Revenue and Billings Up 22% in Fourth Quarter,
Company Improves Profitability on GAAP and non-GAAP Basis
Fourth Quarter 2016 Highlights
• Revenue of $362.8 million, up 22% year over year
• Billings of $463.4 million, up 22% year over year1
• GAAP diluted net income per share $0.14
• Non-GAAP diluted net income per share grew 67% year
over year to $0.301
• Cash flow from operations of $101.0 million
• Free cash flow of $84.2 million1
• Cash, cash equivalents and investments of $1.31
billion2
• Deferred revenue of $1.04 billion, up 31% year over
year
Full Year 2016 Highlights
• Revenue of $1.28 billion, up 26% year over year
• Billings of $1.52 billion, up 23% year over year1
• GAAP diluted net income per share $0.18
• Non-GAAP diluted net income per share grew 43% year
over year to $0.731
• Cash flow from operations of $345.7 million
• Free cash flow of $278.5 million1
Dubai, UAE, February 08, 2017:
News Summary:
Fortinet® (NASDAQ: FTNT), a global leader in high performance
cyber security solutions, today announced financial results for the fourth
quarter and full year ended December 31, 2016.
“We are pleased with our
strong finish to 2016, demonstrating our strong technology advantage and
revenue growth,” said Ken Xie, founder, chairman and chief executive officer. “Our ability to provide a
broad, powerful, and automated Security Fabric that protects all points in the
network, from IoT to cloud, sets Fortinet apart. This technology advantage,
combined with improvements in sales execution delivered strong results in the
mid to large enterprise segments of the market and positions us well for future
growth.”
Financial Highlights for the Fourth Quarter of 2016
• Revenue: Total revenue was
$362.8 million for the fourth quarter of 2016, an increase of 22% compared to
$296.5 million in the same quarter of 2015. Within total revenue, product
revenue was $158.9 million, an increase of 10% compared to $144.8 million in
the same quarter of 2015. Service revenue was $203.9 million, an increase of
34% compared to $151.8 million in the same quarter of 2015.
• Billings1: Total billings were
$463.4 million for the fourth quarter of 2016, an increase of 22% compared to
$380.9 million in the same quarter of 2015.
• Deferred Revenue:
Total deferred revenue was $1.04 billion as of December 31, 2016, an increase
of 31% compared to $791.3 million as of December 31, 2015. Total deferred
revenue increased by $100.6 million compared to $934.8 million as of September
30, 2016.
• Cash2 and Cash Flow:
As of December 31, 2016, cash, cash equivalents and investments were $1.31
billion, compared to $1.27 billion as of September 30, 2016. In the fourth
quarter of 2016, cash flow from operations was $101.0 million compared to $68.6
million in the same quarter of 2015. Free cash flow1 was $84.2 million during
the fourth quarter of 2016 compared to $60.2 million in the same quarter of
2015.
• GAAP Operating Income: GAAP operating income was $45.2 million for the fourth quarter
of 2016, representing a GAAP operating margin of 12%. GAAP operating income was
$12.9 million for the same quarter of 2015, representing a GAAP operating
margin of 4%.
• Non-GAAP Operating Income1: Non-GAAP operating income was $81.1 million for the fourth
quarter of 2016, representing a non-GAAP operating margin of 22%. Non-GAAP
operating income was $47.6 million for the same quarter of 2015, representing a
non-GAAP operating margin of 16%.
• GAAP Net Income or Loss and Diluted Net Income or Loss
Per Share: GAAP net income was $25.2 million for the fourth
quarter of 2016, compared to GAAP net loss of $2.5 million for the same quarter
of 2015. GAAP diluted net income per share was $0.14 for the fourth quarter of
2016, compared to GAAP diluted net loss per share of $0.01 for the same quarter
of 2015.• Non-GAAP Net Income and Diluted Net Income Per Share1:
Non-GAAP net income was $53.2 million for the fourth
quarter of 2016, compared to non-GAAP net income of $32.4 million for the same
quarter of 2015. Non-GAAP diluted net income per share was $0.30 for the
fourth quarter of 2016, compared to $0.18 for the same quarter of 2015.
Financial Highlights for the Full Year 2016
• Revenue: Total revenue was
$1.28 billion for 2016, an increase of 26% compared to $1.01 billion in 2015.
Within total revenue, product revenue was $548.1 million, an increase of 15%
compared to $476.8 million in 2015. Service revenue was $727.3 million, an
increase of 37% compared to $532.5 million in 2015.
• Billings1: Total billings were
$1.52 billion for 2016, an increase of 23% compared to $1.23 billion in 2015.
• Cash Flow: In 2016, cash flow
from operations was $345.7 million compared to $282.5 million in 2015. Free
cash flow1 was $278.5 million in 2016 compared to $245.2 million in 2015.
• GAAP Operating Income: GAAP operating income was $42.9 million for 2016, representing
a GAAP operating margin of 3%. GAAP operating income was $14.9 million for
2015, representing a GAAP operating margin of 1%.
• Non-GAAP Operating Income1: Non-GAAP operating income was $193.1 million for 2016,
representing a non-GAAP operating margin of 15%. Non-GAAP operating income was
$133.3 million for 2015, representing a non-GAAP operating margin of 13%.
• GAAP Net Income and Diluted Net Income Per Share: GAAP net income was $32.2 million for 2016, compared to GAAP net
income of $8.0 million for 2015. GAAP diluted net income per share was $0.18
for 2016, compared to $0.05 for 2015.
• Non-GAAP Net Income and Diluted Net Income Per Share1:
Non-GAAP net income was $129.5 million for 2016, compared
to non-GAAP net income of $89.4 million for 2015. Non-GAAP diluted net
income per share was $0.73 for 2016, compared to $0.51 for 2015.
1 A reconciliation of GAAP to non-GAAP financial and
liquidity 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 During the fourth
quarter and year ended December 31, 2016, we repurchased $35.8 million and
$110.8 million, respectively, of our common stock under our share repurchase
program. During the fourth quarter and year ended December 31, 2015, we
repurchased $60.0 million of our common stock under our share repurchase
program.
