Hello, and welcome to Darktrace FY 2021 results call. My name is Poppy Gustafsson, the CEO of Darktrace, and I'm joined on the line by Cathy Graham, our CFO. This is our first results call as a public company. I thank all of you for your interest. Up next on screen, we have our standard disclaimer language, which will be made available to you separately. Looking back through the past year, we've been pleased with our performance, despite what was a difficult year for many due to uncertainty brought about by the global pandemic. Our Self-Learning AI is truly unique and forms a cornerstone of our success. In terms of financial performance, we have demonstrated the strength of our business model by delivering strong constant currency ARR growth of 45% and robust year-over-year revenue growth across all geographic markets and contract sizes. We grew our customer base from approximately 3,800 to 5,600 customers, also up 45%. This year saw us close our largest deal in Darktrace's history, and we have seen strong traction with our email product, Antigena Email. When it comes to our global workforce, the team has grown to 1,600 globally, up from 1,150 in 2020. Our R&D headcount increased year-over-year by almost a half, with an increase in the very core development team of 97%. This team is comprised of some of the world's leading experts in Self-Learning AI. We remain committed to life at Darktrace being a career, not just a job, and are building career path programs that encourage long-term retention and loyalty for exceptional employees. We've worked hard to create a new leadership development program, as well as formalizing and structuring the mentoring and coaching initiatives we already have in place. Our strong performance was driven by the uniqueness of our fundamental technology and its ability to tackle an increasingly complex challenge. Modern businesses are under constant attack. Today, in 77% of the companies where we demonstrate our AI, the technology is uncovering serious threats that have got through perimeter defenses. Despite significant existing investment, businesses are still not secure. Looking in the rearview mirror at yesterday's threats is no longer good enough. Self-Learning AI allows us to move rapidly, adapting to extend coverage quickly as the world around us evolves. When the world embraced remote working, we made our technology available for virtual deployments so that organizations could trial the AI remotely. Everything we do is underpinned by that unique Self-Learning AI, which we call the Darktrace Immune System. We have created a technology that goes into a business and learns self for that organization, and that's not just understanding machines and processes, but people and how they interact with those machines. This understanding is constantly changing. As the business changes, the understanding changes with it. By understanding self, the technology can then spot other, even if that other is something that has never been seen before. With this capability, every second of every day, Darktrace's Self-Learning AI is catching in-progress cyber attacks already inside a business that have got past the existing defenses. Crucially, the AI autonomously and immediately reprograms your digital defenses to interrupt the attack before it escalates into a crisis. There is no other cyber vendor that has this range of capability, from detection to investigation to Autonomous Response, and there is no other cyber vendor that is capable of defending the breadth of environments that we can. This year, we announced a range of new products and features that extends that coverage even further. From internet-connected machinery on the factory floor, to email, to employee laptops, to SaaS applications. We protect the entire digital business wherever that data sits. It is well understood that human security teams are overwhelmed and can no longer keep up with the speed of attacks. The boundaries of modern-day businesses are blurred. Remote working is just one of the many contributing factors to this, and security teams are tasked with defending a complex attack surface because of rapid digital transformation and an explosion in IoT. Threats have also moved on, as we saw from the recent attack on the Colonial Pipeline in the United States. Attacks now run at machine speed. Even when humans spot them, they simply cannot respond fast enough. We believe that no organization is invulnerable to this new era of cyber attacks. For more than 5,600 organizations across the world, Darktrace's artificial intelligence is interrupting cyber threats in their tracks, stopping a problem becoming a crisis every second of every day. Today, this machine fight-back capability, what we call Antigena, is on average stopping ransomware within 1 second of threatening activity being detected. This means companies using our Self-Learning AI do not have to shut down systems for days on end and do not have to pay hefty ransoms to criminals. When, on the 4th of July, 1,500 companies fell victim to the ransomware group REvil, who exploited a vulnerability in Kaseya software, our AI defended our customers before any data was encrypted. Our innovative approach and the uniqueness of our technology was recognized not only by our customers but also by several award bodies, including the AIconics Awards for Best Enterprise AI Solution, the Computing Technology Product Awards for Best AI Provider, and the 2021 Cyber Defense Magazine Global InfoSec Awards for five accolades, including Market Leader in Cybersecurity Artificial Intelligence. In addition, Time magazine named Darktrace as one of the 100 most influential companies. Cyber threats continue to make front-page news, and we believe that this will continue. Colonial Pipeline and other ransomware attacks mean cyber is elevated as a priority for enterprise customers, and in our view, that will only grow over time. COVID has expanded the attack surface and companies' risk exposure with the shift to working from home. Both of these factors have been part of a continuing emphasis on cyber, driving steady demand rather than causing a temporary demand spike. Overall, I am encouraged by what we've achieved in the last year. Exiting the second half of FY 2021 with strong sales trends, we are increasing expectations for FY 2022 once more. Through strong strategic execution, we've also strengthened the foundations for the future. I'm going to come back to this feature later, but for now, over to Cathy to go through the financial review. Thank you, Poppy. It's a pleasure to be here with you, sharing both our FY 2021 results and increased expectations for FY 2022. Darktrace delivered strong 2021 financial year performance. In our second half, both constant currency ARR and revenue came in above expectations with, in the case of ARR, much of that outperformance coming from better than expected June sales. At $281.3 million, FY 2021 revenue grew by 41.3% over the prior year. More than 99.5% of our revenue continues to come from subscription sales, which combined with our multi-year contract structure, drives significant RPO or contracted backlog. This gives us a high recurring revenue base and provides significant revenue visibility. For FY 2021, approximately 80% of revenue was fully contracted and in RPO before the start of the financial year. As approximately 20% of FY 2021 revenue came from in-year sales efforts, which also drive future period growth, we remained laser-focused on expanding constant currency ARR. In FY 2021, at FY 2021 constant currency rates, we increased ARR by 45.7% to $343.5 million. Underlying this was net ARR added of $107.8 million, which was 62.1% greater than the amount we added in the prior year. Let me spend a minute on this, as a 60-plus% growth rate is higher than we typically expect, and there are good reasons not to extrapolate this rate forward. As shown here, the net ARR amounts we added for FY 2020 and FY 2019 were nearly the same. As we've discussed previously, in the second half of FY 2020, we noticed that net ARR added and the resulting ARR growth rate were trending down. We quickly discovered that our sales efforts had become unbalanced with a higher than expected% of contract activity in early renewals and extensions. Because of this, the second half of FY 2020 had a slightly lower net ARR added than the first half. With some small changes to our sales management structure and commission plans, however, we were able to restore a more suitable new versus existing balance. Fast-forward to FY 2021, and the low level of net ARR we added in the second half of FY 2020 resulted in higher than typical second half and full year FY 2021 net ARR added growth rates. As these rates were driven by a temporary past period aberration, they can't just be rolled forward. I'd encourage you to look at the value of ARR added in FY 2021 rather than just the growth rate when thinking about what to expect for FY 2022. Given our large TAM and prospect pool, we are not a land and expand business. We're a land, land business. This means our focus is on, and most of our ARR growth is coming from, adding new customers. During FY 2021, we added 1,747 net new customers, expanding our customer base by 45.3% year-on-year. Further, since our products can be used by businesses of almost any size and industry, we continue to sell across a broad range of customer and contract sizes. Our account distribution in FY 2021 remained consistent with prior years. 53% of total ARR came from the 86% of customers with less than $100,000 in ARR, and 47% came from the 14% of customers with ARR of more than $100,000. While having a ubiquitous platform gives us a large addressable market and a long sales runway, the resulting smaller average customer size means that our gross ARR churn tends to be somewhat higher than vendors who target larger enterprises. Looking over the past several years, you can also see how creating our customer success team in the second half of FY 2020, and then the COVID pandemic, have moved this metric. The customer success team was formed after seeing rising churn in late FY 2019 and early FY 2020. Despite having COVID uncertainty in the fourth quarter of FY 2020, that team had a meaningful impact on gross churn. Escalating COVID-related customer budget and viability issues in the first half of 2021 drove churn back up, though we did see that trend begin to reverse as customers stabilized in the second half of the year. While we don't yet have enough data to forecast a trend. We believe it's possible this rate could drift down somewhat as we lap early COVID comparison periods, allowing the work done by our customer success team to show through. Darktrace currently has a 10-product platform, and most of our customers buy multiple products from us. We continue to deepen product penetration, with 62.2% of customers having three or more products, and 39.2% of customers having four or more products by the end of FY 2021. Along with our land, land strategy, our aim is to sell as many products as possible in a new customer's first purchase. While this is absolutely the right strategy for us at this point in our life cycle, it does leave fewer opportunities to upsell and results in a lower net ARR retention than you would see in a land and expand strategy. That said, as churn declined slightly in the second half of FY 2021, and we continued our upsell campaigns, we did see net ARR retention increase to 103.1%. Echoing my previous comment on churn, however, we don't yet have enough data to forecast a trend. That said, we do believe it's possible this rate could drift up a bit if churn continues to improve and our upsell campaigns remain productive. Now let's turn to our earnings measures and the costs that drive them. In terms of cost structure and trends, it's hard to compare FY 2021 to prior periods. As is clear from the large year-over-year increase in net loss, despite remaining in the 90% gross margin range, we had a lot going on in and below operating costs. Here we've broken out our costs in a way we think will help clarify the big movements and help you think about what our cost structure might look like going forward. Instead of starting at the top, let's get finance costs out of the way, because it's the largest impact, and about $107 million of it is both non-cash and non-recurring. In July of 2020, we issued about $163 million in convertible notes to a small number of existing investors, using most of the proceeds to buy back shares as a part of restructuring our ownership before listing. The notes conversion feature meant that we had to separate the instruments into smaller notes and larger derivatives, then run both interest and accretion to the expected note conversion values through finance costs. As both the accreted note and interest values were convertible, the entire amount was non-cash. The conversion did occur. These costs stopped at IPO. We should only have a normal level of bank charges, letter of credit fees, and other operating finance costs in FY 22. Moving back to operating costs, let's start in sales and marketing with recurring non-T&E costs. These costs, primarily salaries, commissions, and direct marketing spend, were a bit lower than we typically expect, largely because of early COVID hiring delays. While the exact amount of that impact is hard to quantify, it was not the major driver of the 9 percentage point reduction in these costs as a% of revenue. The economies of scale we continue to drive in sales and marketing are real. Like many companies, we had significant T&E savings from COVID-related travel and gathering restrictions. At Darktrace, $17.9 million of our total $19.2 million in year-over-year savings were in sales and marketing. It's hard to predict how T&E will return and what normal looks like over the next 12 to 24 months. You should expect that we are resuming customer and prospect visits, marketing, and customer events, and employee gatherings for training and collaboration as it becomes safe and productive to do so. In R&D, the three percentage point increase in recurring non-T&E costs as a% of revenue was largely the result of us acting on our stated intention to expand product development capacity. Year-over-year, our R&D headcount increased by 47.8%, including a core development team that increased by 97.2%. Similarly, in other administrative expenses, the three percentage point increase in recurring non-T&E costs as a% of revenue was driven primarily by staffing growth. As we only formalized our customer success function in the second half of FY 20, that team scaled significantly during the year, increasing by 150%. We also hired more and more experienced staff in finance, legal, and other supporting functions, enabling us to operate successfully as a listed company. year-over-year, headcount in those functions increased by 39.5%. In FY 2021, both share-based payments and related employer tax charges increased across all three operating cost categories. Share-based payment charges increased by $6.7 million year-on-year, driven by both a normal increase in participating employees as our business grows and the impact of grants we made as a part of transitioning from private to public company share plan structures. This increase was dwarfed, however, by the related employer tax charges, which went from a small $67,000 benefit in FY 20 to a $21.5 million charge in FY 2021. This swing was because for most countries where we have participants, tax charges don't get recognized until there's a clear path to liquidity for the underlying shares, which we triggered by entering the IPO process. At that point, we had to recognize out-of-period catch-up charges for previously vested grants. Additionally, we had to start recognizing charges related to both prior period grants still vesting and the transition grants we made at IPO. Finally, and perhaps most importantly, these tax charges depend on our share price in that the tax we accrue is on the employee's expected gain. As such, the rise in share price from IPO to June 30th substantially increased the charge we recognized for FY 2021. Given the vesting structure of the transition grants we made, we expect that the combination of share-based payment and related tax charges will remain high through FY 2022 before normalizing. Going forward, we expect employee stock plan dilution to average in the range of 1% to 2% per year. Adjusted EBITDA increased by 233.3% in FY 2021 to $29.7 million. Most of this growth was due to real improvements in underlying profitability. Since year-on-year T&E savings of $19.2 million were largely offset by $15.3 million in one-time IPO costs. I also want to remind you that to be more comparable to vendors that deploy software on hardware they sell, we adjust out the appliance depreciation running through cost of sales for customer deployments, lowering our adjusted EBITDA. For FY 2021, this was $11.6 million of the total $15.9 million in appliance depreciation recognized during the year. Turning to guidance, I first want to remind you that for purposes of reporting constant currency ARR and related measures, we have reset our constant currency rates for FY 2022. This results in rebased ARR balance of $357.3 million at June 30, 2021, which is what we'll measure constant currency ARR growth against for FY 22. Now that we've completed our FY 21 audit and know that there were no adjustments that could affect future periods, and with July and August, typically our slowest months, having performed towards the upper end of our expectations, we're raising our guidance for FY 22. We now expect year-over-year revenue growth of between 35%-37%, up from the 29%-32% range we provided in July. This step-up reflects both an increase in constant currency ARR growth expectations to between 34%-36%, with a corresponding constant currency ARR added expectation of between 12%-14% growth. In earlier guidance, we built in an expectation that FX tailwinds we saw in FY 21 could reverse, adding a bit of conservatism to our conversion of ARR into revenue. With little headwind in the first two months, we have updated our expectations to incorporate that experience, but have still left some room for lower ARR to revenue conversion later in the year. With respect to ARR and net ARR added growth, I also want to remind you that over the next few months, we'll be evolving our sales force to give us additional levers to pull in the future, something Poppy will talk more about. While we don't expect a big change to what our prospect-facing teams do or to the composition of our customer base, every time you adjust something, no matter how small, you risk distraction. We have incorporated some potential impact into our ARR expectations for FY 22, but are convinced that these changes will further support our ability to scale over the longer term. Also, to help you think about seasonality and how we expect the business to evolve across the year, we are currently expecting 45%-46% of both revenue and net ARR added to be recognized in the first half of the year. Regarding sales force growth, we are close to returning to pre-pandemic levels for total sales force growth. Because it takes until month five of employment for a new salesperson to be productive, we don't expect productive sales force growth to normalize until mid-year. Further, as quotas for new salespeople scale up between months five and 12, we'll still be scaling sales force maturity and therefore sales capacity into the second half of FY 22. With these increases to the top line and its drivers, we are also raising our adjusted EBITDA margin expectations to between 2% and 5%. With this positive outlook on the back of a very strong set of annual results, I'm going to hand things back to Poppy to talk about what we're doing for the rest of the year. Thanks for Kathy. Now, I want to take a look at what is on the horizon through three lenses: Darktrace's purpose, ambitious vision, and strategic focus. Let me start with our purpose. To date, cybersecurity is characterized by restriction on how the workforce and business can operate. Organizations are encouraged to curb employee behavior and think twice about which new devices and platforms they bring into the business. At Darktrace, we're seeking to change the narrative. Cybersecurity can, and should, be an enabler. Done correctly, cybersecurity enables and accelerates business transformation rather than constrains it. Darktrace is here to help strengthen the organizations on which we all depend in our daily lives, to empower employees to focus on what they do best, and to enable executives to bring in emerging, exciting technologies, all while remaining safe and secure. We are proud that our technology currently defends organizations on which we all rely, from the NHS to power stations, government departments, supermarkets, and global shipping. Where might this take us next? Innovation is woven into the fabric of Darktrace, and our company culture encourages our employees to challenge the status quo and approach problems in a way that no one has before. We began by building algorithms based on Self-Learning AI with the ability to discover unpredictable attacks as they emerged. We then moved on to using that understanding to create Autonomous Response to interrupt attacks, minimize disruption, and keep the business running. There is more that can be done. Jack Stockdale, our Chief Technology Officer, has continued to oversee the development team in Cambridge. With the additional investment in R&D, Jack and his team have set the most ambitious technology vision in cybersecurity to date, one that transforms the way we protect our customers from cyber disruption. As we speak, our R&D team is looking at how we can create an AI-driven feedback loop that autonomously improves and optimizes the digital business to best mitigate cyber risk. This research will drive the next phase of product development. I want to remind you of what Darktrace has excelled at to date, using Self-Learning AI to handle the parts of cybersecurity that are not only labor-intensive for humans but go beyond human capabilities. For example, responding at machine speed to stop an in-progress attack. There are two very interesting areas in cyber that still heavily rely on humans today. The first is a large services industry conducting penetration testing and red teaming. Simply put, businesses pay to be attacked to try and find out where their weaknesses are. What should then be an optimization and verification process can all too often result in big surprises and a very long to-do list of technical fixes that will likely not be completed before the next test is conducted, or perhaps ever. Take critical infrastructure, for example. A nuclear power plant is a major capital investment that is intended to operate for many decades. It is frequently impossible to fix security risks with this equipment, and it won't be replaced anytime soon. But what if, with Darktrace's breadth and contextual understanding, you are able to autonomously identify and mitigate against these risks rather than just telling you that you are vulnerable? CIOs don't need more lists of things to fix. They need businesses that can become self-resilient. The second area is in cleanup or remediation. An attack, once sorted, needs to have all the tendrils of infection removed. This is a human-intensive task that is prone to human error and insufficient vigilance. Imagine a future where this is handled by artificial intelligence that is personalized using its understanding of the unique fingerprint of the business as well as its understanding of how the attack happened. It can return that organization to its normal, as if the attack was never there. We see a future where this process is AI-driven to create truly continuous cyber defense, effectively a self-learning, self-healing network that can protect, defend, and heal. We are uniquely positioned to achieve this because we have this interconnected understanding of the enterprise where each AI brain feeds into the next. This forms a continuous AI loop, a virtuous circle that amplifies our ability in each of them. We are currently creating algorithms that, based on the understanding of Self-Learning AI for a business, can continuously test the technology and human relationships for security risks and mitigate them before they are exploited by a genuine attack. Development of this breakthrough innovation, which can be understood as our prevent capability, is on track, and we expect this to be released to early adopters by the end of this calendar year. This loop is much more than a couple of new products. It's one that transforms the way businesses can protect themselves from cyber disruption. Darktrace's technology is what sets it apart from not only every other cybersecurity solution on the market today but also from other approaches to artificial intelligence. This vision is only possible because of our deep, leading expertise in Self-Learning AI. Unlike most other AI applications on the market, it does not rely on being programmed with vast amounts of training data that collect data on the average Windows laptop or cloud server, but instead learns the real business on the job. Unlike other approaches, we bring our artificial intelligence to the data rather than bringing data to the artificial intelligence. As we look ahead, where does this bring our strategic focus? When it comes to growth opportunity, I want to remind you that our current bottom-up TAM amounts to approximately $41 billion, reflecting a substantial global greenfield opportunity. There are over 150,000 companies that would benefit from our immune system, 27x our current customer base. We aspire for every single one of these organizations to become Darktrace customers. We do not segment the market in the same way that other vendors do, and our focus is to continue delivering our technology to all organizations around the world. This large addressable market will remain our number one driver of revenue growth for many years to come. As mentioned before, the beauty of Darktrace's AI is that it can be applied to companies of almost all sizes across all sectors and geographies and is complementary to traditional security solutions. As a platform-based business, we continue to see a large proportion of new customers buy multiple components of our platform upfront, as demonstrated by the significant increase that we've seen in the percentage of customers with multiple product deployments. Our priority has always been, and will be for the foreseeable future, winning as many new customers that we can and landing as much of that platform from day one as possible. As mentioned by Cathy, this is not your typical land and expand model. Our focus remains land, land. In order to achieve our ambitious goals and to take advantage of our global greenfield opportunity, we know that we need to be adding more and more talented and ambitious people to the workforce. As I touched on at the start, during 2021, Darktrace's total number of employees increased by 45%, despite an early COVID hiring freeze. We have a well-established graduate recruitment model that seeks out bright, energetic individuals with strong educational backgrounds and provides extensive on-the-job training. This approach to hiring gives the company access to a largely unconstrained talent pool, reducing barriers to growth, and enables management to train and develop its sales force according to the needs of the company and, crucially, our customers. At this time of the year in the Darktrace financial calendar, we are known for launching new initiatives and refreshing our focus. We've just completed our annual sales kickoff, delivering new messaging and training to our global workforce that they are set up for success as we head into the new financial year. Like many prior years, this is also the point in the year that we look to make changes to the sales organization and structure to allow the business to prepare for the future anticipated scale. As I just described, Darktrace's key lever to revenue growth is adding more talented, bright sparks to the workforce, specifically to the sales function. At our inaugural trading update, I mentioned that we will not only be adding more people to the sales force, but it will be evolving the structure of the team. This is to lay the foundations for the future and to provide us with another lever for growth. Historically, Darktrace salespeople have had the latitude to sell to any kind of business in their region. This has worked incredibly well for us, and that is evident in the strong year-on-year growth that we have sustained. After some successful small-scale experiments, we will begin to segment the sales force according to the size of a customer's organization at the beginning of October. I want to remind you, this is not about changing the profile of our customer base. There are 150,000 organizations out there that are potential Darktrace customers. Our aim is to deliver our technology to all of them. This evolution builds the foundation to the future, and while there may be short-term impact to sales productivity, this more structured approach builds an optionality in terms of focus and sales motion as we scale up the company in the years to come. I'm happy that we've been able to grow our customer base by over 45% this financial year. We've built a business that can scale. We also know that customer retention plays an important part in our future success. We are doubling down on our customer success team, the part of the business that is dedicated to providing a stellar customer experience at every stage of their journey. Having formalized the team in 2019, we know that we were slow in launching this function, and over the last financial year, we have worked hard to double the size of the team. In closing, we've delivered a strong financial performance this year whilst laying the foundations for the future. Over the last 12 months, we've added almost 2,000 organizations to our customer roster. We've grown our workforce to over 1,600 employees, and we continue to protect businesses, critical services, and infrastructure from increasingly sophisticated cyber threats. At our core, we continue to be a fundamental technology company. All of our success has been underpinned by our expertise in Self-Learning AI, and innovation is at the heart of everything that we do. Our priority as a business remains on those 150,000 organizations globally that can benefit from our technology in fighting back against sophisticated cyber threats. There is a long runway ahead of Darktrace, and we are looking forward to a continuing conversation with our investors as we execute on our ambitious goals. Thanks very much for your time.
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