Darktrace PLC (LSE:DARK) returned to year-on-year recurring revenue growth in its past quarter and underlying profit margins were above previous guidance of at least 21%.
As a result, the cybersecurity AI group improved its full-year guidance for recurring revenue, raised expectations for total revenue and margins, and maintained cash flow guidance.
In the three months to 31 March, the third quarter of the FTSE 250 company's financial year, annualised recurring revenue (ARR) was up 23.5% year-on-year at $731.1 million, with the third quarter alone contributing $29.0 million to this growth.
Total third-quarter revenue was $176.1 million, a 26.5% year-over-year increase, while maintaining a steady gross margin and reporting a slight improvement in ARR churn and retention rates.
Full-year guidance is now for constant currency ARR growth of 22.25-23%, previously 21.5-23%, with total revenue growth of at least 25.5% now expected, half a percentage point above the high end of its previous range.
Adjusted EBITDA margin is now anticipated to be least 23% as it said it continues to control its discretionary spending without sacrificing planned investment.
Chief financial officer Cathy Graham said: "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.
"Today's results reinforce our view of first-half stabilisation and second-half re-acceleration, with a return to Net ARR added growth supporting our view that Darktrace has a sustainable opportunity for ARR, revenue and margin expansion."