Fortinet Inc (NASDAQ:FTNT) reported third-quarter earnings that surpassed analyst expectations, but shares tumbled 8% in after-hours trading despite the cybersecurity firm raising its full-year outlook.
The company posted adjusted earnings per share of $0.63, beating the analyst estimate of $0.52. Revenue for the quarter came in at $1.51 billion, exceeding the consensus estimate of $1.48 billion and representing a 13% YoY increase.
Fortinet's service revenue, which accounts for the bulk of its total revenue, grew 19.1% YoY to $1.03 billion. Product revenue saw a modest 1.7% YoY increase to $473.9 million.
Despite the strong results, investors appeared to focus on the company's billings growth, which slowed to 6.1% YoY, reaching $1.58 billion for the quarter.
Ken Xie, Founder, Chairman and CEO of Fortinet, commented, "We are pleased to report another strong quarter as non-GAAP operating margin increased 830 basis points year over year to a company record of 36%, while revenue exceeded the high end of our guidance range."
Looking ahead, Fortinet raised its full-year 2024 guidance. The company now expects revenue between $5.86 billion and $5.92 billion, up from its previous forecast and in line with analyst expectations of $5.86 billion. Adjusted EPS is projected to be in the range of $2.20 to $2.28, above the consensus estimate of $2.04.
For the fourth quarter, Fortinet anticipates revenue between $1.56 billion and $1.62 billion, with adjusted EPS of $0.58 to $0.62.
The company also announced a $1 billion increase to its share repurchase program, bringing the total remaining authorization to approximately $2 billion.