UPDATED 19:51 EDT / AUGUST 06 2020

SECURITY

Fortinet reports strong earnings and debuts a new firewall product

Cybersecurity company Fortinet Inc. delivered second-quarter results today that came in above expectations, but the strong performance wasn’t enough to prevent its stock falling in after-hours trading.

The company, which sells tools that simplify operations for organizations with a large number of breach prevention systems, reported a profit before certain costs such as stock compensation of 68 cents per share. Its revenue rose 18% from a year ago, to $615.5 million. Wall Street was looking for a profit of 65 cents per share on revenue of $599 million.

Fortinet Chief Executive Ken Xie (pictured) said in a statement that the company had seen strong demand for its software-defined wide-area network and work-from-home related security products.

“Secure SD-WAN billings were approximately 12% of second quarter billings, making this the first time in which SD-WAN represented over 10% of quarterly billings,” Xie said. “With the network edge stretched across the entire digital infrastructure, we believe networking and security will continue to converge. Recent Secure Access Service Edge, or SASE, market momentum further validates our security-driven networking approach.”

Fortinet reported product revenue of $211.9 million, up 12% from a year ago, while services revenue came to $403.6 million, up 22%. The company also reported total billings of $711.5 million in the quarter, up 14% from the same period last year.

For the next quarter, Fortinet said it’s looking at a profit of 76 to 78 cents per share on revenue of $630 million to $645 million. Wall Street had earlier forecast third-quarter earnings of 72 cents per share on revenue of $624.3 million.

Despite the optimism, Fortinet’s stock fell more than 6% after-hours.

Separately, the company also announced the launch of a new network firewall product that’s designed to protect hyperscale data centers and 5G networks. FortiGate 4400F is powered by the firm’s new NP7 network processor.

Fortinet said FortiGate 4400F offers carrier-grade network address translation that enables packet delivery networks and low latency for logging and audit trails. It added that FortiGate 4400F also provides critical scale for Security Gateway at 4G and 5G mobile for Radio Access Network control, enabling service provides to build high-capacity networks that maximize return on investment.

The FortiGate 4400F solution competes with offerings from rival network firms, including Cisco Systems Inc. and Palo Alto Networks Inc.

“Hyperscale data centers and 5G networks have the biggest need for security that can keep pace with unprecedented user and enterprise demands,” said ZK Research analyst Zeus Kerravala. “Fortinet is delivering security performance figures that far exceed those of competitor solutions to finally give hyperscale organizations the ability to efficiently and effectively secure their business.”

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