Fortinet Inc. (NASDAQ:FTNT)

Current Assets

The current assets have demonstrated a generally positive trend over the five-year period. Starting from approximately 2.22 billion USD in 2018, the value increased to around 2.77 billion USD in 2019, representing a significant rise. There was a slight decline noted in 2020 to about 2.74 billion USD, which may indicate a temporary reduction in liquidity or current asset holdings. However, the value rebounded strongly in subsequent years, reaching 3.60 billion USD in 2021 and further increasing to approximately 3.81 billion USD in 2022, indicating sustained growth in current assets.

Adjusted Current Assets

The adjusted current assets follow a very similar pattern to the unadjusted current assets, beginning at roughly 2.22 billion USD in 2018 and rising to approximately 2.77 billion USD in 2019. Similarly, there is a slight decrease in 2020 to about 2.74 billion USD, followed by significant growth to 3.60 billion USD in 2021 and continuing up to around 3.81 billion USD in 2022. The close alignment of adjusted current assets to reported current assets suggests that adjustments have a minimal impact on the reported liquidity position throughout this period.

Total assets

The total assets showed a consistent growth trend over the five-year period. Starting at approximately 3.08 billion US dollars at the end of 2018, total assets increased steadily each year, reaching about 6.23 billion US dollars by the end of 2022. The most significant growth occurred between 2020 and 2021, with an increase of over 1.87 billion US dollars, indicating a possible expansion phase or acquisition activity. The growth rate slowed slightly in 2022 but remained positive.

Adjusted total assets

Adjusted total assets followed a similar upward trajectory, beginning at around 2.87 billion US dollars in 2018 and rising to approximately 5.66 billion US dollars by 2022. Like total assets, the largest year-over-year increase occurred between 2020 and 2021, with an increase of about 1.77 billion US dollars. Comparing adjusted to total assets each year shows that adjusted assets consistently represent a slightly lower value, suggesting some exclusions or adjustments have been made for valuation or accounting purposes.

Insights

The overall upward trend in both total and adjusted total assets reflects growing resource accumulation and potentially strengthening financial position. The substantial jump in assets from 2020 to 2021 could correlate with strategic initiatives undertaken during that period. The narrower gap between total and adjusted total assets over time indicates a stable approach to asset adjustments, possibly signaling increasing consistency in accounting or asset valuation methodologies.

Current Liabilities

The current liabilities of the company exhibit a continuous upward trend over the five-year period. Starting from approximately 1,256,400 thousand US dollars at the end of 2018, the figure rises each year, reaching about 3,078,400 thousand US dollars by the end of 2022. This consistent increase suggests growing short-term obligations, which may imply expansion or increased operational activities requiring more immediate funding or payables.

Adjusted Current Liabilities

The adjusted current liabilities also display a rising trajectory, growing from 290,500 thousand US dollars in 2018 to 729,100 thousand US dollars in 2022. Although the growth is steady, the increase is relatively moderate compared to total current liabilities. The adjusted figure might represent current liabilities after certain adjustments to reflect more precise operational obligations, indicating that the core short-term liabilities have increased but at a somewhat slower pace than the total current liabilities.

Overall Analysis

Both metrics show substantial growth over the analyzed period, with total current liabilities more than doubling and adjusted liabilities increasing by more than twofold. The divergence in the scale of absolute increases might reflect changes in accounting treatments or the nature of liabilities included in the adjusted figures. This upward trend in liabilities could signal heightened growth activities or potentially a rising short-term financial risk that warrants attention for liquidity management and operational funding strategies.

The financial data indicates a consistent and significant increase in both total liabilities and adjusted total liabilities over the analyzed five-year period ending December 31, 2022.

Total Liabilities

The total liabilities have progressively increased each year, beginning at approximately $2.07 billion in 2018 and reaching about $6.51 billion in 2022. This trajectory reflects a more than threefold increase over the five years, with a particularly notable acceleration from 2020 onwards, especially into 2021 and 2022 where the liabilities jumped by over $1.3 billion each year.

Adjusted Total Liabilities

Adjusted total liabilities also exhibit an upward trend, moving from approximately $422 million in 2018 to around $1.86 billion by 2022. The rise is more moderate initially, with a slight increase between 2018 and 2020, followed by a significant surge in 2021 that nearly triples the amount compared to the previous year. The growth continued into 2022 but at a slower pace.

General Observations

Both measures of liabilities display an increasing financial leverage or obligations over time, suggesting the company may have been financing growth or operations through increased borrowing or assumed obligations. The sharper rise in total liabilities relative to adjusted liabilities suggests nuances in the underlying accounting or classification of liabilities, with the adjusted figure possibly excluding certain categories or reclassifying them. The accelerated growth in liabilities from 2020 onward may reflect strategic initiatives, market conditions, or external financial pressures during that period.

Stockholders’ Equity (Deficit)

The total stockholders’ equity experienced growth from 1,010,200 thousand USD in 2018 to a peak of 1,321,900 thousand USD in 2019. However, from 2019 onward, there was a noticeable decline to 856,000 thousand USD in 2020, further decreasing to 781,700 thousand USD in 2021, and ultimately resulting in a deficit of -281,600 thousand USD by the end of 2022. This indicates a significant erosion of equity over the latter years, transitioning from positive equity to a negative position.

Adjusted Total Equity (Deficit)

The adjusted total equity demonstrated consistent growth over the analyzed period, starting at 2,451,900 thousand USD in 2018 and increasing to 3,231,400 thousand USD in 2019. It remained relatively stable at 3,226,600 thousand USD in 2020, then increased further to a peak of 3,919,400 thousand USD in 2021. There was a slight decline in 2022 to 3,801,000 thousand USD, although the value remained substantially higher than the initial 2018 figure.

Overall Trends and Insights

While the traditional measure of stockholders’ equity shows a pronounced negative turnaround by 2022, the adjusted total equity remains robust and relatively stable, suggesting that adjustments made to the equity figures reflect underlying value or resources not captured in the standard equity measure. The divergence between these two metrics increasingly widens after 2019, highlighting potential changes in accounting, valuation, or recognition practices. The data implies financial challenges impacting the conventional equity measure, but the adjusted figure suggests mitigation or offsetting factors are recognized internally.

The financial data indicates a dynamic change in the company's capital structure over the observed periods. Several key observations emerge from the trends in debt, equity, and total capital.

Total Reported Debt

This category shows data only for the two most recent periods, with values of approximately 988.4 million and 990.4 million US dollars respectively, reflecting a marginal increase and relative stability in total reported debt during these years.

Total Stockholders’ Equity (Deficit)

Equity figures display significant volatility. Starting at 1.01 billion US dollars in 2018, equity grew to a peak of 1.32 billion in 2019 before declining sharply to 856 million in 2020, and further down to 781.7 million in 2021. A notable downturn is observed in 2022, where equity turns negative, reaching a deficit of approximately 281.6 million US dollars, indicating a potential financial strain or accumulation of losses affecting net worth.

Total Reported Capital

This metric aggregates debt and equity, showing an uptrend from 1.01 billion US dollars in 2018 to a peak of 1.77 billion in 2021, followed by a sharp drop to 708.8 million in 2022. The steep decline in the last period is likely driven by the corresponding equity deficit despite the stability in debt.

Adjusted Total Debt

Adjusted debt initially remains low and relatively stable between 46.1 million and 53.1 million US dollars from 2018 through 2020. However, an abrupt increase is seen in 2021 to over 1.05 billion and further to approximately 1.09 billion in 2022, aligning with the surge in total reported debt noted for recent years. This suggests a significant change in debt metrics when adjusted for certain factors.

Adjusted Total Equity (Deficit)

Adjusted equity shows a consistent upward trend over the entire period, starting at 2.45 billion US dollars in 2018 and growing steadily to 3.81 billion by 2022. This steady increase contrasts with the volatility seen in total reported equity, indicating that adjustments may remove transient factors or non-recurring items to reflect underlying shareholder value.

Adjusted Total Capital

The adjusted capital, encompassing both adjusted debt and equity, demonstrates continuous growth from 2.50 billion US dollars in 2018 to nearly 4.89 billion in 2022. The upward trajectory throughout the periods suggests an overall expansion in the company’s capital base when accounting for adjustments, highlighting increasing financial resources or investment capacity.

In summary, the reported figures illustrate significant fluctuations in equity and total capital with a notable equity deficit in the most recent period, suggesting financial challenges or restructuring. Meanwhile, adjusted figures present a more stable and growing capital structure, emphasizing the importance of considering adjustments when evaluating financial health.

The company's revenue demonstrates a consistent upward trajectory over the five-year period. Starting from approximately 1.8 billion US dollars at the end of 2018, revenue increased to nearly 4.4 billion US dollars by the end of 2022. This represents more than a twofold growth, showing a strong expansion in the company's operations and market presence.

Adjusted revenue, which presumably accounts for certain non-recurring or non-operational items to provide a clearer picture of core business performance, also shows a similar increasing trend. The adjusted revenue figures started at about 2.15 billion US dollars in 2018 and rose steadily each year, reaching over 5.6 billion US dollars by the end of 2022. This progression indicates that the underlying business fundamentals improved significantly during the period under review, with growth outpacing that of the reported revenue.

Comparing the two revenue measures, adjusted revenue consistently exceeds reported revenue throughout the years. The gap between adjusted revenue and reported revenue appears to widen over time, suggesting that adjustments have become more substantial or that certain non-recurring expenses or accounting treatments have increased as the company scaled. This difference may merit further analysis to understand the nature of these adjustments and their impact on revenue recognition.

Overall, the data reflects strong and accelerating growth in both reported and adjusted revenue, highlighting a positive trend in the company’s financial performance over the five years analyzed.

Net Income Attributable to Fortinet, Inc.

The net income attributable to the company displayed a positive growth trend over the analyzed period. Starting from approximately US$332.2 million in 2018, the figure slightly decreased to US$326.5 million in 2019. However, from 2019 onwards, the net income demonstrated substantial and consistent increases, reaching US$488.5 million in 2020, US$606.8 million in 2021, and peaking at US$857.3 million by the end of 2022. This progression indicates strong profitability growth and operational improvements over the latter years.

Adjusted Net Income Including Non-Controlling Interests

Adjusted net income including non-controlling interests exhibited a robust and sustained upward trajectory throughout the period. Beginning at US$575.1 million in 2018, it increased significantly to US$808.1 million in 2019, followed by further growth to US$978.5 million in 2020. The upward momentum continued, reaching US$1.3543 billion in 2021 and culminating at US$1.806 billion in 2022. This consistent rise denotes enhanced earnings quality and suggests that operational performance alongside adjustments for non-controlling interests contributed positively to the overall profitability.

Summary of Trends

Both net income attributable to the company and adjusted net income including non-controlling interests demonstrate strong growth patterns between 2018 and 2022. Notably, while the net income exhibited a minor dip between 2018 and 2019, it quickly rebounded with significant increases thereafter. Adjusted net income showed uninterrupted growth across all years. The overall financial performance suggests effective management strategies and improving profitability over time.