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Akamai forecasts fourth-quarter revenue below estimates on weak client spending
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Akamai forecasts fourth-quarter revenue below estimates on weak client spending
Nov 9, 2024 12:39 PM

Nov 7 (Reuters) - Akamai Technologies ( AKAM ) 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 ( AKAM ), 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 ( AKAM ) 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 ( AKAM ) third-quarter revenue rose 4% to $1.01 billion,

compared to estimates of $999 million.

Its customers include Adobe, eBay ( EBAY ) and

Electronic Arts ( EA ), 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.

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