NASDAQ$FTNT

Fortinet Inc · Q2 2023 earnings

Q2 2023 earnings · · Investor relations

Briefing

Fortinet's financial performance improved, marked by revenue growth and increased profitability.

Fortinet reported a strong second quarter in 2023, with revenue reaching $1.29 billion, a 25.5% increase year-over-year. The company's GAAP EPS rose to $0.33, up 57% year-over-year, and non-GAAP EPS increased to $0.38, a 58% increase year-over-year. Fortinet's focus on secure networking, consolidated cybersecurity fabric, hybrid cloud security, and operational technology contributed to its growth.

  • Total revenue increased by 25.5% year-over-year, reaching $1.29 billion.
  • Product revenue grew by 18% year-over-year to $472.6 million.
  • Service revenue increased by 30% year-over-year to $820.2 million.
  • GAAP diluted net income per share increased by 57% year-over-year to $0.33.

Headline financials

Total Revenue

$1.29B

Previous: $1.03B+25.5%
EPS (adj)

$0.38

Previous: $0.24+58.3%
Total Billings

$1.54B

Previous: $1.3B+18.5%
Capital Expenditures

-$107M

Previous: -$163M+34.1%
Free Cash Flow

$159M

Previous: $11M+1347.3%
Net Income

$266M

Previous: $174M+53.5%
Operating Income

$279M

Previous: $195M+42.9%
Gross Profit

$997M

Previous: $779M+27.9%
Cash & Equivalents

$2.38B

Previous: $710M+234.7%
Total Assets

$7.49B

Previous: $5.29B+41.4%
Stock-Based Comp

$65M

Previous: $54.7M+18.8%

Revenue & EPS history

Fortinet · Revenue · Quarterly

$1.29B

Q2 2023+25.5%vs Q2 2022
Beat estimate in 9 of 15 quarters(60%)
ActualEstimate

Revenue by segment

Fortinet · $473M total across 1 segment · Q2 2023

  • Product Revenue
    $473M+17.9%

Forward guidance

For the third quarter of 2023, Fortinet expects revenue between $1.315 billion and $1.375 billion, and billings between $1.560 billion and $1.620 billion. Non-GAAP gross margin is expected to be in the range of 75.5% to 76.5%, and non-GAAP operating margin in the range of 24.5% to 25.5%. Diluted non-GAAP net income per share is projected to be between $0.35 and $0.37.

Tailwinds

  • Revenue in the range of $1.315 billion to $1.375 billion
  • Billings in the range of $1.560 billion to $1.620 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 in the range of $0.35 to $0.37

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 2023

Historical avgQ2 2023

+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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