Trustpilot shares slumped 16% to 219p on Tuesday even though the online reviews group's half-year numbers landed pretty much where the City expected them to.
The disconnect between solid figures and a bruised share price appears to owe less to the trading performance and more to a pair of administrative slip-ups the company owned up to alongside the results.
Revenue rose 23% to US$151 million, with earnings before interest, tax and other charges up 46% to $26 million as the margin widened to 17%.
Free cash flow of $16 million came in $6 million ahead of forecasts, and the group finished the period sitting on $22 million of net cash. North America was the standout, where bookings grew 27%.
So far, so reassuring. The wrinkles lie elsewhere.
Trustpilot admitted it had incorrectly processed US sales taxes on certain invoices, triggering a $1 million historical provision and a small restatement of last year's figures. It also mishandled the way it assessed the reserves available for buying back its own shares, an error that now requires shareholders to bless those purchases after the event via a formal circular.
Panmure Liberum, which sticks with a hold rating and 250p price target, was sanguine. The broker has long viewed Trustpilot as a maturing business, and reckons the telling point is not that the mistakes happened but that the company found and disclosed them itself. A speed bump, in other words, rather than a wrong turn.
Peel Hunt was breezier still. The broker kept its buy stance and 380p target intact, arguing there were few surprises given July's trading update had already flagged most of the detail. It sees artificial intelligence as a structural tailwind, casting Trustpilot as a trusted source for AI-powered search, and points out the shares change hands at a hefty discount to software peers.
Management left full-year guidance untouched, still pencilling in high-teens revenue growth and a further improvement in margins.
For all the hand-wringing over the tax and buyback blunders, then, the underlying business appears to be ticking along much as the brokers had penned in. Investors, on Tuesday at least, chose to focus on the mess.
