Fortinet ((FTNT)) has held its Q4 earnings call. Read on for the main highlights of the call.
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Fortinet’s recent earnings call painted a picture of robust financial health, with impressive growth in unified SaaS and secure operations. The company achieved record operating margins, underscoring strong financial performance and execution. However, the positive sentiment was tempered by concerns over weaker billings guidance and geopolitical uncertainties, including potential impacts from tariffs.
Record Operating Margin Achieved
Fortinet reported a record operating margin of 39% in the fourth quarter of 2024. This milestone reflects Fortinet’s strong execution and financial performance, signaling the company’s ability to efficiently manage costs while driving growth.
Total Revenue and Product Revenue Growth
The company saw a 17% increase in total revenue, with product revenue climbing by 18%, marking the highest growth rate in six quarters. This growth highlights Fortinet’s success in expanding its market presence and product offerings.
Strong Performance in Unified SaaS and Secure Operations
Unified SaaS billing growth reached 13%, now accounting for 23% of Fortinet’s business. Additionally, AI-driven secure operations contributed 11% to total billings, with an impressive annual recurring revenue growth of 32%, showcasing Fortinet’s innovation in cybersecurity solutions.
Recognition as a Trusted Company
Fortinet’s reputation was bolstered by being ranked number seven on Forbes’ most trusted company list and as the only cybersecurity firm in the top fifty. This recognition enhances the company’s brand credibility and customer trust.
Significant Fourth-Quarter Wins
Fortinet secured several seven-figure deals with healthcare providers and Fortune 500 companies, emphasizing the strategic value of its solutions, including FortiSASE and SD-WAN, in diverse industries.
Weak Billings Guidance for Q1 2025
Despite the strong performance, Fortinet’s guidance for the first quarter of 2025 showed weaker growth expectations for billings, with concerns over multinational footprint exposure and potential disruptions from the US government.
Tariff and Supply Chain Uncertainties
The company expressed concerns over tariffs and potential retaliatory policies, which pose challenges to demand and supply chain stability, particularly in regions like Latin America and Canada.
Forward-Looking Guidance
For the first quarter of 2025, Fortinet projected billings between $1.52 billion and $1.6 billion, indicating an 11% growth at the midpoint, with revenue expected to hit $1.5 billion to $1.56 billion, reflecting 13% growth. For the full year, billings are anticipated to reach $7.2 billion to $7.4 billion, and revenue is forecasted at $6.65 billion to $6.85 billion, both showing strong growth projections. Infrastructure investments and recent acquisitions are expected to enhance these figures further.
In summary, Fortinet’s earnings call conveyed strong financial results and strategic wins but also highlighted areas of caution regarding future billings and geopolitical uncertainties. The company remains optimistic about its growth trajectory for 2025, supported by solid revenue forecasts and strategic investments.
