Fortinet, Inc.
Jan 31, 2012

Fortinet Reports Fourth Quarter and Full Year 2011 Financial Results

SUNNYVALE, CA -- (MARKET WIRE) -- 01/31/12 -- Fortinet® (NASDAQ: FTNT)

Fourth Quarter 2011 Highlights

Full Year 2011 Highlights:

Fortinet® (NASDAQ: FTNT) -- a leading network security provider and the worldwide leader in unified threat management (UTM) solutions -- today announced financial results for the fourth quarter and full year ended December 31, 2011.


Financial Highlights for the Fourth Quarter of 2011

Full Year 2011 Financial Results

(1) Effective January 1, 2011, we prospectively adopted the Financial Accounting Standards Board's new accounting standards related to software revenue recognition for applicable transactions originating or materially modified after December 31, 2010.

(2)A reconciliation of GAAP to non-GAAP financial 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."

(3) Includes the impact of a $9.0 million payment in the fourth quarter of 2011 to Trend Micro Incorporated to settle a dispute.

(4) Effective June 1, 2011, we completed a two-for-one stock split of our outstanding shares of common stock effected in the form of a stock dividend. All prior share and per share amounts in this release have been retroactively adjusted so the stock split is reflected for all periods presented.

Management Commentary:

Ken Xie, founder, president and chief executive officer of Fortinet, stated: "2011 was another exciting year for Fortinet. Demand for network security solutions remained robust and our growth continued to significantly outpace the overall UTM market and we continued to win business in other network security markets. Our efforts to strengthen our global sales team and enhance our product portfolio have enabled us to successfully penetrate the large enterprise market that is looking to deploy high performance, low latency next generation firewall solutions, as well as grow in the service provider and SMB markets."

Ken Goldman, chief financial officer of Fortinet, stated: "We had a very strong finish to 2011 with exceptional execution across all geographies and verticals. Since becoming a public company nine quarters ago, we have exceeded our expectations across key metrics, and our fourth quarter results are no exception. We once again outperformed in terms of revenue, profitability, and cash flow and continued to enhance our competitive position and leverage the investments we have made in our R&D and sales infrastructure. Our strong billings performance, robust product revenue growth, market-leading product portfolio and solid overall pipeline of business position the company to maintain momentum in the year ahead."

Conference Call Details

Fortinet will host a conference call today, January 31, 2012, at 1:30 p.m. Pacific Time (4:30 p.m. Eastern Time) to discuss its financial results. To access this call, dial (877) 303-6913 (domestic) or (224) 357-2188 (international) with conference ID # 41662134. A live webcast of the conference call and supplemental slides will be accessible from the Investor Relations page of Fortinet's website at http://investor.fortinet.com and a replay will be archived and accessible at: http://investor.fortinet.com/events.cfm. A replay of this conference call can also be accessed through February 14, 2012, by dialing (855) 859-2056 (domestic) or (404) 537-3406 (international) with conference ID# 41662134.

Following Fortinet's earnings conference call, the Company will host an additional question-and-answer session at 3:30 p.m. Pacific Time (6:30 p.m. Eastern Time) to provide an opportunity for financial analysts and investors to ask more detailed product and financial questions. To access this call, dial (877) 303-6913 (domestic) or (224) 357-2188 (international) with conference ID # 41663984. This follow-up call will be webcast live and accessible at http://investor.fortinet.com, and a replay will be archived and available after the call at http://investor.fortinet.com/events.cfm. A replay of this conference call will also be available through February 14, 2012 by dialing (855) 859-2056 (domestic) or (404) 537-3406 (international) with conference ID # 41663984.

About Fortinet (www.fortinet.com)

Fortinet (NASDAQ: FTNT) is a worldwide provider of network security appliances and the market leader in unified threat management (UTM). Our products and subscription services provide broad, integrated and high-performance protection against dynamic security threats while simplifying the IT security infrastructure. Our customers include enterprises, service providers and government entities worldwide, including the majority of the 2011 Fortune Global 100. Fortinet's flagship FortiGate product delivers ASIC-accelerated performance and integrates multiple layers of security designed to help protect against application and network threats. Fortinet's broad product line goes beyond UTM to help secure the extended enterprise -- from endpoints, to the perimeter and the core, including databases and applications. Fortinet is headquartered in Sunnyvale, Calif., with offices around the world.

Copyright © 2012 Fortinet, Inc. All rights reserved. The symbols ® and ™ denote respectively federally registered trademarks and unregistered trademarks of Fortinet, Inc., its subsidiaries and affiliates. Fortinet's trademarks include, but are not limited to, the following: Fortinet, FortiGate, FortiGuard, FortiManager, FortiMail, FortiClient, FortiCare, FortiAnalyzer, FortiReporter, FortiOS, FortiASIC, FortiWiFi, FortiSwitch, FortiVoIP, FortiBIOS, FortiLog, FortiResponse, FortiCarrier, FortiScan, FortiDB and FortiWeb. Other trademarks belong to their respective owners.

FTNT-F

Forward-looking Statements

This press release contains forward-looking statements that involve risks and uncertainties. These forward-looking statements include statements regarding the momentum in our business and our pipeline of business in 2012. Although we attempt to be accurate in making forward-looking statements, it is possible that future circumstances might differ from the assumptions on which such statements are based. Important factors that could cause results to differ materially from the statements herein include the following: general economic risks; specific economic risks in different geographies and among different customer segments; uncertainty regarding increased business and renewals from existing customers; uncertainties around continued success in sales growth and market share gains; failure to convert sales pipeline into final sales; risks associated with successful implementation of multiple integrated software products and other product functionality risks; execution risks around new product introductions and innovation; the ability to attract and retain personnel; changes in strategy; risks associated with management of growth; lengthy sales and implementation cycles, particularly in larger organizations; technological changes that make our products and services less competitive; risks associated with the adoption of, and demand for, the UTM model in general and by specific customer segments; and the other risk factors set forth from time to time in our filings with the SEC, copies of which are available free of charge at the SEC's website at www.sec.gov or upon request from our investor relations department. All forward-looking statements herein reflect our opinions only as of the date of this release, and we undertake no obligation, and expressly disclaim any obligation, to update forward-looking statements herein in light of new information or future events.

Non-GAAP Financial Measures

We have provided in this release financial information that has not been prepared in accordance with GAAP. We use these non-GAAP financial measures internally in analyzing our financial results and believe they are useful to investors, as a supplement to GAAP measures, in evaluating our ongoing operational performance. We believe that the use of these non-GAAP financial measures provides an additional tool for investors to use in evaluating ongoing operating results and trends and in comparing our financial results with other companies in our industry, many of which present similar non-GAAP financial measures to investors.

Non-GAAP financial measures should not be considered in isolation from, or as a substitute for, financial information prepared in accordance with GAAP. Investors are encouraged to review the reconciliation of these non-GAAP financial measures to their most directly comparable GAAP financial measures below. As previously mentioned, a reconciliation of our non-GAAP financial measures to their most directly comparable GAAP measures has been provided in the financial statement tables included below in this press release.

Billings. We define billings as revenue recognized plus the change in deferred revenue from the beginning to the end of the period. We consider billings to be a useful metric for management and investors because billings drive deferred revenue, which is an important indicator of the health and visibility of our business, and has historically represented a majority of the quarterly revenue that we recognize. There are a number of limitations related to the use of billings versus revenue calculated in accordance with GAAP. First, billings include amounts that have not yet been recognized as revenue. Second, we may calculate billings in a manner that is different from peer companies that report similar financial measures. Management compensates for these limitations by providing specific information regarding GAAP revenue and evaluating billings together with revenues calculated in accordance with GAAP.

Free Cash Flow. We define free cash flow as net cash provided by operating activities plus the amount we paid in the fourth quarter of 2011 to settle a lawsuit with Trend Micro Incorporated, minus capital expenditures. We consider free cash flow to be a liquidity measure that provides useful information to management and investors about the amount of cash generated by the business that, after the acquisition of property and equipment, can be used for strategic opportunities, including investing in our business, making strategic acquisitions, and strengthening the balance sheet. For the fourth quarter of 2011, we also added back the amount we paid to settle a lawsuit with Trend Micro Incorporated, which was a one-time event that impacted our net cash provided by operating activities during this period. For the full year 2011, we offset the amount we paid to Trend Micro Incorporated with a payment we received in a prior quarter to settle our lawsuit with Palo Alto Networks. Analysis of free cash flow facilitates management's comparisons of our operating results to competitors' operating results. A limitation of using free cash flow versus the GAAP measure of net cash provided by operating activities as a means for evaluating the Company is that free cash flow does not represent the total increase or decrease in the cash balance from operations for the period because it excludes cash used for capital expenditures during the period. Management compensates for this limitation by providing information about our capital expenditures on the face of the cash flow statement and under the caption "Management's Discussion and Analysis of Financial Condition and Results of Operations - Liquidity and Capital Resources" in our Quarterly Report on Form 10-Q and Annual Report on Form 10-K.

Non-GAAP operating income and operating margin. We define non-GAAP operating income as operating income plus stock-based compensation reduced by the income from payments we received from a patent settlement. Non-GAAP operating margin is defined as non-GAAP operating income divided by revenue. We consider these non-GAAP financial measures to be useful metrics for management and investors because they exclude the effect of stock-based compensation expense and patent settlement related income so that our management and investors can compare our recurring core business operating results over multiple periods. There are a number of limitations related to the use of non-GAAP operating income versus operating income calculated in accordance with GAAP. First, non-GAAP operating income excludes stock-based compensation expense. Stock-based compensation has been and will continue to be for the foreseeable future a significant recurring expense in our business. Second, stock-based compensation is an important part of our employees' compensation and impacts their performance. Third, the components of the costs that we exclude in our calculation of non-GAAP operating income may differ from the components that our peer companies exclude when they report their non-GAAP results of operations. Management compensates for these limitations by providing specific information regarding the GAAP amounts excluded from non-GAAP operating income and evaluating non-GAAP operating income together with operating income calculated in accordance with GAAP.

Non-GAAP net income and EPS. We define non-GAAP net income as net income plus stock-based compensation expense reduced by the income from payments we received from a patent settlement, less the related tax effects. We define non-GAAP EPS as non-GAAP net income divided by the weighted-average shares outstanding, on a fully-diluted basis. We consider these non-GAAP financial measures to be useful metrics for management and investors for the same reasons that we use non-GAAP operating income and non-GAAP operating margin. However, in order to provide a complete picture of our recurring core business operating results, we exclude from non-GAAP net income and non-GAAP EPS the tax effects associated with stock-based compensation and the patent settlement. We used a 33 percent effective tax rate to calculate non-GAAP net income for the fourth quarter of 2011. We used a 27 percent effective tax rate to calculate non-GAAP net income for the fourth quarter of 2010. We believe these effective tax rates are reasonable estimates of long-term normalized tax rates under our global operating structure. The same limitations described above regarding our use of non-GAAP operating income and non-GAAP operating margin apply to our use of non-GAAP net income and non-GAAP EPS. We compensate for these limitations by providing specific information regarding the GAAP amounts excluded from non-GAAP net income and non-GAAP EPS and evaluating non-GAAP net income and non-GAAP EPS together with net income and EPS calculated in accordance with GAAP.


                               FORTINET, INC.



                        CONSOLIDATED BALANCE SHEETS

                         (Unaudited, in thousands)



                                                December 31,   December 31,

                     ASSETS                         2011           2010

                                               -------------  -------------



CURRENT ASSETS:

  Cash and cash equivalents                    $      71,990  $      66,859

  Short-term investments                             318,283        246,651

  Accounts receivable, net of allowance for

   doubtful accounts of $336 and $303,

   respectively                                       95,522         72,336

  Inventory                                           16,249         13,517

  Deferred tax asset                                   7,578          8,158

  Prepaid expenses and other current assets           11,808          8,849

  Deferred cost of revenues                            2,140          3,788

                                               -------------  -------------



    Total current assets                             523,570        420,158



PROPERTY AND EQUIPMENT - Net                           7,966          7,056



DEFERRED TAX ASSET - Non-current                      46,523         37,443



DEFERRED COST OF REVENUES - Non-current                3,375          5,543



LONG-TERM INVESTMENTS                                148,414         73,950



OTHER ASSETS                                           4,899          1,272

                                               -------------  -------------

TOTAL ASSETS                                   $     734,747  $     545,422

                                               =============  =============



      LIABILITIES AND STOCKHOLDERS' EQUITY



CURRENT LIABILITIES:

  Accounts payable                             $      19,768  $      12,761

  Accrued liabilities                                 15,971         16,303

  Accrued payroll and compensation                    24,197         19,670

  Deferred revenue                                   206,928        169,648

                                               -------------  -------------



    Total current liabilities                        266,864        218,382



DEFERRED REVENUE - Non-current                        87,905         82,983

OTHER NON-CURRENT LIABILITIES                         21,624         11,603

                                               -------------  -------------

    Total liabilities                                376,393        312,968

                                               -------------  -------------



STOCKHOLDERS' EQUITY:

  Common stock                                           156            150

  Additional paid-in-capital                         317,026        251,845

  Treasury stock - common                             (2,995)        (2,995)

  Accumulated other comprehensive income                 402          2,181

  Retained earnings (accumulated deficit)             43,765        (18,727)

                                               -------------  -------------



    Total stockholders' equity                       358,354        232,454

                                               -------------  -------------

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY     $     734,747  $     545,422

                                               =============  =============





                               FORTINET, INC.



                   CONSOLIDATED STATEMENTS OF OPERATIONS

            (Unaudited, in thousands, except per share amounts)



                         Three Months Ended          Twelve Months Ended

                     --------------------------  --------------------------

                     December 31,  December 31,  December 31,  December 31,

                         2011          2010          2011          2010

                     ------------  ------------  ------------  ------------



REVENUE:

  Product            $     57,463  $     41,080  $    197,408  $    135,140

  Services                 61,076        47,930       220,268       172,046

  Ratable and other

   revenue                  2,322         4,589        15,900        17,510

                     ------------  ------------  ------------  ------------



    Total revenue         120,861        93,599       433,576       324,696

                     ------------  ------------  ------------  ------------



COST OF REVENUE:

  Product(1)               21,929        15,545        73,201        51,944

  Services(1)               9,671         7,116        35,486        26,967

  Ratable and other

   revenue                    886         1,562         4,911         6,295

                     ------------  ------------  ------------  ------------



    Total cost of

     revenue               32,486        24,223       113,598        85,206

                     ------------  ------------  ------------  ------------



GROSS PROFIT:

  Product                  35,534        25,535       124,207        83,196

  Services                 51,405        40,814       184,782       145,079

  Ratable and other

   revenue                  1,436         3,027        10,989        11,215

                     ------------  ------------  ------------  ------------



    Total gross

     profit                88,375        69,376       319,978       239,490

                     ------------  ------------  ------------  ------------



OPERATING EXPENSES:

  Research and

   development(1)          16,379        12,802        63,577        49,801

  Sales and

   marketing(1)            39,984        30,481       145,532       111,968

  General and

   administrative(1)        5,492         5,395        21,965        22,380

                     ------------  ------------  ------------  ------------



    Total operating

     expenses              61,855        48,678       231,074       184,149

                     ------------  ------------  ------------  ------------



OPERATING INCOME           26,520        20,698        88,904        55,341



INTEREST INCOME               963           634         3,523         1,815



OTHER EXPENSE - NET          (112)         (250)         (354)         (815)

                     ------------  ------------  ------------  ------------



INCOME BEFORE INCOME

 TAXES                     27,371        21,082        92,073        56,341



PROVISION FOR INCOME

 TAXES                     10,877         4,941        29,581        15,096

                     ------------  ------------  ------------  ------------



NET INCOME           $     16,494  $     16,141  $     62,492  $     41,245

                     ============  ============  ============  ============



Net income per

 share(2):

  Basic              $       0.11  $       0.11  $       0.41  $       0.29

                     ============  ============  ============  ============

  Diluted            $       0.10  $       0.10  $       0.38  $       0.26

                     ============  ============  ============  ============



Weighted-average

 shares

 outstanding(2):

  Basic                   154,429       147,698       152,581       140,726

                     ============  ============  ============  ============

  Diluted                 164,505       160,668       163,781       156,406

                     ============  ============  ============  ============



(1) Includes stock-

 based compensation

 expense as follows:

  Cost of product

   revenue           $         54  $         25  $        183  $        101

  Cost of services

   revenue                    666           245         1,790           929

  Research and

   development              1,737           598         4,691         2,339

  Sales and marketing       3,036         1,030         9,325         3,810

  General and

   administrative             848           571         3,026         2,136

                     ------------  ------------  ------------  ------------

                     $      6,341  $      2,469  $     19,015  $      9,315

                     ============  ============  ============  ============



(2) Effective June 1, 2011, we completed a two-for-one stock split of our

 outstanding shares of common stock. In accordance with GAAP, we have

 retroactively displayed the effect of the change in our consolidated

 financial statements.





                               FORTINET, INC.



                   CONSOLIDATED STATEMENTS OF CASH FLOWS

                         (Unaudited, in thousands)



                         Three Months Ended          Twelve Months Ended

                     --------------------------  --------------------------

                     December 31,  December 31,  December 31,  December 31,

                         2011          2010          2011          2010

                     ------------  ------------  ------------  ------------

CASH FLOWS FROM

 OPERATING

 ACTIVITIES:

  Net income         $     16,494  $     16,141  $     62,492  $     41,245

  Adjustments to

   reconcile net

   income to net cash

   provided by

   operating

   activities:

    Depreciation and

     amortization           1,702         1,463         6,816         5,696

    Loss on disposal

     of fixed assets            -             -            22            14

    Amortization of

     investment

     premiums               3,007         2,415        12,515         7,349

    Stock-based

     compensation           6,341         2,469        19,015         9,315

    Excess tax

     benefits from

     employee stock

     option plans         (10,565)       (1,590)      (19,829)       (5,781)

    Changes in

     operating assets

     and liabilities:

      Accounts

       receivable -

       net                (19,687)      (12,773)      (23,246)      (17,784)

      Inventory            (4,556)       (3,131)       (6,034)       (5,946)

      Deferred tax

       assets              (2,328)       (4,270)       (7,874)       (4,278)

      Prepaid

       expenses and

       other current

       assets              (2,136)         (944)       (4,565)       (3,849)

      Deferred cost

       of revenues            629           638         3,817           364

      Other assets           (311)            5        (1,767)           55

      Accounts

       payable              4,287         3,126         6,801         2,437

      Accrued

       liabilities         (5,241)          652          (374)        2,363

      Accrued payroll

       and

       compensation         3,191         1,153         4,773         5,465

      Deferred

       litigation

       settlement and

       other

       liabilities           (525)            -         2,139             -

      Deferred

       revenue             19,706        17,381        42,177        50,701

      Income taxes

       payable             12,551         8,690        35,964        16,017

                     ------------  ------------  ------------  ------------



        Net cash

         provided by

         operating

         activities        22,559        31,425       132,842       103,383

                     ------------  ------------  ------------  ------------



CASH FLOWS FROM

 INVESTING

 ACTIVITIES:

  Purchases of

   investments           (109,796)     (104,381)     (516,906)     (416,376)

  Maturities and

   sales of

   investments             76,646        56,283       356,327       136,380

  Payments made in

   connection with

   business

   acquisition, net             -             -        (2,623)            -

  Purchase of

   property and

   equipment                 (839)         (876)       (3,624)       (3,776)

  Deposits of

   restricted cash              -            66             -            62

                     ------------  ------------  ------------  ------------



        Net cash used

         in investing

         activities       (33,989)      (48,908)     (166,826)     (283,710)

                     ------------  ------------  ------------  ------------



CASH FLOWS FROM

 FINANCING

 ACTIVITIES:

  Proceeds from

   exercise of stock

   options and

   warrants                 5,950         5,218        19,968        29,110

  Offering costs paid

   in connection with

   Initial Public

   Offering                     -             -             -          (872)

  Excess tax benefit

   from employee

   stock option plans      10,565         1,590        19,829         5,781

                     ------------  ------------  ------------  ------------



        Net cash

         provided by

         financing

         activities        16,515         6,808        39,797        34,019

                     ------------  ------------  ------------  ------------



EFFECT OF EXCHANGE

 RATES ON CASH AND

 CASH EQUIVALENTS             275           395          (682)          709

                     ------------  ------------  ------------  ------------



NET INCREASE

 (DECREASE) IN CASH

 AND CASH EQUIVALENTS       5,360       (10,280)        5,131      (145,599)



CASH AND CASH

 EQUIVALENTS -

 Beginning of period       66,630        77,139        66,859       212,458

                     ------------  ------------  ------------  ------------



CASH AND CASH

 EQUIVALENTS - End of

 period              $     71,990  $     66,859  $     71,990  $     66,859

                     ============  ============  ============  ============







Reconciliations of non-GAAP results of operations measures to the nearest

 comparable GAAP measures

(Unaudited, in thousands)



Reconciliation of GAAP revenue to billings



                         Three Months Ended          Twelve Months Ended

                     --------------------------  --------------------------

                     December 31,  December 31,  December 31,  December 31,

                         2011          2010          2011          2010

                     ------------  ------------  ------------  ------------

Total revenue        $    120,861  $     93,599  $    433,576  $    324,696

  Increase in

   deferred revenue        19,706        17,381        42,202        50,701

                     ------------  ------------  ------------  ------------



Total billings (Non-

 GAAP)               $    140,567  $    110,980  $    475,778  $    375,397

                     ============  ============  ============  ============





Reconciliation of cash provided by operating activities to free cash flow



                         Three Months Ended          Twelve Months Ended

                     --------------------------  --------------------------

                     December 31,  December 31,  December 31,  December 31,

                         2011          2010          2011          2010

                     ------------  ------------  ------------  ------------

Net cash provided by

 operating activities$     22,559  $     31,425  $    132,842  $    103,383

  Less purchases of

   property and

   equipment                 (839)         (876)       (3,624)       (3,776)

  Add patent

   litigation

   settlement(1)            9,000             -         6,000             -

                     ------------  ------------  ------------  ------------



Free cash flow (Non-

 GAAP)               $     30,720  $     30,549  $    135,218  $     99,607

                     ============  ============  ============  ============



Net cash used in

 investing

 activities*         $    (33,989) $    (48,908) $   (166,826) $   (283,710)

                     ============  ============  ============  ============



Net cash provided by

 financing activities$     16,515  $      6,808  $     39,797  $     34,019

                     ============  ============  ============  ============



(1) For the three months ended December 31, 2011, we had $7.2 million in

 accrued liabilities as of the date of the settlement of our litigation

 with Trend Micro Incorporated. The remaining $1.8 million of the

 settlement was a prepaid asset at December 31, 2011. For the twelve months

 ended December 31, 2011, the $9.0 million settlement with Trend Micro

 Incorporated was partially offset by $3.0 million in cash provided by our

 litigation settlement with Palo Alto Networks.



*includes purchases of property and equipment.





Reconciliations of non-GAAP results of operations measures to the nearest

 comparable GAAP measures and other non-GAAP financial information

(Unaudited, in thousands, except per share amounts)



Reconciliation of GAAP to non-GAAP operating income, operating margin, net

 income and net income per share.



                Three Months Ended                Three Months Ended

                 December 31, 2011                 December 31, 2010

          -------------------------------  --------------------------------

             GAAP   Adjust       Non-GAAP     GAAP    Adjust       Non-GAAP

           Results   ments       Results    Results    ments       Results

          --------- ------      ---------  ---------  ------      ---------



Operating

 Income   $  26,520  5,863  (a) $  32,383  $  20,698   2,469  (b) $  23,167

          ========= ======      =========  =========  ======      =========



Operating

 Margin          22%                   27%        22%                    25%

          =========             =========  =========              =========



                     5,863  (a)                        2,469  (b)

                       (90) (c)                       (1,332) (c)

                    ------                            ------



Net

 Income   $  16,494  5,773      $  22,267  $  16,141   1,137      $  17,278

          =========             =========  =========              =========



Net

 income

 per

 share -

 diluted  $    0.10             $    0.14  $    0.10              $    0.11

          =========             =========  =========              =========



Shares

 used in

 per

 share

 calculat

 ion -

 diluted    164,505               164,505    160,668                160,668

          =========             =========  =========              =========



(a) To eliminate $6.3 million of stock-based compensation expense offset by

 the $0.5 million of patent settlement income in the three months ended

 December 31, 2011.

(b) To eliminate $2.5 million of stock-based compensation expense in the

 three months ended December 31, 2010.

(c) To eliminate the tax effects related to expenses noted in (a) and (b).







Reconciliation of GAAP to non-GAAP operating income, operating margin, net

income and net income per share.



                Twelve Months Ended              Twelve Months Ended

                 December 31, 2011                 December 31, 2010

          -------------------------------  --------------------------------

             GAAP   Adjust       Non-GAAP     GAAP    Adjust       Non-GAAP

           Results   ments       Results    Results    ments       Results

          --------- ------      ---------  ---------  ------      ---------



Operating

 Income   $  88,904 17,104  (a) $ 106,008  $  55,341   9,315  (b) $  64,656

          ========= ======      =========  =========  ======      =========



Operating

 Margin          21%                   24%        17%                    20%

          =========             =========  =========              =========



                    17,104  (a)                        9,315  (b)

                    (6,447) (c)                       (5,914) (c)

                    ------                            ------



Net

 Income   $  62,492 10,657      $  73,149  $  41,245   3,401      $  44,646

          =========             =========  =========              =========



Net

 income

 per

 share -

 diluted  $    0.38             $    0.45  $    0.26              $    0.29

          =========             =========  =========              =========



Shares

 used in

 per

 share

 calculat

 ion -

 diluted    163,781               163,781    156,406                156,406

          =========             =========  =========              =========



(a) To eliminate $19.0 million of stock-based compensation expense offset

 by the $1.9 million of patent settlement income in the twelve months ended

 December 31, 2011.

(b) To eliminate $9.3 million of stock-based compensation expense in the

 twelve months ended December 31, 2010.

(c) To eliminate the tax effects related to expenses noted in (a) and (b).

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Investor & Media Contact:

Michelle Spolver

Fortinet, Inc.

408-486-7837

mspolver@fortinet.com



Source: Fortinet

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