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Strong growth for Fortinet despite economic climate

Fortinet : 05 December, 2008  (Company News)
3rd quarter growth enables Fortinet to expand workforce and continue gaining market share in IT security market
Fortinet has 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 indispensible technology.

"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 market opportunities.

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 making use of 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.

Sales of 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 2005.
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