Shares of cybersecurity firms Fortinet and Tenable rise on strong earnings reports

Shares of cybersecurity firms Fortinet and Tenable rise on strong earnings reports

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Shares in cybersecurity companies Fortinet Inc. and Tenable Holdings Inc. rose in after-hours trading after both delivered strong earnings reports.

For its fourth quarter that ended Dec. 31, Fortinet reported earnings before costs such as stock compensation of 44 cents a share, up 76% compared to the same quarter last year. Revenue rose 33%, to $1.28 billion. Analysts had expected a 39-cents-per-share adjusted profit on revenue of $1.3 billion.

The numbers were up across the board at Fortinet, with product revenue rising 43% year-over-year, to $540.1 million, and service revenue up 27%, to $742.9 million. Total billings rose 32%, to $1.72 billion, adjusted operating income jumped 52%, to $417.6 million, and cash flow from operations totaled $528.1 million.

For the fiscal year, total revenue rose 26%, to $4.42 billion, and adjusted net income per share shot up 49%, to $1.19.

“Our market share gains are being driven by Fortinet’s integrated and single platform approach to cybersecurity combined with FortiASIC technology, which lowers the management costs and the total cost of ownership for organizations,” Ken Xie, founder, chairman and chief executive officer of Fortinet, said in a statement. “Given our cost-for-performance advantage, the convergence of security and networking, and the consolidation of products and vendors, we expect to continue our solid growth trajectory.”

For the quarter ahead, Fortinet predicts adjusted net income per share of 27 to 29 cents on revenue of $1.18 billion to $1.22 billion. For its full fiscal year 2023, the company expects adjusted net earnings per share of $1.39 to $1.41 on revenue of $5.37 billion to $5.43 billion. Analysts had been expecting $1.40 per share and $5.34 billion.

Fortinet shares rose 12.5% in late trading.

Tenable reported adjusted earnings per share of 12 cents, up from five cents in the fourth quarter of 2021, on revenue of $184.6 million, up 24% year-over-year. Analysts had expected adjusted earnings of seven cents on revenue of $181.4 million.

For its full fiscal year, Tenable delivered adjusted earnings per share of 38 cents, up from 34 cents the year prior. Revenue rose 26%, to $683.2 million.

Looking ahead, Tenable predicts adjusted earnings of two to three cents a share in its fiscal first quarter of 2023 on revenue of $186 million to $188 million. For the full fiscal year 2023, the company expects adjusted earnings of 52 to 56 cents on revenue of $915 million to $925 million.

“We are seeing incredible traction with Tenable One, which helps customers understand and reduce risk across the interconnected attack surface,” Amit Yoran, chairman and CEO of Tenable, said in a statement. “Product innovation, coupled with continued focus on financial performance, including strong free cash flow generation, position us well in this fluid market.”

Tenable shares rose about 3.7% in late trading.

Image: The Finance Point

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