18 July 2024
Darktrace
plc 4Q and FY 2024 Trading Update
Accelerating Net ARR added growth drives strong growth in ARR
and Revenue
Darktrace plc (DARK.L) (together
with its subsidiaries, "Darktrace" or "the Group")
a global leader in cyber security AI, today
provides a trading update for its fourth quarter and full financial
year ended 30 June 2024.
Operating and Financial Performance
At FY 2024 constant currency
rates(1), Darktrace's Annualised recurring
revenue ("ARR") at 30 June 2024 was $782.2 million, representing
year-over-year growth of 22.7%(2). This implies Net ARR added
for the year of $144.9 million, for a year-over-year decline of
(0.3)%. In the fourth quarter, Darktrace added net ARR of $51.1
million, for year-over-year growth of 12.4% on a constant currency
basis. This marked an acceleration in year-over-year growth and the
third consecutive quarter of upward trajectory in Net ARR
added.
Darktrace's FY 2024 Revenue is
expected to total at least $689.5 million, for year-over-year
growth of at least 26.4%. This incorporates fourth quarter revenue
of at least $183.1 million, reflecting year-over-year growth of at
least 24.6%.
Reflecting strong customer success
efforts and continuing economic stability, One-year gross ARR churn
at 30 June 2024 was 6.3%, a 0.3 percentage point improvement on
March 2024 and a 0.5 percentage point improvement year-over-year.
Darktrace's Net ARR retention rate at 30 June 2024 was 106.6%,
improved by 1.3 and 2.0 percentage points from March 2024 and June
2023, respectively, as a stabilised churn environment enabled a
greater proportion of the continued improvements in upsell activity
to be reflected in Darktrace's Net ARR retention rate.
With 9,735 customers at 30 June
2024, year-over-year growth in Darktrace's customer base was 10.6%.
It added 936 net new customers since June 2023, 333 of which were
added in the fourth quarter. Darktrace continues to drive a
significant amount of new ARR added from its existing customer base
but expects new customer ARR additions to increase through FY
2025.
Though its accounts for the
reporting periods are not yet fully closed, Darktrace's preliminary
view is that its direct cost profile has remained relatively
stable, leading it to expect a full-year Gross margin in the range
of recent reported periods.
At this point in time, due to
regulation governing, and market practices surrounding, the
proposed Thoma Bravo acquisition, Darktrace is not providing its
expected FY 2024 Adjusted EBITDA margin and Free cash flow
conversion (of Adjusted EBITDA), or an outlook for its FY 2025
performance.
Note that Darktrace reports ARR in
constant currency, established as the average rates on the last day
of the prior financial year(3). Applying FY 2025 rates
to the Group's ARR balance for 30 June 2024 and all prior
comparison periods, results in a rebased ARR balance of $777.0
million, implying Net ARR added for FY 2024 of $143.7 million.
These amounts become the new amounts against which Darktrace will
measure constant currency ARR and Net ARR added growth for FY
2025.
Darktrace will update investors on
its full FY 2024 results, its annual report and accounts for the
year ending 30 June 2024, and, if applicable, its performance
outlook for FY 2025, in due course.
(1) The Group's primary currency exposures are the British Pound
and the Euro converting to its US Dollar reporting currency. For FY
2024, its constant currency rates are 1.2682 and 1.0908 for the
British Pound and the Euro, respectively.
(2) Darktrace's USD ARR at 30 June 2024 was $777.0 million, for
year-over-year growth of at least 21.9%.
(3) For FY 2025, Darktrace is using constant currency rates of
1.2648 and 1.0735 for the British Pound and the Euro, respectively.
For reference, ARR at the end of the most recent five quarters, at
FY 2025 and FY 2024 constant currency rates, rebases to the
following amounts:
(in $millions)
|
30
Jun
2023
|
30
Sept
2023
|
31
Dec
2023
|
31
Mar
2024
|
30
Jun
2024
|
FY 2025 CC
Rates
|
$633.4m
|
$654.3m
|
$697.6m
|
$726.3m
|
$777.0m
|
FY 2024 CC
Rates
|
$637.3m
|
$658.4m
|
$702.1m
|
$731.1m
|
$782.2m
|
Poppy Gustafsson, CEO of Darktrace, said:
"We are pleased with the strong
close to our financial year, which saw the third consecutive
quarter of upward trajectory in year-over-year Net ARR added
growth. This, alongside a reduction in gross ARR churn, an
improvement in net ARR retention, and continued margin strength,
demonstrate that the significant changes we implemented across the
business to prepare for our next phase of growth are having a
sustained positive impact.
The Thoma Bravo offer to acquire Darktrace
continues to progress as expected, with our shareholders voting
overwhelmingly in favour of the offer. The regulatory processes are
proceeding with relevant waiting periods having expired and formal
and informal clearances being received in line with the anticipated
timelines. As we await the conclusion of the remaining regulatory
processes, we remain fully focused on bringing more of our
AI-powered cyber security products to additional customers around
the world, and we remain excited about the many opportunities ahead
for our business."
About Darktrace
Darktrace (DARK.L), a global leader in
cybersecurity artificial intelligence, is on a mission to free the
world from cyber disruption. Breakthrough innovations from our
R&D teams in Cambridge, UK, and The Hague, Netherlands have
resulted in over 200 patent applications filed. Rather than study
historic attacks, Darktrace's technology continuously learns and
updates its knowledge of your business data and applies that
understanding to help transform security operations to a state of
proactive cyber resilience. The Darktrace ActiveAI Security
Platform™ provides a full lifecycle approach to cyber resilience
that can autonomously spot and respond to known and unknown in
progress threats within seconds across the entire organisation,
including cloud, apps, email, endpoint, network and operational
technology (OT). Darktrace, which listed on the London Stock
Exchange in 2021, employs over 2,400 people around the world and
protects over 9,700 customers globally from advanced cyber threats.
To learn more, visit http://www.darktrace.com.
Cautionary
Statement
This announcement contains certain
forward-looking statements, including with respect to the Company's
current targets, expectations and projections about future
performance, anticipated events or trends and other matters that
are not historical facts. These forward-looking statements, which
sometimes use words such as "aim", "anticipate", "believe",
"intend", "plan", "estimate", "expect" and words of similar
meaning, include all matters that are not historical facts and
reflect the directors' beliefs and expectations, made in good faith
and based on the information available to them at the time of the
announcement. Such statements involve a number of risks,
uncertainties and assumptions that could cause actual results and
performance to differ materially from any expected future results
or performance expressed or implied by the forward-looking
statement and should be treated with caution. Any forward-looking
statements made in this announcement by or on behalf of Darktrace
speak only as of the date they are made. Except as required by
applicable law or regulation, Darktrace expressly disclaims any
obligation or undertaking to publish any updates or revisions to
any forward-looking statements contained in this announcement to
reflect any changes in its expectations with regard thereto or any
changes in events, conditions or circumstances on which any such
statement is based.
Enquiries:
Luk Janssens - Investor Relations
Darktrace
Direct: +44 7811 027918
luk.janssens@darktrace.com
Headland - PR advisor
Henry Wallers
Direct: +44 7876 562 436
hwallers@headlandconsultancy.com