Fortinet (0IR9.L) reported Q3 2024 (calendar quarter ended 2024-09-30) with a strong top and bottom-line performance underpinned by a high gross margin and cash-generative operations. Revenue of $1.5081 billion marked a 13.0% year-over-year increase and a 5.15% sequential rise, driven by continued demand for Fortinet’s integrated cybersecurity portfolio and subscription-based services. Gross profit reached $1.2447 billion, delivering an 82.53% gross margin, while operating income of $470.9 million represented a 31.22% operating margin. Net income was $539.9 million, or $0.71 per basic share and $0.70 per diluted share, up 67.2% YoY and 42.15% QoQ, signaling strong operating leverage and favorable mix towards high-margin recurring revenue.
The company generated robust operating cash flow of $608.1 million and free cash flow of $571.8 million, supported by a strong balance sheet with cash and cash equivalents of approximately $2.489 billion and a net cash position (net debt negative) of about $1.496 billion. Fortinet’s balance sheet shows substantial liquidity with current and quick ratios of 1.344x and 1.253x, respectively, and sizable deferred revenue (current $3.0812 billion; non-current $2.9305 billion) indicating durable, recurring revenue streams and revenue recognition that underpins future earnings. Capex was modest at $36.3 million, while stock activity reflected a modest net share repurchase of $0.6 million and new equity issuance of $20.1 million, highlighting a balanced capital allocation approach.
Looking ahead, management commentary (where available in the accompanying materials) focalizes ongoing investments in the Fortinet security fabric, continued subscription growth, and monetization of multi-product deployments. While explicit forward guidance was not embedded in the provided data, the quarterly cadence and cash-generative profile suggest continued leverage of high-margin security subscriptions, ongoing product enhancements, and acceleration in services and cloud-delivered offerings. Investors should monitor subscription mix growth, renewal rates, and the pace of new customer acquisition, alongside industry-wide cybersecurity demand and macro budget trends.