Summary
Fortinet, Inc. (FTNT) reported strong financial results for the nine months and third quarter ended September 30, 2019. Total revenue grew 21% year-over-year for the quarter and 19% for the nine-month period, driven by both product and service revenue. The company's Security Fabric platform continues to perform well, with significant growth in FortiGuard security subscriptions and FortiCare technical support. Operating income saw substantial increases, up 59% for the quarter and 55% for the nine months, indicating improved operational efficiency. The company maintains a healthy balance sheet with $2.14 billion in cash, cash equivalents, and investments. Deferred revenue, a key indicator of future revenue, increased by 15% to $1.95 billion, highlighting strong future revenue potential from services. Fortinet generated robust operating cash flow of $617.6 million for the nine months ended September 30, 2019, a 35% increase year-over-year, demonstrating strong cash generation capabilities. The company also continued its share repurchase program, repurchasing $117.4 million of common stock during the nine-month period.
Financial Highlights
52 data points| Revenue | $548.10M |
| Cost of Revenue | $124.10M |
| Gross Profit | $424.00M |
| R&D Expenses | $69.90M |
| Operating Expenses | $323.40M |
| Operating Income | $100.60M |
| Net Income | $80.20M |
| EPS (Basic) | $0.09 |
| EPS (Diluted) | $0.09 |
| Shares Outstanding (Basic) | 856.50M |
| Shares Outstanding (Diluted) | 874.00M |
Key Highlights
- 1Total revenue for the third quarter of 2019 increased by 21% year-over-year to $547.5 million, with service revenue showing strong growth of 21%.
- 2Product revenue also saw a healthy increase of 20% year-over-year for the quarter, reaching $197.1 million.
- 3Operating income surged by 59% year-over-year to $100.0 million in the third quarter, demonstrating improved profitability.
- 4Net income increased to $79.8 million ($0.46 per diluted share) for the third quarter, compared to $58.7 million ($0.33 per diluted share) in the prior year.
- 5Cash, cash equivalents, and investments grew by 25% to $2.14 billion as of September 30, 2019.
- 6Deferred revenue, representing future recognized revenue, increased by 15% to $1.95 billion, indicating strong future revenue potential.
- 7Net cash provided by operating activities for the first nine months of 2019 was $617.6 million, a 35% increase compared to the same period in 2018.