Fortinet Reports First Quarter 2023 Financial Results
Fortinet® (Nasdaq: FTNT), a global leader in broad, integrated and
automated cybersecurity solutions, today announced financial
results for the first quarter ended March 31, 2023.
“Revenue growth in the first quarter was 32% due
to strong growth in both product and service revenue. With 35%
product revenue growth, we continue to gain market share while
being a leading product revenue company in the cybersecurity
industry. Service revenue grew over 30% for the first time in a
quarter in six years. We believe we have a significant opportunity
to continue to grow service revenue by upselling value-added
security services to our large installed base of customers,” said
Ken Xie, Founder, Chairman and Chief Executive Officer. “Companies
of all sizes are increasingly recognizing that Fortinet's
integrated FortiOS and custom ASIC technology can deliver a lower
total cost of ownership while improving the efficiency and efficacy
of their security.”
Financial Highlights for the First Quarter
of 2023
- Product Revenue: Product revenue was $500.7
million for the first quarter of 2023, an increase of 35.0%
compared to $371.0 million for the same quarter of 2022.
- Service Revenue: Service revenue was $761.6
million for the first quarter of 2023, an increase of 30.5%
compared to $583.8 million for the same quarter of 2022.
- Revenue: Total revenue was $1.26 billion for
the first quarter of 2023, an increase of 32.2% compared to $954.8
million for the same quarter of 2022.
- Billings1:
Total billings were $1.50 billion for the first quarter of 2023, an
increase of 29.6% compared to $1.16 billion for the same quarter of
2022.
- Deferred Revenue: Total deferred revenue was
$4.88 billion as of March 31, 2023, an increase of 33.4%
compared to $3.66 billion as of March 31, 2022.
- GAAP Operating Income and Margin: GAAP
operating income was $273.5 million for the first quarter of 2023,
representing a GAAP operating margin of 21.7%. GAAP operating
income was $151.0 million for the same quarter of 2022,
representing a GAAP operating margin of 15.8%.
- Non-GAAP Operating Income
and Margin1:
Non-GAAP operating income was $334.0 million for the first quarter
of 2023, representing a non-GAAP operating margin of 26.5%.
Non-GAAP operating income was $210.2 million for the same quarter
of 2022, representing a non-GAAP operating margin of 22.0%.
- GAAP Net Income and Diluted Net Income Per Share
Attributable to Fortinet,
Inc.2: GAAP net income
was $247.7 million for the first quarter of 2023, compared to GAAP
net income of $138.4 million for the same quarter of 2022. GAAP
diluted net income per share was $0.31 for the first quarter of
2023, based on 793.4 million diluted weighted-average shares
outstanding, compared to GAAP diluted net income per share of $0.17
for the same quarter of 2022, based on 820.8 million diluted
weighted-average shares outstanding.
- Non-GAAP Net Income and Diluted Net
Income Per Share Attributable to Fortinet,
Inc.1,2: Non-GAAP net
income was $269.7 million for the first quarter of 2023, compared
to non-GAAP net income of $155.1 million for the same quarter of
2022. Non-GAAP diluted net income per share was $0.34 for the first
quarter of 2023, based on 793.4 million diluted
weighted-average shares outstanding, compared to $0.19 for the same
quarter of 2022, based on 820.8 million diluted
weighted-average shares outstanding.
- Cash Flow: Cash flow from operations was
$677.5 million for the first quarter of 2023, compared to $396.1
million for the same quarter of 2022.
- Free Cash
Flow1: Free cash flow
was $647.2 million for the first quarter of 2023, compared to
$273.5 million for the same quarter of 2022.
- Share Repurchase Program: In April 2023,
Fortinet’s board of directors authorized a $1.0 billion increase in
the authorized stock repurchase under our share repurchase program.
As of May 4, 2023, approximately $1.53 billion remained available
for future share repurchases.
Guidance
For the second quarter of 2023, Fortinet currently
expects:
- Revenue in the range of $1.280 billion to $1.320 billion
- Billings in the range of $1.560 billion to $1.600 billion
- Non-GAAP gross margin in the range of 75.5% to 76.5%
- Non-GAAP operating margin in the range of 24.5% to 25.5%
- Diluted non-GAAP net income per share attributable to Fortinet,
Inc. in the range of $0.33 to $0.35, assuming a non-GAAP effective
tax rate of 17%. This assumes a diluted share count of 790 million
to 800 million.
For the fiscal year 2023, Fortinet currently
expects:
- Revenue in the range of $5.425 billion to $5.485 billion
- Service revenue in the range of $3.370 billion to $3.400
billion
- Billings in the range of $6.750 billion to $6.810 billion
- Non-GAAP gross margin in the range of 75.0% to 76.0%
- Non-GAAP operating margin in the range of 25.0% to 26.0%
- Diluted non-GAAP net income per share attributable to Fortinet,
Inc. in the range of $1.44 to $1.48, assuming a non-GAAP effective
tax rate of 17%. This assumes a diluted share count of 795 million
to 805 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”. 2 All share and per share
amounts presented herein have been retroactively adjusted to
reflect the five-for-one forward stock split which was effective
June 22, 2022.
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.
Second Quarter 2023 Conference
Participation Schedule:
- J.P. Morgan Global Technology, Media and Communications
Conference May 23, 2023
- Bank of America Global Technology Conference
June 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, FortiAI, 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, FortiFone,
FortiGSLB, FortiGuest, FortiHypervisor, FortiInsight,
FortiIsolator, FortiLAN, FortiLink, FortiMonitor, FortiNAC,
FortiNDR, FortiPAM, FortiPenTest, FortiPhish, FortiPolicy,
FortiPortal, FortiPresence, FortiProxy, FortiRecon, FortiRecorder,
FortiSASE, FortiSDNConnector, FortiSIEM, FortiSMS, FortiSOAR,
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 market share gains, guidance and
expectations around future financial results, including guidance
and expectations for the second quarter and full year 2023,
statements regarding the momentum in our business and future growth
expectations, statements regarding the opportunity to grow service
revenue, 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 due to the current global environment;
negative impacts from the COVID-19 pandemic on sales, billings,
revenue, demand and buying patterns, component supply and ability
to manufacture products to meet demand in a timely fashion, and
costs such as possible increased costs for shipping and components;
the ongoing war in Ukraine, 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; 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 the COVID-19 pandemic;
competition and pricing pressure; product inventory shortages for
any reason, including those caused by the effects of increased
inflation and interest rates in certain geographies, the COVID-19
pandemic 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 such as the COVID-19 pandemic, 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; 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 and net of proceeds from intellectual
property matter, 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, impairment and 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)
|
March 31, 2023 |
|
December 31, 2022 |
ASSETS |
|
|
|
CURRENT ASSETS: |
|
|
|
Cash and cash equivalents |
$ |
2,304.2 |
|
|
$ |
1,682.9 |
|
Short-term investments |
|
548.8 |
|
|
|
502.6 |
|
Marketable equity securities |
|
26.1 |
|
|
|
25.5 |
|
Accounts receivable—net |
|
1,087.2 |
|
|
|
1,261.7 |
|
Inventory |
|
302.7 |
|
|
|
264.6 |
|
Prepaid expenses and other current assets |
|
89.7 |
|
|
|
73.1 |
|
Total current assets |
|
4,358.7 |
|
|
|
3,810.4 |
|
LONG-TERM INVESTMENTS |
|
15.6 |
|
|
|
45.5 |
|
PROPERTY AND EQUIPMENT—NET |
|
917.4 |
|
|
|
898.5 |
|
DEFERRED CONTRACT COSTS |
|
536.9 |
|
|
|
518.2 |
|
DEFERRED TAX ASSETS |
|
649.6 |
|
|
|
569.4 |
|
GOODWILL AND OTHER INTANGIBLE ASSETS—NET |
|
178.9 |
|
|
|
184.0 |
|
OTHER ASSETS |
|
175.2 |
|
|
|
202.0 |
|
TOTAL ASSETS |
$ |
6,832.3 |
|
|
$ |
6,228.0 |
|
LIABILITIES AND STOCKHOLDERS’ EQUITY
(DEFICIT) |
|
|
|
CURRENT LIABILITIES: |
|
|
|
Accounts payable |
$ |
238.4 |
|
|
$ |
243.4 |
|
Accrued liabilities |
|
346.7 |
|
|
|
266.3 |
|
Accrued payroll and compensation |
|
213.4 |
|
|
|
219.4 |
|
Deferred revenue |
|
2,463.3 |
|
|
|
2,349.3 |
|
Total current liabilities |
|
3,261.8 |
|
|
|
3,078.4 |
|
DEFERRED REVENUE |
|
2,417.6 |
|
|
|
2,291.0 |
|
INCOME TAX LIABILITIES |
|
70.5 |
|
|
|
67.8 |
|
LONG-TERM DEBT |
|
990.9 |
|
|
|
990.4 |
|
OTHER LIABILITIES |
|
80.1 |
|
|
|
82.0 |
|
Total liabilities |
|
6,820.9 |
|
|
|
6,509.6 |
|
COMMITMENTS AND CONTINGENCIES |
|
|
|
STOCKHOLDERS’ EQUITY (DEFICIT): |
|
|
|
Common stock |
|
0.8 |
|
|
|
0.8 |
|
Additional paid-in capital |
|
1,327.4 |
|
|
|
1,284.2 |
|
Accumulated other comprehensive loss |
|
(18.1 |
) |
|
|
(20.2 |
) |
Accumulated deficit |
|
(1,298.7 |
) |
|
|
(1,546.4 |
) |
Total stockholders’ equity (deficit) |
|
11.4 |
|
|
|
(281.6 |
) |
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT) |
$ |
6,832.3 |
|
|
$ |
6,228.0 |
|
FORTINET, INC.
CONDENSED CONSOLIDATED STATEMENTS OF
INCOME (Unaudited, in millions, except per share
amounts)
|
Three Months Ended |
|
March 31, 2023 |
|
March 31, 2022 |
REVENUE: |
|
|
|
Product |
$ |
500.7 |
|
|
$ |
371.0 |
|
Service |
|
761.6 |
|
|
|
583.8 |
|
Total revenue |
|
1,262.3 |
|
|
|
954.8 |
|
COST OF REVENUE: |
|
|
|
Product |
|
193.6 |
|
|
|
161.0 |
|
Service |
|
114.2 |
|
|
|
92.8 |
|
Total cost of revenue |
|
307.8 |
|
|
|
253.8 |
|
GROSS PROFIT: |
|
|
|
Product |
|
307.1 |
|
|
|
210.0 |
|
Service |
|
647.4 |
|
|
|
491.0 |
|
Total gross profit |
|
954.5 |
|
|
|
701.0 |
|
OPERATING EXPENSES: |
|
|
|
Research and development |
|
151.1 |
|
|
|
124.9 |
|
Sales and marketing |
|
478.3 |
|
|
|
387.6 |
|
General and administrative |
|
52.8 |
|
|
|
38.6 |
|
Gain on intellectual property matter |
|
(1.2 |
) |
|
|
(1.1 |
) |
Total operating expenses |
|
681.0 |
|
|
|
550.0 |
|
OPERATING INCOME |
|
273.5 |
|
|
|
151.0 |
|
INTEREST INCOME |
|
20.6 |
|
|
|
1.3 |
|
INTEREST EXPENSE |
|
(5.0 |
) |
|
|
(4.5 |
) |
OTHER INCOME (EXPENSE)—NET |
|
2.0 |
|
|
|
(9.1 |
) |
INCOME BEFORE INCOME TAXES AND LOSS FROM EQUITY METHOD
INVESTMENT |
|
291.1 |
|
|
|
138.7 |
|
PROVISION FOR (BENEFIT FROM) INCOME TAXES |
|
21.3 |
|
|
|
(8.1 |
) |
LOSS FROM EQUITY METHOD INVESTMENT |
|
(22.1 |
) |
|
|
(8.5 |
) |
NET INCOME INCLUDING NON-CONTROLLING INTERESTS |
|
247.7 |
|
|
|
138.3 |
|
Less: NET LOSS ATTRIBUTABLE TO NON-CONTROLLING INTERESTS, NET OF
TAX |
|
— |
|
|
|
(0.1 |
) |
NET INCOME ATTRIBUTABLE TO FORTINET, INC. |
$ |
247.7 |
|
|
$ |
138.4 |
|
Net income per share attributable to Fortinet, Inc. (a): |
|
|
|
Basic |
$ |
0.32 |
|
|
$ |
0.17 |
|
Diluted |
$ |
0.31 |
|
|
$ |
0.17 |
|
Weighted-average shares used to compute net income per share
attributable to Fortinet, Inc. (a): |
|
|
|
Basic |
|
783.2 |
|
|
|
803.4 |
|
Diluted |
|
793.4 |
|
|
|
820.8 |
|
(a) All share and per share amounts presented
herein have been retroactively adjusted to reflect the five-for-one
forward stock split which was effective June 22, 2022.
FORTINET, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH
FLOWS (Unaudited, in millions)
|
Three Months Ended |
|
March 31, 2023 |
|
March 31, 2022 |
CASH FLOWS FROM OPERATING ACTIVITIES: |
|
|
|
Net income including non-controlling interests |
$ |
247.7 |
|
|
$ |
138.3 |
|
Adjustments to reconcile net income to net cash provided by
operating activities: |
|
|
|
Stock-based compensation |
|
56.3 |
|
|
|
53.2 |
|
Amortization of deferred contract costs |
|
62.5 |
|
|
|
52.5 |
|
Depreciation and amortization |
|
27.5 |
|
|
|
25.5 |
|
Amortization of investment premiums (discounts) |
|
(0.3 |
) |
|
|
1.7 |
|
Loss from equity method investment |
|
22.1 |
|
|
|
8.5 |
|
Other |
|
3.8 |
|
|
|
8.4 |
|
Changes in operating assets and liabilities, net of impact of
business combinations: |
|
|
|
Accounts receivable—net |
|
171.1 |
|
|
|
15.4 |
|
Inventory |
|
(45.3 |
) |
|
|
(13.5 |
) |
Prepaid expenses and other current assets |
|
(16.0 |
) |
|
|
(26.0 |
) |
Deferred contract costs |
|
(81.2 |
) |
|
|
(66.6 |
) |
Deferred tax assets |
|
(81.1 |
) |
|
|
(87.6 |
) |
Other assets |
|
4.5 |
|
|
|
(20.6 |
) |
Accounts payable |
|
(4.1 |
) |
|
|
35.5 |
|
Accrued liabilities |
|
80.0 |
|
|
|
68.2 |
|
Accrued payroll and compensation |
|
(6.0 |
) |
|
|
(13.6 |
) |
Other liabilities |
|
(4.7 |
) |
|
|
11.3 |
|
Deferred revenue |
|
240.7 |
|
|
|
205.5 |
|
Net cash provided by operating activities |
|
677.5 |
|
|
|
396.1 |
|
CASH FLOWS FROM INVESTING ACTIVITIES: |
|
|
|
Purchases of investments |
|
(207.2 |
) |
|
|
(385.2 |
) |
Sales of investments |
|
— |
|
|
|
3.0 |
|
Maturities of investments |
|
195.0 |
|
|
|
459.4 |
|
Purchases of property and equipment |
|
(30.3 |
) |
|
|
(122.6 |
) |
Other |
|
0.1 |
|
|
|
— |
|
Net cash used in investing activities |
|
(42.4 |
) |
|
|
(45.4 |
) |
CASH FLOWS FROM FINANCING ACTIVITIES: |
|
|
|
Repurchase and retirement of common stock |
|
— |
|
|
|
(691.2 |
) |
Proceeds from issuance of common stock |
|
21.2 |
|
|
|
11.0 |
|
Taxes paid related to net share settlement of equity awards |
|
(34.5 |
) |
|
|
(64.8 |
) |
Other |
|
(0.4 |
) |
|
|
(1.0 |
) |
Net cash used in financing activities |
|
(13.7 |
) |
|
|
(746.0 |
) |
EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS |
|
(0.1 |
) |
|
|
(0.3 |
) |
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS |
|
621.3 |
|
|
|
(395.6 |
) |
CASH AND CASH EQUIVALENTS—Beginning of period |
|
1,682.9 |
|
|
|
1,319.1 |
|
CASH AND CASH EQUIVALENTS—End of period |
$ |
2,304.2 |
|
|
$ |
923.5 |
|
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 |
|
March 31, 2023 |
|
March 31, 2022 |
Reconciliation of non-GAAP operating income: |
|
|
|
GAAP operating income |
$ |
273.5 |
|
|
$ |
151.0 |
|
GAAP operating margin |
|
21.7 |
% |
|
|
15.8 |
% |
Add back: |
|
|
|
Stock‐based compensation |
|
57.0 |
|
|
|
53.9 |
|
Amortization of acquired intangible assets |
|
4.7 |
|
|
|
6.4 |
|
Gain on intellectual property matter |
|
(1.2 |
) |
|
|
(1.1 |
) |
Non‐GAAP operating income |
$ |
334.0 |
|
|
$ |
210.2 |
|
Non‐GAAP operating margin |
|
26.5 |
% |
|
|
22.0 |
% |
|
|
|
|
Reconciliation of non-GAAP net income attributable to
Fortinet, Inc.: |
|
|
|
GAAP net income attributable to Fortinet, Inc. |
$ |
247.7 |
|
|
$ |
138.4 |
|
Add back: |
|
|
|
Stock‐based compensation |
|
57.0 |
|
|
|
53.9 |
|
Amortization of acquired intangible assets |
|
4.7 |
|
|
|
6.4 |
|
Gain on intellectual property matter |
|
(1.2 |
) |
|
|
(1.1 |
) |
Tax adjustment (a) |
|
(38.5 |
) |
|
|
(41.7 |
) |
Adjustments attributable non-controlling interests (b) |
|
— |
|
|
|
(0.8 |
) |
Non-GAAP net income attributable to Fortinet, Inc. |
$ |
269.7 |
|
|
$ |
155.1 |
|
|
|
|
|
Non-GAAP net income per share attributable to Fortinet,
Inc., diluted |
|
|
|
Non-GAAP net income attributable to Fortinet, Inc. |
$ |
269.7 |
|
|
$ |
155.1 |
|
Non-GAAP shares used in diluted net income per share attributable
to Fortinet, Inc. calculations (c) |
|
793.4 |
|
|
|
820.8 |
|
Non-GAAP net income per share attributable to Fortinet, Inc.,
diluted (c) |
$ |
0.34 |
|
|
$ |
0.19 |
|
|
|
|
|
Reconciliation of non-GAAP net income per share
attributable to Fortinet, Inc., diluted |
|
|
|
GAAP net income per share attributable to Fortinet, Inc., diluted
(c) |
$ |
0.31 |
|
|
$ |
0.17 |
|
Add back: |
|
|
|
Non-GAAP adjustments to net income per share attributable to
Fortinet, Inc. (c) |
|
0.03 |
|
|
|
0.02 |
|
Non-GAAP net income per share attributable to Fortinet, Inc.,
diluted (c) |
$ |
0.34 |
|
|
$ |
0.19 |
|
(a) Non-GAAP financial information is adjusted to
an effective tax rate of 17% in the three months ended
March 31, 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 March 31, 2022. (c) All share and per share amounts
presented herein have been retroactively adjusted to reflect the
five-for-one forward stock split which was effective June 22,
2022.
Reconciliation of net cash provided by
operating activities to free cash flow
|
Three Months Ended |
|
March 31, 2023 |
|
March 31, 2022 |
Net cash provided by operating activities |
$ |
677.5 |
|
|
$ |
396.1 |
|
Less: Purchases of property and equipment |
|
(30.3 |
) |
|
|
(122.6 |
) |
Free cash flow |
$ |
647.2 |
|
|
$ |
273.5 |
|
Net cash used in investing activities |
$ |
(42.4 |
) |
|
$ |
(45.4 |
) |
Net cash used in financing activities |
$ |
(13.7 |
) |
|
$ |
(746.0 |
) |
Reconciliation of total revenue to total
billings
|
Three Months Ended |
|
March 31, 2023 |
|
March 31, 2022 |
Total revenue |
$ |
1,262.3 |
|
$ |
954.8 |
Add: Change in deferred revenue |
|
240.6 |
|
|
205.0 |
Total billings |
$ |
1,502.9 |
|
$ |
1,159.8 |
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)
Gráfica de Acción Histórica
De Mar 2024 a Abr 2024
Fortinet (LSE:0IR9)
Gráfica de Acción Histórica
De Abr 2023 a Abr 2024