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Fortinet Announces First Quarter 2009 Corporate and Financial Highlights
Posted: Tue Jun 02, 2009 12:34:00 PM
 
Strong Market Demand and Solid Business Execution Help Network Security Appliance Leader Grow Revenue, Billings and Profits

SUNNYVALE, Calif., June 1, 2009 - Fortinet® - a market-leading network security provider and worldwide leader of unified threat management (UTM) solutions - today announced continued financial growth and profitability for the first quarter of 2009 ending March 29, 2009. Despite lingering macro-economic challenges across all sectors, Fortinet continued to achieve financial success, generating $60 million in billings and increasing revenue by 20 percent to $55 million as compared to 1Q08. Fortinet also continued to achieve profitability, generating $5 million in pre-tax profits during the quarter and growing its cash balance to end the first quarter of 2009 with $129 million in total cash and short-term investments. Fortinet credits its consistent and predictable financial performance to a time-tested and evolving technology platform, and the recent broadening of its portfolio with new solutions that secure additional layers of the network.

"Enabling more powerful and differentiated technology with even greater efficiencies and growing our installed based through portfolio expansion is the dual-pronged strategy that Fortinet has embraced over the past 12 months as we lay the foundation for growth," said Ken Xie, founder, president and CEO of Fortinet. "The products and business execution you'll see from Fortinet the remainder of 2009 will echo this strategy, which has already received strong support from some of our biggest enterprise and carrier customers."

First Quarter 2009 Financial Highlights
Fortinet experienced growth in a number of financial metrics in 1Q09, increasing revenues, billings, total cash and short-term investments and profits. The company grew revenues 20 percent to $55 million compared to 1Q08 and generated $60 million in billings during the quarter. Fortinet's deferred revenues grew by 25 percent to $177 million, total cash and short-term investments grew by 31 percent to $129 million (after use of $8M of cash to re-purchase company shares from certain selling stockholders during 1Q09) compared to 1Q08, and the company continues to have no short or long term debt. Additionally, Fortinet again achieved GAAP operating profitability for 1Q09 and has been operating cash-flow positive each year since 2005.

Fortinet continued to reap the benefits of the growing trend toward technology consolidation due to the capital and operational savings it enables. In addition, solid business execution and tight cost controls helped to sustain profit generation, while a recurring security subscriptions business model contributes to a strong deferred revenue stream. These factors all contributed to continued growth and profit and a solid financial position for Fortinet.

Industry Leadership
Fortinet maintained its leadership position in the worldwide UTM market for 4Q08 and all of 2008, according to analyst firm IDC . This marks the 12th consecutive quarter of UTM leadership for Fortinet. Data from the March 2009 IDC Worldwide Quarterly Security Appliance Tracker also revealed Fortinet's lead in both factory revenue and units shipped for two enterprise ($10K-$24.9K and $25K-$49.9K) and high-end ($50K-$99.9K) price bands - the most significant segments of focus for the company. Data from the IDC report also confirmed Fortinet as the overall leader in UTM factory revenue for Western Europe and Asia Pacific for all of 2008 and 4Q08.

Technology Expansion
In 1Q09, Fortinet released a major software update for its market-leading FortiGate® multi-threat security appliances and expanded its product portfolio to include solutions that secure deeper layers of the network:

* FortiOS™ 4.0 operating system: major firmware upgrade which integrates hundreds of new features to significantly improve the value and functionality of FortiGate security appliances; four of the most notable features include application control, data leakage protection (DLP), WAN optimization and SSL traffic inspection;
* FortiWeb™-1000B: a mid- to large-enterprise product and first in a family of Web security appliances that provide application and XML firewalling to protect, balance and accelerate web applications, databases and the information exchanged between them;
* FortiDB™ Monitoring & Auditing: new capabilities added to database vulnerability management appliances announced in 2008 enable 24x7 or scheduled-based monitoring and a complete audit trail to help organizations meet regulatory compliance. Also, the debut of two new models - the FortiDB-400B and FortiDB-2000B - join the previously announced FortiDB-1000B appliance to round out the family of database security products, offering appropriate sizing for small, medium and large enterprises.

Xie added: "In the current economic climate, customers' predisposition for highly efficient and cost-effective technologies is working strongly in our favor, especially with the release of our newest operating system - FortiOS 4.0 - which adds even more functionality without more cost. More and more companies are seeing the benefits of security consolidation and are increasingly showing their support for this approach, which is validating Fortinet's vision and growth strategy."

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