Fortinet, Inc. stock research
FY2023 Q4
Fortinet (FTNT) Gross Margin — Quarter Ended Dec 31, 2023
Revenue was higher than both the previous quarter and the same quarter a year earlier, while cost of revenue was slightly lower than the prior quarter but higher than the prior year. Gross profit increased accordingly, leading to an improved gross margin compared with both periods.
Gross margin takeaway
Quarter ended Dec 31, 2023 · FY2023 Q4
Revenue was higher than both the previous quarter and the same quarter a year earlier, while cost of revenue was slightly lower than the prior quarter but higher than the prior year. Gross profit increased accordingly, leading to an improved gross margin compared with both periods.
- The strongest observable driver of gross margin improvement was the combination of higher revenue and a relatively stable cost of revenue compared with the preceding quarter, which allowed gross profit to grow at a faster rate.
- Gross margin strengthened both sequentially and from the same quarter one year earlier, reflecting a higher proportion of revenue retained as gross profit.
Gross margin snapshot
The selected quarter's reported revenue, gross profit, direct costs, and margin comparisons.
Gross margin
77.7%
Gross profit
$1.1B
Revenue
$1.4B
Cost of revenue
$315.9M
Quarter-over-quarter change
+1.5 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% |
| Dec 31, 2023 | $1.4B | $1.1B | $315.9M | 77.7% |
Quarterly comparisons
Compare the selected margin with the preceding quarter and the same fiscal quarter one year earlier.
Previous-quarter change
Sep 30, 2023
+1.5 pts
Year-over-year change
Dec 31, 2022
+0.8 pts
What the margin says
Filing-constrained interpretation of margin direction, comparisons, and what to monitor next.
The strongest observable driver of gross margin improvement was the combination of higher revenue and a relatively stable cost of revenue compared with the preceding quarter, which allowed gross profit to grow at a faster rate.
Gross margin strengthened both sequentially and from the same quarter one year earlier, reflecting a higher proportion of revenue retained as gross profit.
Monitor the trend in deferred revenue, as it represents a significant portion of future revenue and free cash flow, per the filing discussion.