Companies /Technology

Fortinet Inc

NASDAQ: FTNT Software - Infrastructure
$156.29
▼ $0.07 (−0.04%) today
Markets closed · 7:05pm ET

Q3 2022 Earnings

Reported Nov 2, 2022, 4:09pm ET · SEC source
$0.33
Beat +22.22%
EPS · est. $0.27
$1.1B
Beat +2.35%
Revenue · est. $1.1B
+4.6%
Beating market
FTNT vs S&P since report
7 quarters
Consecutive EPS beats

Market Reaction

% change · around the report
0+7%+14%Nov 2Nov 3report 4:09pm ETearnings−1.1%−2.3%
0+7%+14%Nov 2Nov 3earnings−1.1%−2.3%
FTNT −2.3%S&P 500 −1.1%
0+7%+14%Nov 2Nov 3report 4:09pm ETearnings−1.9%−2.3%
0+7%+14%Nov 2Nov 3earnings−1.9%−2.3%
FTNT −2.3%NASDAQ −1.9%
0+8%+16%Nov 1Nov 10report 4:09pm ETearnings+5.6%+17.1%
0+8%+16%Nov 1Nov 10earnings+5.6%+17.1%
FTNT +17.1%S&P 500 +5.6%
0+8%+16%Nov 1Nov 10report 4:09pm ETearnings+6.8%+17.1%
0+8%+16%Nov 1Nov 10earnings+6.8%+17.1%
FTNT +17.1%NASDAQ +6.8%
−13.71%
Day of report
+2.55%
Next session
+18.42%
One week
+10.71%
30 days

S&P 500 over the same 30 days: +6.15%.

Did FTNT Beat Earnings? Q3 2022 Results

Fortinet delivered a notably strong third quarter, posting non-GAAP diluted EPS of $0.33 against a consensus estimate of $0.27, a beat of 22.22%, while revenue of $1.15 billion topped the $1.12 billion estimate by 2.35% and grew 32.5% year over year. The results were powered by broad-based demand across both product and service lines, with service revenue reaching $680.80 million and reflecting a growing recurring revenue base that underpinned margin expansion, as non-GAAP operating margin widened to 28.3% from 25.8% a year ago. Billings of $1.41 billion and deferred revenue of $4.19 billion pointed to healthy forward visibility, though the market's reaction was complicated by Q4 billings guidance that fell short of analyst expectations, with management citing a slowdown in closing large deals amid broader enterprise spending caution. Looking ahead, Fortinet guided Q4 revenue of $1.27 to $1.31 billion and full-year 2022 revenue of $4.41 to $4.45 billion, with non-GAAP EPS of $1.13 to $1.15 for the full year.

Key Takeaways
  • 32.6% year-over-year revenue growth outpacing industry growth rates
  • Strong product revenue growth of 39% driven by cybersecurity demand
  • Service revenue growth of 28.4% reflecting growing recurring revenue base
  • Deferred revenue growth of 35% to $4.19 billion indicating future revenue visibility
  • Non-GAAP operating margin expansion to 28.3% from 25.8% year over year
  • Convergence of security and networking driving platform adoption

“We continued to gain market share in the large addressable and fast-growing cybersecurity industry. Revenue and billings growth of over 30% in the third quarter significantly outpaced industry growth rates.”

Fortinet CEO, on the earnings call

Forward Guidance & Outlook

For Q4 2022, Fortinet expects revenue of $1.275–$1.315 billion, billings of $1.665–$1.720 billion, non-GAAP gross margin of 75.0–76.0%, non-GAAP operating margin of 30.0–31.0%, and non-GAAP diluted EPS of $0.38–$0.40. For full-year 2022, the company expects revenue of $4.410–$4.450 billion, service revenue of $2.645–$2.655 billion, billings of $5.540–$5.595 billion, non-GAAP gross margin of 75.0–76.0%, non-GAAP operating margin of 26.0–27.0%, and non-GAAP diluted EPS of $1.13–$1.15.

FTNT YoY Financials

Q3 2022 vs Q3 2021 · SEC filings Q3 2021 Q3 2022
$0$400.0M$800.0M$1.2B$867.2M$1.1BRevenue$656.0M$866.5MGross Profit$166.4M$265.5MOperating Income$163.1M$231.6MNet Income
$0$400.0M$800.0M$1.2BRevenueGross ProfitOperating IncomeNet Income

FTNT Revenue by Segment

Service Revenue$680.8M+28.4%
Product Revenue$468.7M+39.0%

Figures from SEC filings and company reports. Not investment advice.