In This Article:
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Revenue: $1.54 billion, a growth of 14%.
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Product Revenue: $459 million, increased by 12%.
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Service Revenue: $1.08 billion, grew by 14%.
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Gross Margin: 81.9%, increased by 380 basis points.
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Operating Margin: Record 34.2%, increased by 570 basis points.
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Free Cash Flow: $783 million, with a margin of 51%.
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Total Billings: $1.6 billion, grew by 14%.
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Unified SASE Billing Growth: 18%, accounting for 25% of the business.
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AI-driven SecOps Billing Growth: 29%, accounting for 10% of the business.
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RPO (Remaining Performance Obligations): $6.5 billion, grew by 12%.
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Current RPO: $3.4 billion, grew by over 15%.
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Adjusted Free Cash Flow: $839 million, representing a margin of 54%.
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New Logos: Increased by 14% to over 6,300.
Release Date: May 07, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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Fortinet Inc (NASDAQ:FTNT) reported a strong first quarter with billing revenue growth of 14% and a record operating margin of 34%.
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The company achieved a record free cash flow of $783 million, with a margin of 51%.
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Fortinet Inc (NASDAQ:FTNT) saw significant growth in secure operations and unified SASE, with security service edge billing growth of over 110%.
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The company is recognized as the number 1 deployed firewall vendor worldwide and a market leader in SD-WAN and OT security.
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Fortinet Inc (NASDAQ:FTNT) continues to invest in AI capabilities, holding over 500 issued and pending AI patents, and integrating AI technology into multiple products.
Negative Points
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There is uncertainty in the macroeconomic environment, which could influence customer investment decisions.
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The company is facing potential headwinds from US tariffs, although the impact is currently limited.
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Fortinet Inc (NASDAQ:FTNT) is cautious about the broader economic outlook, maintaining its full-year billings and revenue guidance ranges.
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The company noted some hesitancy from sales teams due to geopolitical uncertainties and macroeconomic news.
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There is a potential risk of customers delaying purchases due to the evolving geopolitical environment and economic conditions.
Q & A Highlights
Q: Can you explain the dynamics behind the maintenance and services revenue, and how do you expect it to grow throughout the year? A: Christiane Ohlgart, Chief Accounting Officer, explained that the quarter-over-quarter decline was affected by Q4 having two more days than Q1, impacting the daily rate going into revenue. The growth of acquired entities and their revenue streams also needs more time, impacting Q1 service revenue. Kenneth Xie, CEO, added that FortiGate growth above billing growth will drive future service revenue, with more services being added on top of FortiOS.