Fortinet Stock Climbs Amid SASE, SecOps Growth

The company said that billings for its security operations tools surged 44 percent while SASE billings grew 19 percent during its latest quarter.

Fortinet disclosed Tuesday that its product offerings for security operations (SecOps) and secure access service edge (SASE) both saw strong growth in demand during its latest quarter.

Billings for SecOps surged 44 percent while SASE billings grew 19 percent during the fourth quarter, ended Dec. 31, 2023, executives said during the company’s quarterly call with analysts Tuesday.

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“Fortinet has become an increasingly diversified business over the past decade,” Fortinet CFO Keith Jensen said during the call — noting that this has most recently included “prioritizing investments in SASE, SecOps and other software- and cloud-based solutions.”

Following the expectations-beating financial report Tuesday, Fortinet saw its stock price climb 12 percent in after-hours trading, rising to $75.55 a share.

The showing marked a major reversal for the Sunnyvale, Calif.-based cybersecurity vendor compared to the company’s prior two quarters, when disappointing results had led Fortinet shares to plunge following both reports.

Eight-Figure Deals

Total Fortinet revenue for the fourth quarter rose 10.3 from the year before to $1.42 billion, just above the analyst consensus estimate of $1.41 billion.

During the call with analysts, Fortinet Co-Founder and CEO Ken Xie said highlights of the quarter included six deals that reached eight-figures in size. “All six of these transactions included all three of our [segments] — SASE, [SecOps] and secure networking solutions,” Xie said.

Product revenue dropped 9.6 percent to $488.1 million during Fortinet’s Q4, year over year, which the company attributed to a “tough” comparison from an unusually strong quarter a year earlier.

Fortinet’s quarterly service revenue, however, jumped 24.8 percent year over year to $927 million, thanks in part to the shift in customer spending to services from products, the company said.

Other SASE vendors that compete with Fortinet, but that have yet to report their latest quarterly results, also saw stock price increases in after-hours trading Tuesday. Shares in Palo Alto Networks were up 2.3 percent to $349.40 a share, while Zscaler’s stock price rose about 1 percent to $236.69 a share, in trading Tuesday evening.