Fortinet's Q1 2024 results show 7% increase in total revenue

Fortinet recently announced that they had generated total revenue of US$1.35 billion in the first quarter of 2024, which is a seven per cent increase year on year. The company's service revenue reached US$944 million, an impressive 24 per cent hike compared to the same period in the previous year. The cash flow hailing from operations was recorded at US$830 million, with a free cash flow of US$609 million. These figures underpin Fortinet's financially robust first quarter, ending on March 31, 2024.

Ken Xie, founder, chairman, and chief executive officer of Fortinet, expressed his satisfaction with the company's performance, stating, "We are diligently executing on our strategy announced six months ago to leverage our scale, go-to-market capabilities, customer-first focus, and engineering expertise to capitalise on the fast-growing unified secure access service edge (SASE) and security operations markets while continuing to gain market share in secure networking." He further asserted his belief in their unified SASE offering, pronouncing it to be the most comprehensive in the industry, and expressed confidence in harnessing their expertise to drive growth in three key areas.

Detailed financial results for the first quarter of 2024 reveal several highlights. Notably, the total revenue had undergone a 7.2 per cent increase, reaching US$1.35 billion, up from the US$1.26 billion reported for the same quarter in 2023. However, product revenue experienced a decrease of 18.3 per cent compared to the previous year, amounting to US$408.9 million. The service revenue, in contrast, had risen significantly by 24 per cent, achieving US$944.4 million compared to US$761.6 million in the previous year. Choices and investments seem to be reflected in the company's GAAP operating margin, which is at 23.7 per cent, with a non-GAAP operating margin representing 28.5 per cent.

Looking forward to the second quarter of 2024, Fortinet projects revenue in the range of US$1.375 billion to US$1.435 billion. Billings are estimated to fall within the range of US$1.490 billion to US$1.550 billion. Diluted non-GAAP net income per share is anticipated to lie between US$0.39 and US$0.41. Concerning the full fiscal year of 2024, the company expects revenue to be somewhere between US$5.745 billion to US$5.845 billion, with service revenue predicted to range from US$3.940 billion to US$3.990 billion. Billings for the same period are estimated to be in the vicinity of US$6.400 billion to US$6.600 billion.

All these figures are forward-looking, meaning that actual results may differ materially due to uncertain or uncontrollable factors. Fortinet's predictive statements base themselves on non-GAAP financial measures, excluding stock-based compensation, amortisation of acquired intangible assets, and gain on intellectual property matters. A reconciliation to the corresponding GAAP measures is not available without unreasonable effort due to the unpredictability and the uncontrollability of certain impacting items.