Total Billings (in millions)

Free Cash Flow (in millions)

33324ebfe4e3fa7b5024c8c6ce3a5f18dd70262aa3b9411e0b38c5ab5e944c25

Product

Service

- Security Subscription

- Technical Support and Other

- Technical Support

- Professional Services and Training

Ratable and Other Revenue

Total Revenue

c043a4911335f0bddf47658c68075061c32fb4d28f2d00c49bad11b4f4269830

Adjustments for Non-Cash Items [USD, Millions]

Stock-Based Compensation [USD, Millions]

Changes in Working Capital [USD, Millions]

Capital Expenditures (CapEx) [USD, Millions]

Proceeds from / Repayments of Debt [USD, Millions]

Share Repurchases [USD, Millions]

Dividend Payments [USD, Millions]

Net Change in Cash [USD, Millions]

a9abaeaec3ce5da741b92a71716d946658511a39118f397d49041f3055a07ae4

Total Revenue [USD, Millions]

Cost of Goods Sold (COGS) [USD, Millions]

SG&A [USD, Millions]

R&D [USD, Millions]

D&A [USD, Millions]

Interest Expense [USD, Millions]

Operating Income (EBIT) [USD, Millions]

Net Income [USD, Millions]

EPS - Basic [USD, Units]

EPS - Diluted [USD, Units]

44d231ee96ed5053077e11309985e5d07ce7cd516d1b805d3860e6c993393dbf

Americas

- United States

- Other Americas

- Latin America (LATAM)

- Canada

EMEA

APAC

be159c98b8c06cf202d72e3d091c726d2e99111b9151b92e13f3cffe91d02df8

9f30f4451766ff59d29eba1d968f0acc05d5e0ee9d0320e21a325c40a55d1a6d

5f12f1859abf382a05b0e52a067077244b6fd41c91ca119953d32fdf7bdd225d

The sharp drop in operating cash flow in Q4 2023 was primarily driven by several key factors. **Deferred revenue growth** slowed compared to prior periods, reducing the impact of cash collected for future services.  **[0001262039-24-000006_ftntq4-2023ex991.htm:1]** **[0001262039-24-000014_ftnt-20231231.htm:105]**  **High cash taxes paid**—notably **$341 million** which included **$210 million** in deferred SMA tax payments—significantly drained cash flow.  **[FTNT_3372016_5]**  There were also substantial **working capital changes**, with increases in **accounts receivable** (by **$146.4 million**) and **inventory** (by **$253.5 million**), which increased the cash tied up in operations.  **[0001262039-24-000006_ftntq4-2023ex991.htm:12]** **[0001262039-24-000014_ftnt-20231231.htm:105]**  Additionally, a rise in **deferred contract costs** by **$353.5 million** further diminished operating cash flow.  **[0001262039-24-000006_ftntq4-2023ex991.htm:12]** **[0001262039-24-000014_ftnt-20231231.htm:105]** 

What led to the sharp drop in Operating Cash Flow in Q4 2023?

In Q1 2024, the spike in CAPEX was primarily due to the acquisition of certain real estate properties in California, with a total purchase price of **$207.1 million**. These acquisitions were made to support the company's research and development and warehousing operations, resulting in a significant increase in the **purchases of property and equipment** to **$221.9 million** compared to previous quarters.  **[0001262039-24-000020_ftnt-20240331.htm:11]** **[0001262039-24-000017_ftntq1-2024ex991.htm:12]** **[0001262039-24-000020_ftnt-20240331.htm:6]** 

Why did CAPEX spike in Q1 2024?

What factors contributed to the drastic fall in Free Cash Flow in Q4 2023?

The documents indicate that the **net cash provided by operating activities** decreased from **$515.1 million** in Q2 2023 to **$342.0 million** in Q2 2024.  **[0001262039-24-000034_ftntq2-2024ex991corrected.htm:13]** **[0001262039-24-000032_ftntq2-2024ex991.htm:13]**  However, they do not provide detailed, specific reasons for this decline. They do note that in general, shifts in operating assets and liabilities—such as accounts receivable, deferred revenue, and accrued liabilities—can affect operating cash flow, but the exact factors for Q2 2024 were not explicitly stated.  **[0001262039-24-000037_ftnt-20240630.htm:44]** 

Why did Operating Cash Flow decline in Q2 2024?

043456eedc6114aa8a8c19a722487422cb0b774aaf0010d8d4cef9432c48dfef

Fortinet Inc (FTNT)

Financials