Fortinet Inc. (NASDAQ:FTNT)

Analysis of the financial data reveals significant trends over the period from 2009 to 2022.

Revenue

The revenue experienced consistent and substantial growth throughout the period. Starting at approximately $252 million in 2009, revenue increased every year, reaching around $4.42 billion by the end of 2022. This indicates a strong upward trend in sales or service delivery capacity, with particularly notable acceleration in the latter years, especially from 2020 to 2022.

Operating Income

Operating income showed a more volatile pattern in earlier years but overall trended upward significantly. The figure rose from roughly $25 million in 2009 up to about $969.6 million in 2022. Between 2010 and 2015, there was a noticeable dip and fluctuation, with operating income falling sharply in 2014 and 2015, reaching a low around $14.9 million in 2015. However, from 2016 onwards, operating income improved dramatically and consistently, indicating improved operational efficiency or margin expansion in recent years.

Net Income Attributable to Fortinet, Inc.

Net income attributable to the company exhibited strong growth overall but with fluctuations in the earlier years. It started at about $60 million in 2009, decreased in the following years with the lowest point near $8 million in 2015, before rebounding and growing steadily thereafter. A remarkable surge in net income is visible from 2017 onwards, peaking at approximately $857 million by 2022. This reflects improved profitability despite earlier challenges, potentially driven by increasing revenues combined with better cost control or favorable tax impacts.

In summary, the data indicates a growing and increasingly profitable company with some operational challenges in the middle of the period under review. Both operating income and net income recovered and expanded strongly following a period of relative weakness, culminating in robust financial performance by 2022.

The analysis of the annual financial data reveals a consistent upward trend in both current assets and total assets over the period from 2009 to 2022. The current assets exhibit a steady increase year over year, growing from approximately 342 million USD in 2009 to around 3.81 billion USD by the end of 2022. This represents a more than tenfold increase over the 13-year span, indicating significant growth in the company’s liquid and short-term asset base.

Similarly, total assets also show a robust and continuous growth pattern. The value rose from about 387 million USD in 2009 to approximately 6.23 billion USD in 2022. This consistent increase in total assets reflects both the expansion of current assets and presumably a rise in long-term assets, underscoring the company’s broad asset base growth.

Current Assets

From 2009 to 2013, current assets increased steadily from 342 million to 736 million USD, demonstrating an average annual growth rate that indicates improving liquidity and operational capacity.

A notable acceleration in growth is visible from 2013 onward, with current assets reaching over 3.81 billion USD by 2022. The sharpest increases occurred particularly after 2015, signaling enhanced asset management or expansion in working capital.

Total Assets

Total assets grew from 387 million USD in 2009 to about 1.17 billion in 2013, aligned but slightly ahead of the pace of current assets growth, suggesting increases in longer-term holdings as well.

From 2013 onwards, total assets expanded more sharply, surpassing 6.2 billion USD by 2022. This reflects substantial investment or acquisition activity, capital expenditure, or growth in intangible and fixed assets supporting business scaling.

Both asset categories demonstrate a stable positive trend without notable fluctuations or periods of decline, indicating financial stability and continuous growth. The company’s asset base enlargement over the years establishes a sound foundation for operational expansion and potential future investment opportunities.

Current Liabilities

Current liabilities exhibited a consistent upward trend from 2009 to 2022. Starting at approximately 180.6 million USD in 2009, the figure nearly doubled every few years, reaching around 3.08 billion USD in 2022. The growth was steady, with notable acceleration between 2019 and 2022, indicating increasing short-term obligations over time.

Total Liabilities

Total liabilities followed a similar expanding trajectory, rising from about 244.8 million USD in 2009 to approximately 6.51 billion USD in 2022. The increase was relatively steady but showed marked acceleration post-2019, especially between 2020 and 2022, where liabilities surged by over 2 billion USD, reflecting significant leverage or borrowing during that period.

Long-term Debt

Data for long-term debt is only available for 2021 and 2022, showing balances close to 988.4 million USD and 990.4 million USD, respectively. This suggests the initiation or disclosure of substantial long-term debt obligations in recent years, accounting for a significant portion of the total liabilities in those years.

Stockholders’ Equity

Stockholders’ equity generally increased from 2009 through 2018, rising from 142.5 million USD to above 1.32 billion USD in 2019. However, after reaching this peak, equity values saw a considerable decline, dropping to 856 million USD in 2020, then to 781.7 million USD in 2021, before turning negative at -281.6 million USD in 2022. This recent negative equity position indicates financial strain, potentially driven by accumulated losses or large liabilities exceeding assets.

Overall Trends and Insights

The company’s financial structure over the observed period reveals growing liabilities with a steady increase in current liabilities and total liabilities, reflecting expanded operational scale or increased funding requirements. The late appearance of long-term debt suggests a strategic shift or new financing activities starting around 2021. Despite growth in equity up to 2019, the sharp decline and eventual negative equity in 2022 implies potential financial challenges, possibly linked to rising liabilities outpacing asset growth or cumulative losses impacting net worth. These patterns warrant close attention to balance sheet management and capital structure optimization going forward.

Operating Activities Cash Flow

There is a consistent upward trend in net cash provided by operating activities from 2009 through 2022. Starting at 61,971 thousand US dollars in 2009, cash flows increased steadily almost every year, reaching 1,730,600 thousand US dollars by 2022. The growth was particularly notable from 2016 onwards, with significant jumps in 2017 and subsequent years, indicating strengthening operational performance and cash generation capabilities over time.

Investing Activities Cash Flow

Net cash provided by (used in) investing activities shows a more volatile pattern. The organization had positive cash inflows from investing activities in 2009 but experienced large negative outflows starting in 2010 and continuing through 2015, reflecting substantial investments or asset purchases. The years 2011 through 2014 saw significant cash outflows, though the amounts varied. After 2015, the fluctuations continued, with a considerable spike into negative territory in 2019 and again in 2021, followed by a positive value in 2022. This volatility suggests active investing decisions, possibly acquisitions or capital expenditures, with 2022 reflecting perhaps divestitures or asset sales.

Financing Activities Cash Flow

Cash flows from financing activities exhibit substantial variability with no clear trend. Early years (2009 to 2012) generally yielded positive values, peaking at 78,049 thousand in 2009. However, negative figures became prominent starting in 2013, with a pronounced decline in 2016 and 2017 reaching deeply negative levels indicative of repurchases, debt repayments, or dividend distributions exceeding financing inflows. The period from 2018 to 2020 maintained substantial outflows reaching over one million in negative cash flow by 2020. There is a brief positive inflow in 2021 but a sharp return to large negative cash flow in 2022, signaling fluctuating financing activity likely related to changing capital structure strategies or liquidity management measures.

The analysis of the financial performance over the period from 2009 to 2022 reveals several important trends related to earnings per share and dividend distribution.

Basic Earnings Per Share (EPS)

The basic earnings per share demonstrated significant fluctuations in the early years, starting at $0.19 in 2009, then sharply declining to $0.06 in 2010. From 2010 to 2015, EPS remained relatively low and stable, oscillating between $0.01 and $0.08, indicating a period of constrained profitability or reinvestment phases. Beginning in 2016, a noticeable upward trend emerged, with EPS increasing gradually to $0.39 by 2018, marking the start of stronger earnings performance. This positive momentum intensified from 2019 onwards, culminating in a peak EPS of $1.08 in 2022, reflecting robust growth and improved profitability.

Diluted Earnings Per Share

The diluted EPS closely parallels the pattern observed in basic EPS, albeit with slightly lower values as expected due to dilution effects. The diluted EPS ranged from $0.08 in 2009, dipped to $0.05 in 2010, and then stabilized within the $0.01 to $0.08 range through 2015. From 2016, it followed an upward trajectory similar to basic EPS, rising from $0.04 to $1.06 in 2022. This consistency between basic and diluted EPS underscores stable share structure and reflects genuine earnings growth.

Dividend Per Share

No dividends were paid throughout the analyzed period, indicating a strategic choice to retain earnings for reinvestment, growth initiatives, or other corporate purposes rather than distributing cash to shareholders.

Overall, the earnings per share data depict a company transitioning from modest profitability in the early years to strong and accelerating earnings growth in the latter part of the examined timeframe. The absence of dividends complements this outlook, suggesting a focus on expansion and value creation within the business rather than immediate shareholder returns.