Company Overview November 4, 2025 1 Disclaimers This presentation contains forward-looking statements. All statements contained in this presentation other than statements of historical facts, including, without limitation, statements regarding our market opportunity, demand for our product and service offerings, expectations regarding our annualized recurring revenue (ARR), free cash flow, and our other non-GAAP measures, our business strategy, plans and objectives for future operations and expectations reg ...

Core Insights - Fortinet reported strong financial results for Q1 2025, with a non-GAAP operating margin of 34%, up 570 basis points year over year, and billings growth of 14% year over year [3][5][6]. Financial Performance - Total revenue reached $1.54 billion, reflecting a 14% increase from $1.35 billion in Q1 2024 [5][6]. - Product revenue was $459 million, up 12% from $408.9 million in the same quarter last year [5][6]. - Service revenue amounted to $1.08 billion, a 14.4% increase compared to $944.4 million in Q1 2024 [6]. - Total billings were $1.60 billion, marking a 13.5% increase from $1.41 billion in Q1 2024 [6]. - Remaining performance obligations stood at $6.49 billion, up 11.7% year over year, with an expected revenue recognition of approximately $3.38 billion over the next 12 months [6]. Growth Areas - Unified SASE Annual Recurring Revenue (ARR) increased by 26% to $1.15 billion, while Security Operations ARR grew by 30% to $434.5 million [5][6]. - The company continues to invest in Unified SASE and Security Operations markets, aiming to strengthen its leadership in Secure Networking [3]. Profitability Metrics - GAAP operating income was $453.8 million, with a GAAP operating margin of 29.5%, compared to 23.7% in Q1 2024 [6][29]. - Non-GAAP operating income reached $526.2 million, resulting in a non-GAAP operating margin of 34.2%, up from 28.5% in the previous year [6][32]. - GAAP net income was $433.4 million, with diluted net income per share of $0.56, compared to $299.3 million and $0.39 per share in Q1 2024 [6][29][32]. Cash Flow and Liquidity - Cash flow from operations was a record $863 million, compared to $830.4 million in Q1 2024 [5][12]. - Free cash flow also set a record at $783 million, up from $608.5 million in the same quarter last year [12][35]. Guidance - For Q2 2025, Fortinet expects revenue between $1.590 billion and $1.650 billion, and billings between $1.685 billion and $1.765 billion [12]. - For the full fiscal year 2025, revenue is projected to be in the range of $6.650 billion to $6.850 billion [12].