Fourth Quarter 2024 Highlights
- Total revenue of $1.66 billion, up 17% year over year
- Product revenue of $574 million, up 18% year over year
- Billings of $2.00 billion, up 7% year over year1
- Record GAAP operating margin of 35%
- Record Non-GAAP operating margin of 39%1
- Unified SASE ARR2 up 28% and Security Operations ARR2 up 32%, year over year
- Ranked #7 on the Forbes Most Trusted Companies in America 2025 list, the only cybersecurity company in the top 50
Full Year 2024 Highlights
- Total revenue of $5.96 billion, up 12% year over year
- Service revenue of $4.05 billion, up 20% year over year
- Record GAAP operating margin of 30%
- Record Non-GAAP operating margin of 35%1
- Remaining performance obligations of $6.42 billion, up 12% year over year
- Cash flow from operations of $2.26 billion
- Free cash flow of $1.88 billion1
- Exceeded the ‘Rule of 45’ for the fifth consecutive year
SUNNYVALE, Calif., Feb. 06, 2025 (GLOBE NEWSWIRE) -- Fortinet® (Nasdaq: FTNT), a global cybersecurity leader driving the convergence of networking and security, today announced financial results for the fourth quarter of 2024 and full year ended December 31, 2024.
“In the fourth quarter, we successfully balanced growth and profitability as our non-GAAP operating margin increased 720 basis points year-over-year to a company record of 39%, while revenue grew 17%,” said Ken Xie, Founder, Chairman and Chief Executive Officer of Fortinet. “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. Our customers are increasingly recognizing the benefits of a single-vendor approach to SASE, and we expect to emerge as a leader in this space, being the only company to natively develop all SASE functions within a unified operating system, FortiOS, which seamlessly integrates networking and security capabilities.”
Financial Summary for the Fourth Quarter of 2024
- Revenue: Total revenue was $1.66 billion for the fourth quarter of 2024, an increase of 17.3% compared to $1.42 billion for the same quarter of 2023.
- Service Revenue: Service revenue was $1.09 billion for the fourth quarter of 2024, an increase of 17.2% compared to $927.0 million for the same quarter of 2023.
- Product Revenue: Product revenue was $574.0 million for the fourth quarter of 2024, an increase of 17.6% compared to $488.1 million for the same quarter of 2023.
- Billings1: Total billings were $2.00 billion for the fourth quarter of 2024, an increase of 7.4% compared to $1.86 billion for the same quarter of 2023.
- Unified SASE ARR2: Unified SASE ARR was $1.12 billion for the fourth quarter of 2024, an increase of 27.9% compared to $875.3 million for the same quarter of 2023.
- Security Operations ARR2: Security Operations ARR was $422.4 million for the fourth quarter of 2024, an increase of 32.2% compared to $319.6 million for the same quarter of 2023.
- GAAP Operating Income and Margin: GAAP operating income was $574.1 million for the fourth quarter of 2024, representing a GAAP operating margin of 34.6%. GAAP operating income was $385.4 million for the same quarter of 2023, representing a GAAP operating margin of 27.2%.
- Non-GAAP Operating Income and Margin1: Non-GAAP operating income was $650.9 million for the fourth quarter of 2024, representing a non-GAAP operating margin of 39.2%. Non-GAAP operating income was $453.5 million for the same quarter of 2023, representing a non-GAAP operating margin of 32.0%.
- GAAP Net Income and Diluted Net Income Per Share: GAAP net income was $526.2 million for the fourth quarter of 2024, compared to GAAP net income of $310.9 million for the same quarter of 2023. GAAP diluted net income per share was $0.68 for the fourth quarter of 2024, based on 775.2 million diluted weighted-average shares outstanding, compared to GAAP diluted net income per share of $0.40 for the same quarter of 2023, based on 772.3 million diluted weighted-average shares outstanding.
- Non-GAAP Net Income and Diluted Net Income Per Share1: Non-GAAP net income was $571.5 million for the fourth quarter of 2024, compared to non-GAAP net income of $392.0 million for the same quarter of 2023. Non-GAAP diluted net income per share was $0.74 for the fourth quarter of 2024, based on 775.2 million diluted weighted-average shares outstanding, compared to $0.51 for the same quarter of 2023, based on 772.3 million diluted weighted-average shares outstanding.
- Cash Flow: Cash flow from operations was $477.6 million for the fourth quarter of 2024, compared to $191.7 million for the same quarter of 2023.
- Free Cash Flow1: Free cash flow was $380.0 million for the fourth quarter of 2024, compared to $164.8 million for the same quarter of 2023.
Financial Summary for the Full Year 2024
- Revenue: Total revenue was $5.96 billion for 2024, an increase of 12.3% compared to $5.30 billion in 2023.
- Service Revenue: Service revenue was $4.05 billion for 2024, an increase of 19.8% compared to $3.38 billion in 2023.
- Product Revenue: Product revenue was $1.91 billion for 2024, a decrease of 1.0% compared to $1.93 billion in 2023.
- Billings1: Total billings were $6.53 billion for 2024, an increase of 2.1% compared to $6.40 billion in 2023.
- Remaining performance obligations: Remaining performance obligations were $6.42 billion as of December 31, 2024, an increase of 11.7% compared to $5.75 billion as of December 31, 2023.
- Deferred Revenue: Total deferred revenue was $6.36 billion as of December 31, 2024, an increase of 10.9% compared to $5.74 billion as of December 31, 2023.
- GAAP Operating Income and Margin: GAAP operating income was $1.80 billion for 2024, representing a GAAP operating margin of 30.3%. GAAP operating income was $1.24 billion for 2023, representing a GAAP operating margin of 23.4%.
- Non-GAAP Operating Income and Margin1: Non-GAAP operating income was $2.09 billion for 2024, representing a non-GAAP operating margin of 35.0%. Non-GAAP operating income was $1.51 billion for 2023, representing a non-GAAP operating margin of 28.4%.
- GAAP Net Income and Diluted Net Income Per Share: GAAP net income was $1.75 billion for 2024, compared to GAAP net income of $1.15 billion for 2023. GAAP diluted net income per share was $2.26 for 2024, based on 771.9 million diluted weighted-average shares outstanding, compared to GAAP diluted net income per share of $1.46 for 2023, based on 788.2 million diluted weighted-average shares outstanding.
- Non-GAAP Net Income and Diluted Net Income Per Share1: Non-GAAP net income was $1.83 billion for 2024, compared to non-GAAP net income of $1.29 billion for 2023. Non-GAAP diluted net income per share was $2.37 for 2024, based on 771.9 million diluted weighted-average shares outstanding, compared to $1.63 for 2023, based on 788.2 million diluted weighted-average shares outstanding.
- Cash Flow: Cash flow from operations was $2.26 billion in 2024 compared to $1.94 billion in 2023.
- Free Cash Flow1: Free cash flow was $1.88 billion in 2024, compared to $1.73 billion in 2023.
Guidance
For the first quarter of 2025, Fortinet currently expects:
- Revenue in the range of $1.500 billion to $1.560 billion
- Billings in the range of $1.520 billion to $1.600 billion
- Non-GAAP gross margin in the range of 80.0% to 81.0%
- Non-GAAP operating margin in the range of 30.0% to 31.0%
- Diluted non-GAAP net income per share in the range of $0.52 to $0.54, assuming a non-GAAP effective tax rate of 18%. This assumes a diluted share count of 774 million to 780 million.
For the fiscal year 2025, Fortinet currently expects:
- Revenue in the range of $6.650 billion to $6.850 billion
- Service revenue in the range of $4.575 billion to $4.725 billion
- Billings in the range of $7.200 billion to $7.400 billion
- Non-GAAP gross margin in the range of 79.0% to 81.0%
- Non-GAAP operating margin in the range of 31.0% to 33.0%
- Diluted non-GAAP net income per share in the range of $2.41 to $2.47, assuming a non-GAAP effective tax rate of 18%. This assumes a diluted share count of 773 million to 783 million.
These statements are forward looking and actual results may differ materially. Refer to the Forward-Looking Statements section below for information on the factors that could cause our actual results to differ materially from these forward-looking statements.
Our guidance with respect to non-GAAP financial measures excludes stock-based compensation, amortization of acquired intangible assets, charges in connection with litigation settlement, gain on intellectual property matters, gain on bargain purchase related to acquisition, non-cash charge of impairment on an equity method investment and a tax adjustment required for an effective tax rate on a non-GAAP basis, which differs from the GAAP effective tax rate. We have not reconciled our guidance with respect to non-GAAP financial measures to the corresponding GAAP measures because certain items that impact these measures are uncertain or out of our control, or cannot be reasonably predicted. Accordingly, a reconciliation of these non-GAAP financial measures to the corresponding GAAP measures is not available without unreasonable effort.
1 A reconciliation of GAAP to non-GAAP measures has been provided in the financial statement tables included in this press release. An explanation of these measures is also included below under the heading “Non-GAAP Financial Measures”.
2 ARR is defined as the annualized value of renewable / recurring customer agreements as of the measurement date, assuming any contract that expires during the next 12 months is renewed at its existing value.
Conference Call Details
Fortinet will host a conference call today at 1:30 p.m. Pacific Time (4:30 p.m. Eastern Time) to discuss the earnings results. A live webcast of the conference call and supplemental slides will be accessible from the Investor Relations page of Fortinet’s website at https://investor.fortinet.com and a replay will be archived and accessible at https://investor.fortinet.com/events-and-presentations.
First Quarter 2025 Conference Participation Schedule:
- Morgan Stanley Technology, Media & Telecom Conference
March 4, 2025
Members of Fortinet’s management team are expected to present at this conference and discuss the latest company strategies and initiatives. Fortinet’s conference presentations are expected to be available via webcast on the company’s website. To access the most updated information, pre-register and listen to the webcast of each event, please visit the Investor Presentation & Events page of Fortinet’s website at https://investor.fortinet.com/events-and-presentations. The schedule is subject to change.
About Fortinet (www.fortinet.com)
Fortinet (Nasdaq: FTNT) is a driving force in the evolution of cybersecurity and the convergence of networking and security. Our mission is to secure people, devices and data everywhere, and today we deliver cybersecurity everywhere our customers need it with the largest integrated portfolio of over 50 enterprise-grade products. Well over half a million customers trust Fortinet’s solutions, which are among the most deployed, most patented and most validated in the industry. The Fortinet Training Institute, one of the largest and broadest training programs in the industry, is dedicated to making cybersecurity training and new career opportunities available to everyone. Collaboration with esteemed organizations from both the public and private sectors, including Computer Emergency Response Teams (“CERTs”), government entities, and academia, is a fundamental aspect of Fortinet’s commitment to enhance cyber resilience globally. FortiGuard Labs, Fortinet’s elite threat intelligence and research organization, develops and utilizes leading-edge machine learning and AI technologies to provide customers with timely and consistently top-rated protection and actionable threat intelligence.