Summary
Fortinet, Inc. reported strong financial results for the third quarter and first nine months of 2020, showcasing robust revenue growth driven by both product and service segments. Total revenue increased by 19% year-over-year for the quarter to $651.1 million and by 20% for the nine months to $1.85 billion. This growth was supported by a 14% increase in product revenue and a significant 22% increase in service revenue for both periods. The company demonstrated improving profitability with operating income up 26% for the quarter and 58% for the nine months, reaching $126.9 million and $362.4 million, respectively. This was also aided by favorable gross margins, which improved to 78.6% for the quarter. Fortinet's balance sheet remains strong, with total cash, cash equivalents, and investments standing at $1.77 billion as of September 30, 2020. The company continued its commitment to shareholder returns by repurchasing $1.05 billion of its common stock during the first nine months of the year, while also managing its deferred revenue effectively, which grew by 13% to $2.39 billion. The company also reported a significant IP matter gain of $39 million for the nine-month period. Despite a challenging economic environment due to the COVID-19 pandemic, Fortinet has shown resilience and sustained growth, with management expressing confidence in its ability to navigate future uncertainties.
Financial Highlights
55 data points| Revenue | $651.10M |
| Cost of Revenue | $139.20M |
| Gross Profit | $511.90M |
| R&D Expenses | $90.00M |
| Operating Expenses | $385.00M |
| Operating Income | $126.90M |
| Interest Expense | $0 |
| Net Income | $123.40M |
| EPS (Basic) | $0.15 |
| EPS (Diluted) | $0.15 |
| Shares Outstanding (Basic) | 810.50M |
| Shares Outstanding (Diluted) | 828.00M |
Key Highlights
- 1Total revenue increased by 19% to $651.1 million in Q3 2020 and by 20% to $1.85 billion in the first nine months of 2020, year-over-year.
- 2Service revenue showed strong growth, increasing by 22% in both the three and nine-month periods.
- 3Operating income grew by 26% to $126.9 million for the quarter and by 58% to $362.4 million for the nine months, indicating improved profitability.
- 4Gross margin improved to 78.6% in Q3 2020, up from 77.4% in the prior year's quarter.
- 5The company ended the period with a strong liquidity position, holding $1.77 billion in cash, cash equivalents, and investments.
- 6Fortinet repurchased $1.05 billion of its common stock during the first nine months of 2020, demonstrating commitment to shareholder value.
- 7Deferred revenue increased by 13% to $2.39 billion as of September 30, 2020, reflecting strong future revenue potential.