October 3, 2022

Robotic Notes

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Darktrace shares rise on growing demand for services

2 min read



Shares in machine learning cybersecurity firm Darktrace PLC rose in regular trading after the company revised its outlook due to growing demand for its services.

For the six months to Dec. 31, Darkrace reported a net profit of $ 5.9 million compared to a loss of $ 48.4 million in the same six months in 2020. Revenue came in at $ 192.7 million, up 52.3% year-over-year.

Adjusted earnings before interest, taxes, depreciation and amortization came in at $ 46.7 million, up 124% compared to the six months to Dec. 31, 2020, while cash flow before financing activities was up 158.8% to $ 42.3 million. Annual recurring revenue as of Dec. 31 was $ 427,267, up 45.5% and Darktrace had 6,531 customers, up 39.6%.

Darktrace noted that its recent growth in EBITDA and adjusted EBITDA was higher than expected because of continuing pandemic-related suppression of key costs. These costs are expected to return over the intermediate term, but scale efficiencies continue to support anticipated long-term steady-state margins.

Looking forward, Darktrace said it expected a year-over-year increase in ARR for between 38.5% and 40%, revised up from a previous estimate of 37% to 38.5%. The company also expects year-over-year revenue growth of between 44.5% and 46.5%, up from previous guidance of 42% to 44%. The increase is partly driven by lower than previously predicted forecasts for foreign exchange headwinds.

The outlook includes results from Cybersprint BV, which Darktrace acquired in February. Cybersprint contributes a 1% increase in expected year-over-year ARR growth and 3.5% in the increase is expected net ARR added.

“The Group continues to balance strong sales momentum trends with potential temporary sales productivity impacts that may occur as it evolves ways to expand and optimize its salesforce structure,” Darktrace said in its earnings release. “These efforts, which are intended to support anticipated growth and continued scaling of its business, began in the second quarter of FY 2022 and are expected to continue through 2H FY 2022.”

In an interview with This is Money, Chief Executive Office Poppy Gustafsson said that “the current geopolitical situation has heightened the urgency for businesses and governments to improve cyber resilience.”

Investors liked the revised outlook, with Darktrace shares up 14.57% to 527 pence ($ 7.03) as of 5 pm UK time.

Image: Darktrace

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