Fortinet, Inc. Files 10-Q for Period Ending March 31, 2024

TL;DR

<b>Fortinet, Inc. filed its Q1 2024 10-Q report detailing financial positions and operational data.</b>

AI Summary

Fortinet, Inc. (FTNT) filed a Quarterly Report (10-Q) with the SEC on May 6, 2024. Fortinet, Inc. filed a 10-Q report for the quarterly period ended March 31, 2024. The filing covers the period from January 1, 2024, to March 31, 2024. The company's principal executive offices are located at 909 Kifer Road, Sunnyvale, CA 94086. Fortinet, Inc. is classified under SIC code 3577 for Computer Peripheral Equipment, NEC. The filing includes data related to common stock, additional paid-in capital, accumulated other comprehensive income, and retained earnings as of various dates in 2023 and 2024.

Why It Matters

For investors and stakeholders tracking Fortinet, Inc., this filing contains several important signals. This 10-Q filing provides investors and analysts with the latest quarterly financial performance and position of Fortinet, Inc., crucial for valuation and investment decisions. Understanding the breakdown of revenue segments (Products vs. Services) and changes in equity accounts offers insights into the company's growth drivers and financial health.

Risk Assessment

Risk Level: low — Fortinet, Inc. shows low risk based on this filing. The filing is a standard quarterly report (10-Q) and does not contain immediate, significant negative news, indicating a low level of immediate risk from this specific document.

Analyst Insight

Monitor future filings for revenue growth trends in product vs. service segments and changes in the company's cash and debt positions.

Key Numbers

• 2024-03-31 — Reporting Period End Date (The end date of the quarterly period covered by the 10-Q.)
• 2024-01-01 — Reporting Period Start Date (The start date of the quarterly period covered by the 10-Q.)
• 2024-05-06 — Filing Date (The date the 10-Q was filed with the SEC.)

Key Players & Entities

• Fortinet, Inc. (company) — Filer name and company being reported on.
• 909 Kifer Road, Sunnyvale, CA 94086 (location) — Business and mailing address of Fortinet, Inc.
• 3577 (industry_code) — Standard Industrial Classification code for Fortinet, Inc.

FAQ

Industry Context

Fortinet operates in the cybersecurity industry, providing a broad range of security solutions including firewalls, antivirus, intrusion prevention, and secure access.

Regulatory Implications

As a publicly traded company, Fortinet is subject to SEC regulations requiring regular filings like the 10-Q to ensure transparency for investors.

What Investors Should Do

1. Review the full 10-Q for detailed financial statements and management's discussion and analysis.
2. Compare Q1 2024 revenue and profitability metrics against prior periods and analyst expectations.
3. Analyze the company's balance sheet for changes in assets, liabilities, and equity.

Key Dates

• 2024-03-31: Quarterly Period End — Marks the end of the reporting period for the 10-Q.
• 2024-05-06: Filing Date — Date the 10-Q was officially submitted to the SEC.

Year-Over-Year Comparison

This filing represents the first quarterly report for fiscal year 2024, following the 2023 annual report.

Key Financial Figures

• $0.001 — ange on which registered Common Stock, $0.001 Par Value FTNT The Nasdaq Stock Market

Filing Documents

• ftnt-20240331.htm (10-Q) — 1527KB
• ftnt-ex311_20240331x10q.htm (EX-31.1) — 10KB
• ftnt-ex312_20240331x10q.htm (EX-31.2) — 10KB
• ftnt-ex321_20240331x10q.htm (EX-32.1) — 10KB
• 0001262039-24-000020.txt (&nbsp;) — 7692KB
• ftnt-20240331.xsd (EX-101.SCH) — 43KB
• ftnt-20240331_cal.xml (EX-101.CAL) — 71KB
• ftnt-20240331_def.xml (EX-101.DEF) — 258KB
• ftnt-20240331_lab.xml (EX-101.LAB) — 660KB
• ftnt-20240331_pre.xml (EX-101.PRE) — 458KB
• ftnt-20240331_htm.xml (XML) — 1135KB

— FINANCIAL INFORMATION

PART I — FINANCIAL INFORMATION

Financial Statements (unaudited)

Item 1. Financial Statements (unaudited) 3 Condensed Consolidated Balance Sheets as of March 3 1 , 202 4 and December 31, 202 3 3 Condensed Consolidated Statements of Income for the Three Months Ended March 3 1 , 202 4 and 202 3 4 Condensed Consolidated Statements of Comprehensive Income for the Three Months Ended March 3 1 , 202 4 and 202 3 5 Condensed Consolidated Statements of Stockholders' Equity (Deficit) for the Three Months Ended March 3 1 , 202 4 and 202 3 6 Condensed Consolidated Statements of Cash Flows for the Three Months Ended March 3 1 , 202 4 and 202 3 7 Notes to Condensed Consolidated Financial Statements 8

Management's Discussion and Analysis of Financial Condition and Results of Operations

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 24

Quantitative and Qualitative Disclosures about Market Risk

Item 3. Quantitative and Qualitative Disclosures about Market Risk 35

Controls and Procedures

Item 4. Controls and Procedures 35

—OTHER INFORMATION

PART II—OTHER INFORMATION

Legal Proceedings

Item 1. Legal Proceedings 37

Risk Factors

Item 1A. Risk Factors 37

Unregistered Sales of Equity Securities, Use of Proceeds and Issuer Purchases of Equity Securities

Item 2. Unregistered Sales of Equity Securities, Use of Proceeds and Issuer Purchases of Equity Securities 71

Other Information

Item 5. Other Information 71

Exhibits

Item 6. Exhibits 72 Exhibit Index 72

Signatures

Signatures 73 Summary of Risk Factors Our business is subject to numerous risks and uncertainties, including those described in Part II, Item 1A, "Risk Factors" in this Quarterly Report on Form 10-Q. You should carefully consider these risks and uncertainties when investing in our common stock. Some of the principal risks and uncertainties include: Our operating results are likely to vary significantly and be unpredictable. Adverse economic conditions, such as a possible economic downturn or recession, and possible impacts of inflation or stagflation, increasing or decreasing interest rates, changes in government spending or reduced information technology spending, including firewall spending, may adversely impact our business. We have been, and may in the future be, susceptible to supply chain constraints, supply shortages and disruptions, long or less predictable lead times for components and finished goods and supply changes because some of the key components in our products come from limited sources of supply. As a result of supply chain disruptions in previous periods, we increased our purchase order commitments in previous periods and, as a result, may be required to accept or pay for components and finished goods regardless of our level of sales in a particular period, which may negatively impact our operating results and financial condition. Our billings, revenue, and free cash flow growth may slow further or may not continue, and our operating margins may decline. Our real estate assets, including construction, acquisitions, sales or strategy changes, and ongoing maintenance and management of office buildings, warehouses, data centers and points of presence, as well as data center expansions or enhancements, could involve significant risks to our business. Our backlog may fluctuate over quarters and any decrease in growth or negative growth of in-quarter billings and revenue may not be reflected by our aggregate billings and revenue if we

—FINANCIAL INFORMATION

PART I—FINANCIAL INFORMATION

Financial Statements

ITEM 1. Financial Statements FORTINET, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited, in millions, except per share amounts) March 31, 2024 December 31, 2023 ASSETS CURRENT ASSETS: Cash and cash equivalents $ 1,926.3 $ 1,397.9 Short-term investments 1,075.4 1,021.5 Marketable equity securities 21.4 21.0 Accounts receivable—net 996.2 1,402.0 Inventory 439.5 484.8 Prepaid expenses and other current assets 100.9 101.1 Total current assets 4,559.7 4,428.3 PROPERTY AND EQUIPMENT—NET 1,247.4 1,044.4 DEFERRED CONTRACT COSTS 600.0 605.6 DEFERRED TAX ASSETS 942.5 868.8 GOODWILL 129.0 126.5 OTHER INTANGIBLE ASSETS—NET 34.1 35.3 OTHER ASSETS 149.4 150.0 TOTAL ASSETS $ 7,662.1 $ 7,258.9 LIABILITIES AND STOCKHOLDERS' DEFICIT CURRENT LIABILITIES: Accounts payable $ 135.2 $ 204.3 Accrued liabilities 538.7 423.7 Accrued payroll and compensation 214.5 242.3 Deferred revenue 2,912.0 2,848.7 Total current liabilities 3,800.4 3,719.0 DEFERRED REVENUE 2,877.9 2,886.3 LONG-TERM DEBT 992.8 992.3 OTHER LIABILITIES 128.5 124.7 Total liabilities 7,799.6 7,722.3 COMMITMENTS AND CONTINGENCIES (Note 10) STOCKHOLDERS' DEFICIT: Common stock, $ 0.001 par value— 1,500.0 shares authorized; 763.2 and 761.0 shares issued and outstanding on March 31, 2024 and December 31, 2023, respectively 0.8 0.8 Additional paid-in capital 1,448.9 1,416.4 Accumulated other comprehensive loss ( 24.8 ) ( 18.9 ) Accumulated deficit ( 1,562.4 ) ( 1,861.7 ) Total stockholders' deficit ( 137.5 ) ( 463.4 ) TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT $ 7,662.1 $ 7,258.9 See notes to condensed consolidated financial statements. 3 Table of Contents FORTINET, INC. CONDENSED CONSOLIDATED STATEMENTS OF INCOME (unaudited, in millions, except per share amounts) Three Months Ended March 31, 2024 March 31, 2023 REVENUE: Product $ 408.9 $ 500.7 Service 944.4 761.6 Total revenue 1,353.3 1,262.3 COST OF REVENUE: Product 182.8 193.6 Service 121.9 114.2 Total cost

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View this 10-Q filing on SEC EDGAR