to $71.4 million compared to $67.3 million in the third quarter of fiscal 2024. However, the total revenue for the third quarter decreased to $82.7 million from $89.4 million in the third quarter of fiscal 2024 due to the strategic wind-down of the legacy other MSS business. The GAAP gross profit specific to Taegis was $51.5 million compared to $47.4 million in the third quarter of fiscal 2024, while the non-GAAP Taegis gross profit was $53.5 million compared to $48.9 million during the same period last year.
The GAAP gross margin for the third quarter increased to 67.8% from 61.3% in the same period last year, while the non-GAAP gross margin increased to 70.6% from 66.3% in the third quarter of fiscal 2024. The GAAP net loss for the third quarter was $27.5 million, or $0.31 per share, compared with a net loss of $14.4 million, or $0.17 per share, in the same period last year. However, the non-GAAP net income was $0.2 million, or $0.00 per share, compared with a non-GAAP net loss of $0.0 million, or $0.00 per share, in the same period last year.
Additionally, the adjusted EBITDA for the quarter was $1.4 million compared with an adjusted EBITDA loss of $1.2 million in the third quarter of fiscal 2024, representing an adjusted EBITDA margin of 1.7%. The company ended the third quarter with $53.1 million in cash and cash equivalents and no borrowings on its credit facility.
These financial results reflect the company's continued commitment to delivering unmatched value to customers and partners amidst a 30% rise in active ransomware groups year over year and a continually evolving threat landscape. Furthermore, the company continued to innovate and expand the Taegis platform to help customers reduce organizational risk and strengthen their security posture.
Secureworks is also set to close the transaction with Sophos in early 2025, aiming to deliver exceptional security solutions to their combined customers, subject to customary closing conditions. As a result of the proposed transaction with Sophos, Secureworks has suspended financial guidance for the fourth quarter and fiscal year 2025.
The company's focus on innovation and expansion of its cybersecurity solutions, alongside its strategic business decisions, has positioned it to navigate the evolving cybersecurity landscape and deliver value to its customers and partners. Today the company's shares have moved 0.2% to a price of $8.47. If you want to know more, read the company's complete 8-K report here.
