Shares of SecureWorks Corp. (NASDAQ: SCWX) surged double digits on Thursday after reporting quarterly earnings and revenue that were higher than expected. The IT security firm posted a narrow quarterly loss, raising optimism that it was on a path to profitability.\r\n\r\n \r\nQ2 Earnings Update\r\n\r\n \tEarnings: -$0.01\r\n \tRevenue: $136.61 million\r\n\r\nIn its fiscal second quarter ended Aug. 2, SecureWorks reported a net loss of $10.3 million on revenues of $136.61 million. Net loss per share amounted to $0.13 and $0.01 in non-GAAP terms. The non-GAAP earnings and revenue numbers were both better than expected.\r\n\r\nYear-over-year, revenues climbed 6.1%. SecureWorks posted a 26.7% increase in international sales.\r\n\r\nAlthough the company hasn\u2019t been profitable since going public, losses have generally been contained. Revenues have increased every year since 2016 when it raised $112 million in an initial public offering.\r\n\r\nMichael Cote, SecureWorks\u2019 CEO, said his company is undergoing a \u201cstrategic transition\u201d to become the \u201cSOC of the future.\u201d In the cyber world, SOC refers to an information security operations centre.\r\n\r\n\u201cThe \u2018SOC of the future\u2019 demands a leap forward in capabilities made possible through software-driven solutions that leverage the speed and scale of machine learning, crowd-sourced threat intelligence and incident response insights to provide visibility across a customer\u2019s environment, real-time collaboration with experts and smarter automation,\u201d he said.\r\n\r\n \r\nSCWX Surges\r\n\r\n\r\n\r\n\r\nSecureWorks\u2019 stock price surged on Thursday, as investors rallied behind the upbeat earnings call. SCWX peaked at $14.46 in New York trading for a gain of more than 15%. The stock is now trading at its highest level in over two months.\r\n\r\nThe stock closed at $14.04, having gained 14.7%.\r\n\r\nYear-to-date, SCWX has been a huge disappointment. The stock is down over 13% in 2019, vastly underperforming the S&P 500\u2019s information technology index, which has gained 28% since Jan. 1.\r\n\r\nAt current values, SecureWorks has a total market capitalization of more than $1.1 billion. By definition, SCWX is a small-cap stock and will likely remain so for the foreseeable future.\r\n\r\nSCWX had a disappointing debut back in April 2016, which reflected a battered U.S. technology IPO market at the time. The stock\u2019s price has risen little since debuting more than three years ago, but is down 40% from the January high.\r\n\r\n \r\nConclusion\r\nSecureWorks is another fast-growing technology company generating ample revenues over its short history. But Wall Street has made it abundantly clear that it does not value cash-burning tech firms that can\u2019t generate profit. In this environment, demand for SCWX could remain subdued for some time.\r\n\r\nDisclaimer: Author holds no investment position in SecureWorks at the time of writing.