Slide 1: Q1 2023 Financial Results
Q1 2023 Financial Results May 4, 2023
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 second quarter and full year 2023 guidance, and future prospects and expectations are forward-looking statements that involve r
Slide 3: Q1 2023 Non-GAAP Results
Q1 2023 Non-GAAP Results Q1'21 Q2'21 Q3'21 Q4'21 Q1'22 Q2'22 Q3'22 Q4'22 Q1'23 Billings (1) $850.6M $960.9M $1.064B $1.306B $1.160B $1.304B $1.411B $1.719B $1.503B Y/Y % Change 27.4% 35.1% 41.9% 35.9% 36.4% 35.7% 32.6% 31.6% 29.6% Revenue $710.3M $801.1M $867.2M $963.6M $954.8M $1.030B $1.150B $1.28
Slide 4: Q1 2023 Non-GAAP Results
Q1 2023 Non-GAAP Results Q1'21 Q2'21 Q3'21 Q4'21 Q1'22 Q2'22 Q3'22 Q4'22 Q1'23 Gross Profit (1) $560.1M $621.2M $663.8M $744.4M $710.2M $788.5M $875.5M $996.0M $963.6M Gross Margin (1) 78.9% 77.5% 76.5% 77.3% 74.4% 76.5% 76.2% 77.6% 76.3% Operating Income (1)(2) $173.9M $203.3M $223.6M $274.7M $210.
Slide 5: Revenue by Geography
Revenue by Geography Q1'21 Q2'21 Q3'21 Q4'21 Q1'22 Q2'22 Q3'22 Q4'22 Q1'23 Y/Y % Y/Y % Y/Y % Y/Y % Y/Y % Y/Y % Y/Y % Y/Y % Y/Y % ($ in millions) $ $ $ $ $ $ $ $ $ Change Change Change Change Change Change Change Change Change Americas $290.9 19.9% $337.0 29.1% $350.1 28.5% $380.8 26.4% $382.6 31.5%
Slide 6: Number of Deals & FortiGate Sales
Number of Deals & FortiGate Sales Number of Deals (1) Q1'21 Q2'21 Q3'21 Q4'21 Q1'22 Q2'22 Q3'22 Q4'22 Q1'23 No. of Deals >$50K 2,489 2,856 3,021 3,807 3,241 3,583 4,269 4,904 4,583 No. of Deals >$250K 387 499 548 758 598 699 830 1,008 838 No. of Deals >$500K 167 203 232 320 243 312 355 450 323 No. o
Slide 7: Statement of Cash Flows (Non-GAAP)
Statement of Cash Flows (Non-GAAP) ($ in millions) Q1'21 Q2'21 Q3'21 Q4'21 Q1'22 Q2'22 Q3'22 Q4'22 Q1'23 GAAP Net Income Including Non-controlling Interests $107.2 $137.5 $163.2 $198.8 $138.3 $173.4 $231.1 $313.8 $247.7 Depreciation, Amortization and Stock-Based Compensation 66.8 71.5 75.6 78.4 78.7
Slide 8: Free Cash Flow and Adjusted Free Cash Flow Growth (Non-GAAP)
Free Cash Flow and Adjusted Free Cash Flow Growth (Non-GAAP) $662.1 ($ in millions) $509.8 $463.8 $402.8 $386.9 $366.2 $344.5 (1) $301.6 $304.7 $647.2 Reported Free Cash Flow Real Estate Related Add Backs (2) $497.2 $394.7 $395.2 $329.8 $263.8 $273.5 $283.5 $215.5 Q1'21 Q2'21 Q3'21 Q4'21 Q1'22 Q2'22
Slide 9: LTM Adjusted Free Cash Flow
LTM Adjusted Free Cash Flow $1,940 ($ in millions) $1,645 $1,500 $1,479 $1,402 (1), (2) LTM Adj FCF Q1'22 Q2'22 Q3'22 Q4'22 Q1'23 Notes (1) Free Cash Flow is a non-GAAP measure that we define as net cash provided by operating activities minus purchases of property and equipment. (2) Adjusted Free Ca
Slide 10: Q2 and 2023 Guidance (Non-GAAP)
Q2 and 2023 Guidance (Non-GAAP)(1) Actual Q2'23E Actual 2022 2023E Q2'22 Billings (2) $1.304B $1.560 - 1.600B $5.594B $6.750 - 6.810B Y/Y Mid-Pt Growth 21.1% 21.2% Revenue (GAAP) $1.030B $1.280 - 1.320B $4.417B $5.425 - 5.485B Y/Y Mid-Pt Growth 26.2% 23.5% Service Revenue (GAAP) $629.4M $2.637B $3.3
Slide 11: Additional Modeling Points
Additional Modeling Points Actual Q2’23E 2023E Q1'23 Cash Paid for Taxes $21M $35M $390M Capital Expenditures $30M $80 - $110M $400 - $450M Non-GAAP Tax Rate 17% 17% 17% © Fortinet Inc. All Rights Reserved. 11
Slide 12: GAAP to Non-GAAP Reconciliations
GAAP to Non-GAAP Reconciliations ($ in millions) Q1'21 Q2'21 Q3'21 Q4'21 Q1'22 Q2'22 Q3'22 Q4'22 Q1'23 Total revenue $710.3 $801.1 $867.2 $963.6 $954.8 $1,030.1 $1,149.5 $1,283.0 $1,262.3 Add: Change in deferred revenue 140.3 159.8 201.0 346.5 205.0 274.1 261.5 446.8 240.6 Less: Deferred revenue bal
Slide 13: GAAP to Non-GAAP Reconciliations
GAAP to Non-GAAP Reconciliations ($ in millions) Q1'21 Q2'21 Q3'21 Q4'21 Q1'22 Q2'22 Q3'22 Q4'22 Q1'23 GAAP product gross profit $149.4 $182.7 $202.8 $232.4 $210.0 $245.5 $283.5 $350.2 $307.1 Stock-based compensation 0.4 0.5 0.4 0.4 0.4 0.4 0.5 0.4 0.4 Amortization of acquired intangible assets 0.9
Slide 14: GAAP to Non-GAAP Reconciliations (Continued)
GAAP to Non-GAAP Reconciliations (Continued) ($ in millions) Q1'21 Q2'21 Q3'21 Q4'21 Q1'22 Q2'22 Q3'22 Q4'22 Q1'23 GAAP general and administrative expense $32.0 $34.4 $35.8 $41.3 $38.6 $45.4 $40.7 $44.3 $52.8 Stock-based compensation (6.3) (7.0) (6.9) (6.9) (7.2) (7.7) (7.4) (7.8) (8.2) Non-GAAP gen
Slide 15: GAAP to Non-GAAP Reconciliations (Continued)
GAAP to Non-GAAP Reconciliations (Continued) ($ in millions) Q1'21 Q2'21 Q3'21 Q4'21 Q1'22 Q2'22 Q3'22 Q4'22 Q1'23 GAAP provision for (benefit from) income taxes $12.2 $7.5 $(9.3) $3.7 $(8.1) $2.4 $27.3 $9.2 $21.3 Tax adjustments related to the above 23.9 34.6 54.2 52.4 41.7 39.1 27.8 63.6 38.5 Non-
Slide 16: Fortinet
F=SRTINET.