Fortinet, Inc. stock research
FY2023 Q3
Fortinet (FTNT) Gross Margin — Quarter Ended Sep 30, 2023
Revenue was stable compared with the prior quarter, while gross profit increased slightly; cost of revenue rose at a somewhat faster pace, causing gross margin to weaken. Compared with the same quarter one year earlier, revenue, gross profit, and cost of revenue were all higher, and gross margin improved.
Gross margin takeaway
Quarter ended Sep 30, 2023 · FY2023 Q3
Revenue was stable compared with the prior quarter, while gross profit increased slightly; cost of revenue rose at a somewhat faster pace, causing gross margin to weaken. Compared with the same quarter one year earlier, revenue, gross profit, and cost of revenue were all higher, and gross margin improved.
- Gross profit rose while cost of revenue increased at a higher rate than revenue, resulting in a slightly lower gross margin sequentially. The year-over-year improvement in gross margin was supported by a larger increase in gross profit relative to the increase in revenue.
- Compared with the immediately preceding quarter, gross margin weakened modestly as cost of revenue grew faster than revenue. Compared with the same quarter one year earlier, gross margin improved, with gross profit rising more than revenue.
Gross margin snapshot
The selected quarter's reported revenue, gross profit, direct costs, and margin comparisons.
Gross margin
76.2%
Gross profit
$1.0B
Revenue
$1.3B
Cost of revenue
$317.7M
Quarter-over-quarter change
-0.9 pts
Year-over-year change
+0.8 pts
Quarterly gross margin trend
A four-quarter view of the revenue and direct-cost bridge behind gross margin.
| Period | Revenue | Gross profit | Cost of revenue | Gross margin |
|---|---|---|---|---|
| Mar 31, 2023 | $1.3B | $954.5M | $307.8M | 75.6% |
| Jun 30, 2023 | $1.3B | $997.0M | $295.8M | 77.1% |
| Sep 30, 2023 | $1.3B | $1.0B | $317.7M | 76.2% |
Quarterly comparisons
Compare the selected margin with the preceding quarter and the same fiscal quarter one year earlier.
Previous-quarter change
Jun 30, 2023
-0.9 pts
Year-over-year change
Sep 30, 2022
+0.8 pts
What the margin says
Filing-constrained interpretation of margin direction, comparisons, and what to monitor next.
Gross profit rose while cost of revenue increased at a higher rate than revenue, resulting in a slightly lower gross margin sequentially. The year-over-year improvement in gross margin was supported by a larger increase in gross profit relative to the increase in revenue.
Compared with the immediately preceding quarter, gross margin weakened modestly as cost of revenue grew faster than revenue. Compared with the same quarter one year earlier, gross margin improved, with gross profit rising more than revenue.
Monitor the relationship between revenue and cost of revenue growth rates in future quarters, as a faster increase in cost of revenue could pressure gross margin.