Stock Analysis on Net
Stock Analysis on Net

Fortinet Inc. (NASDAQ:FTNT)

This company has been moved to the archive! The financial data has not been updated since May 8, 2023.

Analysis of Goodwill and Intangible Assets

Microsoft Excel

Goodwill and Intangible Asset Disclosure

Fortinet Inc., balance sheet: goodwill and intangible assets

US$ in thousands

Microsoft Excel
Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019 Dec 31, 2018
Goodwill 128,000 125,100 93,000 67,200 38,200
Developed technologies 85,100 82,200 59,300 50,200 34,400
Customer relationships 31,000 22,200 24,800 21,600 17,500
Trade name 5,300 6,100 — — —
Backlog 4,200 4,800 — — —
Finite-lived intangible assets, gross 125,600 115,300 84,100 71,800 51,900
Accumulated amortization (69,600) (51,700) (52,500) (40,700) (29,800)
Finite-lived intangible assets, net 56,000 63,600 31,600 31,100 22,100
Other intangible assets, net 56,000 63,600 31,600 31,100 22,100
Goodwill and other intangible assets, net 184,000 188,700 124,600 98,300 60,300

Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).

Item Description The company
Goodwill Amount after accumulated impairment loss of an asset representing future economic benefits arising from other assets acquired in a business combination that are not individually identified and separately recognized. Fortinet Inc. goodwill increased from 2020 to 2021 and from 2021 to 2022.
Other intangible assets, net Sum of the carrying amounts of all intangible assets, excluding goodwill, as of the balance sheet date, net of accumulated amortization and impairment charges. Fortinet Inc. other intangible assets, net increased from 2020 to 2021 but then slightly decreased from 2021 to 2022.
Goodwill and other intangible assets, net Sum of the carrying amounts of all intangible assets, including goodwill, as of the balance sheet date, net of accumulated amortization and impairment charges. Fortinet Inc. goodwill and other intangible assets, net increased from 2020 to 2021 but then slightly decreased from 2021 to 2022.

Adjustments to Financial Statements: Removal of Goodwill

Fortinet Inc., adjustments to financial statements

US$ in thousands

Microsoft Excel
Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019 Dec 31, 2018
Adjustment to Total Assets
Total assets (as reported) 6,228,000 5,919,100 4,044,500 3,885,500 3,078,000
Less: Goodwill 128,000 125,100 93,000 67,200 38,200
Total assets (adjusted) 6,100,000 5,794,000 3,951,500 3,818,300 3,039,800
Adjustment to Total Fortinet, Inc. Stockholders’ Equity (deficit)
Total Fortinet, Inc. stockholders’ equity (deficit) (as reported) (281,600) 781,700 856,000 1,321,900 1,010,200
Less: Goodwill 128,000 125,100 93,000 67,200 38,200
Total Fortinet, Inc. stockholders’ equity (deficit) (adjusted) (409,600) 656,600 763,000 1,254,700 972,000

Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).

Fortinet Inc., Financial Data: Reported vs. Adjusted

Adjusted Financial Ratios: Removal of Goodwill (Summary)

Fortinet Inc., adjusted financial ratios

Microsoft Excel
Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019 Dec 31, 2018
Total Asset Turnover
Reported total asset turnover 0.71 0.56 0.64 0.55 0.59
Adjusted total asset turnover 0.72 0.58 0.66 0.56 0.59
Financial Leverage
Reported financial leverage — 7.57 4.72 2.94 3.05
Adjusted financial leverage — 8.82 5.18 3.04 3.13
Return on Equity (ROE)
Reported ROE — 77.63% 57.07% 24.70% 32.88%
Adjusted ROE — 92.42% 64.02% 26.02% 34.18%
Return on Assets (ROA)
Reported ROA 13.77% 10.25% 12.08% 8.40% 10.79%
Adjusted ROA 14.05% 10.47% 12.36% 8.55% 10.93%

Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).

Financial ratio Description The company
Adjusted total asset turnover An activity ratio calculated as total revenue divided by adjusted total assets. Fortinet Inc. adjusted total asset turnover ratio deteriorated from 2020 to 2021 but then improved from 2021 to 2022 exceeding 2020 level.
Adjusted ROA A profitability ratio calculated as net income divided by adjusted total assets. Fortinet Inc. adjusted ROA deteriorated from 2020 to 2021 but then improved from 2021 to 2022 exceeding 2020 level.

Fortinet Inc., Financial Ratios: Reported vs. Adjusted

Adjusted Total Asset Turnover

Microsoft Excel
Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019 Dec 31, 2018
As Reported
Selected Financial Data (US$ in thousands)
Revenue 4,417,400 3,342,200 2,594,400 2,156,200 1,801,200
Total assets 6,228,000 5,919,100 4,044,500 3,885,500 3,078,000
Activity Ratio
Total asset turnover1 0.71 0.56 0.64 0.55 0.59
Adjusted for Goodwill
Selected Financial Data (US$ in thousands)
Revenue 4,417,400 3,342,200 2,594,400 2,156,200 1,801,200
Adjusted total assets 6,100,000 5,794,000 3,951,500 3,818,300 3,039,800
Activity Ratio
Adjusted total asset turnover2 0.72 0.58 0.66 0.56 0.59

Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).

2022 Calculations

1 Total asset turnover = Revenue ÷ Total assets
= 4,417,400 ÷ 6,228,000 = 0.71

2 Adjusted total asset turnover = Revenue ÷ Adjusted total assets
= 4,417,400 ÷ 6,100,000 = 0.72

Activity ratio Description The company
Adjusted total asset turnover An activity ratio calculated as total revenue divided by adjusted total assets. Fortinet Inc. adjusted total asset turnover ratio deteriorated from 2020 to 2021 but then improved from 2021 to 2022 exceeding 2020 level.

Adjusted Financial Leverage

Microsoft Excel
Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019 Dec 31, 2018
As Reported
Selected Financial Data (US$ in thousands)
Total assets 6,228,000 5,919,100 4,044,500 3,885,500 3,078,000
Total Fortinet, Inc. stockholders’ equity (deficit) (281,600) 781,700 856,000 1,321,900 1,010,200
Solvency Ratio
Financial leverage1 — 7.57 4.72 2.94 3.05
Adjusted for Goodwill
Selected Financial Data (US$ in thousands)
Adjusted total assets 6,100,000 5,794,000 3,951,500 3,818,300 3,039,800
Adjusted total Fortinet, Inc. stockholders’ equity (deficit) (409,600) 656,600 763,000 1,254,700 972,000
Solvency Ratio
Adjusted financial leverage2 — 8.82 5.18 3.04 3.13

Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).

2022 Calculations

1 Financial leverage = Total assets ÷ Total Fortinet, Inc. stockholders’ equity (deficit)
= 6,228,000 ÷ -281,600 = —

2 Adjusted financial leverage = Adjusted total assets ÷ Adjusted total Fortinet, Inc. stockholders’ equity (deficit)
= 6,100,000 ÷ -409,600 = —

Adjusted Return on Equity (ROE)

Microsoft Excel
Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019 Dec 31, 2018
As Reported
Selected Financial Data (US$ in thousands)
Net income attributable to Fortinet, Inc. 857,300 606,800 488,500 326,500 332,200
Total Fortinet, Inc. stockholders’ equity (deficit) (281,600) 781,700 856,000 1,321,900 1,010,200
Profitability Ratio
ROE1 — 77.63% 57.07% 24.70% 32.88%
Adjusted for Goodwill
Selected Financial Data (US$ in thousands)
Net income attributable to Fortinet, Inc. 857,300 606,800 488,500 326,500 332,200
Adjusted total Fortinet, Inc. stockholders’ equity (deficit) (409,600) 656,600 763,000 1,254,700 972,000
Profitability Ratio
Adjusted ROE2 — 92.42% 64.02% 26.02% 34.18%

Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).

2022 Calculations

1 ROE = 100 × Net income attributable to Fortinet, Inc. ÷ Total Fortinet, Inc. stockholders’ equity (deficit)
= 100 × 857,300 ÷ -281,600 = —

2 Adjusted ROE = 100 × Net income attributable to Fortinet, Inc. ÷ Adjusted total Fortinet, Inc. stockholders’ equity (deficit)
= 100 × 857,300 ÷ -409,600 = —

Adjusted Return on Assets (ROA)

Microsoft Excel
Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019 Dec 31, 2018
As Reported
Selected Financial Data (US$ in thousands)
Net income attributable to Fortinet, Inc. 857,300 606,800 488,500 326,500 332,200
Total assets 6,228,000 5,919,100 4,044,500 3,885,500 3,078,000
Profitability Ratio
ROA1 13.77% 10.25% 12.08% 8.40% 10.79%
Adjusted for Goodwill
Selected Financial Data (US$ in thousands)
Net income attributable to Fortinet, Inc. 857,300 606,800 488,500 326,500 332,200
Adjusted total assets 6,100,000 5,794,000 3,951,500 3,818,300 3,039,800
Profitability Ratio
Adjusted ROA2 14.05% 10.47% 12.36% 8.55% 10.93%

Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).

2022 Calculations

1 ROA = 100 × Net income attributable to Fortinet, Inc. ÷ Total assets
= 100 × 857,300 ÷ 6,228,000 = 13.77%

2 Adjusted ROA = 100 × Net income attributable to Fortinet, Inc. ÷ Adjusted total assets
= 100 × 857,300 ÷ 6,100,000 = 14.05%

Profitability ratio Description The company
Adjusted ROA A profitability ratio calculated as net income divided by adjusted total assets. Fortinet Inc. adjusted ROA deteriorated from 2020 to 2021 but then improved from 2021 to 2022 exceeding 2020 level.