Fortinet Inc (NASDAQ:FTNT) reported solid 1Q results, record billings growth and a solid large enterprise deal growth.
Fortinet noted that the company has benefited from a healthy security market. The company’s investments in sales and marketing in 1Q are already yielding results. The company’s record billings growth means that the company is in good position to perform beyond expectations going forward.
Fortinet reported 1Q revenue of $212.9 million; this was beyond the high-end guidance ($200 million -$205 million) and the consensus estimate of $205.2 million. The company’s revenue exceeded the estimates by 3.8% that is its lowest beat since 3Q2013 yet it is the eighth time the company has beaten expectations. Fortinet reported operating margin of 9.4% which is above the guidance estimate of 7%.
Billings for the 1Q increased by 36% to $254.3 million which was well beyond the guidance estimate of $230 million on the high end. 23% of the billings came from service providers, and 11% came from the government. According to the management, the billings growth is strong across all regions with the American enterprise market increasing by 70%. 37% of product billings came from high-end appliances, and mid-range accounted for 26% with the rest being low end.
The number of Deals worth more than $100,000 increased to 35 marking a 36% increase year over year. Deals over $250,000 increased by 51% and those above $500,000 increased by 28%.
The company has increased the guidance for 2015. The revenue range has been increased to $940 million at the high end and $935 at the lower end.
Fortinet is putting much of its money back into business to propel faster growth. The company, however, remains profitable though it has a P/E ratio of 250 and is not cheap.
Fortinet Inc (NASDAQ:FTNT) now expects 2Q2015 revenue to range from $224 million to $228 million resulting in EPS of $0.08 to $0.09. The company’s 2Q EPS guidance is below the Wall Street’s projection of $.0.11
