Cybersecurity firms Fortinet, Cloudflare, NortonLifeLock and Netscout report solid earnings
It was a solid day for security-related companies across equities markets, as Fortinet Inc., Cloudflare Inc., NortonLifeLock Inc. and Netscout Systems Inc. today reported better-than-expected quarterly earnings results.
For the quarter ended Sept. 30, Fortinet reported total revenue of $867.2 million, up 33% year-over-year, while profit before costs such as stock compensation came in at $223.6 million, or 99 cents per share. Analysts had been expecting an adjusted profit of 94 cents a share on revenue of $812 million.
Fortinet’s product revenue rose 51%, to $337.1 million, and service revenue grew 24%, to $530.1 million. Total billings increased 42%, to $1.06 billion, and deferred revenue sat at $3.11 billion as of Sept. 30, up 30%.
“The total addressable market for network security is rapidly expanding from the data center outward to the local and wide-area networks, to the work-from-anywhere environment and to the cloud,” Ken Xie, founder, chairman and chief executive officer of Fortinet, said in a statement. We are focused on leveraging our ASIC-supported security fabric platform across this expanding total addressable market to drive better than industry average long-term growth for Fortinet.”
Looking forward, Fortinet expects an adjusted profit of $1.10 to $1.15 a share on revenue of $940 million to $970 million in the fourth quarter.
Fortinet shares rose 2.5% in after-hours trading.
Cloudflare reported its revenue rose 51%, to $172.3 million, with adjusted income of $1.4 million, coming out to breakeven per share. Analysts had been predicting revenue of $165.5 million and a loss of four cents per share.
Highlights in the quarter included Cloudflare adding 170 large customers, bringing the total number of large customers to 1,260.
“Our strong growth and efficiency… propelled us to reach profitability this quarter, achieving that milestone a year ahead of our original timeline,” said Matthew Prince, co-founder and CEO of Cloudflare, said in a statement. “We’re laser-focused on investing profits back into our business, continuing to fuel our innovation machine, and supporting even more global organizations as they plug into our network platform.”
Looking forward, Cloudflare estimates revenue of $184 million to $195 million in its fourth quarter, with an adjusted loss of zero to one cent a share. For the full year 2021, the company estimated revenue of $647 million to $648 million and an adjusted loss per share of five to six cents.
Investors liked the numbers, with Cloudflare’s share price up almost 5% after the bell.
For the company’s fiscal second quarter ended Oct. 1, NortonLifeLock reported revenue rose 11%, to $692 million, with adjusted earnings of $255 million or 43 cents per share. The earnings per share was higher than the 42 cents expected by analysts.
“With double-digit revenue growth and eight consecutive quarters of sequential customer growth, we continue to deliver consistent performance,” Natalie Derse, chief financial officer of NortonLifeLock, said in a statement. “Our integrated Cyber Safety platform and ability to execute position us for continued momentum as consumers look to NortonLifeLock to help protect and empower their digital lives.”
NortonLifeLock predicted revenue of $695 million to $705 million in its fiscal third quarter and an adjusted profit of 42 to 44 cents per share. The company’s share price rose 2% in late trading.
For its fiscal second quarter 2022 ended Sept. 30, Netscout reported revenue of $211.9 million, up slightly from $205.3 million in the same quarter a year ago. Adjusted profit came in at $35.3 million, or 47 cents per share, versus $28.2 million, or 38 cents per share, a year ago.
Analysts had been predicting revenue of $205.1 million and earnings per share of 38 cents.
“The strong growth of our ‘software-only’ product revenue in the second quarter supported our overall revenue increase, enhanced our margins and improved our diluted earnings per share on a year-over-year basis,” Anil Singhal, president and CEO of Netscout, said in a statement. “Additionally, as customers dealt with the challenging supply chain environment and experienced procurement issues, our ‘software-only’ solutions enabled them to utilize their budgets more effectively by accelerating the timing of their purchases with us.”
Netscout did not offer an outlook for its next quarter but did provide an outlook for its full fiscal year 2022. The company is now predicting revenue of $835 million to $865 million and adjusted net income per share of between $1.71 and $1.77.
Despite the solid results, reported at the beginning of the day, Netscout shares closed up only a small fraction of a point, to $33.12 a share.
Image: Space Coast Daily
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