Fortinet Reports Second Quarter 2024 Financial Results
Record quarterly GAAP and Non-GAAP operating
margins
Raises 2024 revenue and Non-GAAP operating margin
guidance
Continuing to invest in the fast-growing Unified SASE and
Security Operations markets
Second Quarter 2024 Highlights
- Total revenue of $1.43 billion, up 11% year over
year
- Service revenue of $982 million, up 20% year over
year
- Record GAAP operating margin of 30.5%
- Record Non-GAAP operating margin of
35.1%1
- Cash flow from operations of $342 million
SUNNYVALE, Calif., Aug. 06, 2024 (GLOBE NEWSWIRE) -- Fortinet®
(Nasdaq: FTNT), a global cybersecurity leader driving the
convergence of networking and security, today announced financial
results for the second quarter ended June 30, 2024.
“In the second quarter, we successfully balanced growth and
profitability as our non-GAAP operating margin increased 820 basis
points year-over-year to a company record of
35.1%1, while billings and revenue were at the
high end of their respective guidance ranges,” said Ken Xie,
Founder, Chairman and Chief Executive Officer of Fortinet. “We are
continuing to execute our strategy to invest in the fast-growing
Unified SASE and Security Operations markets, while gaining market
share in Secure Networking. We expect to emerge as a SASE leader,
as we are the only vendor in the Gartner Magic Quadrant™ for
Single-Vendor SASE that is also recognized in five different
network security Magic Quadrant™ reports.2”
Financial Highlights for the Second Quarter of
2024
- Revenue: Total revenue was $1.43 billion for
the second quarter of 2024, an increase of 10.9% compared to $1.29
billion for the same quarter of 2023.
- Product Revenue: Product revenue was $451.9
million for the second quarter of 2024, a decrease of 4.4% compared
to $472.6 million for the same quarter of 2023.
- Service Revenue: Service revenue was $982.4
million for the second quarter of 2024, an increase of 19.8%
compared to $820.2 million for the same quarter of 2023.
- Billings1: Total billings were
$1.54 billion for the second quarter of 2024, remaining flat
compared to $1.54 billion for the same quarter of 2023.
- Deferred Revenue: Total deferred revenue was
$5.90 billion as of June 30, 2024, an increase of 15.0%
compared to $5.13 billion as of June 30, 2023.
- GAAP Operating Income and Margin: GAAP
operating income was $437.2 million for the second quarter of 2024,
representing a GAAP operating margin of 30.5%. GAAP operating
income was $279.0 million for the same quarter of 2023,
representing a GAAP operating margin of 21.6%.
- Non-GAAP Operating Income and
Margin1: Non-GAAP operating income was $503.6
million for the second quarter of 2024, representing a non-GAAP
operating margin of 35.1%. Non-GAAP operating income was $348.1
million for the same quarter of 2023, representing a non-GAAP
operating margin of 26.9%.
- GAAP Net Income and Diluted Net Income Per
Share: GAAP net income was $379.8 million for the second
quarter of 2024, compared to GAAP net income of $266.3 million for
the same quarter of 2023. GAAP diluted net income per share was
$0.49 for the second quarter of 2024, based on 769.9 million
diluted weighted-average shares outstanding, compared to GAAP
diluted net income per share of $0.33 for the same quarter of 2023,
based on 795.9 million diluted weighted-average shares
outstanding.
- Non-GAAP Net Income and Diluted Net Income Per
Share1: Non-GAAP net income was $439.9 million
for the second quarter of 2024, compared to non-GAAP net income of
$300.4 million for the same quarter of 2023. Non-GAAP diluted net
income per share was $0.57 for the second quarter of 2024, based on
769.9 million diluted weighted-average shares outstanding,
compared to $0.38 for the same quarter of 2023, based on
795.9 million diluted weighted-average shares outstanding.
- Cash Flow: Cash flow from operations was
$342.0 million for the second quarter of 2024, compared to $515.1
million for the same quarter of 2023.
- Free Cash Flow1: Free cash flow was
$318.9 million for the second quarter of 2024, compared to $438.3
million for the same quarter of 2023.
Guidance
For the third quarter of 2024, Fortinet currently expects:
- Revenue in the range of $1.445 billion to $1.505 billion
- Billings in the range of $1.530 billion to $1.600 billion
- Non-GAAP gross margin in the range of 79.0% to 80.0%
- Non-GAAP operating margin in the range of 30.5% to 31.5%
- Diluted non-GAAP net income per share in the range of $0.56 to
$0.58, assuming a non-GAAP effective tax rate of 17%. This assumes
a diluted share count of 767 million to 777 million.
For the fiscal year 2024, Fortinet currently expects:
- Revenue in the range of $5.800 billion to $5.900 billion
- Service revenue in the range of $3.975 billion to $4.025
billion
- Billings in the range of $6.400 billion to $6.600 billion
- Non-GAAP gross margin in the range of 79.0% to 80.0%
- Non-GAAP operating margin in the range of 30.0% to 31.5%
- Diluted non-GAAP net income per share in the range of $2.13 to
$2.19, assuming a non-GAAP effective tax rate of 17%. This assumes
a diluted share count of 767 million to 777 million.
These statements are forward looking and actual results may
differ materially. Refer to the Forward-Looking Statements section
below for information on the factors that could cause our actual
results to differ materially from these forward-looking
statements.
Our guidance with respect to non-GAAP financial measures
excludes stock-based compensation, amortization of acquired
intangible assets, gain on intellectual property matters and
non-cash charge on equity method investment of impairment. We have
not reconciled our guidance with respect to non-GAAP financial
measures to the corresponding GAAP measures because certain items
that impact these measures are uncertain or out of our control, or
cannot be reasonably predicted. Accordingly, a reconciliation of
these non-GAAP financial measures to the corresponding GAAP
measures is not available without unreasonable effort.
GARTNER is a registered trademark and service mark of
Gartner and Magic Quadrant is a registered trademark of Gartner,
Inc. and/or its affiliates in the U.S. and internationally and are
used herein with permission. All rights reserved.
Gartner does not endorse any vendor, product or service
depicted in our research publications, and does not advise
technology users to select only those vendors with the highest
ratings or other designation. Gartner research publications consist
of the opinions of Gartner research organization and should not be
construed as statements of fact. Gartner disclaims all warranties,
expressed or implied, with respect to this research, including any
warranties of merchantability or fitness for a particular
purpose.
1 A reconciliation of GAAP to
non-GAAP measures has been provided in the financial statement
tables included in this press release. An explanation of these
measures is also included below under the heading “Non-GAAP
Financial Measures”.
2 Magic Quadrant for SD-WAN,
Jonathan Forest, Naresh Singh, Andrew Lerner, Karen Brown,
Published 27 September 2023
Magic Quadrant for Enterprise Wired and Wireless LAN
Infrastructure, Tim Zimmerman, Christian Canales, Nauman Raja, Mike
Leibovitz, Published 06 March 2024
Magic Quadrant for Network Firewalls, Rajpreet Kaur, Adam Hils,
Thomas Lintemuth, Published 19 December 2022
Magic Quadrant for Security Service Edge, Charlie Winckless, Thomas
Lintemuth, Dale Koeppen, Published 15 April 2024
Magic Quadrant for Single-Vendor SASE, Andrew Lerner, Jonathan
Forest, Neil MacDonald, Nat Smith, Charlie Winckless, Published 16
August 2023
Conference Call Details
Fortinet will host a conference call today at 1:30 p.m. Pacific
Time (4:30 p.m. Eastern Time) to discuss the earnings results. A
live webcast of the conference call and supplemental slides will be
accessible from the Investor Relations page of Fortinet’s website
at https://investor.fortinet.com and a replay will be archived
and accessible at
https://investor.fortinet.com/events-and-presentations.
Third Quarter 2024 Conference Participation
Schedule:
- Oppenheimer Technology, Internet & Communications
Conference
August 12, 2024
- Deutsche Bank Technology Conference
August 28, 2024
- Goldman Sachs Communacopia + Technology
Conference
September 9, 2024
Members of Fortinet’s management team are expected to present at
these conferences and discuss the latest company strategies and
initiatives. Fortinet’s conference presentations are expected to be
available via webcast on the company’s website. To access the most
updated information, pre-register and listen to the webcast of each
event, please visit the Investor Presentation & Events page of
Fortinet’s website at
https://investor.fortinet.com/events-and-presentations. The
schedule is subject to change.
About Fortinet (www.fortinet.com)
Fortinet (Nasdaq: FTNT) is a driving force in the evolution
of cybersecurity and the convergence of networking and security.
Our mission is to secure people, devices and data everywhere, and
today we deliver cybersecurity everywhere our customers need it
with the largest integrated portfolio of over 50 enterprise-grade
products. Over half a million customers trust Fortinet’s solutions,
which are among the most deployed, most patented and most validated
in the industry. The Fortinet Training Institute, one of the
largest and broadest training programs in the industry, is
dedicated to making cybersecurity training and new career
opportunities available to everyone. Collaboration with
high-profile, well-respected organizations from both the public and
private sectors, including CERTs, government entities, and
academia, is a fundamental aspect of Fortinet’s commitment to
enhance cyber resilience globally. FortiGuard Labs, Fortinet’s
elite threat intelligence and research organization, develops and
utilizes leading-edge machine learning and AI technologies to
provide customers with timely and consistently top-rated protection
and actionable threat intelligence. Learn more at
https://www.fortinet.com, the Fortinet Blog or FortiGuard
Labs.
Copyright © 2024 Fortinet, Inc. All
rights reserved. The symbols ® and ™ denote respectively federally
registered trademarks and common law trademarks of Fortinet, Inc.,
its subsidiaries and affiliates. Fortinet’s trademarks include, but
are not limited to, the following: Fortinet, the Fortinet logo,
FortiGate, FortiOS, FortiGuard, FortiCare, FortiAnalyzer,
FortiManager, FortiASIC, FortiClient, FortiCloud, FortiMail,
FortiSandbox, FortiADC, FortiAI, FortiAIOps, FortiAntenna, FortiAP,
FortiAPCam, FortiAuthenticator, FortiCache, FortiCam, FortiCamera,
FortiCarrier, FortiCASB, FortiCentral, FortiCNP, FortiConnect,
FortiController, FortiConverter, FortiCSPM, FortiCWP, FortiDAST,
FortiDB, FortiDDoS, FortiDeceptor, FortiDeploy, FortiDevSec,
FortiEDR, FortiExplorer, FortiExtender, FortiFirewall, FortiFlex,
FortiFone, FortiGSLB, FortiGuest, FortiHypervisor, FortiInsight,
FortiIsolator, FortiLAN, FortiLink, FortiMonitor, FortiNAC,
FortiNDR, FortiPAM, FortiPenTest, FortiPhish, FortiPoint,
FortiPolicy, FortiPortal, FortiPresence, FortiProxy, FortiRecon,
FortiRecorder, FortiSASE, FortiSDNConnector, FortiSIEM, FortiSMS,
FortiSOAR, FortiStack, FortiSwitch, FortiTester, FortiToken,
FortiTrust, FortiVoice, FortiWAN, FortiWeb, FortiWiFi, FortiWLC,
FortiWLM and FortiXDR. Other trademarks belong to their respective
owners. Fortinet has not independently verified statements or
certifications herein attributed to third parties and Fortinet does
not independently endorse such statements. Notwithstanding anything
to the contrary herein, nothing herein constitutes a warranty,
guarantee, contract, binding specification or other binding
commitment by Fortinet or any indication of intent related to a
binding commitment, and performance and other specification
information herein may be unique to certain environments.
FTNT-F
Forward-Looking Statements
This press release contains forward-looking statements that
involve risks and uncertainties. These forward-looking statements
include statements regarding any indications related to future
growth and market share gains, our strategy going forward, and
guidance and expectations around future financial results,
including guidance and expectations for the third quarter and full
year 2024, and any statements regarding our market opportunity and
market size, and business momentum. Although we attempt to be
accurate in making forward-looking statements, it is possible that
future circumstances might differ from the assumptions on which
such statements are based such that actual results are materially
different from our forward-looking statements in this release.
Important factors that could cause results to differ materially
from the statements herein include the following: general economic
risks, including those caused by economic challenges, a possible
economic downturn or recession and the effects of inflation or
stagflation, rising interest rates or reduced information
technology spending; supply chain challenges; negative impacts from
the ongoing war in Ukraine and its related macroeconomic effects
and our decision to reduce operations in Russia, as well as the
Israel-Hamas war; competitiveness in the security market; the
dynamic nature of the security market and its products and
services; specific economic risks worldwide and in different
geographies, and among different customer segments; uncertainty
regarding demand and increased business and renewals from existing
customers; sales execution risks, including risks in connection
with the timing and completion of large strategic deals;
uncertainties around continued success in sales growth and market
share gains; uncertainties in market opportunities and the market
size; actual or perceived vulnerabilities in our supply chain,
products or services, and any actual or perceived breach of our
network or our customers’ networks; longer sales cycles,
particularly for larger enterprise, service providers, government
and other large organization customers; the effectiveness of our
salesforce and failure to convert sales pipeline into final sales;
risks associated with successful implementation of multiple
integrated software products and other product functionality risks;
risks associated with integrating acquisitions and changes in
circumstances and plans associated therewith, including, among
other risks, changes in plans related to product and services
integrations, product and services plans and sales strategies;
sales and marketing execution risks; execution risks around new
product development and introductions and innovation; litigation
and disputes and the potential cost, distraction and damage to
sales and reputation caused thereby or by other factors;
cybersecurity threats, breaches and other disruptions; market
acceptance of new products and services; the ability to attract and
retain personnel; changes in strategy; risks associated with
management of growth; lengthy sales and implementation cycles,
particularly in larger organizations; technological changes that
make our products and services less competitive; risks associated
with the adoption of, and demand for, our products and services in
general and by specific customer segments, including those caused
by competition and pricing pressure; excess product inventory for
any reason, including those caused by the effects of increased
inflation and interest rates in certain geographies and the war in
Ukraine and the Israel-Hamas war; risks associated with business
disruption caused by natural disasters and health emergencies such
as earthquakes, fires, power outages, typhoons, floods, health
epidemics and viruses, and by manmade events such as civil unrest,
labor disruption, international trade disputes, international
conflicts such as the war in Ukraine and the Israel-Hamas war or
tensions between China and Taiwan, terrorism, wars, and critical
infrastructure attacks; tariffs, trade disputes and other trade
barriers, and negative impact on sales based on geo-political
dynamics and disputes and protectionist policies; any political and
government disruption around the world, including the impact of any
future shutdowns of the U.S. government; and the other risk factors
set forth from time to time in our most recent Annual Report on
Form 10-K, our most recent Quarterly Report on Form 10-Q and our
other filings with the Securities and Exchange Commission (“SEC”),
copies of which are available free of charge at the SEC’s website
at www.sec.gov or upon request from our investor relations
department. All forward-looking statements herein reflect our
opinions only as of the date of this release, and we undertake no
obligation, and expressly disclaim any obligation, to update
forward-looking statements herein in light of new information or
future events.
Non-GAAP Financial Measures
We have provided in this release financial information that has
not been prepared in accordance with U.S. Generally Accepted
Accounting Principles (GAAP). These non-GAAP financial and
liquidity measures are not based on any standardized methodology
prescribed by GAAP and are not necessarily comparable to similar
measures presented by other companies. We use these non-GAAP
financial measures internally in analyzing our financial results
and believe they are useful to investors, as a supplement to GAAP
measures, in evaluating our ongoing operational performance. We
believe that the use of these non-GAAP financial measures provides
an additional tool for investors to use in evaluating ongoing
operating results and trends and in comparing our financial results
with peer companies, many of which present similar non-GAAP
financial measures to investors.
Non-GAAP financial measures should not be considered in
isolation from, or as a substitute for, financial information
prepared in accordance with GAAP. Investors are encouraged to
review the reconciliation of these non-GAAP financial measures to
their most directly comparable GAAP financial measures provided in
the financial statement tables below.
Billings (non-GAAP). We define billings as revenue
recognized in accordance with GAAP plus the change in deferred
revenue from the beginning to the end of the period less any
deferred revenue balances acquired from business combination(s)
during the period. We consider billings to be a useful metric for
management and investors because billings drive current and future
revenue, which is an important indicator of the health and
viability of our business. There are a number of limitations
related to the use of billings instead of GAAP revenue. First,
billings include amounts that have not yet been recognized as
revenue and are impacted by the term of security and support
agreements. Second, we may calculate billings in a manner that is
different from peer companies that report similar financial
measures. Management accounts for these limitations by providing
specific information regarding GAAP revenue and evaluating billings
together with GAAP revenue.
Free cash flow (non-GAAP). We define free cash flow as
net cash provided by operating activities minus purchases of
property and equipment and excluding any significant non-recurring
items. We believe free cash flow to be a liquidity measure that
provides useful information to management and investors about the
amount of cash generated by the business that, after capital
expenditures, can be used for strategic opportunities, including
repurchasing outstanding common stock, investing in our business,
making strategic acquisitions and strengthening the balance sheet.
A limitation of using free cash flow rather than the GAAP measures
of cash provided by or used in operating activities, investing
activities, and financing activities is that free cash flow does
not represent the total increase or decrease in the cash and cash
equivalents balance for the period because it excludes cash flows
from significant non-recurring items, investing activities other
than capital expenditures and cash flows from financing activities.
Management accounts for this limitation by providing information
about our capital expenditures and other investing and financing
activities on the face of the cash flow statement and under the
caption “Management’s Discussion and Analysis of Financial
Condition and Results of Operations—Liquidity and Capital
Resources” in our most recent Quarterly Report on Form 10-Q and
Annual Report on Form 10-K and by presenting cash flows from
investing and financing activities in our reconciliation of free
cash flow. In addition, it is important to note that other
companies, including companies in our industry, may not use free
cash flow, may calculate free cash flow in a different manner than
we do or may use other financial measures to evaluate their
performance, all of which could reduce the usefulness of free cash
flow as a comparative measure.
Non-GAAP operating income and operating margin. We
define non-GAAP operating income as operating income plus
stock-based compensation, amortization of acquired intangible
assets, less gain on intellectual property matter and, when
applicable, other significant non-recurring items in a given
quarter. Non-GAAP operating margin is defined as non-GAAP operating
income divided by GAAP revenue. We consider these non-GAAP
financial measures to be useful metrics for management and
investors because they exclude the items noted above so that our
management and investors can compare our recurring core business
operating results over multiple periods. There are a number of
limitations related to the use of non-GAAP operating income instead
of operating income calculated in accordance with GAAP. First,
non-GAAP operating income excludes the items noted above. Second,
the components of the costs that we exclude from our calculation of
non-GAAP operating income may differ from the components that peer
companies exclude when they report their non-GAAP results of
operations. Management accounts for these limitations by providing
specific information regarding the GAAP amounts excluded from
non-GAAP operating income and evaluating non-GAAP operating income
together with operating income calculated in accordance with
GAAP.
Non-GAAP net income and diluted net income per share. We define
non-GAAP net income as net income plus the items noted above under
non-GAAP operating income and operating margin. In addition, we
adjust non-GAAP net income and diluted net income per share for a
non-cash charge of impairment on equity method investment, a tax
adjustment required for an effective tax rate on a non-GAAP basis,
which differs from the GAAP effective tax rate. We define non-GAAP
diluted net income per share as non-GAAP net income divided by the
non-GAAP diluted weighted-average shares outstanding. We consider
these non-GAAP financial measures to be useful metrics for
management and investors for the same reasons that we use non-GAAP
operating income and non-GAAP operating margin. However, in order
to provide a more complete picture of our recurring core business
operating results, we include in non-GAAP net income and non-GAAP
diluted net income per share, the tax adjustment required resulting
in an effective tax rate on a non-GAAP basis, which often differs
from the GAAP tax rate. We believe the non-GAAP effective tax rates
we use are reasonable estimates of normalized tax rates for our
current and prior fiscal years under our global operating
structure. The same limitations described above regarding our use
of non-GAAP operating income and non-GAAP operating margin apply to
our use of non-GAAP net income and non-GAAP diluted net income per
share. We account for these limitations by providing specific
information regarding the GAAP amounts excluded from non-GAAP net
income and non-GAAP diluted net income per share and evaluating
non-GAAP net income and non-GAAP diluted net income per share
together with net income and diluted net income per share
calculated in accordance with GAAP.
FORTINET, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited, in millions)
|
| |
June 30,
2024 |
|
December 31,
2023 |
| ASSETS |
|
|
|
| CURRENT ASSETS: |
|
|
|
|
Cash and cash equivalents |
$ |
2,203.2 |
|
|
$ |
1,397.9 |
|
|
Short-term investments |
|
1,114.9 |
|
|
|
1,021.5 |
|
|
Marketable equity securities |
|
21.2 |
|
|
|
21.0 |
|
|
Accounts receivable—net |
|
1,083.4 |
|
|
|
1,402.0 |
|
|
Inventory |
|
383.2 |
|
|
|
484.8 |
|
|
Prepaid expenses and other current assets |
|
113.4 |
|
|
|
101.1 |
|
|
Total current assets |
|
4,919.3 |
|
|
|
4,428.3 |
|
| PROPERTY AND
EQUIPMENT—NET |
|
1,242.7 |
|
|
|
1,044.4 |
|
| DEFERRED CONTRACT COSTS |
|
596.9 |
|
|
|
605.6 |
|
| DEFERRED TAX ASSETS |
|
998.5 |
|
|
|
868.8 |
|
| GOODWILL AND OTHER INTANGIBLE
ASSETS—NET |
|
158.1 |
|
|
|
161.8 |
|
| OTHER ASSETS |
|
137.4 |
|
|
|
150.0 |
|
| TOTAL ASSETS |
$ |
8,052.9 |
|
|
$ |
7,258.9 |
|
| LIABILITIES AND
STOCKHOLDERS’ EQUITY (DEFICIT) |
|
|
|
| CURRENT LIABILITIES: |
|
|
|
|
Accounts payable |
$ |
132.1 |
|
|
$ |
204.3 |
|
|
Accrued liabilities |
|
400.6 |
|
|
|
423.7 |
|
|
Accrued payroll and compensation |
|
217.3 |
|
|
|
242.3 |
|
|
Deferred revenue |
|
2,975.3 |
|
|
|
2,848.7 |
|
|
Total current liabilities |
|
3,725.3 |
|
|
|
3,719.0 |
|
| DEFERRED REVENUE |
|
2,920.9 |
|
|
|
2,886.3 |
|
| LONG-TERM DEBT |
|
993.3 |
|
|
|
992.3 |
|
| OTHER LIABILITIES |
|
125.2 |
|
|
|
124.7 |
|
|
Total liabilities |
|
7,764.7 |
|
|
|
7,722.3 |
|
| COMMITMENTS AND
CONTINGENCIES |
|
|
|
| STOCKHOLDERS’ EQUITY
(DEFICIT): |
|
|
|
|
Common stock |
|
0.8 |
|
|
|
0.8 |
|
|
Additional paid-in capital |
|
1,499.0 |
|
|
|
1,416.4 |
|
|
Accumulated other comprehensive loss |
|
(29.0 |
) |
|
|
(18.9 |
) |
|
Accumulated deficit |
|
(1,182.6 |
) |
|
|
(1,861.7 |
) |
|
Total stockholders’ equity (deficit) |
|
288.2 |
|
|
|
(463.4 |
) |
| TOTAL LIABILITIES AND
STOCKHOLDERS’ EQUITY (DEFICIT) |
$ |
8,052.9 |
|
|
$ |
7,258.9 |
|
FORTINET, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited, in millions, except per share
amounts)
|
| |
Three Months Ended |
|
Six Months Ended |
|
|
June 30,
2024 |
|
June 30,
2023 |
|
June 30,
2024 |
|
June 30,
2023 |
| REVENUE: |
|
|
|
|
|
|
|
|
Product |
$ |
451.9 |
|
|
$ |
472.6 |
|
|
$ |
860.8 |
|
|
$ |
973.3 |
|
|
Service |
|
982.4 |
|
|
|
820.2 |
|
|
|
1,926.8 |
|
|
|
1,581.8 |
|
|
Total revenue |
|
1,434.3 |
|
|
|
1,292.8 |
|
|
|
2,787.6 |
|
|
|
2,555.1 |
|
| COST OF REVENUE: |
|
|
|
|
|
|
|
|
Product |
|
155.1 |
|
|
|
174.5 |
|
|
|
337.9 |
|
|
|
368.1 |
|
|
Service |
|
119.9 |
|
|
|
121.3 |
|
|
|
241.8 |
|
|
|
235.5 |
|
|
Total cost of revenue |
|
275.0 |
|
|
|
295.8 |
|
|
|
579.7 |
|
|
|
603.6 |
|
| GROSS PROFIT: |
|
|
|
|
|
|
|
|
Product |
|
296.8 |
|
|
|
298.1 |
|
|
|
522.9 |
|
|
|
605.2 |
|
|
Service |
|
862.5 |
|
|
|
698.9 |
|
|
|
1,685.0 |
|
|
|
1,346.3 |
|
|
Total gross profit |
|
1,159.3 |
|
|
|
997.0 |
|
|
|
2,207.9 |
|
|
|
1,951.5 |
|
| OPERATING EXPENSES: |
|
|
|
|
|
|
|
|
Research and development |
|
165.4 |
|
|
|
153.3 |
|
|
|
338.4 |
|
|
|
304.4 |
|
|
Sales and marketing |
|
501.3 |
|
|
|
515.9 |
|
|
|
1,002.4 |
|
|
|
994.2 |
|
|
General and administrative |
|
56.6 |
|
|
|
49.9 |
|
|
|
111.0 |
|
|
|
102.7 |
|
|
Gain on intellectual property matter |
|
(1.2 |
) |
|
|
(1.1 |
) |
|
|
(2.3 |
) |
|
|
(2.3 |
) |
|
Total operating expenses |
|
722.1 |
|
|
|
718.0 |
|
|
|
1,449.5 |
|
|
|
1,399.0 |
|
| OPERATING INCOME |
|
437.2 |
|
|
|
279.0 |
|
|
|
758.4 |
|
|
|
552.5 |
|
| INTEREST INCOME |
|
38.3 |
|
|
|
31.6 |
|
|
|
70.5 |
|
|
|
52.2 |
|
| INTEREST EXPENSE |
|
(5.0 |
) |
|
|
(5.2 |
) |
|
|
(10.1 |
) |
|
|
(10.2 |
) |
| OTHER EXPENSE—NET |
|
(2.2 |
) |
|
|
(6.2 |
) |
|
|
(5.1 |
) |
|
|
(4.2 |
) |
| INCOME BEFORE INCOME TAXES AND
LOSS FROM EQUITY METHOD INVESTMENTS |
|
468.3 |
|
|
|
299.2 |
|
|
|
813.7 |
|
|
|
590.3 |
|
| PROVISION FOR INCOME
TAXES |
|
76.5 |
|
|
|
27.6 |
|
|
|
116.0 |
|
|
|
48.9 |
|
| LOSS FROM EQUITY METHOD
INVESTMENTS |
|
(12.0 |
) |
|
|
(5.3 |
) |
|
|
(18.6 |
) |
|
|
(27.4 |
) |
| NET INCOME |
$ |
379.8 |
|
|
$ |
266.3 |
|
|
$ |
679.1 |
|
|
$ |
514.0 |
|
| Net income per share: |
|
|
|
|
|
|
|
|
Basic |
$ |
0.50 |
|
|
$ |
0.34 |
|
|
$ |
0.89 |
|
|
$ |
0.66 |
|
|
Diluted |
$ |
0.49 |
|
|
$ |
0.33 |
|
|
$ |
0.88 |
|
|
$ |
0.65 |
|
| Weighted-average shares
outstanding: |
|
|
|
|
|
|
|
|
Basic |
|
763.8 |
|
|
|
785.0 |
|
|
|
763.1 |
|
|
|
784.1 |
|
|
Diluted |
|
769.9 |
|
|
|
795.9 |
|
|
|
770.2 |
|
|
|
794.7 |
|
FORTINET, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH
FLOWS
(Unaudited, in millions)
|
| |
Six Months Ended |
|
|
June 30,
2024 |
|
June 30,
2023 |
| CASH FLOWS FROM OPERATING
ACTIVITIES: |
|
|
|
|
Net income |
$ |
679.1 |
|
|
$ |
514.0 |
|
|
Adjustments to reconcile net income to net cash provided by
operating activities: |
|
|
|
|
Stock-based compensation |
|
126.2 |
|
|
|
121.3 |
|
|
Amortization of deferred contract costs |
|
144.7 |
|
|
|
127.9 |
|
|
Depreciation and amortization |
|
57.8 |
|
|
|
54.9 |
|
|
Amortization of investment discounts |
|
(24.9 |
) |
|
|
(5.9 |
) |
|
Loss from equity method investments |
|
18.6 |
|
|
|
27.4 |
|
|
Other |
|
7.0 |
|
|
|
8.8 |
|
|
Changes in operating assets and liabilities, net of impact of
business combination: |
|
|
|
|
Accounts receivable—net |
|
318.9 |
|
|
|
179.0 |
|
|
Inventory |
|
85.2 |
|
|
|
(130.2 |
) |
|
Prepaid expenses and other current assets |
|
(12.3 |
) |
|
|
(35.4 |
) |
|
Deferred contract costs |
|
(136.0 |
) |
|
|
(168.5 |
) |
|
Deferred tax assets |
|
(130.3 |
) |
|
|
(161.8 |
) |
|
Other assets |
|
(7.6 |
) |
|
|
10.8 |
|
|
Accounts payable |
|
(67.2 |
) |
|
|
(3.6 |
) |
|
Accrued liabilities |
|
(24.9 |
) |
|
|
168.3 |
|
|
Accrued payroll and compensation |
|
(24.3 |
) |
|
|
6.0 |
|
|
Other liabilities |
|
0.7 |
|
|
|
(9.7 |
) |
|
Deferred revenue |
|
161.7 |
|
|
|
489.3 |
|
|
Net cash provided by operating activities |
|
1,172.4 |
|
|
|
1,192.6 |
|
| CASH FLOWS FROM INVESTING
ACTIVITIES: |
|
|
|
|
Purchases of investments |
|
(974.3 |
) |
|
|
(804.6 |
) |
|
Maturities of investments |
|
904.6 |
|
|
|
445.1 |
|
|
Purchases of property and equipment |
|
(245.0 |
) |
|
|
(107.1 |
) |
|
Payments made in connection with business combination, net of cash
acquired |
|
(5.7 |
) |
|
|
— |
|
|
Other |
|
— |
|
|
|
0.1 |
|
|
Net cash used in investing activities |
|
(320.4 |
) |
|
|
(466.5 |
) |
| CASH FLOWS FROM FINANCING
ACTIVITIES: |
|
|
|
|
Proceeds from issuance of common stock |
|
19.6 |
|
|
|
29.3 |
|
|
Taxes paid related to net share settlement of equity awards |
|
(63.1 |
) |
|
|
(59.7 |
) |
|
Other |
|
(0.8 |
) |
|
|
(1.0 |
) |
|
Net cash used in financing activities |
|
(44.3 |
) |
|
|
(31.4 |
) |
| EFFECT OF EXCHANGE RATE
CHANGES ON CASH AND CASH EQUIVALENTS |
|
(2.4 |
) |
|
|
(1.3 |
) |
| NET INCREASE IN CASH AND CASH
EQUIVALENTS |
|
805.3 |
|
|
|
693.4 |
|
| CASH AND CASH
EQUIVALENTS—Beginning of period |
|
1,397.9 |
|
|
|
1,682.9 |
|
| CASH AND CASH EQUIVALENTS—End
of period |
$ |
2,203.2 |
|
|
$ |
2,376.3 |
|
Reconciliations of non-GAAP results of
operations measures to the nearest comparable GAAP
measures
(Unaudited, in millions, except per share
amounts)
Reconciliation of GAAP operating income to non-GAAP
operating income, operating margin, net income and diluted net
income per share
| |
Three Months Ended |
|
|
June 30,
2024 |
|
June 30,
2023 |
| Reconciliation of
non-GAAP operating income: |
|
|
|
|
GAAP operating income |
$ |
437.2 |
|
|
$ |
279.0 |
|
| GAAP operating
margin |
|
30.5 |
% |
|
|
21.6 |
% |
| Add
back: |
|
|
|
|
Stock‐based compensation |
|
64.3 |
|
|
|
65.7 |
|
|
Amortization of acquired intangible assets |
|
3.3 |
|
|
|
4.5 |
|
|
Gain on intellectual property matter |
|
(1.2 |
) |
|
|
(1.1 |
) |
| Non‐GAAP operating income |
$ |
503.6 |
|
|
$ |
348.1 |
|
| Non‐GAAP operating
margin |
|
35.1 |
% |
|
|
26.9 |
% |
| |
|
|
|
| Reconciliation of
non-GAAP net income: |
|
|
|
| GAAP net income |
$ |
379.8 |
|
|
$ |
266.3 |
|
| Add
back: |
|
|
|
|
Stock‐based compensation |
|
64.3 |
|
|
|
65.7 |
|
|
Amortization of acquired intangible assets |
|
3.3 |
|
|
|
4.5 |
|
|
Gain on intellectual property matter |
|
(1.2 |
) |
|
|
(1.1 |
) |
|
Tax adjustment (a) |
|
(14.3 |
) |
|
|
(35.0 |
) |
|
Non-cash charge on equity method investment (b) |
|
8.0 |
|
|
|
— |
|
| Non-GAAP net income |
$ |
439.9 |
|
|
$ |
300.4 |
|
| |
|
|
|
| Non-GAAP net income
per share, diluted |
|
|
|
| Non-GAAP net income |
$ |
439.9 |
|
|
$ |
300.4 |
|
|
Non-GAAP shares used in diluted net income per share
calculations |
|
769.9 |
|
|
|
795.9 |
|
| Non-GAAP net income per share,
diluted |
$ |
0.57 |
|
|
$ |
0.38 |
|
| |
|
|
|
| Reconciliation of
non-GAAP net income per share, diluted |
|
|
|
| GAAP net income per share |
$ |
0.49 |
|
|
$ |
0.33 |
|
| Add
back: |
|
|
|
|
Non-GAAP adjustments to net income per share |
|
0.08 |
|
|
|
0.05 |
|
| Non-GAAP net income per share,
diluted |
$ |
0.57 |
|
|
$ |
0.38 |
|
(a) Non-GAAP financial information is adjusted to an effective
tax rate of 17% in the three months ended June 30, 2024 and
2023, respectively, on a non-GAAP basis, which differs from the
GAAP effective tax rate.
(b) To exclude an $8.0 million non-cash charge of impairment
on our equity method investment in Linksys.
Reconciliation of net cash provided by operating
activities to free cash flow
| |
Three Months Ended |
| |
June 30,
2024 |
|
June 30,
2023 |
|
Net cash provided by operating activities |
$ |
342.0 |
|
|
$ |
515.1 |
|
|
Less: Purchases of property and equipment |
|
(23.1 |
) |
|
|
(76.8 |
) |
| Free cash flow |
$ |
318.9 |
|
|
$ |
438.3 |
|
| Net cash used in investing
activities |
$ |
(50.1 |
) |
|
$ |
(424.1 |
) |
| Net cash used in financing
activities |
$ |
(14.0 |
) |
|
$ |
(17.7 |
) |
Reconciliation of total revenue to total billings
| |
Three Months Ended |
| |
June 30,
2024 |
|
June 30,
2023 |
|
Total revenue |
$ |
1,434.3 |
|
$ |
1,292.8 |
|
Add: Change in deferred revenue |
|
106.3 |
|
|
247.7 |
| Total billings |
$ |
1,540.6 |
|
$ |
1,540.5 |
|
Investor Contact: |
|
Media Contact: |
| |
|
|
| Aaron Ovadia |
|
Michelle Zimmermann |
| Fortinet, Inc. |
|
Fortinet, Inc. |
| 408-235-7700 |
|
408-235-7700 |
| investors@fortinet.com |
|
pr@fortinet.com |
Fortinet (LSE:0IR9)
Graphique Historique de l'Action
De Nov 2024 à Déc 2024
Fortinet (LSE:0IR9)
Graphique Historique de l'Action
De Déc 2023 à Déc 2024
