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Losses Nearly Doubled at Dell's IPO-Bound SecureWorks

SAP CEO Bill McDermott and Red Hat CEO Jim Whitehurst have been named to the board of directors.

SecureWorks

SecureWorks, the Dell-owned computer security firm that is on its way to an IPO later this year, posted a steeply higher loss in its most recent fiscal year, ended Jan. 29, according to its latest filing with the U.S. Securities and Exchange Commission.

Net losses at Atlanta-based SecureWorks increased by 88 percent to $72.4 million, while revenue rose to $340 million, up 30 percent, according to the little-noticed filing, dated March 22. Operating expenses increased by 77 47 percent to nearly $262 million from the prior year.

Dell plans to float about 20 percent of SecureWorks’ shares on the Nasdaq exchange later this year, but didn’t specify a target date or say how much it expected to raise in the offering. The proposed ticker symbol is SCWX. SecureWorks says it doesn’t plan to transfer any of the proceeds raised from the offering to Dell, which is in the process of raising more than $50-plus billion in debt that Dell plans to take on in order to acquire data storage equipment company EMC.

The IPO of a small portion of SecureWorks is a repeat of a move that EMC made in 2007 with its software subsidiary VMware. EMC acquired VMware, which specializes in virtualization software that allows one computer to act like many, in 2003 for about $625 million. In 2007 EMC sold about 19 percent of VMware’s shares in an IPO that valued it at about $19 billion.

Dell acquired SecureWorks in 2011 for $612 million. Its potential valuation in an IPO is unclear. Dell first filed to take SecureWorks public in December.

Another potential IPO may be pending for EMC-owned Pivotal. As Re/code reported in November, that plan would include a similar VMware-like offering of about 20 percent of its shares, with the parent EMC and ultimately Dell retaining majority ownership.

SecureWorks also nominated several new directors to its board. Michael Dell will be chairman. Egon Durban, the managing partner at Silver Lake, the private equity firm that co-owns Dell, will also sit on the board. Bill McDermott, the CEO of the German software giant SAP, and Jim Whitehurst, the CEO of Red Hat, the open source enterprise software company, have both been nominated for board seats, along with Mark Hawkins, the CFO of Salesforce.com.

Update: We fixed a math error on operating expenses and added context on how SecureWorks plans to use proceeds raised from the eventual IPO.

This article originally appeared on Recode.net.