Palo Alto Networks Inc., a cybersecurity company, experienced a decline in late trading after revising its revenue forecast for the year, raising concerns about a potential contraction in tech spending by customers.

The company stated on Tuesday that sales for the fiscal year would be between $7.95 billion and $8 billion.

This is a reduction from its earlier projection of revenue reaching up to $8.2 billion, and analysts had estimated $8.18 billion.

The revised outlook suggests a possible restraint in customers’ spending intentions, even in the face of increasing online attacks.

The upper limit of Palo Alto Networks’ sales forecast reflects a 16% increase, considerably below its growth rate of 25% or more in recent years.

Despite the adjusted revenue forecast, the company maintained its outlook for earnings and free cash flow for fiscal 2024, Bloomberg reported.

Chief Financial Officer Dipak Golechha emphasized that this reflected the company’s “disciplined execution on profitable growth.”

During a conference call, Chief Executive Officer Nikesh Arora echoed these sentiments, highlighting the successful execution of their profitable growth strategy.

However, he also acknowledged that customers were encountering “spending fatigue” in the realm of cybersecurity.

Written by B.C. Begley