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Darktrace Builds on its Cybersprint Acquisition

Posted on Thursday, Sep 22nd 2022

According to a recent report, the global cyber security market size is expected to grow 9% annually from $173.5 billion in 2022 to $266.2 billion by 2027 fueled by the increasing adoption of digital transformation tools to streamline operations, increase mobility, and migrate away from on-premise technologies. UK-based Darktrace is a leading AI-based cyber security provider that continues to improve its product offerings to drive market expansion.

Darktrace’s Financials

Recently, Darktrace announced its fiscal year results. Revenues grew 46% to $415.5 million. It ended the year with an EBITDA of $91.4 million, up 173%.

Among key operating metrics, its ARR grew 43% to $514.38 million. Customers with ARR less than $100,000 accounted for 48% of its revenues compared with 51% a year ago. Net ARR added during the year increased 37% to $153.7 million.

Darktrace expects to end the current year with a y-o-y growth of 31%-34%, and an EBITDA margin of 15%-18%.

Darktrace’s Product Upgrade Leveraging CyberSprint Acquisition

Darktrace continued to leverage AI capabilities in its product portfolio and announced the launch of Darktrace PREVENT, an interconnected set of AI products that will help provide a proactive cyber security capability to organizations to pre-empt future cyber-attacks.

Darktrace PREVENT will be a part of Darktrace’s Cyber AI Loop, one of the pioneering solutions in the industry that work together autonomously to optimize an organization’s state of security through a continuous feedback loop. The Darktrace PREVENT product family is based on breakthroughs developed in its Cambridge Cyber AI Research Centre and leverages its earlier acquisition of Cybersprint. Darktrace has acquired Cybersprint for an estimated $53.7 million to enhance its Darktrace Detect and Respond products with external vulnerability data and accelerate its entry into areas such as proactive AI cyber security.

Darktrace’s HackerOne Partnership

During the quarter, Darktrace also announced a partnership with HackerOne, a leader in Attack Resistance Management, to combine Darktrace PREVENT/Attack Surface Management technology with the security assessment capabilities of the HackerOne platform. The partnership expands the existing HackerOne OpenASM initiative and works with Darktrace to help organizations secure their digital estate through leading technology and a community of ethical hackers.

HackerOne needed an ASM partner that could enhance the asset discovery and reconnaissance efforts of its community of hackers. Darktrace’s PREVENT/ASM offers a set of AI-powered capabilities that perform reconnaissance on a target attack surface simply by knowing the name of an organization or brand and identifying threats external to that target.

By integrating the AI and security expertise of the two platforms, the companies will be able to deliver continuous insights and help organizations find and eliminate blind spots across their digital landscape before attackers can exploit them. To ensure ongoing security improvement, Darktrace and HackerOne will also work together to train hackers on ASM best practices as they find, enrich, and risk rank assets. The partnership will help organizations close their security gap.

Darktrace went public in April 2021, when its raised £165.1 million (~$200 million) at a valuation of £1.7 billion (~$2.2 billion). Its stock is currently trading at £348.90 with a market capitalization of £2.51 billion. It had climbed to a 52-week high of £1,003 in October this year and a 52-week low of £281.30 in June this year.

Disclosure: All investors should make their own assessments based on their own research, informed interpretations, and risk appetite. This article expresses my own opinions based on my own research of product-market fit, channel execution, and other factors. My primary interest is in product strategy. While this may have bearing on stock movements, my writings tend to focus on long-term implications. The information presented is illustrative and educational, but should not be regarded as a complete analysis nor recommendation to buy or sell the securities mentioned herein. I am not a registered investment adviser and I am not receiving compensation for this article.

Photo Credit: Gerd Altmann from Pixabay

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