Fortinet gets back on track with earnings beat that's lifting the stock

By Emily Bary

Cybersecurity company says improved sales execution is paying off

After whiffing big with its previous two earnings reports, Fortinet Inc. delivered upbeat profit and billings numbers for its most recent quarter Tuesday, helping to send its stock rocketing.

The cybersecurity company generated fourth-quarter net income of $310.9 million, or 40 cents a share, which was nearly flat from the $313.8 million, or 40 cents a share, that Fortinet (FTNT) logged a year before.

On an adjusted basis, the company earned 51 cents a share, while analysts tracked by FactSet were modeling 43 cents a share.

Shares surged 11.6% in after-hours trading Tuesday. They logged double-digit percentage declines following each of the company's prior two reports.

Revenue rose 10% to $1.42 billion, whereas the FactSet consensus was for $1.41 billion. The company's billings, which captures deferred revenue, came in at $1.86 billion, while analysts were modeling $1.63 billion.

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Fortinet's results reflected "our successful sales strategy shift and the improved execution of our sales teams," Chief Executive Ken Xie said in a release.

For its current fiscal year, the company models $5.715 billion to $5.815 billion in revenue, along with $6.4 billion to $6.6 billion in billings. The FactSet consensus was for $5.9 billion in revenue and $6.5 billion in billings.

Looking at the first quarter, Fortinet expects $1.3 billion to $1.36 billion in revenue as well as $1.390 billion to $1.450 billion in billings. The FactSet consensus was for $1.37 billion in revenue and $1.47 billion in billings.

-Emily Bary

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02-06-24 2018ET

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