Summary
Fortinet, Inc. reported total revenue of $135.8 million for the first quarter of 2013, a 16% increase year-over-year. This growth was primarily driven by a 22% increase in services revenue, reaching $75.9 million, while product revenue grew by 9% to $58.0 million. Despite revenue growth, net income decreased to $12.2 million from $14.2 million in the prior year's quarter, resulting in diluted EPS of $0.07 compared to $0.09. This decline in profitability can be attributed to increased operating expenses, particularly in sales and marketing and research and development, as the company continued to invest in headcount and product innovation. The company also reported a decrease in cash flow from operations to $38.1 million from $48.5 million in the prior year's quarter, primarily due to changes in working capital. However, Fortinet ended the quarter with a strong cash position of $97.4 million and total cash, cash equivalents, and investments of $782.5 million. The company experienced a slowdown in sales to the U.S. service provider sector and faced macroeconomic challenges in Latin America and EMEA. Despite these headwinds, Fortinet completed the acquisition of Coyote Point Systems, Inc. in March 2013 to expand its product portfolio. The company continues to focus on expanding its sales force and product development to drive future growth.
Financial Highlights
51 data points| Revenue | $135.82M |
| Cost of Revenue | $39.13M |
| Gross Profit | $96.69M |
| R&D Expenses | $23.33M |
| Operating Expenses | $81.30M |
| Operating Income | $15.39M |
| Net Income | $12.25M |
| EPS (Basic) | $0.02 |
| EPS (Diluted) | $0.01 |
| Shares Outstanding (Basic) | 806.41M |
| Shares Outstanding (Diluted) | 839.12M |
Key Highlights
- 1Total revenue increased by 16% to $135.8 million in Q1 2013 compared to Q1 2012.
- 2Services revenue showed strong growth, up 22% year-over-year to $75.9 million, while product revenue increased by 9% to $58.0 million.
- 3Net income decreased by approximately 14% to $12.2 million, with diluted EPS falling to $0.07 from $0.09 in the prior year.
- 4Operating expenses increased by 20% to $81.3 million, driven by investments in sales and marketing and R&D headcount.
- 5Cash flow from operating activities decreased by 21% to $38.1 million.
- 6Total cash, cash equivalents, and investments remained strong at $782.5 million.
- 7Acquired Coyote Point Systems, Inc. in March 2013 to expand its application delivery solutions.