Adjusted EPS of $0.38 beat the consensus of $0.34.

Sales of $1.29 billion missed the estimate of $1.30 billion.

Product revenue rose 18% Y/Y to $472.6 million, and service revenue increased 30% Y/Y to $820.2 million.

Billings grew 18% Y/Y to $1.54 billion in the quarter.

Deferred revenue increased 30% Y/Y to $5.13 billion.

Adjusted operating income rose 36% Y/Y to $348.1 million, with margins expanding to 26.9% from 24.8% a year ago.

Operating cash flow stood at $515.1 million, and free cash flow reached $438.3 million in the quarter.

As of June 30, 2023, cash and cash equivalents stood at $3.3 billion.

In April and July 2023, Fortinet's board of directors authorized a $1.0 billion increase and $500.0 million increase in the share repurchase program, respectively, bringing the total authorized amount to $6.75 billion through February 29, 2024. 

As of August 3, 2023, the company had around $2.03 billion remaining available for share repurchases. 

Outlook: FTNT shares are trading down by 18.9% at $61.50 premarket on the last check Friday.