Second Quarter 2022 Highlights
- Product income of $400.7 million, up 34% 12 months over 12 months
- Whole income of $1.03 billion, up 29% 12 months over 12 months
- Bookings of $1.38 billion, up 42% 12 months over 12 months1
- Billings of $1.30 billion, up 36% 12 months over 12 months2
- Deferred income of $3.93 billion, up 35% 12 months over 12 months
- GAAP working margin of 19.0%
- Non-GAAP working margin of 24.8%2
- GAAP diluted internet revenue per share attributable to Fortinet, Inc. of $0.213
- Non-GAAP diluted internet revenue per share attributable to Fortinet, Inc. of $0.242,3
- Money stream from operations of $323.4 million
- Free money stream of $283.5 million2
- Money paid for share repurchases of $800.0 million
SUNNYVALE, Calif., Aug. 03, 2022 (GLOBE NEWSWIRE) — Fortinet® (Nasdaq: FTNT), a world chief in broad, built-in and automatic cybersecurity options, at this time introduced monetary outcomes for the second quarter ended June 30, 2022.
“We delivered robust income and billings progress within the second quarter pushed by an over 50% year-over-year enhance within the variety of transactions bigger than a million {dollars}. Massive enterprise firms proceed to favor Fortinet’s trade main price for efficiency benefit and built-in platform technique,” stated Ken Xie, Founder, Chairman, and Chief Government Officer. “Fortinet’s market share beneficial properties are being pushed by the convergence of networking and safety and an accelerating concentrate on vendor consolidation with our Core Platform and Platform Extension options designed to safe our clients’ whole infrastructure from the info middle to the cloud.”
Monetary Highlights for the Second Quarter of 2022
- Income: Whole income was $1.03 billion for the second quarter of 2022, a rise of 28.6% in comparison with $801.1 million for a similar quarter of 2021.
- Product Income: Product income was $400.7 million for the second quarter of 2022, a rise of 34.3% in comparison with $298.3 million for a similar quarter of 2021.
- Service Income: Service income was $629.4 million for the second quarter of 2022, a rise of 25.2% in comparison with $502.8 million for a similar quarter of 2021.
- Bookings1: Whole bookings had been $1.38 billion for the second quarter of 2022, a rise of 42.1% in comparison with $967.9 million for a similar quarter of 2021. Backlog was $349.9 million as of June 30, 2022, a rise of $188.0 million in comparison with $161.9 million as of December 31, 2021.
- Billings2: Whole billings had been $1.30 billion for the second quarter of 2022, a rise of 35.7% in comparison with $960.9 million for a similar quarter of 2021.
- Deferred Income: Whole deferred income was $3.93 billion as of June 30, 2022, a rise of 35.3% in comparison with $2.91 billion as of June 30, 2021.
- GAAP Working Revenue and Margin: GAAP working revenue was $195.3 million for the second quarter of 2022, representing a GAAP working margin of 19.0%. GAAP working revenue was $147.5 million for a similar quarter of 2021, representing a GAAP working margin of 18.4%.
- Non-GAAP Working Revenue and Margin2: Non-GAAP working revenue was $255.4 million for the second quarter of 2022, representing a non-GAAP working margin of 24.8%. Non-GAAP working revenue was $203.3 million for a similar quarter of 2021, representing a non-GAAP working margin of 25.4%.
- GAAP Internet Revenue and Diluted Internet Revenue Per Share Attributable to Fortinet, Inc.3: GAAP internet revenue was $173.5 million for the second quarter of 2022, in comparison with GAAP internet revenue of $137.5 million for a similar quarter of 2021. GAAP diluted internet revenue per share was $0.21 for the second quarter of 2022, based mostly on 810.1 million diluted weighted-average shares excellent, in comparison with GAAP diluted internet revenue per share of $0.16 for a similar quarter of 2021, based mostly on 835.4 million diluted weighted-average shares excellent.
- Non-GAAP Internet Revenue and Diluted Internet Revenue Per Share Attributable to Fortinet, Inc.2,3: Non-GAAP internet revenue was $194.1 million for the second quarter of 2022, in comparison with non-GAAP internet revenue of $158.7 million for a similar quarter of 2021. Non-GAAP diluted internet revenue per share was $0.24 for the second quarter of 2022, based mostly on 810.1 million diluted weighted-average shares excellent, in comparison with $0.19 for a similar quarter of 2021, based mostly on 835.4 million diluted weighted-average shares excellent.
- Money Movement: Money stream from operations was $323.4 million for the second quarter of 2022, in comparison with $418.2 million for a similar quarter of 2021.
- Free Money Movement2: Free money stream was $283.5 million for the second quarter of 2022, in comparison with $394.7 million for a similar quarter of 2021.
- Share Repurchase Program3: In the course of the three and 6 months ended June 30, 2022, Fortinet repurchased 14.4 million and 25.8 million shares of its widespread inventory at a median worth of $55.45 and $57.82 per share and for an mixture buy worth of $800.0 million and $1.49 billion, respectively. In the course of the three and 6 months ended June 30, 2021, Fortinet repurchased 2.3 million shares of its widespread inventory at a median worth of $40.28 per share and for an mixture buy worth of $91.6 million. In July 2022, Fortinet’s board of administrators licensed a $1.0 billion enhance within the licensed inventory repurchase below our share repurchase program. As of August 1, 2022, roughly $1.03 billion remained out there for future share repurchases.
Steering
For the third quarter of 2022, Fortinet at present expects:
- Income within the vary of $1.105 billion to $1.135 billion
- Billings within the vary of $1.385 billion to $1.415 billion
- Non-GAAP gross margin within the vary of 75.0% to 76.0%
- Non-GAAP working margin within the vary of 25.0% to 26.0%
- Diluted non-GAAP internet revenue per share attributable to Fortinet, Inc. within the vary of $0.26 to $0.28, assuming a non-GAAP efficient tax price of 17%. This assumes a diluted share depend of 810 million to 820 million.
For the fiscal 12 months 2022, Fortinet at present expects:
- Income within the vary of $4.350 billion to $4.400 billion
- Service income within the vary of $2.620 billion to $2.670 billion
- Billings within the vary of $5.560 billion to $5.640 billion
- Non-GAAP gross margin within the vary of 75.0% to 76.0%
- Non-GAAP working margin within the vary of 25.0% to 26.0%
- Diluted non-GAAP internet revenue per share attributable to Fortinet, Inc. within the vary of $1.01 to $1.06, assuming a non-GAAP efficient tax price of 17%. This assumes a diluted share depend of 810 million to 820 million.
These statements are ahead trying and precise outcomes could differ materially. Consult with the Ahead-Trying Statements part beneath for info on the components that would trigger our precise outcomes to vary materially from these forward-looking statements.
Our steerage with respect to non-GAAP monetary measures excludes stock-based compensation, amortization of acquired intangible property and achieve on mental property issues. Now we have not reconciled our steerage with respect to non-GAAP monetary measures to the corresponding GAAP measures as a result of sure objects that impression these measures are unsure or out of our management, or can’t be moderately predicted. Accordingly, a reconciliation of those non-GAAP monetary measures to the corresponding GAAP measures is just not out there with out unreasonable effort.
1 Bookings represents the whole worth of all orders acquired in the course of the interval. Backlog represents orders acquired however not fulfilled and excludes Alaxala Networks Company. When an order is fulfilled, billings and income are acknowledged.
2 A reconciliation of GAAP to non-GAAP measures has been supplied within the monetary assertion tables included on this press launch. A proof of those measures can be included beneath below the heading “Non-GAAP Monetary Measures”.
3 All share and per share quantities offered herein have been retroactively adjusted to replicate the five-for-one ahead inventory cut up which was efficient June 22, 2022.
Convention Name Particulars
Fortinet will host a convention name at this time at 1:30 p.m. Pacific Time (4:30 p.m. Jap Time) to debate the earnings outcomes. A reside webcast of the convention name and supplemental slides might be accessible from the Investor Relations web page of Fortinet’s web site at https://investor.fortinet.com and a replay might be archived and accessible at https://investor.fortinet.com/events-and-presentations.
Third Quarter 2022 Convention Participation Schedule:
- KeyBanc Know-how Management Convention
August 8, 2022
- Stifel Tech Government Summit Deer Valley
August 29-31, 2022
- Citibank Investor Convention
September 7, 2022
- Evercore Investor Convention
September 8, 2022
- Goldman Sachs Communicopia Convention
September 12, 2022
Members of Fortinet’s administration workforce are anticipated to current at these conferences and focus on the newest firm methods and initiatives. Fortinet’s convention shows are anticipated to be out there by way of webcast on the corporate’s website. To entry probably the most up to date info, pre-register and hearken to the webcast of every occasion, please go to the Investor Presentation & Occasions web page of Fortinet’s web site at https://investor.fortinet.com/events-and-presentations. The schedule is topic to alter.
About Fortinet (www.fortinet.com)
Fortinet (NASDAQ: FTNT) makes attainable a digital world that we will belief by means of its mission to guard individuals, units and knowledge in every single place. Because of this most of the world’s largest enterprises, service suppliers and authorities organizations select Fortinet to securely speed up their digital journey. The Fortinet Core Platform and Platform Extension merchandise ship broad, built-in and automatic protections throughout the complete digital assault floor, securing crucial units, knowledge, functions, and connections from the info middle to the cloud to the house workplace. The Fortinet NSE Coaching Institute, an initiative of Fortinet’s Coaching Development Agenda, supplies one of many largest and broadest coaching packages within the trade to make cyber coaching and new profession alternatives out there to everybody. Be taught extra at https://www.fortinet.com, the Fortinet Blog or FortiGuard Labs.
Copyright © 2022 Fortinet, Inc. All rights reserved. The symbols ® and ™ denote respectively federally registered logos and customary legislation logos of Fortinet, Inc., its subsidiaries and associates. Fortinet’s logos embody, however should not restricted to, the next: Fortinet, the Fortinet emblem, FortiGate, FortiOS, FortiGuard, FortiCare, FortiAnalyzer, FortiManager, FortiASIC, FortiClient, FortiCloud, FortiMail, FortiSandbox, FortiADC, FortiAI, FortiAIOps, FortiAntenna, FortiAP, FortiAPCam, FortiAuthenticator, FortiCache, FortiCall, FortiCam, FortiCamera, FortiCarrier, FortiCASB, FortiCentral, FortiConnect, FortiController, FortiConverter, FortiCWP, FortiDB, FortiDDoS, FortiDeceptor, FortiDeploy, FortiDevSec, FortiEdge, FortiEDR, FortiExplorer, FortiExtender, FortiFirewall, FortiFone, FortiGSLB, FortiHypervisor, FortiInsight, FortiIsolator, FortiLAN, FortiLink, FortiMoM, FortiMonitor, FortiNAC, FortiNDR, FortiPenTest, FortiPhish, FortiPlanner, FortiPolicy, FortiPortal, FortiPresence, FortiProxy, FortiRecon, FortiRecorder, FortiSASE, FortiSDNConnector, FortiSIEM, FortiSMS, FortiSOAR, FortiSwitch, FortiTester, FortiToken, FortiTrust, FortiVoice, FortiWAN, FortiWeb, FortiWiFi, FortiWLC, FortiWLM and FortiXDR. Different logos belong to their respective house owners. Fortinet has not independently verified statements or certifications herein attributed to 3rd events and Fortinet doesn’t independently endorse such statements. However something on the contrary herein, nothing herein constitutes a guaranty, assure, contract, binding specification or different binding dedication by Fortinet or any indication of intent associated to a binding dedication, and efficiency and different specification info herein could also be distinctive to sure environments.
FTNT-F
Ahead-Trying Statements
This press launch incorporates forward-looking statements that contain dangers and uncertainties. These forward-looking statements embody statements concerning any indications associated to future market share beneficial properties, steerage and expectations round future monetary outcomes, together with steerage and expectations for the third quarter and full 12 months 2022, statements concerning the momentum in our enterprise and future progress expectations, and any statements concerning our market alternative and market measurement, and enterprise momentum. Though we try and be correct in making forward-looking statements, it’s attainable that future circumstances may differ from the assumptions on which such statements are based mostly such that precise outcomes are materially completely different from our forward-looking statements on this launch. Vital components that would trigger outcomes to vary materially from the statements herein embody the next: basic financial dangers, together with these brought on by the COVID-19 pandemic, the struggle in Ukraine, financial challenges, fears of a recession, and any precise recession, and the results of elevated inflation in sure geographies; considerably heightened provide chain challenges because of the present world surroundings; adverse impacts from the COVID-19 pandemic on gross sales, billings, income, demand and shopping for patterns, part provide and talent to fabricate merchandise to fulfill demand in a well timed vogue, and prices resembling attainable elevated prices for transport and elements; world financial circumstances, country-specific financial circumstances, and overseas foreign money dangers; competitiveness within the safety market; the dynamic nature of the safety market and its services and products; particular financial dangers worldwide and in numerous geographies, and amongst completely different buyer segments; uncertainty concerning demand and elevated enterprise and renewals from present clients; uncertainties round continued success in gross sales progress and market share beneficial properties; uncertainties in market alternatives and the market measurement; precise or perceived vulnerabilities in our provide chain, services or products, and any precise or perceived breach of our community or our clients’ networks; longer gross sales cycles, notably for bigger enterprise, service suppliers, authorities and different giant group clients; the effectiveness of our salesforce and failure to transform gross sales pipeline into last gross sales; dangers related to profitable implementation of a number of built-in software program merchandise and different product performance dangers; dangers related to integrating acquisitions and modifications in circumstances and plans related therewith, together with, amongst different dangers, modifications in plans associated to product and providers integrations, product and providers plans and gross sales methods; gross sales and advertising and marketing execution dangers; execution dangers round new product growth and introductions and innovation; litigation and disputes and the potential price, distraction and harm to gross sales and status prompted thereby or by different components; cybersecurity threats, breaches and different disruptions; market acceptance of latest services and products; the power to draw and retain personnel; modifications in technique; dangers related to administration of progress; prolonged gross sales and implementation cycles, notably in bigger organizations; technological modifications that make our services and products much less aggressive; dangers related to the adoption of, and demand for, our services and products basically and by particular buyer segments, together with these brought on by the COVID-19 pandemic; competitors and pricing strain; product stock shortages for any cause, together with these brought on by the COVID-19 pandemic, the struggle in Ukraine and the results of elevated inflation in sure geographies; dangers related to enterprise disruption brought on by pure disasters and well being emergencies resembling earthquakes, fires, energy outages, typhoons, floods, well being epidemics and viruses such because the COVID-19 pandemic, and by artifical occasions resembling civil unrest, labor disruption, worldwide commerce disputes, worldwide conflicts such because the struggle in Ukraine, terrorism, wars, and significant infrastructure assaults; tariffs, commerce disputes and different commerce boundaries, and adverse impression on gross sales based mostly on geo-political dynamics and disputes and protectionist insurance policies; any political and authorities disruption world wide, together with the impression of any future shutdowns of the U.S. authorities; and the opposite threat components set forth occasionally in our most up-to-date Annual Report on Type 10-Okay, our most up-to-date Quarterly Report on Type 10-Q and our different filings with the Securities and Alternate Fee (SEC), copies of which can be found freed from cost on the SEC’s web site at www.sec.gov or upon request from our investor relations division. All forward-looking statements herein replicate our opinions solely as of the date of this launch, and we undertake no obligation, and expressly disclaim any obligation, to replace forward-looking statements herein in mild of latest info or future occasions.
COVID-19 Influence
Whereas the broader implications of the COVID-19 pandemic on our staff and general monetary efficiency stay unsure, now we have seen sure impacts on our enterprise and operations, outcomes of operations, monetary situation, money flows, liquidity and capital and monetary sources. Going ahead, the scenario is unsure, quickly altering and exhausting to foretell, and the COVID-19 pandemic could have a cloth adverse impression on our future durations, together with our outcomes for the three months ending September 30, 2022, our annual outcomes for 2022, and past. To focus on the uncertainty remaining for the three-month interval ending September 30, 2022, it ought to be famous that, as a consequence of buyer shopping for patterns and the efforts of our gross sales pressure and channel companions to fulfill or exceed quarterly quotas, now we have traditionally acquired a considerable portion of every quarter’s gross sales orders and generated a considerable portion of every quarter’s billings and income over the past two weeks of the quarter. Moreover, considerably heightened provide chain challenges are impacting companies across the globe. If we expertise important modifications in our billings progress charges or if we’re unable to provide product to fulfill demand, it should impression product income within the present quarter and FortiGuard and FortiCare service revenues in subsequent quarters, as we promote annual and multi-year service contracts which might be acknowledged ratably over the contractual service time period. As well as, the broader implications of the pandemic on our enterprise and operations and our monetary outcomes, together with the extent to which the results of the pandemic will impression future outcomes and progress within the cybersecurity trade, stay unsure. The length and severity of the financial downturn from the pandemic could negatively impression our enterprise and operations, outcomes of operations, monetary situation, money flows, liquidity and capital and monetary sources in a cloth manner. In consequence, the results of the pandemic is probably not totally mirrored in our outcomes of operations till future durations.
Non-GAAP Monetary Measures
Now we have supplied on this launch monetary info that has not been ready in accordance with U.S. Usually Accepted Accounting Rules (GAAP). These non-GAAP monetary and liquidity measures should not based mostly on any standardized methodology prescribed by GAAP and should not essentially similar to related measures offered by different firms. We use these non-GAAP monetary measures internally in analyzing our monetary outcomes and consider they’re helpful to traders, as a complement to GAAP measures, in evaluating our ongoing operational efficiency. We consider that using these non-GAAP monetary measures supplies a further instrument for traders to make use of in evaluating ongoing working outcomes and tendencies and in evaluating our monetary outcomes with peer firms, a lot of which current related non-GAAP monetary measures to traders.
Non-GAAP monetary measures shouldn’t be thought-about in isolation from, or as an alternative to, monetary info ready in accordance with GAAP. Buyers are inspired to assessment the reconciliation of those non-GAAP monetary measures to their most instantly comparable GAAP monetary measures supplied within the monetary assertion tables beneath.
Billings (non-GAAP). We outline billings as income acknowledged in accordance with GAAP plus the change in deferred income from the start to the tip of the interval, much less any deferred income balances acquired from enterprise mixture(s) and adjustment as a consequence of adoption of latest accounting customary in the course of the interval. We contemplate billings to be a helpful metric for administration and traders as a result of billings drive present and future income, which is a crucial indicator of the well being and viability of our enterprise. There are a selection of limitations associated to using billings as a substitute of GAAP income. First, billings embody quantities that haven’t but been acknowledged as income and are impacted by the time period of safety and assist agreements. Second, we could calculate billings in a way that’s completely different from peer firms that report related monetary measures. Administration accounts for these limitations by offering particular info concerning GAAP income and evaluating billings along with GAAP income.
Free money stream (non-GAAP). We outline free money stream as internet money supplied by working actions minus purchases of property and gear and excluding any important non-recurring objects, resembling proceeds from mental property matter. We consider free money stream to be a liquidity measure that gives helpful info to administration and traders about the amount of money generated by the enterprise that, after capital expenditures and internet of proceeds from mental property matter, can be utilized for strategic alternatives, together with repurchasing excellent widespread inventory, investing in our enterprise, making strategic acquisitions and strengthening the stability sheet. A limitation of utilizing free money stream moderately than the GAAP measures of money supplied by or utilized in working actions, investing actions, and financing actions is that free money stream doesn’t symbolize the whole enhance or lower within the money and money equivalents stability for the interval as a result of it excludes money flows from important non-recurring objects, resembling proceeds from mental property matter, investing actions apart from capital expenditures and money flows from financing actions. Administration accounts for this limitation by offering details about our capital expenditures and different investing and financing actions on the face of the money stream assertion and below the caption “Administration’s Dialogue and Evaluation of Monetary Situation and Outcomes of Operations—Liquidity and Capital Assets” in our most up-to-date Quarterly Report on Type 10-Q and Annual Report on Type 10-Okay and by presenting money flows from investing and financing actions in our reconciliation of free money stream. As well as, you will need to notice that different firms, together with firms in our trade, could not use free money stream, could calculate free money stream in a special method than we do or could use different monetary measures to guage their efficiency, all of which may scale back the usefulness of free money stream as a comparative measure.
Non-GAAP working revenue and working margin. We outline non-GAAP working revenue as working revenue plus stock-based compensation, impairment and amortization of acquired intangible property, much less achieve on mental property matter and, when relevant, different important non-recurring objects in a given quarter, resembling non-recurring beneficial properties or losses on litigation-related issues. Non-GAAP working margin is outlined as non-GAAP working revenue divided by GAAP income. We contemplate these non-GAAP monetary measures to be helpful metrics for administration and traders as a result of they exclude the objects famous above in order that our administration and traders can examine our recurring core enterprise working outcomes over a number of durations. There are a selection of limitations associated to using non-GAAP working revenue as a substitute of working revenue calculated in accordance with GAAP. First, non-GAAP working revenue excludes the objects famous above. Second, the elements of the prices that we exclude from our calculation of non-GAAP working revenue could differ from the elements that peer firms exclude after they report their non-GAAP outcomes of operations. Administration accounts for these limitations by offering particular info concerning the GAAP quantities excluded from non-GAAP working revenue and evaluating non-GAAP working revenue along with working revenue calculated in accordance with GAAP.
Non-GAAP internet revenue and diluted internet revenue per share attributable to Fortinet, Inc. We outline non-GAAP internet revenue as internet revenue or loss plus the objects famous above below non-GAAP working revenue and working margin. As well as, we regulate non-GAAP internet revenue and diluted internet revenue per share for beneficial properties or losses on investments in privately held firms, a tax adjustment required for an efficient tax price on a non-GAAP foundation and changes attributable to non-controlling pursuits, which differs from the GAAP efficient tax price. We outline non-GAAP diluted internet revenue per share as non-GAAP internet revenue divided by the non-GAAP diluted weighted-average shares excellent. We contemplate these non-GAAP monetary measures to be helpful metrics for administration and traders for a similar causes that we use non-GAAP working revenue and non-GAAP working margin. Nonetheless, with a view to present a extra full image of our recurring core enterprise working outcomes, we embody in non-GAAP internet revenue and non-GAAP diluted internet revenue per share, the tax adjustment required leading to an efficient tax price on a non-GAAP foundation, which regularly differs from the GAAP tax price. We consider the non-GAAP efficient tax charges we use are cheap estimates of normalized tax charges for our present and prior fiscal years below our world working construction. The identical limitations described above concerning our use of non-GAAP working revenue and non-GAAP working margin apply to our use of non-GAAP internet revenue and non-GAAP diluted internet revenue per share. We account for these limitations by offering particular info concerning the GAAP quantities excluded from non-GAAP internet revenue and non-GAAP diluted internet revenue per share and evaluating non-GAAP internet revenue and non-GAAP diluted internet revenue per share along with internet revenue or loss and diluted internet revenue per share calculated in accordance with GAAP.
FORTINET, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited, in thousands and thousands)
June 30, 2022 |
December 31, 2021 |
||||||
ASSETS | |||||||
CURRENT ASSETS: | |||||||
Money and money equivalents | $ | 710.0 | $ | 1,319.1 | |||
Quick-term investments | 1,020.6 | 1,194.0 | |||||
Marketable fairness securities | 24.3 | 38.6 | |||||
Accounts receivable—internet | 919.5 | 807.7 | |||||
Stock | 195.2 | 175.8 | |||||
Pay as you go bills and different present property | 83.3 | 65.4 | |||||
Whole present property | 2,952.9 | 3,600.6 | |||||
LONG-TERM INVESTMENTS | 188.5 | 440.8 | |||||
PROPERTY AND EQUIPMENT—NET | 814.6 | 687.6 | |||||
DEFERRED CONTRACT COSTS | 456.9 | 423.3 | |||||
DEFERRED TAX ASSETS | 480.2 | 342.3 | |||||
GOODWILL AND OTHER INTANGIBLE ASSETS—NET | 166.7 | 188.7 | |||||
OTHER ASSETS | 234.7 | 235.8 | |||||
TOTAL ASSETS | $ | 5,294.5 | $ | 5,919.1 | |||
LIABILITIES AND EQUITY (DEFICIT) | |||||||
CURRENT LIABILITIES: | |||||||
Accounts payable | $ | 193.1 | $ | 148.4 | |||
Accrued liabilities | 241.2 | 197.3 | |||||
Accrued payroll and compensation | 187.4 | 195.0 | |||||
Deferred income | 2,013.2 | 1,777.4 | |||||
Whole present liabilities | 2,634.9 | 2,318.1 | |||||
DEFERRED REVENUE | 1,918.8 | 1,675.5 | |||||
INCOME TAX LIABILITIES | 67.1 | 79.5 | |||||
LONG-TERM DEBT | 989.4 | 988.4 | |||||
OTHER LIABILITIES | 63.9 | 59.2 | |||||
Whole liabilities | 5,674.1 | 5,120.7 | |||||
COMMITMENTS AND CONTINGENCIES | |||||||
EQUITY (DEFICIT): | |||||||
Frequent inventory | 0.8 | 0.8 | |||||
Extra paid-in capital | 1,237.3 | 1,253.6 | |||||
Accrued different complete loss | (23.4 | ) | (4.8 | ) | |||
Accrued deficit | (1,607.6 | ) | (467.9 | ) | |||
Whole Fortinet, Inc. stockholders’ fairness (deficit) | (392.9 | ) | 781.7 | ||||
Non-controlling pursuits | 13.3 | 16.7 | |||||
Whole fairness (deficit) | (379.6 | ) | 798.4 | ||||
TOTAL LIABILITIES AND EQUITY (DEFICIT) | $ | 5,294.5 | $ | 5,919.1 | |||
FORTINET, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited, in thousands and thousands, besides per share quantities)
Three Months Ended | Six Months Ended | ||||||||||||||
June 30, 2022 |
June 30, 2021 |
June 30, 2022 |
June 30, 2021 |
||||||||||||
REVENUE: | |||||||||||||||
Product | $ | 400.7 | $ | 298.3 | $ | 771.7 | $ | 539.0 | |||||||
Service | 629.4 | 502.8 | 1,213.2 | 972.4 | |||||||||||
Whole income | 1,030.1 | 801.1 | 1,984.9 | 1,511.4 | |||||||||||
COST OF REVENUE: | |||||||||||||||
Product | 155.2 | 115.6 | 316.2 | 206.9 | |||||||||||
Service | 95.6 | 71.3 | 188.4 | 136.6 | |||||||||||
Whole price of income | 250.8 | 186.9 | 504.6 | 343.5 | |||||||||||
GROSS PROFIT: | |||||||||||||||
Product | 245.5 | 182.7 | 455.5 | 332.1 | |||||||||||
Service | 533.8 | 431.5 | 1,024.8 | 835.8 | |||||||||||
Whole gross revenue | 779.3 | 614.2 | 1,480.3 | 1,167.9 | |||||||||||
OPERATING EXPENSES: | |||||||||||||||
Analysis and growth | 124.3 | 106.6 | 249.2 | 203.8 | |||||||||||
Gross sales and advertising and marketing | 415.5 | 326.9 | 803.1 | 630.9 | |||||||||||
Common and administrative | 45.4 | 34.4 | 84.0 | 66.4 | |||||||||||
Achieve on mental property matter | (1.2 | ) | (1.2 | ) | (2.3 | ) | (2.3 | ) | |||||||
Whole working bills | 584.0 | 466.7 | 1,134.0 | 898.8 | |||||||||||
OPERATING INCOME | 195.3 | 147.5 | 346.3 | 269.1 | |||||||||||
INTEREST INCOME | 2.4 | 1.2 | 3.7 | 2.3 | |||||||||||
INTEREST EXPENSE | (4.5 | ) | (4.5 | ) | (9.0 | ) | (5.8 | ) | |||||||
OTHER INCOME (EXPENSE)—NET | (9.3 | ) | 0.8 | (18.4 | ) | (1.2 | ) | ||||||||
INCOME BEFORE INCOME TAXES AND LOSS FROM EQUITY METHOD INVESTMENT | 183.9 | 145.0 | 322.6 | 264.4 | |||||||||||
PROVISION FOR (BENEFIT FROM) INCOME TAXES | 2.4 | 7.5 | (5.7 | ) | 19.7 | ||||||||||
LOSS FROM EQUITY METHOD INVESTMENT | (8.1 | ) | — | (16.6 | ) | — | |||||||||
NET INCOME INCLUDING NON-CONTROLLING INTERESTS | 173.4 | 137.5 | 311.7 | 244.7 | |||||||||||
Much less: NET LOSS ATTRIBUTABLE TO NON-CONTROLLING INTERESTS, NET OF TAX | (0.1 | ) | — | (0.2 | ) | — | |||||||||
NET INCOME ATTRIBUTABLE TO FORTINET, INC. | $ | 173.5 | $ | 137.5 | $ | 311.9 | $ | 244.7 | |||||||
Internet revenue per share attributable to Fortinet, Inc.(a): | |||||||||||||||
Primary | $ | 0.22 | $ | 0.17 | $ | 0.39 | $ | 0.30 | |||||||
Diluted | $ | 0.21 | $ | 0.16 | $ | 0.38 | $ | 0.29 | |||||||
Weighted-average shares used to compute internet revenue per share attributable to Fortinet, Inc.(a): | |||||||||||||||
Primary | 795.4 | 816.7 | 799.4 | 815.9 | |||||||||||
Diluted | 810.1 | 835.4 | 815.4 | 833.7 | |||||||||||
(a) All share and per share quantities offered herein have been retroactively adjusted to replicate the five-for-one ahead inventory cut up which was efficient June 22, 2022.
FORTINET, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited, in thousands and thousands)
Six Months Ended | |||||||
June 30, 2022 |
June 30, 2021 |
||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | |||||||
Internet revenue together with non-controlling pursuits | $ | 311.7 | $ | 244.7 | |||
Changes to reconcile internet revenue to internet money supplied by working actions: | |||||||
Inventory-based compensation | 107.9 | 102.1 | |||||
Amortization of deferred contract prices | 107.1 | 81.8 | |||||
Depreciation and amortization | 50.6 | 36.2 | |||||
Amortization of funding premiums | 2.8 | 2.9 | |||||
Loss from fairness methodology funding | 16.6 | — | |||||
Different | 22.8 | 0.3 | |||||
Modifications in working property and liabilities, internet of impression of enterprise combos: | |||||||
Accounts receivable—internet | (119.3 | ) | 135.6 | ||||
Stock | (31.2 | ) | (20.1 | ) | |||
Pay as you go bills and different present property | (18.2 | ) | (16.4 | ) | |||
Deferred contract prices | (140.6 | ) | (124.8 | ) | |||
Deferred tax property | (136.3 | ) | (25.8 | ) | |||
Different property | (16.7 | ) | (11.8 | ) | |||
Accounts payable | 52.7 | (9.5 | ) | ||||
Accrued liabilities | 30.1 | 21.3 | |||||
Accrued payroll and compensation | (6.8 | ) | 18.7 | ||||
Different liabilities | 5.7 | (1.2 | ) | ||||
Deferred income | 480.6 | 300.1 | |||||
Internet money supplied by working actions | 719.5 | 734.1 | |||||
CASH FLOWS FROM INVESTING ACTIVITIES: | |||||||
Purchases of investments | (389.1 | ) | (1,262.5 | ) | |||
Gross sales of investments | 3.0 | 71.4 | |||||
Maturities of investments | 797.3 | 600.3 | |||||
Purchases of property and gear | (162.5 | ) | (75.6 | ) | |||
Purchases of funding in privately held firm | — | (75.0 | ) | ||||
Funds made in reference to enterprise combos, internet of money acquired | — | (10.3 | ) | ||||
Internet money supplied by (utilized in) investing actions | 248.7 | (751.7 | ) | ||||
CASH FLOWS FROM FINANCING ACTIVITIES: | |||||||
Proceeds from long-term borrowings, internet of low cost and underwriting charges | — | 989.4 | |||||
Funds for debt issuance prices | — | (2.4 | ) | ||||
Repurchase and retirement of widespread inventory | (1,491.2 | ) | (91.6 | ) | |||
Proceeds from issuance of widespread inventory | 15.9 | 15.8 | |||||
Taxes paid associated to internet share settlement of fairness awards | (99.9 | ) | (76.0 | ) | |||
Different | (1.1 | ) | (0.1 | ) | |||
Internet money supplied by (utilized in) financing actions | (1,576.3 | ) | 835.1 | ||||
EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS | (1.0 | ) | — | ||||
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | (609.1 | ) | 817.5 | ||||
CASH AND CASH EQUIVALENTS—Starting of interval | 1,319.1 | 1,061.8 | |||||
CASH AND CASH EQUIVALENTS—Finish of interval | $ | 710.0 | $ | 1,879.3 | |||
Reconciliations of non-GAAP outcomes of operations measures to the closest comparable GAAP measures
(Unaudited, in thousands and thousands, besides per share quantities)
Reconciliation of internet money supplied by working actions to free money stream
Three Months Ended | |||||||
June 30, 2022 |
June 30, 2021 |
||||||
Internet money supplied by working actions | $ | 323.4 | $ | 418.2 | |||
Much less: Purchases of property and gear | (39.9 | ) | (23.5 | ) | |||
Free money stream | $ | 283.5 | $ | 394.7 | |||
Internet money supplied by (utilized in) investing actions | $ | 294.1 | $ | (278.2 | ) | ||
Internet money utilized in financing actions | $ | (830.3 | ) | $ | (120.9 | ) | |
Reconciliation of GAAP working revenue to non-GAAP working revenue, working margin, internet revenue attributable to Fortinet, Inc. and diluted internet revenue per share attributable to Fortinet, Inc.
Three Months Ended June 30, 2022 | Three Months Ended June 30, 2021 | ||||||||||||||||||||||
GAAP Outcomes | Changes | Non-GAAP Outcomes | GAAP Outcomes | Changes | Non-GAAP Outcomes | ||||||||||||||||||
Working revenue | $ | 195.3 | $ | 60.1 | (a) | $ | 255.4 | $ | 147.5 | $ | 55.8 | (b) | $ | 203.3 | |||||||||
Working margin | 19.0 | % | 24.8 | % | 18.4 | % | 25.4 | % | |||||||||||||||
Changes: | |||||||||||||||||||||||
Inventory-based compensation | 55.3 | 53.5 | |||||||||||||||||||||
Amortization of acquired intangible property | 6.0 | 3.5 | |||||||||||||||||||||
Achieve on mental property matter | (1.2 | ) | (1.2 | ) | |||||||||||||||||||
Tax adjustment | (39.1 | ) | (c) | (34.6 | ) | (c) | |||||||||||||||||
Changes attributable non-controlling pursuits | (0.4 | ) | (d) | — | |||||||||||||||||||
Internet revenue attributable to Fortinet, Inc. | $ | 173.5 | $ | 20.6 | $ | 194.1 | $ | 137.5 | $ | 21.2 | $ | 158.7 | |||||||||||
Diluted internet revenue per share attributable to Fortinet, Inc.(e) | $ | 0.21 | $ | 0.24 | $ | 0.16 | $ | 0.19 | |||||||||||||||
Shares utilized in diluted internet revenue per share attributable to Fortinet, Inc. calculations(e) | 810.1 | 810.1 | 835.4 | 835.4 | |||||||||||||||||||
(a) To exclude $55.3 million of stock-based compensation and $6.0 million of amortization of acquired intangible property, offset by a $1.2 million achieve on mental property matter within the three months ended June 30, 2022.
(b) To exclude $53.5 million of stock-based compensation and $3.5 million of amortization of acquired intangible property, offset by a $1.2 million achieve on mental property matter within the three months ended June 30, 2021.
(c) Non-GAAP monetary info is adjusted to an efficient tax price of 17% and 21% within the three months ended June 30, 2022 and 2021, respectively, on a non-GAAP foundation, which differs from the GAAP efficient tax price.
(d) Changes associated to the non-GAAP outcomes attributable to non-controlling pursuits, which had been adjusted to an efficient tax price of 31% for the subsidiary of Alaxala Networks Company within the three months ended June 30, 2022.
(e) All share and per share quantities offered herein have been retroactively adjusted to replicate the five-for-one ahead inventory cut up which was efficient June 22, 2022.
Reconciliation of complete income to complete billings
Three Months Ended | |||||
June 30, 2022 |
June 30, 2021 |
||||
Whole income | $ | 1,030.1 | $ | 801.1 | |
Add: Change in deferred income | 274.1 | 159.8 | |||
Whole billings | $ | 1,304.2 | $ | 960.9 | |
Investor Contact: | Media Contact: | |
Peter Salkowski | Sandra Wheatley | |
Fortinet, Inc. | Fortinet, Inc. | |
408-331-4595 | 408-391-9408 | |
[email protected] | [email protected] |