Shares of Fortinet (FTNT 3.37%) rose on Thursday after the cybersecurity company reported its first-quarter results. Both revenue and earnings were ahead of analyst expectations, and the company provided second-quarter guidance despite pandemic-related uncertainty. Fortinet stock was up about 20.3% at 12:50 p.m. EDT.
Fortinet reported first-quarter revenue of $576.9 million, up 22% year over year and nearly $23 million higher than the average analyst estimate. Product revenue was up 18% to $192.3 million, while service revenue soared 24.1% to $384.6 million.
Fortinet CEO Ken Xie expects the company to do well in the current economic environment. "Our proprietary FortiASIC security processing unit (SPU) can deliver 10 times the VPN throughput capacity of comparable competitor solutions to support teleworkers," he said. "This significant competitive advantage is one reason we believe we will continue to gain market share during a period of tougher economic conditions."
Non-GAAP (adjusted) earnings per share (EPS) came in at $0.60, up from $0.46 in the prior-year period and $0.10 better than analysts were expecting. Fortinet generated $319.4 million of operating cash flow and $241.8 million of free cash flow during the quarter.
For the second quarter, Fortinet expects to produce revenue between $590 million and $605 million, and non-GAAP EPS between $0.64 and $0.66. In the second quarter of 2019, the company generated $521.7 million of revenue and $0.58 of non-GAAP EPS.
With Fortinet's results holding up amid the pandemic, the stock carved out a new 52-week high on Thursday.