Fortinet reports 4th Quarter and Full Year 2013 Financial Results

Fortinet-logoNew Delhi, India, February 04, 2014:  Fortinet, a player in high-performance network security has announced financial results for the fourth quarter and full year ended December 31, 2013.

Ken Xie, founder, chairman, and chief executive officer said, “We had a strong finish to 2013, meeting or exceeding our expectations across our key non-GAAP operating metrics during the fourth quarter. Our performance highlights the global demand for our network security solutions, improved execution, and the leverage we are now experiencing from prior investments in our sales, marketing, and product development. Looking forward, we expect the advanced persistent threat opportunity, continued execution in the data center with 100Gbps deployments, and next-generation firewall displacements, to be key drivers of our business.”

Financial Highlights for the Fourth Quarter of 2013

  • Billings: Total billings were $209.8 million for the fourth quarter of 2013, an increase of 20% compared to $174.3 million in the same quarter of 2012.
  • Revenue: Total revenue was $177.4 million for the fourth quarter of 2013, an increase of 17% compared to $151.2 million in the same quarter of 2012.  Within total revenue, product revenue was $83.9 million, an increase of 18% compared to the same quarter of 2012.  Services revenue was $90.3 million, an increase of 18% compared to the same quarter of 2012.
  • Deferred Revenue: Deferred revenue was $432.6 million as of December 31, 2013, up $32.5 million from $400.2 million as of September 30, 2013.
  • Cash and Cash Flow: As of December 31, 2013, cash, cash equivalents and investments were $843.0 million, compared to $839.0 million as of September 30, 2013. In the fourth quarter of 2013, cash flow from operations was $46.7 million and free cash flow was $39.5 million.
  • GAAP Operating Income: GAAP operating income was $24.6 million for the fourth quarter of 2013, representing a GAAP operating margin of 14%. GAAP operating income was $35.0 million for the same quarter of 2012, representing a GAAP operating margin of 23%.
  • GAAP Net Income and Diluted Net Income Per Share: GAAP net income was $12.0 million for the fourth quarter of 2013, based on a 53% tax rate for the quarter. This compares to GAAP net income of $21.5 million for the same quarter of 2012, based on a 41% tax rate for the quarter.  GAAP diluted net income per share was $0.07 for the fourth quarter of 2013, based on 168.9 million weighted-average diluted shares outstanding, compared to $0.13 for the same quarter of 2012, based on 167.0 million weighted-average diluted shares outstanding. 
  • Non-GAAPOperating Income: Non-GAAP operating income was $37.8 million for the fourth quarter of 2013, representing a non-GAAP operating margin of 21%. Non-GAAP operating income was $41.6 million for the same quarter of 2012, representing a non-GAAP operating margin of 27%.
  • Non-GAAPNet Income and Diluted Net Income Per Share: Non-GAAP net income was $25.9 million for the fourth quarter of 2013, based on a 33% effective tax rate for the quarter.  Non-GAAP net income for the same quarter of 2012 was $28.2 million, based on a 34% effective tax rate.  Non-GAAP diluted net income per share was $0.15 for the fourth quarter of 2013 based on 168.9 million weighted-average diluted shares outstanding, compared to $0.17 for the same quarter of 2012, based on 167.0 million weighted-average diluted shares outstanding.

 

Financial Highlights for the Full Year 2013

  • Billings: Total billings were $684.2 million for fiscal 2013, an increase of 14% compared to $602.0 million in fiscal 2012.
  • Revenue: Total revenue was $615.3 million for fiscal 2013, an increase of 15% compared to $533.6 million for fiscal 2012.  Within total revenue, product revenue was $278.0 million for fiscal 2013, an increase of 12% compared to $248.9 million for fiscal 2012.  Services revenue was $329.7 million for fiscal 2013, an increase of 20% compared to $274.0 million for fiscal 2012.
  • Deferred Revenue: Deferred revenue was $432.6 million as of December 31, 2013, an increase of 19% compared to deferred revenue of $363.2 million as of December 31, 2012.
  • Cash and Cash Flow: As of December 31, 2013, cash, cash equivalents and investments were $843.0 million4, compared to $739.6 million as of December 31, 2012. In fiscal 2013, cash flow from operations was $147.4 million and free cash flow was $133.5 million.
  • GAAP Operating Income: GAAP operating income was $72.1 million for fiscal 2013, representing a GAAP operating margin of 12%. GAAP operating income was $100.5 million for fiscal 2012, representing a GAAP operating margin of 19%.
  • GAAP Net Income and Diluted Net Income Per Share: GAAP net income was $44.3 million for fiscal 2013, based on a 42% tax rate for the year. This compares to GAAP net income of $66.8 million for fiscal 2012, based on a 36% tax rate for the year.  GAAP diluted net income per share was $0.26 for fiscal 2013, based on 168.2 million weighted-average diluted shares outstanding, compared to $0.40 for fiscal 2012, based on 166.3 million weighted-average diluted shares outstanding. 
  • Non-GAAPOperating Income: Non-GAAP operating income was $116.7 million for fiscal 2013, representing a non-GAAP operating margin of 19%. Non-GAAP operating income was $130.1 million for fiscal 2012, representing a non-GAAP operating margin of 24%.
  • Non-GAAPNet Income and Diluted Net Income Per Share: Non-GAAP net income was $80.7 million for fiscal 2013, based on a 33% effective tax rate for the year.  Non-GAAP net income for fiscal 2012 was $88.8 million, based on a 34% effective tax rate.  Non-GAAP diluted net income per share was $0.48 for fiscal 2013 based on 168.2 million weighted-average diluted shares outstanding, compared to $0.53 for fiscal 2012, based on 166.3 weighted-average diluted shares outstanding.

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