Q2 2024 Fortinet Inc Earnings Call Transcript
Key Points
- Fortinet Inc (FTNT) achieved record operating margins of 35.1% and gross margins of 81.5%, exceeding expectations.
- Revenue grew by 11% year-over-year, driven by strong service revenue growth and robust software revenue growth.
- The company added 6,300 new logos, indicating successful customer acquisition and channel partner investments.
- Fortinet Inc (FTNT) continues to invest in high-growth areas such as unified SASE and secure networking, positioning itself for future growth.
- The company completed strategic acquisitions of Life's Work and Next DLP, expanding its total addressable market by $10 billion and enhancing its product offerings.
- Product revenue decreased by 4%, although it was better than expected.
- The company faces a tough macroeconomic environment, including high interest rates and commodity costs, which may impact customer purchasing decisions.
- Fortinet Inc (FTNT) does not expect a full firewall refresh cycle to occur in 2024, likely pushing it to 2025.
- There is a need for increased investment in sales and marketing to maintain growth, as current spending in these areas is lower than desired.
- The service provider and manufacturing verticals faced challenges, impacting overall performance in these segments.
(audio streaming in progress)
(audio in progress) (Operator Instructions) Aaron Ovadia, Director of Investor Relations.
thank you and good afternoon, everyone, and this is Aaron over-ear, Director of Investor Relations at Fortinet. I am pleased to welcome everyone to our call to discuss Fortinet's financial results for the second quarter of 2020. For joining on today's call are Ken VNCE., Keith Jensen, our CFO, and John Littel, our CO. with the live call that will be available for replay via webcast on our Investor Relations website.
Ken will begin our call today by providing a high-level perspective you our financial and operating results second quarter of 2024 before providing guidance for the third quarter of 2024 and updating the full year will then open the call for questions. During the Q&A session, we ask that you please limit yourself to one question and one follow-up question to allow others to participate. Before we begin, I'd like to remind everyone on
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