Autonomy on target but shares slump

SOFTWARE firm Autonomy reported a record second quarter performance yesterday, but shares dropped as some analysts expressed disappointment at the firm&rsquo;s cautious outlook.<br /><br />The company, which specialises in meaning-based search technology, said that second quarter revenues grew by 55 per cent to &pound;195.1m year-on-year, and profit-before-tax was up 64 per cent to &pound;71.7m.<br /><br />&ldquo;Despite the continued uncertainty in the markets, we remain cautiously optimistic,&rdquo; said Mike Lynch, Autonomy&rsquo;s chief executive.<br /><br />Lynch added that Interwoven, a US content management firm acquired for $775m in January, had been successfully integrated ahead of target.<br /><br />But Panmure Gordon analyst George O&rsquo;Connor said the market was expecting the firm to be more on the front foot.<br /><br />&ldquo;The company could have been more robust in terms of its outlook,&rdquo; he said. &ldquo;In addition, there is constant concern about underlying organic growth in Autonomy and although they gave the 18 per cent growth in IDOL software they didn&rsquo;t any segmental information, particularly on the Interwoven wide.&rdquo;<br /><br />Lynch said that the Cambridge-based group would nudge up guidance as the year progressed, but he would not be drawn on timing.<br /><br />&ldquo;Our normal model is to upgrade through the year, one would hope as you get more information would be in a position to do that at some point,&rdquo; he said. &ldquo;The basic principle is there and it will unfold as it unfolds.&rdquo;<br /><br />In addition some analysts were disappointed by the level of deferred revenue and questioned Autonomy&rsquo;s calculations regarding cash conversion. But Lynch defended the calculations, saying that they were appropriate for a rapidly growing business.