Fortinet Reports First Quarter 2019 Financial Results

Sunnyvale, California - 2019年5月2日


First Quarter 2019 Highlights

  • Revenue of $472.6 million, up 18% year over year
  • Billings of $551.6 million, up 19% year over year1
  • Deferred revenue of $1.77 billion, up 26% year over year
  • GAAP operating margin of 11%
  • Non-GAAP operating margin of 20%1
  • GAAP diluted net income per share of $0.34
  • Non-GAAP diluted net income per share of $0.461
  • Cash flow from operations of $201.3 million
  • Free cash flow of $191.1 million1

SUNNYVALE, Calif. - May 2, 2019 - Fortinet® (Nasdaq: FTNT), a global leader in broad, integrated and automated cybersecurity solutions, today announced financial results for the first quarter ended March 31, 2019.

“We had an excellent start to the year demonstrating the strong demand for our product and services,” said Ken Xie, Founder, Chairman and Chief Executive Officer. “We expect 2019 to be another year of better-than-industry growth, driven by the momentum in our business and strong customer demand for our broad, integrated and automated Security Fabric platform.”

Financial Highlights for the First Quarter of 2019

  • Revenue: Total revenue was $472.6 million for the first quarter of 2019, an increase of 18% compared to $399.0 million for the same quarter of 2018.
  • Product revenue was $162.7 million for the first quarter of 2019, an increase of 14% compared to $142.8 million for the same quarter of 2018.
  • Service revenue was $309.9 million for the first quarter of 2019, an increase of 21% compared to $256.2 million for the same quarter of 2018.
  • Billings1: Total billings were $551.6 million for the first quarter of 2019, an increase of 19% compared to $463.2 million for the same quarter of 2018.
  • Deferred Revenue: Total deferred revenue was $1.77 billion as of March 31, 2019, an increase of 26% compared to $1.40 billion as of March 31, 2018.
  • GAAP Operating Income and Margin: GAAP operating income was $50.6 million for the first quarter of 2019, representing a GAAP operating margin of 11%. GAAP operating income was $32.4 million for the same quarter of 2018, representing a GAAP operating margin of 8%.
  • Non-GAAP Operating Income and Margin1: Non-GAAP operating income was $96.6 million for the first quarter of 2019, representing a non-GAAP operating margin of 20%. Non-GAAP operating income was $70.7 million for the first quarter of 2018, representing a non-GAAP operating margin of 18%.
  • GAAP Net Income and Diluted Net Income Per Share: GAAP net income was $58.8 million for the first quarter of 2019, compared to GAAP net income of $41.6 million for the same quarter of 2018. GAAP diluted net income per share was $0.34 for the first quarter of 2019, based on 174.8 million diluted weighted-average shares outstanding, compared to GAAP diluted net income per share of $0.24 for the same quarter of 2018, based on 171.8 million diluted weighted-average shares outstanding.
  • Non-GAAP Net Income and Diluted Net Income Per Share1: Non-GAAP net income was $80.8 million for the first quarter of 2019, compared to non-GAAP net income of $57.0 million for the same quarter of 2018. Non-GAAP diluted net income per share was $0.46 for the first quarter of 2019, based on 174.8 million diluted weighted-average shares outstanding, compared to $0.33 for the same quarter of 2018, based on 171.8 million diluted weighted-average shares outstanding.
  • Cash Flow and Free Cash Flow1: In the first quarter of 2019, cash flow from operations was $201.3 million compared to $139.7 million in the same quarter of 2018. Free cash flow was $191.1 million during the first quarter of 2019, compared to $128.1 million for the same quarter of 2018.

Guidance

For the second quarter of 2019, Fortinet currently expects:

  • Revenue in the range of $505 million to $515 million
  • Billings in the range of $585 million to $605 million
  • Non-GAAP gross margin in the range of 75.5% to 76.5%
  • Non-GAAP operating margin in the range of 22.0% to 22.5%
  • Diluted non-GAAP net income per share in the range of $0.49 to $0.51, assuming a non-GAAP effective tax rate of 24%. This assumes a diluted share count of 177 million to 179 million

For the fiscal year 2019, Fortinet currently expects:

  • Revenue in the range of $2.07 billion to $2.10 billion
  • Service revenue in the range of $1.34 billion to $1.36 billion
  • Billings in the range of $2.47 billion to $2.52 billion
  • Non-GAAP gross margin in the range of 75.5% to 76.5%
  • Non-GAAP operating margin in the range of 22.5% to 23.5%
  • Diluted non-GAAP net income per share in the range of $2.10 to $2.15, assuming a non-GAAP effective tax rate of 24%. This assumes a diluted share count of 178 million to 180 million

Our guidance with respect to non-GAAP financial measures excludes stock-based compensation and amortization of acquired intangible assets. 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.”

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. The call can be accessed by dialing (877) 303-6913 (domestic) or (224) 357-2188 (international) with conference ID # 9894018. A live webcast of the conference call and supplemental slides will be accessible from the Investor Relations page of Fortinet’s website at http://investor.fortinet.com and a replay will be archived and accessible at http://investor.fortinet.com/events.cfm. A replay of this conference call can also be accessed through May 9, 2019, by dialing (855) 859-2056 (domestic) or (404) 537-3406 (international) with conference ID #9894018.

Second Quarter 2019 Investor Conference Participation Schedule:

  • Jefferies 2019 Software Conference - Interactions! (Meetings Only)

May 8-9, 2019 - Beverly Hills, CA

  • 47th Annual J.P. Morgan Global Technology, Media and Communications Conference

May 14, 2019 - Boston, MA

  • Baird 2019 Global Consumer, Technology & Services Conference (Meetings Only)

June 4, 2019 - New York, NY

  • William Blair 39th Annual Growth Stock Conference

June 5, 2019 - Chicago, IL

  • Bank of America Merrill Lynch 2019 Global Technology Conference

June 6, 2019 - San Francisco, CA

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 listen to these presentations and access the most updated information and listen to the webcast of each event, please visit the Investor Relations page of Fortinet’s website at http://investor.fortinet.com. The schedule is subject to change.

Read the full press release (includes financial tables)

About Fortinet

Fortinet (NASDAQ: FTNT) secures the largest enterprise, service provider, and government organizations around the world. Fortinet empowers its customers with intelligent, seamless protection across the expanding attack surface and the power to take on ever-increasing performance requirements of the borderless network - today and into the future. Only the Fortinet Security Fabric architecture can deliver security features without compromise to address the most critical security challenges, whether in networked, application, cloud or mobile environments. Fortinet ranks #1 in the most security appliances shipped worldwide and more than 385,000 customers trust Fortinet to protect their businesses. Learn more at https://www.fortinet.com, the Fortinet Blog, or FortiGuard Labs.

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