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Increased demand for cybersecurity drives Fortinet revenue growth

By Shannon Williams
Tue 8 Feb 2022

Fortinet has released its fourth quarter and full year 2021 financial results, showing total revenue of US$963.6 million, up 29 per cent year over year.

In the fourth quarter, the company saw product revenue of US$378.9 million, up 31 per cent year over year, with service revenue reaching US$584.7 million, up 27 per cent year over year. Billings reached US$1.31 billion, up 36 per cent year over year, with bookings of US$1.43 billion, up 49 per cent year over year. 

Total revenue for the full 2021 year reached US$3.34 billion, up 29 per cent year over year. 

“Revenue growth accelerated to 29 per cent in 2021, after three consecutive years with revenue growth of 20 per cent or more," says Ken Xie, founder, chairman, and chief executive officer, Fortinet.

"Cash flow from operations was US$1.5 billion and free cash flow was a record US$1.2 billion for the year. 

"Our 2021 performance was driven by increased demand for our cybersecurity solutions and exceptional execution from our global operations and sales teams and excellent support from our channel partners and distributors," Xie says.

"Fortinet’s integrated and single platform approach to security is resonating with customers that want to effectively protect their corporate networks from a wide range of attack vectors. Given our robust pipeline and strong business momentum, we expect several more years of solid growth as Fortinet is well positioned to address our US$174 billion market opportunity.”

Financial highlights for the full year 2021

  • Revenue: Total revenue was US$3.34 billion for 2021, an increase of 28.8 per cent compared to US$2.59 billion in 2020. 
  • Product revenue: Product revenue was US$1.26 billion for 2021, an increase of 36.9 per cent compared to US$916.4 million in 2020. 
  • Service revenue: Service revenue was US$2.09 billion for 2021, an increase of 24.4 per cent compared to US$1.68 billion in 2020. Billings: Total billings were US$4.18 billion for 2021, an increase of 35.3 per cent compared to US$3.09 billion in 2020. 
  • Bookings: Total bookings were US$4.33 billion for 2021, an increase of 40.2 per cent compared to US$3.09 billion in 2020. 
  • Deferred revenue: Total deferred revenue was US$3.45 billion as of December 31, 2021, an increase of 32.5 per cent compared to US$2.61 billion as of December 31, 2020. 

For the first quarter of 2022, Fortinet currently expects: 
Revenue in the range of US$865 million to US$895 million. 
Billings in the range of US$1.050 billion to US$1.090 billion. 
Non-GAAP gross margin in the range of 75.5 per cent to 76.5 per cent. 
Non-GAAP operating margin in the range of 19.5 per cent to 20.5 per cent.   
Diluted non-GAAP net income per share attributable to Fortinet, Inc. in the range of US$0.75 to US$0.80, assuming a non-GAAP effective tax rate of 18 per cent. This assumes a diluted share count of 166 million to 168 million.

For the fiscal year 2022, Fortinet currently expects: 
Revenue in the range of US$4.275 billion to US$4.325 billion. 
Service revenue in the range of US$2.685 billion to US$2.715 billion. 
Billings in the range of US$5.400 billion to US$5.480 billion. 
Non-GAAP gross margin in the range of 74.0 per cent to 76.0 per cent. 
Non-GAAP operating margin in the range of 24.0 per cent to 26.0 per cent.   
Diluted non-GAAP net income per share attributable to Fortinet, Inc. in the range of US$4.85 to US$5.00, assuming a non-GAAP effective tax rate of 18 per cent. This assumes a diluted share count of 169 million to 171 million.

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