Sophos shares crash on billings warning

Shares in Sophos tumbled on Friday after the cybersecurity firm warned that “subdued” trading would drag into the fourth quarter.

In a stock market update, the company said that it experienced a decline in billings from new customers, as well as a decline in hardware orders in the third quarter to December 31, adding that the final three months of the year would see a similar trend.

Constant currency billings grew 2% in the third quarter and were up 2% for the nine-month period, but total billings in the three months to December declined 0.6% to 193.7 million US dollars.

FTSE 250-listed Sophos said the lacklustre figures were dragged down by challenging comparatives last year and warned that constant-currency billings for the full year would see a “modest decline”.

Shares tumbled more than 25% in morning trade to 282p following the update.

Boss Kris Hagerman said: “Sophos remains strongly positioned from a technology, product, and strategic perspective. We are confident in our strengthening product platform and how it positions us for the future.”

Sophos posted operating profit of 23.9 million US dollars in the third quarter, which compares with a loss of 1.6 million US dollars in the same period last year.

Third-quarter revenue rose 7.3% to 178 million US dollars.