Darktrace delivers 'robust' Q3 performance

Cyber security firm Darktrace said on Thursday that it had delivered a "robust" third-quarter trading performance but warned that macro headwinds had limited its full-year expectations.

Darktrace reported annual recurring revenues of $583.6m as at 31 March, up 33.7% year-on-year, stating its high constant currency ARR growth was supported by its multi-year contract structure, which continues to moderate the impact of a "challenging" macroeconomic environment.

During the third quarter, Darktrace added net constant currency ARR of $27.0m, a decline of 6.3% when compared to the same quarter a year earlier, reflecting what continues to be "a difficult environment" for new customer acquisitions,

For 2023, Darktrace now expects year-on-year growth in constant currency ARR to be at or around 29%, the low end of previous guidance, but increased its guidance for its adjusted underlying earnings margins to at or around 19% - above its previous 16% to 18.5% range.

Chief financial officer Cathy Graham said: "The current macroeconomic environment continues to pose challenges to winning new customers, as requirements to hold or cut spend have made prospects more reluctant to run product trials.

"Though we are very excited about the new and upsell opportunities created by our recent Darktrace/Email upgrade and continue to be optimistic about PREVENT's ability to contribute to our future growth, against a backdrop of weaker trends and continuing uncertainty, we are being prudent and expecting a slower than normal sales environment for the remainder of the financial year."

As of 0905 BST, Darktrace shares were up 1.98% at 247.80p.

Reporting by Iain Gilbert at Sharecast.com