Fortinet, Inc.
Feb 5, 2018

Fortinet Reports Fourth Quarter and Full Year 2017 Financial Results

Fortinet Reports Full Year Revenue Up 17% and Billings Up 19% over 2016

Fourth Quarter 2017 Highlights

Full Year 2017 Highlights

SUNNYVALE, Calif., Feb. 05, 2018 (GLOBE NEWSWIRE) -- Fortinet® (NASDAQ:FTNT), a global leader in broad, automated and integrated cyber security solutions, today announced financial results for the fourth quarter and full year ended December 31, 2017.

"We are pleased with our strong fourth quarter and full year results, which demonstrate our clear technology advantage and market leadership," said Ken Xie, Founder, Chairman and Chief Executive Officer. "Our ability to provide our customers with broad, integrated and automated security across the entire network infrastructure sets us apart from our competition. Led by the innovation of the Fortinet Security Fabric, Fortinet has strong market momentum and is well positioned for robust future growth."

Financial Highlights for the Fourth Quarter of 2017

Financial Highlights for the Full Year 2017

Guidance

For the first quarter of 2018, Fortinet expects:

For the fiscal year of 2018, Fortinet expects:

The above guidance for the first quarter and full year of 2018 excludes the transition impact of ASC 606 adoption, which is effective January 1, 2018. Our guidance with respect to non-GAAP financial measures excludes stock-based compensation and amortization of acquired intangible assets. We have not reconciled our guidance with respect to non-GAAP financial measures to the corresponding GAAP measures because certain items that impact these measures are uncertain or out of our control, or cannot be reasonably predicted. Accordingly, a reconciliation of these non-GAAP financial measures to the corresponding GAAP measures is not available without unreasonable effort.

1 A reconciliation of GAAP to non-GAAP 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."

Keith Jensen Named Interim Chief Financial Officer - Effective February 16, 2018
Keith Jensen, a 35-year finance veteran and Fortinet's chief accounting officer since May 2014, will succeed CFO Drew Del Matto as interim CFO effective February 16, 2018. Keith served as chief administrative officer and chief accounting officer (CAO) at DataDirect Networks and CAO at Sybase. Before Sybase, Keith was chief financial officer of Dorado Network Systems. "The past four years have been incredibly rewarding and I am honored to have worked with Ken, Michael and the rest of the Fortinet team. I will miss them all and I am excited that Keith is taking over the interim CFO role," said Drew Del Matto, who is leaving for another opportunity. "Over the last four years, Drew has made a strong impact on the business and significantly contributed to the company's growth and profitability. During that time Drew has developed a deep bench of seasoned leaders and has built a strong financial organization to support and grow the business. We wish Drew the very best in his next opportunity and we thank him for his significant contributions," said Ken Xie.

Conference Call Details
Fortinet will host a conference call today at 1:30 p.m. Pacific Time (4:30 p.m. Eastern Time) to discuss the earnings results. The call can be accessed by dialing (877) 303-6913 (domestic) or (224) 357-2188 (international) with conference ID # 1373759. 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 12, 2018, by dialing (855) 859-2056 (domestic) or (404) 537-3406 (international) with conference ID #1373759.

Following Fortinet's financial results conference call, Fortinet 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 #6075549. This call will be webcast live and accessible at http://investor.fortinet.com, and will be archived and accessible at http://investor.fortinet.com/events.cfm. A replay of this conference call will also be available through February 12, 2018, by dialing (855) 859-2056 (domestic) or (404) 537-3406 (international) with conference ID #6075549.

First Quarter 2018 Analyst Day and Investor Conference Participation Schedule:

Members of Fortinet's management team are expected to present at these events and discuss the latest company strategies and initiatives. To access the most updated information and listen to the webcast of each event, please visit the Investor Relations page of Fortinet's website at http://investor.fortinet.com. The schedule is subject to change.

About Fortinet (www.fortinet.com)
Fortinet (NASDAQ:FTNT) secures the largest enterprise, service provider, and government organizations around the world. Fortinet empowers its customers with intelligent, seamless protection across the expanding attack surface and the power to take on ever-increasing performance requirements of the borderless network - today and into the future. Only the Fortinet Security Fabric architecture can deliver security without compromise to address the most critical security challenges, whether in networked, application, cloud or mobile environments. Fortinet ranks #1 in the most security appliances shipped worldwide and more than 330,000 customers trust Fortinet to protect their businesses. Learn more at http://www.fortinet.com, the Fortinet Blog, or FortiGuard Labs.    

Copyright © 2018 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, FortiCloud, FortiCare, FortiAnalyzer, FortiReporter, FortiOS, FortiASIC, FortiWiFi, FortiSwitch, FortiVoIP, FortiBIOS, FortiLog, FortiResponse, FortiCarrier, FortiScan, FortiAP, FortiDB, FortiVoice, FortiWeb and FortiCASB. 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 our market position, strong market momentum, position for future growth, ability to continue to grow our market position and address our market opportunity, and guidance and future financial results. 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; global economic conditions, country-specific economic conditions, and foreign currency risks; competitiveness in the security market; the dynamic nature of the security market; specific economic risks worldwide and 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; longer sales cycles, particularly for larger enterprise customers; failure to convert sales pipeline into final sales; risks associated with successful implementation of multiple integrated software products and other product functionality risks; sales and marketing execution risks; execution risks around new product development and introductions and innovation; 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; 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, our products and services in general and by specific customer segments; competition and pricing pressure; risks related to integrating acquisitions; 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 Securities and Exchange Commission (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 and liquidity 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 peer companies, 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 provided in the financial statement tables below.

Billings (Non-GAAP). We define billings as revenue recognized in accordance with GAAP 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 future revenue, which is an important indicator of the health and viability of our business. There are a number of limitations related to the use of billings instead of GAAP revenue. First, billings include amounts that have not yet been recognized as revenue and are impacted by the term of security and support agreements. Second, we may calculate billings in a manner that is different from peer companies that report similar financial measures. Management accounts for these limitations by providing specific information regarding GAAP revenue and evaluating billings together with GAAP revenue.

Free cash flow (Non-GAAP). We define free cash flow as net cash provided by operating activities minus capital expenditures such as purchases of real estate and other property and equipment. We believe 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 capital expenditures, can be used for strategic opportunities, including investing in our business, making strategic acquisitions, repurchasing outstanding common stock, and strengthening the balance sheet. However, free cash flow is not intended to represent our residual cash flow available for discretionary expenditures, since we may have other non-discretionary expenditures that are not deducted from the measure. A limitation of using free cash flow rather than the GAAP measure of net cash provided by operating activities is that free cash flow does not represent the total increase or decrease in the cash, cash equivalents and investments balance for the period because it excludes cash provided by or used for other investing and financing activities. Management accounts for this limitation by providing information about our capital expenditures and other investing and financing activities 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 and by presenting cash flows from investing and financing activities in our reconciliation of free cash flows. In addition, it is important to note that other companies, including companies in our industry, may not use free cash flow, may calculate free cash flow in a different manner than we do or may use other financial measures to evaluate their performance, all of which could reduce the usefulness of free cash flows as a comparative measure.

Non-GAAP operating income and operating margin. We define non-GAAP operating income as operating income or loss plus stock-based compensation, business acquisition-related charges, purchase accounting adjustments, impairment and amortization of acquired intangible assets, restructuring charges, expenses associated with the implementation of a new Enterprise Resource Planning (ERP) system, litigation settlement expenses and, when applicable, other significant non-recurring items in a given quarter. Non-GAAP operating margin is defined as non-GAAP operating income divided by GAAP revenue. We consider these non-GAAP financial measures to be useful metrics for management and investors because they exclude the items noted above 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 instead of operating income or loss calculated in accordance with GAAP. First, non-GAAP operating income excludes the items noted above. Second, the components of the costs that we exclude from our calculation of non-GAAP operating income may differ from the components that peer companies exclude when they report their non-GAAP results of operations. Management accounts 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 or loss plus the items noted above under non-GAAP operating income and operating margin, including a tax adjustment to achieve our effective tax rate on a non-GAAP basis, which often differs from the GAAP effective tax rate. We define non-GAAP diluted net income per share as non-GAAP net income divided by the non-GAAP diluted weighted-average 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 more 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 resulting in an effective tax rate on a non-GAAP basis, which often differs from the GAAP tax rate. We believe the non-GAAP effective tax rates we use are reasonable estimates of normalized tax rates for our current and prior fiscal years 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. We account 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 or loss and diluted net income per share calculated in accordance with GAAP.

 

 
FORTINET, INC.
CONSOLIDATED BALANCE SHEETS
(Unaudited, in thousands)  
 
 December 31,
 2017
 December 31,
 2016
ASSETS   
CURRENT ASSETS:   
Cash and cash equivalents$811,004  $709,003 
Short-term investments440,273  376,522 
Accounts receivable—net348,185  312,998 
Inventory77,291  106,887 
Prepaid expenses and other current assets40,067  33,306 
Total current assets1,716,820  1,538,716 
LONG-TERM INVESTMENTS98,022  224,983 
PROPERTY AND EQUIPMENT—NET245,395  137,249 
DEFERRED TAX ASSETS146,932  182,745 
OTHER INTANGIBLE ASSETS—NET 16,255  24,828 
GOODWILL14,553  14,553 
OTHER ASSETS19,939  16,867 
TOTAL ASSETS$2,257,916  $2,139,941 
LIABILITIES AND STOCKHOLDERS' EQUITY   
CURRENT LIABILITIES:   
Accounts payable$70,009  $ 56,732 
Accrued liabilities50,015  35,640 
Accrued payroll and compensation91,944  78,138  
Income taxes payable21,435  13,588 
Deferred revenue793,820  645,342 
Total current liabilities1,027,223  829,440 
DEFERRED REVENUE542,494  390,007 
INCOME TAX LIABILITIES90,213  68,551 
OTHER LIABILITIES8,609  14,262 
Total liabilities1,668,539  1,302,260 
COMMITMENTS AND CONTINGENCIES   
STOCKHOLDERS' EQUITY:   
Common stock168  173 
Additional paid-in capital909,636  800,653 
Accumulated other comprehensive loss(847) (765)
Retained earnings (deficit)(319,580) 37,620 
Total stockholders' equity589,377  837,681 
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $2,257,916  $2,139,941 
        

 

 
FORTINET, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited, in thousands, except per share amounts)
 
 Three Months Ended Year Ended
 December 31,
 2017
 December 31,
 2016
 December 31,
 2017
 December 31,
 2016
REVENUE:       
Product$162,118  $158,925  $577,171  $548,110 
Service254,550   203,905  917,759  727,333 
Total revenue416,668  362,830  1,494,930  1,275,443 
COST OF REVENUE:       
Product 169,634  56,616  243,824  208,984 
Service 135,785  34,275  141,460  128,853 
Total cost of revenue105,419  90,891  385,284  337,837 
GROSS PROFIT:       
Product92,484  102,309  333,347  339,126 
Service218,765  169,630  776,299  598,480 
Total gross profit311,249  271,939  1,109,646  937,606 
OPERATING EXPENSES:       
Research and development 154,774  45,589  210,614  183,084 
Sales and marketing 1191,928  162,873  701,026  626,501 
General and administrative 122,349  17,451  87,862  81,080 
Restructuring charges  833  340  3,997 
Total operating expenses269,051  226,746  999,842  894,662 
OPERATING INCOME42,198  45,193   109,804  42,944 
INTEREST INCOME4,061  1,964  13,482  7,303 
OTHER INCOME (EXPENSE)—NET(1,181) (3,650) 708  (7,099)
INCOME BEFORE INCOME TAXES45,078  43,507  123,994  43,148 
PROVISION FOR INCOME TAXES74,039  18,341  92,595  10,961 
NET INCOME (LOSS)$(28,961) $25,166  $31,399  $32,187 
Net income (loss) per share:       
Basic$(0.17) $0.15  $0.18  $0.19 
Diluted$(0.17) $ 0.14  $0.18  $0.18 
Weighted-average shares outstanding:       
Basic171,530  173,315  174,315  172,621 
Diluted171,530  176,679  178,079  176,338 
        
1 Includes stock-based compensation as follows:       
Cost of product revenue$341  $313  $1,380  $1,200 
Cost of service revenue2,349  2,276  9,503  8,771 
Research and development8,067  7,871  32,194  30,120 
Sales and marketing19,614  17,930  77,994  68,113 
General and administrative4,083  3,691  16,112  14,219 
 $34,454  $32,081  $137,183  $122,423 
                

 

 
FORTINET, INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(Unaudited, in thousands)
 
 Three Months Ended Year Ended
 December 31,
 2017
 December 31,
 2016
 December 31,
 2017
 December 31,
 2016
Net income (loss)$(28,961) $25,166  $31,399  $32,187 
Other comprehensive income (loss):       
Change in unrealized gains (losses) on investments(599) (1,411) (93) 258 
Tax provision (benefit) related to change in unrealized
gains (losses) on investments
(168) (493) (11) 90 
Other comprehensive income (loss)(431) (918) (82) 168 
Comprehensive income (loss)$(29,392) $24,248  $31,317   $32,355 
                

 

 
FORTINET, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited, in thousands)
 
 Three Months Ended Year Ended
 December 31,
 2017
 December 31,
 2016
 December 31,
 2017
 December 31,
 2016
CASH FLOWS FROM OPERATING ACTIVITIES:        
Net income (loss)$(28,961) $25,166  $31,399  $32,187 
Adjustments to reconcile net income (loss) to net cash
provided by operating activities:
       
Depreciation and amortization14,268  13,624  55,476  48,520 
Amortization of investment premiums417  952  2,542  4,780 
Stock-based compensation34,454   32,081  137,183  122,423 
Other non-cash items—net601  (2,202) 3,780  2,644 
Changes in operating assets and liabilities, net of
assets acquired and liabilities assumed in business
acquisitions:
       
Accounts receivable—net(89,902) (70,663) (38,455) (57,875)
Inventory(8,264) (18,468) 9,423  (43,023)
Prepaid expenses and other current assets2,873  (1,685) (6,726) 2,616 
Deferred tax assets57,957  7,183  35,824  (27,822)
Other assets(641) 243  (1,001) (2,352)
Accounts payable29,627  1,623  13,090  39 
Accrued liabilities6,393  (3,808) 14,445  (3,210)
Accrued payroll and compensation16,098  12,443  12,567  15,696 
Other liabilities(1,659) (1,894) (5,489) (5,013)
Deferred revenue116,489  100,094  300,839  242,961 
Income taxes payable7,792  6,348  29,508  13,137 
Net cash provided by operating activities157,542  101,037  594,405  345,708 
CASH FLOWS FROM INVESTING ACTIVITIES:       
Purchases of investments(309,602) (103,035 ) (669,171) (473,608)
Sales of investments290,322  6,506  300,317  28,311 
Maturities of investments98,231  115,484  427,363  460,443 
Purchases of property and equipment(13,671) (16,863) (135,312) (67,182)
Payments made in connection with business acquisitions,
net of cash acquired
       (22,087)
Net cash provided by (used in) investing activities65,280  2,092  (76,803) (74,123)
CASH FLOWS FROM FINANCING ACTIVITIES:       
Repurchase and retirement of common stock(322,377) (35,828) (446,333) (110,828)
Proceeds from issuance of common stock14,033  2,569  75,869  44,861 
Taxes paid related to net share settlement of equity awards(9,268) (8,380) (45,137) (38,266)
Payments of debt assumed in business acquisition       (1,626)
Net cash used in financing activities(317,612) (41,639) (415,601) (105,859)
NET INCREASE IN CASH AND CASH EQUIVALENTS(94,790) 61,490  102,001  165,726 
CASH AND CASH EQUIVALENTS—Beginning of period905,794  647,513  709,003  543,277 
CASH AND CASH EQUIVALENTS—End of period$811,004  $709,003  $811,004  $709,003 
                

 

 
Reconciliations of non-GAAP results of operations measures to the nearest comparable GAAP measures
(Unaudited, in thousands, except per share amounts)
 
Reconciliation of net cash provided by operating activities to free cash flow
 
 Three Months Ended Year Ended
 December 31,
 2017
 December 31,
 2016
 December 31,
 2017
 December 31,
 2016
Net cash provided by operating activities$157,542  $101,037  $594,405  $345,708 
Less purchases of property and equipment(13,671) (16,863) (135,312) (67,182)
Free cash flow$143,871  $84,174  $459,093  $278,526 
Net cash provided by (used) in investing activities$65,280   $2,092  $(76,803) $(74,123)
Net cash used in financing activities$(317,612) $(41,639) $(415,601) $(105,859)
                

 

Reconciliation of GAAP operating income to non-GAAP operating income, operating margin, net income and diluted net income per share
 
 Three Months Ended December 31, 2017 Three Months Ended December 31, 2016
 GAAP Results Adjustments Non-GAAP Results GAAP Results Adjustments Non-GAAP Results
Operating income$42,198  $36,490 (a)$78,688  $45,193  $35,936 (b)$81,129 
Operating margin10%   19% 12%    22%
Adjustments:           
Stock-based
compensation
  34,454      32,081   
Amortization of
acquired intangible
assets
  2,036      3,022    
Restructuring charges        833   
Tax adjustment  47,937 (c)    (7,875)(c) 
Net income (loss)$(28,961) $84,427  $55,466  $25,166  $28,061  $53,227 
Diluted net income (loss)
per share
$(0.17)   $0.32  $0.14    $0.30 
Shares used in diluted net
income (loss) per share
calculations
171,530    175,384  176,679    176,679 

(a) To exclude $34.5 million of stock-based compensation and $2.0 million of amortization of acquired intangible assets in the three months ended December 31, 2017.
(b) To exclude $32.1 million of stock-based compensation, $3.0 million of amortization of acquired intangible assets and $0.8 million of restructuring charges in the three months ended December 31, 2016.
(c)  Non-GAAP financial information is adjusted to achieve an overall 32% and 33% effective tax rate in 2017 and 2016, respectively, on a non-GAAP basis, which differs from the GAAP effective tax rate.

 

 
 Year Ended December 31, 2017 Year Ended December 31, 2016
 GAAP
Results
 Adjustments Non-GAAP
Results
 GAAP
Results
 Adjustments Non-GAAP
Results
Operating income$109,804  $147,595 (a)$257,399  $42,944  $150,186 (b)$193,130 
Operating margin7%   17% 3%   15%
Adjustments:           
Stock-based
compensation
  137,183       122,423   
Amortization of acquired
intangible assets
  8,572      9,308   
Litigation settlement
expenses
  1,500         
Restructuring charges  340       3,997   
ERP-related expenses        13,362   
Inventory fair value
adjustment amortization
         842   
Acquisition-related
charges
        254   
Tax adjustment  5,687 (c)    (52,839)(c) 
Net income$31,399  $153,282  $184,681  $32,187  $ 97,347  $129,534 
Diluted net income per share$0.18    $1.04  $0.18    $0.73 
Shares used in diluted net
income per share calculations
178,079    178,079  176,338    176,338 

(a) To exclude $137.2 million of stock-based compensation, $8.6 million of amortization of acquired intangible assets, $1.5 million litigation settlement expenses and $0.3 million of restructuring charges in 2017.
(b) To exclude $122.4 million of stock-based compensation, $9.3 million of amortization of acquired intangible assets, $4.0 million of restructuring charges, $13.4 million of ERP-related expenses, $0.8 million of inventory fair value adjustment amortization recorded pursuant to our business acquisition and $0.3 million of acquisition-related charges in 2016.
(c)  Non-GAAP financial information is adjusted to achieve an overall 32% and 33% effective tax rate in 2017 and 2016, respectively, on a non-GAAP basis, which differs from the GAAP effective tax rate.

 

 
Reconciliation of diluted weighted-average shares outstanding used in the calculation of GAAP and non-GAAP earnings per share
 
  Three Months Ended Year Ended
  December 31,
 2017
 December 31,
 2016
 December 31,
 2017
 December 31,
 2016
Shares used in diluted net income (loss) per
share calculations - GAAP
 171,530  176,679  178,079  176,338 
Adjustment for diluted weighted-average
shares outstanding
(a)3,854       
Shares used in diluted net income per share
calculations - Non-GAAP
 175,384  176,679  178,079  176,338 

(a) GAAP diluted weighted-average shares outstanding differs from non-GAAP diluted weighted-average shares outstanding in periods when we have a GAAP net loss and a non-GAAP net income. The adjustment for diluted weighted-average shares outstanding represents the dilutive effect of employee equity incentive plan awards and is calculated by applying the treasury stock method.

 

 
Billings Reconciliation
 
 Three Months Ended Year Ended
 December 31,
 2017
 December 31,
 2016
 December 31,
 2017
  December 31,
 2016
Total revenue$416,668  $362,830  $1,494,930  $1,275,443 
Add change in deferred revenue117,357  100,557  300,965  244,046 
Less deferred revenue balance
acquired in business acquisition
      (4,400)
Total billings$534,025  $463,387  $1,795,895  $1,515,089 
                 

Investor Contact:

Peter Salkowski
Fortinet, Inc.
408-331-4595
psalkowski@fortinet.com

Media Contact:

Sandra Wheatley
Fortinet, Inc.
408-391-9408
swheatley@fortinet.com

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Source: Fortinet, Inc.

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