Fortinet (FTNT) Q3 2022 Earnings
How Did FTNT Stock React to Q3 2022 Earnings?
S&P 500 over the same 30 days: +6.15%.
Did FTNT Beat Earnings? Q3 2022 Results
Yes. Fortinet reported Q3 2022 earnings of $0.33 a share on Nov 2, 2022, beating the $0.27 consensus estimate by 22.2%. Revenue was $1.1B against a $1.1B estimate.
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.
- 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
What Was Fortinet's Outlook in Q3 2022?
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
| Metric | Q3 2022 | Q3 2021 | Year over year |
|---|---|---|---|
| Revenue | $1.1B | $867.2M | +32.6% |
| Gross Profit | $866.5M | $656.0M | +32.1% |
| Operating Income | $265.5M | $166.4M | +59.6% |
| Net Income | $231.6M | $163.1M | +42.0% |
FTNT Revenue by Segment
Figures from SEC filings and company reports. Not investment advice.