Shareholders in US-based cybersecurity company Fortinet (FTNT:NASDAQ) endured a hell of a 2023, with shock earnings misses leaving them understandably worried.

While the shares ended 2023 up 20% or so, investors were saddled with two hefty stock drops - 25% in August and more than 12% in November.

Latest results for the fourth quarter 2023 delivered upbeat profit and billings numbers, while improvements made to sales execution seem to be paying off, sending its stock rocketing. Shares in the $52 billion company jumped more than 8% in after-hours trading overnight on Wall Street, implying $72.90 and within touching distance of $79 peaks of July 2023.

WHAT WAS REPORTED FOR Q4

The cybersecurity company posted Q4 earnings per share (EPS) of $0.51, beating the consensus estimates of $0.43, on revenue of $1.42 billion, up 10% year-on-year, and surpassing the projected $1.41 billion.

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At a more granular level, service revenue saw a significant jump of 25% year-on-year to $927 million, beating the predicted $914.8 million of consensus, although product revenue fell 9.6% to $488.1 million, falling short of the anticipated $498.1 million.

Deferred revenue grew by 24% on Q4 2022 to $5.74 billion, outperforming the estimate of $5.5 billion, and billings reached $1.86 billion, marking an 8.5% increase year-on-year to surpass the expected $1.62 billion. Adjusted operating margins remained stable at 32%, compared to 32.5% the previous year, and higher than the expected 27.9%.

LOOKING TO FULL YEAR 2024

For the full year 2024, Fortinet forecasts its EPS to be in the range of $1.65 to $1.70, closely matching the consensus estimate of $1.67. The company’s expected revenue for the year is projected to be between $5.715 billion and $5.815 billion, short of the consensus forecast of $5.93 billion.

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Full-year billings are anticipated to be in the range of $6.40 billion to $6.60 billion, while analysts guided for $6.52 billion.

‘In the fourth quarter of 2023, Security Operations billings grew 44% year over year and SASE billings increased 19% year over year, driven by our successful sales strategy shift and the improved execution of our sales teams’, said Ken Xie, founder, chairman and chief executive of Fortinet.

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