Slide 1: Q2 2020 Financial Results
Q2 2020 Financial Results August 6, 2020 © Copyright Fortinet Inc. All rights reserved.
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 Q3 2020 guidance, and future prospects and expectations are forward-looking statements that involve risks and uncertainties. Th
Slide 3: Q2 2020 Non-GAAP Results
Q2 2020 Non-GAAP Results Q2'18 Q3'18 Q4'18 Q1'19 Q2'19 Q3'19 Q4'19 Q1'20 Q2'20 Billings (1) $513.4M $527.5M $649.2M $551.6M $622.4M $626.6M $802.3M $667.8M $711.5M Y/Y % Change 20.3% 22.2% 21.6% 19.1% 21.2% 18.8% 23.6% 21.1% 14.3% Revenue $441.3M $453.9M $507.0M $472.6M $521.7M $547.5M $614.4M $576.
Slide 4: Q2 2020 Non-GAAP Results (Continued)
Q2 2020 Non-GAAP Results (Continued) Q2'18 Q3'18 Q4'18 Q1'19 Q2'19 Q3'19 Q4'19 Q1'20 Q2'20 Gross Margin (1) 75.4% 76.5% 75.7% 77.2% 76.4% 78.2% 78.0% 78.7% 79.0% Operating Income (1)(2) $93.1M $108.5M $130.6M $96.6M $123.1M $144.6M $164.9M $128.4M $168.2M Operating Margin (1)(2) 21.1% 23.9% 25.8% 20
Slide 5: Revenue by Geography
Revenue by Geography Q2'18 Q3'18 Q4'18 Q1'19 Q2'19 Q3'19 Q4'19 Q1'20 Q2'20 Y/Y % Y/Y % Y/Y % Y/Y % Y/Y % Y/Y % Y/Y % Y/Y % Y/Y % ($ in millions) $ Change $ Change $ Change $ Change $ Change $ Change $ Change $ Change $ Change Americas $189.3 17.8% $194.0 20.3% $203.8 17.1% $200.5 14.1% $225.5 19.1%
Slide 6: Number of Deals & FortiGate Sales
Number of Deals & FortiGate Sales Number of Deals (1) Q2'18 Q3'18 Q4'18 Q1'19 Q2'19 Q3'19 Q4'19 Q1'20 Q2'20 No. of Deals >$50K 1,669 1,710 2,154 1,683 1,906 1,908 2,565 2,121 2,111 No. of Deals >$250K 261 264 363 266 346 333 469 323 369 No. of Deals >$500K 113 103 129 108 147 130 197 120 146 No. of
Slide 7: Statement of Cash Flows (Non-GAAP)
Statement of Cash Flows (Non-GAAP) ($ in millions) Q2'18 Q3'18 Q4'18 Q1'19 Q2'19 Q3'19 Q4'19 Q1'20 Q2'20 GAAP Net Income $49.3 $58.7 $182.6 $58.8 $72.7 $79.8 $115.2 $104.0 $112.1 Depreciation and Stock-Based Compensation 54.2 57.4 57.3 58.7 60.2 57.4 59.4 62.4 66.7 Accounts Receivable (20.0) 9.1 (12
Slide 8: Free Cash Flow and Adjusted Free Cash Flow Growth (Non-GAAP)
Free Cash Flow and Adjusted Free Cash Flow Growth (Non-GAAP) $262 $237 ($ in millions) $215 $195 $187 $178 $164 $174 Reported Free Cash Flow $138 Real Estate Related Add $242 $216 Backs $191 $204 $169 $178 $159 $143 $131 Q2'18 Q3'18 Q4'18 Q1'19 Q2'19 Q3'19 Q4'19 Q1'20 Q2'20 • Free Cash Flow is a non
Slide 9: Q3 2020 Guidance (Non-GAAP)
(1) Q3 2020 Guidance (Non-GAAP) Actual Q3'19 Q3'20 Billings (2) $626.6M $705 - 730M Y/Y Mid-Pt Growth 14.5% Revenue (GAAP) $547.5M $630 - 645M Y/Y Mid-Pt Growth 16.4% Gross Margin (%) (3) 78.2% 78.0 - 79.0% Operating Margin (%) (3) (4) 26.4% 25.5 - 26.5% Net Income per Share(3) (4) (5) (6) $0.67 $0.
Slide 10: GAAP to Non-GAAP Reconciliations
GAAP to Non-GAAP Reconciliations ($ in millions) Q2'18 Q3'18 Q4'18 Q1'19 Q2'19 Q3'19 Q4'19 Q1'20 Q2'20 GAAP product gross profit $92.4 $92.5 $113.9 $92.5 $107.2 $118.1 $146.1 $116.0 $127.5 Stock‐based compensation 0.4 0.3 0.4 0.4 0.4 0.4 0.3 0.4 0.4 Amortization of acquired intangible assets 1.2 1.7
Slide 11: GAAP to Non-GAAP Reconciliations (Continued)
GAAP to Non-GAAP Reconciliations (Continued) ($ in millions) Q2'18 Q3'18 Q4'18 Q1'19 Q2'19 Q3'19 Q4'19 Q1'20 Q2'20 GAAP general and administrative expense $23.5 $22.5 $22.0 $24.5 $24.3 $26.1 $27.2 $28.8 $28.9 Stock‐based compensation (4.7) (4.8) (4.8) (5.0) (5.4) (5.1) (5.4) (5.3) (6.1) Litigation-r
Slide 12: GAAP to Non-GAAP Reconciliations (Continued)
GAAP to Non-GAAP Reconciliations (Continued) ($ in millions) Q2'18 Q3'18 Q4'18 Q1'19 Q2'19 Q3'19 Q4'19 Q1'20 Q2'20 GAAP other income (expense), net $(5.0) $0.9 $(2.3) $(0.5) $(0.4) $(6.0) $(0.6) $(8.0) $0.9 (Gain) loss on investments in privately held companies — (2.2) — — — 3.8 — 4.3 — Non-GAAP oth
Slide 13: GAAP to Non-GAAP Reconciliations (Continued)
GAAP to Non-GAAP Reconciliations (Continued) ($ in millions) Q2'18 Q3'18 Q4'18 Q1'19 Q2'19 Q3'19 Q4'19 Q1'20 Q2'20 GAAP net income $49.3 $58.7 $182.6 $58.8 $72.7 $79.8 $115.2 $104.0 $112.1 Stock‐based compensation 40.6 43.2 42.6 43.0 45.0 42.4 43.7 45.3 49.6 Amortization of acquired intangible asset