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Fortinet Inc. (NASDAQ:FTNT)

This company has been moved to the archive! The financial data has not been updated since May 8, 2023.

Common-Size Balance Sheet: Liabilities and Stockholders’ Equity

Fortinet Inc., common-size consolidated balance sheet: liabilities and stockholders’ equity

Microsoft Excel
Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019 Dec 31, 2018
Accounts payable 3.91 2.51 3.50 2.48 2.81
Accrued liabilities 4.28 3.33 3.69 2.62 3.43
Accrued payroll and compensation 3.52 3.29 3.61 2.62 3.20
Deferred revenue 37.72 30.03 34.44 30.20 31.38
Current liabilities 49.43% 39.16% 45.23% 37.93% 40.82%
Deferred revenue 36.79 28.31 29.98 24.77 23.42
Income tax liabilities 1.09 1.34 2.23 2.13 2.52
Long-term debt 15.90 16.70 0.00 0.00 0.00
Other liabilities 1.32 1.00 1.39 1.16 0.42
Non-current liabilities 55.09% 47.35% 33.60% 28.05% 26.36%
Total liabilities 104.52% 86.51% 78.84% 65.98% 67.18%
Common stock, $0.001 par value 0.01 0.00 0.00 0.01 0.01
Additional paid-in capital 20.62 21.19 29.85 30.38 34.71
Accumulated other comprehensive income (loss) -0.32 -0.08 0.02 0.03 -0.03
Retained earnings (accumulated deficit) -24.83 -7.90 -8.71 3.61 -1.87
Total Fortinet, Inc. stockholders’ equity (deficit) -4.52% 13.21% 21.16% 34.02% 32.82%
Non-controlling interests 0.00 0.28 0.00 0.00 0.00
Total equity (deficit) -4.52% 13.49% 21.16% 34.02% 32.82%
Total liabilities and equity (deficit) 100.00% 100.00% 100.00% 100.00% 100.00%

Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).

The capital structure of the organization has undergone a significant transformation between 2018 and 2022, transitioning from a position of positive equity to a deficit. Total liabilities have grown steadily from 67.18% of total liabilities and equity in 2018 to 104.52% by 2022, resulting in a negative total equity position of -4.52% in the final year of the analyzed period.

Liability Composition and Trends
Total liabilities have increased every year since 2019, with a notable acceleration starting in 2020. Current liabilities rose from 40.82% in 2018 to 49.43% in 2022. Non-current liabilities experienced a more dramatic increase, rising from 26.36% in 2018 to 55.09% in 2022. This shift indicates a growing reliance on long-term obligations to fund operations and growth.
Deferred Revenue Analysis
Deferred revenue constitutes the largest single component of the liability structure. Combined current and non-current deferred revenue rose from approximately 54.8% in 2018 to 74.51% in 2022. Specifically, non-current deferred revenue increased from 23.42% to 36.79%, suggesting a substantial increase in long-term prepaid contracts or subscriptions.
Debt and Financing
The organization maintained zero long-term debt through 2020. In 2021, long-term debt was introduced, representing 16.70% of the total balance sheet, and remained relatively stable at 15.90% in 2022. This introduction of leverage coincides with the period of most rapid equity erosion.
Equity Erosion and Deficit
Total stockholders' equity declined precipitously from 32.82% in 2018 to -4.52% in 2022. This decline is driven by two primary factors: a reduction in additional paid-in capital, which fell from 34.71% to 20.62%, and a severe deterioration in retained earnings. Retained earnings transitioned from a modest deficit of -1.87% in 2018 to a substantial accumulated deficit of -24.83% by 2022.
Working Capital Liabilities
Accounts payable and accrued liabilities have remained relatively stable as a percentage of the total balance sheet, though both saw slight increases by 2022. Accounts payable rose from 2.81% to 3.91%, while accrued liabilities increased from 3.43% to 4.28%, indicating that the overall increase in liabilities is driven by deferred revenue and debt rather than operational payables.

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