Fortinet Inc (NASDAQ:FTNT) stock rose 5.97% (As on May 5, 11:26:09 AM UTC-4, Source: Google Finance) after the company reported earnings and revenue beats in its fiscal first quarter, driven by an increase in its cybersecurity market share. Product revenues jumped 35% year over year to $500.7 million. This upside can be attributed to the continued adoption of the FortiGate-based secure SD-WAN solution, strong revenues from non-FortiGate products and the increased demand for integrated security fabric products. Services revenues climbed 30.5% to $761.6 million, primarily driven by strong growth in the company’s security subscriptions. Billings were up 29.6% to $1.5 billion, primarily driven by strong customer demand across its Core and Enhanced Platform Technologies. As of Mar 31, 2023, deferred revenues were $4.88 billion, up 33.4% year over year. Geographically, the EMEA region registered the highest top-line growth with a 38.2% increase followed by the Americas’ 36.8% and the APAC’s 15.2%. In the first quarter, the Americas accounted for 41.5% of the total revenues, while the EMEA and the APAC accounted for 37.9% and 20.6%, respectively. During the March-end quarter, the company secured 124 total deals worth $1 million or more each. Cash flow in the quarter came in at $677.5 million, up from $396.1 million in the first quarter of 2022, and free cash flow was $647.2 million, up from $273.5 million.

FTNT in the first quarter of FY 23 has reported the adjusted earnings per share of 34 cents, beating the analysts’ estimates for the adjusted earnings per share of 29 cents. The company had reported 42 percent rise in in the adjusted revenue to $1.26 billion in the first quarter of FY 23, missing the analysts’ estimates for revenue of $1.2 billion. The non-GAAP gross margin expanded 190 basis points (bps) year over year to 76.3% in the first quarter of 2023. This reflects an expansion of 440 bps in the Product gross margin, while the Services gross margin increased 70 bps. Legacy pricing actions, easing supply-chain cost pressures and improved discounting drove the Product gross margin higher. The service gross margin improved due to price increases, which more than offset the negative impact of increased investments in data centers and Points of Presence.

For the second quarter, Fortinet expects an adjusted profit per share of 33 to 35 cents on revenue of $1.28 billion to $1.32 billion. Analysts were expecting revenue of $1.275 billion. For the full year 2023, the company expects adjusted earnings per share of $1.44 to $1.48 on revenue of $5.425 billion to $5.485 billion.