(Bloomberg) —
Darktrace Plc lifted its forecast for revenue growth for this year after a change in the foreign exchange backdrop.
The U.K. cybersecurity company now expects annual revenue growth for the current fiscal year of between 37% and 39%, versus a forecast in September for growth to be in a range of 35% to 37%. Darktrace said in a statement foreign exchange headwinds were less than had been previously forecast, affecting the conversion of annual recurring revenue reported on a constant currency basis to dollar-denominated revenue.
Net annualized recurring revenue was $24.1 million in the fiscal first quarter of 2022, up 63.8% from the previous year, reflecting a recovery in sales momentum from the hit due to Covid last year, the the Cambridge, England-based company said.
Chief Executive Officer Poppy Gustafsson said last month Darktrace would add to and restructure its sales force this year. It will also develop new artificial-intelligence-based products that will automate recovery for customers that have been attacked and will help mitigate and identify security risks, reducing reliance on humans to probe for vulnerabilities.
“Darktrace is now expected to deliver amongst the fastest growth in the security sub-sector,” Jefferies analysts led by Charles Brennan said in a research note. “This dynamic, together with conservative forecasts, mean we now believe a 10% premium to the sector average is warranted.”
The company’s shares have more than tripled since the IPO priced them at 250 pence apiece. They rose as much as 2.9% in London on Wednesday.
Darktrace had initially cut its valuation by about half in the run-up to the IPO, which was impacted by British entrepreneur Mike Lynch’s involvement, people familiar with the matter said at the time.
Lynch — who’s been charged with fraud in relation to the sale of his company Autonomy to Hewlett-Packard a decade ago — was a founding investor and adviser to Darktrace via his investment firm. Lynch denies HP’s allegations.
(Adds analyst comment in fifth paragraph, share price in sixth.)
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