Britain's Darktrace on Thursday raised its forecast for annual revenue and core profit margins, as the cybersecurity company bets on strong demand for its artificial intelligence-powered products.

Shares in the FTSE midcap firm were up 7% at 359.1 pence at 0849 GMT, and were among top gainers across all London stocks.

While IT spending has dwindled over the past year, cybersecurity-related expenditure has remained stable as businesses and governments scramble to secure their systems against hackers.

The company expects fiscal year 2024 revenue to grow between 23% and 24.5%, compared to 22%-23.5% earlier, while it sees adjusted core profit margin of 18%-20%, compared with 17%-19% previously.

However, the group said an improvement in annualised recurring revenue (ARR), a key measure of growth, was coming from its existing customer base.

Amid macroeconomic challenges, the potential for new business ARR "appears to have stabilised but not yet materially improved", Darktrace added.

We expect to remain well-placed to capitalise on our AI-powered cyber security products, as attackers capitalise on the availability of increasingly sophisticated tools and tactics, including generative AI, Darktrace finance chief Cathy Graham said.

The company expects revenue of at least $329.6 million for the first half of the year, representing a year-over-year growth of about 27.1%.

(Reporting by Chandini Monnappa and Eva Mathews in Bengaluru; Editing by Sherry Jacob-Phillips and Varun H K)