Fortinet Reports Second Quarter 2012 Financial Results
• Revenues of $129.0 million, up 25% year over year
• Billings of $145.8 million, up 32% year over year1
• GAAP diluted net income per share of $0.08
• Free cash flow of $41.3 million1
• Cash, cash equivalents and investments of $644.4 million, with no debt
Dubai, UAE - July 26, 2012 - Fortinet® (NASDAQ: FTNT) - a leader in high-performance network security - today announced financial results for the second quarter ended June 30, 2012.
Financial Highlights for the Second Quarter of 2012
• Revenue: Total revenue was $129.0 million for the second quarter of 2012, an increase of 25% compared to $103.0 million in the same quarter of 2011. Within total revenue, product revenue was $61.7 million, an increase of 32% compared to the same quarter of 2011. Services revenue was $65.4 million, an increase of 24% compared to the same quarter of 2011.
• Billings1: Total billings were $145.8 million for the second quarter of 2012, an increase of 32% compared to $110.2 million in the same quarter of 2011.
• Deferred Revenue: Deferred revenue was $331.4 million as of June 30, 2012, an increase of 21% compared to deferred revenue of $273.2 million as of June 30, 2011, and up $16.8 million from $314.6 million as of March 31, 2012.
• Cash and Free Cash Flow1: As of June 30, 2012, cash, cash equivalents and investments were $644.4 million, compared to $600.3 million as of March 31, 2012. In the second quarter of 2012, free cash flow was $41.3 million.
• GAAP Operating Income: GAAP operating income was $21.0 million for the second quarter of 2012, representing a GAAP operating margin of 16%. GAAP operating income was $18.8 million for the same quarter of 2011, representing a GAAP operating margin of 18%.
• GAAP Net Income and Diluted Net Income Per Share: GAAP net income was $14.0 million for the second quarter of 2012, based on a 37% tax rate for the quarter. This compares to GAAP net income of $14.5 million for the same quarter of 2011, based on a 25% tax rate for the quarter. GAAP diluted net income per share was $0.08 for the second quarter of 2012, based on 166.1 million weighted-average diluted shares outstanding, compared to $0.09 for the same quarter of 2011, based on 163.9 million weighted-average diluted shares outstanding.
• Non-GAAP Operating Income1: Non-GAAP operating income was $28.3 million for the second quarter of 2012, representing a non-GAAP operating margin of 22%. Non-GAAP operating income was $22.2 million for the same quarter of 2011, representing a non-GAAP operating margin of 22%.
• Non-GAAP Net Income and Diluted Net Income Per Share1: Non-GAAP net income was $19.5 million for the second quarter of 2012, based on a 34% effective tax rate for the quarter. Non-GAAP net income for the same quarter of 2011 was $15.3 million, based on a 33% effective tax rate. Non-GAAP diluted net income per share was $0.12 for the second quarter of 2012 based on 166.1 million weighted-average diluted shares outstanding, compared to $0.09 for the same quarter of 2011, based on 163.9 million weighted-average diluted shares outstanding.
1 A 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.”
Management Commentary:
Ken Xie, founder, president and chief executive officer of Fortinet, stated: “Our strong performance in the second quarter highlights the demand for our network security offerings, which deliver unmatched performance and broad, flexible deployment options. We had healthy growth across all geographies and continued market share gains, especially with large U.S. enterprises. The momentum for Fortinet is high and we are excited about our technology roadmap for the second half of the year.”
Ken Goldman, chief financial officer of Fortinet, stated: “We are very pleased with our second quarter results, particularly our ability to achieve billings growth of 32%, which is the strongest increase we've had since the first quarter of 2011. Our outperformance and ability to continue to grow more than twice the rate of our core market in challenging economic conditions is significant, and evidence that our vision and go-to-market strategy are working and our investments in the business are paying off.”
Conference Call Details
Fortinet will host a conference call today, July 25, 2012, at 1:30 p.m. Pacific Time (4:30 p.m. Eastern Time) to discuss its financial results. To access this call, dial (877) 303-6913 (domestic) or (224) 357-2188 (international) with conference ID # 99551686. A live webcast of the conference call and supplemental slides will be accessible from the Investor Relations page of Fortinet's website at http://investor.fortinet.com and a replay will be archived and accessible at: http://investor.fortinet.com/events.cfm. A replay of this conference call can also be accessed through August 8, 2012, by dialing (855) 859-2056 (domestic) or (404) 537-3406 (international) with conference ID# 99551686.
Following Fortinet's earnings conference call, the Company will host an additional question-and-answer session at 3:30 p.m. Pacific Time (6:30 p.m. Eastern Time) to provide an opportunity for financial analysts and investors to ask more detailed product and financial questions. To access this call, dial (877) 303-6913 (domestic) or (224) 357-2188 (international) with conference ID # 99562437. This follow-up call will be webcast live and accessible at http://investor.fortinet.com, and a replay will be archived and available after the call at http://investor.fortinet.com/events.cfm. A replay of this conference call will also be available through August 8, 2012 by dialing (855) 859-2056 (domestic) or (404) 537-3406 (international) with conference ID # 99562437.
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