Fortinet, Inc. Quarterly Report for Q2 Ended Jun 30, 2014

Summary

Fortinet, Inc. (FTNT) reported strong year-over-year revenue growth for the second quarter of 2014, with total revenue increasing by 25% to $184.1 million. This growth was driven by both product revenue, which rose 28% to $85.4 million, and services and other revenue, which increased 22% to $98.7 million. The company demonstrated robust operational cash flow generation, with $104.7 million for the first six months of the year, a 39% increase compared to the prior year. The balance sheet shows a healthy cash position with $203.9 million in cash and cash equivalents and $706.6 million in short-term and long-term investments as of June 30, 2014. Deferred revenue also saw a significant increase, up $47.6 million to $480.2 million, indicating strong future revenue potential from subscriptions and support services. The company also continued its share repurchase program, repurchasing $22.5 million of common stock in the first six months of 2014.

Key Highlights

• 1Total revenue for the second quarter of 2014 increased by 25% year-over-year to $184.1 million.
• 2Product revenue grew 28% year-over-year to $85.4 million, while Services and other revenue increased 22% to $98.7 million.
• 3Operating cash flow for the first six months of 2014 increased by 39% to $104.7 million.
• 4The company's cash, cash equivalents, and investments totaled $910.6 million as of June 30, 2014.
• 5Deferred revenue increased by $47.6 million to $480.2 million, signaling strong future revenue recognition.
• 6Fortinet repurchased $22.5 million of its common stock under its share repurchase program during the first six months of 2014.
• 7The company experienced increased demand for its high-end FortiGate products, which represented 40% of billings in the second quarter.

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