3ed751439c8d9360478598adcbf132b7eea9d8bae402be069507009e4b21123d

Revenue - Product (USD, millions)

Revenue - Service (USD, millions)

Total Revenue (USD, millions)

Cost of Revenue - Product (USD, millions)

Cost of Revenue - Service (USD, millions)

Total Cost of Revenue (USD, millions)

Gross Profit - Product (USD, millions)

Gross Profit - Service (USD, millions)

Total Gross Profit (USD, millions)

Operating Expenses - Research and Development (USD, millions)

Operating Expenses - Sales and Marketing (USD, millions)

Operating Expenses - General and Administrative (USD, millions)

Operating Expenses - Gain on Intellectual Property Matter (USD, millions)

Total Operating Expenses (USD, millions)

Operating Income (USD, millions)

Interest Income (USD, millions)

Interest Expense (USD, millions)

Other Income (Expense) - Net (USD, millions)

Income Before Income Taxes and Loss from Equity Method Investments (USD, millions)

Provision for (Benefit from) Income Taxes (USD, millions)

Loss from Equity Method Investments (USD, millions)

Net Income (USD, millions)

Net Income per Share - Basic (USD)

Net Income per Share - Diluted (USD)

Weighted-average Shares Outstanding - Basic (Millions)

Weighted-average Shares Outstanding - Diluted (Millions)

365e00deab55cb2f02063329076316a8949e21c9909095a30ebcd2954c5fe3fe

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

c7c2a45e266ab0762a612bd1704a58a953a181aa2ebe158766282d30dc723628

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

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

9f30f4451766ff59d29eba1d968f0acc05d5e0ee9d0320e21a325c40a55d1a6d

Total Billings (in millions)

Free Cash Flow (in millions)

33324ebfe4e3fa7b5024c8c6ce3a5f18dd70262aa3b9411e0b38c5ab5e944c25

Americas

- United States

- Other Americas

- Latin America (LATAM)

- Canada

EMEA

APAC

Total Revenue

72e0abee452521bd2c4d2f34491fdd34d2d75003a7117c254f43b2aeb175ee13

Product

Service

- Security Subscription

- Technical Support and Other

- Technical Support

- Professional Services and Training

Ratable and Other Revenue

9b0342544f0b849ea42af065aaf08123f26e5110c0e6eb59f2146c4c37900cc8

Fortinet (FTNT)

Financials