The Darktrace PLC (LON: DARK) share price has risen 10.3% in the past two days, driven by yesterday’s upbeat final results for its 2023 financial year. The company generated revenues worth $545.43 million in 2023, marking a 31.3% improvement from the $415.48 million generated in the 2022 fiscal year. 12
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The company’s net profit soared to $58.96 million in fiscal 2023, representing a 3,946.5% increase from the $1.46 million recorded in 2022. The firm’s adjusted EBITDA surged 52.2% to $139.16 million in 2023 from $91.41 million in 2022. The company attributed its robust performance to its resilient business model.
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Darktrace noted that its multi-year contracts and flexible cost structure supported continued revenue growth and improved earnings. The company also reported solid year-over-year revenue growth across all geographic markets and customer sizes.
The company attributed its adjusted EBITDA margin improvement of 3.5% to ongoing discretionary cost management, scale efficiencies, and some benefit from certain late-year, largely non-cash, factors, including foreign exchange movements.
Darktrace generated $93.8 million in free cash flows, comprising 67.4% of Adjusted EBITDA, reflecting continued strong cash generation. However, the cash flows were slightly reduced from the previous year by the net settlement of vesting equity grants for Executive Directors during the period.
The company reported average recurring revenues (ARR) of $628.44 million, marking a 29.6% improvement from the $484.88 million recorded last year. Darktrace's multi-year contract model supports the firm’s robust year-over-year growth in constant currency ARR despite slower new customer additions in a challenging macroeconomic environment.
Darktrace noted that its net constant currency ARR added fell only $600,000 year-over-year as a 9.5% increase in average contract ARR primarily offset lower ARR from new customer additions. The firm minimised the declines in gross and net retention metrics by increasing its focus on customer engagement.
The company confirmed its FY 2024 constant currency ARR and revenue guidance provided in its 19th July 2023 trading update. However, it is updating its Adjusted EBITDA margin guidance to reflect the expected impact of changes to sales compensation implemented in FY 2024.
The Darktrace share price.
The Darktrace share price is up 10.29% in two days from Wednesday’s closing price of 360.4p to today’s price of 397.5p.
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