Fortinet Earnings 2017-06-30

Balance Sheet	Income Statement	Cash Flow
Assets, Equity	Rev, G Profit, Net Income	Ops, Inv, Fin

10-Q 1 ftnt-0630201710xq.htm FORM 10-Q Document

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)



x	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2017



o	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file number: 001-34511

______________________________________

FORTINET, INC.

(Exact name of registrant as specified in its charter)

______________________________________



Delaware	77-0560389
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)



899 Kifer Road Sunnyvale, California	94086
(Address of principal executive offices)	(Zip Code)

(408) 235-7700

(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 (“Exchange Act”) during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes x No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.



Large accelerated filer	x		Accelerated filer	o
Non-accelerated filer	o	(Do not check if smaller reporting company)	Smaller reporting company	o
Non-accelerated filer	o	(Do not check if smaller reporting company)	Emerging growth company	o

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If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes o No x

As of July 27, 2017, there were 175,835,328 shares of the registrant’s common stock outstanding.

FORTINET, INC.

QUARTERLY REPORT ON FORM 10-Q

For the Quarter Ended June 30, 2017

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		Page

	Part I

Item 1.	Financial Statements	1
	Condensed Consolidated Balance Sheets as of June 30, 2017 and December 31, 2016	1
	Condensed Consolidated Statements of Operations for the Three and Six Months Ended June 30, 2017 and 2016	2
	Condensed Consolidated Statements of Comprehensive Income (Loss) for the Three and Six Months Ended June 30, 2017 and 2016	3
	Condensed Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2017 and 2016	4
	Notes to Condensed Consolidated Financial Statements	5
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	22
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	35
Item 4.	Controls and Procedures	35

	Part II

Item 1.	Legal Proceedings	36
Item 1A.	Risk Factors	36
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	62
Item 6.	Exhibits	62
	Signatures	63

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Part I

ITEM 1.
Financial Statements

FORTINET, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(unaudited, in thousands, except per share amounts)



	June 30, 2017			December 31, 2016
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	853,137		$	709,003
Short-term investments	354,187			376,522
Accounts receivable—Net of reserves for sales returns and doubtful accounts of $11,855 and $11,235 at June 30, 2017 and December 31, 2016, respectively	274,476			312,998
Inventory	86,439			106,887
Prepaid expenses and other current assets	36,395			33,306
Total current assets	1,604,634			1,538,716
LONG-TERM INVESTMENTS	257,622			224,983
DEFERRED TAX ASSETS	207,029			182,745
PROPERTY AND EQUIPMENT—NET	238,513			137,249
OTHER INTANGIBLE ASSETS—NET	20,328			24,828
GOODWILL	14,553			14,553
OTHER ASSETS	18,012			16,867
TOTAL ASSETS	$	2,360,691		$	2,139,941

LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES:
Accounts payable	$	42,171		$	56,732
Accrued liabilities	41,185			35,640
Accrued payroll and compensation	80,307			78,138
Income taxes payable	15,184			13,588
Deferred revenue	706,672			645,342
Total current liabilities	885,519			829,440
DEFERRED REVENUE	454,799			390,007
INCOME TAX LIABILITIES	81,718			68,551
OTHER LIABILITIES	16,516			14,262
Total liabilities	1,438,552			1,302,260
COMMITMENTS AND CONTINGENCIES (Note 9)
STOCKHOLDERS’ EQUITY:
Common stock, $0.001 par value—300,000 shares authorized; 175,735 and 173,078 shares issued and outstanding at June 30, 2017 and December 31, 2016, respectively	175			173
Additional paid-in capital	880,142			800,653
Accumulated other comprehensive loss	(523		)	(765		)
Retained earnings	42,345			37,620
Total stockholders’ equity	922,139			837,681
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	2,360,691		$	2,139,941

See notes to condensed consolidated financial statements.

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FORTINET, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(unaudited, in thousands, except per share amounts)



	Three Months Ended						Six Months Ended
	June 30, 2017			June 30, 2016			June 30, 2017		June 30, 2016
REVENUE:
Product	$	142,705		$	136,641		$	277,958	$	261,213
Service	220,764			174,750			426,087		334,754
Total revenue	363,469			311,391			704,045		595,967
COST OF REVENUE:
Product	60,787			52,788			116,084		102,101
Service	34,865			31,715			70,132		60,046
Total cost of revenue	95,652			84,503			186,216		162,147
GROSS PROFIT:
Product	81,918			83,853			161,874		159,112
Service	185,899			143,035			355,955		274,708
Total gross profit	267,817			226,888			517,829		433,820
OPERATING EXPENSES:
Research and development	51,159			45,502			102,354		90,256
Sales and marketing	166,337			162,694			336,737		308,797
General and administrative	21,911			22,184			44,488		41,623
Restructuring charges	(90		)	553			340		881
Total operating expenses	239,317			230,933			483,919		441,557
OPERATING INCOME (LOSS)	28,500			(4,045		)	33,910		(7,737		)
INTEREST INCOME	3,163			1,705			5,555		3,451
OTHER INCOME (EXPENSE)—NET	1,243			(1,350		)	1,545		(2,662		)
INCOME (LOSS) BEFORE INCOME TAXES	32,906			(3,690		)	41,010		(6,948		)
PROVISION FOR (BENEFIT FROM) INCOME TAXES	9,873			(2,302		)	7,260		(7,678		)
NET INCOME (LOSS)	$	23,033		$	(1,388	)	$	33,750	$	730
Net income (loss) per share (Note 8):
Basic	$	0.13		$	(0.01	)	$	0.19	$	—
Diluted	$	0.13		$	(0.01	)	$	0.19	$	—
Weighted-average shares outstanding:
Basic	175,741			172,075			175,118		171,910
Diluted	179,701			172,075			178,993		175,360

See notes to condensed consolidated financial statements.

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FORTINET, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(unaudited, in thousands)



	Three Months Ended						Six Months Ended
	June 30, 2017			June 30, 2016			June 30, 2017		June 30, 2016
Net income (loss)	$	23,033		$	(1,388	)	$	33,750	$	730
Other comprehensive income (loss):
Change in unrealized gains (losses) on investments	(91		)	662			334		2,549
Tax provision (benefit) related to change in unrealized gains (losses) on investments	(57		)	232			92		892
Other comprehensive income (loss)	(34		)	430			242		1,657
Comprehensive income (loss)	$	22,999		$	(958	)	$	33,992	$	2,387

See notes to condensed consolidated financial statements.

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FORTINET, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited, in thousands)



	Six Months Ended
	June 30, 2017			June 30, 2016
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	33,750		$	730
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	27,492			21,841
Amortization of investment premiums	1,447			2,794
Stock-based compensation	68,422			59,249
Other non-cash items—net	1,705			1,192
Changes in operating assets and liabilities:
Accounts receivable—net	37,902			2,022
Inventory	9,752			(8,019		)
Deferred tax assets	(24,376		)	(27,120		)
Prepaid expenses and other current assets	(3,223		)	2,442
Other assets	722			(2,409		)
Accounts payable	(19,880		)	(130		)
Accrued liabilities	1,755			(6,426		)
Accrued payroll and compensation	1,565			8,679
Other liabilities	(2,677		)	(2,858		)
Deferred revenue	125,402			111,082
Income taxes payable	14,762			5,463
Net cash provided by operating activities	274,520			168,532
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of investments	(270,463		)	(230,855		)
Sales of investments	9,995			7,366
Maturities of investments	247,187			219,131
Purchases of property and equipment	(99,888		)	(44,399		)
Payments made in connection with business acquisition, net of cash acquired	—			(20,660		)
Net cash used in investing activities	(113,169		)	(69,417		)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of common stock	41,832			22,972
Taxes paid related to net share settlement of equity awards	(25,895		)	(17,358		)
Repurchase of common stock	(33,154		)	(50,000		)
Payments of debt assumed in connection with business acquisition	—			(1,626		)
Net cash used in financing activities	(17,217		)	(46,012		)
NET INCREASE IN CASH AND CASH EQUIVALENTS	144,134			53,103
CASH AND CASH EQUIVALENTS—Beginning of period	709,003			543,277
CASH AND CASH EQUIVALENTS—End of period	$	853,137		$	596,380
NON-CASH INVESTING AND FINANCING ACTIVITIES:
Liability for purchase of property and equipment	$	22,197		$	7,617
Transfers of evaluation units from inventory to property and equipment	$	11,087		$	11,449
Liability incurred in connection with business acquisition	$	—		$	1,513

See notes to condensed consolidated financial statements.

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FORTINET, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


1.	SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation and Preparation—The unaudited condensed consolidated financial statements of Fortinet, Inc. and its wholly owned subsidiaries (collectively, “we,” “us” or “our”) have been prepared in accordance with generally accepted accounting principles in the United States (“GAAP”) for interim financial information, as well as the instructions to Form 10-Q pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (the “SEC”). Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements, and should be read in conjunction with our audited consolidated financial statements as of and for the year ended December 31, 2016, contained in our Annual Report on Form 10-K filed with the SEC on March 1, 2017. In the opinion of management, all adjustments, which includes normal recurring adjustments, considered necessary for a fair presentation have been included. All intercompany balances, transactions and cash flows have been eliminated. The results of operations for the three and six months ended June 30, 2017 are not necessarily indicative of the results for the full year or for any future periods. The condensed consolidated balance sheet as of December 31, 2016 is derived from the audited consolidated financial statements for the year ended December 31, 2016.

The preparation of financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the amounts reported in the condensed consolidated financial statements and accompanying notes. Actual results could differ materially from those estimates. Certain amounts in prior periods have been reclassified to conform with current period presentation.

There have been no material changes to our significant accounting policies as of and for the three and six months ended June 30, 2017, except for changes to our policies related to business combinations. For more information, refer to the “Recently Adopted Accounting Standards.”

Recently Adopted Accounting Standards

In January 2017, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) ASU 2017-01—Business Combinations: Clarifying the Definition of a Business, which clarifies the definition of a business to assist organizations with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. The definition of a business affects many areas of accounting including acquisitions, disposals, goodwill and consolidation. We elected to early adopt ASU 2017-01 on a prospective basis beginning on January 1, 2017. The adoption of ASU 2017-01 did not have a material impact on our consolidated financial statements.

Recent Accounting Standards Not Yet Effective

In May 2017, the FASB issued ASU 2017-09—Compensation - Stock Compensation to clarify when to account for a change to the terms or conditions of a share-based payment award as a modification. Under ASU 2017-09, modifications accounting is required only if the fair value, the vesting conditions or the classification of the award (as equity or liability) changes as a result of the change in terms or conditions. ASU 2017-09 is effective prospectively for us beginning on January 1, 2018. We do not believe ASU 2017-09 will have a material impact on our consolidated financial statements.

In January 2017, the FASB issued ASU 2017-04—Intangibles - Goodwill and Other: Simplifying the Test for Goodwill Impairment. ASU 2017-04 eliminates Step 2 from the goodwill impairment test which measures a goodwill impairment loss by comparing the implied fair value of a reporting unit’s goodwill with the carrying amount of that goodwill. Under ASU 2017-04, an entity should perform its annual or interim goodwill impairment test by comparing the fair value of the reporting unit with its carrying amount, and should recognize an impairment loss for the amount by which the carrying amount exceeds the reporting unit’s fair value, with the loss not exceeding the total amount of goodwill allocated to that reporting unit. ASU 2017-04 will be effective for us beginning on January 1, 2020. Early adoption is permitted for interim or annual goodwill impairment tests performed after January 1, 2017. At adoption, this update will require a prospective approach. We intend to adopt ASU 2017-04 in the fourth quarter of 2017. We do not believe that ASU 2017-04 will have a material impact on our consolidated financial statements.

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FORTINET, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

In October 2016, the FASB issued ASU 2016-16—Income Taxes: —Intra-Entity Transfer of Assets Other Than Inventory, which requires the recognition of the income tax consequences of an intra-entity transfer of an asset, other than inventory, when the transfer occurs. ASU 2016-16 will be effective for us beginning on January 1, 2018. We are currently evaluating the impact of adopting ASU 2016-16 on our consolidated financial statements.

In June 2016, the FASB issued ASU 2016-13—Financial Instruments—Credit Losses—Measurement of Credit Losses on Financial Instruments, which requires measurement and recognition of expected credit losses for financial assets held. ASU 2016-13 is effective for us beginning on January 1, 2020, with the option to adopt early on January 1, 2019. We are currently evaluating the impact of adopting ASU 2016-13 on our consolidated financial statements.

In February 2016, the FASB issued ASU 2016-02—Leases, which requires the recognition of right-of-use assets and lease liabilities on the consolidated balance sheet for substantially all leases. The new guidance includes a number of optional practical expedients that entities may elect to apply. The new guidance will also require significant additional disclosures about the amount, timing and uncertainty of cash flows from leases. This new guidance will be effective for us beginning on January 1, 2019, using a modified retrospective approach. We currently anticipate to early adopt ASU 2016-02 on January 1, 2018. Our ability to early adopt is dependent on system readiness, including software procured from third-party providers, if any, and the completion of our analysis of information necessary to quantify the impact on the prior period financial statements. Based on our current lease portfolio, we currently estimate that the value of leased assets and liabilities that may be recognized to be at least $40.0 million. Previously, we had estimated the amount could be at least $50.0 million. We are continuing to evaluate the impact of ASU 2016-02 and our estimate is subject to change. We do not believe that ASU 2016-02 will have a material impact on our consolidated statements of operations. We expect to expand our disclosures in the footnotes to include more details on our leases, significant judgments and lease-related amounts recognized in the financial statements.

In May 2014, the FASB issued ASU 2014-09—Revenue from Contracts with Customers, which outlines a single, comprehensive model for entities to use in accounting for revenue arising from contracts with customers. The core principle of ASU 2014-09 is to recognize revenue when promised goods or services are transferred to customers in an amount that reflects the consideration that is expected to be received for those goods or services. ASU 2014-09 defines a five step process to achieve this core principle and, accordingly, it is possible more judgment and estimates may be required within the revenue recognition process than is required under existing U.S. GAAP, including identifying performance obligations in the contract, estimating the amount of variable consideration to include in the transaction price and allocating the transaction price to each separate performance obligation. The FASB has recently issued several amendments to ASU 2014-09, including clarification on accounting for licenses of intellectual property and identifying performance obligations. ASU 2014-09 will be effective for us beginning January 1, 2018.

The two permitted transition methods under ASU 2014-09 are the full retrospective method, in which case ASU 2014-09 would be applied to each prior reporting period presented and the cumulative effect of applying ASU 2014-09 would be recognized at the earliest period shown, or the modified retrospective method, in which case the cumulative effect of applying ASU 2014-09 would be recognized at the date of initial application. We have substantially completed our analysis of historical contracts and believe that the quantitative impact on revenue in our consolidated financial statements is not material. We expect the pattern of revenue recognition from the sales of our FortiGate and other appliances, FortiGuard security subscription services and FortiCare technical support services to be substantially unchanged on an ongoing basis. Further, we do not expect that the acceleration of revenue and associated cost of sales to certain channel partners, which are currently accounted for only once the product is sold through to the end-customer, to have a significant impact upon adoption. We expect to select the transition method for adoption in the third quarter of 2017.

Under ASU 2014-09, we will be required to capitalize and amortize incremental costs related to obtaining customer contracts, such as sales commission costs related to service contracts. Under current U.S. GAAP, we expense all sales commissions when incurred. Our quantitative analysis of the impact of the change in accounting for sales commissions, including the various components of our current and future compensation plans and the key assumptions associated with the amortization term, is in progress. We believe that the amortization of incremental commission costs of obtaining customer contracts is likely to have a material impact on our financial statements.

We expect to expand our financial statement disclosures which may include more details on our disaggregation of revenue, performance obligations, contract balances, costs to obtain a contract, as well as any significant judgments. We are in the process of assessing the appropriate changes to our business processes, upgrading our systems and developing new controls

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FORTINET, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

to support recognition and disclosure under ASU 2014-09. Reviews are ongoing which may alter our conclusions and the anticipated financial impact. We will continue to assess the impact of ASU 2014-09 until the adoption date.

2. FINANCIAL INSTRUMENTS AND FAIR VALUE

The following tables summarize our investments (in thousands):



	June 30, 2017
	Amortized Cost		Unrealized Gains		Unrealized Losses			Fair Value
Corporate debt securities	$	429,112	$	78	$	(736	)	$	428,454
Commercial paper	87,464		1		(26		)	87,439
U.S. government and agency securities	50,283		—		(127		)	50,156
Municipal bonds	45,390		21		(56		)	45,355
Term deposit ⁽¹⁾	405		—		—			405
Total available-for-sale securities	$	612,654	$	100	$	(945	)	$	611,809

	December 31, 2016
	Amortized Cost		Unrealized Gains		Unrealized Losses			Fair Value
Corporate debt securities	$	379,494	$	43	$	(925	)	$	378,612
Commercial paper	95,110		23		(25		)	95,108
U.S. government and agency securities	64,604		16		(79		)	64,541
Municipal bonds	59,257		3		(235		)	59,025
Certificates of deposit and term deposits ⁽¹⁾	4,219		—		—			4,219
Total available-for-sale securities	$	602,684	$	85	$	(1,264	)	$	601,505

⁽¹⁾ The majority of our certificates of deposit and term deposits are foreign deposits.

The following tables show the gross unrealized losses and the related fair values of our investments that have been in a continuous unrealized loss position (in thousands):



	June 30, 2017
	Less Than 12 Months					12 Months or Greater					Total
	Fair Value		Unrealized Losses			Fair Value		Unrealized Losses			Fair Value		Unrealized Losses
Corporate debt securities	$	346,768	$	(708	)	$	14,738	$	(28	)	$	361,506	$	(736	)
U.S. government and agency securities	47,668		(127		)	—		—			47,668		(127		)
Municipal bonds	24,032		(56		)	—		—			24,032		(56		)
Commercial paper	42,050		(26		)	—		—			42,050		(26		)
Total available-for-sale securities	$	460,518	$	(917	)	$	14,738	$	(28	)	$	475,256	$	(945	)

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FORTINET, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)



	December 31, 2016
	Less Than 12 Months					12 Months or Greater					Total
	Fair Value		Unrealized Losses			Fair Value		Unrealized Losses			Fair Value		Unrealized Losses
Corporate debt securities	$	311,980	$	(910	)	$	13,541	$	(15	)	$	325,521	$	(925	)
Municipal bonds	52,200		(235		)	—		—			52,200		(235		)
U.S. government and agency securities	33,430		(79		)	—		—			33,430		(79		)
Commercial paper	17,394		(25		)	—		—			17,394		(25		)
Total available-for-sale securities	$	415,004	$	(1,249	)	$	13,541	$	(15	)	$	428,545	$	(1,264	)

The contractual maturities of our investments were as follows (in thousands):



	June 30, 2017		December 31, 2016
Due within one year	$	354,187	$	376,522
Due between one and three years	257,622		224,983
Total	$	611,809	$	601,505

Available-for-sale securities are reported at fair value, with unrealized gains and losses and the related tax impact included as a separate component of stockholders’ equity and in comprehensive income (loss). Realized gains and losses on available-for-sale securities are insignificant in the periods presented and are included in Other income (expense)—net in our condensed consolidated statements of operations. We use the specific identification method to determine the cost basis of investments sold.

The unrealized losses on our available-for-sale securities were caused by fluctuations in market value and interest rates as a result of the economic environment. As the decline in market value are attributable to changes in market conditions and not credit quality, and because we have concluded currently that we neither intend to sell nor is it more likely than not that we will be required to sell these investments prior to a recovery of par value, we do not consider these investments to be other-than temporarily impaired as of June 30, 2017.

Fair Value Accounting—We apply the following fair value hierarchy for disclosure of the inputs used to measure fair value. This hierarchy prioritizes the inputs into three broad levels as follows:

Level 1—Inputs are unadjusted quoted prices in active markets for identical assets or liabilities.

Level 2—Inputs are quoted prices for similar assets and liabilities in active markets or inputs that are observable for the assets or liabilities, either directly or indirectly through market corroboration, for substantially the full term of the financial instruments.

Level 3—Unobservable inputs based on our own assumptions used to measure assets and liabilities at fair value. The inputs require significant management judgment or estimation.

We measure the fair value of money market funds and certain U.S. government and agency securities using quoted prices in active markets for identical assets. The fair value of all other financial instruments was based on quoted prices for similar assets in active markets, or model driven valuations using significant inputs derived from or corroborated by observable market data.

We classify investments within Level 1 if quoted prices are available in active markets for identical securities.

We classify items within Level 2 if the investments are valued using model driven valuations using observable inputs such as quoted market prices, benchmark yields, reported trades, broker/dealer quotes or alternative pricing sources with

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FORTINET, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

reasonable levels of price transparency. Investments are held by custodians who obtain investment prices from a third-party pricing provider that incorporates standard inputs in various asset price models.

Fair Value of Financial Instruments

Assets Measured at Fair Value on a Recurring Basis

The following tables present the fair value of our financial assets measured at fair value on a recurring basis as of June 30, 2017 and December 31, 2016 (in thousands):



	June 30, 2017								December 31, 2016
	Aggregate Fair Value		Quoted Prices in Active Markets For Identical Assets		Significant Other Observable Remaining Inputs		Significant Other Unobservable Remaining Inputs		Aggregate Fair Value		Quoted Prices in Active Markets For Identical Assets		Significant Other Observable Remaining Inputs		Significant Other Unobservable Remaining Inputs
			(Level 1)		(Level 2)		(Level 3)				(Level 1)		(Level 2)		(Level 3)
Assets:
Corporate debt securities	$	428,454	$	—	$	428,454	$	—	$	378,612	$	—	$	378,612	$	—
Commercial paper	106,915		—		106,915		—		105,097		—		105,097		—
U.S. government and agency securities	50,156		44,706		5,450		—		64,541		52,082		12,459		—
Municipal bonds	45,355		—		45,355		—		59,025		—		59,025		—
Money market funds	18,997		18,997		—		—		38,649		38,649		—		—
Certificates of deposit and term deposits ⁽¹⁾	55,758		—		55,758		—		59,479		—		59,479		—
Total	$	705,635	$	63,703	$	641,932	$	—	$	705,403	$	90,731	$	614,672	$	—

Reported as:
Cash equivalents	$	93,826							$	103,898
Short-term investments	354,187								376,522
Long-term investments	257,622								224,983
Total	$	705,635							$	705,403

⁽¹⁾ Subsequent to the issuance of our consolidated financial statements as of and for the year ended December 31, 2016, we determined that $55.3 million in 30-day term deposits, included within cash and cash equivalents in the consolidated balance sheet as of December 31, 2016, should have also been included as Level 2 investments in the fair value hierarchy table for financial assets and financial liabilities measured at fair value on a recurring basis. Accordingly, we have corrected the above table as of December 31, 2016, the effect of which is immaterial to the financial statements as a whole.

There were no transfers between Level 1 and Level 2 of the fair value hierarchy during the six months ended June 30, 2017.

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3. INVENTORY

Inventory consisted of the following (in thousands):



	June 30, 2017		December 31, 2016
Raw materials	$	13,265	$	18,924
Finished goods	73,174		87,963
Inventory	$	86,439	$	106,887

4. PROPERTY AND EQUIPMENT—NET

Property and equipment—net consisted of the following (in thousands):



	June 30, 2017			December 31, 2016
Building and building improvements	$	133,641		$	49,783
Computer equipment and software	72,131			65,323
Land	59,203			35,079
Leasehold improvements	20,169			18,699
Evaluation units	19,600			20,173
Furniture and fixtures	14,531			13,995
Construction-in-progress	1,077			4,669
Total property and equipment	320,352			207,721
Less: accumulated depreciation	(81,839		)	(70,472		)
Property and equipment—net	$	238,513		$	137,249

In April 2017, we purchased certain real estate in Burnaby, Canada for $84.8 million. The purchase was accounted for under the asset acquisition method. The cost of the assets acquired was allocated to land and buildings based on their relative fair values. The amounts allocated to land and buildings were $12.7 million and $72.1 million, respectively.

Depreciation expense was $11.8 million and $9.0 million during the three months ended June 30, 2017 and June 30, 2016, respectively. Depreciation expense was $23.0 million and $18.4 million during the six months ended June 30, 2017 and June 30, 2016, respectively.

5. INVESTMENTS IN PRIVATELY HELD COMPANIES

Our investments in the equity securities of privately held companies totaled $12.1 million and $10.3 million as of June 30, 2017 and December 31, 2016, respectively. These investments are accounted for as cost-basis investments, as we own less than 20% of the voting securities in each of these investments and do not have the ability to exercise significant influence over operating and financial policies of the respective entities. These investments are carried at historical cost and are recorded as other assets on our condensed consolidated balance sheets and would be measured at fair value if indicators of impairment existed. As of June 30, 2017, no events have occurred that would adversely affect the carrying value of these investments.

As of June 30, 2017, we determined that we had a variable interest in these privately held companies. However, we determined that we were not the primary beneficiary as we did not have the power to direct their activities that most significantly affect their economic performance. The variable interest entities are not required to be consolidated in our condensed consolidated financial statements.

6. BUSINESS COMBINATION

On June 7, 2016, we completed our acquisition of AccelOps, Inc. (“AccelOps”), a provider of network security monitoring and analytics solutions, for total cash consideration of $22.1 million, net of cash received. This acquisition extended

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the Fortinet Security Fabric by enhancing our network security visibility, security data analytics and threat intelligence across multi-vendor solutions.

The acquisition of AccelOps was accounted as a business combination in accordance with ASC Topic 805 “Business Combinations” issued by the FASB, and we used our best estimates and assumptions to assign fair value to the tangible and intangible assets acquired and liabilities assumed at the acquisition date. We included acquisition-related costs of $0.3 million in general and administrative expenses. The total purchase price was allocated to AccelOps’ identifiable tangible and intangible assets acquired and liabilities assumed based on their estimated fair values as of the acquisition date. The acquisition also included a contingent obligation for up to $4.0 million in future earn out payments to certain former stockholders of AccelOps if specified future financial targets are met, none of which were met.

Total allocation of the purchase price was (in thousands):



Cash and cash equivalents	$	171
Accounts receivable	1,126
Prepaid expenses and other assets	430
Property and equipment	203
Deferred tax assets	3,435
Finite-lived intangible assets	14,900
Indefinite-lived intangible assets in process research and development	1,600
Goodwill	9,861
Total assets acquired	31,726
Deferred revenue	4,400
Accounts payable and accrued liabilities	3,348
Other liabilities	1,694
Total liabilities assumed	9,442
Total purchase price allocation	$	22,284

Finite-lived intangible assets consist of developed technology, customer relationships and other intangible assets. AccelOps’ technology provides a software solution to manage security, performance and compliance from a single platform. The acquired developed technologies include software patents, know-how, process and designs. The value of customer relationships is attributable to the generation of a consistent income source and the avoidance of costs associated with creating new customer relationships.

The estimated useful life and fair values of the acquired finite-lived intangible assets were as follows (in thousands, except for estimated useful life):



	Estimated Useful Life (in years)	Fair Values
Developed technologies	4	$	12,400
Customer relationships	3	2,300
Other	2	200
Total		$	14,900

The developed technologies and other are amortized on a straight-line basis. The amortization expense of developed technologies and other intangibles are recorded in cost of revenue. The amortization expense of customer relationships is amortized on an accelerated basis and is recorded in sales and marketing expenses.

Indefinite-lived intangible assets consist of in-process research and development, which will begin to be amortized upon completion of development.

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The goodwill of $9.9 million represents the amount of the purchase price in excess of the fair value of the net tangible liabilities assumed and intangible assets acquired, including AccelOps’ assembled workforce. The goodwill recorded as part of the AccelOps acquisition is not deductible for U.S. federal income tax purposes.

7. GOODWILL AND OTHER INTANGIBLE ASSETS—NET

Goodwill

As of June 30, 2017, we had goodwill of $14.6 million. There were no impairments to goodwill during the three and six months ended June 30, 2017 or during prior periods.

Other Intangible Assets—net

The following tables present other intangible assets—net as of June 30, 2017 and December 31, 2016 (in thousands, except years):



	June 30, 2017
	Weighted-Average Useful Life (in Years)	Gross		Accumulated Amortization		Net
Other intangible assets—net:
Finite-lived intangible assets:
Developed technologies and other	3.8	$	23,984	$	11,250	$	12,734
Customer relationships	4.7	14,500		8,506		5,994
		38,484		19,756		18,728

Indefinite-lived intangible assets:
In-process research and development		1,600		—		1,600
Total other intangible assets—net		$	40,084	$	19,756	$	20,328



	December 31, 2016
	Weighted-Average Useful Life (in Years)	Gross		Accumulated Amortization		Net
Other intangible assets—net:
Finite-lived intangible assets:
Developed technologies and other	3.8	$	23,984	$	8,750	$	15,234
Customer relationships	4.7	14,500		6,506		7,994
		38,484		15,256		23,228

Indefinite-lived intangible assets:
In-process research and development		1,600		—		1,600
Total other intangible assets—net		$	40,084	$	15,256	$	24,828

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Amortization expense was $2.2 million and $2.3 million during the three months ended June 30, 2017 and June 30, 2016, respectively. Amortization expense was $4.5 million and $3.5 million during the six months ended June 30, 2017 and June 30, 2016, respectively. The following table summarizes estimated future amortization expense of finite-lived intangible assets—net (in thousands):



	Amount
Years:
2017 (remainder)	$	4,074
2018	6,885
2019	5,406
2020	2,363
Total	$	18,728

8. NET INCOME (LOSS) PER SHARE

Basic net income (loss) per share is computed by dividing net income (loss) by the weighted-average number of shares of common stock outstanding during the period. Diluted net income (loss) per share is computed by dividing net income (loss) by the weighted-average number of shares of common stock outstanding, plus the dilutive effects of restricted stock units (“RSUs”), stock options and the employee stock purchase plan (“ESPP”). Dilutive shares of common stock are determined by applying the treasury stock method. For the three months ended June 30, 2016, we incurred a net loss and, therefore, the effect of dilutive shares were not included in the computation of dilutive net loss per share as the effect was antidilutive.

A reconciliation of the numerator and denominator used in the calculation of basic and diluted net income (loss) per share is as follows (in thousands, except per share amounts):



	Three Months Ended					Six Months Ended
	June 30, 2017		June 30, 2016			June 30, 2017		June 30, 2016
Numerator:
Net income (loss)	$	23,033	$	(1,388	)	$	33,750	$	730

Denominator:
Basic shares:
Weighted-average common stock outstanding-basic	175,741		172,075			175,118		171,910
Diluted shares:
Weighted-average common stock outstanding-basic	175,741		172,075			175,118		171,910
Effect of potentially dilutive securities:
RSUs	2,441		—			2,328		1,580
Stock options	1,488		—			1,506		1,796
ESPP	31		—			41		74
Weighted-average shares used to compute diluted net income (loss) per share	179,701		172,075			178,993		175,360
Net income (loss) per share:
Basic	$	0.13	$	(0.01	)	$	0.19	$	—
Diluted	$	0.13	$	(0.01	)	$	0.19	$	—

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The following weighted-average shares of common stock were excluded from the computation of diluted net income (loss) per share for the periods presented, as their effect would have been antidilutive (in thousands):



	Three Months Ended		Six Months Ended
	June 30, 2017	June 30, 2016	June 30, 2017	June 30, 2016
RSUs	1,158	10,577	1,831	4,715
Stock options	1,124	7,058	1,121	1,182
ESPP	—	554	131	141
	2,282	18,189	3,083	6,038

9. COMMITMENTS AND CONTINGENCIES

The following table summarizes our future principal contractual obligations as of June 30, 2017 (in thousands):



	Total		2017 (remainder)		2018		2019		2020		2021		Thereafter
Operating lease commitments	$	46,907	$	7,099	$	11,296	$	8,668	$	7,283	$	4,122	$	8,439
Inventory purchase commitments	67,237		65,905		1,332		—		—		—		—
Other contractual commitments and open purchase orders	63,228		53,250		7,057		2,278		533		110		—
Total	$	177,372	$	126,254	$	19,685	$	10,946	$	7,816	$	4,232	$	8,439

Operating Leases—We lease certain facilities under various non-cancelable operating leases, which expire through 2026. Certain leases require us to pay variable costs such as taxes, maintenance, and insurance. The terms of certain operating leases also provide for renewal options and escalation clauses. Rent expense was $3.9 million and $4.6 million during the three months ended June 30, 2017 and June 30, 2016, respectively. Rent expense was $8.4 million and $8.5 million during the six months ended June 30, 2017 and June 30, 2016, respectively. Rent expense is recognized using the straight-line method over the term of the lease.

Inventory Purchase Commitments—Our independent contract manufacturers procure components and build our products based on our forecasts. These forecasts are based on estimates of future demand for our products, which are in turn based on historical trends and an analysis from our sales and marketing organizations, adjusted for overall market conditions. In order to reduce manufacturing lead times and plan for adequate component supply, we may issue purchase orders to some of our independent contract manufacturers which may not be cancelable. As of June 30, 2017, we had $67.2 million of open purchase orders with our independent contract manufacturers that may not be cancelable.

Other Contractual Commitments and Open Purchase Orders—In addition to commitments with contract manufacturers, we have open purchase orders and contractual obligations in the ordinary course of business for which we have not received goods or services. As of June 30, 2017, we had $63.2 million in other contractual commitments that may not be cancelable. We also had other contractual commitments for the purchase of certain real estate adjacent to our corporate headquarters amounting to $12.1 million, which we capitalized as part of property and equipment.

Litigation—We are involved in disputes, litigation, and other legal actions. For lawsuits where we are the defendant, we are in the process of defending these litigation matters, and while there can be no assurances and the outcome of these matters is currently not determinable, we currently believe that there are no existing claims or proceedings that are likely to have a material adverse effect on our financial position. There are many uncertainties associated with any litigation and these actions or other third-party claims against us may cause us to incur costly litigation fees, including contingent legal fees with related parties, costs and substantial settlement charges, and possibly subject us to damages and other penalties. In addition, the resolution of any intellectual property litigation may require us to make royalty payments, which could adversely affect our gross margins in future periods. If any of those events were to occur, our business, financial condition, results of operations, and cash flows could be adversely affected. The actual liability in any such matters may be materially different from our estimates, if any, which could result in the need to adjust the liability and record additional expenses. As required under ASC 450, Contingencies, issued by the FASB, we accrue for contingencies when we believe that a loss is probable and that we can reasonably estimate the amount of any such loss.

In October 2016, we received a letter from the United States Attorney’s Office for the Northern District of California requesting information relating to our compliance with the Trade Agreements Act. This inquiry is ongoing and we are fully cooperating with this inquiry.

Indemnification—Under the indemnification provisions of our standard sales contracts, we agree to defend our customers against third-party claims asserting various allegations such as product defects and infringement of certain intellectual property rights, which may include patents, copyrights, trademarks or trade secrets, and to pay judgments entered on such claims. In some contracts, our exposure under these indemnification provisions is limited by the terms of the contracts

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to certain defined limits, such as the total amount paid by our customer under the agreement. However, certain agreements include covenants, penalties and indemnification provisions including and beyond indemnification for third-party claims of intellectual property infringement and that could potentially expose us to losses in excess of the amount received under the agreement, and in some instances to potential liability that is not contractually limited. To date, there have been no material awards under such indemnification provisions.

10. STOCKHOLDERS’ EQUITY

Stock-Based Compensation Plans

We have stock-based compensation plans pursuant to which we have granted stock options and RSUs. We also have an ESPP for all eligible employees. As of June 30, 2017, there were a total of 50,222,634 shares of common stock available for grant under our stock-based compensation plans.

Restricted Stock Units

The following table summarizes the activity and related information for RSUs for the periods presented below (in thousands, except per share amounts):



	Restricted Stock Units Outstanding
	Number of Shares		Weighted-Average Grant Date Fair Value per Share
Balance—December 31, 2016	9,509		$	31.01
Granted	3,132		37.38
Forfeited	(645	)	33.73
Vested	(2,246	)	28.24
Balance—June 30, 2017	9,750		$	33.63

As of June 30, 2017, total compensation expense related to unvested RSUs granted to employees and non-employees under the 2009 Plan, but not yet recognized, was $288.2 million. This expense is expected to be amortized on a straight-line basis over a weighted-average vesting period of 2.8 years.

RSUs settle into shares of common stock upon vesting. Upon the vesting of the RSUs, we net-settle the RSUs and withhold a portion of the shares to satisfy minimum statutory employee withholding taxes. Total payment for the employees’ tax obligations to the taxing authorities is reflected as a financing activity within the condensed consolidated statements of cash flows.

The following summarizes the number and value of the shares withheld for employee taxes (in thousands):



	Six Months Ended
	June 30, 2017		June 30, 2016
Shares withheld for taxes	725		590
Amount withheld for taxes	$	25,895	$	17,358

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Employee Stock Options

The following table summarizes the weighted-average assumptions relating to our employee stock options:



	Three months Ended				Six Months Ended
	June 30, 2017		June 30, 2016		June 30, 2017		June 30, 2016
Expected term in years	4.4		4.3		4.4		4.3
Volatility	34	%	39	%	36	%	43	%
Risk-free interest rate	1.9	%	1.2	%	1.9	%	1.1	%
Dividend rate	—	%	—	%	—	%	—	%

The following table summarizes the stock option activity and related information for the periods presented below (in thousands, except exercise prices and contractual life):



	Options Outstanding
	Number of Shares		Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Life (Years)	Aggregate Intrinsic Value
Balance—December 31, 2016	6,187		$	23.79
Granted	512		37.29
Forfeited	(82	)	29.88
Exercised	(1,368	)	17.52
Balance—June 30, 2017	5,249		$	26.65
Options vested and expected to vest—June 30, 2017	5,249		$	26.65	3.4	$	58,943
Options exercisable—June 30, 2017	3,478		$	24.38	2.1	$	46,541

The aggregate intrinsic value represents the pre-tax difference between the exercise price of stock options and the quoted market price of our common stock on June 30, 2017, for all in-the-money stock options. As of June 30, 2017, total compensation expense related to unvested stock options granted to employees but not yet recognized was $17.5 million. This expense is expected to be amortized on a straight-line basis over a weighted-average period of 2.8 years.

Additional information related to our stock options is summarized below (in thousands, except per share amounts):



	Three Months Ended				Six Months Ended
	June 30, 2017		June 30, 2016		June 30, 2017		June 30, 2016
Weighted-average fair value per share granted	$	12.18	$	10.92	$	12.22	$	8.90
Intrinsic value of options exercised	9,003		6,829		26,901		26,253
Fair value of options vested	1,733		793		5,128		2,876

Employee Stock Purchase Plan

In determining the fair value of the ESPP, we use the Black-Scholes option pricing model that employs the following weighted-average assumptions:

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	Six Months Ended
	June 30, 2017		June 30, 2016
Expected term in years	0.5		0.5
Volatility	33	%	48	%
Risk-free interest rate	0.7	%	0.4	%
Dividend rate	—	%	—	%

Additional information related to the ESPP is provided below (in thousands, except per share amounts):



	Six Months Ended
	June 30, 2017		June 30, 2016
Weighted-average fair value per share granted	$	9.28	$	7.19
Shares issued under the ESPP	634		614
Weighted-average price per share issued	$	27.97	$	20.49

Stock-based Compensation Expense

Stock-based compensation expense is included in costs and expenses as follows (in thousands):



	Three Months Ended				Six Months Ended
	June 30, 2017		June 30, 2016		June 30, 2017		June 30, 2016
Cost of product revenue	$	383	$	298	$	725	$	578
Cost of service revenue	2,473		2,123		4,783		4,257
Research and development	8,253		7,458		16,151		14,601
Sales and marketing	19,745		16,990		38,771		32,805
General and administrative	4,237		3,478		7,992		7,008
Total stock-based compensation expense	$	35,091	$	30,347	$	68,422	$	59,249

The following table summarizes stock-based compensation expense by award type (in thousands):



	Three Months Ended				Six Months Ended
	June 30, 2017		June 30, 2016		June 30, 2017		June 30, 2016
RSUs	$	30,862	$	26,799	$	59,903	$	51,902
Stock options	1,925		1,592		3,770		3,546
ESPP	2,304		1,956		4,749		3,801
Total stock-based compensation expense	$	35,091	$	30,347	$	68,422	$	59,249

Total income tax benefit associated with stock-based compensation that is recognized in the condensed consolidated statements of operations is as follows (in thousands):



	Three Months Ended				Six Months Ended
	June 30, 2017		June 30, 2016		June 30, 2017		June 30, 2016
Income tax benefit associated with stock-based compensation	$	7,743	$	7,416	$	14,389	$	14,737

2016 Share Repurchase Program

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In January 2016, our board of directors approved the 2016 Share Repurchase Program (the “2016 Repurchase Program”), which authorizes the repurchase of up to $200.0 million of our outstanding common stock through December 31, 2017. In October 2016, our board of directors authorized the purchase of an additional $100.0 million of shares of our common stock under the 2016 Repurchase Program, increasing our current authorization to $300.0 million through December 31, 2017. Under the 2016 Repurchase Program, share repurchases may be made by us from time to time in privately negotiated transactions or in open market transactions. The 2016 Repurchase Program does not require us to purchase a minimum number of shares, and may be suspended, modified or discontinued at any time without prior notice.

During the three months ended June 30, 2017, we repurchased 0.8 million shares of common stock under the 2016 Repurchase Program in open market transactions at an average price of $39.07 per share, for an aggregate purchase price of $33.2 million. As of June 30, 2017, $156.0 million remained available for future share repurchases under the 2016 Repurchase Program.

11. INCOME TAXES

Our effective tax rate was 30% for the three months ended June 30, 2017, compared to an effective tax rate of 62% for the same period last year. Our effective tax rate was 18% for the six months ended June 30, 2017, compared to an effective tax rate of 111% for the same period last year. The effective tax rates for the periods presented are comprised of U.S. federal and state taxes, excess tax benefits from stock-based compensation, withholding taxes and foreign income taxes. The tax rates for the three months ended June 30, 2017 and June 30, 2016 were impacted by excess tax benefits of $4.1 million and $2.6 million, respectively, from stock-based compensation. The tax rates for the six months ended June 30, 2017 and June 30, 2016 were impacted by excess tax benefits of $9.6 million and $6.2 million, respectively, from stock-based compensation. Our effective tax rates fluctuate based on the amount of pre-tax income or loss. The impact of discrete items, such as excess tax benefits from stock-based compensation, on our effective tax rate is greater when our pre-tax income is lower.

As of June 30, 2017 and December 31, 2016, unrecognized tax benefits were $76.9 million and $65.5 million, respectively. The total amount of $75.2 million in unrecognized tax benefits, if recognized, would favorably affect our effective tax rate.

It is our policy to classify accrued interest and penalties related to uncertain tax benefits in the provision for income taxes. As of June 30, 2017 and December 31, 2016, accrued interest and penalties were $11.5 million and $9.5 million, respectively.

It is reasonably possible that our gross unrecognized tax benefits will decrease by up to $7.0 million in the next twelve months, primarily due to the lapse of the statute of limitations. These adjustments, if recognized, would positively impact our effective tax rate, and would be recognized as additional tax benefits.

We file income tax returns in the U.S. federal jurisdiction and in various U.S. state and foreign jurisdictions. Generally, we are no longer subject to U.S. state and non-U.S. income tax examinations by tax authorities for tax years prior to 2009. We are no longer subject to examination by U.S federal income tax authorities for tax years prior to 2012. We are currently under examination by U.S federal income tax authorities for tax years 2012, 2013 and 2014. We have filed a waiver extending the statute of limitations to September 15, 2018 for U.S. federal income tax returns for tax years 2012 and 2013. In addition, the tax authorities in France are examining the inter-company relationship between Fortinet, Inc., Fortinet France and Fortinet Singapore. In May 2017, we received a notice from the French tax authorities that an audit was officially opened for tax years from 2007 to 2015. Our Japan tax audit for tax years 2013, 2014 and 2015 was closed with no material adjustment.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

12. DEFINED CONTRIBUTION PLANS

Our tax-deferred savings plan under our 401(k) Plan, permits participating employees to defer a portion of their pre-tax earnings. In Canada, we have a Group Registered Retirement Savings Plan Program (the “RRSP”), which permits participants to make tax deductible contributions. Our board of directors approved 50% matching contributions on employee contributions up to 4% of each employee’s eligible earnings. Our matching contributions to our 401(k) Plan and the RRSP for the three months ended June 30, 2017 and June 30, 2016 were $1.3 million and $1.2 million, respectively. Our matching contributions to our 401(k) Plan and the RRSP for the six months ended June 30, 2017 and June 30, 2016 were $2.6 million and $2.2 million, respectively.

13. SEGMENT AND SIGNIFICANT CUSTOMER INFORMATION

Operating segments are defined as components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision maker in deciding how to allocate resources and in assessing performance. Our chief operating decision maker is our chief executive officer. Our chief executive officer reviews financial information presented on a consolidated basis, accompanied by information about revenue by geographic region for purposes of allocating resources and evaluating financial performance. We have one business activity, and there are no segment managers who are held accountable for operations, operating results and plans for levels or components below the consolidated unit level. Accordingly, we have determined that we have one operating segment, and therefore, one reportable segment.

Revenue by geographic region is based on the billing address of the customer. The following tables set forth revenue and property and equipment—net by geographic region (in thousands):



	Three Months Ended				Six Months Ended
Revenue	June 30, 2017		June 30, 2016		June 30, 2017		June 30, 2016
Americas:
U.S.	$	97,905	$	80,811	$	188,677	$	156,369
Canada	40,859		33,782		78,204		65,087
Latin America (“LATAM”)	21,949		18,053		40,195		31,236
Total Americas	160,713		132,646		307,076		252,692
Europe, Middle East and Africa (“EMEA”)	129,730		114,453		255,879		219,944
Asia Pacific (“APAC”)	73,026		64,292		141,090		123,331
Total revenue	$	363,469	$	311,391	$	704,045	$

Price	78.86	EPS	1
Shares	175	P/E	65
MCap	13,793	P/FCF	22
Net Debt	-1,176	EBIT	252
TEV	12,617	TEV/EBIT	50
TTM 2019-09-30, in MM, except price, ratios

10-Q	2020-09-30	Filed 2020-11-06
10-Q	2020-06-30	Filed 2020-08-06
10-Q	2020-03-31	Filed 2020-05-07
10-K	2019-12-31	Filed 2020-02-26
10-Q	2019-09-30	Filed 2019-10-31
10-Q	2019-06-30	Filed 2019-08-01
10-Q	2019-03-31	Filed 2019-05-08
10-K	2018-12-31	Filed 2019-02-27
10-Q	2018-09-30	Filed 2018-11-07
10-Q	2018-06-30	Filed 2018-08-07
10-Q	2018-03-31	Filed 2018-05-08
10-K	2017-12-31	Filed 2018-02-26
10-Q	2017-09-30	Filed 2017-11-02
10-Q	2017-06-30	Filed 2017-08-02
10-Q	2017-03-31	Filed 2017-05-03
10-K	2016-12-31	Filed 2017-03-01
10-Q	2016-09-30	Filed 2016-11-08
10-Q	2016-06-30	Filed 2016-08-05
10-Q	2016-03-31	Filed 2016-05-06
10-K	2015-12-31	Filed 2016-02-26
10-Q	2015-09-30	Filed 2015-11-09
10-Q	2015-06-30	Filed 2015-08-04
10-Q	2015-03-31	Filed 2015-05-01
10-K	2014-12-31	Filed 2015-03-02
10-Q	2014-09-30	Filed 2014-11-06
10-Q	2014-06-30	Filed 2014-08-05
10-Q	2014-03-31	Filed 2014-05-07
10-K	2013-12-31	Filed 2014-03-03
10-Q	2013-09-30	Filed 2013-11-05
10-Q	2013-06-30	Filed 2013-08-06
10-Q	2013-03-31	Filed 2013-05-08
10-K	2012-12-31	Filed 2013-02-27
10-Q	2012-09-30	Filed 2012-10-30
10-Q	2012-06-30	Filed 2012-08-08
10-Q	2012-03-31	Filed 2012-05-07
10-K	2011-12-31	Filed 2012-02-28
10-Q	2011-09-30	Filed 2011-11-04
10-Q	2011-06-30	Filed 2011-08-04
10-Q	2011-03-31	Filed 2011-05-05
10-K	2010-12-31	Filed 2011-02-25
10-Q	2010-09-30	Filed 2010-11-05
10-Q	2010-06-30	Filed 2010-08-06
10-Q	2010-03-31	Filed 2010-05-13
10-K	2009-12-31	Filed 2010-03-05

8-K	2020-10-29
8-K	2020-08-22
8-K	2020-08-06
8-K	2020-07-17
8-K	2020-06-19
8-K	2020-05-06
8-K	2020-04-17
8-K	2020-02-26
8-K	2020-02-06
8-K	2019-12-12
8-K	2019-10-31
8-K	2019-10-28
8-K	2019-10-18
8-K	2019-08-01
8-K	2019-06-21
8-K	2019-05-02
8-K	2019-02-06
8-K	2018-11-01
8-K	2018-10-23
8-K	2018-08-01
8-K	2018-06-22
8-K	2018-06-04
8-K	2018-05-03
8-K	2018-02-02

EX-31.1	ftnt-ex311_20170630x10q.htm
EX-31.2	ftnt-ex312_20170630x10q.htm
EX-32.1	ftnt-ex321_20170630x10q.htm

FTNT 10Q Quarterly Report

Fortinet Earnings 2017-06-30