Return on Equity (ROE)
since 2009
Calculation
Fortinet Inc., ROE, long-term trends, calculation
| ROE | = | 100 | × | Net income attributable to Fortinet, Inc.1 | ÷ | Total Fortinet, Inc. stockholders’ equity (deficit)1 | |
|---|---|---|---|---|---|---|---|
| Dec 31, 2022 | — | = | 100 | × | 857,300) | ÷ | (281,600) |
| Dec 31, 2021 | 77.63% | = | 100 | × | 606,800) | ÷ | 781,700) |
| Dec 31, 2020 | 57.07% | = | 100 | × | 488,500) | ÷ | 856,000) |
| Dec 31, 2019 | 24.70% | = | 100 | × | 326,500) | ÷ | 1,321,900) |
| Dec 31, 2018 | 32.88% | = | 100 | × | 332,200) | ÷ | 1,010,200) |
| Dec 31, 2017 | 5.33% | = | 100 | × | 31,399) | ÷ | 589,377) |
| Dec 31, 2016 | 3.84% | = | 100 | × | 32,187) | ÷ | 837,681) |
| Dec 31, 2015 | 1.06% | = | 100 | × | 7,987) | ÷ | 755,377) |
| Dec 31, 2014 | 3.75% | = | 100 | × | 25,343) | ÷ | 675,966) |
| Dec 31, 2013 | 7.56% | = | 100 | × | 44,273) | ÷ | 585,760) |
| Dec 31, 2012 | 13.08% | = | 100 | × | 66,836) | ÷ | 510,934) |
| Dec 31, 2011 | 17.44% | = | 100 | × | 62,492) | ÷ | 358,354) |
| Dec 31, 2010 | 17.74% | = | 100 | × | 41,245) | ÷ | 232,454) |
| Dec 31, 2009 | 42.25% | = | 100 | × | 60,179) | ÷ | 142,452) |
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), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31), 10-K (reporting date: 2011-12-31), 10-K (reporting date: 2010-12-31), 10-K (reporting date: 2009-12-31).
1 US$ in thousands
The financial trajectory from 2009 to 2022 is characterized by a significant transition in profitability and capital structure, culminating in a shift from positive equity to a stockholders' deficit despite record net income levels.
- Net Income Trends
- Net income remained relatively stable but low between 2009 and 2017, fluctuating between a low of approximately $7.99 million in 2015 and a high of $66.84 million in 2012. A pivotal shift occurred in 2018, where net income surged to $332.2 million. This growth trajectory accelerated through 2022, reaching a peak of $857.3 million, representing a substantial increase in bottom-line profitability over the final five years of the period.
- Stockholders' Equity Evolution
- Equity exhibited a consistent upward trend from 2009 to 2018, growing from $142.45 million to a peak of $1.01 billion. However, this trend reversed starting in 2019. Following a period of volatility, equity declined sharply, resulting in a stockholders' deficit of $281.6 million by December 31, 2022. This transition to negative equity occurred simultaneously with the period of highest net income.
- Return on Equity (ROE) Analysis
- The ROE experienced three distinct phases. The first phase, from 2009 to 2015, saw a steep decline from 42.25% to a low of 1.06%, driven by equity growth that far outpaced net income. The second phase, beginning in 2018, marked a period of rapid expansion where ROE climbed from 32.88% to a peak of 77.63% in 2021, reflecting highly efficient profit generation relative to the equity base. In 2022, ROE became undefinable or non-calculable due to the transition of stockholders' equity into a deficit, despite the company achieving its highest recorded net income.
The data indicates a strategic shift in the financial profile, where increasing profitability coincided with a reduction in equity, likely suggesting aggressive capital return programs or other balance sheet adjustments that eventually exhausted the equity reserve.
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Comparison to Competitors
Fortinet Inc., ROE, long-term trends, comparison to competitors
| Fortinet Inc. | Accenture PLC | Adobe Inc. | AppLovin Corp. | Cadence Design Systems Inc. | Datadog Inc. | International Business Machines Corp. | Intuit Inc. | Microsoft Corp. | Oracle Corp. | Palantir Technologies Inc. | Palo Alto Networks Inc. | Salesforce Inc. | ServiceNow Inc. | Synopsys Inc. | Workday Inc. | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Dec 31, 2022 | — | 31.11% | 33.85% | -10.13% | 30.93% | -3.56% | 7.47% | 12.57% | 43.68% | — | -14.57% | -127.14% | 2.48% | 6.46% | 17.85% | 0.65% |
| Dec 31, 2021 | 77.63% | 30.25% | 32.59% | 1.66% | 25.39% | -1.99% | 30.38% | 20.89% | 43.15% | 262.43% | -22.71% | -78.63% | 9.81% | 6.22% | 14.31% | -8.62% |
| Dec 31, 2020 | 57.07% | 30.05% | 39.66% | — | 23.69% | -2.56% | 27.14% | 35.76% | 37.43% | 83.94% | -76.61% | -24.23% | 0.37% | 4.18% | 13.54% | -19.33% |
| Dec 31, 2019 | 24.70% | 33.17% | 28.03% | — | 47.03% | -2.14% | 45.25% | 41.53% | 38.35% | 50.87% | — | -5.16% | 7.11% | 29.45% | 13.04% | -21.36% |
| Dec 31, 2018 | 32.88% | 39.17% | 27.67% | — | 26.84% | — | 51.96% | 51.44% | 20.03% | 8.37% | — | -15.30% | 1.36% | -2.40% | 12.43% | -20.33% |
| Dec 31, 2017 | 5.33% | 38.50% | 20.02% | — | 20.63% | — | 32.70% | 71.71% | 29.29% | 17.33% | — | -28.52% | 2.40% | -25.53% | 4.17% | -35.11% |
| Dec 31, 2016 | 3.84% | 54.42% | 15.74% | — | 27.38% | — | 65.07% | 84.32% | 23.33% | 18.82% | — | -28.60% | -0.95% | -116.76% | 8.35% | -25.52% |
| Dec 31, 2015 | 1.06% | 49.78% | 8.99% | — | 18.34% | — | 92.48% | 15.65% | 15.23% | 20.42% | — | -33.81% | -6.61% | -35.01% | 7.21% | -22.02% |
| Dec 31, 2014 | 3.75% | 51.32% | 3.96% | — | 11.92% | — | 101.30% | 29.47% | 24.59% | 23.37% | — | -48.33% | -7.64% | -41.85% | 8.48% | -14.53% |
| Dec 31, 2013 | 7.56% | 66.16% | 4.31% | — | 14.21% | — | 72.32% | 24.30% | 27.69% | 24.47% | — | -10.74% | -11.67% | -18.70% | 8.89% | -20.12% |
| Dec 31, 2012 | 13.08% | 61.59% | 12.49% | — | 48.07% | — | 88.04% | 28.86% | 25.58% | 22.85% | — | 0.32% | -0.73% | -15.34% | 7.29% | — |
| Dec 31, 2011 | 17.44% | 58.72% | 14.40% | — | 17.57% | — | 78.73% | 24.24% | 40.55% | 21.49% | — | — | 5.05% | — | 10.53% | — |
| Dec 31, 2010 | 17.74% | 62.79% | 14.92% | — | 45.74% | — | 64.36% | 20.35% | 40.63% | 19.92% | — | — | 7.73% | — | 11.29% | — |
| Dec 31, 2009 | 42.25% | 55.08% | 7.90% | — | -138.29% | — | 59.31% | 17.49% | 36.83% | 22.29% | — | — | 6.46% | — | 9.09% | — |
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), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31), 10-K (reporting date: 2011-12-31), 10-K (reporting date: 2010-12-31), 10-K (reporting date: 2009-12-31).
Comparison to Sector (Software & Services)
Fortinet Inc., ROE, long-term trends, comparison to sector (software & services)
| Fortinet Inc. | Software & Services | |
|---|---|---|
| Dec 31, 2022 | — | 30.78% |
| Dec 31, 2021 | 77.63% | 35.91% |
| Dec 31, 2020 | 57.07% | 30.34% |
| Dec 31, 2019 | 24.70% | 35.56% |
| Dec 31, 2018 | 32.88% | 20.20% |
| Dec 31, 2017 | 5.33% | 23.83% |
| Dec 31, 2016 | 3.84% | 26.25% |
| Dec 31, 2015 | 1.06% | 23.04% |
| Dec 31, 2014 | 3.75% | 28.09% |
| Dec 31, 2013 | 7.56% | 31.71% |
| Dec 31, 2012 | 13.08% | 32.66% |
| Dec 31, 2011 | 17.44% | 38.82% |
| Dec 31, 2010 | 17.74% | 37.89% |
| Dec 31, 2009 | 42.25% | 35.98% |
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), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31), 10-K (reporting date: 2011-12-31), 10-K (reporting date: 2010-12-31), 10-K (reporting date: 2009-12-31).
Comparison to Industry (Information Technology)
Fortinet Inc., ROE, long-term trends, comparison to industry (information technology)
| Fortinet Inc. | Information Technology | |
|---|---|---|
| Dec 31, 2022 | — | 38.03% |
| Dec 31, 2021 | 77.63% | 41.64% |
| Dec 31, 2020 | 57.07% | 35.38% |
| Dec 31, 2019 | 24.70% | 35.94% |
| Dec 31, 2018 | 32.88% | 30.23% |
| Dec 31, 2017 | 5.33% | 23.19% |
| Dec 31, 2016 | 3.84% | 23.00% |
| Dec 31, 2015 | 1.06% | 25.97% |
| Dec 31, 2014 | 3.75% | 25.43% |
| Dec 31, 2013 | 7.56% | 24.73% |
| Dec 31, 2012 | 13.08% | 26.09% |
| Dec 31, 2011 | 17.44% | 29.03% |
| Dec 31, 2010 | 17.74% | 27.62% |
| Dec 31, 2009 | 42.25% | 20.05% |
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), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31), 10-K (reporting date: 2011-12-31), 10-K (reporting date: 2010-12-31), 10-K (reporting date: 2009-12-31).