Fortinet Stock Hits Record Highs After Cybersecurity Provider’s Q4 Results, Outlook Top Estimates: Retail Positions For Sustained Upside

Fortinet, Inc. (FTNT) stock surged in Thursday’s after-hours session after the cybersecurity software and solutions provider reported better-than-expected fourth-quarter results, underpinned by record margins, and issued upbeat guidance.

Sunnyvale, California-based Fortinet reported fourth-quarter non-GAAP earnings per share (EPS) of $0.74, compared to the year ago’s $0.51 and the consensus estimate of $0.61. 

Revenue increased 17.3% year over year (YoY) to $1.66 billion, exceeding the $1.53-billion consensus estimate and the company’s guidance of $1.56 billion to $1.62 billion.

Service revenue was $1.09 billion, and product revenue was $574 million.

Billings rose 7.4% YoY to $2 billion, hitting the higher end of the guidance range of $1.90 billion to $ 2 billion. The growth accelerated from the third quarter’s 7% pace.

The company noted that GAAP and non-GAAP operating margin were at a record 35% and 39%, respectively.

United SASE annual recurring revenue (ARR) climbed 28% and security operations ARR rose 32%.

The company generated cash flow from operations of $477.6 million for the quarter, up from $191.7 million a year earlier. Free cash flow increased from $164.8 million to $380 million.

Ken Xie, CEO of Fortinet, said, “In the fourth quarter, we successfully balanced growth and profitability as our non-GAAP operating margin increased 720 basis points year-over-year to a company record of 39%, while revenue grew 17%.”

Fortinet expects first-quarter revenue in the range of $1.5 billion to $1.56 billion, billings in the range of $1.52 billion to $1.60 billion and non-GAAP EPS of $0.52-$0.54.

These estimates surrounded the consensus top- and bottom-line estimates of $1.53 billon and $0.53, respectively.

The annual revenue is estimated at $6.65 billion to $6.85 billion, billings at $7.20 billion to $7.40 billion and non-GAAP EPS at $2.41-$2.47. The average analysts’ revenue and EPS estimates are at $6.62 billion and $2.43, respectively.

On Stocktwits, retail sentiment toward Fortinet stock stayed ‘extremely bullish’ (97/100) and message volume remained ‘extremely high.’

A platform user predicted more upside for the stock in Friday’s session when volume builds up.

Another user positioned themselves for sustained upside due to positive fundamentals.

Fortinet stock ended the after-hours session up 7.92% at $113.01, marking a record high. The stock has gained about 11% so far this year, on top of the 61.4% upside in 2024.

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