Fortinet has beaten its guidance – and the market – to record a 20% increase in revenue for the first quarter of 2017 with large deals and multiple product deployments driving the company's success.
The company's APAC business, which represents 20% of the company's overall business in terms of revenue, was ahead of the curve, recording 22% growth in billings with revenue growing 15% year on year.
The security vendor logged total revenue of US$340.6 million, with product revenue up 9% to $135.3 million and services revenue up 28% to $205.3 million.
Billings were up 22% to $403.3 million, which included a US$12 million single deal. The company says around 70% of the revenue from the multi-year contract was deferred into future periods.
Ken Xie, Fortinet founder, chairman and chief executive, says the company has added more than 10,000 new customers during the quarter, bringing its global customer base to more than 310,000.
Xie says the company has seen strength in large, multi-product deals, demonstrating that the security fabric architecture is continuing to gain mind share and market share for Fortinet.
“The Fortinet Security Fabric is a cohesive, multi-product platform that works together to detect, monitor, block and remediate attacks against the entire enterprise surface area, responding to our customers' need for a seamless, tightly integrated approach to security that protects all points in the network,” Xie says.
He says broader adoption of the security fabric has resulted in increased sales int eh quarter of non-FortiGate solutions.
Deferred revenue grew strongly to US$1.98 billion, up 31% year on year, reflecting the shift to more margin rich, recurring subscription and service revenue.
“Sales of enterprise bundles were again strong in the first quarter, driving higher-priced and higher margin recurring revenue over time,” says Drew Del Matto, Fortinet chief financial officer.
Del Matto says service providers were the largest billing vertical for Fortinet in the quarter, at 21%. Government, at 15%, education (13%), financial services (11%) and retail (9%) round out the top five.
High end FortiGate products, typically sold to large enterprises and telco, carriers and service providers, accounted for 36% of the total product billings.
Midrange offerings, sold to enterprises made up 31% of billings, while entry level offerings for distributed enterprises and SMBs, accounted for 33%.