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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
Quarterly Data

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

Microsoft Excel
Mar 31, 2023 Dec 31, 2022 Sep 30, 2022 Jun 30, 2022 Mar 31, 2022 Dec 31, 2021 Sep 30, 2021 Jun 30, 2021 Mar 31, 2021 Dec 31, 2020 Sep 30, 2020 Jun 30, 2020 Mar 31, 2020 Dec 31, 2019 Sep 30, 2019 Jun 30, 2019 Mar 31, 2019 Dec 31, 2018 Sep 30, 2018 Jun 30, 2018 Mar 31, 2018
Accounts payable 3.49 3.91 4.03 3.65 3.09 2.51 2.38 2.37 2.45 3.50 2.67 3.22 2.74 2.48 2.42 2.15 2.16 2.81 2.41 2.47 2.32
Accrued liabilities 5.07 4.28 4.59 4.56 4.63 3.33 4.15 3.04 2.71 3.69 3.56 3.55 3.79 2.62 2.88 2.91 3.52 3.43 3.03 3.13 3.11
Accrued payroll and compensation 3.12 3.52 3.57 3.54 3.20 3.29 2.92 2.96 2.69 3.61 3.40 3.32 3.23 2.62 2.55 2.72 2.53 3.20 3.09 3.54 3.43
Current portion of long-term debt 0.00 0.00 0.00 0.00 0.00 0.00 0.29 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Deferred revenue 36.05 37.72 39.90 38.02 33.50 30.03 27.07 27.58 27.74 34.44 36.25 38.31 38.37 30.20 30.00 30.61 30.92 31.38 31.71 32.98 34.04
Current liabilities 47.74% 49.43% 52.09% 49.77% 44.42% 39.16% 36.81% 35.95% 35.59% 45.23% 45.89% 48.40% 48.13% 37.93% 37.85% 38.40% 39.13% 40.82% 40.24% 42.13% 42.89%
Deferred revenue 35.38 36.79 38.69 36.24 31.23 28.31 24.96 24.69 24.24 29.98 30.45 31.44 31.08 24.77 24.88 24.78 24.17 23.42 24.18 24.12 24.13
Income tax liabilities 1.03 1.09 1.27 1.27 1.46 1.34 1.62 1.71 1.85 2.23 2.21 2.32 2.54 2.13 2.34 2.44 2.52 2.52 2.92 2.98 3.53
Long-term debt, excluding current portion 14.50 15.90 18.55 18.69 17.50 16.70 16.55 17.76 18.69 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Other liabilities 1.17 1.32 1.07 1.21 1.26 1.00 1.04 0.99 1.07 1.39 1.56 1.52 1.53 1.16 1.08 1.07 1.18 0.42 0.40 0.47 0.56
Non-current liabilities 52.09% 55.09% 59.58% 57.40% 51.45% 47.35% 44.17% 45.16% 45.85% 33.60% 34.23% 35.27% 35.15% 28.05% 28.30% 28.30% 27.87% 26.36% 27.50% 27.58% 28.22%
Total liabilities 99.83% 104.52% 111.67% 107.17% 95.87% 86.51% 80.98% 81.11% 81.43% 78.84% 80.11% 83.67% 83.27% 65.98% 66.14% 66.69% 66.99% 67.18% 67.74% 69.71% 71.11%
Common stock, $0.001 par value 0.01 0.01 0.01 0.02 0.00 0.00 0.00 0.00 0.00 0.00 0.01 0.01 0.01 0.01 0.01 0.01 0.01 0.01 0.01 0.01 0.01
Additional paid-in capital 19.43 20.62 23.43 23.37 21.88 21.19 21.06 22.41 23.19 29.85 32.86 34.66 35.19 30.38 32.51 33.54 34.57 34.71 37.94 38.67 39.90
Accumulated other comprehensive income (loss) -0.26 -0.32 -0.48 -0.44 -0.27 -0.08 -0.02 0.00 0.01 0.02 0.04 0.08 -0.10 0.03 0.03 0.03 -0.01 -0.03 -0.04 -0.05 -0.08
Retained earnings (accumulated deficit) -19.01 -24.83 -34.86 -30.36 -17.76 -7.90 -2.32 -3.52 -4.64 -8.71 -13.02 -18.41 -18.38 3.61 1.31 -0.27 -1.56 -1.87 -5.65 -8.34 -10.94
Total Fortinet, Inc. stockholders’ equity (deficit) 0.17% -4.52% -11.89% -7.42% 3.85% 13.21% 18.73% 18.89% 18.57% 21.16% 19.89% 16.33% 16.73% 34.02% 33.86% 33.31% 33.01% 32.82% 32.26% 30.29% 28.89%
Non-controlling interests 0.00 0.00 0.22 0.25 0.27 0.28 0.29 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Total equity (deficit) 0.17% -4.52% -11.67% -7.17% 4.13% 13.49% 19.02% 18.89% 18.57% 21.16% 19.89% 16.33% 16.73% 34.02% 33.86% 33.31% 33.01% 32.82% 32.26% 30.29% 28.89%
Total liabilities and equity (deficit) 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00%

Based on: 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-K (reporting date: 2018-12-31), 10-Q (reporting date: 2018-09-30), 10-Q (reporting date: 2018-06-30), 10-Q (reporting date: 2018-03-31).

The financial structure exhibits a significant transition from a predominantly equity-funded balance sheet to one characterized by high leverage and a period of negative equity. Between March 2018 and March 2023, total liabilities rose from 71.11% to a peak of 111.67% in September 2022, before moderating to 99.83% by the end of the period. This shift indicates a substantial increase in the company's reliance on debt and deferred obligations relative to its total asset base.

Equity and Retained Earnings Trends
A consistent erosion of stockholders' equity is observed, declining from 28.89% in March 2018 to a deficit of -11.89% in September 2022. This trend is closely mirrored by the movement in retained earnings, which fluctuated from an initial deficit of -10.94%, reached a positive peak of 3.61% in December 2019, and subsequently plummeted to a deficit of -34.86% by September 2022. The recovery to a marginal positive equity position of 0.17% by March 2023 suggests a recent stabilization of the capital structure.
Liability Composition and Deferred Revenue
Deferred revenue represents a dominant component of the liability structure. Combined deferred revenue figures show a general upward trajectory, with the non-current portion increasing from 24.13% in March 2018 to 35.38% in March 2023. This indicates a growing volume of prepaid contracts and subscription-based obligations. Current liabilities also expanded, peaking at 52.09% in September 2022, driven largely by these deferred obligations and accrued liabilities.
Debt Profile Evolution
The company maintained a debt-free profile regarding long-term borrowings until March 2021, at which point long-term debt was introduced at 18.69% of total liabilities and equity. This debt level remained relatively stable, fluctuating between 14.50% and 18.69% through March 2023, signaling a strategic shift toward utilizing leverage to fund operations or capital allocation strategies.
Operational Liabilities
Accounts payable and accrued liabilities have shown a gradual increase as a percentage of the total balance sheet. Accounts payable rose from 2.32% in March 2018 to 3.49% in March 2023, while accrued liabilities increased from 3.11% to 5.07% over the same period, reflecting a larger scale of operational obligations relative to the total capital structure.

Overall, the analysis reveals a deliberate shift in the balance sheet composition. The combination of introducing long-term debt and the significant reduction in retained earnings suggests an aggressive capital management strategy, potentially involving share repurchases, which culminated in a period of negative equity before returning to a neutral position in early 2023.

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