Fortinet announces financial results for fourth quarter and full year 2019

Fortinet has announced the financial results for the fourth quarter and full year ended December 31, 2019.

“Our advanced architecture with proprietary SPU technology gives us a significant capacity advantage over our competition as indicated by our security compute ratings and enables us to add additional functionality into our products. Our strong fourth quarter product revenue growth was driven by our ability to include cutting-edge security and networking functionality, including SD-WAN, in our products,” said Ken Xie, Founder, Chairman, and Chief Executive Officer. “We are focused on continuing to gain market share by investing in network security, the build out of our Security Fabric platform, and innovations in the areas of 5G, IoT, edge and cloud security.”

Financial Highlights for the Fourth Quarter of 2019

•      Revenue: Total revenue was $614.4 million for the fourth quarter of 2019, an increase of 21% compared to $507.0 million for the same quarter of 2018.

•      Product Revenue: Product revenue was $238.8 million for the fourth quarter of 2019, an increase of 19% compared to $200.8 million for the same quarter of 2018.

•      Service Revenue: Service revenue was $375.6 million for the fourth quarter of 2019, an increase of 23% compared to $306.2 million for the same quarter of 2018.

•      Billings¹: Total billings were $802.3 million for the fourth quarter of 2019, an increase of 24% compared to $649.2 million for the same quarter of 2018.

•      GAAP Operating Income and Margin: GAAP operating income was $118.4 million for the fourth quarter of 2019, representing a GAAP operating margin of 19%. GAAP operating income was $85.1 million for the same quarter of 2018, representing a GAAP operating margin of 17%.

•      Non-GAAPOperating Incomeand Margin: Non-GAAP operating income was $164.9 million for the fourth quarter of 2019, representing a non-GAAP operating margin of 27%. Non-GAAP operating income was $130.6 million for the fourth quarter of 2018, representing a non-GAAP operating margin of 26%.

•      GAAP Net Income and Diluted Net Income Per Share: GAAP net income was $115.2 million for the fourth quarter of 2019, compared to GAAP net income of $182.6 million for the same quarter of 2018. GAAP diluted net income per share was $0.66 for the fourth quarter of 2019, based on 175.2 million diluted weighted-average shares outstanding, compared to GAAP diluted net income per share of $1.04 for the same quarter of 2018, based on 175.8 million diluted weighted-average shares outstanding.

•      Non-GAAPNet Income and Diluted Net Income Per Share: Non-GAAP net income was $132.4 million for the fourth quarter of 2019, compared to non-GAAP net income of $104.6 million for the same quarter of 2018. Non-GAAP diluted net income per share was $0.76 for the fourth quarter of 2019, based on 175.2 million diluted weighted-average shares outstanding, compared to $0.59 for the same quarter of 2018, based on 175.8 million diluted weighted-average shares outstanding.

•      Cash Flow and Free Cash Flow: In the fourth quarter of 2019, cash flow from operations was $190.4 million compared to $180.2 million in the same quarter of 2018. Free cash flow was $143.2 million during the fourth quarter of 2019, compared to $168.6 million for the same quarter of 2018.

Financial Highlights for the Full Year 2019

•      Revenue: Total revenue was $2.16 billion for 2019, an increase of 20% compared to $1.80 billion in 2018.

•      Product Revenue: Product revenue was $788.5 million for 2019, an increase of 17% compared to $674.4 million in 2018.

•      Service Revenue: Service revenue was $1.37 billion for 2019, an increase of 21% compared to $1.13 billion in 2018.

•      Billings: Total billings were $2.60 billion for 2019, an increase of 21% compared to $2.15 billion in 2018.

•      Deferred Revenue: Total deferred revenue was $2.14 billion as of December 31, 2019, an increase of 27% compared to $1.69 billion as of December 31, 2018.

•      GAAP Operating Income and Margin: GAAP operating income was $344.2 million for 2019, representing a GAAP operating margin of 16%. GAAP operating income was $231.0 million for 2018, representing a GAAP operating margin of 13%.

•      Non-GAAP Operating Incomeand Margin: Non-GAAP operating income was $529.2 million for 2019, representing a non-GAAP operating margin of 25%. Non-GAAP operating income was $402.9 million for 2018, representing a non-GAAP operating margin of 22%.

•      GAAP Net Income and Diluted Net Income Per Share: GAAP net income was $326.5 million for 2019, compared to GAAP net income of $332.2 million for 2018. GAAP diluted net income per share was $1.87 for 2019, based on 175.0 million diluted weighted-average shares outstanding, compared to GAAP diluted net income per share of $1.91 for 2018, based on 174.2 million diluted weighted-average shares outstanding.

•      Non-GAAPNet Income and Diluted Net Income Per Share: Non-GAAP net income was $431.7 million for 2019, compared to non-GAAP net income of $319.7 million for 2018. Non-GAAP diluted net income per share was $2.47 for 2019, based on 175.0 million diluted weighted-average shares outstanding, compared to Non-GAAP diluted net income per share of $1.84 for 2018, based on 174.2 million diluted weighted-average shares outstanding.

•      Cash Flow and Free Cash Flow: In 2019, cash flow from operations was $808.0 million, compared to $638.9 million in 2018. Free cash flow was $715.8 million in 2019, compared to $585.9 million in 2018.