Fortinet, Inc.
Jan 29, 2014

Fortinet Reports Fourth Quarter and Full Year 2013 Financial Results

SUNNYVALE, CA -- (Marketwired) -- 01/29/14 -- Fortinet® (NASDAQ: FTNT)

Fourth Quarter 2013 Highlights

Full Year 2013 Highlights

Fortinet® (NASDAQ: FTNT) -- a leader in high-performance network security -- today announced financial results for the fourth quarter and full year ended December 31, 2013.

"We had a strong finish to 2013, meeting or exceeding our expectations across our key non-GAAP operating metrics during the fourth quarter," said Ken Xie, founder, chairman, and chief executive officer. "Our performance highlights the global demand for our network security solutions, improved execution, and the leverage we are now experiencing from prior investments in our sales, marketing, and product development. Looking forward, we expect the advanced persistent threat opportunity, continued execution in the data center with 100Gbps deployments, and next-generation firewall displacements, to be key drivers of our business."

Financial Highlights for the Fourth Quarter of 2013

Financial Highlights for the Full Year 2013

1 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."

2 Includes the impact of a $2.2 million and $1.9 million sale of patents during the fourth quarter of fiscal 2013 and 2012, respectively.

3 Includes the impact of a $2.8 million and $3.7 million sale of patents during fiscal 2013 and 2012, respectively.

4 Excludes $2.0 million equity investment in a privately-held company, which is recorded in other assets on the consolidated balance sheets.

5 Includes the impact of a $1.5 million non-recurring cumulative out-of-period adjustment recorded during the fourth quarter of fiscal 2012 to reflect a true-up related to forfeitures of stock awards granted to employees. The adjustment resulted in lower stock-based compensation expense and higher operating income and net income during the fourth quarter of fiscal 2012.

6 During the fourth quarter of fiscal 2013, the Company repurchased $38.9 million of its common stock under its share repurchase program, all of which was paid in the fourth quarter of fiscal 2013 except for $5.4 million which was settled and paid in January 2014. In addition, capital expenditure related to the construction and improvement of the Company's future corporate headquarters amounted to $5.5 million.

7 During fiscal 2013, the Company repurchased $38.9 million of its common stock under its repurchase program, all of which was paid in fiscal 2013 except for $5.4 million which was settled and paid in January 2014. In addition, capital expenditure related to the construction and improvement of the Company's future corporate headquarters amounted to $6.8 million.

Conference Call Details

Fortinet will host a conference call today, January 29, 2014, 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 # 34200682. 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 5, 2014, by dialing (855) 859-2056 (domestic) or (404) 537-3406 (international) with conference ID# 34200682.

Following Fortinet's financial results 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 questions. To access this call, dial (877) 303-6913 (domestic) or (224) 357-2188 (international) with conference ID # 34200866. 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 5, 2014 by dialing (855) 859-2056 (domestic) or (404) 537-3406 (international) with conference ID # 34200866.

About Fortinet (www.fortinet.com)

Fortinet (NASDAQ: FTNT) is a worldwide provider of network security appliances and a 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 2012 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 © 2014 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 demand for our solutions, momentum of our business and our expectations regarding the drivers of our future business. 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, including specific economic risks such as those that may result from the U.S. budget process; uncertainty regarding increased business and renewals from existing customers; uncertainties around continued success in sales growth and market share gains; failure to grow the sales pipeline and to convert sales pipeline into final sales, and other sales execution risks; risks associated with successful implementation of multiple integrated software products and other product functionality risks; execution risks around new product development and introductions and innovation; customer support challenges; litigation and disputes and the potential cost, distraction and damage to sales and reputation caused thereby; market acceptance of new products and services; the ability to attract and retain personnel, and the loss of any key personnel; changes in strategy; risks associated with management of growth; lengthy sales and implementation cycles, particularly in larger organizations and service providers; 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; timing of higher capacity data center deployments and upgrades; competition and pricing pressure and the impact of increasing competition and new entrants in the market; and the other risk factors set forth from time to time in our most recent Annual Report on Form 10-K, our most recent Quarterly Report on Form 10-Q and our other 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 Generally Accepted Accounting Principles (GAAP). These non-GAAP financial measures are not based on any standardized methodology prescribed by GAAP and are not necessarily comparable to similar measures presented by other companies. 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 less any deferred revenue balances acquired from business combination(s) during 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 other 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 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. 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. 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 most recent 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 expense, amortization expense and impairment charges related to certain intangible assets, 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, amortization expense and impairment charges related to certain intangible assets, 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, amortization expense and impairment charges related to certain intangible assets. Stock-based compensation expense 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 other 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 diluted net income per share. We define non-GAAP net income as net income plus stock-based compensation expense, amortization expense and impairment charges related to certain intangible assets reduced by the income from payments we received from a patent settlement, and includes the impact of the tax adjustment, if any, required to achieve the effective tax rate on a pro forma basis, which could differ from the GAAP effective tax rate. We define non-GAAP diluted net income per share as non-GAAP net income divided by the weighted-average diluted shares outstanding. 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 include in non-GAAP net income and non-GAAP diluted net income per share, the tax adjustment required to achieve the effective tax rate on a pro forma basis, which could differ from the GAAP tax rate. We believe the effective tax rates we used 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 diluted net income per share. Management compensates for these limitations by providing specific information regarding the GAAP amounts excluded from non-GAAP net income and non-GAAP diluted net income per share and evaluating non-GAAP net income and non-GAAP diluted net income per share together with net income and diluted net income per share calculated in accordance with GAAP.

FORTINET, INC.
CONSOLIDATED BALANCE SHEETS
(Unaudited, in thousands)
December
31, 2013
December
31, 2012
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 115,873 $ 122,975
Short-term investments 375,497 290,719
Accounts receivable, net of allowance for doubtful accounts of $32 and $115, respectively 130,471 107,642
Inventory 48,672 21,060
Deferred tax assets 50,980 13,663
Prepaid expenses and other current assets 14,053 13,215
Total current assets 735,546 569,274
PROPERTY AND EQUIPMENT-Net 33,599 25,638
DEFERRED TAX ASSETS-Non-current 30,058 48,525
LONG-TERM INVESTMENTS 351,675 325,892
OTHER INTANGIBLE ASSETS-Net 6,841 2,117
GOODWILL 2,872 -
OTHER ASSETS 4,820 4,051
TOTAL ASSETS $ 1,165,411 $ 975,497
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $ 32,546 $ 20,816
Accrued liabilities 27,380 18,481
Accrued payroll and compensation 34,997 28,957
Income taxes payable 21,421 3,782
Deferred revenue 293,664 247,268
Total current liabilities 410,008 319,304
DEFERRED REVENUE-Non-current 138,964 115,917
INCOME TAXES PAYABLE-Non-current 30,208 28,778
OTHER LIABILITIES 471 564
Total liabilities 579,651 464,563
STOCKHOLDERS' EQUITY:
Common stock 161 162
Additional paid-in capital 462,644 400,075
Treasury stock - (2,995 )
Accumulated other comprehensive income 1,092 3,091
Retained earnings 121,863 110,601
Total stockholders' equity 585,760 510,934
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 1,165,411 $ 975,497
FORTINET, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited, in thousands, except per share amounts)
Three Months Ended Year Ended
December
31, 2013
December
31, 2012
December
31, 2013
December
31, 2012
REVENUE:
Product $ 83,884 $ 71,025 $ 278,046 $ 248,948
Services 90,276 76,711 329,723 274,043
Ratable and other revenue 3,190 3,426 7,528 10,648
Total revenue 177,350 151,162 615,297 533,639
COST OF REVENUE:
Product 1 37,579 26,974 114,611 93,971
Services 1 15,916 13,836 64,123 50,682
Ratable and other revenue 382 632 1,909 2,767
Total cost of revenue 53,877 41,442 180,643 147,420
GROSS PROFIT:
Product 46,305 44,051 163,435 154,977
Services 74,360 62,875 265,600 223,361
Ratable and other revenue 2,808 2,794 5,619 7,881
Total gross profit 123,473 109,720 434,654 386,219
OPERATING EXPENSES:
Research and development 1 27,747 20,525 102,660 81,078
Sales and marketing 1 62,331 48,117 224,991 179,155
General and administrative 1 8,752 6,038 34,913 25,511
Total operating expenses 98,830 74,680 362,564 285,744
OPERATING INCOME 24,643 35,040 72,090 100,475
INTEREST INCOME 1,318 1,400 5,306 5,006
OTHER EXPENSE-Net (419 ) (170 ) (1,455 ) (485 )
INCOME BEFORE INCOME TAXES 25,542 36,270 75,941 104,996
PROVISION FOR INCOME TAXES 13,526 14,763 31,668 38,160
NET INCOME $ 12,016 $ 21,507 $ 44,273 $ 66,836
Net income per share:
Basic $ 0.07 $ 0.13 $ 0.27 $ 0.42
Diluted $ 0.07 $ 0.13 $ 0.26 $ 0.40
Weighted-average shares outstanding:
Basic 163,281 160,034 162,435 158,074
Diluted 168,873 166,955 168,183 166,329
1 Includes stock-based compensation expense as follows:
Cost of product revenue $ 106 $ 96 $ 383 $ 333
Cost of services revenue 1,298 1,032 4,841 3,736
Research and development 3,666 2,452 13,271 9,226
Sales and marketing 5,599 1,996 19,526 12,793
General and administrative 2,018 1,186 6,450 4,602
$ 12,687 $ 6,762 $ 44,471 $ 30,690
FORTINET, INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Unaudited, in thousands)
Three Months Ended Year Ended
December
31, 2013
December
31, 2012
December
31, 2013
December
31, 2012
Net income $ 12,016 $ 21,507 $ 44,273 $ 66,836
Other comprehensive (loss) income, net of reclassification adjustments:
Foreign currency translation (losses) gains (716 ) (344 ) (1,617 ) 524
Unrealized gains (losses) on investments 239 (110 ) (587 ) 3,331
Tax (provision) benefit related to items of other comprehensive income or loss (84 ) (32 ) 205 (1,166 )
Other comprehensive (loss) income (561 ) (486 ) (1,999 ) 2,689
Comprehensive income $ 11,455 $ 21,021 $ 42,274 $ 69,525
FORTINET, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited, in thousands)
Three Months Ended Year Ended
December
31, 2013
December
31, 2012
December
31, 2013
December
31, 2012
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 12,016 $ 21,507 $ 44,273 $ 66,836
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization 4,112 3,488 15,623 11,564
Amortization of investment premiums 2,734 2,960 11,634 12,962
Stock-based compensation 12,687 6,762 44,471 30,690
Excess tax benefits from employee stock option plan (470 ) (2,458 ) (2,974 ) (12,069 )
Other non-cash items, net 441 (12 ) 961 881
Changes in operating assets and liabilities:
Accounts receivable-net (22,669 ) (17,800 ) (22,080 ) (12,120 )
Inventory (3,749 ) 3,674 (35,093 ) (11,303 )
Deferred tax assets (3,944 ) (4,739 ) (18,750 ) (9,254 )
Prepaid expenses and other current assets (1,111 ) 862 (907 ) 791
Other assets 350 585 1,243 2,470
Accounts payable (569 ) (2,088 ) 10,485 961
Accrued liabilities (1,539 ) (1,000 ) 1,092 301
Accrued payroll and compensation 4,613 3,036 6,013 4,599
Deferred revenue 32,446 23,100 68,871 68,292
Income taxes payable 11,320 12,416 22,522 28,265
Net cash provided by operating activities 46,668 50,293 147,384 183,866
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of investments (133,654 ) (77,698 ) (552,778 ) (601,087 )
Sales of investments 32,409 500 57,897 26,268
Maturities of investments 65,807 72,266 369,659 415,440
Purchases of property and equipment (7,148 ) (1,800 ) (13,877 ) (22,083 )
Payments made in connection with business acquisitions, net of cash acquired - (500 ) (7,635 ) (1,249 )
Net cash used in investing activities (42,586 ) (7,232 ) (146,734 ) (182,711 )
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of common stock 1,114 2,081 25,584 38,087
Taxes paid related to net share settlement of equity awards (486 ) - (1,452 ) -
Excess tax benefit from employee stock option plan 470 2,458 2,974 12,069
Repurchase and retirement of common stock (33,529 ) - (33,529 ) -
Net cash (used in)/provided by financing activities (32,431 ) 4,539 (6,423 ) 50,156
EFFECT OF EXCHANGE RATES ON CASH AND CASH EQUIVALENTS (324 ) (91 ) (1,329 ) (326 )
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS (28,673 ) 47,509 (7,102 ) 50,985
CASH AND CASH EQUIVALENTS--Beginning of period 144,546 75,466 122,975 71,990
CASH AND CASH EQUIVALENTS--End of period $ 115,873 $ 122,975 $ 115,873 $ 122,975
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 Year Ended
December
31, 2013
December
31, 2012
December
31, 2013
December
31, 2012
Total revenue $ 177,350 $ 151,162 $ 615,297 $ 533,639
Increase in deferred revenue 32,455 23,107 69,443 68,352
Less deferred revenue balance acquired in business combination - - (550 ) -
Total billings (Non-GAAP) $ 209,805 $ 174,269 $ 684,190 $ 601,991
Reconciliation of net cash provided by operating activities to free cash flow
Three Months Ended Year Ended
December
31, 2013
December
31, 2012
December
31, 2013
December
31, 2012
Net cash provided by operating activities $ 46,668 $ 50,293 $ 147,384 $ 183,866
Less purchases of property and equipment (7,148 ) (1,800 ) (13,877 ) (22,083 )
Free cash flow (Non-GAAP) $ 39,520 $ 48,493 $ 133,507 $ 161,783
Reconciliation of non-GAAP results of operations to the nearest comparable GAAP measures
(Unaudited, in thousands, except per share amounts)
Reconciliation of GAAP to Non-GAAP operating income, operating margin, net income and diluted net income per share
Three Months Ended
December 31, 2013
Three Months Ended
December 31, 2012
GAAP Results Adjustments Non-GAAP Results GAAP Results Adjustments Non-GAAP Results
Operating Income $ 24,643 $ 13,186 (a) $ 37,829 $ 35,040 $ 6,510 (b) $ 41,550
Operating Margin 14 % 21 % 23 % 27 %
Adjustments:
Stock-based compensation expense 12,687 6,762
Amortization expense of certain intangible assets 508 (c) 226 (c)
Impairment charges related to certain intangible assets 469 -
Patent settlement income (478 ) (478 )
Tax adjustment 746 (d) 218 (e)
Net Income $ 12,016 $ 13,932 $ 25,948 $ 21,507 $ 6,728 $ 28,235
Diluted net income per share $ 0.07 $ 0.15 $ 0.13 $ 0.17
Shares used in per share calculations - diluted 168,873 168,873 166,955 166,955
(a) To exclude $12.7 million of stock-based compensation expense, $0.5 million of amortization expense of certain intangible assets, and $0.5 million of impairment charges related to certain intangible assets offset by $0.5 million of patent settlement income in the three months ended December 31, 2013.
(b) To exclude $6.8 million of stock-based compensation expense and $0.2 million of amortization expense of certain intangible assets offset by $0.5 million of patent settlement income in the three months ended December 31, 2012.
(c) Effective second quarter of fiscal year 2013, amortization expense of certain intangible assets is excluded from GAAP operating income and GAAP net income. Prior period amounts have been adjusted to conform to the current period presentation.
(d) Non-GAAP financial information is adjusted to achieve an overall 33 percent effective tax rate on a pro forma basis, which differs from the GAAP tax rate, in the three months ended December 31, 2013.
(e) Non-GAAP financial information is adjusted to achieve an overall 34 percent effective tax rate on a pro forma basis, which differs from the GAAP tax rate, in the three months ended December 31, 2012.
Year Ended December 31, 2013 Year Ended December 31, 2012
GAAP Results Adjustments Non-GAAP Results GAAP Results Adjusments Non-GAAP Results
Operating Income $ 72,090 $ 44,579 (f) $ 116,668 $ 100,475 $ 29,604 (g) $ 130,079
Operating Margin 12 % 19 % 19 % 24 %
Adjustments:
Stock-based compensation expense 44,471 30,690
Amortization expense of certain intangible assets 1,551 (h) 826 (h)
Impairment charges related to certain intangible assets 469 -
Patent settlement income (1,912 ) (1,912 )
Tax adjustment (8,104 )(i) (7,604 )(j)
Net Income $ 44,273 $ 36,475 $ 80,748 $ 66,836 $ 22,000 $ 88,836
Diluted net income per share $ 0.26 $ 0.48 $ 0.40 $ 0.53
Shares used in per share calculations - diluted 168,183 168,183 166,329 166,329
(f) To exclude $44.5 million of stock-based compensation expense, $1.6 million of amortization expense of certain intangible assets, and $0.5 million of impairment charges related to certain intangible assets offset by $1.9 million of patent settlement income in the twelve months ended December 31, 2013.
(g) To exclude $30.7 million of stock-based compensation expense and $0.8 million of amortization expense of certain intangible assets offset by $1.9 million of patent settlement income in the twelve months ended December 31, 2013.
(h) Effective second quarter of fiscal year 2013, amortization expense of certain intangible assets is excluded from GAAP operating income and GAAP net income. Prior period amounts have been adjusted to conform to the current period presentation.
(i) Non-GAAP financial information is adjusted to achieve an overall 33 percent effective tax rate on a pro forma basis, which differs from the GAAP tax rate, in the twelve months ended December 31, 2013.
(j) Non-GAAP financial information is adjusted to achieve an overall 34 percent effective tax rate on a pro forma basis, which differs from the GAAP tax rate, in the twelve months ended December 31, 2012.

Investor Contact:

Michelle Spolver
Fortinet, Inc.
408-486-7837
mspolver@fortinet.com

Media Contact:

Rick Popko
Fortinet, Inc.
408-486-7853
rpopko@fortinet.com

Source: Fortinet

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