Fortinet, Inc. · NASDAQ:FTNT
Fortinet — Q4 2010 Earnings Presentation
18 slides from Fortinet's earnings presentation, Jan 25, 2011
Slide 1: Q4 2010 Financial Results
Q4 2010 Financial Results January 25, 2011
Slide 2: Forward-Looking Statements
Forward-Looking Statements • Information, statements and projections contained in these presentation slides and related conference call concerning Fortinet's business outlook and momentum, the Q1 and 2011 guidance, and future prospects and expectations are forward-looking statements that involve a n
Slide 3: Q4 2010 Non-GAAP Results
Q4 2010 Non-GAAP Results Y/Y % Q4 10 Q4 09 Q3 10 growth Billings (1) $111M $82M 35% $95M Revenue $94M $71M 32% $85M (2) Non-GAAP Gross Margin (%) 74% 73% +1% 75% (2) Non-GAAP Operating Income $23M $11M 105% $21M (2) Non-GAAP Operating Margin (%) 25% 16% +9% 24% (2) (3) Non-GAAP Net Income $17M $9M 8
Slide 4: 2010 Non-GAAP Results
2010 Non-GAAP Results Y/Y % 2010 2009 growth Billings (1) $375M $282M 33% Revenue $325M $252M 29% (2) Non-GAAP Gross Margin (%) 74% 73% +1% (2) Non-GAAP Operating Income $65M $35M 84% (2) Non-GAAP Operating Margin (%) 20% 14% +6% (2) (3) Non-GAAP Net Income $45M $30M 46% (2) (3) Non-GAAP Earnings pe
Slide 5: Product Segmentation
Product Segmentation FortiGate Billings (Q4 10) FortiGate Billings (Q4 09) Mid Range Mid Range Entry Level Entry Level FG200-800 FG200-800 FG30-100 FG30-100 33% 32% 33% 31% 35% FortiGate Billings (2010) 36% High-End High-End FG1000-5000 FG1000-5000 Mid Range Entry Level FG200-800 FG30-100 31% 35% Hi
Slide 6: Revenue by Geography
Revenue by Geography Revenue by Geo (Q4 10) Revenue by Geo (Q4 09) APAC APAC EMEA EMEA 23% 24% 39% 41% 38% Americas 35% Americas Revenue by Geo (2010) APAC EMEA 24% 38% 38% Americas 5 6
Slide 7: Revenue Growth by Geography
Revenue Growth by Geography ($ in Millions) 93.6 32% 21.6 APAC 70.7 25% 17.3 36.1 EMEA 26% 28.6 35.9 Americas 24.8 45% Q4'09 Q4'10 6
Slide 8: Quarterly Revenue Mix & Q4'10 Y/Y Growth
Quarterly Revenue Mix & Q4’10 Y/Y Growth ($ in Millions) 94 Q4'10 Y/Y Growth 85 32% 76 71 70 66 41 61 36 Product 59 31 40% 53 54 54 29 27 46 26 24 26 19 24 24 Services 21 28% 45 48 37 39 41 33 37 28 30 32 22 25 Ratable 17% Q1'08 Q2'08 Q3'08 Q4'08 Q1'09 Q2'09 Q3'09 Q4'09 Q1'10 Q2'10 Q3'10 Q4'10 7
Slide 9: Global Employee Footprint
Global Employee Footprint Headcount by Location (Q4 2010) Headcount by Function (Q4 2010) G&A China Other Ops. 2% 8% R&D 22% 16% 6% France Service & 32% Support 21% 24% 32% 37% US Canada China Sales & Other 5% France Mktg. 10% 23% Canada 25% 37% US Total Headcount: Headcount Cost by Location (Q4 201
Slide 10: Revenue per Employee
Revenue per Employee ($ in Thousands, Annualized) 284 263 241 234 FY'10 254k 225 226 215 215 203 204 193 FY'09 217k 184 FY'08 202k Q1'08 Q2'08 Q3'08 Q4'08 Q1'09 Q2'09 Q3'09 Q4'09 Q1'10 Q2'10 Q3'10 Q4'10 9
Slide 11: Q4 2010 Select Financial Statistics
Q4 2010 Select Financial Statistics Q4 10 Q3 10 Q4 09 Cash and Investments $387M $352M $260M Deferred Revenue $253M $235M $202M Free Cash Flow $31M $32M $16M Working Capital $202M $180M $162M Accounts Receivable $72M $60M $55M DSO 70 63 69 Net Inventory $14M $11M $11M Inventory Turns 3.9 3.9 3.7 Rev
Slide 12: Maintaining Strong Balance Sheet
Maintaining Strong Balance Sheet ($ in Millions) Q4 10 Q3 10 Q4 09 Assets Cash and Investments 387 352 260 Accounts Receivable 72 60 55 Inventory 14 11 11 Property and Equipment 7 7 6 Deferred Cost of Revenue 9 10 10 Deferred Tax Assets 48 42 41 Other 8 6 4 Total Assets 545 488 387 Liabilities and S
Slide 13: Statement of Cash Flows (Non-GAAP)
Statement of Cash Flows (Non-GAAP) ($ in Millions) Q4 10 Q4 09 2010 2009 Net Income 16 44 41 60 Depreciation, Amortization, and Intangibles 4 5 13 16 Other Adjustments to Net Income 5 (36) 16 (35) Non-GAAP Operating Income + Depreciation 25 13 70 41 Accounts Receivable (13) (10) (18) (9) Inventory (
Slide 14: Q1 and 2011 Guidance
Q1 and 2011 Guidance Y/Y % Y/Y % Q1 11 Mid-Pt 2011 Mid-Pt growth growth Billings (1) $95 - 100M 23% $440 - 460M 20% Revenue $85 - 87M 23% $370 - 385M 16% (2) Non-GAAP Gross Margin (%) 73 - 74% ~74% (2) Non-GAAP Operating Margin (%) 17 - 18% 19 - 20% (2) (3) Non-GAAP Earnings per Share $0.12 - 0.14 $
Slide 15: GAAP to Non-GAAP – Operating Results
GAAP to Non-GAAP – Operating Results (Fiscal 2010 vs. Fiscal 2009) (in thousands, except per share amounts) Pro forma Pro forma Fiscal 2010 Adj Fiscal 2010 Fiscal 2009 Adj Fiscal 2009 Revenue: Product $ 135,140 $ - $ 135,140 $ 98,686 $ - $ 98,686 Services 172,046 - 172,046 139,172 - 139,172 Ratable
Slide 16: GAAP to Non-GAAP – Operating Results (cont.)
GAAP to Non-GAAP – Operating Results (cont.) (Fiscal 2010 vs. Fiscal 2009) % of revenue Pro forma Pro forma Fiscal 2010 Adj Fiscal 2010 Fiscal 2009 Adj Fiscal 2009 Revenue: Product 42% - 42% 39% - 39% Services 53% - 53% 55% - 55% Ratable product and services 5% - 5% 6% - 6% Total Revenue 100% - 100%
Slide 17: GAAP to Non-GAAP – Operating Results (Q4'10 vs. Q4'09 vs. Q3'10)
GAAP to Non-GAAP – Operating Results (Q4’10 vs. Q4’09 vs. Q3’10) (in thousands, except per share amounts) Pro forma Pro forma Pro forma Q4'10 Adj Q4'10 Q4'09 Adj Q4'09 Q3'10 Adj Q3'10 Revenue: Product $ 41,080 $ - $ 41,080 $ 29,359 $ - $ 29,359 $ 35,913 $ - $ 35,913 Services 47,930 - 47,930 37,414 -
Slide 18: GAAP to Non-GAAP – Operating Results (Q4'10 vs. Q4'09 vs. Q3'10)
GAAP to Non-GAAP – Operating Results (Q4’10 vs. Q4’09 vs. Q3’10) % of revenue Pro forma Pro forma Pro forma Q4'10 Adj Q4'10 Q4'09 Adj Q4'09 Q3'10 Adj Q3'10 Revenue: Product 44% - 44% 42% - 42% 42% - 42% Services 51% - 51% 53% - 53% 52% - 52% Ratable product and services 5% - 5% 5% - 5% 6% - 6% Total