(Alliance News) - Darktrace PLC remains poised to outperform after third quarter results demonstrated continued strong momentum, according to Berenberg.
Shares in Darktrack rose 5.5% to 458.89 pence each in London on Thursday. Berenberg reiterated a 'buy' rating and raised its share price target to 630p from 600p.
In a trading update, the Cambridge, England-based cybersecurity company said it saw "strong growth" in revenue during the third quarter of its financial year.
At constant currency rates, annualised recurring revenue at March 31 was USD731.1 million, representing growth of 24% from USD583.6 million a year ago, it said.
Revenue in its third quarter jumped 24% to USD176.1 million from USD139.2 million a year prior.
Darktrace expects adjusted earnings before interest, tax, depreciation and amortisation margin for the third quarter to be above its previously communicated financial 2024 guidance range of at least 21%.
Looking ahead, Darktrace narrowed its guidance range for constant currency ARR, and now expects growth of between 22.3% and 23.0%, from 21.5% to 23.0% previously.
The firm also raised its expectations for year-on-revenue growth and adjusted Ebitda margin, and now expects revenue growth of at least 25.5%, up from its previous 23.5% and 25.0% range. Adjusted Ebitda is expected to be at least 23%, up from 21%.
Chief Financial Officer Cathy Graham says: "Following the roll-out of significant Go-to-Market changes in our first quarter, we were very pleased to see the resulting benefits that drove strong second quarter results, continue to accelerate third quarter financial performance."
Berenberg thinks Darktrace remains poised to outperform, given: its ongoing potential to exceed growth and margin expectations; that it has sufficient growth and operating leverage to drive around 30% 2023 to 2026 compound annual growth in free cash flow per share; and the fact that it warrants a multiple rerating.
It pointed out Darktrace has raised its growth and margin outlook for the third time in three months.
Berenberg felt the growth in ARR was "particularly significant" within the context of negative year-on-year changes in net ARR in the first and second quarters.
By Jeremy Cutler, Alliance News reporter
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