Tue, Apr. 21, 1:35 PM
- Security tech firms are rallying once again (HACK +2.3%) after unified threat management (UTM) hardware leader Fortinet (FTNT +9.6%) beat Q1 estimates on the back of 36% Y/Y billings growth, and provided strong Q2 and full-year sales/billings guidance. At least 8 firms have hiked their Fortinet targets in response to the numbers, which followed a Q1 beat and in-line guidance from firewall vendor Check Point.
- In addition to FireEye, which announced an HP partnership this morning (follows a Check Point partnership), gainers include Palo Alto Networks (PANW +4.8%), CyberArk (CYBR +5.1%), Barracuda Networks (CUDA +5.1%), Qualys (QLYS +4.7%), Imperva (IMPV +2.2%), Proofpoint (PFPT +2.6%), and Zix (ZIXI +3.5%). Proofpoint and Zix report after the close, Barracuda on April 27, Qualys and Imperva on May 5, and CyberArk on May 7.
- "Fortinet is ... benefiting from a favorable security environment and increasing opportunity to sell to organizations that are building a multilayered approach to security," observes William Blair in remarks that also have implications for peers. "U.S. enterprise growth was 70% year-over-year with the company adding a total of 8,000 new customers, suggesting increasing traction." FBR (a long-time security tech bull) sees profit growth (currently pressured by heavy spending) improving as sales/marketing investments pay off.
- On the CC (transcript), CEO Ken Xie asserted Fortinet's ability to offer an integrated security platform covering "internal, data center, perimeter, and endpoint security plus advanced threat protection" was a differentiator. CFO Andrew Del Matto claimed FortiGate UTM/next-gen firewall appliance deals were over Palo Alto, Check Point, Cisco, and Juniper; those companies, of course, might claim wins of their own.
Mon, Apr. 20, 6:10 PM
- On top of beating Q1 estimates, Fortinet (NASDAQ:FTNT) has guided in its earnings slides (.pdf) for Q2 revenue of $224M-$228M (+23% Y/Y at midpoint) and full-year revenue of $935M-$940M (+22% at midpoint), above consensus estimates of $222.1M and $926.1M.
- With heavy spending weighing on EPS, Q1 and full-year EPS guidance is respectively at $0.08-$0.09 and $0.51-$0.52 vs. consensus estimates of $0.11 and $0.50.
- With strong corporate security IT spending acting as a tailwind, Q1 billings totaled $254.3M, +36% Y/Y (much better than 26% revenue growth) and easily topping guidance of $226M-$230M. Q2 billings guidance is at $263M-$268M (+25% at midpoint), and full-year guidance at $1.105B-$1.12B (+24% at midpoint). Given Fortinet's history, the guidance might prove conservative.
- CEO Ken Xie is in a good mood. "Our first quarter billings growth was the highest since becoming a public company over five years ago ... we grew the number of large deals closed against competitors and added over 8,000 customers to our base of more than 200,000 ... we feel Fortinet's scale is starting to provide more of a competitive differentiator on multiple fronts."
- The billings growth resulted in the UTM hardware leader's deferred revenue balance rising 33% Y/Y to $600.2M. It also yielded free cash flow of $59.7M, well above net income of $13.5M. Operating expenses rose 40% Y/Y to $131.2M (outpaced revenue and billings growth), with sales/marketing spend accounting for $91.3M.
- FTNT +8.6% AH to $37.60, making new highs along the way.
- Q1 results, PR.
Mon, Apr. 20, 4:21 PM
Sun, Apr. 19, 5:35 PM
Thu, Jan. 29, 12:22 PM
- In addition to beating Q4 revenue estimates (while posting in-line EPS), Fortinet (NASDAQ:FTNT) guided on its CC (transcript, earnings slides) for Q1 revenue of $200M-$205M and full-year revenue of $915M-$925M (+20% Y/Y at the midpoint), above consensus estimates of $199.1M and $877.8M. But EPS guidance is respectively at $0.06 and $0.49-$0.50, below consensus estimates of $0.12 and $0.59.
- GAAP operating expenses rose 40% Y/Y in Q4 to $138.4M ($93.2M on sales/marketing), outpacing revenue growth of 26% and billings growth of 35%, and preventing an EPS beat. CFO Andrew Del Matto states Fortinet's investments are focused on "strengthening our enterprise sales force including key vertical teams as well as increased marketing to improve our lead generation and sales productivity."
- Q4 billings totaled $283M, soundly exceeding guidance of $245M-$250M. Q1 and full-year billings guidance is respectively at $226M-$230M (+22% at the midpoint) and $1.065B-$1.08B (+20%). The deferred revenue balance rose 29% Y/Y in Q4 to $558.8M.
- Strong billings growth led 2014 free cash flow to total $164.4M, more than 2x net income of $80.8M. Fortinet's high-end FortiGate UTM and next-gen firewall appliances (the 1000, 3000, and 5000 series') made up 40% of product billings.
- FireEye (FEYE -2.9%), Imperva (IMPV -2.2%), and CyberArk (CYBR -2.7%) are following Fortinet lower; Imperva reports on Feb. 5, FireEye on Feb. 11, and CyberArk on Feb. 12. FireEye announced a partnership with major European/Latin American carrier Telefonica this morning.
- Check Point has also provided light EPS guidance (to go with strong revenue guidance) due to its aggressive spending plans.
Wed, Jan. 28, 4:17 PM
Tue, Jan. 27, 5:35 PM| 4 Comments
Oct. 23, 2014, 12:03 PM
- Check Point (CHKP +4.2%) beat Q3 estimates and offered healthy Q4 guidance: Revenue of $395M-$430M and EPS of $0.99-$1.09 vs. a consensus of $410.3M and $1.03.
- Fortinet (FTNT -0.1%) posted a Q3 beat, reported strong billings growth, and issued above-consensus Q4 revenue guidance. EPS guidance was light due to aggressive spending.
- Several security tech peers are outperforming on a day the Nasdaq is up 1.7%. PANW +4.4%. FEYE +4.5%. PFPT +4.9%. QLYS +2.7%. The numbers follow downbeat guidance from IBM, SAP, and VMware, and arguably highlight security's growing share of IT spend.
- Oppenheimer is reiterating an Outperform and $30 target on Fortinet, and notes the company's new billings guidance implies 26% 2014 growth at the midpoint (up from 22%). It thinks the UTM hardware vendor's performance is being driven by strong high-end appliance sales, product refreshes, and the fruits of major sales/marketing investments.
Oct. 22, 2014, 7:00 PM
- Fortinet (NASDAQ:FTNT) guides in its Q3 earnings CC slides (.pdf) for Q4 revenue of $206M-$211M and EPS of $0.13-$0.14 vs. a consensus of $202.9M and $0.15.
- Q3 billings totaled $213M, +29% Y/Y, above guidance of $195M-$200M, and above revenue of $193.4M. Q4 billings guidance is at $245M-$250M.
- Free cash flow was $51M in Q3, much better than net income of $20M. The reason: Fortinet's deferred revenue balance rose 4% Q/Q and 25% Y/Y to $500M. 35 $500K+ deals were inked, up from 19 a year ago.
- Products were 45% of revenue, and services/other 55%. GAAP opex rose 31% to $121M, keeping a lid on EPS. From the looks of things, opex will grow strongly in Q4 as well.
- FTNT +1.5% AH. Q3 results, PR
Oct. 22, 2014, 4:18 PM
Oct. 21, 2014, 5:35 PM
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Jul. 24, 2014, 1:57 PM
- Fortinet (FTNT +6.7%) beat Q2 estimates with the help of 33% Y/Y billings growth (exceeded rev. growth of 25%) and a 95% Y/Y increase in $500K+ deals.
- The company guided in its CC slides (.pdf) for Q3 revenue of $182M-$185M and EPS of $0.11 vs. a consensus of $177.3M and $0.13. Full-year guidance is for revenue of $735M-$740M and EPS of $0.47-$0.48 vs. a consensus of $714M and $0.50. Billings are expected to grow ~22% to $835M-$840M.
- On its CC (transcript), the UTM hardware leader suggested its light EPS guidance is due to a heavy investment pace, including aggressive sales hiring. It also mentioned Americas sales were up 40% Y/Y, fueled by a 73% increase for U.S. enterprise.
- Meanwhile, Vasco Data (VDSI +16.9%) trounced Q2 estimates and hiked its guidance for 2014 revenue from traditional businesses to $175M-$180M from $168M-$172M. The company notes adoption of new productions leveraging its Cronto visual authentication tech (acquired last year) has been strong.
- FireEye (FEYE +3%), Palo Alto Networks (PANW +2.8%), Proofpoint (PFPT +3.6%), and Check Point (CHKP +1.7%) are trading higher. Proofpoint reports after the bell; Check Point provided a Q2 beat and healthy top-line guidance yesterday.
- On the other hand, Barracuda (CUDA -5.9%) is selling off. JPMorgan attributes the decline to Fortinet's CC remarks about rapidly growing sales to mid-sized businesses - Barracuda depends heavily on them - with the help of new resellers. The firm argues the concerns are overblown, particularly since Fortinet is more focused on larger mid-sized businesses.
Jul. 23, 2014, 4:20 PM
Jul. 22, 2014, 5:35 PM
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May 7, 2014, 2:24 PM
- FireEye (FEYE -26.2%) has crashed to new post-IPO lows after offering light EPS guidance to go with a revenue beat, and has sparked a sharp selloff in IT security stocks on (another) down day for momentum plays. PANW -10.2%. IMPV -7.1%. PFPT -6.8%. QLYS -8.7%. FTNT -3.3%.
- Citi is worried about a lack of "opacity" for FireEye's top-line numbers following the Mandiant deal. "Management noted 'bookings' for both FireEye and Mandiant grew >50% Y/Y. With FY13 growth of near 100% this leaves an outstanding question of whether or not business decelerated meaningfully on an organic basis."
- Others are more positive. Wells Fargo (Outperform) is still confident about its forecast for 50%+ revenue growth over the next 3 years, and the "disruptive nature" of FireEye's business model (integrated threat-prevention hardware/software/services). Goldman (Neutral, but with a $58 PT) thinks organic growth is good enough, and expects a flurry of new products to provide a boost.
- FBN (Outperform) is still bullish long-term, but also notes product revenue was below consensus, and is on edge over a May 21 lockup expiration that will lead 68% of shares to become eligible for sale.
Apr. 23, 2014, 5:47 PM
- TriQuint (TQNT) expects Q2 revenue of $215M-$225M and EPS of $0.06-$0.08, above a consensus of $200.3M and $0.04. Shares +6.5% AH. Merger partner RF Micro (RFMD), which reports on April 29, is up 3.1%. Both companies might also be getting a lift from Apple's March quarter iPhone sales print. (Q1 results, PR)
- Fortinet (FTNT) guides in its earnings slides (.pdf) for Q2 revenue of $169M-$172M (above a $168.9M consensus), EPS of $0.10 (below an $0.11 consensus), and billings of $185M-$190M (+17% Y/Y). Q1 billings totaled $188M, +26% Y/Y and well above guidance of $168M-$173M. Shares +4.4% AH. (Q1 results, PR)
- Crown Castle (CCI) has raised its full-year AFFO forecast to $1.346B-$1.361B ($4.04-$4.08/share) from a prior $1.318B-$1.333B. Site rental revenue guidance has been raised by $11M to $2.983B-$2.993B. (Q1 results, PR)
FTNT vs. ETF Alternatives
Fortinet Inc is provider of network security solutions that are designed to address the fundamental problems of an increasingly bandwidth-intensive network environment and a more sophisticated information technology threat landscape.
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