IRNT - IronNet plunges by almost 50% following 'disastrous' results co-CEO's departure

IronNet ( NYSE: IRNT ) watched its shares plummet by more than 47% in pre-market trading Thursday after the cyber-security technology company said two of its top executives would step down following what one analyst called "disastrous" quarterly results.

Prior to the start of trading, IronNet ( IRNT ) co-Chief Executive and Chairman Keith Alexander said that his co-CEO, William Welch, and Chief Financial Officer James Gerber, would leave the company, and that IronNet would also cut a total of 35% of its workforce, or about 110 jobs.

Welch will not be replaced, and Alexander will serve as IronNet's ( IRNT ) sole CEO. Alexander said in a statement that "experienced software and cybersecurity executive" Cameron Pforr will become IronNet's ( IRNT ) new CFO.

Alexander said the moves were being made after IronNet ( IRNT ) saw "unexpected headwinds in our transactional business this quarter." Alexander said IronNet ( IRNT ) would also withdraw its previously issued forecasts for its 2023 fiscal year.

The announcements came as IronNet ( IRNT ) reported a loss, excluding one-time items, of $20.6M on sales of $6.6M. During the same period a year ago, IronNet ( IRNT ) lost $17M in the same quarter a year ago, on $6.1M in sales.

IronNet ( IRNT ) also reported annual recurring revenue of $26.5, which while up from $24.1M a year ago, fell short of Wall Street analysts' expectations of approximately $32M. BTIG analyst Gray Powell said the combination of events led him to cut his rating on IronNet's ( IRNT ) shares to sell from neutral, and said the is "no visibility" going forward regarding the company's prospects.

"Even if IronNet ( IRNT ) addresses liquidity issues, investor are left with a declining business that is nowhere near profitability," Powell said, in a research note.

Wall Street analysts have a consensus hold rating on IronNet's ( IRNT ) stock, while Seeking Alpha authors, and Seeking Alpha's quant system, which regularly outperforms the stock market, give IronNet ( IRNT ) a rating of strong sell .

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