On February 6, 2025, Fortinet Inc (FTNT, Financial) released its 8-K filing detailing the financial results for the fourth quarter and full year of 2024. Fortinet, a prominent cybersecurity vendor known for its comprehensive platform covering network security, cloud security, zero-trust access, and security operations, reported significant growth in both revenue and profitability.
Quarterly Performance Exceeds Expectations
Fortinet Inc (FTNT, Financial) reported total revenue of $1.66 billion for the fourth quarter of 2024, marking a 17% increase year over year and surpassing the analyst estimate of $1.594 billion. The company's product revenue reached $574 million, up 18% from the previous year, while service revenue rose to $1.09 billion, a 17% increase. These results highlight Fortinet's robust growth trajectory in the cybersecurity sector.
Strong Financial Achievements
Fortinet's financial achievements are noteworthy, with a record GAAP operating margin of 35% and a non-GAAP operating margin of 39%. The company's billings increased by 7% to $2.00 billion, reflecting strong demand for its cybersecurity solutions. Additionally, Fortinet's Unified SASE ARR grew by 28%, and Security Operations ARR increased by 32%, underscoring the firm's strategic focus on high-growth markets.
Income and Cash Flow Highlights
For the fourth quarter, Fortinet reported a GAAP net income of $526.2 million, translating to a diluted net income per share of $0.68, which is higher than the analyst estimate of $0.53. The non-GAAP net income was $571.5 million, with a diluted net income per share of $0.74. Cash flow from operations was robust at $477.6 million, and free cash flow stood at $380.0 million, demonstrating the company's strong cash generation capabilities.
Full Year 2024 Financial Summary
For the full year 2024, Fortinet achieved total revenue of $5.96 billion, a 12% increase from 2023, exceeding the annual revenue estimate of $5.891 billion. Service revenue grew by 20% to $4.05 billion, while product revenue slightly decreased by 1% to $1.91 billion. The company's GAAP net income for the year was $1.75 billion, with a diluted net income per share of $2.26, surpassing the estimated annual EPS of $2.11.
Balance Sheet and Cash Flow Analysis
Fortinet's balance sheet remains strong, with total assets of $9.76 billion as of December 31, 2024, compared to $7.26 billion at the end of 2023. The company's cash and cash equivalents increased significantly to $2.88 billion from $1.40 billion, reflecting effective cash management and operational efficiency. Fortinet's free cash flow for the year was $1.88 billion, highlighting its ability to generate substantial liquidity for strategic investments and shareholder returns.
Strategic Insights and Future Outlook
Fortinet's strategic investments in Unified SASE and Security Operations have positioned the company as a leader in the cybersecurity industry. The firm's focus on a single-vendor approach to SASE, leveraging its FortiOS operating system, is expected to drive future growth. As Ken Xie, Founder, Chairman, and CEO of Fortinet, stated,
We continue to execute our strategy of investing in the high-growth Unified SASE and Security Operations markets, while strengthening our position in Secure Networking."
Overall, Fortinet Inc (FTNT, Financial) has demonstrated strong financial performance, exceeding analyst expectations and reinforcing its position as a key player in the cybersecurity market. The company's strategic initiatives and robust financial metrics suggest a promising outlook for continued growth and profitability.
Explore the complete 8-K earnings release (here) from Fortinet Inc for further details.
