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https://killexams.com/exam_list/FortinetKillexams : Fortinet: Looking Ahead To 2023
Fortinet's (NASDAQ:FTNT) revenue growth rates could be set up to slow down. And if that's the case, investors are left with a choice. Is paying up 37x next year's non-GAAP EPS all that compelling? And I don't know the answer to this question.
I guess it depends on whether the Fed deems it necessary to stop raising rates as quickly. But even this line of thought illustrates that Fortinet's valuation isn't that amazing.
To help me drive my point, here's a quote from the earnings call that lays out everything investors need to know,
[...] we remain on track to achieve all of our medium-term financial targets from our May 2022 Analyst Day, including $10 billion in billings and $8 billion in revenue in 2025, each representing a 22% three-year CAGR from the midpoint of our 2022 guidance.
Management clearly stated that it's going to exit 2022 growing at close to 32% CAGR and that in the next 3 years its CAGR gets down to around 22%. Even if there's a substantial amount of conservatism baked in, we are nevertheless forced to question, what's a fair growth rate for 2023?
What's Happening Right Now?
Investor trepidation is now starting to creep into valuations. For a long period of time, cyber security companies were deemed to be recession-proof. Not only are investors now a lot more skeptical, but it also appears that even ''recession resistant'' could now involve substantial qualifiers around it.
To get to my point, consider what Fortinet's CEO stated on the call,
We expect fourth quarter ending backlog to be relatively consistent with the third quarter backlog as we are seeing early signs of a transition back to more normalized customer buying behaviors.
Within that paragraph, we see the news that investors didn't want to hear, ''more normalized customer buying behavior''.
And that's a theme that is percolating throughout enterprise tech. Tech had been seen as the trade to be in, during a recession. And within tech, cyber security was seen as a safe haven. And now? Well, perhaps this trade became a tiny bit too crowded for what it is.
That being said, to be clear, it's absolutely not all bad news when it comes to Fortinet.
Revenue Growth Rates Remain Attractive
Fortinet's revenue growth rates continue to point to a mid-30% CAGR. For a cybersecurity firm that has seen its share price mostly move down for the bulk of 2022, one has to question, whether investors may not be too negative about Fortinet's prospects?
For their part, analysts remain positively bullish on Fortinet's prospects. Even as cyber security and enterprise SaaS companies generally speak of the tough macro environment, Fortinet's analysts continue to revise their revenue estimate outlook upwards.
With this in mind, let's discuss one blemish in the bull thesis.
Capital Allocation, Needle Moving?
During the three and nine months ended September 30, 2022, Fortinet repurchased 10.2 million and 36.0 million shares of its common stock, respectively, at an average price of $49.15 and $55.37 per share, respectively, and for an aggregate purchase price of $500.0 million and $1.99 billion.
And now see if you see a pattern here:
Q1 2022: $691 million (average price $61)
Q2 2022: $800 million (average price $55)
Q3 2022: $500 million (average price $49)
It appears to me that as the share price is moving lower, this coincides with the total amount deployed towards share repurchases coming lower. That being said, there's still a further $530 million left for share repurchases. So it could be the case that these share repurchases could end up being accretive to long-term shareholders.
Altogether, as we look ahead to Q4 2022 this translates into the total share count ending the year down 4.2% y/y.
FTNT Stock Valuation -- 37x non-GAAP EPS
The problem that investors are facing right now, is that there's so much uncertainty over what will FTNT's 2023 revenue growth rates normalize at? On the one hand, we have management openly stating that customer behavior is normalizing.
On the other hand, FTNT's GAAP margins are extremely enticing. In fact, as a point of reference, Q3 2022 reported 23.1% GAAP margins, an increase of 390 basis points from 19.2% reported in the same period a year ago.
On yet the third hand, we have to highlight that the bulk of the revenue growth is coming from its Product business line. And many investors are skeptical that Product revenues will continue to be a growing TAM over the next few years.
The Bottom Line
Optically Fortinet is cheap. Why? Because it has GAAP earnings. Something that many tech companies haven't figured out yet, how to get their business to report GAAP profits.
On the other hand, a large proportion of its growth is not coming from its Service unit, but instead from its Product business. As a point of reference, two years ago, Fortinet's product business made up approximately 34% of its total revenues. While for its most recent quarter, its Product business makes up 41% of its total revenues.
So, it could be that soon 50% of Fortinet's business could be coming from its Product business, with a very limited TAM.
Tue, 29 Nov 2022 01:29:00 -0600entext/htmlhttps://seekingalpha.com/article/4561094-fortinet-looking-ahead-to-2023Killexams : Fortinet: Firewall Leader With Super Margins And Rapid Growth
According to one study, cybersecurity attacks globally have risen by 32% year over year and there are over 1,200 attacks per week. This is no surprise given the increase in the use of technology and the rise of remote working which has widened the attack surface. Therefore it is not surprising that the cybersecurity industry was valued at $139 billion in 2021 and isforecastedto grow at a rapid 13.4% compounded annual growth rate, reaching a value of $376 billion by 2029. Fortinet is in a prime position to benefit from this growth trend as a leader in firewalls. The company has recently posted strong financial results for the third quarter of 2022, beating both top and bottom-line estimates. In this post, I'm going to break down the company's business model, financials, and valuation, let's dive in.
Leading Business Model
Fortinet (NASDAQ:FTNT) has created a "Security Fabric" which aims to converge multiple cybersecurity solutions into a single platform. This includes Fortinet Threat Intelligence, Cloud Security, Zero Trust Access, Network Security and more. The company competes with companies such as Check Point (CHKP) and Palo Alto Networks (PANW) in its Cloud Security Segment. While the business also competes with Zscaler (ZS) for its Zero Trust access offering. "Zero Trust" is a network access methodology that aims to supply users the "least privileged access" to only the applications they need. This stops hackers from entering a company's network via a harmless application before moving laterally to the financial applications.
Fortinet is a Gartner leader in its Next Generation Firewall solution and won the customer choice award in 2022. In addition, the company is the market leader in firewalls with its products making up 37% of all units shipping in 2021.
Strong Third Quarter Results
Fortinet reported solid financial results for the third quarter of 2022. Starting with Billings, which is the amount invoiced to customers and the true "top line" for SaaS companies. Billings increased by 32.6% year over year to $1.41 billion. Following on from this revenue was $1.15 billion, which increased by a rapid 32% year over year and beat analyst estimates by $25.59 million.
Total revenue was driven by solid product revenue growth of $468.7 million which increased by 39% year over year across its Core and Enhanced Platform technology products. This is impressive growth given a tough year-over-year comparison and supply chain challenges. Service revenue also increased by a solid 28.4% year over year and 3% sequentially to $680 million.
There are three drivers which are helping to accelerate revenue growth across its product range. These include the increase in cybersecurity threats (as mentioned in the introduction), the merging of security and networking, and vendor consolidation. For a long time, the cybersecurity industry has been categorized by a variety of single-point solutions and specialist companies. This was great in the short term as each company had its own expertly honed product. However, for IT and security teams the security tech stack has become unmanageable with high operational overhead. For example, internal security will have to manage patches, updates, licenses, etc. on many different solutions.
Fortinet solves this problem with its "platform strategy" which enables customers to "converge" together both networking and security products, resulting in lower management time and lower operating costs.
A Forrester report even highlighted this and labeled Fortinet as a leader in enterprise firewalls for the first time. The report stated, "Fortinet has built a flexible and capable platform" and it "excels at performance for value".
The company has continued to eat market share in the area of Secure SD-WAN (Wide-Area-Network) which increased bookings by 45% year over year. Management believes the company is on track to become the market share leader in this space over the next couple of years.
Fortinet has also been "growing upmarket" as it executes its strategy of targeting higher-order value enterprise customers. In the third quarter of 2022, the number of deals over $1 million increased by over 80% to 153 deals.
Fortinet is well diversified with the Americas making up 40.7% of revenue followed by EMEA at 38.6% and APAC at 20.75%. EMEA was surprisingly the fastest growing segment as revenue increased by 37% year over year. This was followed by the Americas with 34% revenue growth and the APAC region with 23% growth.
On to profitability and margins, the company reported $875.5 million, in gross profit which increased by 32% year over year at a solid 76.2% gross margin. Operating Income was $334.9 million, which increased by blistering 45% year over year. This was driven by a solid improvement in operating margin from 25.8% to 28.3%, as the company benefited from higher operating leverage and FX tailwinds.
Earnings per share were $0.29, which beat analyst expectations by $0.06.
Fortinet has also reported solid growth in its cash flow which increased by 19.9% year over year to $463.8 million, including real estate add-backs.
The company has a solid balance sheet with cash, short-term investments, and marketable securities of $1.81 billion. In addition, the company has ~$989 million in long-term debt.
In order to value Fortinet I have plugged the latest financials into my advanced valuation model which uses the discounted cash flow method of valuation. I have forecasted a conservative 30% revenue growth for next year, which is lower than the 34% guidance for the full year of 2022. In addition, I have forecasted 32% revenue growth per year over the next 2 to 5 years in order to be conservative.
In order to increase the accuracy of the valuation, I have capitalized R&D expenses, which has lifted the net income. In addition, I have forecasted the company to continue to increase its operating margin to 27% over the next 8 years, as it continues to benefit from strong operating leverage.
Given these factors I get a fair value of $52 per share, the stock is trading at $77.87 per share at the time of writing and is thus 33% undervalued.
As an extra data point, Fortinet trades at a Price to Sales ratio = 10 which fairly valued relative to historic multiples. It should be noted that Fortinet trades at a slightly higher PS multiple than industry Peers but the company does have strong profit margins which aren't factored in via the PS metric.
Recession/Longer Sales Cycles
The high inflation and rising interest rate environment is squeezing the margins of many businesses and analysts are even forecasting a recession. Therefore I expect longer sales cycles and delayed spending although the cybersecurity industry does look to be relatively immune from many of the major headwinds.
Fortinet is a solid technology innovator and has a diversified business model. The company has highlighted the problems in the market with multiple vendors and aims to help the industry consolidate. It is growing strong across all product lines and the stock is undervalued intrinsically.
Tue, 29 Nov 2022 14:57:00 -0600entext/htmlhttps://seekingalpha.com/article/4561282-fortinet-stock-firewall-leader-super-margins-rapid-growthKillexams : Fortinet Secure SD-WAN Delivers 300% ROI Over Three Years and Payback in Eight Months, New Independent Study FindsNo result found, try new keyword!Fortinet ® (NASDAQ: FTNT), a global leader in broad, integrated, and automated cybersecurity solutions, today announced a business benefit analysis of Fortinet Secure SD-WAN and its ability to support ...Wed, 07 Dec 2022 00:08:00 -0600en-UStext/htmlhttps://technews.tmcnet.com/news/2022/12/07/9726113.htmKillexams : Cyberattackers Selling Access to Networks Compromised via recent Fortinet Flaw
Fortinet customers that have not yet patched a critical authentication bypass vulnerability that the vendor disclosed in October in multiple versions of its FortiOS, FortiProxy, and FortiSwitch Manager technologies now have an additional reason to do so quickly.
At least one threat actor, operating on a Russian Dark Web forum, has begun selling access to multiple networks compromised via the vulnerability (CVE-2022-40684), and more could follow suit soon. Researchers from Cyble who spotted the threat activity described the victim organizations as likely using unpatched and outdated versions of FortiOS.
Selling Access to Compromised Networks
Dhanalakshmi PK, senior director of malware and research intelligence at Cyble, says the company's available intelligence indicates the threat actor might have access to five major organizations via the vulnerability. Cyble's analysis showed the attacker attempting to add their own public key to the admin user's account on the compromised systems.
"An attacker can update or add a valid public SSH key to a targeted account on a system and can then typically gain complete access to that system," Dhanalakshmi says. "Additionally, the threat actor could launch other attacks against the rest of the IT environment with the foothold and knowledge gained through exploiting this vulnerability."
Cyble said a scan it conducted showed more than 100,000 Internet-exposed FortiGate firewalls, a substantial number of which are likely exploitable because they remain unpatched against the vulnerability
Fortinet publicly disclosed CVE-2022-40684 on Oct. 10, a few days after privately notifying customers of affected products about the threat. The vulnerability essentially gives an unauthenticated attacker a way to gain full control of an affected Fortinet product by sending it specially crafted HTTP and HTTPS requests. Security researchers have described the vulnerability as easy to find and trivial to exploit because all that an attacker needs to do is gain access to the management interface of a vulnerable system.
Popular Target for Attackers
When Fortinet disclosed the vulnerability, it urged customers to immediately update to patched versions of the affected products and warned of active exploit activity targeting the flaw. It also urged companies that could not update to immediately disable HTTPS administration on their vulnerable Internet-facing Fortinet products. The US Cybersecurity and Infrastructure Security Agency (CISA) promptly listed the flaw its catalog of known exploited vulnerabilities and gave federal civilian agencies until Nov. 1, 2022, to address the issue.
Much of the concern stemmed from the popularity of Fortinet products — and technologies from other vendors in the same network edge category — among threat actors. Soon after Fortinet disclosed the flaw, proof-of-concept code for exploiting it became publicly available, and security vendors reported large-scale scanning activity targeting the flaw. The number of unique IP addresses targeting the flaw soared in a matter of days from the single digits to more than 40.
And that number has grown. James Horseman, exploit developer at Horizon3ai, a security vendor that did much of the initial research around the vulnerability, says the number of unique IPs currently targeting the Fortinet flaw has risen to 112, according to data from GreyNoise, which tracks malicious scanning activity on the Internet.
"These Fortinet devices are typically Internet-facing for corporations and are seldom monitored," adds Zach Hanley, chief attack engineer at Horizon3ai. "This combination makes it great for sustained initial access into a network for threat actors who are looking to conduct reconnaissance, deploy ransomware, steal data, etc."
Reporting third-quarter earnings after close of trading last night, CrowdStrike Holdings(CRWD0.75%) easily topped analyst expectations for both sales and earnings, reporting a $0.40 per share pro forma profit, where the Street predicted only $0.31, and with sales of $580.9 million eclipsing expectations for only $573.8 million. CrowdStrike even guided investors to expect a second earnings beat in the fourth quarter, saying its earnings could top expectations by more than $0.10 per share this quarter.
CrowdStrike's stock is down regardless, falling 19.5% through 11:10 a.m. ET. What's more, it seems to be pulling industry leader Palo Alto Networks(PANW-0.83%) down 2.3% as well. On the plus side, Fortinet(FTNT-1.04%), which was down as much as 2.2% earlier in the day, has trimmed its losses to just 0.4%.
So what exactly is going on here? If CrowdStrike beat earnings in Q3 -- and promised to do it again in Q4 -- then why is its stock down? And if CrowdStrike's news was good, what sense does it make for Palo Alto and Fortinet stocks to be falling because of it?
Let's dig into the numbers. CrowdStrike grew its quarterly sales 53% year over year in Q3. Non-GAAP(adjusted) earnings (the aforementioned $0.40 per share) more than doubled year over year. The bad news is that according to generally accepted accounting principles (GAAP), earnings were actually negative $0.24 per share -- about 10% worse than a year ago. (On the plus side, free cash flow for the quarter was $174 million, a quarterly record for CrowdStrike.)
Still, on balance, that sounds pretty good, and CrowdStrike did say that earnings (albeit pro forma) will be even better in Q4. On the other hand, management noted that its net new annual recurring revenue (ARR) was a bit weaker than expected in Q3, impacting Q4 sales, which are predicted to top out around $628 million -- a few million short of Wall Street's prediction. Management further warned that ARR in Q4 could be as much as 10% below Q3 levels.
This, it appears, it's the prediction that spooked the stock market this morning, and caused CrowdStrike stock to sell off so hard.
Why is this a concern? Well, consider that in its entire lifetime as a publicly traded company, CrowdStrike has still never earned a GAAP profit (and isn't expected to start earning profits before 2026, according to estimates collected by S&P Global Market Intelligence). And even valued on free cash flow, by which measure CrowdStrike is already profitable ($621 million generated over the past 12 months), CrowdStrike stock sells for a pricey 52-times-FCF valuation. As such, CrowdStrike's valuation seems heavily dependent upon its expected growth rate. It stands to reason that any hint that growth might begin to falter is going to have an outsize effect on the stock's price -- just as we're seeing today.
That being said, at last report analysts were still forecasting strong 40.5% annualized long-term profits growth for CrowdStrike. That's not quite fast enough to make me call an FCF valuation of 52 cheap, but it's getting close. Compared to the alternatives, I certainly think CrowdStrike stock looks more attractively valued than Fortinet at 33.6 times FCF today, with a 23% projected growth rate.
Still and all, if you're looking for the best bargain in cybersecurity stocks today, I think Palo Alto Networks is your best bet. At 29% projected long-term growth, Palo Alto is growing quickly, yet doesn't have nearly so high a bar to clear, as CrowdStrike does, to meet Wall Street expectations, limiting the chance of an earnings miss. And at a valuation of only 21.5 times FCF, Palo Alto Networks is a much cheaper stock than Fortinet or CrowdStrike.
Long story short, CrowdStrike may look like the best target of opportunity after today's near-20% collapse in price. But Palo Alto Networks is still a better value stock for cybersecurity investors.
Rich Smith has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends CrowdStrike, Fortinet, and Palo Alto Networks. The Motley Fool has a disclosure policy.
Wed, 30 Nov 2022 06:35:00 -0600Rich Smithentext/htmlhttps://www.fool.com/investing/2022/11/30/why-crowdstrike-palo-alto-networks-and-fortinet-st/Killexams : Fortinet Launches Managed Cloud-Native Firewall Service to Simplify Network Security Operations, Available Now on AWS
FortiGate CNF delivers enterprise-grade security managed by Fortinet and cloud-native integrations on AWS to simplify, scale and modernize security operations
John Maddison, EVP of Products and CMO at Fortinet “Organizations that are accelerating their cloud adoption may not have the resources or time to build, scale or adapt their cloud security to meet the pace of their business. As a managed next-generation firewall service, FortiGate CNF removes the heavy lifting around network security operations and provides a frictionless experience to help customers easily deploy best-in-class security on the cloud.”
News Summary Fortinet® (NASDAQ: FTNT), a global leader in broad, integrated and automated cybersecurity solutions, today announced the availability of FortiGate Cloud-Native Firewall (FortiGate CNF) on Amazon Web Services (AWS), an enterprise-grade, managed next-generation firewall service specifically designed for AWS environments. FortiGate CNF incorporates FortiGuard artificial intelligence (AI)-powered Security Services for real-time detection of and protection against malicious external and internal threats, and is underpinned by FortiOS for a consistent network security experience across AWS and on-prem environments.
By shifting the management of network security infrastructure to Fortinet via FortiGate CNF, customers can focus more on their core competencies and deploying effective security policies to protect their business-critical applications and data. Natively supporting AWS and available now in AWS Marketplace, FortiGate CNF gives customers immediate access to FortiGuard AI-powered Security Services for enterprise-grade protection, including URL filtering, DNS filtering, IPS, application control and other FortiGuard security services, that organizations rely on.
FortiGate CNF enables customers to realize the following benefits:
Region-wide network protection at optimized costs: FortiGate CNF is designed to easily aggregate security across cloud networks, availability zones and virtual private clouds (VPCs) in a cloud region. It also natively supports AWS to help optimize cloud security spend and uses AWS Graviton instances to deliver better price performance than other offerings.
Simplified network security operations with cloud-native integrations: FortiGate CNF provides a simple, intuitive user interface (UI) that minimizes the need for security expertise and makes it easy to define and deploy robust security policies including dynamic meta-data based policies on AWS. This AWS support helps security teams move at the speed and scale of applications teams, while support of AWS Gateway Load Balancer eliminates do-it-yourself automation and helps secure Amazon Virtual Private Cloud (Amazon VPC) environments while improving high availability and scaling. Additionally, support of AWS Firewall Manager simplifies security management and automates security rollout.
Increased compliance with consistent enterprise-grade security across on-prem and cloud deployments: In a recent survey of more than 800 cybersecurity professionals, 78% of respondents indicated that a cloud security platform with a single dashboard could help them better protect data across their cloud footprint and strengthen their security posture. FortiGate CNF provides an intuitive dashboard to easily manage security policies across a customer’s AWS deployments. As part of the Fortinet Security Fabric platform, it also offers a single pane of glass through FortiManager to centralize policy management, increase visibility and automate policy enforcement on AWS and beyond. This capability helps teams effectively apply security controls seamlessly across hybrid cloud and on-premises deployments.
Enhanced with AI-powered global threat intelligence: FortiGate CNF includes a suite of trusted FortiGuard AI-powered security services, developed and continually improved by FortiGuard Labs. Using AI/machine learning (ML) models, FortiGate CNF with FortiGuard Security Services enables a proactive security posture and remediation of known and unknown threats based on real-time threat intelligence, behavior-based detection and automated prevention.
Fortinet and AWS – Better Together
FortiGate CNF is the latest example of Fortinet's commitment to delivering cloud-native services to support our customers. Fortinet’s work with AWS ensures that customers’ public cloud workloads are protected by best-in-class security solutions powered by comprehensive threat intelligence. Fortinet support of key AWS services simplifies security management, facilitating full visibility across environments and providing broad protection across your workloads and applications. Throughout any stage in a customer’s migration to the cloud, Fortinet Security Fabric, the industry’s highest performing cybersecurity mesh platform, delivers security-driven networking and adaptive cloud protection for the ultimate flexibility and control needed to build in the cloud.
Supporting Quotes “Fortinet was the clear choice for help when we decided to move our workloads from a data center to a public cloud environment on AWS. By leveraging Fortinet cloud security solutions to complement native AWS security groups, we were able to accelerate our cloud migration to just one month, a process that that would typically take one year. With the introduction of FortiGate CNF, Yedpay is looking forward to having the option of a managed firewall service powered by the collective cloud infrastructure expertise of Fortinet and AWS to further bolster our existing cloud security and enable us to securely grow our business.”
- Simon Lau, CIO & CISO, Yedpay
“We know organizations are looking to further simplify and modernize security on the cloud, which is why we’re working with Fortinet to deliver adaptive cloud security solutions. With FortiGate CNF, customers can build confidently, boost agility, and take advantage of everything AWS has to offer. As a fully managed cloud-native service, FortiGate CNF provides the enterprise-level firewall services and network security that helps reduce risk and Boost compliance, and optimizes customers’ security investments. We’re looking forward to continuing our work with Fortinet to help our mutual customers accelerate their cloud security goals.”
About Fortinet Fortinet (NASDAQ: FTNT) makes possible a digital world that we can always trust through its mission to protect people, devices, and data everywhere. This is why the world’s largest enterprises, service providers, and government organizations choose Fortinet to securely accelerate their digital journey. The Fortinet Security Fabric platform delivers broad, integrated, and automated protections across the entire digital attack surface, securing critical devices, data, applications, and connections from the data center to the cloud to the home office. Ranking #1 in the most security appliances shipped worldwide, more than 595,000 customers trust Fortinet to protect their businesses. And the Fortinet NSE Training Institute, an initiative of Fortinet’s Training Advancement Agenda (TAA), provides one of the largest and broadest training programs in the industry to make cyber training and new career opportunities available to everyone. Learn more at https://www.fortinet.com, the Fortinet Blog, and FortiGuard Labs.
Mon, 05 Dec 2022 16:08:00 -0600en-UStext/htmlhttps://finance.yahoo.com/news/fortinet-launches-managed-cloud-native-140000720.htmlKillexams : Fortinet (FTNT) Up 20.6% Since Last Earnings Report: Can It Continue?
It has been about a month since the last earnings report for Fortinet (FTNT). Shares have added about 20.6% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Fortinet due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Fortinet’s Q3 Earnings and Revenues Beat Estimates
Fortinet Inc. reported third-quarter 2022 non-GAAP earnings per share (EPS) of 33 cents, which topped the Zacks Consensus Estimate of 27 cents. The bottom line improved 65% from the year-ago quarter’s earnings of 20 cents per share.
Total revenues of $1.15 billion beat the Zacks Consensus estimate of $1.12 billion and improved 32.6% year over year. The top line was driven by strong demand for the company’s FortiGate technology, which includes a security processing unit, an integrated Security Fabric platform and hybrid multi-cloud offerings.
Strategic investments in developing powerful products and services and efforts in expanding into the adjacent addressable markets and boosting the firm’s global sales force aided Fortinet’s quarterly performance.
Quarter in Detail
Segment-wise, Product revenues jumped 39% year over year to $468.7 million. This upside can be attributed to the continued adoption of the FortiGate-based secure SD-WAN solution, as well as strong revenues of non FortiGate products and increased demand for integrated security fabric products.
Services revenues climbed 28.4% to $680.8 million.
Billings were up 32.6% to $1.41 billion on solid execution and growth across all regions.
As of Sep 30, 2022, deferred revenues were $4.19 billion, up 35% year over year.
Geographically, the EMEA region registered the highest top-line growth with a 37.3% increase, followed by the Americas’ 33.6% and APAC’s 22.7%.
During the September-end quarter, the company secured 153 total deals worth $1 million or more each. Secure SD-WAN continued to be the leading contributor to growth in terms of the number of deals worth more than $1 million in the quarter.
The non-GAAP gross margin contracted 30 basis points (bps) year over year to 76.2% in the third quarter of 2022. This reflects an expansion of 30 bps in the Product gross margin while Services gross margin remained flat.
Non-GAAP operating income jumped 45.3% to $324.9 million in the reported quarter, while non-GAAP operating margin increased 250 bps to 28.3%.
Balance Sheet & Cash Flow
Fortinet exited the third quarter with cash and cash equivalents and short-term investments of $1.70 billion, down from $1.73 billion reported at the end of second-quarter 2022.
During the reported quarter, FTNT generated operating and free cash flow of $483 million and $395.2 million, respectively. During the first nine months of 2022, the company generated an operating cash flow of $1.20 billion.
In the third quarter, the company bought back $500 million worth of shares and in the first nine months of 2022, it bought back $1.99 billion worth of shares.
Fortinet issued impressive guidance for the fourth quarter and raised the same for the full-year 2022. For the fourth quarter of 2022, the company estimates revenues in the range of $1.275-$1.315 billion. Billings are estimated to be $1.665-$1.720 billion.
Non-GAAP gross margin is expected in the range of 75-76%, while non-GAAP operating margin is anticipated between 30% and 31%. Non-GAAP EPS is projected at 38-40 cents.
For 2022, Fortinet predicts revenues in the band of $4.410-$4.450 billion, up from the prior estimate of $4.350-$4.400 billion. However, billings are now expected in the range of $5.540-$5.595 billion compared with the earlier range of $5.560-$5.640 billion.
Non-GAAP EPS is now anticipated between $1.13 and $1.15, up from the previous range of $1.01-$1.06.
Non-GAAP gross margin and operating margin are now expected in the bands of 75-76% and 26-27%, respectively.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in estimates review.
The consensus estimate has shifted 14.85% due to these changes.
At this time, Fortinet has a great Growth Score of A, though it is lagging a bit on the Momentum Score front with a B. However, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise Fortinet has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.
Performance of an Industry Player
Fortinet is part of the Zacks Security industry. Over the past month, Check Point Software (CHKP), a stock from the same industry, has gained 7.7%. The company reported its results for the quarter ended September 2022 more than a month ago.
Check Point reported revenues of $577.6 million in the last reported quarter, representing a year-over-year change of +8.2%. EPS of $1.77 for the same period compares with $1.65 a year ago.
Check Point is expected to post earnings of $2.35 per share for the current quarter, representing a year-over-year change of +4.4%. Over the last 30 days, the Zacks Consensus Estimate has changed 0%.
Check Point has a Zacks Rank #2 (Buy) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of C.
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Fri, 02 Dec 2022 07:10:00 -0600en-UStext/htmlhttps://finance.yahoo.com/news/fortinet-ftnt-20-6-since-163104817.htmlKillexams : New Fortinet service offers next-gen firewall protection for AWS environments
Cybersecurity firm Fortinet Inc. today announced the availability of FortiGate Cloud-Native Firewall on Amazon Web Services Inc., a managed next-generation service specifically designed for AWS environments.
FortiGate CNF incorporates FortiGuard artificial intelligence-powered Security Services for real-time detection of and protection against malicious external and internal threats. Underpinned by FortiOS, Fortinet’s network operating system, the service is said to deliver a consistent network security experience across AWS and on-premises environments.
Fortinet is pitching the service as allowing customers to focus more on their core competencies and deploy effective security policies to protect their business-critical applications and data. Natively supporting AWS, FortiGate CNF gives customers immediate access to FortiGuard AI-powered Security Services for enterprise-grade protection, including URL filtering, DNS filtering, IPS, application control and other FortiGuard security services that organizations rely on.
Benefits include regionwide network protection at optimized costs, with FortiGate CNF designed to aggregate security across cloud networks, availability zones and virtual private clouds in a cloud region. FortiGate CNF natively supports AWS to optimize cloud security spending and uses AWS Graviton instances to deliver better price-performance than other offerings.
Network security operations with FortiGate CNF offer a simple, intuitive user interface that minimizes the need for security expertise, with support for defining and deploying robust security policies such as dynamic meta-data-based policies on AWS. The AWS support helps security teams move at the speed and scale of applications teams and the support of AWS Gateway Load Balancer eliminates do-it-yourself automation and helps secure Amazon Virtual Private Cloud environments. Additionally, support for AWS Firewall Manager simplifies security management and automates security rollouts.
As part of the Fortinet Security Fabric platform, the new service also offers a single pane of glass through FortiManager to centralize policy management, increase visibility and automate policy enforcement on AWS and beyond.
“Organizations that are accelerating their cloud adoption may not have the resources or time to build, scale or adapt their cloud security to meet the pace of their business,”explained John Maddison, executive vice president of products and chief marketing officer at Fortinet. “As a managed next-generation firewall service, FortiGate CNF removes the heavy lifting around network security operations and provides a frictionless experience to help customers easily deploy best-in-class security on the cloud.”
Fortinet CNF is available now in the AWS Marketplace.
Photo: Robert Hof/SiliconANGLE
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Mon, 05 Dec 2022 11:09:00 -0600en-UStext/htmlhttps://siliconangle.com/2022/11/28/new-fortinet-service-offers-next-gen-firewall-protection-aws-environments/Killexams : Why Zscaler, Palo Alto Networks And Fortinet Shares Are Sliding After Hours
Shares of several cybersecurity firms are trading lower in Tuesday's after-hours session in the wake of CrowdStrike Holdings Inc's CRWDthird-quarter results.
Some of the cybersecurity stocks moving lower include Zscaler Inc ZS, Palo Alto Networks IncPANW, and Fortinet IncFTNT.
CRWD Q1 Revenue: $581 million beat estimate of $573.82
CRWD Q1 EPS: $0.40 beat estimate of $0.31
"Total net new ARR was below our expectations as increased macroeconomic headwinds elongated sales cycles with smaller customers and caused some larger customers to pursue multi-phase subscription start dates, which delays ARR recognition until future quarters," said Geroge Kurtz, co-founder and CEO of CrowdStrike.
Outlook: CrowdStrike sees fourth-quarter revenue between $619.1 million and $628.2 million versus estimates of $632.84 million. The company expects fourth-quarter earnings to be between 42 cents and 45 cents per share versus estimates of 34 cents per share.
Full-year revenue is expected to be between $2.223 billion and $2.232 billion versus estimates of $2.23 billion. CrowdStrike said full-year earnings are expected to be in a range of $1.49 to $1.52 per share versus estimates of $1.32 per share.
Tue, 29 Nov 2022 08:33:00 -0600text/htmlhttps://www.benzinga.com/after-hours-center/22/11/29897672/why-zscaler-palo-alto-networks-and-fortinet-shares-are-sliding-after-hoursKillexams : Fortinet, University of Tasmania partner to ‘close the cybersecurity skills’ gap
The University of Tasmania has partnered with security firm Fortinet by joining the Fortinet Academic Partner Program, aimed at building a diverse, skilled workforce to help close the cybersecurity skills gap.
The program will begin in Semester 1, 2023 and the University of Tasmania is the 498th education institution globally that has implemented the Fortinet Academic Partner Program, and the 16th in Australia.
As part of the Fortinet Training Institute, the Academic Partner Program works with academic institutions worldwide to create a more diverse, equitable, and inclusive cybersecurity workforce by increasing access to training courses to address the global talent shortage.
Fortinet says the program bridges the gap between learning and careers through access to industry-recognised Fortinet Network Security Expert (NSE) training and certification courses.
The Fortinet Academic Partner Program collaborates with higher education institutions and schools around the world to prepare students to become skilled cybersecurity professionals.
At the University of Tasmania, the program will be provided to students in several forms: as part of the ICT curriculum for high achievers/Honours students; as a short course for undergraduate/diploma students or school leavers; and, significantly, to people outside the sector that are looking to reskill, return to work, or switch careers.
According to the Fortinet 2022 Cybersecurity Skills Gap global research report, 80 per cent of organisations worldwide suffered one or more breaches that they could attribute to a lack of cybersecurity skills and/or awareness - (i) Closer to home, the Fortinet Networking and Cybersecurity Adoption Index found that only 41 per cent of organisations considered themselves highly resourced to protect data assets and IT infrastructure. (ii) Further, the (ISC)² Cybersecurity Workforce Study suggests the global cybersecurity workforce needs to grow 65 per cent to effectively defend organisations’ critical assets. (iii)
The Head of the School of ICT at the University of Tasmania, Professor Anna Shillabeer, said, “As part of my work here, we undertook a rethink of what is required to build capability and digital skills. We identified that there are pockets of Tasmania’s IT with significant capabilities; however, there is also a skills shortage that needs to be overcome, especially in cybersecurity, to better cope with demand.
“The Fortinet Academic Partner Program is continuously updating its training with content that is relevant and dynamic for the issues and challenges cyber professionals face today. It is so important that we offer current skills for our students to ensure they are workforce ready.
“This new offering will significantly benefit the Tasmanian industry in all sectors, as students will now enter the workforce with qualifications as well as cybersecurity certifications. Additionally, Tasmanians that have developed life skills in the workforce in alternative sectors will be able to use their certifications to assist with finding employment in IT and cybersecurity roles.”
Dale Nachman, Country Manager – Australia, Fortinet, said, “Fortinet recently surpassed the milestone of issuing one million NSE certifications globally. Partnerships with universities, such as the University of Tasmania, are key to Fortinet’s mission to close the cyber skills gap. The cyber threat landscape continues to grow in both volume and sophistication and having trained professionals to help governments and enterprises Boost their cyber resilience will be critical.
“Through the Fortinet Academic Partner Program, the University of Tasmania will be able to provide leading industry cybersecurity training and certification. Graduates of the program will have in-demand cybersecurity skills to help protect networks from global cyber threats, such as phishing attacks, ransomware, and business email compromise. Fortinet is committed to supporting Tasmania, and Australia more broadly, with the development of cybersecurity professionals. Working with the University of Tasmania is a critical part of this.”