Fortinet’s cash, debt, and cash flow position
So far in this series, we’ve discussed Fortinet’s (FTNT) stock volatility, its recently announced revenues, and its margin growth in fiscal 2015. Now let’s see how strong its balance sheet was in fiscal 2015.
In 2015, Fortinet’s cash reserves and short-term investments stood at $1.2 billion. It generated operating cash flow and free cash flow of $282.5 million and $245.2 million, respectively, during the same period. Fortinet does not have any debt on its books.
Fortinet’s new share buyback program
Fortinet recently announced that the company has authorized a new share repurchase program of $200 million, which will be valid until December 31, 2017. On December 31, 2015, Fortinet completed its last share buyback program, wherein it bought 5.5 million shares for $137.5 million.
The information technology sector spent $45.9 billion on share buybacks in 3Q15. Apple (AAPL) and Microsoft (MSFT) spent $15.3 billion and $4 billion, respectively, on share buybacks in 3Q15, followed by American International Group (AIG) and The Walt Disney Company (DIS), which conducted buybacks amounting to $3.7 billion and $3.3 billion, respectively.
In 4Q15, Fortinet signed 577, 193, and 74 deals worth more than $100,000, more than $250,000, and $500,000, respectively. For comparison purposes, deals in the above-mentioned order were 384, 137, and 60 in 4Q14, as the above table shows.
Fortinet stated that it expects revenue and EPS in $270–275 million and $0.08–0.09 range, respectively, for 1Q16. Billings are expected to be in $315 million–$322 million and $1.5 billion–$1.52 billion range for 1Q16 and 2016, respectively. But Fortinet’s guidance for 1Q16 fell short of analyst expectations for revenues and EPS of $277.09 million and $0.12, respectively.
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