13th October 2021
Darktrace plc Pre-Open Trading Update
Strong Q1 performance, increasing revenue growth expectations for FY 2022
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 first quarter of FY 2022 ended 30th September 2021.
Operating and Financial Performance
- For Q1 FY 2022, Darktrace continued the strong sales performance it delivered in 2H FY 2021, growing its customer base to 5,975, up 42.7% year-on-year. As new customer additions are the primary driver of constant currency Annualised Recurring Revenue (ARR) measures, this resulted in net ARR added for Q1 FY 2022 of $24.1 million, up 63.8% over the same quarter of FY 2021. This unusually high growth in net ARR added was a consequence of comparing to Q1 FY 2021, when sales momentum was materially impacted by the early stages of the COVID-19 pandemic.
- This growth in Q1 FY 2022 net ARR added and the strong performance in recent periods resulted in ARR at 30th September 2021 of $381.5 million, up 45.9% year-on-year.
- Revenue for Q1 FY 2022 was $93.1 million, up 50.8% over the same quarter of FY 2021. During the latter part of the quarter, the U.S. Dollar strengthened against key international currencies, primarily Pound Sterling and the Euro, creating foreign exchange headwinds. The impact of these headwinds on revenue recognised in the full quarter was, however, at the lower end of Darktrace's estimates for the period.
- Gross margin, one-year gross ARR churn and net ARR retention rate remained in the ranges reported in recent periods.
FY 2022 Outlook
- In the short time since Darktrace last updated its expectations, September results were as expected, and management's view of the balance between positive sales momentum and potential impacts from efforts to evolve its salesforce structure, remained unchanged. As such, Darktrace is reiterating the FY 2022 guidance and related commentary it provided for ARR, net ARR added and adjusted EBITDA margin on 15th September 2021 in its FY 2021 earnings release.
- However, as recent foreign exchange headwinds were less than had been previously forecast, accelerating the conversion of constant currency ARR to US dollar denominated revenue, Darktrace is now expecting year-over-year revenue growth of between 37% and 39% (previously 35% to 37%), with 47% to 48% of annual revenue being recognised in the first half of the financial year.
Cathy Graham, CFO of Darktrace, said:
“We have continued our strong performance into the first quarter of FY 2022, growing our customer base, ARR and revenue. We remain focused on empowering organisations to interrupt cyber threats, before they experience a business disruption, using our leading Self-Learning AI technology.
Looking ahead, we have reiterated FY 2022 guidance for ARR, net ARR added and adjusted EBITDA margin, while upgrading guidance on revenue growth due to a smaller-than-expected impact from foreign exchange headwinds in the first quarter.”
Annual General Meeting
On 22nd September 2021, Darktrace announced that its Annual General Meeting (“AGM”) will be held at 9.00 a.m. (London time) on 24th November 2021 at the offices of Latham & Watkins, 99 Bishopsgate Street, London EC2M 3XF, and that the Notice of AGM and the associated Form of Proxy had been posted or made available to Darktrace's registered shareholders. The Notice of AGM and the associated Form of Proxy, along with the FY 2021 Annual Report and Accounts, are available to view on Darktrace's website at https://www.darktrace.com .