Darktrace shares down over 10 per cent after firm cuts revenue forecast
British cyber-security company Darktrace cut its full-year revenue forecast on Wednesday after prospective customers turned more reluctant to run product trials due to the worsening economic environment.
The company, which listed in April 2021, said it now expected its constant currency annual recurring revenue (ARR) to increase by between 29.0 per cent and 31.5 per cent in the year to end-June, down from its previous forecast of 31 per cent to 34 per cent.
It said ARR in the six months to end-December had increased by at least 36.5% to a minimum of $556.3 million, but there had been a noticeable slowdown in new customer additions recently.
Chief Financial Officer Cathy Graham said profitability had been preserved, helped by operating efficiencies that it would maintain in its second half, resulting in an improvement to its full-year core earnings margin forecast.
“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 are starting to decline,” she said in a statement.
She said the slowdown was “very pronounced” in December, one of the strongest months in Darktrace’s annual sales cycle.
“This is largely a new customer win issue and it is more pronounced at the smaller end,” she told Reuters.
Darktrace shares were down around 13 per cent at the time of publication.