Summary
Fortinet, Inc. reported strong financial performance for the third quarter and the first nine months of 2021, demonstrating robust revenue growth driven by both product and service segments. Total revenue increased by 33% year-over-year for the quarter and 29% for the nine-month period, reflecting broad-based demand across its cybersecurity solutions and global markets. Product revenue saw a significant surge of 51% for the quarter and 40% for the nine months, indicating strong demand for its core FortiGate products and other security fabric platform offerings. The company maintained healthy gross margins, although there was a slight compression due to a shift in revenue mix towards lower-margin product sales. Operating expenses increased in absolute terms, driven by investments in R&D and Sales & Marketing to support growth, but as a percentage of revenue, they remained relatively stable or decreased when excluding certain one-off IP gains from the prior year. Fortinet also generated substantial operating cash flow and maintained a strong liquidity position with over $3.4 billion in cash, cash equivalents, investments, and marketable equity securities. The company also announced a significant $1.25 billion increase to its share repurchase program.
Financial Highlights
57 data points| Revenue | $867.20M |
| Cost of Revenue | $211.20M |
| Gross Profit | $656.00M |
| R&D Expenses | $107.80M |
| Operating Expenses | $489.60M |
| Operating Income | $166.40M |
| Interest Expense | $4.60M |
| Net Income | $163.10M |
| EPS (Basic) | $0.20 |
| EPS (Diluted) | $0.19 |
| Shares Outstanding (Basic) | 817.70M |
| Shares Outstanding (Diluted) | 838.60M |
Key Highlights
- 1Total revenue grew 33% year-over-year in Q3 2021 to $867.2 million, and 29% for the first nine months of 2021 to $2.38 billion.
- 2Product revenue showed particularly strong growth, increasing by 51% year-over-year in Q3 2021 to $337.1 million, and 40% for the first nine months to $876.1 million.
- 3Service revenue increased by 24% year-over-year in Q3 2021 to $530.1 million, and 23% for the first nine months to $1.50 billion.
- 4Operating income increased by 31% year-over-year in Q3 2021 to $166.4 million, with operating income as a percentage of revenue remaining flat at 19%.
- 5The company generated $1.13 billion in cash flow from operating activities for the first nine months of 2021, a 44% increase year-over-year.
- 6As of September 30, 2021, Fortinet held $3.42 billion in cash, cash equivalents, investments, and marketable equity securities.
- 7Fortinet repurchased $200.4 million of its common stock during the first nine months of 2021 and expanded its share repurchase program by $1.25 billion.