Q4 FY 2024 Trading Update
18/07/2024 07:00
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RNS Number : 8326W Darktrace PLC 18 July 2024
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 30 Sept 31 Dec 31 Mar 30 Jun
2023 2023 2023 2024 2024
FY 2025 CC $633.4m $654.3m $697.6m $726.3m $777.0m
Rates
FY 2024 CC $637.3m $658.4m $702.1m $731.1m $782.2m
Rates
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
(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 (mailto:luk.janssens@darktrace.com)
Headland - PR advisor
Henry Wallers
Direct: +44 7876 562 436
hwallers@headlandconsultancy.com
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