Cybersecurity firm Fortinet reported revenue jump of 20% to $1.80 billion in 2018, compared to $1.49 billion in 2017. This includes revenues of $674.4 million from product and $1.13 billion from services. For 2018, the company total billings were $2.15 billion, which is an increase of 20% compared to $1.80 billion in 2017.
In the fourth quarter of 2018, Fortinet reported total revenue of $507.0 million, an increase of 22% compared to $416.6 million in the same quarter of 2017. This includes product revenue of $200.8 million, an increase of 24% compared to $162.1 million in the same quarter of 2017 and service revenue of $306.2 million, an increase of 20% compared to $254.5 million in the same quarter of 2017. The company said total billings were $649.2 million for the fourth quarter of 2018, an increase of 22% compared to $534.0 million in the same quarter of 2017.
“Our strong fourth quarter results drove a solid finish to 2018, demonstrating demand for our product and services and illustrating our ability to drive disciplined growth with solid margin improvement,” said Ken Xie, Founder, Chairman and Chief Executive Officer.
“We are well-positioned to achieve another year of better than industry growth in 2019, driven by business momentum and strong customer demand for our broad, integrated, and automated security solutions across their entire network infrastructure,” said Xie.
The overall, GAAP operating income was $85.1 million for the fourth quarter of 2018, representing a GAAP operating margin of 17%. GAAP operating income was $42.2 million for the same quarter of 2017, representing a GAAP operating margin of 10%.
GAAP net income was $182.6 million for the fourth quarter of 2018, compared to GAAP net loss of $29.0 million for the same quarter of 2017. GAAP diluted net income per share was $1.04 for the fourth quarter of 2018, based on 175.8 million diluted weighted-average shares outstanding, compared to GAAP diluted net loss per share of $0.17 for the same quarter of 2017, based on 171.5 million diluted weighted-average shares outstanding.
In the fourth quarter of 2018, cash flow from operations was $180.2 million compared to $157.5 million in the same quarter of 2017. Free cash flow was $168.6 million during the fourth quarter of 2018, compared to $143.9 million in the same quarter of 2017.
During the fourth quarter of 2018, Fortinet repurchased 1.3 million shares of its common stock for a total purchase price of $92.0 million. During the fourth quarter of 2017, Fortinet repurchased 7.9 million shares of its common stock for a total purchase price of $322.4 million.
Fortinet Balance Sheet 2018
Total revenue was $1.80 billion for 2018, an increase of 20% compared to $1.49 billion in 2017. Product revenue was $674.4 million for 2018, an increase of 17% compared to $577.2 million in 2017. Service revenue was $1.13 billion for 2018, an increase of 23% compared to $917.7 million in 2017. Total billings were $2.15 billion for 2018, an increase of 20% compared to $1.80 billion in 2017. Total deferred revenue was $1.69 billion as of December 31, 2018, an increase of 26% compared to $1.34 billion as of December 31, 2017.
GAAP Operating Income and Margin: GAAP operating income was $231.0 million for 2018, representing a GAAP operating margin of 13%. GAAP operating income was $109.8 million for 2017, representing a GAAP operating margin of 7%.
Non-GAAP Operating Income and Margin1: Non-GAAP operating income was $402.9 million for 2018, representing a non-GAAP operating margin of 22%. Non-GAAP operating income was $257.4 million for 2017, representing a non-GAAP operating margin of 17%.
GAAP Net Income and Diluted Net Income Per Share: GAAP net income was $332.2 million for 2018, compared to GAAP net income of $31.4 million for 2017. GAAP diluted net income per share was $1.91 for 2018, based on 174.2 million diluted weighted-average shares outstanding, compared to GAAP diluted net income per share of $0.18 for 2017, based on 178.1 million diluted weighted-average shares outstanding.
In 2018, cash flow from operations was $638.9 million, compared to $594.4 million in 2017. Free cash flow was $585.9 million in 2018, compared to $459.1 million in 2017.
During 2018, Fortinet repurchased 3.8 million shares of its common stock for a total purchase price of $209.1 million. During 2017, Fortinet repurchased 11.2 million shares of its common stock for a total purchase price of $446.3 million.
Fortinet Business Outlook for 2019
For the first quarter of 2019, Fortinet expects: Revenue in the range of $465 million to $475 million. Billings in the range of $515 million to $535 million.
For the fiscal year 2019, Fortinet expects: Revenue in the range of $2.06 billion to $2.10 billion. Service revenue in the range of $1.33 billion to $1.36 billion. Billings in the range of $2.45 billion to $2.50 billion.
