Akamai forecasts fourth-quarter revenue below estimates on weak client spending

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(Reuters) – Akamai Technologies forecast fourth-quarter revenue below estimates on Thursday, expecting a pullback in spending on its cloud and content delivery services by clients grappling with an uncertain macroeconomic environment.

Shares of the Cambridge, Massachusetts-based company fell 9% in extended trading.

Higher-for-longer interest rates and sticky inflation have prompted clients to tighten their purse strings, hurting firms such as Akamai, which provides services to deliver web content faster, as well as cybersecurity software.

The company expects fourth-quarter revenue in a range of $995 million to $1.02 billion, compared with analysts’ average estimate of $1.03 billion, according to data compiled by LSEG.

Slowing traffic growth and a large social media customer optimizing its business to reduce costs had also impacted the company’s sales, Akamai said in May.

Overall traffic growth levels have still not begun to rebound, D.A. Davidson analysts said in a note in August.

Akamai’s third-quarter revenue rose 4% to $1.01 billion, compared to estimates of $999 million.

Its customers include Adobe, eBay and Electronic Arts, as well as the U.S. Defense and Labor departments.

It forecast fourth-quarter adjusted net income per share between $1.49 and $1.56, compared with estimates of $1.62 per share.

(Reporting by Arsheeya Bajwa in Bengaluru; Editing by Mohammed Safi Shamsi)