The firm disclosed the incident back in May and stated that the attack would weigh on revenue. Despite insurance coverage, the incident may have a “material impact” on the company’s overall financial results for the quarter, the report adds.
SmileDirectClub SDC shares fell 15% after hours, following a 1.9% decline in the regular session to close at $6.70. The cyberattack expected $10 Million to $15 million out of the company’s second-quarter revenue. The company reported a second-quarter loss of $16.9 million, or 14 cents a share, compared with a loss of $26.8 million, or 25 cents a share, in the year-ago period.
“The short-term headwinds from residual impacts of the April cyber-attack, the lasting economic effects from COVID on our target demographic and the slower scaling of some of our new international markets due to COVID prevented us from achieving our anticipated second-quarter results,” said Kyle Wailes, SmileDirectClub Chief Financial Officer, in a statement.
Cyberattacks are on the rise at an alarming rate affecting fuel prices, pipelines, healthcare, education, and supply chains. Ransomware attacks are not the only type of cyberattack, but a viral attack orchestrated by state-sponsored actors and online organized criminals, including those threat actors topping the list of Most Wanted Cyber Criminals. Several organizations are shifting to the cloud in response. However, cloud does not equal immunity from ransomware and other forms of cyberattacks. For example, RansomCloud is a type of ransomware attack that invades the cloud to retrieve data and encrypt it to demand a ransom from the business to regain access to their data. Cybercriminals who do not receive a ransom payment are leaking victims’ data on the internet. Withum’s Cyber Incident Response team has seen an increase in incident response calls from cyberattacks on cloud infrastructure. Case in point, “A fairly sizable organization recently rushed to move their business and operations to the cloud. The business thought they were safe, and they had the appropriate expertise to assist in the transition. They were misinformed. Their victim company’s MSP was hit, and it spelled trouble for several others. They were not the only victim.” According to CBS news, independent studies show that ~80% of ransomware victims suffer repeat attacks.