Latest news with #KenXie
Techday NZ
6 days ago
- Business
- Techday NZ
Fortinet lifts outlook as quarterly revenue climbs to USD $1.63bn
Fortinet has reported financial results for the second quarter ended 30 June 2025, showing a 14 per cent year-on-year increase in revenue to USD $1.63 billion and a raised outlook for full-year billings by USD $100 million. Second quarter highlights The company's billings for the quarter reached USD $1.78 billion, a 15 per cent increase compared to the corresponding period last year. Key businesses within Fortinet's portfolio showed notable performance, including unified secure access service edge (SASE) annual recurring revenue (ARR), which grew by 22 per cent year over year, and security operations ARR, which increased by 35 per cent. Fortinet reported a generally accepted accounting principles (GAAP) operating margin of 28 per cent and a non-GAAP operating margin of 33 per cent for the quarter. Executive commentary "Our strong second quarter performance and consistent track record of growth are a direct result of our continued innovation and customer-first strategy, enabling us to beat our billings guidance for the quarter and raise our full year billings outlook. We are the industry leader in network security, with the most deployed firewalls worldwide, a New-Generation SASE Firewall, and recognised leadership in the 2025 Gartner Magic QuadrantTM for SASE Platforms. This recognition, along with our strong business momentum, financial outlook, innovation, and leadership across five separate network security Magic QuadrantTM reports, underscores the strength of our AI-driven security approach and the strategic advantage of our unified FortiOS operating system." Ken Xie, Founder, Chairman and Chief Executive Officer of Fortinet, reflected on the quarterly performance using the above statement. Industry recognition and technology developments Fortinet was recognised as a Leader in the 2025 Gartner Magic Quadrant for SASE Platforms and achieved the number one position in the Critical Capabilities for SASE Platforms report for the Secure Branch Network Modernisation use case. The company was also the only vendor mentioned in five distinct network security Magic Quadrant reports in 2025. The company expanded its FortiCloud portfolio with three new natively integrated services: FortiIdentity, FortiDrive and FortiConnect. In addition to this, Fortinet was named the Overall Leader for the third consecutive year in the Westlands Advisory IT/OT Network Protection Platform Navigator 2025 report and was recognised as a Leader in the Gartner Magic Quadrant for Enterprise Wired and Wireless LAN Infrastructure for the second year running. Fortinet was also named a Gartner Peer Insights Customers' Choice for SD-WAN for the sixth year in a row and for Endpoint Protection for the third year in succession. The company stated that it has crossed 1,400 issued patents worldwide, including over 500 issued and pending artificial intelligence-related patents, attributed to its research and development investments. Financial guidance Looking forward to the third quarter of 2025, Fortinet expects revenue in the range of USD $1.67 billion to USD $1.73 billion and billings between USD $1.76 billion and USD $1.84 billion. The company anticipates a non-GAAP gross margin of between 80.0 per cent and 81.0 per cent, with an operating margin range of 32.5 per cent to 33.5 per cent. Diluted non-GAAP net income per share is projected to be between USD $0.62 and USD $0.64, based on a non-GAAP effective tax rate of 18 per cent and a diluted share count of 772 million to 776 million shares. For the entire fiscal year 2025, projected revenue is between USD $6.675 billion and USD $6.825 billion, with service revenue expected to total between USD $4.55 billion and USD $4.65 billion. Fortinet forecasts billings in the range of USD $7.325 billion to USD $7.475 billion. Non-GAAP gross margin is anticipated to be from 79.0 per cent to 81.0 per cent, and non-GAAP operating margin from 32.0 per cent to 33.5 per cent. Diluted non-GAAP net income per share guidance is set between USD $2.47 and USD $2.53, assuming a non-GAAP effective tax rate of 18 per cent and a diluted share count of 773 million to 777 million. The company explained that its guidance on non-GAAP financial measures excludes certain items, including stock-based compensation and amortisation of acquired intangible assets, among others, due to the inherent uncertainty or unpredictability of these items.
Yahoo
6 days ago
- Business
- Yahoo
Fortinet signals strength in SASE and AI, but market looks for more
-- Shares of Fortinet Inc (NASDAQ:FTNT) edged down 3.7% in after-hours trading Wednesday, as investors weighed strong second-quarter earnings against continued macroeconomic caution and modest top-line momentum. The pullback came despite the company raising its full-year billings outlook and maintaining healthy margin guidance. The cybersecurity firm reported adjusted earnings per share of $0.64 for the quarter ended June 30, exceeding Wall Street expectations of $0.59. Revenue totaled $1.63 billion, in line with consensus estimates, reflecting stable uptake of both products and high-margin services. Billings outperformed guidance, and Fortinet now expects full-year billings between $7.325 billion and $7.475 billion, a bullish signal for forward revenue growth. It guided for gross and operating margins as high as 81% and 33.5%, respectively, demonstrating continued cost discipline and scalability. 'Our strong second quarter performance and consistent track record of growth are a direct result of our continued innovation and customer-first strategy,' said CEO Ken Xie. 'We are the industry leader in network security... underscores the strength of our AI-driven security approach and the strategic advantage of our unified FortiOS operating system.' Fortinet has continued to strengthen its position in converged networking and security, with recent gains in Secure Access Service Edge (SASE) and Security Operations. The company's recognition in five distinct Gartner (NYSE:IT) Magic Quadrant™ reports and expansion of the FortiCloud platform, with new services such as FortiIdentity and FortiConnect, highlight its commitment to innovation-driven differentiation. Despite a premium valuation and shares underperforming in recent weeks, investor sentiment will likely hinge on Fortinet's ability to accelerate revenue growth amid heightened competition. With firewall upgrades expected to ramp and AI innovation remaining a focus, Fortinet remains well-positioned but must execute against elevated expectations. Related articles Fortinet signals strength in SASE and AI, but market looks for more If Powell goes, does Fed trust go with him? 7 Undervalued Stocks on the Rise With 50%+ Upside Potential Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
6 days ago
- Business
- Yahoo
Fortinet Reports Second Quarter 2025 Financial Results
Highlights Revenue grew 14% year over year to $1.63 billion Billings grew 15% year over year to $1.78 billion1 Unified SASE ARR up 22% and Security Operations ARR up 35%, year over year2 GAAP operating margin of 28% Non-GAAP operating margin of 33%1 Raised 2025 full year billings guidance midpoint by $100 million SUNNYVALE, Calif., Aug. 06, 2025 (GLOBE NEWSWIRE) -- Fortinet® (Nasdaq: FTNT), a global cybersecurity leader driving the convergence of networking and security, today announced financial results for the second quarter ended June 30, 2025. 'Our strong second quarter performance and consistent track record of growth are a direct result of our continued innovation and customer-first strategy, enabling us to beat our billings guidance for the quarter and raise our full year billings outlook,' said Ken Xie, Founder, Chairman and Chief Executive Officer of Fortinet. 'We are the industry leader in network security, with the most deployed firewalls worldwide, a New-Generation SASE Firewall, and recognized leadership in the 2025 Gartner® Magic Quadrant™ for SASE Platforms. This recognition, along with our strong business momentum, financial outlook, innovation, and leadership across five separate network security Magic Quadrant™ reports, underscores the strength of our AI-driven security approach and the strategic advantage of our unified FortiOS operating system.' Recent Market Leadership Highlights Recognized as a Leader in the 2025 Gartner® Magic Quadrant™ for SASE Platforms, #1 in the Critical Capabilities for SASE Platforms report for the Secure Branch Network Modernization use case, and the only vendor in five different network security Magic Quadrant™ reports. Expanded FortiCloud with three new natively integrated services: FortiIdentity, FortiDrive, and FortiConnect. Recognized as the Overall Leader in the Westlands Advisory IT/OT Network Protection Platform Navigator 2025™ report for the third time in a row. Named a Leader in the 2025 Gartner® Magic Quadrant™ for Enterprise Wired and Wireless LAN Infrastructure for the second year in a row. Recognized as a Gartner Peer Insights™ Customers' Choice for SD-WAN for the sixth consecutive year and for Endpoint Protection for the third consecutive year. Crossed 1,400 issued patents worldwide, and over 500 issued and pending AI patents, driven by R&D investments. Guidance For the third quarter of 2025, Fortinet currently expects: Revenue in the range of $1.670 billion to $1.730 billion Billings in the range of $1.760 billion to $1.840 billion Non-GAAP gross margin in the range of 80.0% to 81.0% Non-GAAP operating margin in the range of 32.5% to 33.5% Diluted non-GAAP net income per share in the range of $0.62 to $0.64, assuming a non-GAAP effective tax rate of 18%. This assumes a diluted share count of 772 million to 776 million. For the fiscal year 2025, Fortinet currently expects: Revenue in the range of $6.675 billion to $6.825 billion Service revenue in the range of $4.550 billion to $4.650 billion Billings in the range of $7.325 billion to $7.475 billion Non-GAAP gross margin in the range of 79.0% to 81.0% Non-GAAP operating margin in the range of 32.0% to 33.5% Diluted non-GAAP net income per share in the range of $2.47 to $2.53, assuming a non-GAAP effective tax rate of 18%. This assumes a diluted share count of 773 million to 777 million. These statements are forward looking and actual results may differ materially. Refer to the Forward-Looking Statements section below for information on the factors that could cause our actual results to differ materially from these forward-looking statements. Our guidance with respect to non-GAAP financial measures excludes stock-based compensation, amortization of acquired intangible assets, gain on intellectual property matters, gain on bargain purchase related to acquisition, gain from an equity method investment and a tax adjustment required for an effective tax rate on a non-GAAP basis, which differs from the GAAP effective tax rate. We have not reconciled our guidance with respect to non-GAAP financial measures to the corresponding GAAP measures because certain items that impact these measures are uncertain or out of our control, or cannot be reasonably predicted. Accordingly, a reconciliation of these non-GAAP financial measures to the corresponding GAAP measures is not available without unreasonable effort. Conference Call Details Fortinet will host a conference call today at 1:30 p.m. Pacific Time (4:30 p.m. Eastern Time) to discuss the earnings results. A live webcast of the conference call and supplemental slides will be accessible from the Investor Relations page of Fortinet's website at and a replay will be archived and accessible at Third Quarter 2025 Conference Participation Schedule: Deutsche Bank Technology ConferenceAugust 27, 2025 Citi Global TMT ConferenceSeptember 5, 2025 Goldman Sachs Communacopia + Technology ConferenceSeptember 11, 2025 Members of Fortinet's management team are expected to present at these conferences and discuss the latest company strategies and initiatives. Fortinet's conference presentations are expected to be available via webcast on the company's website. To access the most updated information, pre-register and listen to the webcast of each event, please visit the Investor Presentation & Events page of Fortinet's website at The schedule is subject to change. About Fortinet ( Fortinet (Nasdaq: FTNT) is a driving force in the evolution of cybersecurity and the convergence of networking and security. Our mission is to secure people, devices and data everywhere, and today we deliver cybersecurity everywhere our customers need it with the largest integrated portfolio of over 50 enterprise-grade products. Well over half a million customers trust Fortinet's solutions, which are among the most deployed, most patented and most validated in the industry. The Fortinet Training Institute, one of the largest and broadest training programs in the industry, is dedicated to making cybersecurity training and new career opportunities available to everyone. Collaboration with esteemed organizations from both the public and private sectors, including Computer Emergency Response Teams ('CERTs'), government entities, and academia, is a fundamental aspect of Fortinet's commitment to enhance cyber resilience globally. FortiGuard Labs, Fortinet's elite threat intelligence and research organization, develops and utilizes leading-edge machine learning and AI technologies to provide customers with timely and consistently top-rated protection and actionable threat intelligence. Learn more at the Fortinet Blog or FortiGuard Labs. Forward-Looking Statements This press release contains forward-looking statements that involve risks and uncertainties. These forward-looking statements include statements regarding any indications related to future growth and market share gains, our strategy going forward, and guidance and expectations around future financial results, including guidance and expectations for the third quarter and full year 2025, and any statements regarding our market opportunity and market size, and business momentum. Although we attempt to be accurate in making forward-looking statements, it is possible that future circumstances might differ from the assumptions on which such statements are based such that actual results are materially different from our forward-looking statements in this release. Important factors that could cause results to differ materially from the statements herein include the following: general economic risks, including those caused by economic challenges, a possible economic downturn or recession and the effects of inflation or stagflation, rising interest rates or reduced information technology spending; supply chain challenges; negative impacts from the ongoing war in Ukraine and its related macroeconomic effects and our decision to reduce operations in Russia; competitiveness in the security market; the dynamic nature of the security market and its products and services; specific economic risks worldwide and in different geographies, and among different customer segments; uncertainty regarding demand and increased business and renewals from existing customers; sales execution risks, including risks in connection with the timing and completion of large strategic deals; uncertainties around continued success in sales growth and market share gains; uncertainties in market opportunities and the market size; actual or perceived vulnerabilities in our supply chain, products or services, and any actual or perceived breach of our network or our customers' networks; longer sales cycles, particularly for larger enterprise, service providers, government and other large organization customers; the effectiveness of our salesforce and failure to convert sales pipeline into final sales; risks associated with successful implementation of multiple integrated software products and other product functionality risks; risks associated with integrating acquisitions and changes in circumstances and plans associated therewith, including, among other risks, changes in plans related to product and services integrations, product and services plans and sales strategies; sales and marketing execution risks; execution risks around new product development and introductions and innovation; litigation and disputes and the potential cost, distraction and damage to sales and reputation caused thereby or by other factors; cybersecurity threats, breaches and other disruptions; market acceptance of new products and services; the ability to attract and retain personnel; changes in strategy; risks associated with management of growth; lengthy sales and implementation cycles, particularly in larger organizations; technological changes that make our products and services less competitive, including advances in artificial intelligence; risks associated with the adoption of, and demand for, our products and services in general and by specific customer segments, including those caused by competition and pricing pressure; excess product inventory for any reason, including those caused by the effects of increased inflation and interest rates in certain geographies and the war in Ukraine; risks associated with business disruption caused by natural disasters and health emergencies such as earthquakes, fires, power outages, typhoons, floods, health epidemics and viruses, and by manmade events such as civil unrest, labor disruption, international trade disputes, international conflicts such as the war in Ukraine or tensions between China and Taiwan, terrorism, wars, and critical infrastructure attacks; tariffs, trade disputes and other trade barriers, and negative impact on sales based on geo-political dynamics and disputes and protectionist policies, including the impact of any future shutdowns of the U.S. government; and the other risk factors set forth from time to time in our most recent Annual Report on Form 10-K, our most recent Quarterly Report on Form 10-Q and our other filings with the Securities and Exchange Commission ('SEC'), copies of which are available free of charge at the SEC's website at or upon request from our investor relations department. All forward-looking statements herein reflect our opinions only as of the date of this release, and we undertake no obligation, and expressly disclaim any obligation, to update forward-looking statements herein in light of new information or future events. Use of Non-GAAP Financial Measures We believe that the presentation of non-GAAP financial information provides important supplemental information to management and investors regarding financial and business trends relating to our financial condition and results of operations. For further information regarding why we believe that these non-GAAP measures provide useful information to investors, the specific manner in which management uses these measures, and some of the limitations associated with the use of these measures, please refer to the 'Explanation of Non-GAAP Financial Measures' section of this press INC. CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited, in millions) June 30,2025 December 31,2024 ASSETS CURRENT ASSETS: Cash and cash equivalents $ 3,368.5 $ 2,875.9 Short-term investments 1,194.4 1,190.6 Accounts receivable—net 1,215.7 1,463.4 Inventory 405.2 315.5 Prepaid expenses and other current assets 162.5 126.1 Total current assets 6,346.3 5,971.5 LONG-TERM INVESTMENTS 112.0 — PROPERTY AND EQUIPMENT—NET 1,544.8 1,349.5 DEFERRED CONTRACT COSTS 665.4 622.9 DEFERRED TAX ASSETS 1,457.2 1,335.6 GOODWILL AND OTHER INTANGIBLE ASSETS—NET 382.2 350.4 OTHER ASSETS 133.5 133.2 TOTAL ASSETS $ 10,641.4 $ 9,763.1 LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES: Accounts payable $ 245.2 $ 190.9 Accrued liabilities 339.1 337.9 Accrued payroll and compensation 281.3 255.7 Current portion of long-term debt 499.0 — Deferred revenue 3,412.5 3,276.2 Total current liabilities 4,777.1 4,060.7 DEFERRED REVENUE 3,155.1 3,084.7 LONG-TERM DEBT 496.3 994.3 OTHER LIABILITIES 152.5 129.6 Total liabilities 8,581.0 8,269.3 COMMITMENTS AND CONTINGENCIES STOCKHOLDERS' EQUITY: Common stock 0.8 0.8 Additional paid-in capital 1,715.9 1,636.2 Accumulated other comprehensive loss (20.7 ) (26.1 ) Retained earnings (accumulated deficit) 364.4 (117.1 ) Total stockholders' equity 2,060.4 1,493.8 TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 10,641.4 $ 9,763.1 FORTINET, INC. CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited, in millions, except per share amounts) Three Months Ended Six Months Ended June 30,2025 June 30,2024 June 30,2025 June 30,2024 REVENUE: Product $ 508.9 $ 451.9 $ 968.0 $ 860.8 Service 1,121.1 982.4 2,201.7 1,926.8 Total revenue 1,630.0 1,434.3 3,169.7 2,787.6 COST OF REVENUE: Product 165.9 155.1 315.8 337.9 Service 149.0 119.9 292.2 241.8 Total cost of revenue 314.9 275.0 608.0 579.7 GROSS PROFIT: Product 343.0 296.8 652.2 522.9 Service 972.1 862.5 1,909.5 1,685.0 Total gross profit 1,315.1 1,159.3 2,561.7 2,207.9 OPERATING EXPENSES: Research and development 209.5 165.4 408.1 338.4 Sales and marketing 592.0 501.3 1,134.7 1,002.4 General and administrative 56.9 56.6 114.7 111.0 Gain on intellectual property matters (1.3 ) (1.2 ) (7.6 ) (2.3 ) Total operating expenses 857.1 722.1 1,649.9 1,449.5 OPERATING INCOME 458.0 437.2 911.8 758.4 INTEREST INCOME 45.0 38.3 89.3 70.5 INTEREST EXPENSE (4.6 ) (5.0 ) (9.5 ) (10.1 ) OTHER INCOME (EXPENSE)—NET 18.9 (2.2 ) 45.0 (5.1 ) INCOME BEFORE INCOME TAXES AND GAIN (LOSS) FROM EQUITY METHOD INVESTMENTS 517.3 468.3 1,036.6 813.7 PROVISION FOR INCOME TAXES 77.1 76.5 173.6 116.0 GAIN (LOSS) FROM EQUITY METHOD INVESTMENTS (0.1 ) (12.0 ) 10.5 (18.6 ) NET INCOME $ 440.1 $ 379.8 $ 873.5 $ 679.1 Net income per share: Basic $ 0.57 $ 0.50 $ 1.14 $ 0.89 Diluted $ 0.57 $ 0.49 $ 1.13 $ 0.88 Weighted-average shares outstanding: Basic 765.5 763.8 766.9 763.1 Diluted 772.7 769.9 774.8 770.2 FORTINET, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited, in millions) Six Months Ended June 30,2025 June 30,2024 CASH FLOWS FROM OPERATING ACTIVITIES: Net income $ 873.5 $ 679.1 Adjustments to reconcile net income to net cash provided by operating activities: Stock-based compensation 135.2 126.2 Amortization of deferred contract costs 160.0 144.7 Depreciation and amortization 74.1 57.8 Amortization of investment discounts (19.4 ) (24.9 ) Other (44.8 ) 25.6 Changes in operating assets and liabilities, net of impact of business combinations: Accounts receivable—net 262.7 318.9 Inventory (79.6 ) 85.2 Prepaid expenses and other current assets (32.1 ) (12.3 ) Deferred contract costs (202.5 ) (136.0 ) Deferred tax assets (75.3 ) (130.3 ) Other assets (11.7 ) (7.6 ) Accounts payable 46.8 (67.2 ) Accrued liabilities (9.7 ) (24.9 ) Accrued payroll and compensation 22.9 (24.3 ) Deferred revenue 204.8 161.7 Other liabilities 10.3 0.7 Net cash provided by operating activities 1,315.2 1,172.4 CASH FLOWS FROM INVESTING ACTIVITIES: Purchases of investments (976.5 ) (974.3 ) Sales of investments 5.7 — Maturities of investments 869.6 904.6 Purchases of property and equipment (234.3 ) (245.0 ) Payments made in connection with business combinations, net of cash acquired (41.6 ) (5.7 ) Other 0.1 — Net cash used in investing activities (377.0 ) (320.4 ) CASH FLOWS FROM FINANCING ACTIVITIES: Repurchase and retirement of common stock (401.1 ) — Proceeds from issuance of common stock 31.3 19.6 Taxes paid related to net share settlement of equity awards (77.0 ) (63.1 ) Other (0.1 ) (0.8 ) Net cash used in financing activities (446.9 ) (44.3 ) EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS 1.3 (2.4 ) NET INCREASE IN CASH AND CASH EQUIVALENTS 492.6 805.3 CASH AND CASH EQUIVALENTS—Beginning of period 2,875.9 1,397.9 CASH AND CASH EQUIVALENTS—End of period $ 3,368.5 $ 2,203.2 Reconciliations of non-GAAP results of operations measures to the nearest comparable GAAP measures(Unaudited, in millions, except per share amounts) Reconciliation of GAAP operating income to non-GAAP operating income, operating margin, net income and diluted net income per share Three Months Ended June 30,2025 June 30,2024 Reconciliation of non-GAAP operating income: GAAP operating income $ 458.0 $ 437.2 GAAP operating margin 28.1 % 30.5 % Add back: Stock‐based compensation 69.9 64.3 Amortization of acquired intangible assets 13.2 3.3 Gain on intellectual property matters (1.3 ) (1.2 ) Non‐GAAP operating income $ 539.8 $ 503.6 Non‐GAAP operating margin 33.1 % 35.1 % Reconciliation of non-GAAP net income: GAAP net income $ 440.1 $ 379.8 Add back: Stock‐based compensation 69.9 64.3 Amortization of acquired intangible assets 13.2 3.3 Gain on intellectual property matters (1.3 ) (1.2 ) Tax adjustment (a) (30.8 ) (14.3 ) Non-cash charge on equity method investment — 8.0 Non-GAAP net income $ 491.1 $ 439.9 Non-GAAP net income per share, diluted Non-GAAP net income $ 491.1 $ 439.9 Non-GAAP shares used in diluted net income per share calculations 772.7 769.9 Non-GAAP net income per share, diluted $ 0.64 $ 0.57 Reconciliation of non-GAAP net income per share, diluted GAAP net income per share, diluted $ 0.57 $ 0.49 Add back: Non-GAAP adjustments to net income per share 0.07 0.08 Non-GAAP net income per share, diluted $ 0.64 $ 0.57 (a) Non-GAAP financial information is adjusted to an effective tax rate of 18% and 17% in the three months ended June 30, 2025 and 2024, respectively, on a non-GAAP basis, which differs from the GAAP effective tax rate. Reconciliation of net cash provided by operating activities to free cash flow Three Months Ended June 30,2025 June 30,2024 Net cash provided by operating activities $ 451.9 $ 342.0 Less: Purchases of property and equipment (167.8 ) (23.1 ) Free cash flow $ 284.1 $ 318.9 Net cash used in investing activities $ (266.2 ) $ (50.1 ) Net cash used in financing activities $ (414.2 ) $ (14.0 )Reconciliation of total revenue to total billings Three Months Ended June 30,2025 June 30,2024 Total revenue $ 1,630.0 $ 1,434.3 Add: Change in deferred revenue 149.2 106.3 Less: Deferred revenue balance acquired in business acquisitions (0.8 ) — Total billings $ 1,778.4 $ 1,540.6 1 A reconciliation of GAAP to non-GAAP measures has been provided in the financial statement tables included in this press release. An explanation of these measures is also included below under the heading 'Explanation of Non-GAAP Financial Measures'.2 Annual Recurring Revenue or ARR is defined as the annualized value of renewable / recurring customer agreements as of the measurement date, assuming any contract that expires during the next 12 months is renewed at its existing value. Explanation of Non-GAAP Financial Measures We have provided in this release financial information that has not been prepared in accordance with U.S. Generally Accepted Accounting Principles ('GAAP'). These non-GAAP financial and liquidity measures are not based on any standardized methodology prescribed by GAAP and are not necessarily comparable to similar measures presented by other companies. We use these non-GAAP financial measures internally in analyzing our financial results and believe they are useful to investors, as a supplement to GAAP measures, in evaluating our ongoing operational performance. We believe that the use of these non-GAAP financial measures provides an additional tool for investors to use in evaluating ongoing operating results and trends and in comparing our financial results with peer companies, many of which present similar non-GAAP financial measures to investors. Non-GAAP financial measures should not be considered in isolation from, or as a substitute for, financial information prepared in accordance with GAAP. Investors are encouraged to review the reconciliation of these non-GAAP financial measures to their most directly comparable GAAP financial measures provided in the financial statement tables below. Billings (non-GAAP). We define billings as revenue recognized in accordance with GAAP plus the change in deferred revenue from the beginning to the end of the period less any deferred revenue balances acquired from business combination(s) during the period. We consider billings to be a useful metric for management and investors because billings drive current and future revenue, which is an important indicator of the health and viability of our business and cash flows. There are a number of limitations related to the use of billings instead of GAAP revenue. First, billings include amounts that have not yet been recognized as revenue and are impacted by the term of security and support agreements. Second, we may calculate billings in a manner that is different from peer companies that report similar financial measures. Management accounts for these limitations by providing specific information regarding GAAP revenue and evaluating billings together with GAAP revenue. Free cash flow (non-GAAP). We define free cash flow as net cash provided by operating activities minus purchases of property and equipment. We believe free cash flow to be a liquidity measure that provides useful information to management and investors about the amount of cash generated by the business that, after capital expenditures, can be used for strategic opportunities, including repurchasing outstanding common stock, investing in our business, making strategic acquisitions and strengthening the balance sheet. A limitation of using free cash flow rather than the GAAP measures of cash provided by or used in operating activities, investing activities, and financing activities is that free cash flow does not represent the total increase or decrease in the cash and cash equivalents balance for the period because it excludes investing activities other than capital expenditures and cash flows from financing activities. Management accounts for this limitation by providing information about our capital expenditures and other investing and financing activities on the face of the cash flow statement and under the caption 'Management's Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources' in our most recent Quarterly Report on Form 10-Q and Annual Report on Form 10-K and by presenting cash flows from investing and financing activities in our reconciliation of free cash flow. In addition, it is important to note that other companies, including companies in our industry, may not use free cash flow, may calculate free cash flow in a different manner than we do or may use other financial measures to evaluate their performance, all of which could reduce the usefulness of free cash flow as a comparative measure. Non-GAAP operating income and operating margin. We define non-GAAP operating income as operating income plus stock-based compensation, amortization of acquired intangible assets, less gain on intellectual property matters and, when applicable, other significant non-recurring items in a given quarter. Non-GAAP operating margin is defined as non-GAAP operating income divided by GAAP revenue. We consider these non-GAAP financial measures to be useful metrics for management and investors because they exclude the items noted above so that our management and investors can compare our recurring core business operating results over multiple periods. There are a number of limitations related to the use of non-GAAP operating income instead of operating income calculated in accordance with GAAP. First, non-GAAP operating income excludes the items noted above. Second, the components of the costs that we exclude from our calculation of non-GAAP operating income may differ from the components that peer companies exclude when they report their non-GAAP results of operations. Management accounts for these limitations by providing specific information regarding the GAAP amounts excluded from non-GAAP operating income and evaluating non-GAAP operating income together with operating income calculated in accordance with GAAP. Non-GAAP net income and diluted net income per share. We define non-GAAP net income as net income plus the items noted above under non-GAAP operating income and operating margin. In addition, we adjust non-GAAP net income and diluted net income per share for a non-cash charge of impairment on an equity method investment and a tax adjustment required for an effective tax rate on a non-GAAP basis, which differs from the GAAP effective tax rate. We define non-GAAP diluted net income per share as non-GAAP net income divided by the non-GAAP diluted weighted-average shares outstanding. We consider these non-GAAP financial measures to be useful metrics for management and investors for the same reasons that we use non-GAAP operating income and non-GAAP operating margin. However, in order to provide a more complete picture of our recurring core business operating results, we include in non-GAAP net income and non-GAAP diluted net income per share, the tax adjustment required resulting in an effective tax rate on a non-GAAP basis, which often differs from the GAAP tax rate. We believe the non-GAAP effective tax rates we use are reasonable estimates of normalized tax rates for our current and prior fiscal years under our global operating structure. The same limitations described above regarding our use of non-GAAP operating income and non-GAAP operating margin apply to our use of non-GAAP net income and non-GAAP diluted net income per share. We account for these limitations by providing specific information regarding the GAAP amounts excluded from non-GAAP net income and non-GAAP diluted net income per share and evaluating non-GAAP net income and non-GAAP diluted net income per share together with net income and diluted net income per share calculated in accordance with GAAP. Copyright © 2025 Fortinet, Inc. All rights reserved. The symbols ® and ™ denote respectively federally registered trademarks and common law trademarks of Fortinet, Inc., its subsidiaries and affiliates. Fortinet's trademarks include, but are not limited to, the following: Fortinet, the Fortinet logo, FortiGate, FortiOS, FortiGuard, FortiCare, FortiAnalyzer, FortiManager, FortiASIC, FortiClient, FortiCloud, FortiCore, FortiMail, FortiSandbox, FortiADC, FortiAgent, FortiAI, FortiAIOps, FortiAntenna, FortiAP, FortiAPCam, FortiAppSec, FortiAuthenticator, FortiBranchSASE, FortiCall, FortiCam, FortiCamera, FortiCarrier, FortiCART, FortiCASB, FortiCentral, FortiCNP, FortiConnect, FortiController, FortiConverter, FortiCSPM, FortiCWP, FortiDAST, FortiDATA, FortiDB, FortiDDoS, FortiDeceptor, FortiDeploy, FortiDevice, FortiDevSec, FortiDLP, FortiEdge, FortiEDR, FortiEndpoint, FortiExplorer, FortiExtender, FortiFirewall, FortiFlex, FortiFone, FortiGSLB, FortiGuest, FortiHypervisor, FortiInsight, FortiIsolator, FortiLAN, FortiLink, FortiMonitor, FortiNAC, FortiNDR, FortiPAM, FortiPenTest, FortiPhish, FortiPoint, FortiPoints, FortiPolicy, FortiPortal, FortiPresence, FortiProxy, FortiRecon, FortiRecorder, FortiSASE, FortiScanner, FortiSDNConnector, FortiSEC, FortiSIEM, FortiSMS, FortiSOAR, FortiSRA, FortiStack, FortiSwitch, FortiTelemetry, FortiTester, FortiToken, FortiTrust, FortiVoice, FortiWAN, FortiWeb, FortiWiFi, FortiWLC, FortiWLM, FortiXDR, Lacework FortiCNAPP, Linksys, Intelligent Mesh, Velop, Max-Stream, Performance Perfected and SECURITY FABRIC. Other trademarks belong to their respective owners. Fortinet has not independently verified statements or certifications herein attributed to third parties and Fortinet does not independently endorse such statements. Notwithstanding anything to the contrary herein, nothing herein constitutes a warranty, guarantee, contract, binding specification or other binding commitment by Fortinet or any indication of intent related to a binding commitment, and performance and other specification information herein may be unique to certain environments. FTNT-F GARTNER is a registered trademark and service mark of Gartner, Inc. and/or its affiliates in the U.S. and internationally, Magic Quadrant is a registered trademark of Gartner, Inc. and/or its affiliates and is used herein with permission. All rights reserved. Gartner does not endorse any vendor, product, or service depicted in its research publications, and does not advise technology users to select only those vendors with the highest ratings or other designation. Gartner research publications consist of the opinions of Gartner's research organization and should not be construed as statements of fact. Gartner disclaims all warranties, expressed or implied, with respect to this research, including any warranties of merchantability or fitness for a particular purpose. Note for Gartner Peer Insights™: Reviews from vendor partners or end users of companies with less than $50 million in revenue are excluded from this methodology. See the full 'Voice of the Customer' methodology. Gartner and Peer Insights are trademarks of Gartner, Inc. and/or its affiliates. All rights reserved. Gartner Peer Insights content consists of the opinions of individual end users based on their own experiences, and should not be construed as statements of fact, nor do they represent the views of Gartner or its affiliates. Gartner does not endorse any vendor, product or service depicted in this content nor makes any warranties, expressed or implied, with respect to this content, about its accuracy or completeness, including any warranties of merchantability or fitness for a particular purpose. Gartner, Magic Quadrant for SASE Platforms, By Jonathan Forest, Neil MacDonald, Dale Koeppen, 09 July 2025 Gartner, Critical Capabilities for SASE Platforms, By Jonathan Forest, John Watts, Andrew Lerner, Charlie Winckless, 14 July 2025 Gartner, Magic Quadrant for Enterprise Wired and Wireless LAN Infrastructure, By Mike Leibovitz, Christian Canales, Nauman Raja, Tim Zimmerman, 25 June 2025 Gartner, Gartner Peer Insights™ 'Voice of the Customer': SD-WAN, Peer Contributors, 2025, 2024, & 2023 Gartner, Gartner Peer Insights™ 'Voice of the Customer': Endpoint Protection Platform, Peer Contributors, 2025, 2024, & 2023 Investor Contact: Media Contact: Aaron Ovadia Stephanie Lira Fortinet, Inc. Fortinet, Inc. 408-235-7700 408-235-7700 investors@ pr@
Zawya
15-05-2025
- Business
- Zawya
Fortinet reports first quarter 2025 financial results
Product revenue of $459 million, up 12% year over year Billings of $1.60 billion, up 14% year over year1 Unified SASE ARR2 up 26% and Security Operations ARR2 up 30%, year over year Record first quarter GAAP operating margin of 29% Record first quarter Non-GAAP operating margin of 34%1 Record Cash flow from operations of $863 million Record Free cash flow of $783 million1 Fortinet® (Nasdaq: FTNT), a global cybersecurity leader driving the convergence of networking and security, today announced financial results for the first quarter ended March 31, 2025. 'We are pleased to report another strong quarter as non-GAAP operating margin increased 570 basis points year over year to a first quarter record of 34%, while billings grew 14% year over year,' said Ken Xie, Founder, Chairman and Chief Executive Officer of Fortinet. 'We continue to accelerate our growth strategy by investing in the rapidly expanding Unified SASE and Security Operations markets, while strengthening our leadership in Secure Networking. Leveraging our deep expertise in networking and security convergence, a strong track record of AI-driven innovation, and seamless product development and integration through our FortiOS operating system, we have established ourselves as the leader in organic innovation and will continue setting the industry standard in cybersecurity.' Financial Highlights for the First Quarter of 2025 Revenue: Total revenue was $1.54 billion for the first quarter of 2025, an increase of 13.8% compared to $1.35 billion for the same quarter of 2024. Product Revenue: Product revenue was $459.1 million for the first quarter of 2025, an increase of 12.3% compared to $408.9 million for the same quarter of 2024. Service Revenue: Service revenue was $1.08 billion for the first quarter of 2025, an increase of 14.4% compared to $944.4 million for the same quarter of 2024. Billings1: Total billings were $1.60 billion for the first quarter of 2025, an increase of 13.5% compared to $1.41 billion for the same quarter of 2024. Remaining performance obligations: Remaining performance obligations were $6.49 billion as of March 31, 2025, an increase of 11.7% compared to $5.81 billion as of March 31, 2024. We expect to recognize approximately $3.38 billion as revenue over the next 12 months, an increase of 15.4% compared to $2.93 billion as of March 31, 2024. Unified SASE ARR 2: Unified SASE ARR was $1.15 billion as of March 31, 2025, an increase of 25.7% compared to $914.7 million as of March 31, 2024. Security Operations ARR 2: Security Operations ARR was $434.5 million as of March 31, 2025, an increase of 30.3% compared to $333.5 million as of March 31, 2024. GAAP Operating Income and Margin: GAAP operating income was $453.8 million for the first quarter of 2025, representing a GAAP operating margin of 29.5%. GAAP operating income was $321.2 million for the same quarter of 2024, representing a GAAP operating margin of 23.7%. Non-GAAP Operating Income and Margin1: Non-GAAP operating income was $526.2 million for the first quarter of 2025, representing a non-GAAP operating margin of 34.2%. Non-GAAP operating income was $386.1 million for the same quarter of 2024, representing a non-GAAP operating margin of 28.5%. GAAP Net Income and Diluted Net Income Per Share: GAAP net income was $433.4 million for the first quarter of 2025, compared to GAAP net income of $299.3 million for the same quarter of 2024. GAAP diluted net income per share was $0.56 for the first quarter of 2025, based on 776.8 million diluted weighted-average shares outstanding, compared to GAAP diluted net income per share of $0.39 for the same quarter of 2024, based on 770.5 million diluted weighted-average shares outstanding. Non-GAAP Net Income and Diluted Net Income Per Share1: Non-GAAP net income was $452.3 million for the first quarter of 2025, compared to non-GAAP net income of $333.9 million for the same quarter of 2024. Non-GAAP diluted net income per share was $0.58 for the first quarter of 2025, based on 776.8 million diluted weighted-average shares outstanding, compared to $0.43 for the same quarter of 2024, based on 770.5 million diluted weighted-average shares outstanding. Cash Flow: Cash flow from operations was $863.3 million for the first quarter of 2025, compared to $830.4 million for the same quarter of 2024. Cash flow from operations for the first quarter of 2025 includes $14.0 million proceeds from an intellectual property matter. Free Cash Flow1: Free cash flow was $782.8 million for the first quarter of 2025, compared to $608.5 million for the same quarter of 2024. Guidance For the second quarter of 2025, Fortinet currently expects: Revenue in the range of $1.590 billion to $1.650 billion Billings in the range of $1.685 billion to $1.765 billion Non-GAAP gross margin in the range of 80.0% to 81.0% Non-GAAP operating margin in the range of 31.5% to 32.5% Diluted non-GAAP net income per share in the range of $0.58 to $0.60, assuming a non-GAAP effective tax rate of 18%. This assumes a diluted share count of 773 million to 777 million. For the fiscal year 2025, Fortinet currently expects: Revenue in the range of $6.650 billion to $6.850 billion Service revenue in the range of $4.575 billion to $4.725 billion Billings in the range of $7.200 billion to $7.400 billion Non-GAAP gross margin in the range of 79.0% to 81.0% Non-GAAP operating margin in the range of 31.5% to 33.5% Diluted non-GAAP net income per share in the range of $2.43 to $2.49, assuming a non-GAAP effective tax rate of 18%. This assumes a diluted share count of 769 million to 779 million. These statements are forward looking and actual results may differ materially. Refer to the Forward-Looking Statements section below for information on the factors that could cause our actual results to differ materially from these forward-looking statements. Our guidance with respect to non-GAAP financial measures excludes stock-based compensation, amortization of acquired intangible assets, gain on intellectual property matters, gain on bargain purchase related to acquisition, gain from an equity method investment and a tax adjustment required for an effective tax rate on a non-GAAP basis, which differs from the GAAP effective tax rate. We have not reconciled our guidance with respect to non-GAAP financial measures to the corresponding GAAP measures because certain items that impact these measures are uncertain or out of our control, or cannot be reasonably predicted. Accordingly, a reconciliation of these non-GAAP financial measures to the corresponding GAAP measures is not available without unreasonable effort. 1 A reconciliation of GAAP to non-GAAP measures has been provided in the financial statement tables included in this press release. An explanation of these measures is also included below under the heading 'Non-GAAP Financial Measures'. 2 Annual Recurring Revenue or ARR is defined as the annualized value of renewable / recurring customer agreements as of the measurement date, assuming any contract that expires during the next 12 months is renewed at its existing value. Conference Call Details Fortinet will host a conference call today at 1:30 p.m. Pacific Time (4:30 p.m. Eastern Time) to discuss the earnings results. A live webcast of the conference call and supplemental slides will be accessible from the Investor Relations page of Fortinet's website at and a replay will be archived and accessible at Second Quarter 2025 Conference Participation Schedule: J.P. Morgan Global Technology, Media and Communications Conference May 13, 2025 Bank of America Global Technology Conference June 3, 2025 Members of Fortinet's management team are expected to present at these conferences and discuss the latest company strategies and initiatives. Fortinet's conference presentations are expected to be available via webcast on the company's website. To access the most updated information, pre-register and listen to the webcast of each event, please visit the Investor Presentation & Events page of Fortinet's website at The schedule is subject to change. About Fortinet ( Fortinet (Nasdaq: FTNT) is a driving force in the evolution of cybersecurity and the convergence of networking and security. Our mission is to secure people, devices and data everywhere, and today we deliver cybersecurity everywhere our customers need it with the largest integrated portfolio of over 50 enterprise-grade products. Well over half a million customers trust Fortinet's solutions, which are among the most deployed, most patented and most validated in the industry. The Fortinet Training Institute, one of the largest and broadest training programs in the industry, is dedicated to making cybersecurity training and new career opportunities available to everyone. Collaboration with esteemed organizations from both the public and private sectors, including Computer Emergency Response Teams ('CERTs'), government entities, and academia, is a fundamental aspect of Fortinet's commitment to enhance cyber resilience globally. FortiGuard Labs, Fortinet's elite threat intelligence and research organization, develops and utilizes leading-edge machine learning and AI technologies to provide customers with timely and consistently top-rated protection and actionable threat intelligence. Learn more at the Fortinet Blog or FortiGuard Labs.
Yahoo
10-05-2025
- Business
- Yahoo
Why Fortinet Stock Is Plummeting Today
Fortinet's first-quarter earnings were perfectly fine. However, its guidance for the upcoming quarter and full year disappointed the market. Ultimately, Fortinet's leadership status remains unchanged, and its new growth areas remain promising. 10 stocks we like better than Fortinet › Shares of leading cybersecurity juggernaut Fortinet (NASDAQ: FTNT) were down 8% as of 1:15 p.m. ET on Thursday, according to data provided by S&P Global Market Intelligence. The next-gen firewall specialist reported first-quarter earnings on Wednesday and delivered 14% sales growth alongside record-setting free cash flow (FCF). However, with the company trading at 44 times FCF prior to earnings, the market expected perfection from Fortinet, and management's guidance didn't live up to these hopes. While Fortinet met analysts' expectations for Q1, its guidance for 13% sales growth and a mere 4% increase in adjusted earnings per share in the upcoming quarter spooked the market. In my opinion, this is a classic case of a market-beating stock priced for perfection delivering "adequate" earnings. Nothing was really "wrong" with earnings or guidance, but it wasn't perfect. As always, it's crucial to look beyond what Fortinet's potential numbers could be over the next 90 days and focus on its long-term investment thesis. Fortinet is: No. 1 in firewalls deployed globally Ranked No. 7 on Forbes' list of most trustworthy companies Used by 80% of the Fortune 100 and 72% of the Global 2000 A Gartner Magic Quadrant leader in firewalls, SD-WAN, and wired and wireless LAN A Gartner Magic Quadrant challenger in its nascent Secure Access Security Edge (SASE) and Security Service Edge (SSE) business lines Founder and CEO Ken Xie summed up Fortinet's moat during the earnings call, saying, "We remain the only vendor to have organically developed all of the core SASE capabilities within a single operating system, FortiOS." With its up-and-coming SSE and Unified SASE solutions growing billings by 110% and 18% in Q1, Fortinet's growth story should have many chapters remaining. Before you buy stock in Fortinet, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Fortinet wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $623,103!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $717,471!* Now, it's worth noting Stock Advisor's total average return is 909% — a market-crushing outperformance compared to 162% for the S&P 500. Don't miss out on the latest top 10 list, available when you join . See the 10 stocks » *Stock Advisor returns as of May 5, 2025 Josh Kohn-Lindquist has positions in Fortinet. The Motley Fool has positions in and recommends Fortinet. The Motley Fool recommends Gartner. The Motley Fool has a disclosure policy. Why Fortinet Stock Is Plummeting Today was originally published by The Motley Fool Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
