Feb 7, 2020

Another good year for Fortinet saw the company expand its revenue 20% yoy to US$2.2bn, with billings up 21% to US$2.6bn. Rare for a cyber security supplier, Fortinet even made a GAAP net profit of US$326m, consistent with the US$332m posted in FY18. Acquisitions played a small part after the purchases of Scottish software provider ZoneFox and secure automation and orchestration specialist Bradford Networks in 2018 ( a deal for endpoint detection and response start up enSilo last October came too late to make a contribution). But the majority of the company’s growth has been organic and management cited sales of its secure software defined wide area network (SD-WAN) solutions as a big contributor to its performance (used by 21k customers worldwide). Fortinet is unusual too in looking like it actually grew its hardware revenue, with product sales expanding 17% yoy to US$674m as it also found a ready market for its Next Generation Firewall, Sandbox and secure web gateway appliances, many of which are powered by its own security optimised CPU architecture (or SPUs). Service turnover too saw rapid acceleration, up 21% to US$1.4bn, with its managed security service (MSS) proposition, identity access management (IAM) and cloud access security broker (CASB) solutions playing big roles. Fortinet has done a good job of building an integrated security hardware, software and service portfolio geared towards protecting hybrid cloud infrastructure that stretches from on-premise applications across the network to off-premise data centres, with a smattering of Internet of Things (IoT) focussed protection thrown in  It also has a Fabric Ready Program that harnesses the sales power of MSSPs to get its products into enterprise IT departments, a market which is seeing rapid growth (subscribers to SecureConnectViews can read more in our Cyber Security Market Trends and Forecasts to 2022 report here ). Combining network security and SD-WAN into appliances using its own custom ASICs looks like a master stroke for Fortinet as others go down the virtualisation route, and one that continues to help the company steal market share from its competitors. The company expects organic billings to grow at least 15% a year between FY20 and FY22, with revenue predicted to hit US$2.5bn in the current financial year.