Demand for Fortinet’s Integrated Security Appliances Drives 3Q Growth,
Market Share Gains and Workforce Expansion
Fortinet® – the pioneer and leading provider of unified threat
management (UTM) solutions – today announced continued growth and GAAP profitability
in 3Q08 in spite of the difficult global financial climate. Following its first
quarter of profitability in 2Q08, Fortinet continued profitable growth into the
third quarter of 2008, recording a 42 percent increase in revenues and a 27
percent increase in billings year over year. The company attributes its
performance to several factors: technology focus and solid business execution, growing
customer adoption of and relevance for its integrated security solutions, a
diversified and global revenue base, and security’s position as an
“Even in a down economy, protecting the corporate network
is not a discretionary expense, but when companies are faced with budget cuts
and need to do more with less, the value of an integrated security solution
becomes even greater,” said Ken Xie, founder, president and CEO, Fortinet. “Beyond
providing improved protection and ease of management, integrated security
appliances, like Fortinet’s, offer a significant reduction in CAPEX and OPEX over
multiple point products. These advantages help drive demand for our
market-leading products even in challenging economic times.”
Based on the current level of demand for Fortinet’s network
security appliances, the company remains optimistic about future growth,
expecting to end FY08 strongly, and remains focused on continuing its growth in
2009. As a result, the company is aggressively hiring numerous key
engineering and sales positions to help drive continued innovation and fulfill
Customers’ confidence in Fortinet products is backed by
trusted industry watchers who have validated the company’s technology and
vision of the UTM market:
Analyst firm Frost & Sullivan recently
awarded Fortinet the “2008 Global Market Leadership Award for UTM” and
highlighted Fortinet’s superior protection, low TCO and leading 15-percent share
of the $1.6 billion UTM market, which the firm forecasted would increase at a
compound annual growth rate of 23 percent to $6.9 billion in 2014.
- IDC research data recently confirmed that
Fortinet maintained its No. 1 ranking in worldwide UTM factory revenue for ten
consecutive quarters ahead of Check Point, Cisco, Juniper and SonicWALL.
Analyst firm Gartner stated: “The most important
way information security organizations will save money is by leveraging the
convergence of established security functions into network- or host-based
security platforms that provide multiple styles of security protection in one
product.” (source: Gartner: “Cost Cutting While Improving Security” by J.
Pescatore, K. Kavanagh, N. MacDonald, March 2008).
“We believe the tremendous
efficiencies and protections that our integrated security solutions offer can
be credited for the significant growth of the UTM market, which, according to IDC
data, has surpassed the stand-alone firewall market in 2008. This serves as a
strong validation of Fortinet’s integrated security vision and leadership
position in the UTM market,” Xie added.
3Q08 Financial Highlights
Fortinet’s enterprise and high-end security appliances continued to constitute
the fastest-growing segments of its business, helping to fuel continued growth.
During its third quarter, ending September 28, 2008, Fortinet grew billings 27 percent
to $59 million and grew revenues 42 percent to $54 million, compared to the third
quarter of 2007. Additionally, deferred revenues grew by 32 percent year over
year — contributing $5 million in cash, and enabling Fortinet to end the
period with $109 million in total cash and cash equivalents and investments. The
company has shown non-GAAP operating profit in
2Q08, 3Q08 and year to date, and has been cash flow positive each year since
Delivered via its
flagship family of FortiGate® appliances, Fortinet
provides a flexible platform that enables enterprises and service providers of
all sizes to consolidate critical security technology and services to maximize
network protection and reduce total cost of ownership. The company complements
these solutions with an array of messaging, management and analysis
systems. FortiGate and FortiMail systems
are kept up to date automatically by Fortinet’s FortiGuard® subscription
services, which provide updates to help protect against the latest viruses,
worms, Trojans and other threats – around the clock and around the world.
For more information on Fortinet products, please visit: http://www.fortinet.com/products.
 Non-GAAP operating
profitability is calculated by adding back non-cash based stock compensation to
the GAAP operating profit/(loss).