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September 6, 2023

Darktrace revenue up 31% as ‘age of AI cyberattacks’ arrives

Income is up for the security vendor as businesses battle more AI-powered cyberattacks.

By Matthew Gooding

UK cybersecurity vendor Darktrace grew revenue by 31% in the past year, with the company’s AI-powered technology being used by more businesses to bolster their security. But the company’s share price fell on Wednesday morning as it reported the outlook for the coming year is less rosy than it initially hoped.

Darktrace saw revenue grow 31% in 2023. (Photo by Rafapress/Shutterstock)

The company’s full-year earnings for the 12 months to the end of June show revenue of $545.4m, up 31.3% on 2022’s $415.4m, while net profit soared to $58.9m, up from just $1.4m a year ago.

But it also says it is predicting EBITDA growth for 2024 to be 17–19%, down from the 22% it forecast in a July trading update. It also said it could take on more debt and was in discussions with banks over new credit facilities.

Darktrace CEO on the AI revolution and cybersecurity

Jointly headquartered in Cambridge and San Francisco, Darktrace provides security software to 8,799 customers globally. The company’s technology uses AI and machine learning to spot and counter cyberattacks.

CEO Poppy Gustafsson said the AI boom and growth in popularity of generative AI tools such as ChatGPT is a watershed moment for the cybersecurity industry. “We have always understood that AI would eventually dramatically change the game for businesses and their data but few predicted the seismic shift that generative AI has created – for the world and for cybersecurity,” Gustafsson said. “Generative AI was a transition point – we are now living in a generative AI world that is already drastically changing the cyber sector, and it will continue to do so.”

She added that security teams are “also questioning how these advances in AI will be used against them”, and said: “Many fear that the age of AI-powered attacks is here, and the speed, scale and sophistication of novel attacks is going to increase.”

This change means Darktrace’s technology is more relevant to businesses than ever, Gustafsson claims. “From ransomware to the rise of generative AI our customers are protected not only from today’s threats but from the emerging threats of tomorrow,” she said.

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The company boosted its portfolio earlier this year with a new product, HEAL, designed to help businesses recover after a cyberattack.

Are things looking up for Darktrace?

Darktrace was hailed as a shining light of the UK tech scene when it went public in 2021, but after seeing its value boom in its first year of trading on the London Stock Exchange, its reputation has been hit by conflict with shareholders.

In February it appointed auditors from EY to review its books after investor Quintessential Capital Management questioned its financial statements. But the auditor’s report, released in July, found only small “errors and inconsistencies” that did not have any impact on previous financial statements.

The company has also been caught in the storm surrounding founder and major shareholder Mike Lynch, who has been extradited to the US to face charges of fraud relating to the sale of a previous business, Autonomy, to HP in 2011. Lynch used Darktrace shares worth $50m to secure his bail in the US, but he and his wife have been reducing their stake in Darktrace over recent months.

Read more: UK government sets out priorities for AI safety summit

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