Billings Grow 26% and Revenues Grow 24% year-over-year

  • Billings of $187.6 million, up 26% year over year1
  • Revenues of $168.9 million, up 24% year over year
  • GAAP diluted net income per share of $0.05
  • Non-GAAP diluted net income per share of $0.111
  • Cash flow from operations of $60.9 million
  • Free cash flow of $49.6 million
  • Cash, cash equivalents and investments of $888.3 million, with no debt

SUNNYVALE, Calif. – April 23, 2014 – Fortinet® (NASDAQ: FTNT), a global leader in high-performance network security, today announced financial results for the first quarter ended March 31, 2014.

“The first quarter marked a strong start to the year, highlighted by billings, revenue, and operating profitability, each of which exceeded expectations,” said Ken Xie, founder, chairman, and chief executive officer. “Fortinet’s business momentum is being driven by our focused execution and the strength, applicability, and breadth of our technology, as evidenced by the demand for recently-introduced products such as the FortiGate-3700D and 1500D high speed, low latency next-generation enterprise data center security appliances. Given the leverage we have seen from recent growth initiatives, we remain committed to investing for growth and delivering security innovation to further extend our market share and leadership position globally.”

Financial Highlights for the First Quarter of 2014

  • Billings: Total billings were $187.6 million for the first quarter of 2014, an increase of 26% compared to $148.5 million in the same quarter of 2013.
  • Revenue: Total revenue was $168.9 million for the first quarter of 2014, an increase of 24% compared to $135.8 million in the same quarter of 2013. Within total revenue, product revenue was $76.8 million, an increase of 32% compared to the same quarter of 2013. Services and other revenue was $92.2 million, an increase of 18% compared to the same quarter of 2013.
  • Deferred Revenue: Deferred revenue was $451.3 million as of March 31, 2014, an increase of 20% compared to deferred revenue of $376.4 million as of March 31, 2013, and an increase of $18.7 million from $432.6 million as of December 31, 2013.
  • Cash and Cash Flow: As of March 31, 2014, cash, cash equivalents and investments were $888.3 million, compared to $843.0 million as of December 31, 2013. In the first quarter of 2014, cash flow from operations was $60.9 million and free cash flow was $49.6 million. Cash flow from operations and free cash flow during the first quarter of 2014 included payment to Fortinet of $20.0 million pursuant to a six year mutual covenant-not-to-sue and release agreement.
  • GAAP Operating Income: GAAP operating income was $12.8 million for the first quarter of 2014, representing a GAAP operating margin of 8%. GAAP operating income was $15.4 million for the same quarter of 2013, representing a GAAP operating margin of 11%.
  • GAAP Net Income and Diluted Net Income Per Share: GAAP net income was $8.4 million for the first quarter of 2014, based on a 39% effective tax rate for the quarter. This compares to GAAP net income of $12.2 million for the same quarter of 2013, based on a 28% effective tax rate for the quarter. GAAP diluted net income per share was $0.05 for the first quarter of 2014, based on 168.1 million weighted-average diluted shares outstanding, compared to $0.07 for the same quarter of 2013, based on 167.8 million weighted-average diluted shares outstanding.
  • Non-GAAP Operating Income: Non-GAAP operating income was $26.3 million for the first quarter of 2014, representing a non-GAAP operating margin of 16%. Non-GAAP operating income was $25.0 million for the same quarter of 2013, representing a non-GAAP operating margin of 18%.
  • Non-GAAP Net Income and Diluted Net Income Per Share: Non-GAAP net income was $18.2 million for the first quarter of 2014, based on a 33% effective tax rate for the quarter. Non-GAAP net income for the same quarter of 2013 was $17.8 million, based on a 33% effective tax rate. Non-GAAP diluted net income per share was $0.11 for the first quarter of 2014 based on 168.1 million weighted-average diluted shares outstanding, compared to $0.11 for the same quarter of 2013, based on 167.8 million weighted-average diluted shares outstanding.