Fortinet Reports Fourth Quarter and Full Year 2012 Financial Results

Company Exceeds Its Expectations Across All Key Metrics

Fourth Quarter 2012 Highlights

• Revenues of USD 151.2 million, up 25% year over year2

• Billings of USD 174.3 million, up 24% year over year1,2

• GAAP diluted net income per share of USD 0.13
• Non-GAAP diluted net income per share of USD 0.171
• Cash flow from operations of USD 50.3 million

• Free cash flow of USD 48.5 million1,2
• Cash, cash equivalents and investments of USD 739.6 million4, with no debt

Full Year 2012 Highlights

• Revenues of USD 533.6 million, up 23% year over year3

• Billings of USD 602.0 million, up 27% year over year1,3

• GAAP diluted net income per share of USD 0.40
• Non-GAAP diluted net income per share of USD 0.531
• Cash flow from operations of USD 183.9 million

• Free cash flow of USD 161.8 million1,3,4

DUBAI, UAE - February 14, 2013 - Fortinet® (NASDAQ: FTNT) - a leader in high-performance network security – has recently announced financial results for the fourth quarter and full year ended December 31, 2012.

Financial Highlights for the Fourth Quarter of 2012

• Revenue2: Total revenue was USD 151.2 million for the fourth quarter of 2012, an increase of 25% compared to USD 120.9 million in the same quarter of 2011.  Within total revenue, product revenue was USD 71.0 million, an increase of 24% compared to the same quarter of 2011.  Services revenue was USD 76.7 million, an increase of 26% compared to the same quarter of 2011.  

• Billings1,2: Total billings were USD 174.3 million for the fourth quarter of 2012, an increase of 24% compared to USD 140.6 million in the same quarter of 2011.  

• Deferred Revenue: Deferred revenue was USD 363.2 million as of December 31, 2012, up USD 23.1 million from USD 340.1 million as of September 30, 2012.

• Cash and Cash Flow1,2: As of December 31, 2012, cash, cash equivalents and investments were USD 739.6 million, compared to USD 690.3 million as of September 30, 2012. In the fourth quarter of 2012, cash flow from operations was USD 50.3 million and free cash flow was USD 48.5 million.

• GAAP Operating Income2,5: GAAP operating income was USD 35.0 million for the fourth quarter of 2012, representing a GAAP operating margin of 23%. GAAP operating income was USD 26.5 million for the same quarter of 2011, representing a GAAP operating margin of 22%.  

• GAAP Net Income and Diluted Net Income Per Share2,5: GAAP net income was USD 21.5 million for the fourth quarter of 2012, based on a 41% tax rate for the quarter. This compares to GAAP net income of USD 16.5 million for the same quarter of 2011, based on a 40% tax rate for the quarter.  GAAP diluted net income per share was USD 0.13 for the fourth quarter of 2012, based on 167.0 million weighted-average diluted shares outstanding, compared to USD 0.10 for the same quarter of 2011, based on 164.5 million weighted-average diluted shares outstanding.  

• Non-GAAP Operating Income1,2: Non-GAAP operating income was USD 41.3 million for the fourth quarter of 2012, representing a non-GAAP operating margin of 27%. Non-GAAP operating income was USD 32.4 million for the same quarter of 2011, representing a non-GAAP operating margin of 27%.  

• Non-GAAP Net Income and Diluted Net Income Per Share1,2: Non-GAAP net income was USD 28.1 million for the fourth quarter of 2012, based on a 34% effective tax rate for the quarter.  Non-GAAP net income for the same quarter of 2011 was USD 22.3 million, based on a 33% effective tax rate.  Non-GAAP diluted net income per share was USD 0.17 for the fourth quarter of 2012 based on 167.0 million weighted-average diluted shares outstanding, compared to USD 0.14 for the same quarter of 2011, based on 164.5 million weighted-average diluted shares outstanding.  

Financial Highlights for the Full Year 2012

• Revenue3: Total revenue was USD 533.6 million for fiscal 2012, an increase of 23% compared to USD 433.6 million for fiscal 2011.  Within total revenue, product revenue was USD 248.9 million for fiscal 2012, an increase of 26% compared to USD 197.4 million for fiscal 2011.  Services revenue was USD 274.0 million for fiscal 2012, an increase of 24% compared to USD 220.3 million for fiscal 2011.  

• Billings1,3: Total billings were USD 602.0 million for fiscal 2012, an increase of 27% compared to USD 475.8 million in fiscal 2011.  

• Deferred Revenue: Deferred revenue was USD 363.2 million as of December 31, 2012, an increase of 23% compared to deferred revenue of USD 294.8 million as of December 31, 2011.

• Cash and Cash Flow1,3,4: As of December 31, 2012, cash, cash equivalents and investments were USD 739.6 million, compared to USD 538.7 million as of December 31, 2011. In fiscal 2012, cash flow from operations was USD 183.9 million and free cash flow was USD 161.8 million.

• GAAP Operating Income3,5: GAAP operating income was USD 100.5 million for fiscal 2012, representing a GAAP operating margin of 19%. GAAP operating income was USD 88.9 million for fiscal 2011, representing a GAAP operating margin of 21%.  

• GAAP Net Income and Diluted Net Income Per Share3,5: GAAP net income was USD 66.8 million for fiscal 2012, based on a 36% tax rate for the year. This compares to GAAP net income of USD 62.5 million for fiscal 2011, based on a 32% tax rate for the year.  GAAP diluted net income per share was USD 0.40 for fiscal 2012, based on 166.3 million weighted-average diluted shares outstanding, compared to USD 0.38 for fiscal 2011, based on 163.8 million weighted-average diluted shares outstanding.  

• Non-GAAP Operating Income1,3: Non-GAAP operating income was USD 129.3 million for fiscal 2012, representing a non-GAAP operating margin of 24%. Non-GAAP operating income was USD 106.0 million for fiscal 2011, representing a non-GAAP operating margin of 24%.  

• Non-GAAP Net Income and Diluted Net Income Per Share1,3: Non-GAAP net income was USD 88.3 million for fiscal 2012, based on a 34% effective tax rate for the year.  Non-GAAP net income for fiscal 2011 was USD 73.1 million, based on a 33% effective tax rate.  Non-GAAP diluted net income per share was USD 0.53 for fiscal 2012 based on 166.3 million weighted-average diluted shares outstanding, compared to USD 0.45 for fiscal 2011, based on 163.8 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.”

2 Includes the impact of a USD 1.9 million sale of previously-acquired patents during the fourth quarter of 2012.

3 Includes the impact of a USD 3.7 million sale of previously-acquired patents during fiscal 2012.  In addition, fiscal 2011 includes the impact of a USD 2.6 million sale of previously-acquired patents.

4 Includes the impact of USD 14.5 million paid for the purchase of land and buildings near our Silicon Valley headquarters during the third quarter of 2012.

5 Includes the impact of a USD 1.5 million non-recurring cumulative out-of-period adjustment recorded during the fourth quarter of 2012 to reflect a true-up related to forfeitures of stock awards granted to employees. The adjustment resulted in lower stock-based compensation expense and higher operating income and net income during the fourth quarter of 2012. We believe the impact of the adjustment is not material to the current or prior fiscal periods.

 Management Commentary:

Ken Xie, founder, president and chief executive officer of Fortinet, stated: “We had a great fourth quarter, which resulted in a strong finish to the year as we demonstrated our ability to successfully execute our global go to market strategy and increase market share.  We continued to attract and retain a number of large profile enterprise and service provider customers, and we introduced several new and competitive products that differentiate us from our competitors. With a healthy pipeline of business and a plan to continue investments in sales, marketing and product development, we are well-positioned to continue to gain market share and grow our business.”

Nancy Bush, interim chief financial officer of Fortinet, stated: “We reported strong fourth quarter results, which exceeded our expectations across all of our key operating metrics. We had particularly strong growth in revenue, profitability, and cash flow generation, and ended the quarter with a cash, cash equivalents and investments balance of approximately USD 740 million with no debt.  We are confident, yet cautious, as we enter 2013 and remain focused on further gaining market share worldwide by delivering innovative new products, and expanding our sales, marketing and R&D infrastructure.”

Bashar Bashaireh, Regional Director, Fortinet Middle East, said: “Fortinet continues to be strongly positioned to sustain its long-term growth plans across global markets with the Middle East being one of the highest growth regions for the company. Our expansion plans in the Middle East, remain firmly on track leveraging the solid fourth-quarter results, and adding momentum to our continuing thrust to empower Middle East enterprises with powerful network security protection.”

"فورتينت" تعلن عن نتائجها المالية للربع الرابع وكامل السنة المالية 2012

الشركة تتجاوز التوقعات في جميع مؤشرات الأداء الرئيسية

دبي، الإمارات، 14 فبراير 2013 – أعلنت "فورتينت" (Fortinet)، إحدى الشركات العالمية الرائدة في مجال توفير الحلول عالية الأداء لأمن الشبكات والمدرجة في سوق أسهم ناسداك تحت الرمز (NASDAQ:FTNT)، مؤخراً عن نتائجها المالية للربع الرابع وكامل السنة المالية المنتهية بتاريخ 31 ديسمبر/كانون الأول 2012.

أبرز ما تحقق خلال الربع الرابع من العام 2012

• بلغت العائدات 151.2 مليون دولار أمريكي، بارتفاع نسبته 25% على أساس سنوي2
  
  


• بلغت قيمة الفواتير 174.3 مليون دولار أمريكي، بارتفاع نسبته 24% على أساس سنوي2،1
  
  
• بلغ صافي الدخل المخفف للسهم وفق مبادئ المحاسبة غير المعتمدة 0.13 دولار أمريكي
  
  
• بلغ صافي الدخل المخفف للسهم وفق مبادئ المحاسبة المعتمدة 0.17 دولار أمريكي1
  
  
• بلغت التدفقات النقدية للعمليات 50.3 مليون دولار أمريكي
  
  
• بلغت التدفقات النقدية الحرة 48.5 مليون دولار أمريكي2،1
  
  
• بلغ حجم النقد وما يعادله وقيمة الاستثمارات 739.6 مليون دولار أمريكي4، مع عدم وجود ديون
  
  

أبرز ما تحقق خلال كامل السنة المالية 2012

• بلغت العوائد 533.6 مليون دولار، بارتفاع نسبته 23% على أساس سنوي3
  
  


• بلغت قيمة الفواتير 602.0 مليون دولار أمريكي، بارتفاع نسبته 27% على أساس سنوي3،1
  
  
• بلغ صافي الدخل المخفف للسهم وفق مبادئ المحاسبة المعتمدة 0.40 دولار أمريكي
  
  
• بلغ صافي الدخل المخفف للسهم وفق مبادئ المحاسبة غير المعتمدة 0.53 دولار أمريكي1
  
  
• بلغت التدفقات النقدية للعمليات 183.9 مليون دولار أمريكي
  
  
• بلغت التدفقات النقدية الحرة 161.8 مليون دولار أمريكي4،3،1
  
  

تعليقاً على النتائج، قال بشار بشايرة، المدير الإقليمي لشركة "فورتينت الشرق الأوسط": "كما تدل النتائج المعلنة، تعتبر "فورتينت" في وضع قوي يمكّنها من الحفاظ على خطط نموها وتوسيع حضورها في الأسواق العالمية وخصوصاً في أسواق الشرق الأوسط وذلك ضمن المسار الصحيح انسجاماً مع مكانة "فورتينت" كأبرز الشركات المبتكرة لحلول أمن الشبكات عالية الأداء. نحن عازمون على الاستفادة من هذا الأداء القوي لإضافة المزيد من الزخم لسعينا المستمر نحو تزويد الشركات والمؤسسات في المنطقة بحلول شاملة في مجال أمن الشبكات".

وقال كين زاي، مؤسس ورئيس والمدير التنفيذي لشركة "فورتينت": "كان أداؤنا خلال الربع الرابع رائعاً، ما أدى إلى تحقيقنا نهاية قوية للسنة المالية. كما أثبتنا قدرتنا على تنفيذ استراتيجيتنا المتعلقة بدخول الأسواق العالمية بنجاح وزيادة حصتنا السوقية. وواصلنا كذلك استقطاب عدد من المشاريع الكبيرة وعملاء تزويد الخدمات والاحتفاظ بهم، كما قدمنا العديد من المنتجات الجديدة والتنافسية التي ميزتنا عن غيرنا من المنافسين. وفي ظل وجود مناخ صحي لأعمالنا وخطة لمواصلة استثماراتنا في المبيعات والتسويق وتطوير المنتجات، فإننا في وضع جيد يتيح لنا الاستمرار في الاستحواذ على حصة أكبر في السوق وتنمية أعمالنا".

وقالت نانسي بوش، المسؤول المالي المؤقت لدى شركة "فورتينت": "حققنا نتائج مالية قوية خلال الربع الرابع تجاوزت توقعاتنا ضمن جميع مؤشرات الأداء الرئيسية. وحققنا على وجه الخصوص، نمواً قوياً في العوائد والأرباح وتوليد التدفق النقدي، حيث أنهينا الربع مع حجم نقد وما يعادله وقيمة استثمارات بقيمة تقارب 740 مليون دولار دون ديون. ونحن واثقون، لكن بحذر، مع دخولنا السنة المالية 2013، من أننا سنستمر في التركيز على اكتساب مزيد من الحصة السوقية على مستوى العالم من خلال توفير منتجات مبتكرة جديدة وتوسيع نطاق استثماراتنا في المبيعات والتسويق والبحوث والتطوير".