Fortinet Reports Fourth Quarter and Full Year 2024 Financial Results
Fortinet (FTNT) reported strong Q4 2024 financial results with total revenue reaching $1.66 billion, up 17.3% year-over-year. The company achieved record GAAP operating margin of 34.6% and non-GAAP operating margin of 39.2%. Full-year 2024 revenue totaled $5.96 billion, representing 12.3% growth.
Key highlights include service revenue growth of 19.8% to $4.05 billion for the full year, while product revenue slightly decreased by 1%. The company demonstrated strong cash flow generation with $2.26 billion from operations and free cash flow of $1.88 billion in 2024.
Looking ahead, Fortinet provided Q1 2025 guidance with revenue expected between $1.500-1.560 billion and full-year 2025 revenue guidance of $6.650-6.850 billion. The company's Unified SASE ARR grew 28% and Security Operations ARR increased 32% year-over-year.
Fortinet (FTNT) ha riportato solidi risultati finanziari per il quarto trimestre del 2024, con un fatturato totale che ha raggiunto 1,66 miliardi di dollari, in aumento del 17,3% rispetto all'anno precedente. L'azienda ha raggiunto un margine operativo GAAP record del 34,6% e un margine operativo non GAAP del 39,2%. Il fatturato totale per l'intero anno 2024 è stato di 5,96 miliardi di dollari, evidenziando una crescita del 12,3%.
I punti salienti includono una crescita del fatturato da servizi del 19,8% fino a 4,05 miliardi di dollari per l'anno completo, mentre il fatturato da prodotti è leggermente diminuito dell'1%. L'azienda ha dimostrato una forte generazione di flussi di cassa con 2,26 miliardi di dollari provenienti dalle operazioni e un flusso di cassa libero di 1,88 miliardi di dollari nel 2024.
Guardando al futuro, Fortinet ha fornito previsioni per il primo trimestre 2025, con un fatturato atteso tra 1,500-1,560 miliardi di dollari e una guida per il fatturato dell'intero anno 2025 di 6,650-6,850 miliardi di dollari. Il fatturato ricorrente annuale (ARR) del programma Unified SASE è cresciuto del 28% e l'ARR delle operazioni di sicurezza è aumentato del 32% rispetto all'anno precedente.
Fortinet (FTNT) reportó resultados financieros sólidos para el cuarto trimestre de 2024, con ingresos totales que alcanzaron 1.66 mil millones de dólares, un aumento del 17.3% en comparación con el año anterior. La compañía logró un margen operativo GAAP récord del 34.6% y un margen operativo non-GAAP del 39.2%. Los ingresos totales para todo el año 2024 fueron de 5.96 mil millones de dólares, lo que representa un crecimiento del 12.3%.
Los aspectos destacados incluyen un crecimiento de los ingresos por servicios del 19.8% hasta 4.05 mil millones de dólares para todo el año, mientras que los ingresos por productos disminuyeron ligeramente en un 1%. La compañía demostró una fuerte generación de flujo de caja con 2.26 mil millones de dólares de operaciones y un flujo de caja libre de 1.88 mil millones de dólares en 2024.
De cara al futuro, Fortinet proporcionó orientación para el primer trimestre de 2025, con ingresos esperados entre 1,500-1,560 mil millones de dólares y una orientación de ingresos para todo el año 2025 de 6,650-6,850 mil millones de dólares. El ARR del programa Unified SASE creció un 28% y el ARR de Operaciones de Seguridad aumentó un 32% en comparación con el año anterior.
Fortinet (FTNT)는 2024년 4분기 재무 실적을 강력하게 보고했으며, 총 수익이 16억 6천만 달러에 달하여 전년 대비 17.3% 증가했습니다. 이 회사는 GAAP 운영 마진 34.6%와 비 GAAP 운영 마진 39.2%라는 기록을 달성했습니다. 2024년 전체 연간 수익은 59억 6천만 달러로 12.3% 성장했습니다.
주요 하이라이트에는 전체 연간 서비스 수익이 19.8% 증가하여 40억 5천만 달러에 이른 반면, 제품 수익은 1% 소폭 감소했습니다. 이 회사는 2024년에 운영에서 22억 6천만 달러의 강력한 현금 흐름을 생성하고, 자유 현금 흐름은 18억 8천만 달러를 기록했습니다.
미래를 내다보며 Fortinet은 2025년 1분기 가이던스를 제공했으며, 예상 수익은 15억-15억 6천만 달러 사이이고 2025년 전체 연간 수익 가이던스는 66억 5천만-68억 5천만 달러로 제시했습니다. 회사의 Unified SASE ARR은 28% 증가하고 보안 운영 ARR도 전년 대비 32% 증가했습니다.
Fortinet (FTNT) a annoncé de solides résultats financiers pour le quatrième trimestre de 2024, avec des revenus totaux atteignant 1,66 milliard de dollars, en hausse de 17,3 % par rapport à l'année précédente. L'entreprise a atteint un record de 34,6 % de marge opérationnelle GAAP et une marge opérationnelle non GAAP de 39,2 %. Les revenus totaux pour l'année 2024 se sont élevés à 5,96 milliards de dollars, représentant une croissance de 12,3 %.
Les points forts comprennent une croissance des revenus de services de 19,8 % à 4,05 milliards de dollars pour l'année complète, tandis que les revenus des produits ont légèrement diminué de 1 %. L'entreprise a démontré une forte génération de flux de trésorerie avec 2,26 milliards de dollars provenant des opérations et un flux de trésorerie disponible de 1,88 milliard de dollars en 2024.
En regardant vers l'avenir, Fortinet a fourni des prévisions pour le premier trimestre de 2025, avec des revenus attendus entre 1,500-1,560 milliard de dollars et des prévisions de revenus pour l'année entière 2025 de 6,650-6,850 milliards de dollars. Le chiffre d'affaires récurrent annuel (ARR) du programme Unified SASE a augmenté de 28 % et l'ARR des opérations de sécurité a augmenté de 32 % par rapport à l'année précédente.
Fortinet (FTNT) hat starke Finanzzahlen für das vierte Quartal 2024 gemeldet, wobei der Gesamtumsatz 1,66 Milliarden Dollar erreichte, was einem Anstieg von 17,3% im Vergleich zum Vorjahr entspricht. Das Unternehmen erzielte einen Rekord von 34,6% beim GAAP-Betriebsgewinnmargen und eine non-GAAP-Betriebsgewinnmarge von 39,2%. Der Umsatz für das gesamte Jahr 2024 betrug 5,96 Milliarden Dollar, was ein Wachstum von 12,3% darstellt.
Zu den wichtigsten Highlights gehören ein Umsatzwachstum von 19,8% im Bereich Dienstleistungen auf 4,05 Milliarden Dollar für das Gesamtjahr, während der Produktumsatz leicht um 1% zurückging. Das Unternehmen demonstrierte eine starke Cash-Generierung mit 2,26 Milliarden Dollar aus dem Betrieb und einem freien Cashflow von 1,88 Milliarden Dollar im Jahr 2024.
Für die Zukunft gab Fortinet eine Prognose für das erste Quartal 2025 ab, mit einem erwarteten Umsatz zwischen 1.500-1.560 Millionen Dollar und einer Umsatzprognose für das gesamte Jahr 2025 von 6.650-6.850 Millionen Dollar. Der ARR des Unified SASE-Programms wuchs um 28% und der ARR der Sicherheitsoperationen stieg im Jahresvergleich um 32%.
- Revenue growth of 17.3% YoY to $1.66 billion in Q4 2024
- Record GAAP operating margin of 34.6% and non-GAAP margin of 39.2% in Q4
- Service revenue increased 19.8% to $4.05 billion for full-year 2024
- Strong cash flow from operations of $2.26 billion in 2024
- Unified SASE ARR grew 27.9% and Security Operations ARR up 32.2%
- Product revenue declined 1% in full-year 2024 compared to 2023
- Billings growth slowed to 7.4% in Q4 and 2.1% for full-year 2024
Insights
Fortinet's Q4 2024 results demonstrate exceptional operational execution and financial discipline. The standout
The company's strategic focus on high-growth segments is paying dividends, evidenced by the robust growth in Unified SASE and Security Operations ARR. The
Free cash flow generation remains impressive at
Looking ahead, the FY2025 guidance of
Fourth Quarter 2024 Highlights
- Total revenue of
$1.66 billion , up17% year over year - Product revenue of
$574 million , up18% year over year - Billings of
$2.00 billion , up7% year over year1 - Record GAAP operating margin of
35% - Record Non-GAAP operating margin of
39% 1 - Unified SASE ARR2 up
28% and Security Operations ARR2 up32% , year over year - Ranked #7 on the Forbes Most Trusted Companies in America 2025 list, the only cybersecurity company in the top 50
Full Year 2024 Highlights
- Total revenue of
$5.96 billion , up12% year over year - Service revenue of
$4.05 billion , up20% year over year - Record GAAP operating margin of
30% - Record Non-GAAP operating margin of
35% 1 - Remaining performance obligations of
$6.42 billion , up12% year over year - Cash flow from operations of
$2.26 billion - Free cash flow of
$1.88 billion 1 - Exceeded the ‘Rule of 45’ for the fifth consecutive year
SUNNYVALE, Calif., Feb. 06, 2025 (GLOBE NEWSWIRE) -- Fortinet® (Nasdaq: FTNT), a global cybersecurity leader driving the convergence of networking and security, today announced financial results for the fourth quarter of 2024 and full year ended December 31, 2024.
“In the fourth quarter, we successfully balanced growth and profitability as our non-GAAP operating margin increased 720 basis points year-over-year to a company record of
Financial Summary for the Fourth Quarter of 2024
- Revenue: Total revenue was
$1.66 billion for the fourth quarter of 2024, an increase of17.3% compared to$1.42 billion for the same quarter of 2023. - Service Revenue: Service revenue was
$1.09 billion for the fourth quarter of 2024, an increase of17.2% compared to$927.0 million for the same quarter of 2023. - Product Revenue: Product revenue was
$574.0 million for the fourth quarter of 2024, an increase of17.6% compared to$488.1 million for the same quarter of 2023. - Billings1: Total billings were
$2.00 billion for the fourth quarter of 2024, an increase of7.4% compared to$1.86 billion for the same quarter of 2023. - Unified SASE ARR2: Unified SASE ARR was
$1.12 billion for the fourth quarter of 2024, an increase of27.9% compared to$875.3 million for the same quarter of 2023. - Security Operations ARR2: Security Operations ARR was
$422.4 million for the fourth quarter of 2024, an increase of32.2% compared to$319.6 million for the same quarter of 2023. - GAAP Operating Income and Margin: GAAP operating income was
$574.1 million for the fourth quarter of 2024, representing a GAAP operating margin of34.6% . GAAP operating income was$385.4 million for the same quarter of 2023, representing a GAAP operating margin of27.2% . - Non-GAAP Operating Income and Margin1: Non-GAAP operating income was
$650.9 million for the fourth quarter of 2024, representing a non-GAAP operating margin of39.2% . Non-GAAP operating income was$453.5 million for the same quarter of 2023, representing a non-GAAP operating margin of32.0% . - GAAP Net Income and Diluted Net Income Per Share: GAAP net income was
$526.2 million for the fourth quarter of 2024, compared to GAAP net income of$310.9 million for the same quarter of 2023. GAAP diluted net income per share was$0.68 for the fourth quarter of 2024, based on 775.2 million diluted weighted-average shares outstanding, compared to GAAP diluted net income per share of$0.40 for the same quarter of 2023, based on 772.3 million diluted weighted-average shares outstanding. - Non-GAAP Net Income and Diluted Net Income Per Share1: Non-GAAP net income was
$571.5 million for the fourth quarter of 2024, compared to non-GAAP net income of$392.0 million for the same quarter of 2023. Non-GAAP diluted net income per share was$0.74 for the fourth quarter of 2024, based on 775.2 million diluted weighted-average shares outstanding, compared to$0.51 for the same quarter of 2023, based on 772.3 million diluted weighted-average shares outstanding. - Cash Flow: Cash flow from operations was
$477.6 million for the fourth quarter of 2024, compared to$191.7 million for the same quarter of 2023. - Free Cash Flow1: Free cash flow was
$380.0 million for the fourth quarter of 2024, compared to$164.8 million for the same quarter of 2023.
Financial Summary for the Full Year 2024
- Revenue: Total revenue was
$5.96 billion for 2024, an increase of12.3% compared to$5.30 billion in 2023. - Service Revenue: Service revenue was
$4.05 billion for 2024, an increase of19.8% compared to$3.38 billion in 2023. - Product Revenue: Product revenue was
$1.91 billion for 2024, a decrease of1.0% compared to$1.93 billion in 2023. - Billings1: Total billings were
$6.53 billion for 2024, an increase of2.1% compared to$6.40 billion in 2023. - Remaining performance obligations: Remaining performance obligations were
$6.42 billion as of December 31, 2024, an increase of11.7% compared to$5.75 billion as of December 31, 2023. - Deferred Revenue: Total deferred revenue was
$6.36 billion as of December 31, 2024, an increase of10.9% compared to$5.74 billion as of December 31, 2023. - GAAP Operating Income and Margin: GAAP operating income was
$1.80 billion for 2024, representing a GAAP operating margin of30.3% . GAAP operating income was$1.24 billion for 2023, representing a GAAP operating margin of23.4% . - Non-GAAP Operating Income and Margin1: Non-GAAP operating income was
$2.09 billion for 2024, representing a non-GAAP operating margin of35.0% . Non-GAAP operating income was$1.51 billion for 2023, representing a non-GAAP operating margin of28.4% . - GAAP Net Income and Diluted Net Income Per Share: GAAP net income was
$1.75 billion for 2024, compared to GAAP net income of$1.15 billion for 2023. GAAP diluted net income per share was$2.26 for 2024, based on 771.9 million diluted weighted-average shares outstanding, compared to GAAP diluted net income per share of$1.46 for 2023, based on 788.2 million diluted weighted-average shares outstanding. - Non-GAAP Net Income and Diluted Net Income Per Share1: Non-GAAP net income was
$1.83 billion for 2024, compared to non-GAAP net income of$1.29 billion for 2023. Non-GAAP diluted net income per share was$2.37 for 2024, based on 771.9 million diluted weighted-average shares outstanding, compared to$1.63 for 2023, based on 788.2 million diluted weighted-average shares outstanding. - Cash Flow: Cash flow from operations was
$2.26 billion in 2024 compared to$1.94 billion in 2023. - Free Cash Flow1: Free cash flow was
$1.88 billion in 2024, compared to$1.73 billion in 2023.
Guidance
For the first quarter of 2025, Fortinet currently expects:
- Revenue in the range of
$1.50 0 billion to$1.56 0 billion - Billings in the range of
$1.52 0 billion to$1.60 0 billion - Non-GAAP gross margin in the range of
80.0% to81.0% - Non-GAAP operating margin in the range of
30.0% to31.0% - Diluted non-GAAP net income per share in the range of
$0.52 t o$0.54 , assuming a non-GAAP effective tax rate of18% . This assumes a diluted share count of 774 million to 780 million.
For the fiscal year 2025, Fortinet currently expects:
- Revenue in the range of
$6.65 0 billion to$6.85 0 billion - Service revenue in the range of
$4.57 5 billion to$4.72 5 billion - Billings in the range of
$7.20 0 billion to$7.40 0 billion - Non-GAAP gross margin in the range of
79.0% to81.0% - Non-GAAP operating margin in the range of
31.0% to33.0% - Diluted non-GAAP net income per share in the range of
$2.41 t o$2.47 , assuming a non-GAAP effective tax rate of18% . This assumes a diluted share count of 773 million to 783 million.
These statements are forward looking and actual results may differ materially. Refer to the Forward-Looking Statements section below for information on the factors that could cause our actual results to differ materially from these forward-looking statements.
Our guidance with respect to non-GAAP financial measures excludes stock-based compensation, amortization of acquired intangible assets, charges in connection with litigation settlement, gain on intellectual property matters, gain on bargain purchase related to acquisition, non-cash charge of impairment on an equity method investment and a tax adjustment required for an effective tax rate on a non-GAAP basis, which differs from the GAAP effective tax rate. 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”.
2 ARR is defined as the annualized value of renewable / recurring customer agreements as of the measurement date, assuming any contract that expires during the next 12 months is renewed at its existing value.
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. A live webcast of the conference call and supplemental slides will be accessible from the Investor Relations page of Fortinet’s website at https://investor.fortinet.com and a replay will be archived and accessible at https://investor.fortinet.com/events-and-presentations.
First Quarter 2025 Conference Participation Schedule:
- Morgan Stanley Technology, Media & Telecom Conference
March 4, 2025
Members of Fortinet’s management team are expected to present at this conference and discuss the latest company strategies and initiatives. Fortinet’s conference presentations are expected to be available via webcast on the company’s website. To access the most updated information, pre-register and listen to the webcast of each event, please visit the Investor Presentation & Events page of Fortinet’s website at https://investor.fortinet.com/events-and-presentations. The schedule is subject to change.
About Fortinet (www.fortinet.com)
Fortinet (Nasdaq: FTNT) is a driving force in the evolution of cybersecurity and the convergence of networking and security. Our mission is to secure people, devices and data everywhere, and today we deliver cybersecurity everywhere our customers need it with the largest integrated portfolio of over 50 enterprise-grade products. Well over half a million customers trust Fortinet’s solutions, which are among the most deployed, most patented and most validated in the industry. The Fortinet Training Institute, one of the largest and broadest training programs in the industry, is dedicated to making cybersecurity training and new career opportunities available to everyone. Collaboration with esteemed organizations from both the public and private sectors, including Computer Emergency Response Teams (“CERTs”), government entities, and academia, is a fundamental aspect of Fortinet’s commitment to enhance cyber resilience globally. FortiGuard Labs, Fortinet’s elite threat intelligence and research organization, develops and utilizes leading-edge machine learning and AI technologies to provide customers with timely and consistently top-rated protection and actionable threat intelligence. Learn more at https://www.fortinet.com, the Fortinet Blog or FortiGuard Labs.
Copyright © 2025 Fortinet, Inc. All rights reserved. The symbols ® and ™ denote respectively federally registered trademarks and common law trademarks of Fortinet, Inc., its subsidiaries and affiliates. Fortinet’s trademarks include, but are not limited to, the following: Fortinet, the Fortinet logo, FortiGate, FortiOS, FortiGuard, FortiCare, FortiAnalyzer, FortiManager, FortiASIC, FortiClient, FortiCloud, FortiMail, FortiSandbox, FortiADC, FortiAgent, FortiAI, FortiAIOps, FortiAntenna, FortiAP, FortiAPCam, FortiAppSec, FortiAuthenticator, FortiCache, FortiCall, FortiCam, FortiCamera, FortiCarrier, FortiCART, FortiCASB, FortiCentral, FortiCNP, FortiConnect, FortiController, FortiConverter, FortiCSPM, FortiCWP, FortiDAST, FortiDATA, FortiDB, FortiDDoS, FortiDeceptor, FortiDeploy, FortiDevice, FortiDevSec, FortiDLP, FortiEdge, FortiEDR, FortiEndpoint, FortiExplorer, FortiExtender, FortiFirewall, FortiFlex, FortiFone, FortiGSLB, FortiGuest, FortiHypervisor, FortiInsight, FortiIsolator, FortiLAN, FortiLink, FortiMonitor, FortiNAC, FortiNDR, FortiPAM, FortiPenTest, FortiPhish, FortiPoint, FortiPolicy, FortiPortal, FortiPresence, FortiProxy, FortiRecon, FortiRecorder, FortiSASE, FortiScanner, FortiSDNConnector, FortiSEC, FortiSIEM, FortiSMS, FortiSOAR, FortiSRA, FortiStack, FortiSwitch, FortiTester, FortiTIP, FortiToken, FortiTrust, FortiVoice, FortiWAN, FortiWeb, FortiWiFi, FortiWLC, FortiWLM, FortiXDR and Lacework FortiCNAPP. Other trademarks belong to their respective owners. Fortinet has not independently verified statements or certifications herein attributed to third parties and Fortinet does not independently endorse such statements. Notwithstanding anything to the contrary herein, nothing herein constitutes a warranty, guarantee, contract, binding specification or other binding commitment by Fortinet or any indication of intent related to a binding commitment, and performance and other specification information herein may be unique to certain environments.
FTNT-F
Forward-Looking Statements
This press release contains forward-looking statements that involve risks and uncertainties. These forward-looking statements include statements regarding any indications related to future growth and market share gains, our strategy going forward, and guidance and expectations around future financial results, including guidance and expectations for the first quarter of 2025 and full year 2025, and any statements regarding our market opportunity and market size, and business momentum. Although we attempt to be accurate in making forward-looking statements, it is possible that future circumstances might differ from the assumptions on which such statements are based such that actual results are materially different from our forward-looking statements in this release. Important factors that could cause results to differ materially from the statements herein include the following: general economic risks, including those caused by economic challenges, a possible economic downturn or recession and the effects of inflation or stagflation, rising interest rates or reduced information technology spending; supply chain challenges; negative impacts from the ongoing war in Ukraine and its related macroeconomic effects and our decision to reduce operations in Russia; competitiveness in the security market; the dynamic nature of the security market and its products and services; specific economic risks worldwide and in different geographies, and among different customer segments; uncertainty regarding demand and increased business and renewals from existing customers; sales execution risks, including risks in connection with the timing and completion of large strategic deals; uncertainties around continued success in sales growth and market share gains; uncertainties in market opportunities and the market size; actual or perceived vulnerabilities in our supply chain, products or services, and any actual or perceived breach of our network or our customers’ networks; longer sales cycles, particularly for larger enterprise, service providers, government and other large organization customers; the effectiveness of our salesforce and failure to convert sales pipeline into final sales; risks associated with successful implementation of multiple integrated software products and other product functionality risks; risks associated with integrating acquisitions and changes in circumstances and plans associated therewith, including, among other risks, changes in plans related to product and services integrations, product and services plans and sales strategies; sales and marketing execution risks; execution risks around new product development and introductions and innovation; litigation and disputes and the potential cost, distraction and damage to sales and reputation caused thereby or by other factors; cybersecurity threats, breaches and other disruptions; market acceptance of new products and services; the ability to attract and retain personnel; changes in strategy; risks associated with management of growth; lengthy sales and implementation cycles, particularly in larger organizations; technological changes that make our products and services less competitive, including advances in artificial intelligence; risks associated with the adoption of, and demand for, our products and services in general and by specific customer segments, including those caused by competition and pricing pressure; excess product inventory for any reason, including those caused by the effects of increased inflation and interest rates in certain geographies and the war in Ukraine; risks associated with business disruption caused by natural disasters and health emergencies such as earthquakes, fires, power outages, typhoons, floods, health epidemics and viruses, and by manmade events such as civil unrest, labor disruption, international trade disputes, international conflicts such as the war in Ukraine or tensions between China and Taiwan, terrorism, wars, and critical infrastructure attacks; tariffs, trade disputes and other trade barriers, and negative impact on sales based on geo-political dynamics and disputes and protectionist policies, including the impact of any future shutdowns of the U.S. government and the transition in administrations; and the other risk factors set forth from time to time in our most recent Annual Report on Form 10-K, our most recent Quarterly Report on Form 10-Q and our other filings with the Securities and Exchange Commission (“SEC”), copies of which are available free of charge at the SEC’s website at www.sec.gov or upon request from our investor relations department. All forward-looking statements herein reflect our opinions only as of the date of this release, and we undertake no obligation, and expressly disclaim any obligation, to update forward-looking statements herein in light of new information or future events.
Non-GAAP Financial Measures
We have provided in this release financial information that has not been prepared in accordance with U.S. Generally Accepted Accounting Principles (“GAAP”). These non-GAAP financial and liquidity measures are not based on any standardized methodology prescribed by GAAP and are not necessarily comparable to similar measures presented by other companies. We use these non-GAAP financial measures internally in analyzing our financial results and believe they are useful to investors, as a supplement to GAAP measures, in evaluating our ongoing operational performance. We believe that the use of these non-GAAP financial measures provides an additional tool for investors to use in evaluating ongoing operating results and trends and in comparing our financial results with peer companies, many of which present similar non-GAAP financial measures to investors.
Non-GAAP financial measures should not be considered in isolation from, or as a substitute for, financial information prepared in accordance with GAAP. Investors are encouraged to review the reconciliation of these non-GAAP financial measures to their most directly comparable GAAP financial measures provided in the financial statement tables below.
Billings (non-GAAP). We define billings as revenue recognized in accordance with GAAP plus the change in deferred revenue from the beginning to the end of the period less any deferred revenue balances acquired from business combination(s) during the period. We consider billings to be a useful metric for management and investors because billings drive current and future revenue, which is an important indicator of the health and viability of our business. There are a number of limitations related to the use of billings instead of GAAP revenue. First, billings include amounts that have not yet been recognized as revenue and are impacted by the term of security and support agreements. Second, we may calculate billings in a manner that is different from peer companies that report similar financial measures. Management accounts for these limitations by providing specific information regarding GAAP revenue and evaluating billings together with GAAP revenue.
Free cash flow (non-GAAP). We define free cash flow as net cash provided by operating activities minus purchases of property and equipment. We believe free cash flow to be a liquidity measure that provides useful information to management and investors about the amount of cash generated by the business that, after capital expenditures, can be used for strategic opportunities, including repurchasing outstanding common stock, investing in our business, making strategic acquisitions and strengthening the balance sheet. A limitation of using free cash flow rather than the GAAP measures of cash provided by or used in operating activities, investing activities, and financing activities is that free cash flow does not represent the total increase or decrease in the cash and cash equivalents balance for the period because it excludes investing activities other than capital expenditures and cash flows from financing activities. Management accounts for this limitation by providing information about our capital expenditures and other investing and financing activities on the face of the cash flow statement and under the caption “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources” in our most recent Quarterly Report on Form 10-Q and Annual Report on Form 10-K and by presenting cash flows from investing and financing activities in our reconciliation of free cash flow. In addition, it is important to note that other companies, including companies in our industry, may not use free cash flow, may calculate free cash flow in a different manner than we do or may use other financial measures to evaluate their performance, all of which could reduce the usefulness of free cash flow as a comparative measure.
Non-GAAP operating income and operating margin. We define non-GAAP operating income as operating income plus stock-based compensation, amortization of acquired intangible assets and charges in connection with litigation settlement, less gain on intellectual property matter and, when applicable, other significant non-recurring items in a given quarter. Non-GAAP operating margin is defined as non-GAAP operating income divided by GAAP revenue. We consider these non-GAAP financial measures to be useful metrics for management and investors because they exclude the items noted above so that our management and investors can compare our recurring core business operating results over multiple periods. There are a number of limitations related to the use of non-GAAP operating income instead of operating income calculated in accordance with GAAP. First, non-GAAP operating income excludes the items noted above. Second, the components of the costs that we exclude from our calculation of non-GAAP operating income may differ from the components that peer companies exclude when they report their non-GAAP results of operations. Management accounts for these limitations by providing specific information regarding the GAAP amounts excluded from non-GAAP operating income and evaluating non-GAAP operating income together with operating income calculated in accordance with GAAP.
Non-GAAP net income and diluted net income per share. We define non-GAAP net income as net income plus the items noted above under non-GAAP operating income and operating margin. In addition, we adjust non-GAAP net income and diluted net income per share for a gain on bargain purchase related to acquisition, a non-cash charge of impairment on an equity method investment and a tax adjustment required for an effective tax rate on a non-GAAP basis, which differs from the GAAP effective tax rate. We define non-GAAP diluted net income per share as non-GAAP net income divided by the non-GAAP diluted weighted-average shares outstanding. We consider these non-GAAP financial measures to be useful metrics for management and investors for the same reasons that we use non-GAAP operating income and non-GAAP operating margin. However, in order to provide a more complete picture of our recurring core business operating results, we include in non-GAAP net income and non-GAAP diluted net income per share, the tax adjustment required resulting in an effective tax rate on a non-GAAP basis, which often differs from the GAAP tax rate. We believe the non-GAAP effective tax rates we use are reasonable estimates of normalized tax rates for our current and prior fiscal years under our global operating structure. The same limitations described above regarding our use of non-GAAP operating income and non-GAAP operating margin apply to our use of non-GAAP net income and non-GAAP diluted net income per share. We account for these limitations by providing specific information regarding the GAAP amounts excluded from non-GAAP net income and non-GAAP diluted net income per share and evaluating non-GAAP net income and non-GAAP diluted net income per share together with net income and diluted net income per share calculated in accordance with GAAP.
| FORTINET, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited, in millions) | |||||||
| December 31, 2024 | December 31, 2023 | ||||||
| ASSETS | |||||||
| CURRENT ASSETS: | |||||||
| Cash and cash equivalents | $ | 2,875.9 | $ | 1,397.9 | |||
| Short-term investments | 1,126.4 | 1,021.5 | |||||
| Marketable equity securities | 64.2 | 21.0 | |||||
| Accounts receivable—net | 1,463.4 | 1,402.0 | |||||
| Inventory | 315.5 | 484.8 | |||||
| Prepaid expenses and other current assets | 126.1 | 101.1 | |||||
| Total current assets | 5,971.5 | 4,428.3 | |||||
| PROPERTY AND EQUIPMENT—NET | 1,349.5 | 1,044.4 | |||||
| DEFERRED CONTRACT COSTS | 622.9 | 605.6 | |||||
| DEFERRED TAX ASSETS | 1,335.6 | 868.8 | |||||
| GOODWILL AND OTHER INTANGIBLE ASSETS—NET | 350.4 | 161.8 | |||||
| OTHER ASSETS | 133.2 | 150.0 | |||||
| TOTAL ASSETS | $ | 9,763.1 | $ | 7,258.9 | |||
| LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT) | |||||||
| CURRENT LIABILITIES: | |||||||
| Accounts payable | $ | 190.9 | $ | 204.3 | |||
| Accrued liabilities | 337.9 | 423.7 | |||||
| Accrued payroll and compensation | 255.7 | 242.3 | |||||
| Deferred revenue | 3,276.2 | 2,848.7 | |||||
| Total current liabilities | 4,060.7 | 3,719.0 | |||||
| DEFERRED REVENUE | 3,084.7 | 2,886.3 | |||||
| LONG-TERM DEBT | 994.3 | 992.3 | |||||
| OTHER LIABILITIES | 129.6 | 124.7 | |||||
| Total liabilities | 8,269.3 | 7,722.3 | |||||
| COMMITMENTS AND CONTINGENCIES | |||||||
| STOCKHOLDERS’ EQUITY (DEFICIT): | |||||||
| Common stock | 0.8 | 0.8 | |||||
| Additional paid-in capital | 1,636.2 | 1,416.4 | |||||
| Accumulated other comprehensive loss | (26.1 | ) | (18.9 | ) | |||
| Accumulated deficit | (117.1 | ) | (1,861.7 | ) | |||
| Total stockholders’ equity (deficit) | 1,493.8 | (463.4 | ) | ||||
| TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT) | $ | 9,763.1 | $ | 7,258.9 | |||
| FORTINET, INC. CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited, in millions, except per share amounts) | |||||||||||||||
| Three Months Ended | Year Ended | ||||||||||||||
| December 31, 2024 | December 31, 2023 | December 31, 2024 | December 31, 2023 | ||||||||||||
| REVENUE: | |||||||||||||||
| Product | $ | 574.0 | $ | 488.1 | $ | 1,908.7 | $ | 1,927.3 | |||||||
| Service | 1,086.1 | 927.0 | 4,047.1 | 3,377.5 | |||||||||||
| Total revenue | 1,660.1 | 1,415.1 | 5,955.8 | 5,304.8 | |||||||||||
| COST OF REVENUE: | |||||||||||||||
| Product | 178.0 | 197.2 | 652.0 | 763.6 | |||||||||||
| Service | 136.5 | 118.7 | 505.6 | 473.6 | |||||||||||
| Total cost of revenue | 314.5 | 315.9 | 1,157.6 | 1,237.2 | |||||||||||
| GROSS PROFIT: | |||||||||||||||
| Product | 396.0 | 290.9 | 1,256.7 | 1,163.7 | |||||||||||
| Service | 949.6 | 808.3 | 3,541.5 | 2,903.9 | |||||||||||
| Total gross profit | 1,345.6 | 1,099.2 | 4,798.2 | 4,067.6 | |||||||||||
| OPERATING EXPENSES: | |||||||||||||||
| Research and development | 191.1 | 152.5 | 716.8 | 613.8 | |||||||||||
| Sales and marketing | 526.5 | 507.4 | 2,044.8 | 2,006.0 | |||||||||||
| General and administrative | 55.1 | 55.1 | 237.8 | 211.3 | |||||||||||
| Gain on intellectual property matter | (1.2 | ) | (1.2 | ) | (4.6 | ) | (4.6 | ) | |||||||
| Total operating expenses | 771.5 | 713.8 | 2,994.8 | 2,826.5 | |||||||||||
| OPERATING INCOME | 574.1 | 385.4 | 1,803.4 | 1,241.1 | |||||||||||
| INTEREST INCOME | 42.3 | 30.5 | 155.2 | 119.7 | |||||||||||
| INTEREST EXPENSE | (4.9 | ) | (5.4 | ) | (20.0 | ) | (21.0 | ) | |||||||
| GAIN ON BARGAIN PURCHASE | — | — | 106.3 | — | |||||||||||
| OTHER INCOME (EXPENSE)—NET | 6.9 | 5.1 | 13.6 | (6.1 | ) | ||||||||||
| INCOME BEFORE INCOME TAXES AND LOSS FROM EQUITY METHOD INVESTMENTS | 618.4 | 415.6 | 2,058.5 | 1,333.7 | |||||||||||
| PROVISION FOR INCOME TAXES | 86.7 | 95.2 | 283.9 | 143.8 | |||||||||||
| LOSS FROM EQUITY METHOD INVESTMENTS | (5.5 | ) | (9.5 | ) | (29.4 | ) | (42.1 | ) | |||||||
| NET INCOME | $ | 526.2 | $ | 310.9 | $ | 1,745.2 | $ | 1,147.8 | |||||||
| Net income per share: | |||||||||||||||
| Basic | $ | 0.69 | $ | 0.41 | $ | 2.28 | $ | 1.47 | |||||||
| Diluted | $ | 0.68 | $ | 0.40 | $ | 2.26 | $ | 1.46 | |||||||
| Weighted-average shares outstanding: | |||||||||||||||
| Basic | 766.5 | 764.9 | 764.4 | 778.6 | |||||||||||
| Diluted | 775.2 | 772.3 | 771.9 | 788.2 | |||||||||||
| FORTINET, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited, in millions) | |||||||
| Year Ended | |||||||
| December 31, 2024 | December 31, 2023 | ||||||
| CASH FLOWS FROM OPERATING ACTIVITIES: | |||||||
| Net income | $ | 1,745.2 | $ | 1,147.8 | |||
| Adjustments to reconcile net income to net cash provided by operating activities: | |||||||
| Stock-based compensation | 257.9 | 249.0 | |||||
| Amortization of deferred contract costs | 293.7 | 266.3 | |||||
| Depreciation and amortization | 122.8 | 113.4 | |||||
| Amortization of investment discounts | (48.8 | ) | (27.7 | ) | |||
| Loss from equity method investments | 29.4 | 42.1 | |||||
| Gain on bargain purchase | (106.3 | ) | — | ||||
| Other | (15.2 | ) | 18.5 | ||||
| Changes in operating assets and liabilities, net of impact of business combinations: | |||||||
| Accounts receivable—net | (45.4 | ) | (146.4 | ) | |||
| Inventory | 131.2 | (253.5 | ) | ||||
| Prepaid expenses and other current assets | (13.7 | ) | (27.6 | ) | |||
| Deferred contract costs | (311.1 | ) | (353.5 | ) | |||
| Deferred tax assets | (223.2 | ) | (301.9 | ) | |||
| Other assets | (11.0 | ) | 17.7 | ||||
| Accounts payable | (10.2 | ) | (43.1 | ) | |||
| Accrued liabilities | (106.7 | ) | 137.4 | ||||
| Accrued payroll and compensation | — | 23.4 | |||||
| Other liabilities | (8.3 | ) | (21.7 | ) | |||
| Deferred revenue | 577.8 | 1,095.3 | |||||
| Net cash provided by operating activities | 2,258.1 | 1,935.5 | |||||
| CASH FLOWS FROM INVESTING ACTIVITIES: | |||||||
| Purchases of investments | (1,948.6 | ) | (1,855.8 | ) | |||
| Sales of investments | 0.5 | 4.0 | |||||
| Maturities of investments | 1,891.7 | 1,414.8 | |||||
| Purchases of property and equipment | (378.9 | ) | (204.1 | ) | |||
| Purchase of investment in privately held company | — | (8.5 | ) | ||||
| Payments made in connection with business combinations, net of cash acquired | (275.5 | ) | — | ||||
| Purchases of marketable equity securities | (16.7 | ) | — | ||||
| Other | 0.1 | 0.3 | |||||
| Net cash used in investing activities | (727.4 | ) | (649.3 | ) | |||
| CASH FLOWS FROM FINANCING ACTIVITIES: | |||||||
| Repurchase and retirement of common stock | (0.6 | ) | (1,500.5 | ) | |||
| Proceeds from issuance of common stock | 63.1 | 43.8 | |||||
| Taxes paid related to net share settlement of equity awards | (100.9 | ) | (112.5 | ) | |||
| Other | (11.7 | ) | (1.2 | ) | |||
| Net cash used in financing activities | (50.1 | ) | (1,570.4 | ) | |||
| EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS | (2.6 | ) | (0.8 | ) | |||
| NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | 1,478.0 | (285.0 | ) | ||||
| CASH AND CASH EQUIVALENTS—Beginning of year | 1,397.9 | 1,682.9 | |||||
| CASH AND CASH EQUIVALENTS—End of year | $ | 2,875.9 | $ | 1,397.9 | |||
| Reconciliations of non-GAAP results of operations measures to the nearest comparable GAAP measures (Unaudited, in millions, except per share amounts) |
Reconciliation of GAAP operating income to non-GAAP operating income, operating margin, net income and diluted net income per share
| Three Months Ended | Year Ended | ||||||||||||||
| December 31, 2024 | December 31, 2023 | December 31, 2024 | December 31, 2023 | ||||||||||||
| Reconciliation of non-GAAP operating income: | |||||||||||||||
| GAAP operating income | $ | 574.1 | $ | 385.4 | $ | 1,803.4 | $ | 1,241.1 | |||||||
| GAAP operating margin | 34.6 | % | 27.2 | % | 30.3 | % | 23.4 | % | |||||||
| Add back: | |||||||||||||||
| Stock‐based compensation | 66.5 | 64.0 | 260.2 | 251.6 | |||||||||||
| Amortization of acquired intangible assets | 11.5 | 5.3 | 23.1 | 18.9 | |||||||||||
| Litigation-related matter (a) | — | — | 3.2 | — | |||||||||||
| Gain on intellectual property matter | (1.2 | ) | (1.2 | ) | (4.6 | ) | (4.6 | ) | |||||||
| Non‐GAAP operating income | $ | 650.9 | $ | 453.5 | $ | 2,085.3 | $ | 1,507.0 | |||||||
| Non‐GAAP operating margin | 39.2 | % | 32.0 | % | 35.0 | % | 28.4 | % | |||||||
| Reconciliation of non-GAAP net income: | |||||||||||||||
| GAAP net income | $ | 526.2 | $ | 310.9 | $ | 1,745.2 | $ | 1,147.8 | |||||||
| Add back: | |||||||||||||||
| Stock‐based compensation | 66.5 | 64.0 | 260.2 | 251.6 | |||||||||||
| Amortization of acquired intangible assets | 11.5 | 5.3 | 23.1 | 18.9 | |||||||||||
| Litigation-related matter (a) | — | — | 3.2 | — | |||||||||||
| Gain on intellectual property matter | (1.2 | ) | (1.2 | ) | (4.6 | ) | (4.6 | ) | |||||||
| Gain on bargain purchase (b) | — | — | (106.3 | ) | — | ||||||||||
| Tax adjustment (c) | (31.5 | ) | 13.0 | (95.9 | ) | (128.1 | ) | ||||||||
| Non-cash charge on equity method investment (d) | — | — | 8.0 | — | |||||||||||
| Non-GAAP net income | $ | 571.5 | $ | 392.0 | $ | 1,832.9 | $ | 1,285.6 | |||||||
| Non-GAAP net income per share, diluted | |||||||||||||||
| Non-GAAP net income | $ | 571.5 | $ | 392.0 | $ | 1,832.9 | $ | 1,285.6 | |||||||
| Non-GAAP shares used in diluted net income per share calculations | 775.2 | 772.3 | 771.9 | 788.2 | |||||||||||
| Non-GAAP net income per share, diluted | $ | 0.74 | $ | 0.51 | $ | 2.37 | $ | 1.63 | |||||||
| Reconciliation of non-GAAP net income per share, diluted | |||||||||||||||
| GAAP net income per share, diluted | $ | 0.68 | $ | 0.40 | $ | 2.26 | $ | 1.46 | |||||||
| Add back: | |||||||||||||||
| Non-GAAP adjustments to net income per share | 0.06 | 0.11 | 0.11 | 0.17 | |||||||||||
| Non-GAAP net income per share, diluted | $ | 0.74 | $ | 0.51 | $ | 2.37 | $ | 1.63 | |||||||
(a) To exclude a
(b) To exclude a
(c) Non-GAAP financial information is adjusted to an effective tax rate of
(d) To exclude an
Reconciliation of net cash provided by operating activities to free cash flow
| Three Months Ended | Year Ended | ||||||||||||||
| December 31, 2024 | December 31, 2023 | December 31, 2024 | December 31, 2023 | ||||||||||||
| Net cash provided by operating activities | $ | 477.6 | $ | 191.7 | $ | 2,258.1 | $ | 1,935.5 | |||||||
| Less: Purchases of property and equipment | (97.6 | ) | (26.9 | ) | (378.9 | ) | (204.1 | ) | |||||||
| Free cash flow | $ | 380.0 | $ | 164.8 | $ | 1,879.2 | $ | 1,731.4 | |||||||
| Net cash used in investing activities | $ | (79.9 | ) | $ | (71.6 | ) | $ | (727.4 | ) | $ | (649.3 | ) | |||
| Net cash used in financing activities | $ | (8.8 | ) | $ | (910.1 | ) | $ | (50.1 | ) | $ | (1,570.4 | ) | |||
Reconciliation of total revenue to total billings
| Three Months Ended | Year Ended | ||||||||||||||
| December 31, 2024 | December 31, 2023 | December 31, 2024 | December 31, 2023 | ||||||||||||
| Total revenue | $ | 1,660.1 | $ | 1,415.1 | $ | 5,955.8 | $ | 5,304.8 | |||||||
| Add: Change in deferred revenue | 349.2 | 449.7 | 625.9 | 1,094.7 | |||||||||||
| Less: Deferred revenue balance acquired in business acquisitions | (6.8 | ) | — | (49.2 | ) | — | |||||||||
| Total billings | $ | 2,002.5 | $ | 1,864.8 | $ | 6,532.5 | $ | 6,399.5 | |||||||
| Investor Contact: | Media Contact: |
| Aaron Ovadia | Michelle Zimmermann |
| Fortinet, Inc. | Fortinet, Inc. |
| 408-235-7700 | 408-235-7700 |
| investors@fortinet.com | pr@fortinet.com |
FAQ
What was Fortinet's (FTNT) revenue growth in Q4 2024?
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What is FTNT's revenue guidance for fiscal year 2025?
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How much cash flow did FTNT generate in 2024?
