· Revenues of $103.0 million, up 35% year over year1
· Billings of $110.2 million, up 22% year over year
· GAAP EPS and Non-GAAP EPS of $0.092
· Cash and investments of $468.5 million, with no debt
· Free cash flow of $33.3 million, up 99% year over year
· GAAP net income of $14.5 million, up 111% year over year
· Non-GAAP net income of $15.3 million, up 88% year over year
SUNNYVALE, Calif. - July 19, 2011 - Fortinet® (NASDAQ: FTNT) - a leading network security provider and the worldwide leader in unified threat management (UTM) solutions - today announced financial results for the second quarter ended June 30, 2011.
 

Financial Highlights for the Second Quarter of 2011
 

· Revenue1: Total revenue was $103.0 million for the second quarter of 2011, an increase of 35% compared to the second quarter of 2010. Within total revenue, product revenue was $46.7 million, an increase of 50% compared to the second quarter of 2010. Services revenue was $52.7 million, an increase of 29% compared to the second quarter of 2010. Ratable product and services revenue was $3.7 million, a decrease of 15% compared to the second quarter of 2010.

· Billings3: Total billings were $110.2 million for the second quarter of 2011, an increase of 22% compared to the second quarter of 2010. We define billings, a non-GAAP financial measure, as revenue recognized during the period plus the change in deferred revenue from the beginning to the end of the period.

· Deferred Revenue: Deferred revenue was $273.2 million as of June 30, 2011, an increase of 21% compared to deferred revenue as of June 30, 2010, and up $7.2 million from March 31, 2011.

· Cash and Cash Flow: As of June 30, 2011, cash, cash equivalents and investments were $468.5 million, compared to $432.7 million as of March 31, 2011. Cash flow from operations was $34.1 million for the second quarter of 2011, compared to $18.0 million for the second quarter of 2010. In the second quarter of 2011, free cash flow was $33.3 million, compared to $16.7 million for the second quarter of 2010. We define free cash flow, a non-GAAP financial measure of liquidity, as net cash provided by operating activities less capital expenditures.3

· GAAP Operating Income: GAAP operating income was $18.8 million for the second quarter of 2011, representing a GAAP operating margin of 18%, and an increase of 92% compared to the second quarter of 2010.

· Non-GAAP3 Operating Income: Non-GAAP operating income was $22.2 million for the second quarter of 2011, representing a non-GAAP operating margin of 22%, and an increase of 84% compared to the second quarter of 2010. Non-GAAP operating income and operating margin exclude stock-based compensation expense and income from payments we received related to a patent...