Darktrace plc’s latest half-year results have revealed revenue growth of more than 27% to nearly £260 million.

In a trading update for the six months ended 31st December 2023, the global leader in cybersecurity AI said it expects that adjusted EBITDA margin will be above the top end of its 17-19% guidance range.

Ending the period with 9,232 customers, year-over-year growth in Darktrace’s customer base was 12.9%, with the customer base having grown by 433 since 30th June 2023. 

The group says it drove an increased amount of new annualised recurring revenue from its existing customer base during the economic period which it said “with respect to new prospects, appears to have stabilised but not yet materially improved”. 

It saw a year-over-year increase in average contract ARR of at least 10% across its customer base.

Darktrace is raising its expectations for year-over-year revenue growth and adjusted EBITDA margin.  It now expects FY 2024 revenue growth of between 23-24.5% – previously 22-23.5% – reflecting continued strong ARR to revenue conversion and a relatively stable exchange rate environment.

Its expectation for adjusted EBITDA margin is now 18-20%, up from 17-19%. 

“Following the roll-out of significant go-to-market changes that impacted performance in our first quarter, we were very pleased to see the resulting benefits play out in our strong second quarter financial performance,” said Cathy Graham, CFO. 

“Today’s results, along with continued acceleration in top and mid-funnel prospect engagement across our key partner and large strategic customer segments, support our belief that we are seeing a return to positive and sustainable growth and reinforces our view of first half stabilisation and second half re-acceleration. 

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“We are pleased to be able to make the resulting upward revisions to our full year ARR, revenue and profitability guidance as well as reduce risk associated with achieving second half financial targets.

“Our strong margins and cash position enable us to continue making smart investments in our future product pipeline, go-to-market strategy, and business foundations. 

“Looking forward, we expect to emerge from a period of relative market uncertainty in an even stronger position, and well-placed to capitalise on the large market opportunity for our AI-powered cyber security products as attackers capitalise on the availability of increasingly sophisticated tools and tactics, including generative AI.”

In early 2023 the Cambridge-headquartered company was accused by US hedge fund Quintessential Capital Management of including “simulated or anticipated sales to phantom end-users through a network of resellers” in its figures.

A subsequent third-party review of its key financial processes and controls by Ernst & Young concluded that improvements could be made – but the publicly listed company said there was no impact on its previously filed financial statements.

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