Shares of Fortinet (NASDAQ:FTNT) jumped on Thursday following the release of the cybersecurity company's second-quarter report. Fortinet beat analyst estimates on all fronts, provided guidance that was above expectations, and dedicated an additional $500 million to share repurchases. As of 11 a.m. EDT, the stock was up about 11.7%.
Fortinet reported second-quarter revenue of $441.3 million, up 21% year over year and about $15.8 million higher than the average analyst estimate. Product revenue jumped 17% to $166.3 million, while service revenue rose 25% to $275.0 million. Billings also grew at strong double-digit pace, up 20% to $513.4 million.
Non-GAAP earnings per share came in at $0.41, up from $0.27 in the prior-year period and $0.05 better than analysts were expecting. Gross margin was 74.4%, up from 73.7% in the prior-year period. Operating expenses grew 16%, a bit slower than revenue, which helped to push up the bottom line.
"Our market share gains are being driven by the competitive advantages of our Security Fabric architecture. We remain focused on solving customers' pressing security needs and helping them drive their digital transformation," said CEO Ken Xie.
Fortinet expects to produce third-quarter revenue between $445 million and $455 million, well ahead of the consensus analyst estimate of $431.4 million. Non-GAAP EPS guidance of $0.41 to $0.43 was also higher than the $0.39 analysts were expecting.
For the full year, Fortinet sees revenue between $1.77 billion and $1.79 billion, and non-GAAP EPS between $1.63 and $1.67. Both ranges are above analyst estimates of $1.73 billion and $1.53, respectively. On top of trouncing analyst estimates, Fortinet added $500 million to its share buyback authorization. That adds to $325.8 million already available for repurchases.
It was all good news for Fortinet, and investors wasted no time pushing up the stock. With the cybersecurity market set up for long-term growth, Fortinet is well-positioned for the future.