Fortinet, Check Point CEOs spar over firewall performance

Fortinet CEO Ken Xie fired back on Check Point’s claims of firewall performance superiority, saying its rival compared a brand-new Check Point model to a two-year-old Fortinet model.

Check Point CEO Gil Shwed told investors Thursday morning that the San Carlos, Calif.-based platform security vendor’s Quantum Lightspeed 250 released last month delivers performance of 250 gigabits per second, which is faster than Fortinet’s FortiGate 1800F, which runs at 198 gigabits per second. Shwed said Check Point’s LS-250 delivers 20 percent better performance for just US$3,000 more than the 1800F.

“Fortinet built itself on this huge gap in price performance that they can deliver,” Shwed said Thursday morning. “And we are going to change that and change the dynamics in our marketplace and say that you don’t need to compromise.”

Xie (pictured above) retorted that Fortinet’s latest products are much faster than what Check Point can offer given that the FortiGate 1800F was released more than two years ago and Moore’s law dictates that product speeds will double every 18 months. Fortinet also has an edge on its competitors since the company develops its own ASIC chip while its rivals have to rely on commercially available chips on the market.

“We have a unique advantage with our own ASIC chip, which helps provide a high-speed, low-cost network security solution,” Xie told investors Thursday afternoon. “We‘re leading innovation in both space with our own ASIC, and with our secure SD-WAN 5G connection.”

In contrast, Check Point used Nvidia’s ASIC chip for the first time in its Quantum Lightspeed line of firewalls. Shwed (pictured above) characterized Nvidia’s as “the world’s most successful ASIC provider these days.”

Xie said Fortinet’s network security offerings across FortiGate, SD-WAN and 5G can fulfill a total addressable market that’s much larger than the firewall and expected to reach US$170 billion by 2025. Sunnyvale, Calif.-based Fortinet’s non-firewall business is growing faster than its firewall business and for the first time represented more than 30 percent of billings in the most recent quarter, according to Xie.

“The market is large enough for pretty much all the competitors to compete,” Xie said. ‘And that’s why we definitely have to keep up the innovation and keep up the change to keep gaining market share.”

Revenue for the quarter ended Dec. 31 soared to US$963.6 million, up 28.8 percent from US$748 million a year earlier. That edged out Seeking Alpha’s sales estimate of US$961.5 million.

Net income jumped to US$199 million, or US$1.19 per diluted share, up 35.7 percent from US$146.7 million, or US$0.89 per diluted share, the year prior. On a non-GAAP basis, net income skyrocketed to US$205.8 million, or US$1.23 per diluted share, up 17.3 percent from US$175.5 million, or US$1.06 per diluted share, the year prior. That beat Seeking Alpha’s net income estimate of US$1.15 per share.

Fortinet’s stock is up US$7.12 (2.40 percent) to US$304.12 per share in after-hours trading. Earnings were announced after the market closed Thursday.

On a full-year basis, revenue soared to US$3.34 billion, up 28.8 percent from US$2.59 billion the year prior. Net income for 2021 leapfrogged to US$606.8 million, or US$3.63 per diluted share, up 24.2 percent from US$488.5 million, or US$2.91 per diluted share, last year.

In the fourth quarter, services revenue jumped to US$584.7 million, up 27.2 percent from US$459.6 million last year. And product revenue climbed to US$378.9 million, up 31.4 percent from US$288.4 million the year prior.

For the quarter ending March 31, Fortinet expects non-GAAP net income of US$0.75 to US$0.80 per share on revenue in the range of US$865 million to US$895 million. Analysts had been expecting earnings of US$0.94 per share on revenue of US$873.3 million, according to Seeking Alpha.

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