Slide 1: Q4 2021 Financial Results
Q4 2021 Financial Results February 3, 2022 1
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 2022 guidance, and future prospects and expectations are forward-looking statements that involve ri
Slide 3: Q4 2021 Non-GAAP Results
Q4 2021 Non-GAAP Results Q4'19 Q1'20 Q2'20 Q3'20 Q4'20 Q1'21 Q2'21 Q3'21 Q4'21 Billings (1) $802.3M $667.8M $711.5M $749.8M $960.9M $850.6M $960.9M $1.06B $1.31B Y/Y % Change 23.6% 21.1% 14.3% 19.7% 19.8% 27.4% 35.1% 41.9% 35.9% Revenue $618.1M $577.7M $617.6M $651.1M $748.0M $710.3M $801.1M $867.2M
Slide 4: Backlog and Bookings (Non-GAAP)
Backlog and Bookings (Non-GAAP) ($ in millions) $1,427.8 $1,083.8 $960.3 $967.9 $851.6 $161.9 $12.2 $13.2 $20.2 $39.9 Q4'20 Q1'21 Q2'21 Q3'21 Q4'21 (1) (2) Backlog Bookings Notes (1) Backlog represents orders received but not fulfilled and excludes Alaxala. (2) Bookings represent the total value of
Slide 5: Q4 2021 Non-GAAP Results
Q4 2021 Non-GAAP Results Q4'19 Q1'20 Q2'20 Q3'20 Q4'20 Q1'21 Q2'21 Q3'21 Q4'21 Gross Profit (1) $482.7M $455.0M $488.4M $517.6M $587.0M $560.1M $621.2M $663.8M $744.4M Gross Margin (1) 78.1% 78.8% 79.1% 79.5% 78.5% 78.9% 77.5% 76.5% 77.3% Operating Income (1)(2) $168.6M $129.2M $170.3M $178.6M $219.
Slide 6: 2021 Non-GAAP Results
2021 Non-GAAP Results 2019 2020 2021 Billings (1) $2.603B $3.090B $4.181B Y/Y % Change 20.9% 18.7% 35.3% Revenue $2.163B $2.594B $3.342B Y/Y % Change 19.9% 19.9% 28.8% Product Revenue $788.5M $916.4M $1.255B Y/Y % Change 16.9% 16.2% 36.9% Service Revenue $1.375B $1.678B $2.087B Y/Y % Change 21.6% 22
Slide 7: Backlog and Bookings (Non-GAAP)
Backlog and Bookings (Non-GAAP) ($ in millions) $4,331.1 $3,090.1 $161.9 $12.2 FY20 FY21 (1) (2) Backlog Bookings Notes (1) Backlog represents orders received but not fulfilled and excludes Alaxala. (2) Bookings represent the total value of all orders received during the fiscal period. 7
Slide 8: 2021 Non-GAAP Results
2021 Non-GAAP Results 2019 2020 2021 Gross Profit (1) $1.678B $2.048B $2.590B Gross Margin (%) (1) 77.6% 78.9% 77.5% Operating Income (1)(2) $536.0M $698.0M $875.5M Operating Margin (%) (1)(2) 24.8% 26.9% 26.2% Net Income Attributable to Fortinet, Inc. (1)(2)(3)(4)(5) $436.7M $562.6M $666.0M Diluted
Slide 9: Revenue by Geography
Revenue by Geography Q4'19 Q1'20 Q2'20 Q3'20 Q4'20 Q1'21 Q2'21 Q3'21 Q4'21 Y/Y % Y/Y % Y/Y % Y/Y % Y/Y % Y/Y % Y/Y % Y/Y % Y/Y % ($ in millions) $ $ $ $ $ $ $ $ $ Change Change Change Change Change Change Change Change Change Americas $252.2 23.1% $242.6 20.9% $261.0 15.3% $272.4 13.0% $301.3 19.5%
Slide 10: Revenue by Geography (Continued)
Revenue by Geography (Continued) 2019 2020 2021 Y/Y % Y/Y % Y/Y % ($ in millions) $ Change $ Change $ Change Americas $920.2 20.4% $1,077.2 17.1% $1,358.8 26.1% EMEA $816.5 20.2% $991.9 21.5% $1,275.9 28.6% APAC $426.3 18.1% $525.3 23.2% $707.5 34.7% Total $2,163.0 19.9% $2,594.4 19.9% $3,342.2 28.8
Slide 11: Number of Deals & FortiGate Sales
Number of Deals & FortiGate Sales Number of Deals (1) Q4'19 Q1'20 Q2'20 Q3'20 Q4'20 Q1'21 Q2'21 Q3'21 Q4'21 No. of Deals >$50K 2,565 2,121 2,111 2,267 2,991 2,489 2,856 3,021 3,807 No. of Deals >$250K 469 323 369 398 491 387 499 548 758 No. of Deals >$500K 197 120 146 168 205 167 203 232 320 No. of
Slide 12: Statement of Cash Flows (Non-GAAP)
Statement of Cash Flows (Non-GAAP) ($ in millions) Q4'19 Q1'20 Q2'20 Q3'20 Q4'20 Q1'21 Q2'21 Q3'21 Q4'21 GAAP Net Income Including Non-controlling Interests $118.2 $104.6 $113.8 $123.4 $146.7 $107.2 $137.5 $163.2 $198.8 Depreciation, Amortization and Stock-Based Compensation 59.4 62.4 66.7 66.0 65.4
Slide 13: Statement of Cash Flows (Non-GAAP) (Continued)
Statement of Cash Flows (Non-GAAP) (Continued) ($ in millions) 2019 2020 2021 GAAP Net Income Including Non-controlling Interests $331.7 $488.5 $606.7 Depreciation, Amortization and Stock-Based Compensation 235.7 260.5 292.3 Accounts Receivable (96.7) (176.4) (72.5) Inventory (48.5) (42.2) (19.4) De
Slide 14: Free Cash Flow and Adjusted Free Cash Flow Growth (Non-GAAP)
Free Cash Flow and Adjusted Free Cash Flow Growth (Non-GAAP) $402.8 $386.9 $344.5 ($ in millions) $301.6 $286.6 $261.5 $237.5 $211.8 (1) $178.5 $394.7 Reported Free Cash Flow $329.8 Real Estate Related Add Backs(2) $241.8 $264.2 $263.8 $216.1 $215.5 $185.7 $143.2 Q4'19 Q1'20 Q2'20 Q3'20 Q4'20 Q1'21
Slide 15: Free Cash Flow and Adjusted Free Cash Flow Growth (Continued)
Free Cash Flow and Adjusted Free Cash Flow Growth (Non-GAAP) (Continued) ($ in millions) 181% 164% $1,435.8 161% $997.4 (1) Reported Free Cash Flow $775.1 Real Estate Related Add Backs (2) (3) Free Cash Flow Conversion $1,203.8 $907.8 $715.8 2019 2020 2021 Notes (1) Free Cash Flow is a non-GAAP meas
Slide 16: Q1 and 2022 Guidance (Non-GAAP)
(1) Q1 and 2022 Guidance (Non-GAAP) Actual Q1'22E Actual 2021 2022E Q1'21 Billings (2) $850.6M $1.050 - 1.090B $4.181B $5.400 - 5.480B Y/Y Mid-Pt Growth 25.8% 30.1% Bookings (3) $851.6M $1.100 - 1.150B $4.331B $5.580 - 5.680B Y/Y Mid-Pt Growth 32.1% 30.0% Revenue (GAAP) $710.3M $865 - 895M $3.342B $
Slide 17: GAAP to Non-GAAP Reconciliations
GAAP to Non-GAAP Reconciliations ($ in millions) Q4'19 Q1'20 Q2'20 Q3'20 Q4'20 Q1'21 Q2'21 Q3'21 Q4'21 Total revenue $618.1 $577.7 $617.6 $651.1 $748.0 $710.3 $801.1 $867.2 $963.6 Add: Change in deferred revenue 186.6 90.1 93.9 98.9 213.3 140.3 159.8 201.0 346.5 Less: Deferred revenue balance acquir
Slide 18: GAAP to Non-GAAP Reconciliations
GAAP to Non-GAAP Reconciliations ($ in millions) Q4'19 Q1'20 Q2'20 Q3'20 Q4'20 Q1'21 Q2'21 Q3'21 Q4'21 GAAP product gross profit $146.1 $116.0 $127.5 $139.5 $181.0 $149.4 $182.7 $202.8 $232.4 Stock‑based compensation 0.3 0.4 0.4 0.4 0.4 0.4 0.5 0.4 0.4 Amortization of acquired intangible assets 1.5
Slide 19: GAAP to Non-GAAP Reconciliations (Continued)
GAAP to Non-GAAP Reconciliations (Continued) ($ in millions) Q4'19 Q1'20 Q2'20 Q3'20 Q4'20 Q1'21 Q2'21 Q3'21 Q4'21 GAAP general and administrative expense $27.2 $28.8 $28.9 $29.4 $32.4 $32.0 $34.4 $35.8 $41.3 Stock‑based compensation (5.4) (5.3) (6.1) (5.9) (6.0) (6.3) (7.0) (6.9) (6.9) Litigation-r
Slide 20: GAAP to Non-GAAP Reconciliations (Continued)
GAAP to Non-GAAP Reconciliations (Continued) ($ in millions) Q4'19 Q1'20 Q2'20 Q3'20 Q4'20 Q1'21 Q2'21 Q3'21 Q4'21 GAAP other income (expense), net $(0.6) $(8.0) $0.9 $(1.0) $0.3 $(2.0) $0.8 $(6.3) $(4.1) Loss on investments in privately-held companies — 4.3 — — — — — — — Non-GAAP other income (expe
Slide 21: GAAP to Non-GAAP Reconciliations
GAAP to Non-GAAP Reconciliations ($ in millions) 2019 2020 2021 Total revenue $2,163.0 $2,594.4 $3,342.2 Add: Change in deferred revenue 442.3 496.2 847.6 Less: Deferred revenue balance acquired in business combination (2.4) (0.6) (4.1) Less: Adjustment due to adoption of ASU 2021-08 (1) — — (4.3) T
Slide 22: GAAP to Non-GAAP Reconciliations (Continued)
GAAP to Non-GAAP Reconciliations (Continued) ($ in millions) 2019 2020 2021 GAAP product gross profit $463.9 $564.0 $767.3 Stock‑based compensation 1.5 1.6 1.7 Amortization of acquired intangible assets 6.5 4.7 5.7 Non‑GAAP product gross profit $471.9 $570.3 $774.7 Non‑GAAP product gross margin 59.9
Slide 23: GAAP to Non-GAAP Reconciliations (Continued)
GAAP to Non-GAAP Reconciliations (Continued) ($ in millions) 2019 2020 2021 GAAP general and administrative expense $102.1 $119.5 $143.5 Stock‑based compensation (20.9) (23.3) (27.1) Litigation-related matter — 0.7 — Non‑GAAP general and administrative expense $81.2 $96.9 116.4 Non‑GAAP general and
Slide 24: GAAP to Non-GAAP Reconciliations (Continued)
GAAP to Non-GAAP Reconciliations (Continued) ($ in millions) 2019 2020 2021 GAAP other expense, net $(7.5) $(7.8) $(11.6) Loss on investments in privately-held companies $3.8 $4.3 — Non-GAAP other expense, net $(3.7) $(3.5) $(11.6) Non‑GAAP other expense, net as a percentage of revenue (0.2)% (0.1)%
Slide 25: F=SRTINET.
F=SRTINET.