Fortinet Inc. today reported earnings and revenue beats in its fiscal first quarter, driven by an increase in its cybersecurity market share.

For the quarter that ended on March 31, Fortinet reported net income before costs such as stock compensation of 34 cents per share, up 79% on an adjusted basis from the same quarter of last year. The figure in the first quarter of 2022 was 81 cents per share, but Fortinet undertook a five-for-one stock split in June. Revenue jumped 42%, to $1.26 billion. Analysts had expected earnings per share of 29 cents on revenue of $1.2 billion.

It was solid increases all around for Fortinet, with product revenue up 35% year-over-year, to $500.7 million, and service revenue up 30%, to $761.1 million. Billings rose 30%, to $1.5 billion, and deferred revenue rose 33%, to $4.88 billion.

Cash flow in the quarter came in at $677.5 million, up from $396.1 million in the first quarter of 2022, and free cash flow was $647.2 million, up from $273.5 million.

Highlights in the quarter included Fortinet’s release of enhanced products and services for operational technology environments as an expansion of its Security Fabric for OT on March 1. The product releases assist organizations in protecting their OT environments, improving visibility and real-time response across the entire attack surface.

A week later, Fortinet also announced several enhancements to its single-vendor Secure Access Service Edge product FortiSASE that enable additional deployment flexibility and new secure access capabilities for digital resources across private applications, software as a service and the wider internet.

“We believe we have a significant opportunity to continue to grow service revenue by upselling value-added security services to our large installed base of customers,” Ken Xie, founder, chairman and chief executive of Fortinet, said in the company’s earnings release. “Companies of all sizes are increasingly recognizing that Fortinet’s integrated FortiOS and custom ASIC technology can deliver a lower total cost of ownership while improving the efficiency and efficacy of their security.”

For the second quarter, Fortinet expects an adjusted profit per share of 33 to 35 cents on revenue of $1.28 billion to $1.32 billion. Analysts were expecting revenue of $1.275 billion. For the full year 2023, the company expects adjusted earnings per share of $1.44 to $1.48 on revenue of $5.425 billion to $5.485 billion.

Image: Fortinet