What Helped Fortinet’s Billings Post Double-Digit Growth in 2015?


Dec. 4 2020, Updated 10:52 a.m. ET

Fortinet’s billings continued double-digit growth in 2015

Previously in this series, we discussed the volatility Fortinet’s (FTNT) stock and other technology stocks have seen so far in February 2016. The company recently announced its 4Q15 and 2015 results, showing continued double-digit growth in its revenues in 2015. (We’ll discuss the company’s revenues and growth in more detail later in this series.)

Apart from revenues and EPS, industry analysts keep a watchful eye on billings growth in the cybersecurity space because it gives them an indication about company’s future revenues. Billings denote future revenues that have yet to become visible in the company’s income statement. Now let’s take a look Fortinet’s billings growth in 4Q15 and 2015.

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In 2015, Fortinet’s billings grew to about $1.2 billion, an increase of 37% on a YoY basis. In 4Q15, Fortinet’s billings grew by 35% to $380.9 million. Analysts expected the company would post billings of $367.5 million. Fortinet’s majority of product revenues are generated from appliances. As the below presentation shows, Fortinet’s high-end appliances accounted for 41% and 42% of billings in 4Q15 and 2015, respectively.

Fortinet, a top player in network security space

For comparison purposes, Fortinet’s peer Palo Alto Networks (PANW) reported billings growth of 61% on a YoY (year-over-year) basis. According to Jeff Wilson, Research Director for Cybersecurity at IHS, apart from Fortinet and Palo Alto Network, Cisco (CSCO) and Check Point (CHKP) are the top players in the network security space.

Palo Alto Networks is considered here for billings growth versus that of Fortinet. The former company also provides next-generation firewalls for servers, the cloud, mobile devices, and other physical and virtual workstations.

Investors wanting gain exposure to the cybersecurity space might consider investing in the PureFunds ISE Cyber Security ETF (HACK), which invests ~5% of its total holdings in Fortinet.


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