Slide 1: Q4 2024 Financial Results
Q4 2024 Financial Results February 6, 2025
Slide 2: Safe Harbor Statement
Safe Harbor Statement Information, statements and projections contained in these presentation slides and related conference call concerning Fortinet’s business outlook, the first quarter and full year 2025 guidance, and future prospects and expectations are forward-looking statements that involve ri
Slide 3: Industry categories based on G2000 and F100 accounts
Notes: Industry categories are based on 2024 billings from the G2000 list. G2000 - based off of the 2024 Forbes list; total number of accounts is 1,939 after factoring in M&A activity since publication. F100 - based off of the 2024 Fortune list; total number of accounts is 100 after factoring in M&A
Slide 4: The Most Integrated Operating System
The Most Integrated Operating System Single OS with leadership in five network security Gartner Magic Quadrants © Fortinet Inc. All Rights Reserved. 4
Slide 5: FortiOS Advantage
FortiOS Advantage © Fortinet Inc. All Rights Reserved. 5
Slide 6: The Fortinet Journey: A Seamless Security Evolution
The Fortinet Journey: A Seamless Security Evolution With FortiGate NGFW, customers gain industry-leading protection and can seamlessly activate SD-WAN for optimized performance and extend to SASE for secure remote access. © Fortinet Inc. All Rights Reserved. 6
Slide 7: Unified SASE and Security Operations RPO, ARR, and Billings Growth
Unified SASE and Security Operations RPO, ARR, and Billings Growth Note: Unified SASE includes SD-WAN (based on a percentage of FortiGate billings), SSE and related solutions. ARR is defined as the annualized value of renewable / recurring customer agreements as of the measurement date, assuming any
Slide 8: Cross-selling SASE and SecOps to our Existing Customer Base
1 Cross-selling SASE and SecOps to our Existing Customer Base Note 1: Based on invoiced amounts for the quarter ended December 31, 2024. © Fortinet Inc. All Rights Reserved. 8
Slide 9: Leader in Network Firewall Security
Leader in Network Firewall Security 1 Note: PANW 2024 product revenue is based on actuals for 3QFY24 – 1QFY25 and consensus estimates for 2QFY25 as 2QFY25 actuals have not yet been © Fortinet Inc. All Rights Reserved. 9 released as of the date of this presentation.
Slide 10: Secure Networking – Upgrade
Secure Networking – Upgrade 2026 Upgrade is Underway, Adding Product Revenue and Service Upsell/Expansion 1 Average Cumulative Closed Won Multiple after quarter of 1st Sale per Account by Market Segment. Data is based on Global Parent. Large enterprise is defined as companies with annual revenues of
Slide 11: New FortiGate Entry G Series
New FortiGate Entry G Series 1 © Fortinet Inc. All Rights Reserved. 11
Slide 12: © Fortinet Inc. All Rights Reserved.
1 © Fortinet Inc. All Rights Reserved. 12
Slide 13: Q4 2024 Non-GAAP Results
Q4 2024 Non-GAAP Results Q4'22 Q1'23 Q2'23 Q3'23 Q4'23 Q1'24 Q2'24 Q3'24 Q4'24 Billings (1) $1.719B $1.503B $1.541B $1.491B $1.865B $1.407B $1.541B $1.582B $2.003B Y/Y % Change 31.6% 29.6% 18.1% 5.7% 8.5% (6.4)% —% 6.1% 7.4% Revenue $1.283B $1.262B $1.293B $1.335B $1.415B $1.353B $1.434B $1.508B $1.
Slide 14: Q4 2024 Non-GAAP Results
Q4 2024 Non-GAAP Results Q4'22 Q1'23 Q2'23 Q3'23 Q4'23 Q1'24 Q2'24 Q3'24 Q4'24 Gross Profit (1) $996.0M $963.6M $1.01B $1.03B $1.11B $1.06B $1.17B $1.26B $1.36B Gross Margin (1) 77.6% 76.3% 77.9% 76.9% 78.5% 78.1% 81.5% 83.2% 81.9% Operating Income (1)(2) $417.6M $334.0M $348.1M $371.4M $453.5M $386
Slide 15: 2024 Non-GAAP Results
2024 Non-GAAP Results 2022 2023 2024 Billings (1) $5.594B $6.400B $6.533B Y/Y % Change 33.8% 14.4% 2.1% Revenue $4.417B $5.305B $5.956B Y/Y % Change 32.2% 20.1% 12.3% Product Revenue $1.781B $1.927B $1.909B Y/Y % Change 41.9% 8.2% (1.0)% Service Revenue $2.637B $3.378B $4.047B Y/Y % Change 26.3% 28.
Slide 16: Quarterly Revenue by Geography
Quarterly Revenue by Geography Q4'22 Q1'23 Q2'23 Q3'23 Q4'23 Q1'24 Q2'24 Q3'24 Q4'24 ($ in millions) $ % $ % $ % $ % $ % $ % $ % $ % $ % % is Y/Y % Change Americas $521.2 36.9% $523.5 36.8% $537.0 29.8% $545.6 16.7% $569.1 9.2% $557.0 6.4% $595.3 10.9% $624.0 14.4% $665.9 17.0% EMEA $510.1 37.6% $47
Slide 17: Annual Revenue by Geography (Continued)
Annual Revenue by Geography (Continued) 2022 2023 2024 ($ in millions) % is Y/Y % Change $ % $ % $ % Americas $1,785.0 31.4% $2,175.2 21.9% $2,442.2 12.3% EMEA $1,691.8 32.6% $2,072.9 22.5% $2,396.2 15.6% APAC $940.6 32.9% $1,056.7 12.3% $1,117.4 5.7% Total $4,417.4 32.2% $5,304.8 20.1% $5,955.8 12.
Slide 18: Statement of Cash Flows (Non-GAAP)
Statement of Cash Flows (Non-GAAP) ($ in millions) Q4'22 Q1'23 Q2'23 Q3'23 Q4'23 Q1'24 Q2'24 Q3'24 Q4'24 GAAP Net Income Including gain on bargain purchase $313.8 $247.7 $266.3 $322.9 $310.9 $299.3 $379.8 $539.9 $526.2 Depreciation, Amortization and Stock-Based Compensation 82.0 83.8 92.4 92.6 93.6
Slide 19: Statement of Cash Flows (Non-GAAP) (Continued)
Statement of Cash Flows (Non-GAAP) (Continued) ($ in millions) 2022 2023 2024 GAAP Net Income Including gain on bargain purchase $856.6 $1,147.8 $1,745.2 Depreciation, Amortization and Stock-Based Compensation 321.6 362.4 380.7 Accounts Receivable (456.7) (146.4) (45.4) Inventory (109.1) (253.5) 131
Slide 20: Quarterly Free Cash Flow and Adjusted Free Cash Flow Growth
Quarterly Free Cash Flow and Adjusted Free Cash Flow Growth $820.6 ($ in millions) $662.1 $604.8 $509.8 $530.8 $497.7 $458.5 (1) Free Cash Flow $324.0 Real Estate Related Add Backs (2) $647.2 $608.5 $571.8 $497.2 $438.3 $481.1 $167.7 $380.0 $318.9 $164.8 Q4'22 Q1'23 Q2'23 Q3'23 Q4'23 Q1'24 Q2'24 Q3'
Slide 21: Annual Free Cash Flow and Adjusted Free Cash Flow Growth
Annual Free Cash Flow and Adjusted Free Cash Flow Growth ($ in millions) $2,207.9 $1,858.3 $1,644.5 (1) Free Cash Flow (2) Real Estate Related Add Backs $1,879.2 $1,731.4 $1,449.4 2022 2023 2024 Notes (1) Free Cash Flow is a non-GAAP measure that we define as net cash provided by operating activitie
Slide 22: 'Rule of 45' — Exceeded 5 Years in a Row
‘Rule of 45’ — Exceeded 5 Years in a Row Expect to Achieve the ‘Rule of 45’ in 2025 Fortinet defines the Rule of 45 as GAAP revenue Y/Y growth plus Non-GAAP Operating Margin © Fortinet Inc. All Rights Reserved. 22
Slide 23: Q1 and 2025 Guidance (Non-GAAP)
Q1 and 2025 Guidance (Non-GAAP) (1) Actual Q1'25E Actual 2024 2025E Q1'24 Billings (2) $1.407B $1.520 - 1.600B $6.533B $7.200 - 7.400B Y/Y Mid-Pt Growth 10.9% 11.8% Revenue (GAAP) $1.353B $1.500 - 1.560B $5.956B $6.650 - 6.850B Y/Y Mid-Pt Growth 13.1% 13.3% Service Revenue (GAAP) $944.4M $4.047B $4.
Slide 24: Additional Modeling Points
Additional Modeling Points Actual 2024 Q1’25E 2025E Cash Paid for Taxes $579M $30 - $35M $525 - $575M Infrastructure Investments $379M $80 - $100M $380 - $430M Non-GAAP Tax Rate 17% 18% 18% © Fortinet Inc. All Rights Reserved. 24
Slide 25: GAAP to Non-GAAP Reconciliations
GAAP to Non-GAAP Reconciliations ($ in millions) Q4'22 Q1'23 Q2'23 Q3'23 Q4'23 Q1'24 Q2'24 Q3'24 Q4'24 Total revenue $1,283.0 $1,262.3 $1,292.8 $1,334.6 $1,415.1 $1,353.3 $1,434.3 $1,508.1 $1,660.1 Add: Change in deferred revenue 446.8 240.6 247.7 156.7 449.7 54.9 106.3 115.5 349.2 Less: Deferred re
Slide 26: GAAP to Non-GAAP Reconciliations (Continued)
GAAP to Non-GAAP Reconciliations (Continued) ($ in millions) Q4'22 Q1'23 Q2'23 Q3'23 Q4'23 Q1'24 Q2'24 Q3'24 Q4'24 GAAP product gross profit $350.2 $307.1 $298.1 $267.6 $290.9 $226.1 $296.8 $337.8 $396.0 Stock-based compensation 0.4 0.4 0.5 0.4 0.5 0.5 0.4 0.5 0.5 Amortization of acquired intangible
Slide 27: GAAP to Non-GAAP Reconciliations (Continued)
GAAP to Non-GAAP Reconciliations (Continued) ($ in millions) Q4'22 Q1'23 Q2'23 Q3'23 Q4'23 Q1'24 Q2'24 Q3'24 Q4'24 GAAP general and administrative expense $44.3 $52.8 $49.9 $53.5 $55.1 $54.4 $56.6 $71.7 $55.1 Stock-based compensation (7.8) (8.2) (9.9) (9.9) (9.9) (9.8) (10.2) (10.7) (11.0) Litigatio
Slide 28: GAAP to Non-GAAP Reconciliations (Continued)
GAAP to Non-GAAP Reconciliations (Continued) ($ in millions) Q4'22 Q1'23 Q2'23 Q3'23 Q4'23 Q1'24 Q2'24 Q3'24 Q4'24 GAAP provision for (benefit from) income taxes $9.2 $21.3 $27.6 $(0.3) $95.2 $39.5 $76.5 $81.2 $86.7 Tax adjustments related to the above 63.6 38.5 35.0 67.6 (13.0) 30.3 14.3 19.8 31.5
Slide 29: GAAP to Non-GAAP Reconciliations
GAAP to Non-GAAP Reconciliations ($ in millions) 2022 2023 2024 Total revenue $4,417.4 $5,304.8 $5,955.8 Add: Change in deferred revenue 1,187.4 1,094.7 625.9 Less: Deferred revenue balance acquired in business combinations (10.8) — (49.2) Total billings $5,594.0 $6,399.5 $6,532.5 GAAP Cash Flow fro
Slide 30: GAAP to Non-GAAP Reconciliations (Continued)
GAAP to Non-GAAP Reconciliations (Continued) ($ in millions) 2022 2023 2024 GAAP product gross profit $1,089.2 $1,163.7 $1,256.7 Stock-based compensation 1.7 1.8 1.9 Amortization of acquired intangible assets 7.8 7.1 4.3 Non-GAAP product gross profit $1,098.7 $1,172.6 $1,262.9 Non-GAAP product gross
Slide 31: GAAP to Non-GAAP Reconciliations (Continued)
GAAP to Non-GAAP Reconciliations (Continued) ($ in millions) 2022 2023 2024 GAAP general and administrative expense $169.0 $211.3 $237.8 Stock-based compensation (30.1) (37.9) (41.7) Litigation-related matter — — (3.2) Non-GAAP general and administrative expense $138.9 $173.4 $192.9 Non-GAAP general
Slide 32: GAAP to Non-GAAP Reconciliations (Continued)
GAAP to Non-GAAP Reconciliations (Continued) ($ in millions) 2022 2023 2024 GAAP provision for income taxes $30.8 $143.8 $283.9 Tax adjustments related to the above 172.2 128.1 95.9 Non-GAAP provision for income taxes $203.0 $271.9 $379.8 Non-GAAP effective tax rate 17% 17% 17% GAAP net income attri
Slide 33: Our Pillars
Our Pillars Note 1: SD-WAN includes a percentage of certain FortiGate billings. In Q4’24, Lacework FortiCNAPP and FortiDDoS were moved to the Unified SASE pillar from the Security Operations and Secure Networking pillars, respectively. © Fortinet Inc. All Rights Reserved. 33
Slide 34: Fortinet
F=SRTINET.