Technology Stocks

Fortinet, Inc. (NASDAQ:FTNT) Grew Revenue By 20% In FY2018 Despite Slowing Chinese Economy, Brexit And The U.S. Government Shutdown

Fortinet, Inc. (NASDAQ:FTNT) gained 1% following the release of the Q4 revenue results that showed a 20% growth. In the last trading session, the upward trend continued and the stock was up 1.76% closing the day at $83.13.

The Cybersecurity Company gained following the release of the Q4 results on February 6, 2019, which showed that the company’s revenue grew by over 20% with its adjusted earnings doubling.

Q4 revenue results

The company indicates that they expect slow growth in 2019 but the management expects growth in the industry to slow down. However, the slowdown including in China will not hurt the company’s results.

GAAP net income increased as a result of the $90.5 million tax benefit while product revenue grew by 23.9% to $200.8 million compared to the previous year. The service earnings were $306.2 million which was 20.3% up from previous earnings in the same period. Deferred revenue increased by 26% to $1.69 billion as total billings rose by 22% to $649.2 million.

The company produced an operational cash flow of $180.2 million with free cash flow for the Q4 being $168.6 million. In the period the company reacquired over 1.3 million shares worth $92 million spending a total of $209.1 in 2018 for share repurchases.

The federal shutdown did not affect results

Keith Jensen, the CFO of Fortinet indicated that neither the slowdown in China nor the U.S government shutdown affected their results. Jensen said that the strong revenue growth demonstrates that the shutdown and other issues raised concerning slowing down of the Chinese economy and Brexit did not impact on the company’s performance in the fourth quarter.

Jensen stated that the company had diversified their services and that was the reason behind the global issues not affecting their performance. He said that the company’s government vertical is diversified to include the federal government, local state as well as intergovernmental agencies. Similarly, China and the U.K are single countries in diversified EMEA regions.

Although revenue growth is likely slowdown in 2019 the company is optimistic that they will hit double-digit growth with their revenue growth exceeding the $2 billion they got this year.

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