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Darktrace
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=== Margin leverage likely to be limited through JP Morgan's forecast horizon === Non-T&E G&A expenses as % of revenue grew from 13% in 2020 to 20% in 1H22 as a result of higher public company costs post IPO. Darktrace expects G&A to tick up in 2H22 followed by decline from 2023. '''Figure 30: Non-T&E R&D expenses* as % of revenue'''<ref name=":5" /> [[File:Figure 30.png]] '''Figure 31: Non-T&E G&A expenses* as % of revenue<ref name=":5" /><br />'''[[File:Figure 31.png]] Darktrace reported total T&E expenses of $1.8m in 2021, down from $21m in 2020 (normalized 2020 T&E expense is $27-28m). The company reported a lower-than- expected T&E expense in 1H22 of $2.7m – with economies opening up and travel returning to normal, Darktrace expects a steep ramp in T&E expenses in 2H22, returning to a more normalized run-rate. Factoring-in these assumptions, JP Morgan models total opex (incl. share-based compensation and associated tax charges) as % of revenue to tick up slightly from 97% in 2022 to 100% in 2023 (driven by the full year impact of normalized T&E expenses and normalized salesforce hiring), followed by a decline to 96% in 2024. JP Morgan models share-based compensation and associated employer tax charges to be ~11% of revenue throughout JP Morgan's forecast period. '''Figure 32: Total opex as % of revenue: 2019-24E'''<ref name=":6">Source: Company data, J.P. Morgan estimates; FY ends in Jun.</ref> [[File:Figure 32.png]] '''Figure 33: Total opex (excl. charges associated with share-based comp) as % of revenue: 2019-24E<ref name=":6" />''' [[File:Figure 33.png]] Given JP Morgan's assumptions on opex, JP Morgan models continued operating loss throughout JP Morgan's forecast horizon. Even after excluding share-based compensation and associated employer tax charges, JP Morgan does not model any significant improvement in adjusted EBIT margin during JP Morgan's forecast horizon.
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