NASDAQ$FTNT

Fortinet Inc · Q1 2020 earnings

Q1 2020 earnings · · Investor relations

Briefing

Fortinet's first quarter results were driven by strategic internal investments, leading to industry-leading products and services with expansion into adjacent markets and sales force growth.

Fortinet reported a strong first quarter with a 22% year-over-year increase in total revenue, driven by growth in both product and service revenue. The company's strategic investments and competitive advantages, particularly in VPN throughput capacity, contributed to market share gains. Fortinet expects the COVID-19 pandemic may have a material negative impact on future periods.

  • Total revenue increased by 22% year-over-year to $576.9 million.
  • Product revenue grew by 18% year-over-year to $192.3 million.
  • Billings increased by 21% year-over-year to $667.8 million.
  • GAAP diluted net income per share was $0.60.

Headline financials

Total Revenue

$577M

Previous: $473M+22.1%
EPS (adj)

$0.12

Previous: $0.09+33.3%
Total Billings

$668M

Previous: $552M+21.1%
Capital Expenditures

-$27.6M

Previous: -$10.2M-170.6%
Free Cash Flow

$76.4M

Previous: $48.6M+57.2%
Net Income

$104M

Previous: $58.8M+76.9%
Operating Income

$116M

Previous: $50.6M+129.1%
Gross Profit

$448M

Previous: $360M+24.6%
Cash & Equivalents

$626M

Previous: $1.22B-48.5%
Total Assets

$3.21B

Previous: $3.21B+0.0%
Stock-Based Comp

$44.8M

Previous: $43M+4.2%

Revenue & EPS history

Fortinet · Revenue · Quarterly

$577M

Q1 2020+22.1%vs Q1 2019
Beat estimate in 16 of 16 quarters(100%)
ActualEstimate

Revenue by segment

Fortinet · $192M total across 1 segment · Q1 2020

  • Product Revenue
    $192M+18.2%

Forward guidance

For the second quarter of 2020, Fortinet expects revenue between $590 million and $605 million, billings between $700 million and $725 million, non-GAAP gross margin between 77.5% and 78.5%, non-GAAP operating margin between 23% and 24%, and diluted non-GAAP net income per share between $0.64 and $0.66.

Tailwinds

  • Revenue in the range of $590 million to $605 million
  • Billings in the range of $700 million to $725 million
  • Non-GAAP gross margin in the range of 77.5% to 78.5%
  • Non-GAAP operating margin in the range of 23% to 24%
  • Diluted non-GAAP net income per share in the range of $0.64 to $0.66, assuming a non-GAAP effective tax rate of 22%.

Historical earnings impact

How earnings announcements have historically affected this stock's price.

Avg. return before/after earnings

Based on 20 quarterly earnings reports · overlaid with Q1 2020

Historical avgQ1 2020

+0.6%

Avg return

Earnings day

+2.3%

Avg return

5 days after

+5.2%

Avg return

30 days after

55%

36 / 66 earnings

Positive

+26.3%

Q2 2024

Best reaction

-23.6%

Q2 2023

Worst reaction

Earnings price reactions
QuarterReport dateReaction (Day 0)+5 days+30 days
Q1 2026+0.2%+26.2%+61.0%
Q4 2025+4.9%+11.3%+6.0%
Q3 2025+4.2%-2.7%+1.1%
Q2 2025-1.2%+5.4%+4.7%
Q1 2025-8.6%-1.6%-1.7%
Q4 2024+2.8%+2.8%-3.3%
Q3 2024+13.8%+22.6%+22.7%
Q2 2024+26.3%+25.8%+36.8%
Q1 2024-7.3%-6.5%-6.6%
Q4 2023+6.0%+6.6%+10.6%
Q3 2023-11.9%-13.6%-8.4%
Q2 2023-23.6%-21.2%-18.1%
Q1 2023+6.8%+9.8%+12.6%
Q4 2022+14.7%+14.7%+15.3%
Q3 2022-18.6%-15.2%-5.0%
Q2 2022-12.9%-11.7%-19.5%
Q1 2022-0.7%-14.4%+3.5%
Q4 2021+1.4%+1.6%+8.3%
Q3 2021+3.4%+5.8%-8.2%
Q2 2021+0.2%+9.6%+16.3%
Q1 2021+3.2%+4.4%+10.4%
Q4 2020+3.0%+6.0%+11.0%
Q3 2020-7.2%-5.5%+4.1%
Q2 2020-6.5%-9.7%-16.0%
Q1 2020+24.5%+29.4%+29.4%
Q4 2019-2.3%-2.1%-16.9%
Q3 2019+9.1%+10.9%+27.2%
Q2 2019+7.2%+2.2%-1.4%
Q1 2019-6.5%-11.0%-21.1%
Q4 2018-3.2%-0.3%-1.6%
Q3 2018-11.7%-9.0%-10.1%
Q2 2018+17.2%+17.0%+33.1%
Q1 2018-2.1%+1.8%+10.8%
Q4 2017+3.6%+3.6%+16.8%
Q3 2017-2.4%-0.7%+5.6%
Q2 2017-5.7%-9.3%-8.7%
Q1 2017-2.3%-1.3%-1.0%
Q4 2016+13.9%+14.1%+9.6%
Q3 2016+5.3%+5.2%+1.3%
Q2 2016-5.3%-7.2%-2.6%
Q1 2016+6.5%
Q4 2015+8.9%
Q3 2015-16.7%
Q2 2015+9.1%
Q1 2015+13.1%
Q4 2014-10.0%
Q3 2014+0.8%
Q2 2014+6.8%
Q1 2014+4.1%
Q4 2013+0.7%
Q3 2013+0.7%
Q2 2013+4.4%
Q1 2013+0.0%
Q4 2012+19.8%
Q3 2012-18.6%
Q2 2012+12.6%
Q1 2011-1.6%
Q1 2012+0.2%
Q4 2011+0.7%
Q4 2009+0.7%
Q3 2010-4.2%
Q3 2011-4.2%
Q2 2010-7.1%
Q4 2010-7.1%
Q2 2011-7.1%
Q1 2010-6.4%

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