- Shares up 7% to 469p
- Three-month sales up 26%
- 999 net new customers
Shares in Darktrace (DARK) were up 7% to 469p in morning trading as the UK enterprise cybersecurity firm raised its guidance for year-on-year revenue growth and adjusted EBITDA (earnings before interest taxation depreciation and amortisation) margin.
The announcement came as the company reported a 26.5% increase in revenue to $176.1 million for the three months ending 31 March 2024.
ARR (annualised recurring revenue) as of 31 March was $731.1 million, representing year-on-year growth of 23.5%.
Shares have gained an impressive 91% over the past year and touched an 18-month high last month.
GO-TO-MARKET INITIATIVES
The results in the first quarter were helped by the roll-out out of the go-to-market initiatives undertaken earlier in the financial year according to chief financial officer Cathy Graham.
Graham said: ‘We were very pleased to see the resulting benefits that drove strong second quarter results, continue to accelerate third quarter financial performance.’
As of 31 March, Darktrace had 9,402 customers, an increase of 999 clients or 11.9% since March 2023.
Berenberg analysts said in a research note: ‘Darktrace’s significantly revamped go-to-market strategy is aimed at a move upmarket, further US penetration, and a deeper relationship with the partner channel.
‘Our FY23 to FY26 revenue CAGR (compound annual growth rate) forecast is circa 20%, with Darktrace set to achieve more than $1 billion in ARR within three years.
‘However, this could be markedly higher if the new go-to-market strategy is delivered successfully. Small, incremental improvements to the key growth levers of customer logos, churn rate and upsell would have an outsized positive effect on Darktrace’s financial profile.’
EXPERT VIEW
Ben Barringer, technology analyst at Quilter Cheviot, was upbeat about the UK cybersecurity enterprise firm: ‘The trading statement showed consistent strong growth and another beat and raise.
‘Revenues are up 26% and, importantly, net annualised recurring revenue turned positive. Roughly half of this growth is coming from new customers, while the other half is coming from an increase in sales to existing customers, resulting in good churn and upsell metrics.
‘Darktrace raised guidance for its revenue growth, now expecting 25.5%, while margins were also raised from at least 21% to at least 23%. This means strong earnings upgrades which should help narrow the discount to US peers.’
