Summary
Fortinet, Inc. reported solid financial performance for the nine months ending September 30, 2017, with total revenue reaching $1.08 billion, an 18% increase year-over-year. This growth was primarily driven by a strong performance in service revenue, which increased by 27% to $663.2 million, outpacing product revenue growth of 7%. The company demonstrated significant operational improvements, with operating income turning positive to $67.6 million for the nine-month period, a substantial improvement from an operating loss of $2.2 million in the prior year. This profitability improvement was supported by an increase in gross margin to 74.0% and effective management of operating expenses, which decreased as a percentage of revenue. The company also maintained a strong liquidity position, with total cash, cash equivalents, and investments growing to $1.52 billion, and generated robust operating cash flow of $436.9 million. Fortinet continues to invest in research and development and sales and marketing to fuel future growth while also actively returning capital to shareholders through a significant share repurchase program.
Financial Highlights
50 data points| Revenue | $374.20M |
| Cost of Revenue | $93.60M |
| Gross Profit | $280.60M |
| R&D Expenses | $53.50M |
| Operating Expenses | $246.90M |
| Operating Income | $33.70M |
| Net Income | $26.70M |
| EPS (Basic) | $0.03 |
| EPS (Diluted) | $0.03 |
| Shares Outstanding (Basic) | 877.50M |
| Shares Outstanding (Diluted) | 895.00M |
Key Highlights
- 1Total revenue grew 18% year-over-year to $1.08 billion for the first nine months of 2017, driven by strong service revenue growth (+27%).
- 2Operating income improved significantly, turning positive to $67.6 million for the nine-month period, compared to a loss of $2.2 million in the prior year.
- 3Total gross margin increased to 74.0% for the nine-month period, primarily due to higher-margin service revenue.
- 4Cash, cash equivalents, and investments increased by 16% to $1.52 billion as of September 30, 2017.
- 5Operating cash flow was strong, generating $436.9 million for the nine months ended September 30, 2017, a 79% increase year-over-year.
- 6Deferred revenue continued to grow, reaching $1.22 billion, indicating strong future revenue potential.
- 7The company repurchased $124.0 million of its common stock during the first nine months of 2017 and had $365.2 million available under its share repurchase program as of September 30, 2017.