In one sense Darktrace is in limbo until an audit of its finances – aimed at addressing concerns flagged by a New York short seller – is complete. Until then everything it says to the market is going to be lacking in credibility.
First-half results showing a 90%-plus plunge in operating profit is not going to lighten the mood. Revenues were up but there was an appreciable and worrying slowdown in new business in the three-month period to 31 December.
AJ Bell’s Russ Mould said: “Darktrace is sticking with its full-year targets and flags ‘hacktivism’ and AI as drivers of future sales. There is logic to this argument. We live in an increasingly digitised world and cyber security is like a fourth emergency service – keeping us safe from harm online.
“The problem for the company is that its AI-driven model is difficult to understand and doubts have been raised over its accounting. Until the business is less opaque the market may well treat its promise of jam tomorrow with scepticism.”