Key Takeaways Fortinet outperforms Check Point in network security stock comparison with stronger growth. FTNT shares gained 11.6% in three months while CHKP returned 5.8% in same period. Fortinet's SASE strategy and firewall refresh cycle position it for 2025 growth.The cybersecurity landscape continues to evolve rapidly, with network security remaining a critical priority for enterprises worldwide. Two industry stalwarts, Fortinet (FTNT) and Check Point Software Technologies (CHKP) , have established th ...

SUNNYVALE, Calif., July 02, 2025 (GLOBE NEWSWIRE) -- News Summary Fortinet® (NASDAQ: FTNT), the global cybersecurity leader driving the convergence of networking and security, announced that it will hold a conference call to discuss its second quarter 2025 financial results on Wednesday, August 6, at 1:30 p.m. Pacific Time (4:30 p.m. Eastern Time). Media Contact: Investor Contact: Analyst Contact: Aaron Ovadia Fortinet (Nasdaq: FTNT) is a driving force in the evolution of cybersecurity and the convergence o ...

Core Insights - Fortinet's FortiGate platform is central to its secure networking strategy, driving hardware adoption and facilitating expansion into other solutions [1][10] - The launch of the FortiGate 700G series enhances performance and energy efficiency, appealing to mid-sized businesses and distributed enterprises [3][10] - Fortinet's product revenues grew 12% year-over-year in Q1 2025, with FortiGate hardware being the primary growth driver [4] Product and Market Performance - FortiGate firewalls are often the first product for customers, leading to increased integration of Fortinet's other offerings [2][10] - In Q1 2025, FortiGate hardware outpaced overall product growth, expanding in the mid-teens [4] - The company estimates product revenues for 2025 to reach $2.14 billion, indicating a 12.3% year-over-year growth [4] Competitive Landscape - Fortinet faces stiff competition from Palo Alto Networks and Check Point Software, both of which are experiencing strong adoption of their firewall capabilities [5] - Palo Alto Networks reported a 20% year-over-year growth in Software Firewall ARR, driven by public cloud deployments [6] - Check Point Software saw a 14% year-over-year rise in product and license revenues, with expectations of continued momentum through 2026 [7] Stock Performance and Valuation - Fortinet's shares have risen 11.1% year-to-date, underperforming the Zacks Security industry's growth of 23.4% [8] - The stock is currently trading at a Price/Book ratio of 40.17X, compared to the industry's 24.88X, indicating a lower valuation score [12] - The Zacks Consensus Estimate for Q2 2025 earnings is 59 cents per share, reflecting a 3.51% year-over-year growth [15]

Q4 2017 Financial Results February 5, 2018 © Copyright Fortinet Inc. All rights reserved. Safe Harbor Statement Information, statements and projections contained in these presentation slides and related conference calls concerning Fortinet's business outlook, the Q1 and 2018 guidance, and future prospects and expectations are forward-looking statements that involve a number of uncertainties and risks. Actual results could differ materially from those projected in the forward-looking statements as a result o ...

Fortinet (FTNT) 2025 Conference Summary Industry Overview - **Cybersecurity Market Resilience**: The cybersecurity market is described as resilient, with no significant impact from economic volatility or GDP expectations. The demand for cybersecurity solutions remains stable despite uncertainties in the broader IT spending environment [2][3][6]. Key Points and Arguments - **Growth Drivers**: The increase in connected devices and advancements in AI are driving growth in the cybersecurity sector. Fortinet anticipates continued growth in network security, particularly in operational technology (OT) security, where it is positioned as a leader [3][4][6][62]. - **SASE and Network Security Integration**: Fortinet has integrated SASE (Secure Access Service Edge) functions into its existing OS, allowing for seamless deployment and management. This integration is seen as a competitive advantage over other players who rely on disparate systems [22][25][59]. - **Customer Base and Migration**: Fortinet boasts a large customer base of over 800,000, facilitating easier migration to SASE solutions. The company emphasizes its ability to offer cost-effective solutions compared to competitors, particularly when utilizing its own infrastructure [22][24][59]. - **Tariff Impact**: Fortinet's products are predominantly exempt from tariffs, and the company reassures customers that current pricing will not be affected. The global market presence mitigates potential tariff impacts [9][10][33]. Financial Insights - **Sales Conservatism**: There was a noted conservatism in sales outlook due to uncertainties surrounding tariffs and economic conditions. However, Fortinet has maintained a strong pipeline, particularly in large enterprise deals [29][30][31]. - **Guidance Philosophy**: The guidance provided by Fortinet is based on a comprehensive analysis of the pipeline, including sales capacity and economic factors. The company is focused on managing its pipeline diligently to ensure accurate forecasting [33][34]. Emerging Trends - **AI in Cybersecurity**: Fortinet has been investing in AI for over 15 years, with a focus on enhancing security operations. The company offers AI-assisted products that have shown promising revenue growth [37][39][40]. - **Operational Technology (OT) Security**: Fortinet has invested significantly in OT security, with over a billion dollars in revenue from this segment. The company anticipates that OT security will be a rapidly growing market due to the increasing number of connected devices [61][62]. Competitive Landscape - **Market Positioning**: Fortinet is positioned well against competitors in the SASE market, leveraging its existing infrastructure and integrated solutions. The company acknowledges increased competition but believes its unique advantages will sustain its growth trajectory [56][59]. Conclusion - Fortinet is confident in its growth prospects within the cybersecurity market, driven by the integration of advanced technologies and a robust customer base. The company is well-prepared to navigate economic uncertainties while capitalizing on emerging trends in AI and OT security.

Core Viewpoint - Fortinet (FTNT) has demonstrated strong performance in 2025, with a year-to-date (YTD) share price increase of 10.6%, significantly outperforming the S&P 500 index and the Zacks Computer and Technology sector, which saw declines of 0.4% and 1.7% respectively [1][2]. Group 1: Financial Performance - Total revenues for Q1 2025 increased by 14% year over year to $1.54 billion, with product revenues reaching $459 million, up 12% year over year [6]. - Total billings grew by 14% year over year to $1.6 billion, driven by unified SASE and AI-driven SecOps, which contributed 18% and 29% growth respectively [7]. - Gross margin expanded by 380 basis points to 81.9%, and operating margin reached a record 34.2% in Q1 2025 [7]. - Fortinet added over 6,300 new customers during the quarter, marking a 14% increase from the previous year [7]. Group 2: Competitive Positioning - Fortinet differentiates itself in the competitive cybersecurity market through its unified FortiOS platform, which integrates various security solutions, leading to 18% growth in SASE billings and 26% growth in SASE ARR in Q1 2025 [10]. - The company holds over 500 issued and pending AI patents, more than any competitor, and has integrated AI into multiple products, enhancing its market position in AI and firewall solutions [11]. - The introduction of the FortiGate 700G firewall, which offers up to 10x performance gains over competitors, strengthens Fortinet's competitive edge in secure networking [12]. Group 3: Future Outlook - Fortinet anticipates Q2 2025 revenues between $1.59 billion and $1.65 billion, indicating a growth of 13% at the midpoint, with non-GAAP earnings per share expected in the range of 58-60 cents [13]. - The Zacks Consensus Estimate for Q2 2025 revenues is $1.62 billion, suggesting a year-over-year growth of 12.96% [14]. - Fortinet's Price/Book ratio of 40.72X, while above the industry average, is justified by its strong market position and integrated platform strategy, signaling long-term growth potential [15]. Group 4: Investment Recommendation - Fortinet's strong execution and focus on long-term growth, alongside new product innovations, position it as a compelling investment opportunity [17]. - The company maintains a Zacks Rank 2 (Buy) and a Growth Score of A, indicating a favorable investment outlook [18].

Core Insights - Fortinet (FTNT) and Cisco Systems (CSCO) are significant players in the network security market, with Fortinet focusing solely on security and Cisco integrating security with broader networking solutions [1][2] Market Overview - The network security market is projected to grow from $24.95 billion in 2025 to $42.93 billion by 2030, reflecting a CAGR of 11.47% during the forecast period [2] Fortinet's Performance - Fortinet has shown strong momentum in network security, maintaining its position as the leading firewall vendor globally and achieving double-digit growth in FortiGate hardware revenues [3][4] - The unified Secure Access Service Edge (SASE) platform has been a key growth driver, with 18% year-over-year growth in SASE billings and a 73% penetration rate in large enterprise SD-WAN [4][6] - The launch of the FortiGate 700G series has enhanced Fortinet's competitive edge, delivering 5x to 10x performance over competitors [5] - Fortinet's sovereign SASE solution is gaining traction in regulated sectors, ensuring compliance while maintaining performance [6] Cisco's Performance - Cisco's network security business reported strong results, with security orders rising in the high double digits year over year, driven by product innovation and customer demand [7] - The company added over 370 new customers, benefiting from partnerships that enhance its AI-ready secure infrastructure [8] - Despite strong performance, Cisco faces challenges with historical growth comparisons and uncertainties related to tariffs and macroeconomic conditions [9] Stock Performance and Valuation - Year-to-date, FTNT shares have returned 10.2%, outperforming CSCO's 7.7% gain and the sector's decline of 1.5% [10] - FTNT's forward 12-month P/S ratio is 11.16X, significantly higher than CSCO's 4.38X, reflecting investor confidence in FTNT's growth potential [13] - The Zacks Consensus Estimate for FTNT's 2025 earnings is $2.47 per share, indicating a 4.22% year-over-year increase, while CSCO's estimate is $3.73 per share, showing no change year over year [16][17] Investment Outlook - Fortinet presents a stronger investment opportunity with consistent double-digit revenue growth and expanding SASE adoption [19] - Cisco, while promising, faces delayed revenue realization and macro uncertainties, making its near-term outlook less compelling compared to Fortinet [20]

Core Insights - Fortinet Inc. reported strong first-quarter 2025 results, with both earnings and revenues exceeding expectations and showing year-over-year improvement [1][2]. Financial Performance - Non-GAAP EPS for Q1 2025 was 58 cents, beating the Zacks Consensus Estimate by 9.43%, and up 34.9% from 43 cents in the same quarter last year [1]. - Total revenues reached $1.54 billion, surpassing the consensus mark by 0.21% and reflecting a 13.8% year-over-year increase, driven by growth in services and product revenues [2]. - Product revenues increased by 12.3% year over year to $459.1 million, with notable growth in both hardware and software solutions [3]. - Service revenues grew 14.4% year over year to $1.08 billion, accounting for 70% of total revenues, with security subscriptions rising 16% [4]. Growth Metrics - Fortinet added over 6,300 new logos in Q1, supported by investments in channel partners [2]. - Remaining Performance Obligations (RPO) grew 12% to $6.5 billion, while total billings rose 14% to $1.6 billion, driven by growth in AI-driven SecOps and Unified SASE [2]. - AI-driven Security Operations billings increased by 29%, representing 10% of Fortinet's business [5]. Margins and Efficiency - Total gross margin increased by 380 basis points to 81.9%, exceeding the high end of the guided range by 90 basis points [6]. - Operating margin reached a record 34.2%, up 570 basis points, reflecting strong gross margins and cost efficiencies [7]. Cash Flow and Balance Sheet - Fortinet ended Q1 2025 with cash and cash equivalents of $4.78 billion, an increase from $4 billion at the end of Q4 2024 [8]. - Cash flow from operations was $863.3 million, compared to $830.4 million in Q1 2024, while free cash flow rose to $782.8 million from $608.5 million [9]. Guidance - For Q2 2025, Fortinet estimates revenues between $1.59 billion and $1.65 billion, with billings expected between $1.685 billion and $1.765 billion [10]. - For the full year 2025, revenues are projected between $6.65 billion and $6.85 billion, with services revenues expected between $4.575 billion and $4.725 billion [11].

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]