Core Insights - Fortinet (FTNT.US) reported a significant year-over-year increase in earnings, exceeding Wall Street expectations, but the stock fell 12.25% in after-hours trading due to investor concerns about future growth prospects and broader market trends affecting the tech industry [1][2] - The company achieved a revenue growth of 13.7% year-over-year, reaching $1.539 billion, aligning with market expectations, while net profit surged by 44.8% to $433.4 million, translating to earnings per share (EPS) of $0.56 [1] - Analysts have mixed views on the stock's potential, with target prices ranging from $83 to $135, despite the impressive 79.57% return over the past year [1] Financial Performance - Fortinet's adjusted earnings for the quarter were $452.3 million, or $0.58 per share, surpassing the average analyst estimate of $0.53 [1] - The company expects next quarter's EPS to be between $0.58 and $0.60, with revenue projected between $1.59 billion and $1.65 billion, slightly below the analyst forecast of $1.63 billion [1][2] - For the full year, the EPS is anticipated to be between $2.43 and $2.49, with revenue expectations set at $6.65 billion to $6.85 billion [2] Strategic Outlook - Fortinet's CEO expressed satisfaction with the quarterly results, highlighting a 570 basis point increase in non-GAAP operating margin to a record high of 34%, along with a 14% year-over-year growth in order volume [2] - The company plans to continue investing in growth strategies, focusing on the rapidly expanding Unified SASE and security operations markets while reinforcing its leadership in the security networking sector [2] - Fortinet aims to set new benchmarks in the cybersecurity field through its expertise in network and security convergence, AI-driven innovations, and seamless product development via the FortiOS operating system [2]

Core Insights - Fortinet reported $1.54 billion in revenue for Q1 2025, a year-over-year increase of 13.8% and an EPS of $0.58 compared to $0.43 a year ago, exceeding Zacks Consensus Estimates for both revenue and EPS [1][3] Financial Performance - Total billings (Non-GAAP) reached $1.60 billion, surpassing the 10-analyst average estimate of $1.57 billion [4] - Total deferred revenue was $6.42 billion, slightly above the six-analyst average estimate of $6.39 billion [4] - Geographic revenue breakdown: - Total Americas: $629.80 million, a year-over-year change of +13.1%, compared to the $635.09 million average estimate [4] - Asia Pacific and Japan: $281.50 million, a year-over-year change of +9.6%, below the $308.33 million average estimate [4] - Europe, Middle East, and Africa: $628.40 million, a year-over-year change of +16.5%, exceeding the $600.09 million average estimate [4] - Revenue from products was $459.10 million, a +12.3% change year-over-year, above the $443.39 million estimated by 14 analysts [4] - Revenue from services was $1.08 billion, a +14.4% change year-over-year, slightly below the $1.09 billion average estimate [4] Profitability Metrics - Gross profit from products (Non-GAAP) was $311 million, exceeding the $279.69 million estimated by 10 analysts [4] - Gross profit from services (Non-GAAP) was $949.30 million, slightly below the $958.33 million average estimate [4] - Overall gross profit from products was $309.20 million, above the $274.11 million average estimate [4] - Overall gross profit from services was $937.40 million, below the $956.03 million average estimate [4] Stock Performance - Fortinet shares returned +21.5% over the past month, outperforming the Zacks S&P 500 composite's +10.6% change [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating potential performance in line with the broader market in the near term [3]

分组1 - Fortinet reported quarterly earnings of $0.58 per share, exceeding the Zacks Consensus Estimate of $0.53 per share, and up from $0.43 per share a year ago, representing an earnings surprise of 9.43% [1] - The company achieved revenues of $1.54 billion for the quarter ended March 2025, surpassing the Zacks Consensus Estimate by 0.21%, and an increase from $1.35 billion year-over-year [2] - Fortinet has consistently surpassed consensus EPS and revenue estimates over the last four quarters [2] 分组2 - The stock has increased approximately 13.4% since the beginning of the year, contrasting with the S&P 500's decline of -4.7% [3] - The current consensus EPS estimate for the upcoming quarter is $0.58 on revenues of $1.62 billion, and for the current fiscal year, it is $2.44 on revenues of $6.74 billion [7] - The Zacks Industry Rank indicates that the Security industry is currently in the bottom 31% of over 250 Zacks industries, which may impact stock performance [8]

Financial Data and Key Metrics Changes - The company reported a revenue growth of 14%, reaching $1,540,000,000, with product revenue increasing by 12% to $459,000,000 [14][15] - Total billings grew 14% to $1,600,000,000, driven by 18% growth in unified SaaS and 29% growth in AI-driven SecOps [14][15] - The operating margin reached a record 34%, exceeding the high end of guidance by 320 basis points [17][31] - Free cash flow was a record $783,000,000, representing a margin of 51% [17] Business Line Data and Key Metrics Changes - Unified SaaS billing growth was 18%, accounting for 25% of total business, while secure operations and unified SaaS saw strong growth with security service edge billing growth over 110% [7][14] - Security subscriptions revenue increased by 16%, while support and related service revenues grew by 12% [15][16] - AI-driven security operations accounted for 10% of the business, with a 29% increase in revenue [9][10] Market Data and Key Metrics Changes - EMEA was the best-performing geography with mid-teens growth, particularly in financial services and government sectors, which grew over 20% [24][25][101] - The number of new logos increased by 14% to over 6,300, driven by investments in channel partners [14][15] Company Strategy and Development Direction - The company aims to become the number one player in the SASE market, leveraging its strong SASE strategy and unified operating system [19][20] - Continued investment in AI capabilities is expected to drive growth, with over 500 issued and pending AI patents [10] - The company is focusing on expanding its offerings in OT security and AI as key growth drivers over the next five years [10] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the strong demand for cybersecurity solutions despite geopolitical uncertainties, with a growing pipeline and robust close rates [26][27] - The company is maintaining its full-year guidance to account for potential top-line risks associated with the evolving geopolitical environment [29][31] - The management noted that the firewall upgrade cycle is expected to gain momentum in the second half of 2025 [30] Other Important Information - The company announced a transition in CFO roles, with Keith Jensen stepping down and Christiana Ohlgart taking over [3][4] - The company has not seen significant impacts from U.S. tariffs in Q1 and does not expect meaningful impacts in Q2 [27][73] Q&A Session Summary Question: Dynamics behind maintenance and services revenue - Management explained that the slight decline was affected by Q4 having two more days than Q1, impacting daily revenue rates [38][39] Question: Guidance for the next quarter - Management indicated that while there is good momentum, they are being cautious due to geopolitical uncertainties [46][47] Question: Customer hesitancy in purchasing - Management noted that while there is hesitancy, they have not seen delays yet, and positive feedback from channel activities is expected to resolve this [54][55] Question: Large transactions and their drivers - Management confirmed that large transactions are primarily driven by SD WAN deployments, with customers buying additional solutions [67] Question: Impact of tariffs on margins - Management stated that they do not expect significant impacts from tariffs in Q1 or Q2, as only a few products are subject to tariffs [73][75] Question: Changes in channel partner behavior ahead of tariffs - Management reported no specific acceleration of deals due to tariffs, although there were inquiries about potential price increases [77][79] Question: Upcoming refresh cycle assumptions - Management indicated that smaller customers are buying more, while larger customers' strategies vary based on consolidation or upgrading [119][120]

Financial Data and Key Metrics Changes - Fortinet reported a revenue growth of 14% year-over-year, reaching $1,540,000,000 in Q1 2025, with product revenue increasing by 12% to $459,000,000 [12][14] - The operating margin reached a record 34%, reflecting strong gross margins and cost efficiencies [16][30] - Free cash flow was a record $783,000,000, with a margin of 51%, up six points from the previous year [16] Business Line Data and Key Metrics Changes - Unified SaaS billing grew by 18%, driven by a 110% increase in security service edge billing, accounting for 25% of the business [6][13] - AI-driven security operations revenue increased by 29%, representing 10% of total business [9][10] - Security subscriptions revenue grew by 16%, while support and related service revenues increased by 12% [15] Market Data and Key Metrics Changes - EMEA was the best-performing geography with mid-teens growth, particularly in financial services and government sectors, which grew over 20% [24][95] - The number of new logos increased by 14% to over 6,300, driven by investments in channel partners [13][14] - Large enterprise customers showed a growth of around 30%, with an increase in deals greater than $1,000,000 [23] Company Strategy and Development Direction - Fortinet aims to maintain its leadership in the firewall market and expand its presence in the SASE and OT security markets [6][10] - The company is focusing on integrating AI capabilities into its products, holding over 500 AI patents, and enhancing its SASE strategy [10][11] - Fortinet is also investing in Sovereign SASE solutions for large enterprises and service providers, ensuring compliance with local regulations [9] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the continued adoption of Fortinet solutions despite macroeconomic uncertainties, citing strong customer demand [18][25] - The company is cautious in its guidance due to potential risks from geopolitical factors but remains optimistic about achieving growth targets [28][30] - The upcoming firewall upgrade cycle is expected to gain momentum in the second half of 2025 [29] Other Important Information - The company announced the FortiGate 700 series, a high-performance firewall aimed at mid-sized businesses, which is expected to enhance market share [11] - Infrastructure investments decreased to $67,000,000, reflecting a lower level of real estate investment [17] Q&A Session Summary Question: Dynamics behind maintenance and services revenue - Management explained that the slight decline in service revenue was affected by fewer days in Q1 compared to Q4, impacting daily revenue rates [36][38] Question: Lightness in guidance for the next quarter - Management acknowledged some uncertainty in customer purchasing decisions due to geopolitical factors but noted strong close rates and sales momentum [44][45] Question: Conversations with customers regarding hesitancy to commit - Management indicated that while there is hesitancy due to macro news, they have not seen delays in deals yet [50][51] Question: Impact of tariffs on hardware sales - Management stated that tariffs are not expected to have a significant impact on operating margins, as only a few components are subject to tariff charges [68][70] Question: Large transactions and their representation of the Fortinet platform - Management confirmed that large transactions are primarily driven by SD WAN deployments, with customers expanding into the Fortinet security fabric [63][64] Question: Service revenue downtick and customer refresh dynamics - Management noted that the service revenue decline was partly due to customers refreshing appliances without adding new subscriptions [84][91]

Financial Performance - Q1 2025 - Fortinet's Q1 2025 billings reached $1.597 billion, a 13.5% year-over-year increase[35] - The company's Q1 2025 revenue was $1.540 billion, representing a 13.8% year-over-year growth[35] - Service revenue for Q1 2025 amounted to $1.081 billion, a 14.4% increase compared to the previous year, and accounted for 70% of total revenue[35] - Non-GAAP operating income for Q1 2025 was $526.2 million, resulting in an operating margin of 34.2%[36] - Non-GAAP net income for Q1 2025 reached $452.3 million, with a diluted net income per share of $0.58[36] Cash Flow and Balance Sheet - Fortinet's Q1 2025 free cash flow was $782.8 million[40] - Deferred revenue increased to $6.42 billion[36] - Remaining Performance Obligations reached $6.49 billion[36] Geographic Revenue - Americas revenue in Q1 2025 was $629.8 million, a 13.1% year-over-year increase[39] - EMEA revenue in Q1 2025 reached $628.4 million, a 16.5% year-over-year increase[39] - APAC revenue in Q1 2025 was $281.5 million, a 9.6% year-over-year increase[39] Guidance - Fortinet projects Q2 2025 billings to be between $1.685 billion and $1.765 billion, representing a mid-point growth of 12.0%[46] - The company anticipates Q2 2025 revenue to be in the range of $1.590 billion to $1.650 billion, with a mid-point growth of 12.9%[46]

• Total revenue of $1.54 billion, up 14% year over year • Product revenue of $459 million, up 12% year over year • Billings of $1.60 billion, up 14% year over year 1 • Unified SASE ARR up 26% and Security Operations ARR up 30%, year over year 2 2 • Record first quarter GAAP operating margin of 29% • Record first quarter Non-GAAP operating margin of 34% 1 • Record Cash flow from operations of $863 million • Record Free cash flow of $783 million 1 • Revenue: Total revenue was $1.54 billion for the first quart ...

Core Insights - Fortinet reported strong financial results for Q1 2025, with a non-GAAP operating margin of 34%, up 570 basis points year over year, and billings growth of 14% year over year [3][5][6]. Financial Performance - Total revenue reached $1.54 billion, reflecting a 14% increase from $1.35 billion in Q1 2024 [5][6]. - Product revenue was $459 million, up 12% from $408.9 million in the same quarter last year [5][6]. - Service revenue amounted to $1.08 billion, a 14.4% increase compared to $944.4 million in Q1 2024 [6]. - Total billings were $1.60 billion, marking a 13.5% increase from $1.41 billion in Q1 2024 [6]. - Remaining performance obligations stood at $6.49 billion, up 11.7% year over year, with an expected revenue recognition of approximately $3.38 billion over the next 12 months [6]. Growth Areas - Unified SASE Annual Recurring Revenue (ARR) increased by 26% to $1.15 billion, while Security Operations ARR grew by 30% to $434.5 million [5][6]. - The company continues to invest in Unified SASE and Security Operations markets, aiming to strengthen its leadership in Secure Networking [3]. Profitability Metrics - GAAP operating income was $453.8 million, with a GAAP operating margin of 29.5%, compared to 23.7% in Q1 2024 [6][29]. - Non-GAAP operating income reached $526.2 million, resulting in a non-GAAP operating margin of 34.2%, up from 28.5% in the previous year [6][32]. - GAAP net income was $433.4 million, with diluted net income per share of $0.56, compared to $299.3 million and $0.39 per share in Q1 2024 [6][29][32]. Cash Flow and Liquidity - Cash flow from operations was a record $863 million, compared to $830.4 million in Q1 2024 [5][12]. - Free cash flow also set a record at $783 million, up from $608.5 million in the same quarter last year [12][35]. Guidance - For Q2 2025, Fortinet expects revenue between $1.590 billion and $1.650 billion, and billings between $1.685 billion and $1.765 billion [12]. - For the full fiscal year 2025, revenue is projected to be in the range of $6.650 billion to $6.850 billion [12].

Core Insights - Fortinet has launched the FortiGate 700G series, a next-generation firewall designed for modern campuses, featuring advanced capabilities such as post-quantum cryptography and AI-driven threat detection [1][2] Performance and Specifications - The FortiGate 700G series offers up to 7x higher firewall throughput (164 Gbps) and 4x better threat protection (26 Gbps) compared to industry averages [4][5] - It supports IPsec VPN throughput of 55 Gbps, which is also 7x higher than competitors [4] - The series can handle 16 million concurrent sessions and 700,000 connections per second, outperforming other leading brands [6] Energy Efficiency - The FortiGate 700G series consumes 1.8 watts per Gbps for firewall throughput, which is 7x more efficient than the industry average [6] - For IPsec VPN throughput, it consumes 5.4 watts per Gbps, 6x lower than competitors [6] Advanced Security Features - The series includes FortiAI-Protect for AI-driven threat detection and risk mitigation, enhancing the ability to block sophisticated cyber threats [5] - It features post-quantum cryptography readiness, enabling organizations to protect sensitive data against future quantum threats [5] Integration and Scalability - Fortinet's Security Fabric integrates the FortiGate 700G series into a unified cybersecurity platform, providing centralized management and real-time visibility across hybrid environments [7] - The series supports a wide range of network interfaces from 5GE to 25GE, allowing for flexibility and future upgrades without significant costs [5]

Core Insights - The increasing reliance on digital systems highlights the importance of data security and the infrastructure that supports businesses in a connected world [1] Group 1 - The digital realm has become a vital extension of daily life, affecting personal data storage and the operational networks of companies [1] - The article emphasizes the need for informed investment decisions based on current and forward-looking market trends [1]