Darktrace reiterates FY guidance, makes solid start to FY24

(Sharecast News) - Cybersecurity firm Darktrace reiterated its full-year guidance on Thursday as it reported a solid start to the new trading year amid an uplift in new business activity. Darktrace expects year-over-year constant currency annualised recurring revenue growth of 21% to 23%, implying net annual recurring revenue additions of $133.8m-$146.6m.

It also reaffirmed its guidance for year-over-year revenue growth of 22.0-23.5%, an adjusted underlying margin range of 17.0%-19.0%, and free cash flow of 50% to 60% of adjusted underlying earnings.

The FTSE 250 firm said the coming financial year would be categorised in terms of first-half stabilisation and second-half re-acceleration, with Darktrace now expecting around 44% of net ARR added to be in the first half and around 56% to be added in the second.

As far as the first quarter was concerned, revenue was $161.6m, reflecting year-on-year growth of 28.0%, gross margins, as well as one-year gross ARR churn and net ARR retention rates remained unchanged.

Chief financial officer Cathy Graham said: "Though recent changes to our Go-to-Market teams and tactics had the expected, noticeable impact on first-quarter sales, our long-term contract model, which dampens the effect of short-term sales swings, allowed us to maintain sizeable ARR and revenue growth. More importantly, we started to see early signs that the transformations we have been targeting are starting to take hold."

As of 0845 BST, Darktrace shares were down 6.75% at 366.0p.

Reporting by Iain Gilbert at Sharecast.com