David Reynolds, an analyst at Davy Research, has characterized the accounting restatement as an “oversight,” expressing reservations about its impact on investor confidence. However, during Thursday’s results call, Mrs. Gustafsson confidently stated that Darktrace has a proven business model that generates cash and that today’s results exemplify the company’s strong performance. She also emphasized that being listed on the London Stock Exchange is exactly where Darktrace wants to be.
In an investor statement, Darktrace disclosed that it had determined $3.8 million of revenue recognized in 2022, including a portion reported in its unaudited first half of 2022 results, should instead have been recognized in FY 2021, clarifying that this was an error.
Darktrace’s stock price plummeted by 30% within the first 20 minutes of trading on Thursday. While news of Thoma Bravo’s interest had initially caused the stock to soar by 25% and break the £5 mark, it closed at £5.04 on Wednesday and dropped to £3.46 by midday on Thursday, below the level expected by JP Morgan Cazenove analysts.
CCS Insight research director Bola Rotibi highlighted concerns about Darktrace’s overstatement of its addressable client base, which may have exacerbated the issue when scrutinized closely. Thoma Bravo declined to comment on the matter.
Industry insiders have previously criticized Darktrace for its high-pressure sales tactics, describing them as more forceful than those of its competitors in the fiercely competitive field of cybersecurity.
According to market analyst Michael Hewson of CMC Capital Markets, there is a significant divergence of opinion among investors regarding Darktrace’s ability to meet expectations of future customer and recurring revenue growth. As a result, today’s announcement of the full-year results may be overshadowed.
Earlier this year, the High Court found Mr. Lynch, along with Autonomy’s accounting chief, guilty of fraud. Mr. Lynch intends to appeal the ruling and is also fighting criminal charges in the US while facing an extradition attempt by American prosecutors.
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