Fortinet Reports Third Quarter 2023 Financial Results
Fortinet® (Nasdaq: FTNT), a global cybersecurity leader driving the
convergence of networking and security, today announced financial
results for the third quarter ended September 30, 2023.
“While the Secure Networking market is experiencing slower
growth as product demand returns to normal levels following two
years of elevated growth, we are leveraging our scale, go-to-market
capabilities and engineering expertise to focus our attention on
the faster growing SASE and Security Operations markets, in
addition to continuing our focus on Secure Networking,” said Ken
Xie, Founder, Chairman and Chief Executive Officer of Fortinet. “We
are well-positioned to capitalize on these emerging growth
opportunities by leveraging our integrated FortiOS operating
system, industry leadership in firewall and SD-WAN, and exceptional
solutions in each of the SASE and Security Operations markets.”
Financial Highlights for the Third Quarter of
2023
- Revenue: Total revenue was $1.33 billion for
the third quarter of 2023, an increase of 16.1% compared to $1.15
billion for the same quarter of 2022.
- Product Revenue: Product revenue was $465.9
million for the third quarter of 2023, a decrease of 0.6% compared
to $468.7 million for the same quarter of 2022.
- Service Revenue: Service revenue was $868.7
million for the third quarter of 2023, an increase of 27.6%
compared to $680.8 million for the same quarter of 2022.
- Billings1:
Total billings were $1.49 billion for the third quarter of 2023, an
increase of 5.7% compared to $1.41 billion for the same quarter of
2022.
- Deferred Revenue: Total deferred revenue was
$5.29 billion as of September 30, 2023, an increase of 26.0%
compared to $4.19 billion as of September 30, 2022.
- GAAP Operating Income and Margin: GAAP
operating income was $303.2 million for the third quarter of 2023,
representing a GAAP operating margin of 22.7%. GAAP operating
income was $265.5 million for the same quarter of 2022,
representing a GAAP operating margin of 23.1%.
- Non-GAAP Operating Income
and Margin1:
Non-GAAP operating income was $371.4 million for the third quarter
of 2023, representing a non-GAAP operating margin of 27.8%.
Non-GAAP operating income was $324.9 million for the same quarter
of 2022, representing a non-GAAP operating margin of 28.3%.
- GAAP Net Income and Diluted Net Income Per Share
Attributable to Fortinet, Inc.: GAAP net income was $322.9
million for the third quarter of 2023, compared to GAAP net income
of $231.6 million for the same quarter of 2022. GAAP diluted net
income per share was $0.41 for the third quarter of 2023, based on
791.2 million diluted weighted-average shares outstanding,
compared to GAAP diluted net income per share of $0.29 for the same
quarter of 2022, based on 798.6 million diluted
weighted-average shares outstanding.
- Non-GAAP Net Income and Diluted Net
Income Per Share Attributable to Fortinet,
Inc.1: Non-GAAP net
income was $323.5 million for the third quarter of 2023, compared
to non-GAAP net income of $262.7 million for the same quarter of
2022. Non-GAAP diluted net income per share was $0.41 for the third
quarter of 2023, based on 791.2 million diluted
weighted-average shares outstanding, compared to $0.33 for the same
quarter of 2022, based on 798.6 million diluted
weighted-average shares outstanding.
- Cash Flow: Cash flow from operations was
$551.2 million for the third quarter of 2023, compared to $483.0
million for the same quarter of 2022.
- Free Cash
Flow1: Free cash flow
was $481.1 million for the third quarter of 2023, compared to
$395.2 million for the same quarter of 2022.
- Share Repurchase Program: During the three and
nine months ended September 30, 2023, Fortinet repurchased 10.4
million shares of its common stock at an average price of $58.43
per share and for an aggregate purchase price of $605.2 million.
During the three and nine months ended September 30, 2022, Fortinet
repurchased 10.2 million and 36.0 million shares of its
common stock, respectively, at an average price of $49.15 and
$55.37 per share, respectively, and for an aggregate purchase price
of $500.0 million and $1.99 billion, respectively.
Subsequent to September 30, 2023 through October 31, 2023, Fortinet
repurchased 7.7 million shares of its common stock at an average
price of $57.43 per share for an aggregate purchase price of $444.4
million.
Guidance
For the fourth quarter of 2023, Fortinet currently expects:
- Revenue in the range of $1.380 billion to $1.440 billion
- Billings in the range of $1.560 billion to $1.700 billion
- Non-GAAP gross margin in the range of 75.5% to 76.5%
- Non-GAAP operating margin in the range of 27.5% to 28.5%
- Diluted non-GAAP net income per share attributable to Fortinet,
Inc. in the range of $0.42 to $0.44, assuming a non-GAAP effective
tax rate of 17%. This assumes a diluted share count of 780 million
to 790 million.
For the fiscal year 2023, Fortinet currently expects:
- Revenue in the range of $5.270 billion to $5.330 billion
- Service revenue in the range of $3.355 billion to $3.375
billion
- Billings in the range of $6.095 billion to $6.235 billion
- Non-GAAP gross margin in the range of 76.0% to 77.0%
- Non-GAAP operating margin in the range of 26.5% to 27.5%
- Diluted non-GAAP net income per share attributable to Fortinet,
Inc. in the range of $1.54 to $1.56, assuming a non-GAAP effective
tax rate of 17%. This assumes a diluted share count of 790 million
to 800 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 and gain on intellectual property matters. 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”.
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 https://investor.fortinet.com and a replay will be archived
and accessible at
https://investor.fortinet.com/events-and-presentations.
Fourth Quarter 2023 Conference Participation
Schedule:
- Stifel Midwest One-on-One Growth
ConferenceNovember 9, 2023
- Wells Fargo TMT SummitNovember 28, 2023
- Barclays Global Technology, Media &
Telecommunications ConferenceDecember 6, 2023
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 web site. 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
https://investor.fortinet.com/events-and-presentations. The
schedule is subject to change.
About Fortinet (www.fortinet.com)
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. 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. 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
https://www.fortinet.com, the Fortinet Blog or FortiGuard
Labs.
Copyright © 2023 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, FortiMail,
FortiSandbox, FortiADC, FortiAIOps, FortiAntenna, FortiAP,
FortiAPCam, FortiAuthenticator, FortiCache, FortiCall, FortiCam,
FortiCamera, FortiCarrier, FortiCASB, FortiCentral, FortiCNP,
FortiConnect, FortiController, FortiConverter, FortiCWP, FortiDAST,
FortiDB, FortiDDoS, FortiDeceptor, FortiDeploy, FortiDevSec,
FortiEDR, FortiExplorer, FortiExtender, FortiFirewall, FortiFlex,
FortiFone, FortiGSLB, FortiGuest, FortiHypervisor, FortiInsight,
FortiIsolator, FortiLAN, FortiLink, FortiMonitor, FortiNAC,
FortiNDR, FortiPAM, FortiPenTest, FortiPhish, FortiPoint,
FortiPolicy, FortiPortal, FortiPresence, FortiProxy, FortiRecon,
FortiRecorder, FortiSASE, FortiSDNConnector, FortiSIEM, FortiSMS,
FortiSOAR, FortiStack, FortiSwitch, FortiTester, FortiToken,
FortiTrust, FortiVoice, FortiWAN, FortiWeb, FortiWiFi, FortiWLC,
FortiWLM and FortiXDR. 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
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 fourth quarter and full
year 2023, 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; instability in the global banking system;
supply chain challenges; negative impacts from the ongoing war in
Ukraine and its related macroeconomic effects and our decision to
reduce operations in Russia, as well as the Israel-Hamas war;
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; 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; 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 and the Israel-Hamas war; 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 and the Israel-Hamas war 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; any political and
government disruption around the world, 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 www.sec.gov 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.
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. 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 and excluding any significant non-recurring items. 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 cash flows
from significant non-recurring items, 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 matter 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
attributable to Fortinet, Inc. 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 tax adjustment required for
an effective tax rate on a non-GAAP basis and adjustments
attributable to non-controlling interests, 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.
|
FORTINET, INC.CONDENSED CONSOLIDATED
BALANCE SHEETS(Unaudited, in
millions) |
| |
September 30,2023 |
|
December 31,2022 |
| ASSETS |
|
|
|
| CURRENT ASSETS: |
|
|
|
|
Cash and cash equivalents |
$ |
2,186.8 |
|
|
$ |
1,682.9 |
|
|
Short-term investments |
|
962.2 |
|
|
|
502.6 |
|
|
Marketable equity securities |
|
19.8 |
|
|
|
25.5 |
|
|
Accounts receivable—net |
|
1,013.8 |
|
|
|
1,261.7 |
|
|
Inventory |
|
467.5 |
|
|
|
264.6 |
|
|
Prepaid expenses and other current assets |
|
102.6 |
|
|
|
73.1 |
|
|
Total current assets |
|
4,752.7 |
|
|
|
3,810.4 |
|
| LONG-TERM INVESTMENTS |
|
1.5 |
|
|
|
45.5 |
|
| PROPERTY AND
EQUIPMENT—NET |
|
1,038.0 |
|
|
|
898.5 |
|
| DEFERRED CONTRACT COSTS |
|
569.9 |
|
|
|
518.2 |
|
| DEFERRED TAX ASSETS |
|
788.5 |
|
|
|
569.4 |
|
| GOODWILL AND OTHER INTANGIBLE
ASSETS—NET |
|
165.0 |
|
|
|
184.0 |
|
| OTHER ASSETS |
|
163.7 |
|
|
|
202.0 |
|
| TOTAL ASSETS |
$ |
7,479.3 |
|
|
$ |
6,228.0 |
|
| LIABILITIES AND
STOCKHOLDERS’ EQUITY (DEFICIT) |
|
|
|
| CURRENT LIABILITIES: |
|
|
|
|
Accounts payable |
$ |
253.9 |
|
|
$ |
243.4 |
|
|
Accrued liabilities |
|
317.2 |
|
|
|
248.7 |
|
|
Accrued payroll and compensation |
|
210.5 |
|
|
|
219.4 |
|
|
Income taxes payable |
|
220.1 |
|
|
|
17.6 |
|
|
Deferred revenue |
|
2,647.3 |
|
|
|
2,349.3 |
|
|
Total current liabilities |
|
3,649.0 |
|
|
|
3,078.4 |
|
| DEFERRED REVENUE |
|
2,638.0 |
|
|
|
2,291.0 |
|
| INCOME TAX LIABILITIES |
|
61.8 |
|
|
|
67.8 |
|
| LONG-TERM DEBT |
|
991.8 |
|
|
|
990.4 |
|
| OTHER LIABILITIES |
|
64.6 |
|
|
|
82.0 |
|
|
Total liabilities |
|
7,405.2 |
|
|
|
6,509.6 |
|
| COMMITMENTS AND
CONTINGENCIES |
|
|
|
| STOCKHOLDERS’ EQUITY
(DEFICIT): |
|
|
|
|
Common stock |
|
0.8 |
|
|
|
0.8 |
|
|
Additional paid-in capital |
|
1,397.0 |
|
|
|
1,284.2 |
|
|
Accumulated other comprehensive loss |
|
(24.3 |
) |
|
|
(20.2 |
) |
|
Accumulated deficit |
|
(1,299.4 |
) |
|
|
(1,546.4 |
) |
|
Total stockholders’ equity (deficit) |
|
74.1 |
|
|
|
(281.6 |
) |
| TOTAL LIABILITIES AND
STOCKHOLDERS’ EQUITY (DEFICIT) |
$ |
7,479.3 |
|
|
$ |
6,228.0 |
|
|
FORTINET, INC.CONDENSED CONSOLIDATED
STATEMENTS OF INCOME(Unaudited, in millions,
except per share amounts) |
| |
Three Months Ended |
|
Nine Months Ended |
|
|
September 30,2023 |
|
September 30,2022 |
|
September 30,2023 |
|
September 30,2022 |
| REVENUE: |
|
|
|
|
|
|
|
|
Product |
$ |
465.9 |
|
|
$ |
468.7 |
|
|
$ |
1,439.2 |
|
|
$ |
1,240.4 |
|
|
Service |
|
868.7 |
|
|
|
680.8 |
|
|
|
2,450.5 |
|
|
|
1,894.0 |
|
|
Total revenue |
|
1,334.6 |
|
|
|
1,149.5 |
|
|
|
3,889.7 |
|
|
|
3,134.4 |
|
| COST OF REVENUE: |
|
|
|
|
|
|
|
|
Product |
|
198.3 |
|
|
|
185.2 |
|
|
|
566.4 |
|
|
|
501.4 |
|
|
Service |
|
119.4 |
|
|
|
97.8 |
|
|
|
354.9 |
|
|
|
286.2 |
|
|
Total cost of revenue |
|
317.7 |
|
|
|
283.0 |
|
|
|
921.3 |
|
|
|
787.6 |
|
| GROSS PROFIT: |
|
|
|
|
|
|
|
|
Product |
|
267.6 |
|
|
|
283.5 |
|
|
|
872.8 |
|
|
|
739.0 |
|
|
Service |
|
749.3 |
|
|
|
583.0 |
|
|
|
2,095.6 |
|
|
|
1,607.8 |
|
|
Total gross profit |
|
1,016.9 |
|
|
|
866.5 |
|
|
|
2,968.4 |
|
|
|
2,346.8 |
|
| OPERATING EXPENSES: |
|
|
|
|
|
|
|
|
Research and development |
|
156.9 |
|
|
|
134.3 |
|
|
|
461.3 |
|
|
|
383.5 |
|
|
Sales and marketing |
|
504.4 |
|
|
|
427.1 |
|
|
|
1,498.6 |
|
|
|
1,230.2 |
|
|
General and administrative |
|
53.5 |
|
|
|
40.7 |
|
|
|
156.2 |
|
|
|
124.7 |
|
|
Gain on intellectual property matter |
|
(1.1 |
) |
|
|
(1.1 |
) |
|
|
(3.4 |
) |
|
|
(3.4 |
) |
|
Total operating expenses |
|
713.7 |
|
|
|
601.0 |
|
|
|
2,112.7 |
|
|
|
1,735.0 |
|
| OPERATING INCOME |
|
303.2 |
|
|
|
265.5 |
|
|
|
855.7 |
|
|
|
611.8 |
|
| INTEREST INCOME |
|
37.0 |
|
|
|
4.6 |
|
|
|
89.2 |
|
|
|
8.3 |
|
| INTEREST EXPENSE |
|
(5.4 |
) |
|
|
(4.5 |
) |
|
|
(15.6 |
) |
|
|
(13.5 |
) |
| OTHER EXPENSE—NET |
|
(7.0 |
) |
|
|
(0.9 |
) |
|
|
(11.2 |
) |
|
|
(19.3 |
) |
| INCOME BEFORE INCOME TAXES AND
LOSS FROM EQUITY METHOD INVESTMENT |
|
327.8 |
|
|
|
264.7 |
|
|
|
918.1 |
|
|
|
587.3 |
|
| PROVISION FOR (BENEFIT FROM)
INCOME TAXES |
|
(0.3 |
) |
|
|
27.3 |
|
|
|
48.6 |
|
|
|
21.6 |
|
| LOSS FROM EQUITY METHOD
INVESTMENT |
|
(5.2 |
) |
|
|
(6.3 |
) |
|
|
(32.6 |
) |
|
|
(22.9 |
) |
| NET INCOME INCLUDING
NON-CONTROLLING INTERESTS |
|
322.9 |
|
|
|
231.1 |
|
|
|
836.9 |
|
|
|
542.8 |
|
| Less: NET LOSS ATTRIBUTABLE TO
NON-CONTROLLING INTERESTS, NET OF TAX |
|
— |
|
|
|
(0.5 |
) |
|
|
— |
|
|
|
(0.7 |
) |
| NET INCOME ATTRIBUTABLE TO
FORTINET, INC. |
$ |
322.9 |
|
|
$ |
231.6 |
|
|
$ |
836.9 |
|
|
$ |
543.5 |
|
| Net income per share
attributable to Fortinet, Inc.: |
|
|
|
|
|
|
|
|
Basic |
$ |
0.41 |
|
|
$ |
0.29 |
|
|
$ |
1.07 |
|
|
$ |
0.68 |
|
|
Diluted |
$ |
0.41 |
|
|
$ |
0.29 |
|
|
$ |
1.05 |
|
|
$ |
0.67 |
|
| Weighted-average shares used
to compute net income per share attributable to Fortinet,
Inc.: |
|
|
|
|
|
|
|
|
Basic |
|
781.2 |
|
|
|
786.2 |
|
|
|
783.1 |
|
|
|
795.0 |
|
|
Diluted |
|
791.2 |
|
|
|
798.6 |
|
|
|
793.5 |
|
|
|
809.8 |
|
|
FORTINET, INC.CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS(Unaudited, in
millions) |
| |
Nine Months Ended |
|
|
September 30,2023 |
|
September 30,2022 |
| CASH FLOWS FROM OPERATING
ACTIVITIES: |
|
|
|
|
Net income including non-controlling interests |
$ |
836.9 |
|
|
$ |
542.8 |
|
|
Adjustments to reconcile net income to net cash provided by
operating activities: |
|
|
|
|
Stock-based compensation |
|
185.6 |
|
|
|
162.6 |
|
|
Amortization of deferred contract costs |
|
195.9 |
|
|
|
163.8 |
|
|
Depreciation and amortization |
|
83.2 |
|
|
|
77.0 |
|
|
Amortization of investment premiums (discounts) |
|
(16.1 |
) |
|
|
3.6 |
|
|
Loss from equity method investment |
|
32.6 |
|
|
|
22.9 |
|
|
Other |
|
13.7 |
|
|
|
21.2 |
|
|
Changes in operating assets and liabilities, net of impact of
business combinations: |
|
|
|
|
Accounts receivable—net |
|
243.4 |
|
|
|
(162.7 |
) |
|
Inventory |
|
(231.0 |
) |
|
|
(59.7 |
) |
|
Prepaid expenses and other current assets |
|
(29.3 |
) |
|
|
(7.6 |
) |
|
Deferred contract costs |
|
(247.5 |
) |
|
|
(221.0 |
) |
|
Deferred tax assets |
|
(221.7 |
) |
|
|
(172.0 |
) |
|
Other assets |
|
13.5 |
|
|
|
(13.9 |
) |
|
Accounts payable |
|
10.4 |
|
|
|
78.6 |
|
|
Accrued liabilities |
|
56.9 |
|
|
|
33.7 |
|
|
Accrued payroll and compensation |
|
(8.0 |
) |
|
|
(3.2 |
) |
|
Income taxes payable |
|
196.8 |
|
|
|
(5.9 |
) |
|
Other liabilities |
|
(17.7 |
) |
|
|
(0.5 |
) |
|
Deferred revenue |
|
646.2 |
|
|
|
742.8 |
|
|
Net cash provided by operating activities |
|
1,743.8 |
|
|
|
1,202.5 |
|
| CASH FLOWS FROM INVESTING
ACTIVITIES: |
|
|
|
|
Purchases of investments |
|
(1,327.6 |
) |
|
|
(389.1 |
) |
|
Sales of investments |
|
4.0 |
|
|
|
3.0 |
|
|
Maturities of investments |
|
931.5 |
|
|
|
1,182.9 |
|
|
Purchases of property and equipment |
|
(177.2 |
) |
|
|
(250.3 |
) |
|
Purchase of investment in privately held company |
|
(8.5 |
) |
|
|
— |
|
|
Other |
|
0.1 |
|
|
|
— |
|
|
Net cash provided by (used in) investing activities |
|
(577.7 |
) |
|
|
546.5 |
|
| CASH FLOWS FROM FINANCING
ACTIVITIES: |
|
|
|
|
Repurchase and retirement of common stock |
|
(604.3 |
) |
|
|
(1,991.2 |
) |
|
Proceeds from issuance of common stock |
|
36.0 |
|
|
|
21.7 |
|
|
Taxes paid related to net share settlement of equity awards |
|
(90.8 |
) |
|
|
(132.1 |
) |
|
Other |
|
(1.2 |
) |
|
|
(1.3 |
) |
|
Net cash used in financing activities |
|
(660.3 |
) |
|
|
(2,102.9 |
) |
| EFFECT OF EXCHANGE RATE
CHANGES ON CASH AND CASH EQUIVALENTS |
|
(1.9 |
) |
|
|
(1.2 |
) |
| NET INCREASE (DECREASE) IN
CASH AND CASH EQUIVALENTS |
|
503.9 |
|
|
|
(355.1 |
) |
| CASH AND CASH
EQUIVALENTS—Beginning of period |
|
1,682.9 |
|
|
|
1,319.1 |
|
| CASH AND CASH EQUIVALENTS—End
of period |
$ |
2,186.8 |
|
|
$ |
964.0 |
|
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 attributable to
Fortinet, Inc. and diluted net income per share attributable to
Fortinet, Inc.
| |
Three Months Ended |
|
|
September 30,2023 |
|
September 30,2022 |
| Reconciliation of
non-GAAP operating income: |
|
|
|
|
GAAP operating income |
$ |
303.2 |
|
|
$ |
265.5 |
|
| GAAP operating margin |
|
22.7 |
% |
|
|
23.1 |
% |
| Add
back: |
|
|
|
|
Stock‐based compensation |
|
64.9 |
|
|
|
55.3 |
|
|
Amortization of acquired intangible assets |
|
4.4 |
|
|
|
5.2 |
|
|
Gain on intellectual property matter |
|
(1.1 |
) |
|
|
(1.1 |
) |
| Non‐GAAP operating income |
$ |
371.4 |
|
|
$ |
324.9 |
|
| Non‐GAAP operating margin |
|
27.8 |
% |
|
|
28.3 |
% |
| |
|
|
|
| Reconciliation of
non-GAAP net income attributable to Fortinet, Inc.: |
|
|
|
| GAAP net income attributable
to Fortinet, Inc. |
$ |
322.9 |
|
|
$ |
231.6 |
|
| Add
back: |
|
|
|
|
Stock‐based compensation |
|
64.9 |
|
|
|
55.3 |
|
|
Amortization of acquired intangible assets |
|
4.4 |
|
|
|
5.2 |
|
|
Gain on intellectual property matter |
|
(1.1 |
) |
|
|
(1.1 |
) |
|
Tax adjustment (a) |
|
(67.6 |
) |
|
|
(27.8 |
) |
|
Adjustments attributable non-controlling interests (b) |
|
— |
|
|
|
(0.5 |
) |
| Non-GAAP net income
attributable to Fortinet, Inc. |
$ |
323.5 |
|
|
$ |
262.7 |
|
| |
|
|
|
| Non-GAAP net income
per share attributable to Fortinet, Inc., diluted |
|
|
|
| Non-GAAP net income
attributable to Fortinet, Inc. |
$ |
323.5 |
|
|
$ |
262.7 |
|
|
Non-GAAP shares used in diluted net income per share attributable
to Fortinet, Inc. calculations |
|
791.2 |
|
|
|
798.6 |
|
| Non-GAAP net income per share
attributable to Fortinet, Inc., diluted |
$ |
0.41 |
|
|
$ |
0.33 |
|
| |
|
|
|
| Reconciliation of
non-GAAP net income per share attributable to Fortinet, Inc.,
diluted |
|
|
|
| GAAP net income per share
attributable to Fortinet, Inc., diluted |
$ |
0.41 |
|
|
$ |
0.29 |
|
| Add
back: |
|
|
|
|
Non-GAAP adjustments to net income per share attributable to
Fortinet, Inc. |
|
— |
|
|
|
0.04 |
|
| Non-GAAP net income per share
attributable to Fortinet, Inc., diluted |
$ |
0.41 |
|
|
$ |
0.33 |
|
(a) Non-GAAP financial information is adjusted to an effective
tax rate of 17% in the three months ended September 30, 2023
and 2022, respectively, on a non-GAAP basis, which differs from the
GAAP effective tax rate.(b) Adjustments related to the non-GAAP
results attributable to non-controlling interests, which were
adjusted to an effective tax rate of 31% for the subsidiary of
Alaxala Networks Corporation in the three months ended
September 30, 2022.
Reconciliation of net cash provided by operating
activities to free cash flow
| |
Three Months Ended |
| |
September 30,2023 |
|
September 30,2022 |
|
Net cash provided by operating activities |
$ |
551.2 |
|
|
$ |
483.0 |
|
|
Less: Purchases of property and equipment |
|
(70.1 |
) |
|
|
(87.8 |
) |
| Free cash flow |
$ |
481.1 |
|
|
$ |
395.2 |
|
| Net cash provided by (used in)
investing activities |
$ |
(111.2 |
) |
|
$ |
297.8 |
|
| Net cash used in financing
activities |
$ |
(628.9 |
) |
|
$ |
(526.6 |
) |
Reconciliation of total revenue to total
billings
| |
Three Months Ended |
| |
September 30,2023 |
|
September 30,2022 |
|
Total revenue |
$ |
1,334.6 |
|
$ |
1,149.5 |
|
Add: Change in deferred revenue |
|
156.7 |
|
|
261.5 |
| Total billings |
$ |
1,491.3 |
|
$ |
1,411.0 |
|
Investor Contact: |
Media Contact: |
| |
|
| Peter Salkowski |
Michelle Zimmermann |
| Fortinet, Inc. |
Fortinet, Inc. |
| 408-331-4595 |
408-235-7700 |
| psalkowski@fortinet.com |
pr@fortinet.com |
Fortinet (LSE:0IR9)
과거 데이터 주식 차트
부터 11월(11) 2024 으로 12월(12) 2024
Fortinet (LSE:0IR9)
과거 데이터 주식 차트
부터 12월(12) 2023 으로 12월(12) 2024
