With a strong second quarter under their belts, top Fortinet execs didn't mince words when it came to their confidence about the network security vendor's ability to continue taking market share from its legacy competitors down the road.
"The security market is fragmenting into a new generation of security vendors, such as Fortinet, who are growing and innovating and the legacy ones who are stagnant," CEO Ken Xie said on the earnings call. "Fortinet is among the select few established security companies experiencing accelerating growth and scale. While some rely on good marketing, Fortinet has the superior technology that will enable us to not only win accounts but retain and expand them. We have good momentum and attractive opportunity ahead."
Revenues for the quarter, which ended June 30, were up 30 percent year over year to $239.8 million. Net income was $0.8 million, down from $6.1 million in the same quarter last year.
The largest portion of that revenue came from sales of the company's FortiGate next-generation firewall solution, and Fortinet said it continued to gain market share by adding new customers and expanding existing relationships. Also driving revenue growth was an opportunity the company has jumped on, around internal segmentation of the firewall and taking advantage of more cross-selling opportunities.
Xie also said Fortinet sees a major growth opportunity around enterprise secured Wi-Fi, a place the vendor bet big on this quarter with its $44 million acquisition of Meru Networks. Xie called the company's expanding portfolio in this area a "competitive advantage" and said it will help the vendor displace legacy competitors in the market and expand its deployments with customers.
This rapid growth comes in the wake of a huge boom in the security industry for many vendors, but CFO Andrew Del Matto said not all security vendors are created equal when it comes to growth.
"The security market remains robust. However, this rising tide is not lifting all ships for very few security companies our size are growing at this impressive rate," Del Matto said. "Fortinet's best-in-class product platform puts us in a strong competitive position. It is enabling continued share gains and significant wins against all competitors."
Del Matto highlighted some of those recent wins on the call, including a seven figure, next-generation firewall expansion deal with a large technology company, and a network security deal with a large enterprise company and a competitive replacement with a Fortune 100 company. Del Matto also highlighted the vendor's more than 90 percent retention rate.
"Our high renewal and retention rates show we are not only winning numerous customers from incumbents, but we are keeping them," Del Matto said.