CURRENT REPORT

Delaware 001-34511

(State or other jurisdiction (Commission

of incorporation) File Number)
77-0560389

(IRS Employer
Identification No.)
(Title of each class) (Trading Symbol)
Common Stock, $0.001 Par Val FTNT
(Name of exchange on which re
The Nasdaq Stock Market LLC
(d) Exhibits

Exhibit No. Description

99.10 Press release dated August 6 ,
104 Cover Page Interactive Data File
SIGNATURES

Fortinet, Inc.
Date: August 6, 2024 By: /s/ JOHN WHITTLE
John Whittle
Chief Operating Officer
CONDENSED CONSOLIDATED BALANCE SHEETS

June 30, December 31,

2024 2023
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 2,203.20 $ 1,397.90
Short-term investments 1,114.90 1,021.50
Marketable equity securities 21.20 21.00
Accounts receivable—net 1,083.40 1,402.00
Inventory 383.20 484.80
Prepaid expenses and other cur 113.40 101.10
Total current assets 4,919.30 4,428.30
PROPERTY AND EQUIPMENT—N 1,242.70 1,044.40
DEFERRED CONTRACT COSTS 596.90 605.60
DEFERRED TAX ASSETS 998.50 868.80
GOODWILL AND OTHER INTANG 158.10 161.80
OTHER ASSETS 137.40 150.00
TOTAL ASSETS $ 8,052.90 $ 7,258.90
LIABILITIES AND STOCKHOLDERS
CURRENT LIABILITIES:
Accounts payable $ 132.10 $ 204.30
Accrued liabilities 400.60 423.70
Accrued payroll and compensat 217.30 242.30
Deferred revenue 2,975.30 2,848.70
Total current liabilities 3,725.30 3,719.00
DEFERRED REVENUE 2,920.90 2,886.30
LONG-TERM DEBT 993.30 992.30
OTHER LIABILITIES 125.20 124.70
Total liabilities 7,764.70 7,722.30
COMMITMENTS AND CONTINGE
STOCKHOLDERS’ EQUITY (DEFICI
Common stock 0.80 0.80
Additional paid-in capital 1,499.00 1,416.40
Accumulated other comprehensi (29.00) (18.90)
Accumulated deficit (1,182.60) (1,861.70)
Total stockholders’ equity (defic 288.20 (463.40)
TOTAL LIABILITIES AND STOCKH $ 8,052.90 $ 7,258.90
December 31,
2023

$ 1,397.90
1,021.50
21.00
1,402.00
484.80
101.10
4,428.30
1,044.40
605.60
868.80
161.80
150.00
$ 7,258.90

$ 204.30
423.70
242.30
2,848.70
3,719.00
2,886.30
992.30
124.70
7,722.30

0.80
1,416.40
(18.90)
(1,861.70)
(463.40)
$ 7,258.90
CONDENSED CONSOLIDATED STATEMENTS OF INCOME

Three Months Ended

June 30, June 30,

2024 2023
REVENUE:
Product $ 451.90 $ 472.60
Service 982.40 820.20
Total revenue 1,434.30 1,292.80
COST OF REVENUE:
Product 155.10 174.50
Service 119.90 121.30
Total cost of revenue 275.00 295.80
GROSS PROFIT:
Product 296.80 298.10
Service 862.50 698.90
Total gross profit 1,159.30 997.00
OPERATING EXPENSES:
Research and development 165.40 153.30
Sales and marketing 501.30 515.90
General and administrative 56.60 49.90
Gain on intellectual property m (1.20) (1.10)
Total operating expenses 722.10 718.00
OPERATING INCOME 437.20 279.00
INTEREST INCOME 38.30 31.60
INTEREST EXPENSE (5.00) (5.20)
OTHER EXPENSE—NET (2.20) (6.20)
INCOME BEFORE INCOME TAXE 468.30 299.20
PROVISION FOR INCOME TAXES 76.50 27.60
LOSS FROM EQUITY METHOD I (12.00) (5.30)
NET INCOME $ 379.80 $ 266.30
Net income per share:
Basic $ 0.50 $ 0.34
Diluted $ 0.49 $ 0.33
Weighted-average shares outst
Basic 763.80 785.00
Diluted 769.90 795.90
 Six Months Ended

June 30, June 30,

2023 2024

$ 472.60 $ 860.80
820.20 1,926.80
1,292.80 2,787.60

174.50 337.90
121.30 241.80
295.80 579.70

298.10 522.90
698.90 1,685.00
997.00 2,207.90

153.30 338.40
515.90 1,002.40
49.90 111.00
(1.10) (2.30)
718.00 1,449.50
279.00 758.40
31.60 70.50
(5.20) (10.10)
(6.20) (5.10)
299.20 813.70
27.60 116.00
(5.30) (18.60)
$ 266.30 $ 679.10

$ 0.34 $ 0.89
$ 0.33 $ 0.88

785.00 763.10
795.90 770.20
Months Ended

June 30,
2023

$ 973.30
1,581.80
2,555.10

368.10
235.50
603.60

605.20
1,346.30
1,951.50

304.40
994.20
102.70
(2.30)
1,399.00
552.50
52.20
(10.20)
(4.20)
590.30
48.90
(27.40)
$ 514.00

$ 0.66
$ 0.65

784.10
794.70
Consolidated Cash Flows

Six Months Ended

June 30, June 30,

2024 2023
CASH FLOWS FROM OPERATING
Net income $ 679.10 $ 514.00
Adjustments to reconcile net in
Stock-based compensation 126.20 121.30
Amortization of deferred contra 144.70 127.90
Depreciation and amortization 57.80 54.90
Amortization of investment dis (24.90) (5.90)
Loss from equity method inves 18.60 27.40
Other 7.00 8.80
Changes in operating assets and
Accounts receivable—net 318.90 179.00
Inventory 85.20 (130.20)
Prepaid expenses and other cur (12.30) (35.40)
Deferred contract costs (136.00) (168.50)
Deferred tax assets (130.30) (161.80)
Other assets (7.60) 10.80
Accounts payable (67.20) (3.60)
Accrued liabilities (24.90) 168.30
Accrued payroll and compensat (24.30) 6.00
Other liabilities 0.70 (9.70)
Deferred revenue 161.70 489.30
Net cash provided by operating 1,172.40 1,192.60
CASH FLOWS FROM INVESTING A
Purchases of investments (974.30) (804.60)
Maturities of investments 904.60 445.10
Purchases of property and equ (245.00) (107.10)
Payments made in connection wi (5.70) —
Other — 0.10
Net cash used in investing activi (320.40) (466.50)
CASH FLOWS FROM FINANCING A
Proceeds from issuance of com 19.60 29.30
Taxes paid related to net share (63.10) (59.70)
Other (0.80) (1.00)
Net cash used in financing activi (44.30) (31.40)
EFFECT OF EXCHANGE RATE CH (2.40) (1.30)
NET INCREASE IN CASH AND C 805.30 693.40
CASH AND CASH EQUIVALENTS—B 1,397.90 1,682.90
CASH AND CASH EQUIVALENTS—$ 2,203.20 $ 2,376.30
June 30,
2023

$ 514.00

121.30
127.90
54.90
(5.90)
27.40
8.80

179.00
(130.20)
(35.40)
(168.50)
(161.80)
10.80
(3.60)
168.30
6.00
(9.70)
489.30
1,192.60

(804.60)
445.10
(107.10)
—
0.10
(466.50)

29.30
(59.70)
(1.00)
(31.40)
(1.30)
693.40
1,682.90
$ 2,376.30
Reconciliation of GAAP operating income to non-GAAP operatin

Three Months Ended

June 30, June 30,

2024 2023
Reconciliation of non-GAAP ope
GAAP operating income $ 437.20 $ 279.00
GAAP operating margin 30.5% 21.6%
Add back:
Stock‐based compensation 64.30 65.70
Amortization of acquired intang 3.30 4.50
Gain on intellectual property m (1.20) (1.10)
Non‐GAAP operating income $ 503.60 $ 348.10
Non‐GAAP operating margin 35.1% 26.9%
Reconciliation of non-GAAP net
GAAP net income $ 379.80 $ 266.30
Add back:
Stock‐based compensation 64.30 65.70
Amortization of acquired intang 3.30 4.50
Gain on intellectual property m (1.20) (1.10)
Tax adjustment (a) (14.30) (35.00)
Non-cash charge on equity meth 8.00 —
Non-GAAP net income $ 439.90 $ 300.40
Non-GAAP net income per share
Non-GAAP net income $ 439.90 $ 300.40
Non-GAAP shares used in dilute 769.90 795.90
Non-GAAP net income per share $ 0.57 $ 0.38
Reconciliation of non-GAAP net
GAAP net income per share $ 0.49 $ 0.33
Add back:
Non-GAAP adjustments to net i 0.08 0.05
Non-GAAP net income per share $ 0.57 $ 0.38
June 30,
2023

$ 279.00
21.6%

65.70
4.50
(1.10)
$ 348.10
26.9%

$ 266.30

65.70
4.50
(1.10)
(35.00)
—
$ 300.40

$ 300.40
795.90
$ 0.38

$ 0.33

0.05
$ 0.38
Reconciliation of net cash provided by operating activities to fr

Three Months Ended

June 30, June 30,

2024 2023
Net cash provided by operating $ 342.00 $ 515.10
Less: Purchases of property an (23.10) (76.80)
Free cash flow $ 318.90 $ 438.30
Net cash used in investing activi ($50.10) ($424.10)
Net cash used in financing activi ($14.00) ($17.70)
June 30,
2023
$ 515.10
(76.80)
$ 438.30
($424.10)
($17.70)
Reconciliation of total revenue to total billings

Three Months Ended

June 30, June 30,

2024 2023
Total revenue $ 1,434.30 $ 1,292.80
Add: Change in deferred reven 106.30 247.70
Total billings $ 1,540.60 $ 1,540.50
June 30,
2023
$ 1,292.80
247.70
$ 1,540.50