UTM, Large Retail Deals Boost Fortinet Q2 Revenue, Profits

Fortinet’s Q2 second quarter sales revenues reached $103 million, an increase of 35 percent from the second quarter of 2010. The company's second quarter profits also rose to $14.5 million, an increase of 111 percent year-over-year.

Executives were pleased with the results, which they said came at or above the high-end of previous guidance.

“It was a solid quarter,” said Ken Goldman, Fortinet chief financial officer, on a company earnings call Tuesday. “We saw strong revenue growth, strong profits, and we witnessed momentum in deal flow.”

Fortinet CEO Ken Xie attributed the robust second quarter growth to strong sales of its flagship Unified Threat Management platform attributed, in part, to an economic landscape that compelled organizations in all market segments to consolidate technologies and perform multiple security functions with one device.

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“The Unified Threat Management market remains strong and growing, as enterprises of all sizes are increasingly consolidating their security to reduce complexity and cost, and service providers realize the flexibility to enable them to deliver of a variety of managed security services,” Xie said on a company conference call Tuesday.

Of the company's total revenue, product sales continued to experience the strongest growth, increasing 50 percent year-over-year to reach $46.7 million, while Fortinet’s services experienced 29 percent growth to $52.7 million from the year-ago period.

Ken Goldman, Fortinet chief financial officer, said that geographically the company performed best in the Americas and APAC, “driven by a healthy business environment,” and would work to reenergize growth in EMEA.

In addition, Xie said that customer and partner referrals were integral in driving Fortinet sales, and added that the products were further validated by a myriad of independent third-party certifications, which led to many successful product deals.

“Many of our sales wins came from referrals by customers and partners who use our products and we believe no other security vendor has as many certifications as Fortinet does,” Xie said. “With over 1,000 of Fortinet’s employees in engineering-related roles, we take innovation, security and quality very seriously, and we’re proud of the products we produce.”

Also boosting profit and revenue growth were numerous large distributed deals in the retail sector, executives said, driven by sales of the company’s FortiGate-80CM and 60CM integrated wireless broadband UTM appliances, as well as the new FortiGate-AP wireless controller products.

In addition, the company scored a six-figure deal with a large manufacturer in Japan, which sought to initiate a disaster recovery project that included the FortiGate-3950 multi-gigabit appliances following the earthquake and tsunami.