Fortinet Reports Strong First Quarter 2015 Financial Results

Investment Strategy Continues to Pay Off: Billings Growth of 36% Year over Year is Highest in History as a Public Company

First Quarter 2015 Highlights

•Billings of $254.3 million, up 36% year over year1
•Revenues of $212.9 million, up 26% year over year
•Non-GAAP diluted net income per share of $0.081
•Cash flow from operations of $64.6 million
•Free cash flow of $59.7 million1
•Cash, cash equivalents and investments of $1.07 billion
•Deferred revenue of $600.2 million, up 33% year over year

Dubai, UAE − April 22, 2015 - Fortinet® (NASDAQ: FTNT), a global leader in high performance cyber security solutions, today announced financial results for the first quarter ended March 31, 2015.

“Fortinet had an exceptionally strong first quarter that reflects our ability to continue to execute in a strong security market and once again exceed our expectations across all key metrics,” said Ken Xie, founder, chairman and chief executive officer. “Our first quarter billings growth was the highest since becoming a public company over five years ago and is further evidence that our investment strategy is paying off. During the first quarter, we grew the number of large deals closed against competitors and added over 8,000 customers to our base of more than 200,000, which already include most of the Fortune Global 100. Looking forward, we feel Fortinet's scale is starting to provide more of a competitive differentiator on multiple fronts, and helps us provide the best solution to our customers. And Fortinet remains well positioned to maintain momentum and grow market share globally given our best-in-class integrated end-to-end network security platform, which provides superior protection against advanced cyber threats.”

Financial Highlights for the First Quarter of 2015
•Billings1: Total billings were $254.3 million for the first quarter of 2015, an increase of 36% compared to $187.6 million in the same quarter of 2014.

•Revenue: Total revenue was $212.9 million for the first quarter of 2015, an increase of 26% compared to $168.9 million in the same quarter of 2014. Within total revenue, product revenue was $97.5 million, an increase of 27% compared to the same quarter of 2014. Services and other revenue was $115.4 million, an increase of 25% compared to the same quarter of 2014.

•Deferred Revenue: Total deferred revenue was $600.2 million as of March 31, 2015, an increase of $41.4 million from $558.8 million as of December 31, 2014.

•Cash and Cash Flow2: As of March 31, 2015, cash, cash equivalents and investments were $1.07 billion, compared to $991.7 million as of December 31, 2014. In the first quarter of 2015, cash flow from operations was $64.6 million and free cash flow1 was $59.7 million.

•GAAP Operating Income: GAAP operating income was $0.9 million for the first quarter of 2015, representing a GAAP operating margin of 0.4%. GAAP operating income was $12.8 million for the same quarter of 2014, representing a GAAP operating margin of 8%.

•GAAP Net Income and Diluted Net Income Per Share: GAAP net income was $1.6 million for the first quarter of 2015, compared to GAAP net income of $8.4 million for the same quarter of 2014. GAAP diluted net income per share was $0.01 for the first quarter of 2015, compared to $0.05 for the same quarter of 2014.

•Non-GAAP Operating Income1: Non-GAAP operating income was $20.1 million for the first quarter of 2015, representing a non-GAAP operating margin of 9%. Non-GAAP operating income was $26.3 million for the same quarter of 2014, representing a non-GAAP operating margin of 16%.

•Non-GAAP Net Income and Diluted Net Income Per Share1: Non-GAAP net income was $13.5 million for the first quarter of 2015, compared to non-GAAP net income of $18.2 million for the same quarter of 2014. Non-GAAP diluted net income per share was $0.08 for the first quarter of 2015, compared to $0.11 for the same quarter of 2014.

1A reconciliation of GAAP to non-GAAP financial measures has been provided in the financial statement tables included in this press release. An explanation of these measures is also included below under the heading “Non-GAAP Financial Measures.”

2During the first quarter of 2015, there were no shares repurchased under our share repurchase program.