Fortinet, Inc. stock research
FY2024 Q2
Fortinet (FTNT) Gross Margin — Quarter Ended Jun 30, 2024
Revenue remained stable compared to the prior quarter, while a reduction in cost of revenue drove a rise in gross profit and an improvement in gross margin. Compared to the same quarter last year, revenue increased and gross profit grew more, as cost of revenue was lower, leading to a stronger gross margin.
Gross margin takeaway
Quarter ended Jun 30, 2024 · FY2024 Q2
Revenue remained stable compared to the prior quarter, while a reduction in cost of revenue drove a rise in gross profit and an improvement in gross margin. Compared to the same quarter last year, revenue increased and gross profit grew more, as cost of revenue was lower, leading to a stronger gross margin.
- The strongest observable driver of the margin improvement was a reduction in cost of revenue relative to revenue, as revenue held steady quarter over quarter and grew year over year while costs declined in both comparisons.
- Compared to the preceding quarter, gross margin improved as revenue was unchanged but gross profit rose with lower costs. Versus the same quarter a year ago, gross margin also strengthened, driven by higher revenue and a larger increase in gross profit relative to cost of revenue.
Gross margin snapshot
The selected quarter's reported revenue, gross profit, direct costs, and margin comparisons.
Gross margin
80.8%
Gross profit
$1.2B
Revenue
$1.4B
Cost of revenue
$275.0M
Quarter-over-quarter change
+3.3 pts
Year-over-year change
+3.7 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 |
|---|---|---|---|---|
| Sep 30, 2023 | $1.3B | $1.0B | $317.7M | 76.2% |
| Dec 31, 2023 | $1.4B | $1.1B | $315.9M | 77.7% |
| Mar 31, 2024 | $1.4B | $1.0B | $304.7M | 77.5% |
| Jun 30, 2024 | $1.4B | $1.2B | $275.0M | 80.8% |
Quarterly comparisons
Compare the selected margin with the preceding quarter and the same fiscal quarter one year earlier.
Previous-quarter change
Mar 31, 2024
+3.3 pts
Year-over-year change
Jun 30, 2023
+3.7 pts
What the margin says
Filing-constrained interpretation of margin direction, comparisons, and what to monitor next.
The strongest observable driver of the margin improvement was a reduction in cost of revenue relative to revenue, as revenue held steady quarter over quarter and grew year over year while costs declined in both comparisons.
Compared to the preceding quarter, gross margin improved as revenue was unchanged but gross profit rose with lower costs. Versus the same quarter a year ago, gross margin also strengthened, driven by higher revenue and a larger increase in gross profit relative to cost of revenue.
Monitor whether cost of revenue remains at a lower level, as the filing notes potential risks from economic conditions and supply chain factors that could affect costs.