Fortinet Inc (NASDAQ:FTNT) Reports Q3 Earnings

Fortinet Inc reported third-quarter earnings that surpassed analyst expectations, but shares tumbled 8% in after-hours trading despite the cybersecurity firm raising its full-year outlook.

Financial Highlights

• Adjusted Earnings Per Share: $0.63 (beating the estimate of $0.52)
• Revenue: $1.51 billion (exceeding $1.48 billion estimate, representing a 13% YoY increase)

Revenue Breakdown

• Service Revenue: Grew 19.1% YoY to $1.03 billion (bulk of total revenue)
• Product Revenue: Modest growth of 1.7% YoY to $473.9 million

Investor Concerns

Despite the strong results, investors focused on the company’s billings growth, which slowed to 6.1% YoY, totaling $1.58 billion for the quarter.

CEO Commentary

Ken Xie, Founder, Chairman and CEO of Fortinet, expressed:
> "We are pleased to report another strong quarter as non-GAAP operating margin increased 830 basis points year over year to a company record of 36%, while revenue exceeded the high end of our guidance range."

Outlook

Fortinet raised its full-year 2024 guidance, expecting:
– Revenue: Between $5.86 billion and $5.92 billion (up from previous forecasts, in line with analyst expectations)
– Adjusted EPS: Projected range of $2.20 to $2.28 (above consensus estimate of $2.04)

Q4 Expectations

For the fourth quarter, Fortinet anticipates:
– Revenue: Between $1.56 billion and $1.62 billion
– Adjusted EPS: Between $0.58 and $0.62

Share Repurchase Program

The company announced a $1 billion increase to its share repurchase program, bringing the total remaining authorization to approximately $2 billion.