Shares of Fortinet (NASDAQ:FTNT) jumped over 12% after the closing bell on Tuesday following the company’s better-than-expected Q4 earnings and revenue.
The cybersecurity firm posted Q4 earnings per share (EPS) of $0.51, beating the consensus estimates of $0.43. Revenue came in at $1.42 billion, up 10% year-over-year, and surpassing the projected $1.41 billion.
Service revenue saw a significant jump of 25% YoY to $927.0 million, exceeding the predicted $914.8 million. However, product revenue declined by 9.6% YoY to $488.1 million, falling short of the anticipated $498.1 million.
Deferred revenue grew by 24% YoY to $5.74 billion, outperforming the estimate of $5.5 billion.
Billings reached $1.86 billion, marking an 8.5% increase YoY, surpassing the expected $1.62 billion.
The adjusted operating margin remained stable at 32%, compared to 32.5% the previous year, and was higher than the expected 27.9%.
Fortinet projects its EPS for the first quarter of 2024 to be between $0.37 and $0.39, aligning with the average analyst expectation of $0.37. The company anticipates Q1 revenue to range from $1.3 billion to $1.36 billion, slightly below the analyst consensus of $1.37 billion.
Billings are seen ranging from $1.39 billion to $1.45 billion in the first quarter, compared to the consensus estimates of $1.47 billion.
For the full year 2024, Fortinet forecasts its EPS to be in the range of $1.65 to $1.70, closely matching the consensus estimate of $1.67. The company's expected revenue for the year is projected to be between $5.715 billion and $5.815 billion, short of the consensus forecast of $5.93 billion.
Full-year billings are anticipated to be in the range of $6.40 billion to $6.60 billion, while analysts guided for $6.52 billion.
“In the fourth quarter of 2023, Security Operations billings grew 44% year over year and SASE billings increased 19% year over year, driven by our successful sales strategy shift and the improved execution of our sales teams,” said Ken Xie, Founder, Chairman and CEO of Fortinet.