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British-American cyber security company, Darktrace plc’s (Darktrace) shares fell by 18% on 11 January 2022. The sharp fall saw the FTSE 250 company’s shares drop below the IPO price of 250 pence for the first time since April 2021. By mid-day, the share price had crept up slightly and settled at 14% lower, trading at 252.67 pence.

The dip in share price coincides with the publication of Darktrace‘s on 11 January 2023. The update references ‘macro-economic uncertainty’ as the underlying reason for financial trouble. In the update, Darktrace noted that the impact of this uncertainty has had a ‘larger than expected’ effect on customer growth and stated that it expects these trends to continue throughout the second half of its financial year. The company forecast a year-over-year increase of between 29% and 31.5% for 2023, down from 31% to 34% the previous year.

CFO Cathy Graham  :

‘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.  While we continue to be optimistic about PREVENT’s ability to contribute in the second half, and remain very positive about the potential of other new product developments in our pipeline, against this backdrop of weaker trends and continuing uncertainty, we are being prudent and revising our FY 2023 guidance.’

 The slump comes after Darktrace appointed Denise Walters as Chief Revenue Officer. Walters will lead global revenue generation for the company, focusing on revenue growth in the United States. In a press release, Darktrace announced that Walters’ appointment is to help ‘bring more of our world-class technology to more customers – new and existing – around the world.’

Share prices plummeting is yet another hit for Darktrace. At its AGM on 4 November 2022, it suffered a shareholder revolt with 20.7% votes cast against its remuneration report (see: Co-founders’ opposition leads to surprise dissent at Darktrace). Additionally, US private equity software firm, Thoma Bravo pulled out of a takeover bid in mid-September, resulting in the share price falling nearly 30% (see: Private equity group Thoma Bravo terminates takeover bid for Darktrace).

 Market Tracker will continue to monitor these developments.