Cybersecurity Firm Fortinet Q1 Earnings: Product Revenue Falls, Billings Fall, Robust Outlook

Fortinet, Inc. FTNT reported its first-quarter financial results after the bell on Thursday. Here are the highlights.

Fortinet reported quarterly earnings of 43 cents per share, which beat the analyst consensus estimate of 38 cents. 

The quarterly revenue grew 6.97% year over year to $1.35 billion, beating the analyst consensus estimate of $1.338 billion.

Product revenue fell 18.3% year over year to $408.9 million, while Service revenue grew 24% to $944.4 million.

Total billings were $1.41 billion for the first quarter, a decrease of 6.4% compared to $1.50 billion for the same quarter of 2023.

"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 capitalize on the fast-growing Unified SASE and Security Operations markets while continuing to gain market share in Secure Networking," said Ken Xie, CEO of Fortinet.

"We believe our Unified SASE offering is the most comprehensive in the industry and we are well-positioned to lead in our three core growth areas by leveraging our expertise in converging networking and security, our history of AI innovation, and our ability to integrate products across our FortiOS operating system."

Outlook: Fortinet sees second-quarter adjusted earnings between 39 cents and 41 cents per share, versus the 40 cents estimate, and revenue between $1.375 billion and $1.435 billion, versus the $1.394 billion estimate. 

Fortinet expects full-year 2024 earnings between $1.73 and $1.79 per share, versus the $1.71 estimate, and revenue in a range of $5.745 billion to $5.845 billion versus the $5.783 billion estimate. 

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Shares of other cybersecurity companies, including Zscaler, Inc. ZS, CrowdStrike Holdings, Inc. CRWD and SentinelOne, Inc. S are moving lower in sympathy with Fortinet following the print. 

FTNT Price Action: According to Benzinga Pro, Fortinet shares are down 7.96% after-hours at $60.01 at the time of publication Thursday.

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