NASDAQ$FTNT

Fortinet Inc · Q2 2022 earnings

Q2 2022 earnings · · Investor relations

Briefing

Announced financial results, demonstrating strong revenue and billings growth driven by large enterprise transactions and vendor consolidation.

Fortinet reported strong Q2 2022 financial results, with revenue reaching $1.03 billion, a 29% year-over-year increase. Billings grew by 36% year-over-year to $1.30 billion, driven by an over 50% increase in transactions larger than one million dollars. The company's market share gains are attributed to the convergence of networking and security, and an accelerating focus on vendor consolidation.

  • Total revenue increased by 29% year-over-year to $1.03 billion.
  • Product revenue grew by 34% year-over-year to $400.7 million.
  • Total billings increased by 36% year-over-year to $1.30 billion.
  • GAAP operating margin was 19.0%.

Headline financials

Total Revenue

$1.03B

Previous: $801M+28.6%
EPS (adj)

$0.24

Previous: $0.19+26.3%
Total Billings

$1.3B

Previous: $961M+35.3%
Capital Expenditures

-$163M

Previous: -$75.6M-114.9%
Free Cash Flow

$11M

Previous: $61.9M-82.2%
Net Income

$174M

Previous: $138M+26.2%
Operating Income

$195M

Previous: $148M+32.4%
Gross Profit

$779M

Previous: $614M+26.9%
Cash & Equivalents

$710M

Previous: $1.88B-62.2%
Total Assets

$5.29B

Previous: $5.56B-4.8%
Stock-Based Comp

$54.7M

Previous: $52.6M+4.0%

Revenue & EPS history

Fortinet · Revenue · Quarterly

$1.03B

Q2 2022+28.6%vs Q2 2021
Beat estimate in 15 of 16 quarters(94%)
ActualEstimate

Revenue by segment

Fortinet · $401M total across 1 segment · Q2 2022

  • Product Revenue
    $401M+34.3%

Forward guidance

For the third quarter of 2022, Fortinet expects revenue in the range of $1.105 billion to $1.135 billion and billings in the range of $1.385 billion to $1.415 billion.

Tailwinds

  • Revenue in the range of $1.105 billion to $1.135 billion
  • Billings in the range of $1.385 billion to $1.415 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 in the range of $0.26 to $0.28, assuming a non-GAAP effective tax rate of 17%.

Headwinds

  • General economic risks, including those caused by the COVID-19 pandemic, the war in Ukraine, economic challenges, fears of a recession, and any actual recession, and the effects of increased inflation in certain geographies
  • Significantly heightened 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
  • Global economic conditions, country-specific economic conditions, and foreign currency risks
  • Competitiveness in the security market

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 Q2 2022

Historical avgQ2 2022

+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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