Fortinet outpaces Wall Street estimates, brings in $867 million revenue for Q3

Product revenue was up more than 50% compared to Q3 2020 at $337.1 million while service revenue was $530.1 million for the third quarter of 2021, an increase of 24.1% year over year.

Fortinet handily beat Wall Street estimates on Thursday, reporting a strong third quarter growth thanks to an expansion in business from the Asia-Pacific region.

Fortinet delivered third quarter revenue of $867.2 million, up 33% from a year ago. For the third quarter, Fortinet's non-GAAP earnings of $0.99 a share were above expectations. 

Wall Street was expecting Fortinet to report third quarter earnings of $0.94 a share on revenue of $809.9 million.

Fortinet CEO Ken Xie said the company was pleased with its Q3 because they exceeded $1 billion in quarterly billings for the first time in their history. 

"Additionally, Gartner again recognized our Secure SD-WAN solution as a Leader in the 2021 Magic Quadrant for WAN Edge Infrastructure while placing highest in its ability to execute," Xie said. 

"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. 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."

Product revenue was up more than 50% compared to Q3 2020 at $337.1 million. Service revenue was $530.1 million for the third quarter of 2021, an increase of 24.1% compared to the same quarter of 2020.

The company was able to increase the revenue it brought in from APAC, growing it to $193.9 million, a 43.2% year over year change. 

For the fourth quarter, Fortinet is projecting revenue between $940 million and $970 million with non-GAAP earnings between $1.10 and $1.15 a share.  

For 2021, Fortinet is projecting revenue of $3.32 billion to $3.35 billion with non-GAAP earnings of $3.85 to $3.95 a share.

In Q4 2020, the company updated its FortiOS operating system with more than 300 new features including Zero Trust Network Access capabilities and tools to better secure networks and proliferating end points.

Fortinet announced in March that it was investing $75 million in router maker Linksys as part of a "strategic alliance" aimed at securing work from home networks.

Ahead of the earnings call, the company announced that it was combining its portfolio of zero trust, endpoint, and network security solutions under the "Fortinet Security Fabric," banner.

"Empowering users to move seamlessly between different work environments has critical implications for maintaining user productivity as well as security," said John Maddison, EVP of Products and CMO at Fortinet. 

"Cybercriminals have been quick to exploit the expanded attack surface and security gaps created by this shift in work patterns to get a foothold into the corporate network. Today's enterprise organizations require work-from-anywhere security that is as flexible and dynamic as today's business demands. Fortinet is the only vendor capable of delivering unified security built for the Work-from-Anywhere Era that seamlessly adapts based on a user's environment and risk profile."