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Fortinet (FTNT)

Fortinet secures the largest enterprise, service provider, and government organizations around the world. Fortinet empowers its customers with complete visibility and control across the expanding attack surface and the power to take on ever-increasing performance requirements today and into the future. Only the Fortinet Security Fabric platform can address the most critical security challenges and protect data across the entire digital infrastructure, whether in networked, application, multi-cloud or edge environments. Fortinet ranks #1 in the most security appliances shipped worldwide and more than 500,000 customers trust Fortinet to protect their businesses. Both a technology company and a learning organization, the Fortinet Network Security Expert (NSE) Training Institute has one of the largest and broadest cybersecurity training programs in the industry.

Company profile

Ticker
FTNT
Exchange
CEO
Ken Xie
Employees
Location
Fiscal year end
Former names
FORTINET INC
SEC CIK
Subsidiaries
Fortinet Austria GmbH • Fortinet Belgium BV • Fortinet Network Security Brazil Limitada • Fortinet Technologies (Canada), ULC • Holdings 1504 Enterprises Inc. • Holdings 1502 Enterprises Ltd. • Fortinet International, Inc. • Fortinet Information Technology (Beijing) Co., Ltd. • Fortinet Denmark ApS • Fortinet S.A.R.L. ...
IRS number
770560389

FTNT stock data

Calendar

5 Aug 22
28 Sep 22
31 Dec 22
Quarter (USD) Jun 22 Mar 22 Dec 21 Sep 21
Revenue
Cost of revenue
Operating income
Operating margin
Net income
Net profit margin
Cash on hand
Change in cash
Diluted EPS
Annual (USD) Dec 21 Dec 20 Dec 19 Dec 18
Revenue
Cost of revenue
Operating income
Operating margin
Net income
Net profit margin
Cash on hand
Change in cash
Diluted EPS
Cash burn rate (est.) Burn method: Change in cash Burn method: Operating income Burn method: FCF (opex + capex)
Last Q Avg 4Q Last Q Avg 4Q Last Q Avg 4Q
Cash on hand (at last report) 710M 710M 710M 710M 710M 710M
Cash burn (monthly) 71.17M 97.44M (no burn) (no burn) (no burn) (no burn)
Cash used (since last report) 210.13M 287.72M n/a n/a n/a n/a
Cash remaining 499.87M 422.28M n/a n/a n/a n/a
Runway (months of cash) 7.0 4.3 n/a n/a n/a n/a

Beta Read what these cash burn values mean

Date Owner Security Transaction Code Indirect 10b5-1 $Price #Shares $Value #Remaining
25 Aug 22 Keith Jensen Common Stock Sell Dispose S No Yes 50.5687 39,440 1.99M 4,541
25 Aug 22 Keith Jensen Common Stock Option exercise Acquire M No Yes 34.39 11,980 411.99K 43,981
25 Aug 22 Keith Jensen Common Stock Option exercise Acquire M No Yes 22.9 12,730 291.52K 32,001
25 Aug 22 Keith Jensen Common Stock Option exercise Acquire M No Yes 16.9 14,730 248.94K 19,271
25 Aug 22 Keith Jensen Stock Option Common Stock Option exercise Dispose M No Yes 34.39 11,980 411.99K 119,825
25 Aug 22 Keith Jensen Stock Option Common Stock Option exercise Dispose M No Yes 22.9 12,730 291.52K 76,390
25 Aug 22 Keith Jensen Stock Option Common Stock Option exercise Dispose M No Yes 16.9 14,730 248.94K 29,465
18 Aug 22 Ken Xie Common Stock Option exercise Acquire M No No 4.766 300,000 1.43M 63,248,610
18 Aug 22 Ken Xie Nonqualified Stock Option Common Stock Option exercise Dispose M No No 4.766 300,000 1.43M 0
17 Aug 22 Goldman Kenneth A RSU Common Stock Grant Acquire A No No 0 4,131 0 4,131
65.5% owned by funds/institutions
13F holders Current Prev Q Change
Total holders 891 908 -1.9%
Opened positions 107 100 +7.0%
Closed positions 124 127 -2.4%
Increased positions 766 289 +165.1%
Reduced positions 13 409 -96.8%
13F shares Current Prev Q Change
Total value 29.74B 36.09B -17.6%
Total shares 516.72M 105.8M +388.4%
Total puts 3.29M 1.12M +195.4%
Total calls 2.89M 992.3K +191.3%
Total put/call ratio 1.1 1.1 +1.4%
Largest owners Shares Value Change
Vanguard 67.38M $3.81B +395.4%
TROW T. Rowe Price 53M $3B +395.4%
BLK Blackrock 52.87M $2.99B +357.3%
STT State Street 25.87M $1.46B +380.5%
BK Bank Of New York Mellon 21.23M $1.2B +382.9%
Alliancebernstein 19.74M $1.12B +576.8%
Geode Capital Management 15.09M $852.94M +400.1%
AMP Ameriprise Financial 13.25M $749.14M +441.4%
Altshuler Shaham 9.84M $556.9M +389.8%
FMR 7.42M $419.61M +148.6%
Largest transactions Shares Bought/sold Change
Vanguard 67.38M +53.77M +395.4%
TROW T. Rowe Price 53M +42.3M +395.4%
BLK Blackrock 52.87M +41.31M +357.3%
STT State Street 25.87M +20.49M +380.5%
BK Bank Of New York Mellon 21.23M +16.84M +382.9%
Alliancebernstein 19.74M +16.82M +576.8%
Geode Capital Management 15.09M +12.08M +400.1%
AMP Ameriprise Financial 13.25M +10.8M +441.4%
Altshuler Shaham 9.84M +7.83M +389.8%
MS Morgan Stanley 6.97M +6.17M +765.9%

Financial report summary

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Risks
  • Our operating results are likely to vary significantly and be unpredictable.
  • Adverse economic conditions or reduced information technology spending may adversely impact our business.
  • We are dependent on the continued services and performance of our senior management, the loss of any of whom could adversely affect our business, operating results and financial condition.
  • We rely significantly on revenue from FortiGuard and other security subscription and FortiCare technical support services, and revenue from these services may decline or fluctuate. Because we recognize revenue from these services over the term of the relevant service period, downturns or upturns in sales of FortiGuard and other security subscription and FortiCare technical support services are not immediately reflected in full in our operating results.
  • If we are unable to hire, retain and motivate qualified personnel, our business will suffer.
  • We have incurred indebtedness and may incur other debt in the future, which may adversely affect our financial condition and future financial results.
  • We generate a majority of revenue from sales to distributors, resellers and end-customers outside of the United States, and we are therefore subject to a number of risks associated with international sales and operations.
  • The war in Ukraine and any expansion thereof, and our suspension of operations in Russia have affected and may continue to affect our business
  • If we are not successful in continuing to execute our strategy to increase our sales to large and medium-sized end-customers, our results of operations may suffer.
  • If we do not increase the effectiveness of our sales organization, we may have difficulty adding new end-customers or increasing sales to our existing end-customers and our business may be adversely affected.
  • Unless we continue to develop better market awareness of our company and our products, and to improve lead generation and sales enablement, our revenue may not continue to grow.
  • A portion of our revenue is generated by sales to government organizations and customers, which are subject to a number of regulatory requirements, challenges and risks.
  • We face intense competition in our market and we may not maintain or improve our competitive position.
  • Managing inventory of our products and product components is complex. Insufficient inventory or components may result in lost sales opportunities or delayed revenue, while excess inventory may harm our gross margins.
  • COVID-19 pandemic impacts on global supply chains are impacting our ability to procure parts required for our hardware appliances. Extended lead times have been introduced in delivering products for customer orders in a timely fashion.
  • If our new products and product enhancements do not achieve sufficient market acceptance, our results of operations and competitive position will suffer.
  • Demand for our products may be limited by market perception that individual products from one vendor that provide multiple layers of security protection in one product are inferior to point solution network security solutions from multiple vendors.
  • If functionality similar to that offered by our products is incorporated into existing network infrastructure products, organizations may decide against adding our appliances to their network, which would have an adverse effect on our business.
  • Because we depend on several third-party manufacturers to build our products, we are susceptible to manufacturing delays that could prevent us from shipping customer orders on time, if at all, and may result in the loss of sales and customers, and third-party manufacturing cost increases could result in lower gross margins and free cash flow.
  • We may be adversely affected by the effects of inflation or stagflation or any economic recession
  • Because some of the key components in our products come from limited sources of supply, we are susceptible to supply shortages, long lead times for components, and supply changes, each of which could disrupt or delay our scheduled product deliveries to our customers, result in inventory shortage, cause loss of sales and customers or increase component costs resulting in lower gross margins and free cash flow.
  • We offer retroactive price protection to certain of our major distributors, and if we fail to balance their inventory with end-customer demand for our products, our allowance for price protection may be inadequate, which could adversely affect our results of operations.
  • The sales prices of our products and services may decrease, which may reduce our gross profits and operating margin, and which may adversely impact our financial results and the trading price of our common stock.
  • Actual, possible or perceived defects or vulnerabilities in our products or services, the failure of our products or services to detect or prevent a security breach or the misuse of our products could harm our reputation and divert resources.
  • The network security market is rapidly evolving and the complex technology incorporated in our products makes them difficult to develop. If we do not accurately predict, prepare for and respond promptly to technological and market developments and changing end-customer needs, our competitive position and prospects may be harmed.
  • False detection of vulnerabilities, viruses or security breaches or false identification of spam or spyware could adversely affect our business.
  • Our ability to sell our products is dependent on our quality control processes and the quality of our technical support services, and our failure to offer high-quality technical support services would have a material adverse effect on our sales and results of operations.
  • Our business is subject to the risks of warranty claims, product returns, product liability and product defects.
  • If we do not appropriately manage any future growth, including through the expansion of our real estate facilities, or are unable to improve our systems, processes and controls, our operating results will be negatively affected.
  • We may experience difficulties maintaining and expanding our internal business management systems.
  • Our proprietary rights may be difficult to enforce and we may be subject to claims by others that we infringe their propriety technology.
  • Our products contain third-party open source software components, and failure to comply with the terms of the underlying open source software licenses could restrict our ability to sell our products.
  • Claims by others that we infringe their proprietary technology or other litigation matters could harm our business.
  • We rely on the availability of third-party licenses.
  • Our inability to successfully acquire and integrate other businesses, products or technologies, or to successfully invest in and form successful strategic alliances with other businesses, could seriously harm our competitive position.
  • We are subject to governmental export and import controls that could subject us to liability or restrictions on sales, and that could impair our ability to compete in international markets.
  • Efforts to withdraw from or materially modify international trade agreements, to change tax provisions related to global manufacturing and sales or to impose new tariffs, economic sanctions or related legislation, any of which could adversely affect our financial condition and results of operations.
  • If we fail to comply with environmental requirements, our business, financial condition, operating results and reputation could be adversely affected.
  • Investors’ expectations of our performance relating to environmental, social and governance factors may impose additional costs and expose us to new risks.
  • If our estimates or judgments relating to our critical accounting policies are based on assumptions that change or prove to be incorrect, our operating results could fall below expectations of securities analysts and investors, resulting in a decline in our stock price.
  • We are exposed to fluctuations in currency exchange rates, which could negatively affect our financial condition and results of operations.
  • We could be subject to changes in our tax rates, the adoption of new U.S. or international tax legislation or exposure to additional tax liabilities.
  • Forecasting our estimated annual effective tax rate is complex and subject to uncertainty, and there may be material differences between our forecasted and actual tax rates.
  • As a public company, we are subject to compliance initiatives that will require substantial time from our management and result in significantly increased costs that may adversely affect our operating results and financial condition.
  • If securities or industry analysts stop publishing research or publish inaccurate or unfavorable research about our business, our stock price and trading volume could decline.
  • The trading price of our common stock may be volatile, which may be exacerbated by share repurchases under our Share Repurchase Program.
  • Share repurchases under the Repurchase Program could increase the volatility of the trading price of our common stock, could diminish our cash reserves, could occur at non-optimal prices and may not result in the most effective use of our capital.
  • Anti-takeover provisions contained in our certificate of incorporation and bylaws, as well as provisions of Delaware law, could impair a takeover attempt.
  • Global economic uncertainty, an economic downturn, the possibility of a recession, and weakening product demand caused by political instability, changes in trade agreements and conflicts, such as the conflict between Russia and Ukraine, could adversely affect our business and financial performance.
  • Our business is subject to the risks of earthquakes, drought, fire, power outages, typhoon, floods, virus outbreaks and other broad health-related challenges, cyber events and other catastrophic events, and to interruption by manmade problems such as civil unrest, war, labor disruption, critical infrastructure attack and terrorism.
  • Changes in financial accounting standards may cause adverse unexpected fluctuations and affect our reported results of operations.
Management Discussion
  • Discussion regarding our financial condition and results of operations for 2020 as compared to 2019 can be found in Item 7 of our Annual Report on Form 10-K for the fiscal year ended December 31, 2020, filed with the SEC on February 19, 2021.

Content analysis

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Positive
Negative
Uncertain
Constraining
Legalese
Litigous
Readability
H.S. junior Good
New words: aforementioned, dark, FortiAP, FortiSwitch, guideline, history, implied, linearity, notable, OTTI, par, postage, putting, sequentially, stolen, suggest, thereon
Removed: arose, commencement, distinct, granting, intellectual, largely, paying, protecting, ready, recur, ShieldX, stand