Fortinet's stock falls 8% after cybersecurity company's quarterly billings drop

By Claudia Assis

Shares of Fortinet Inc. fell 8% in the extended session Thursday after the cybersecurity company reported a better-than-expected first quarter and guidance that went beyond Wall Street forecasts, but billings were slightly off the mark.

Fortinet (FTNT) earned $299.3 million, or 39 cents a share, in the quarter, compared with $247.7 million, or 31 cents a share, for the same quarter of 2023.

Adjusted for one-time items, the company earned 43 cents a share, above FactSet consensus of adjusted earnings of 38 cents a share.

Revenue rose 7% to $1.35 billion, including a 24% increase in its services revenue to $944 million. The FactSet analysts expected total revenue of $1.33 billion, including $927 million for services. Product revenue also came in above consensus.

Billings, however, slightly missed expectations and were down 6% year on year to $1.41 billion. The analysts surveyed by FactSet expected billings to hit $1.43 billion.

Fortinet guided for second-quarter revenue in a range of $1.375 billion to $1.435 billion, and adjusted EPS between 39 cents and 41 cents. For fiscal 2024, the company expects revenue in a range of $5.745 billion to $5.845 billion, and adjusted EPS between $1.73 and $1.79.

Those estimates compare with FactSet expectations of second-quarter adjusted EPS of 39 cents a share on revenue of $1.39 billion, and 2024 adjusted EPS of $1.70 on revenue of $5.78 billion.

Shares of Fortinet are up 11% so far this year, outperforming the S&P 500 Index SPX, which is up around 6%.

-Claudia Assis

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05-02-24 2028ET

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