Cyber security firm Darktrace has seen its shares tumble below its flotation price for the first time after slashing its revenue outlook as the deepening economic gloom impacts new customer growth.
The group saw shares plunge as much as 19% at one stage on Wednesday, after it said revenues were now expected to grow by between 29.5% and 31%, down from 30% to 33% previously.
It cautioned that the impact of economic uncertainty on new customer growth “had been larger than expected” in the first half of its financial year and believed the pressures would continue over the final six months.
Shares in Darktrace – whose founder Mike Lynch is facing extradition to the US over fraud charges -slumped as low as 238.8p, before regaining some of its poise to stand 14% lower.
It floated at 250p a share in April 2001, but the stock has lost 40% of its value over the past year, most recently hit after US private equity suitor Thoma Bravo pulled out of bid talks last September.
Darktrace said that its annual recurring revenue (ARR) grew by at least 36.5% to a minimum of 556.3 million US dollars (£458.6 million) in the six months to the end of December, but that there had been a “noticeable late second quarter slowdown” in new customers signed up.
Cathy Graham, chief financial officer of Darktrace, insisted that profitability was holding up thanks to cost efficiencies, allowing the group to increase its full-year underlying earnings margin outlook despite the revenue woes.
She said: “Clearly, however, the current macro-economic environment is creating challenges to winning new customers, with prospects more reluctant to run product trials and, in regions with historically higher conversion rates, those rates starting to decline.”
“Despite expecting growth to remain slower for the rest of this financial year, it is a testament to our resilient business model that we can drive increases in our profitability forecasts over the same period,” she added.