FULLTEXT DEL 1 AV 3
10-Q – 2025-08-08 – ftnt-20250630.htm
ftnt-20250630 0001262039 false 2025 Q2 12/31 24 P1Y P2Y P3Y P1Y P2Y P3Y xbrli:shares iso4217:USD iso4217:USD xbrli:shares xbrli:pure ftnt:business_activity ftnt:segment_manager ftnt:operating_segment ftnt:reportable_segment 0001262039 2025-01-01 2025-06-30 0001262039 2025-08-05 0001262039 2025-06-30 0001262039 2024-12-31 0001262039 us-gaap:ProductMember 2025-04-01 2025-06-30 0001262039 us-gaap:ProductMember 2024-04-01 2024-06-30 0001262039 us-gaap:ProductMember 2025-01-01 2025-06-30 0001262039 us-gaap:ProductMember 2024-01-01 2024-06-30 0001262039 us-gaap:ServiceMember 2025-04-01 2025-06-30 0001262039 us-gaap:ServiceMember 2024-04-01 2024-06-30 0001262039 us-gaap:ServiceMember 2025-01-01 2025-06-30 0001262039 us-gaap:ServiceMember 2024-01-01 2024-06-30 0001262039 2025-04-01 2025-06-30 0001262039 2024-04-01 2024-06-30 0001262039 2024-01-01 2024-06-30 0001262039 us-gaap:RetainedEarningsMember 2025-04-01 2025-06-30 0001262039 us-gaap:CommonStockMember 2025-03-31 0001262039 us-gaap:AdditionalPaidInCapitalMember 2025-03-31 0001262039 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2025-03-31 0001262039 us-gaap:RetainedEarningsMember 2025-03-31 0001262039 2025-03-31 0001262039 us-gaap:CommonStockMember 2025-04-01 2025-06-30 0001262039 us-gaap:AdditionalPaidInCapitalMember 2025-04-01 2025-06-30 0001262039 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2025-04-01 2025-06-30 0001262039 us-gaap:CommonStockMember 2025-06-30 0001262039 us-gaap:AdditionalPaidInCapitalMember 2025-06-30 0001262039 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2025-06-30 0001262039 us-gaap:RetainedEarningsMember 2025-06-30 0001262039 us-gaap:CommonStockMember 2024-03-31 0001262039 us-gaap:AdditionalPaidInCapitalMember 2024-03-31 0001262039 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2024-03-31 0001262039 us-gaap:RetainedEarningsMember 2024-03-31 0001262039 2024-03-31 0001262039 us-gaap:CommonStockMember 2024-04-01 2024-06-30 0001262039 us-gaap:AdditionalPaidInCapitalMember 2024-04-01 2024-06-30 0001262039 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2024-04-01 2024-06-30 0001262039 us-gaap:RetainedEarningsMember 2024-04-01 2024-06-30 0001262039 us-gaap:CommonStockMember 2024-06-30 0001262039 us-gaap:AdditionalPaidInCapitalMember 2024-06-30 0001262039 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2024-06-30 0001262039 us-gaap:RetainedEarningsMember 2024-06-30 0001262039 2024-06-30 0001262039 us-gaap:CommonStockMember 2024-12-31 0001262039 us-gaap:AdditionalPaidInCapitalMember 2024-12-31 0001262039 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2024-12-31 0001262039 us-gaap:RetainedEarningsMember 2024-12-31 0001262039 us-gaap:CommonStockMember 2025-01-01 2025-06-30 0001262039 us-gaap:AdditionalPaidInCapitalMember 2025-01-01 2025-06-30 0001262039 us-gaap:RetainedEarningsMember 2025-01-01 2025-06-30 0001262039 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2025-01-01 2025-06-30 0001262039 us-gaap:CommonStockMember 2023-12-31 0001262039 us-gaap:AdditionalPaidInCapitalMember 2023-12-31 0001262039 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2023-12-31 0001262039 us-gaap:RetainedEarningsMember 2023-12-31 0001262039 2023-12-31 0001262039 us-gaap:CommonStockMember 2024-01-01 2024-06-30 0001262039 us-gaap:AdditionalPaidInCapitalMember 2024-01-01 2024-06-30 0001262039 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2024-01-01 2024-06-30 0001262039 us-gaap:RetainedEarningsMember 2024-01-01 2024-06-30 0001262039 ftnt:SecuritySubscriptionMember 2025-04-01 2025-06-30 0001262039 ftnt:SecuritySubscriptionMember 2024-04-01 2024-06-30 0001262039 ftnt:SecuritySubscriptionMember 2025-01-01 2025-06-30 0001262039 ftnt:SecuritySubscriptionMember 2024-01-01 2024-06-30 0001262039 ftnt:TechnicalSupportandOtherMember 2025-04-01 2025-06-30 0001262039 ftnt:TechnicalSupportandOtherMember 2024-04-01 2024-06-30 0001262039 ftnt:TechnicalSupportandOtherMember 2025-01-01 2025-06-30 0001262039 ftnt:TechnicalSupportandOtherMember 2024-01-01 2024-06-30 0001262039 2025-07-01 2025-06-30 0001262039 2026-07-01 2025-06-30 0001262039 us-gaap:USTreasuryAndGovernmentMember 2025-06-30 0001262039 us-gaap:CommercialPaperNotIncludedWithCashAndCashEquivalentsMember 2025-06-30 0001262039 us-gaap:CorporateDebtSecuritiesMember 2025-06-30 0001262039 ftnt:CertificatesofDepositandTermDepositsMember 2025-06-30 0001262039 us-gaap:USTreasuryAndGovernmentMember 2024-12-31 0001262039 us-gaap:CommercialPaperNotIncludedWithCashAndCashEquivalentsMember 2024-12-31 0001262039 us-gaap:CorporateDebtSecuritiesMember 2024-12-31 0001262039 ftnt:CertificatesofDepositandTermDepositsMember 2024-12-31 0001262039 us-gaap:EstimateOfFairValueFairValueDisclosureMember ftnt:CashEquivalentsLineItemMember us-gaap:FairValueMeasurementsRecurringMember ftnt:MoneyMarketFundsExcludingCommercialPaperMember 2025-06-30 0001262039 us-gaap:EstimateOfFairValueFairValueDisclosureMember us-gaap:FairValueMeasurementsRecurringMember ftnt:MoneyMarketFundsExcludingCommercialPaperMember us-gaap:FairValueInputsLevel1Member ftnt:CashEquivalentsLineItemMember 2025-06-30 0001262039 us-gaap:EstimateOfFairValueFairValueDisclosureMember us-gaap:FairValueMeasurementsRecurringMember ftnt:MoneyMarketFundsExcludingCommercialPaperMember us-gaap:FairValueInputsLevel2Member ftnt:CashEquivalentsLineItemMember 2025-06-30 0001262039 us-gaap:EstimateOfFairValueFairValueDisclosureMember us-gaap:FairValueMeasurementsRecurringMember ftnt:MoneyMarketFundsExcludingCommercialPaperMember us-gaap:FairValueInputsLevel3Member ftnt:CashEquivalentsLineItemMember 2025-06-30 0001262039 us-gaap:EstimateOfFairValueFairValueDisclosureMember ftnt:CashEquivalentsLineItemMember us-gaap:FairValueMeasurementsRecurringMember ftnt:MoneyMarketFundsExcludingCommercialPaperMember 2024-12-31 0001262039 us-gaap:EstimateOfFairValueFairValueDisclosureMember us-gaap:FairValueMeasurementsRecurringMember ftnt:MoneyMarketFundsExcludingCommercialPaperMember us-gaap:FairValueInputsLevel1Member ftnt:CashEquivalentsLineItemMember 2024-12-31 0001262039 us-gaap:EstimateOfFairValueFairValueDisclosureMember us-gaap:FairValueMeasurementsRecurringMember ftnt:MoneyMarketFundsExcludingCommercialPaperMember us-gaap:FairValueInputsLevel2Member ftnt:CashEquivalentsLineItemMember 2024-12-31 0001262039 us-gaap:EstimateOfFairValueFairValueDisclosureMember us-gaap:FairValueMeasurementsRecurringMember ftnt:MoneyMarketFundsExcludingCommercialPaperMember us-gaap:FairValueInputsLevel3Member ftnt:CashEquivalentsLineItemMember 2024-12-31 0001262039 us-gaap:EstimateOfFairValueFairValueDisclosureMember ftnt:CashEquivalentsLineItemMember us-gaap:FairValueMeasurementsRecurringMember us-gaap:CommercialPaperMember 2025-06-30 0001262039 us-gaap:EstimateOfFairValueFairValueDisclosureMember us-gaap:FairValueMeasurementsRecurringMember us-gaap:CommercialPaperMember us-gaap:FairValueInputsLevel1Member ftnt:CashEquivalentsLineItemMember 2025-06-30 0001262039 us-gaap:EstimateOfFairValueFairValueDisclosureMember us-gaap:FairValueMeasurementsRecurringMember us-gaap:CommercialPaperMember us-gaap:FairValueInputsLevel2Member ftnt:CashEquivalentsLineItemMember 2025-06-30 0001262039 us-gaap:EstimateOfFairValueFairValueDisclosureMember us-gaap:FairValueMeasurementsRecurringMember us-gaap:CommercialPaperMember us-gaap:FairValueInputsLevel3Member ftnt:CashEquivalentsLineItemMember 2025-06-30 0001262039 us-gaap:EstimateOfFairValueFairValueDisclosureMember ftnt:CashEquivalentsLineItemMember us-gaap:FairValueMeasurementsRecurringMember us-gaap:CommercialPaperMember 2024-12-31 0001262039 us-gaap:EstimateOfFairValueFairValueDisclosureMember us-gaap:FairValueMeasurementsRecurringMember us-gaap:CommercialPaperMember us-gaap:FairValueInputsLevel1Member ftnt:CashEquivalentsLineItemMember 2024-12-31 0001262039 us-gaap:EstimateOfFairValueFairValueDisclosureMember us-gaap:FairValueMeasurementsRecurringMember us-gaap:CommercialPaperMember us-gaap:FairValueInputsLevel2Member ftnt:CashEquivalentsLineItemMember 2024-12-31 0001262039 us-gaap:EstimateOfFairValueFairValueDisclosureMember us-gaap:FairValueMeasurementsRecurringMember us-gaap:CommercialPaperMember us-gaap:FairValueInputsLevel3Member ftnt:CashEquivalentsLineItemMember 2024-12-31 0001262039 us-gaap:EstimateOfFairValueFairValueDisclosureMember ftnt:CashEquivalentsLineItemMember us-gaap:FairValueMeasurementsRecurringMember us-gaap:CorporateDebtSecuritiesMember 2025-06-30 0001262039 us-gaap:EstimateOfFairValueFairValueDisclosureMember us-gaap:FairValueMeasurementsRecurringMember us-gaap:CorporateDebtSecuritiesMember us-gaap:FairValueInputsLevel1Member ftnt:CashEquivalentsLineItemMember 2025-06-30 0001262039 us-gaap:EstimateOfFairValueFairValueDisclosureMember us-gaap:FairValueMeasurementsRecurringMember us-gaap:CorporateDebtSecuritiesMember us-gaap:FairValueInputsLevel2Member ftnt:CashEquivalentsLineItemMember 2025-06-30 0001262039 us-gaap:EstimateOfFairValueFairValueDisclosureMember us-gaap:FairValueMeasurementsRecurringMember us-gaap:CorporateDebtSecuritiesMember us-gaap:FairValueInputsLevel3Member ftnt:CashEquivalentsLineItemMember 2025-06-30 0001262039 us-gaap:EstimateOfFairValueFairValueDisclosureMember ftnt:CashEquivalentsLineItemMember us-gaap:FairValueMeasurementsRecurringMember us-gaap:CorporateDebtSecuritiesMember 2024-12-31 0001262039 us-gaap:EstimateOfFairValueFairValueDisclosureMember us-gaap:FairValueMeasurementsRecurringMember us-gaap:CorporateDebtSecuritiesMember us-gaap:FairValueInputsLevel1Member ftnt:CashEquivalentsLineItemMember 2024-12-31 0001262039 us-gaap:EstimateOfFairValueFairValueDisclosureMember us-gaap:FairValueMeasurementsRecurringMember us-gaap:CorporateDebtSecuritiesMember us-gaap:FairValueInputsLevel2Member ftnt:CashEquivalentsLineItemMember 2024-12-31 0001262039 us-gaap:EstimateOfFairValueFairValueDisclosureMember us-gaap:FairValueMeasurementsRecurringMember us-gaap:CorporateDebtSecuritiesMember us-gaap:FairValueInputsLevel3Member ftnt:CashEquivalentsLineItemMember 2024-12-31 0001262039 us-gaap:EstimateOfFairValueFairValueDisclosureMember ftnt:CashEquivalentsLineItemMember us-gaap:FairValueMeasurementsRecurringMember 2025-06-30 0001262039 us-gaap:FairValueInputsLevel1Member us-gaap:EstimateOfFairValueFairValueDisclosureMember ftnt:CashEquivalentsLineItemMember us-gaap:FairValueMeasurementsRecurringMember 2025-06-30 0001262039 us-gaap:FairValueInputsLevel2Member us-gaap:EstimateOfFairValueFairValueDisclosureMember ftnt:CashEquivalentsLineItemMember us-gaap:FairValueMeasurementsRecurringMember 2025-06-30 0001262039 us-gaap:FairValueInputsLevel3Member us-gaap:EstimateOfFairValueFairValueDisclosureMember ftnt:CashEquivalentsLineItemMember us-gaap:FairValueMeasurementsRecurringMember 2025-06-30 0001262039 us-gaap:EstimateOfFairValueFairValueDisclosureMember ftnt:CashEquivalentsLineItemMember us-gaap:FairValueMeasurementsRecurringMember 2024-12-31 0001262039 us-gaap:FairValueInputsLevel1Member us-gaap:EstimateOfFairValueFairValueDisclosureMember ftnt:CashEquivalentsLineItemMember us-gaap:FairValueMeasurementsRecurringMember 2024-12-31 0001262039 us-gaap:FairValueInputsLevel2Member us-gaap:EstimateOfFairValueFairValueDisclosureMember ftnt:CashEquivalentsLineItemMember us-gaap:FairValueMeasurementsRecurringMember 2024-12-31 0001262039 us-gaap:FairValueInputsLevel3Member us-gaap:EstimateOfFairValueFairValueDisclosureMember ftnt:CashEquivalentsLineItemMember us-gaap:FairValueMeasurementsRecurringMember 2024-12-31 0001262039 us-gaap:EstimateOfFairValueFairValueDisclosureMember ftnt:ShortTermInvestmentsLineItemMember us-gaap:FairValueMeasurementsRecurringMember us-gaap:USTreasuryAndGovernmentMember 2025-06-30 0001262039 us-gaap:EstimateOfFairValueFairValueDisclosureMember us-gaap:FairValueMeasurementsRecurringMember us-gaap:USTreasuryAndGovernmentMember us-gaap:FairValueInputsLevel1Member ftnt:ShortTermInvestmentsLineItemMember 2025-06-30 0001262039 us-gaap:EstimateOfFairValueFairValueDisclosureMember us-gaap:FairValueMeasurementsRecurringMember us-gaap:USTreasuryAndGovernmentMember us-gaap:FairValueInputsLevel2Member ftnt:ShortTermInvestmentsLineItemMember 2025-06-30 0001262039 us-gaap:EstimateOfFairValueFairValueDisclosureMember us-gaap:FairValueMeasurementsRecurringMember us-gaap:USTreasuryAndGovernmentMember us-gaap:FairValueInputsLevel3Member ftnt:ShortTermInvestmentsLineItemMember 2025-06-30 0001262039 us-gaap:EstimateOfFairValueFairValueDisclosureMember ftnt:ShortTermInvestmentsLineItemMember us-gaap:FairValueMeasurementsRecurringMember us-gaap:USTreasuryAndGovernmentMember 2024-12-31 0001262039 us-gaap:EstimateOfFairValueFairValueDisclosureMember us-gaap:FairValueMeasurementsRecurringMember us-gaap:USTreasuryAndGovernmentMember us-gaap:FairValueInputsLevel1Member ftnt:ShortTermInvestmentsLineItemMember 2024-12-31 0001262039 us-gaap:EstimateOfFairValueFairValueDisclosureMember us-gaap:FairValueMeasurementsRecurringMember us-gaap:USTreasuryAndGovernmentMember us-gaap:FairValueInputsLevel2Member ftnt:ShortTermInvestmentsLineItemMember 2024-12-31 0001262039 us-gaap:EstimateOfFairValueFairValueDisclosureMember us-gaap:FairValueMeasurementsRecurringMember us-gaap:USTreasuryAndGovernmentMember us-gaap:FairValueInputsLevel3Member ftnt:ShortTermInvestmentsLineItemMember 2024-12-31 0001262039 us-gaap:EstimateOfFairValueFairValueDisclosureMember ftnt:ShortTermInvestmentsLineItemMember us-gaap:FairValueMeasurementsRecurringMember us-gaap:CommercialPaperNotIncludedWithCashAndCashEquivalentsMember 2025-06-30 0001262039 us-gaap:EstimateOfFairValueFairValueDisclosureMember us-gaap:FairValueMeasurementsRecurringMember us-gaap:CommercialPaperNotIncludedWithCashAndCashEquivalentsMember us-gaap:FairValueInputsLevel1Member ftnt:ShortTermInvestmentsLineItemMember 2025-06-30 0001262039 us-gaap:EstimateOfFairValueFairValueDisclosureMember us-gaap:FairValueMeasurementsRecurringMember us-gaap:CommercialPaperNotIncludedWithCashAndCashEquivalentsMember us-gaap:FairValueInputsLevel2Member ftnt:ShortTermInvestmentsLineItemMember 2025-06-30 0001262039 us-gaap:EstimateOfFairValueFairValueDisclosureMember us-gaap:FairValueMeasurementsRecurringMember us-gaap:CommercialPaperNotIncludedWithCashAndCashEquivalentsMember us-gaap:FairValueInputsLevel3Member ftnt:ShortTermInvestmentsLineItemMember 2025-06-30 0001262039 us-gaap:EstimateOfFairValueFairValueDisclosureMember ftnt:ShortTermInvestmentsLineItemMember us-gaap:FairValueMeasurementsRecurringMember us-gaap:CommercialPaperNotIncludedWithCashAndCashEquivalentsMember 2024-12-31 0001262039 us-gaap:EstimateOfFairValueFairValueDisclosureMember us-gaap:FairValueMeasurementsRecurringMember us-gaap:CommercialPaperNotIncludedWithCashAndCashEquivalentsMember us-gaap:FairValueInputsLevel1Member ftnt:ShortTermInvestmentsLineItemMember 2024-12-31 0001262039 us-gaap:EstimateOfFairValueFairValueDisclosureMember us-gaap:FairValueMeasurementsRecurringMember us-gaap:CommercialPaperNotIncludedWithCashAndCashEquivalentsMember us-gaap:FairValueInputsLevel2Member ftnt:ShortTermInvestmentsLineItemMember 2024-12-31 0001262039 us-gaap:EstimateOfFairValueFairValueDisclosureMember us-gaap:FairValueMeasurementsRecurringMember us-gaap:CommercialPaperNotIncludedWithCashAndCashEquivalentsMember us-gaap:FairValueInputsLevel3Member ftnt:ShortTermInvestmentsLineItemMember 2024-12-31 0001262039 us-gaap:EstimateOfFairValueFairValueDisclosureMember ftnt:ShortTermInvestmentsLineItemMember us-gaap:FairValueMeasurementsRecurringMember us-gaap:CorporateDebtSecuritiesMember 2025-06-30 0001262039 us-gaap:EstimateOfFairValueFairValueDisclosureMember us-gaap:FairValueMeasurementsRecurringMember us-gaap:CorporateDebtSecuritiesMember us-gaap:FairValueInputsLevel1Member ftnt:ShortTermInvestmentsLineItemMember 2025-06-30 0001262039 us-gaap:EstimateOfFairValueFairValueDisclosureMember us-gaap:FairValueMeasurementsRecurringMember us-gaap:CorporateDebtSecuritiesMember us-gaap:FairValueInputsLevel2Member ftnt:ShortTermInvestmentsLineItemMember 2025-06-30 0001262039 us-gaap:EstimateOfFairValueFairValueDisclosureMember us-gaap:FairValueMeasurementsRecurringMember us-gaap:CorporateDebtSecuritiesMember us-gaap:FairValueInputsLevel3Member ftnt:ShortTermInvestmentsLineItemMember 2025-06-30 0001262039 us-gaap:EstimateOfFairValueFairValueDisclosureMember ftnt:ShortTermInvestmentsLineItemMember us-gaap:FairValueMeasurementsRecurringMember us-gaap:CorporateDebtSecuritiesMember 2024-12-31 0001262039 us-gaap:EstimateOfFairValueFairValueDisclosureMember us-gaap:FairValueMeasurementsRecurringMember us-gaap:CorporateDebtSecuritiesMember us-gaap:FairValueInputsLevel1Member ftnt:ShortTermInvestmentsLineItemMember 2024-12-31 0001262039 us-gaap:EstimateOfFairValueFairValueDisclosureMember us-gaap:FairValueMeasurementsRecurringMember us-gaap:CorporateDebtSecuritiesMember us-gaap:FairValueInputsLevel2Member ftnt:ShortTermInvestmentsLineItemMember 2024-12-31 0001262039 us-gaap:EstimateOfFairValueFairValueDisclosureMember us-gaap:FairValueMeasurementsRecurringMember us-gaap:CorporateDebtSecuritiesMember us-gaap:FairValueInputsLevel3Member ftnt:ShortTermInvestmentsLineItemMember 2024-12-31 0001262039 us-gaap:EstimateOfFairValueFairValueDisclosureMember ftnt:ShortTermInvestmentsLineItemMember us-gaap:FairValueMeasurementsRecurringMember ftnt:CertificatesofDepositandTermDepositsMember 2025-06-30 0001262039 us-gaap:EstimateOfFairValueFairValueDisclosureMember us-gaap:FairValueMeasurementsRecurringMember ftnt:CertificatesofDepositandTermDepositsMember us-gaap:FairValueInputsLevel1Member ftnt:ShortTermInvestmentsLineItemMember 2025-06-30 0001262039 us-gaap:EstimateOfFairValueFairValueDisclosureMember us-gaap:FairValueMeasurementsRecurringMember ftnt:CertificatesofDepositandTermDepositsMember us-gaap:FairValueInputsLevel2Member ftnt:ShortTermInvestmentsLineItemMember 2025-06-30 0001262039 us-gaap:EstimateOfFairValueFairValueDisclosureMember us-gaap:FairValueMeasurementsRecurringMember ftnt:CertificatesofDepositandTermDepositsMember us-gaap:FairValueInputsLevel3Member ftnt:ShortTermInvestmentsLineItemMember 2025-06-30 0001262039 us-gaap:EstimateOfFairValueFairValueDisclosureMember ftnt:ShortTermInvestmentsLineItemMember us-gaap:FairValueMeasurementsRecurringMember ftnt:CertificatesofDepositandTermDepositsMember 2024-12-31 0001262039 us-gaap:EstimateOfFairValueFairValueDisclosureMember us-gaap:FairValueMeasurementsRecurringMember ftnt:CertificatesofDepositandTermDepositsMember us-gaap:FairValueInputsLevel1Member ftnt:ShortTermInvestmentsLineItemMember 2024-12-31 0001262039 us-gaap:EstimateOfFairValueFairValueDisclosureMember us-gaap:FairValueMeasurementsRecurringMember ftnt:CertificatesofDepositandTermDepositsMember us-gaap:FairValueInputsLevel2Member ftnt:ShortTermInvestmentsLineItemMember 2024-12-31 0001262039 us-gaap:EstimateOfFairValueFairValueDisclosureMember us-gaap:FairValueMeasurementsRecurringMember ftnt:CertificatesofDepositandTermDepositsMember us-gaap:FairValueInputsLevel3Member ftnt:ShortTermInvestmentsLineItemMember 2024-12-31 0001262039 us-gaap:EstimateOfFairValueFairValueDisclosureMember ftnt:ShortTermInvestmentsLineItemMember us-gaap:FairValueMeasurementsRecurringMember us-gaap:EquitySecuritiesMember 2025-06-30 0001262039 us-gaap:EstimateOfFairValueFairValueDisclosureMember us-gaap:FairValueMeasurementsRecurringMember us-gaap:EquitySecuritiesMember us-gaap:FairValueInputsLevel1Member ftnt:ShortTermInvestmentsLineItemMember 2025-06-30 0001262039 us-gaap:EstimateOfFairValueFairValueDisclosureMember us-gaap:FairValueMeasurementsRecurringMember us-gaap:EquitySecuritiesMember us-gaap:FairValueInputsLevel2Member ftnt:ShortTermInvestmentsLineItemMember 2025-06-30 0001262039 us-gaap:EstimateOfFairValueFairValueDisclosureMember us-gaap:FairValueMeasurementsRecurringMember us-gaap:EquitySecuritiesMember us-gaap:FairValueInputsLevel3Member ftnt:ShortTermInvestmentsLineItemMember 2025-06-30 0001262039 us-gaap:EstimateOfFairValueFairValueDisclosureMember ftnt:ShortTermInvestmentsLineItemMember us-gaap:FairValueMeasurementsRecurringMember us-gaap:EquitySecuritiesMember 2024-12-31 0001262039 us-gaap:EstimateOfFairValueFairValueDisclosureMember us-gaap:FairValueMeasurementsRecurringMember us-gaap:EquitySecuritiesMember us-gaap:FairValueInputsLevel1Member ftnt:ShortTermInvestmentsLineItemMember 2024-12-31 0001262039 us-gaap:EstimateOfFairValueFairValueDisclosureMember us-gaap:FairValueMeasurementsRecurringMember us-gaap:EquitySecuritiesMember us-gaap:FairValueInputsLevel2Member ftnt:ShortTermInvestmentsLineItemMember 2024-12-31 0001262039 us-gaap:EstimateOfFairValueFairValueDisclosureMember us-gaap:FairValueMeasurementsRecurringMember us-gaap:EquitySecuritiesMember us-gaap:FairValueInputsLevel3Member ftnt:ShortTermInvestmentsLineItemMember 2024-12-31 0001262039 us-gaap:EstimateOfFairValueFairValueDisclosureMember ftnt:ShortTermInvestmentsLineItemMember us-gaap:FairValueMeasurementsRecurringMember 2025-06-30 0001262039 us-gaap:FairValueInputsLevel1Member us-gaap:EstimateOfFairValueFairValueDisclosureMember ftnt:ShortTermInvestmentsLineItemMember us-gaap:FairValueMeasurementsRecurringMember 2025-06-30 0001262039 us-gaap:FairValueInputsLevel2Member us-gaap:EstimateOfFairValueFairValueDisclosureMember ftnt:ShortTermInvestmentsLineItemMember us-gaap:FairValueMeasurementsRecurringMember 2025-06-30 0001262039 us-gaap:FairValueInputsLevel3Member us-gaap:EstimateOfFairValueFairValueDisclosureMember ftnt:ShortTermInvestmentsLineItemMember us-gaap:FairValueMeasurementsRecurringMember 2025-06-30 0001262039 us-gaap:EstimateOfFairValueFairValueDisclosureMember ftnt:ShortTermInvestmentsLineItemMember us-gaap:FairValueMeasurementsRecurringMember 2024-12-31 0001262039 us-gaap:FairValueInputsLevel1Member us-gaap:EstimateOfFairValueFairValueDisclosureMember ftnt:ShortTermInvestmentsLineItemMember us-gaap:FairValueMeasurementsRecurringMember 2024-12-31 0001262039 us-gaap:FairValueInputsLevel2Member us-gaap:EstimateOfFairValueFairValueDisclosureMember ftnt:ShortTermInvestmentsLineItemMember us-gaap:FairValueMeasurementsRecurringMember 2024-12-31 0001262039 us-gaap:FairValueInputsLevel3Member us-gaap:EstimateOfFairValueFairValueDisclosureMember ftnt:ShortTermInvestmentsLineItemMember us-gaap:FairValueMeasurementsRecurringMember 2024-12-31 0001262039 us-gaap:EstimateOfFairValueFairValueDisclosureMember ftnt:LongTermInvestmentsLineItemMember us-gaap:FairValueMeasurementsRecurringMember us-gaap:USTreasuryAndGovernmentMember 2025-06-30 0001262039 us-gaap:EstimateOfFairValueFairValueDisclosureMember us-gaap:FairValueMeasurementsRecurringMember us-gaap:USTreasuryAndGovernmentMember us-gaap:FairValueInputsLevel1Member ftnt:LongTermInvestmentsLineItemMember 2025-06-30 0001262039 us-gaap:EstimateOfFairValueFairValueDisclosureMember us-gaap:FairValueMeasurementsRecurringMember us-gaap:USTreasuryAndGovernmentMember us-gaap:FairValueInputsLevel2Member ftnt:LongTermInvestmentsLineItemMember 2025-06-30 0001262039 us-gaap:EstimateOfFairValueFairValueDisclosureMember us-gaap:FairValueMeasurementsRecurringMember us-gaap:USTreasuryAndGovernmentMember us-gaap:FairValueInputsLevel3Member ftnt:LongTermInvestmentsLineItemMember 2025-06-30 0001262039 us-gaap:EstimateOfFairValueFairValueDisclosureMember ftnt:LongTermInvestmentsLineItemMember us-gaap:FairValueMeasurementsRecurringMember us-gaap:USTreasuryAndGovernmentMember 2024-12-31 0001262039 us-gaap:EstimateOfFairValueFairValueDisclosureMember us-gaap:FairValueMeasurementsRecurringMember us-gaap:USTreasuryAndGovernmentMember us-gaap:FairValueInputsLevel1Member ftnt:LongTermInvestmentsLineItemMember 2024-12-31 0001262039 us-gaap:EstimateOfFairValueFairValueDisclosureMember us-gaap:FairValueMeasurementsRecurringMember us-gaap:USTreasuryAndGovernmentMember us-gaap:FairValueInputsLevel2Member ftnt:LongTermInvestmentsLineItemMember 2024-12-31 0001262039 us-gaap:EstimateOfFairValueFairValueDisclosureMember us-gaap:FairValueMeasurementsRecurringMember us-gaap:USTreasuryAndGovernmentMember us-gaap:FairValueInputsLevel3Member ftnt:LongTermInvestmentsLineItemMember 2024-12-31 0001262039 us-gaap:EstimateOfFairValueFairValueDisclosureMember ftnt:LongTermInvestmentsLineItemMember us-gaap:FairValueMeasurementsRecurringMember us-gaap:CorporateDebtSecuritiesMember 2025-06-30 0001262039 us-gaap:EstimateOfFairValueFairValueDisclosureMember us-gaap:FairValueMeasurementsRecurringMember us-gaap:CorporateDebtSecuritiesMember us-gaap:FairValueInputsLevel1Member ftnt:LongTermInvestmentsLineItemMember 2025-06-30 0001262039 us-gaap:EstimateOfFairValueFairValueDisclosureMember us-gaap:FairValueMeasurementsRecurringMember us-gaap:CorporateDebtSecuritiesMember us-gaap:FairValueInputsLevel2Member ftnt:LongTermInvestmentsLineItemMember 2025-06-30 0001262039 us-gaap:EstimateOfFairValueFairValueDisclosureMember us-gaap:FairValueMeasurementsRecurringMember us-gaap:CorporateDebtSecuritiesMember us-gaap:FairValueInputsLevel3Member ftnt:LongTermInvestmentsLineItemMember 2025-06-30 0001262039 us-gaap:EstimateOfFairValueFairValueDisclosureMember ftnt:LongTermInvestmentsLineItemMember us-gaap:FairValueMeasurementsRecurringMember us-gaap:CorporateDebtSecuritiesMember 2024-12-31 0001262039 us-gaap:EstimateOfFairValueFairValueDisclosureMember us-gaap:FairValueMeasurementsRecurringMember us-gaap:CorporateDebtSecuritiesMember us-gaap:FairValueInputsLevel1Member ftnt:LongTermInvestmentsLineItemMember 2024-12-31 0001262039 us-gaap:EstimateOfFairValueFairValueDisclosureMember us-gaap:FairValueMeasurementsRecurringMember us-gaap:CorporateDebtSecuritiesMember us-gaap:FairValueInputsLevel2Member ftnt:LongTermInvestmentsLineItemMember 2024-12-31 0001262039 us-gaap:EstimateOfFairValueFairValueDisclosureMember us-gaap:FairValueMeasurementsRecurringMember us-gaap:CorporateDebtSecuritiesMember us-gaap:FairValueInputsLevel3Member ftnt:LongTermInvestmentsLineItemMember 2024-12-31 0001262039 us-gaap:EstimateOfFairValueFairValueDisclosureMember ftnt:LongTermInvestmentsLineItemMember us-gaap:FairValueMeasurementsRecurringMember 2025-06-30 0001262039 us-gaap:FairValueInputsLevel1Member us-gaap:EstimateOfFairValueFairValueDisclosureMember ftnt:LongTermInvestmentsLineItemMember us-gaap:FairValueMeasurementsRecurringMember 2025-06-30 0001262039 us-gaap:FairValueInputsLevel2Member us-gaap:EstimateOfFairValueFairValueDisclosureMember ftnt:LongTermInvestmentsLineItemMember us-gaap:FairValueMeasurementsRecurringMember 2025-06-30 0001262039 us-gaap:FairValueInputsLevel3Member us-gaap:EstimateOfFairValueFairValueDisclosureMember ftnt:LongTermInvestmentsLineItemMember us-gaap:FairValueMeasurementsRecurringMember 2025-06-30 0001262039 us-gaap:EstimateOfFairValueFairValueDisclosureMember ftnt:LongTermInvestmentsLineItemMember us-gaap:FairValueMeasurementsRecurringMember 2024-12-31 0001262039 us-gaap:FairValueInputsLevel1Member us-gaap:EstimateOfFairValueFairValueDisclosureMember ftnt:LongTermInvestmentsLineItemMember us-gaap:FairValueMeasurementsRecurringMember 2024-12-31 0001262039 us-gaap:FairValueInputsLevel2Member us-gaap:EstimateOfFairValueFairValueDisclosureMember ftnt:LongTermInvestmentsLineItemMember us-gaap:FairValueMeasurementsRecurringMember 2024-12-31 0001262039 us-gaap:FairValueInputsLevel3Member us-gaap:EstimateOfFairValueFairValueDisclosureMember ftnt:LongTermInvestmentsLineItemMember us-gaap:FairValueMeasurementsRecurringMember 2024-12-31 0001262039 us-gaap:FairValueMeasurementsRecurringMember us-gaap:EstimateOfFairValueFairValueDisclosureMember 2025-06-30 0001262039 us-gaap:FairValueInputsLevel1Member us-gaap:EstimateOfFairValueFairValueDisclosureMember us-gaap:FairValueMeasurementsRecurringMember 2025-06-30 0001262039 us-gaap:FairValueInputsLevel2Member us-gaap:EstimateOfFairValueFairValueDisclosureMember us-gaap:FairValueMeasurementsRecurringMember 2025-06-30 0001262039 us-gaap:FairValueInputsLevel3Member us-gaap:EstimateOfFairValueFairValueDisclosureMember us-gaap:FairValueMeasurementsRecurringMember 2025-06-30 0001262039 us-gaap:FairValueMeasurementsRecurringMember us-gaap:EstimateOfFairValueFairValueDisclosureMember 2024-12-31 0001262039 us-gaap:FairValueInputsLevel1Member us-gaap:EstimateOfFairValueFairValueDisclosureMember us-gaap:FairValueMeasurementsRecurringMember 2024-12-31 0001262039 us-gaap:FairValueInputsLevel2Member us-gaap:EstimateOfFairValueFairValueDisclosureMember us-gaap:FairValueMeasurementsRecurringMember 2024-12-31 0001262039 us-gaap:FairValueInputsLevel3Member us-gaap:EstimateOfFairValueFairValueDisclosureMember us-gaap:FairValueMeasurementsRecurringMember 2024-12-31 0001262039 us-gaap:LandMember 2025-06-30 0001262039 us-gaap:LandMember 2024-12-31 0001262039 us-gaap:BuildingAndBuildingImprovementsMember 2025-06-30 0001262039 us-gaap:BuildingAndBuildingImprovementsMember 2024-12-31 0001262039 us-gaap:ComputerEquipmentMember 2025-06-30 0001262039 us-gaap:ComputerEquipmentMember 2024-12-31 0001262039 us-gaap:LeaseholdsAndLeaseholdImprovementsMember 2025-06-30 0001262039 us-gaap:LeaseholdsAndLeaseholdImprovementsMember 2024-12-31 0001262039 ftnt:EvaluationUnitsMember 2025-06-30 0001262039 ftnt:EvaluationUnitsMember 2024-12-31 0001262039 us-gaap:FurnitureAndFixturesMember 2025-06-30 0001262039 us-gaap:FurnitureAndFixturesMember 2024-12-31 0001262039 us-gaap:ConstructionInProgressMember 2025-06-30 0001262039 us-gaap:ConstructionInProgressMember 2024-12-31 0001262039 ftnt:FrankfurtGermanyMember 2025-01-01 2025-03-31 0001262039 ftnt:FrankfurtGermanyMember us-gaap:LandMember 2025-03-31 0001262039 ftnt:FrankfurtGermanyMember us-gaap:BuildingAndBuildingImprovementsMember 2025-03-31 0001262039 ftnt:CanadaUnitedStatesAndNetherlandsMember 2025-04-01 2025-06-30 0001262039 ftnt:CanadaUnitedStatesAndNetherlandsMember us-gaap:LandMember 2025-06-30 0001262039 ftnt:CanadaUnitedStatesAndNetherlandsMember us-gaap:BuildingAndBuildingImprovementsMember 2025-06-30 0001262039 ftnt:LinksysMember 2021-03-19 2021-03-19 0001262039 ftnt:LinksysMember 2021-03-19 0001262039 ftnt:LinksysMember 2025-01-31 2025-01-31 0001262039 ftnt:LinksysMember 2025-01-31 0001262039 ftnt:LinksysMember 2025-01-31 0001262039 ftnt:LinksysMember 2025-01-31 2025-01-31 0001262039 us-gaap:SeriesOfIndividuallyImmaterialBusinessAcquisitionsMember 2025-04-01 2025-06-30 0001262039 us-gaap:SeriesOfIndividuallyImmaterialBusinessAcquisitionsMember 2025-06-30 0001262039 ftnt:PerceptionPointLtd.Member 2024-12-05 2024-12-05 0001262039 ftnt:PerceptionPointLtd.Member 2024-12-05 0001262039 ftnt:PerceptionPointLtd.Member us-gaap:DevelopedTechnologyRightsMember 2024-12-05 0001262039 ftnt:PerceptionPointLtd.Member us-gaap:CustomerRelationshipsMember 2024-12-05 0001262039 ftnt:NextDLPMember 2024-08-05 2024-08-05 0001262039 ftnt:NextDLPMember 2024-08-05 0001262039 ftnt:NextDLPMember us-gaap:DevelopedTechnologyRightsMember 2024-08-05 0001262039 ftnt:NextDLPMember us-gaap:CustomerRelationshipsMember 2024-08-05 0001262039 ftnt:LaceworkMember 2024-08-01 2024-08-01 0001262039 ftnt:LaceworkMember 2024-08-01 0001262039 ftnt:LaceworkMember us-gaap:DevelopedTechnologyRightsMember 2024-08-01 2024-08-01 0001262039 ftnt:LaceworkMember ftnt:BacklogMember 2024-08-01 2024-08-01 0001262039 ftnt:LaceworkMember us-gaap:CustomerRelationshipsMember 2024-08-01 2024-08-01 0001262039 ftnt:LaceworkMember us-gaap:TradeNamesMember 2024-08-01 2024-08-01 0001262039 us-gaap:DevelopedTechnologyRightsMember 2025-01-01 2025-06-30 0001262039 us-gaap:DevelopedTechnologyRightsMember 2025-06-30 0001262039 us-gaap:CustomerRelationshipsMember 2025-01-01 2025-06-30 0001262039 us-gaap:CustomerRelationshipsMember 2025-06-30 0001262039 us-gaap:TradeNamesMember 2025-01-01 2025-06-30 0001262039 us-gaap:TradeNamesMember 2025-06-30 0001262039 ftnt:BacklogMember 2025-01-01 2025-06-30 0001262039 ftnt:BacklogMember 2025-06-30 0001262039 us-gaap:DevelopedTechnologyRightsMember 2024-01-01 2024-12-31 0001262039 us-gaap:DevelopedTechnologyRightsMember 2024-12-31 0001262039 us-gaap:CustomerRelationshipsMember 2024-01-01 2024-12-31 0001262039 us-gaap:CustomerRelationshipsMember 2024-12-31 0001262039 us-gaap:TradeNamesMember 2024-01-01 2024-12-31 0001262039 us-gaap:TradeNamesMember 2024-12-31 0001262039 ftnt:BacklogMember 2024-01-01 2024-12-31 0001262039 ftnt:BacklogMember 2024-12-31 0001262039 us-gaap:RestrictedStockUnitsRSUMember 2025-04-01 2025-06-30 0001262039 us-gaap:RestrictedStockUnitsRSUMember 2024-04-01 2024-06-30 0001262039 us-gaap:RestrictedStockUnitsRSUMember 2025-01-01 2025-06-30 0001262039 us-gaap:RestrictedStockUnitsRSUMember 2024-01-01 2024-06-30 0001262039 us-gaap:EmployeeStockOptionMember 2025-04-01 2025-06-30 0001262039 us-gaap:EmployeeStockOptionMember 2024-04-01 2024-06-30 0001262039 us-gaap:EmployeeStockOptionMember 2025-01-01 2025-06-30 0001262039 us-gaap:EmployeeStockOptionMember 2024-01-01 2024-06-30 0001262039 us-gaap:PerformanceSharesMember 2025-04-01 2025-06-30 0001262039 us-gaap:PerformanceSharesMember 2024-04-01 2024-06-30 0001262039 us-gaap:PerformanceSharesMember 2025-01-01 2025-06-30 0001262039 us-gaap:PerformanceSharesMember 2024-01-01 2024-06-30 0001262039 us-gaap:RestrictedStockUnitsRSUMember us-gaap:StockCompensationPlanMember 2025-04-01 2025-06-30 0001262039 us-gaap:RestrictedStockUnitsRSUMember us-gaap:StockCompensationPlanMember 2024-04-01 2024-06-30 0001262039 us-gaap:RestrictedStockUnitsRSUMember us-gaap:StockCompensationPlanMember 2025-01-01 2025-06-30 0001262039 us-gaap:RestrictedStockUnitsRSUMember us-gaap:StockCompensationPlanMember 2024-01-01 2024-06-30 0001262039 us-gaap:EmployeeStockOptionMember us-gaap:StockCompensationPlanMember 2025-04-01 2025-06-30 0001262039 us-gaap:EmployeeStockOptionMember us-gaap:StockCompensationPlanMember 2024-04-01 2024-06-30 0001262039 us-gaap:EmployeeStockOptionMember us-gaap:StockCompensationPlanMember 2025-01-01 2025-06-30 0001262039 us-gaap:EmployeeStockOptionMember us-gaap:StockCompensationPlanMember 2024-01-01 2024-06-30 0001262039 us-gaap:PerformanceSharesMember us-gaap:StockCompensationPlanMember 2025-04-01 2025-06-30 0001262039 us-gaap:PerformanceSharesMember us-gaap:StockCompensationPlanMember 2024-04-01 2024-06-30 0001262039 us-gaap:PerformanceSharesMember us-gaap:StockCompensationPlanMember 2025-01-01 2025-06-30 0001262039 us-gaap:PerformanceSharesMember us-gaap:StockCompensationPlanMember 2024-01-01 2024-06-30 0001262039 us-gaap:SeniorNotesMember 2021-03-05 0001262039 ftnt:A2026SeniorNotesMember us-gaap:SeniorNotesMember 2021-03-05 0001262039 ftnt:A2031SeniorNotesMember us-gaap:SeniorNotesMember 2021-03-05 0001262039 ftnt:A2026SeniorNotesMember us-gaap:SeniorNotesMember 2025-06-30 0001262039 ftnt:A2026SeniorNotesMember us-gaap:SeniorNotesMember 2024-12-31 0001262039 ftnt:A2031SeniorNotesMember us-gaap:SeniorNotesMember 2025-06-30 0001262039 ftnt:A2031SeniorNotesMember us-gaap:SeniorNotesMember 2024-12-31 0001262039 us-gaap:SeniorNotesMember 2024-12-31 0001262039 us-gaap:SeniorNotesMember 2025-06-30 0001262039 us-gaap:SeniorNotesMember 2024-04-01 2024-06-30 0001262039 us-gaap:SeniorNotesMember 2025-04-01 2025-06-30 0001262039 us-gaap:SeniorNotesMember 2024-01-01 2024-06-30 0001262039 us-gaap:SeniorNotesMember 2025-01-01 2025-06-30 0001262039 us-gaap:FairValueInputsLevel2Member us-gaap:SeniorNotesMember 2025-06-30 0001262039 us-gaap:StockCompensationPlanMember 2025-06-30 0001262039 us-gaap:RestrictedStockUnitsRSUMember 2024-12-31 0001262039 us-gaap:RestrictedStockUnitsRSUMember 2025-06-30 0001262039 us-gaap:PerformanceSharesMember srt:MinimumMember 2025-06-30 0001262039 us-gaap:PerformanceSharesMember srt:MaximumMember 2025-06-30 0001262039 us-gaap:PerformanceSharesMember us-gaap:ShareBasedCompensationAwardTrancheOneMember 2025-01-01 2025-06-30 0001262039 us-gaap:PerformanceSharesMember us-gaap:ShareBasedCompensationAwardTrancheTwoMember 2025-01-01 2025-06-30 0001262039 us-gaap:PerformanceSharesMember us-gaap:ShareBasedCompensationAwardTrancheThreeMember 2025-01-01 2025-06-30 0001262039 us-gaap:PerformanceSharesMember ftnt:ShareBasedPaymentArrangementTrancheFourMember 2025-01-01 2025-06-30 0001262039 us-gaap:PerformanceSharesMember 2024-12-31 0001262039 us-gaap:PerformanceSharesMember 2025-06-30 0001262039 ftnt:RestrictedStockUnitsAndPerformanceSharesMember 2025-04-01 2025-06-30 0001262039 ftnt:RestrictedStockUnitsAndPerformanceSharesMember 2024-04-01 2024-06-30 0001262039 us-gaap:EmployeeStockOptionMember 2024-12-31 0001262039 us-gaap:EmployeeStockOptionMember 2024-01-01 2024-12-31 0001262039 us-gaap:EmployeeStockOptionMember 2025-06-30 0001262039 ftnt:CostOfGoodsSoldMember 2025-04-01 2025-06-30 0001262039 ftnt:CostOfGoodsSoldMember 2024-04-01 2024-06-30 0001262039 ftnt:CostOfGoodsSoldMember 2025-01-01 2025-06-30 0001262039 ftnt:CostOfGoodsSoldMember 2024-01-01 2024-06-30 0001262039 ftnt:CostOfServicesMember 2025-04-01 2025-06-30 0001262039 ftnt:CostOfServicesMember 2024-04-01 2024-06-30 0001262039 ftnt:CostOfServicesMember 2025-01-01 2025-06-30 0001262039 ftnt:CostOfServicesMember 2024-01-01 2024-06-30 0001262039 us-gaap:ResearchAndDevelopmentExpenseMember 2025-04-01 2025-06-30 0001262039 us-gaap:ResearchAndDevelopmentExpenseMember 2024-04-01 2024-06-30 0001262039 us-gaap:ResearchAndDevelopmentExpenseMember 2025-01-01 2025-06-30 0001262039 us-gaap:ResearchAndDevelopmentExpenseMember 2024-01-01 2024-06-30 0001262039 us-gaap:SellingAndMarketingExpenseMember 2025-04-01 2025-06-30 0001262039 us-gaap:SellingAndMarketingExpenseMember 2024-04-01 2024-06-30 0001262039 us-gaap:SellingAndMarketingExpenseMember 2025-01-01 2025-06-30 0001262039 us-gaap:SellingAndMarketingExpenseMember 2024-01-01 2024-06-30 0001262039 us-gaap:GeneralAndAdministrativeExpenseMember 2025-04-01 2025-06-30 0001262039 us-gaap:GeneralAndAdministrativeExpenseMember 2024-04-01 2024-06-30 0001262039 us-gaap:GeneralAndAdministrativeExpenseMember 2025-01-01 2025-06-30 0001262039 us-gaap:GeneralAndAdministrativeExpenseMember 2024-01-01 2024-06-30 0001262039 ftnt:ShareRepurchaseProgramMember 2024-10-01 2024-10-31 0001262039 ftnt:ShareRepurchaseProgramMember 2025-06-30 0001262039 ftnt:ShareRepurchaseProgramMember 2025-04-01 2025-06-30 0001262039 ftnt:ShareRepurchaseProgramMember 2025-01-01 2025-06-30 0001262039 ftnt:ReportableSegmentMember 2025-04-01 2025-06-30 0001262039 ftnt:ReportableSegmentMember 2024-04-01 2024-06-30 0001262039 ftnt:ReportableSegmentMember 2025-01-01 2025-06-30 0001262039 ftnt:ReportableSegmentMember 2024-01-01 2024-06-30 0001262039 us-gaap:ProductMember ftnt:ReportableSegmentMember 2025-04-01 2025-06-30 0001262039 us-gaap:ProductMember ftnt:ReportableSegmentMember 2024-04-01 2024-06-30 0001262039 us-gaap:ProductMember ftnt:ReportableSegmentMember 2025-01-01 2025-06-30 0001262039 us-gaap:ProductMember ftnt:ReportableSegmentMember 2024-01-01 2024-06-30 0001262039 us-gaap:ServiceMember ftnt:ReportableSegmentMember 2025-04-01 2025-06-30 0001262039 us-gaap:ServiceMember ftnt:ReportableSegmentMember 2024-04-01 2024-06-30 0001262039 us-gaap:ServiceMember ftnt:ReportableSegmentMember 2025-01-01 2025-06-30 0001262039 us-gaap:ServiceMember ftnt:ReportableSegmentMember 2024-01-01 2024-06-30 0001262039 country:US 2025-04-01 2025-06-30 0001262039 country:US 2024-04-01 2024-06-30 0001262039 country:US 2025-01-01 2025-06-30 0001262039 country:US 2024-01-01 2024-06-30 0001262039 ftnt:OtherAmericasMember 2025-04-01 2025-06-30 0001262039 ftnt:OtherAmericasMember 2024-04-01 2024-06-30 0001262039 ftnt:OtherAmericasMember 2025-01-01 2025-06-30 0001262039 ftnt:OtherAmericasMember 2024-01-01 2024-06-30 0001262039 srt:AmericasMember 2025-04-01 2025-06-30 0001262039 srt:AmericasMember 2024-04-01 2024-06-30 0001262039 srt:AmericasMember 2025-01-01 2025-06-30 0001262039 srt:AmericasMember 2024-01-01 2024-06-30 0001262039 us-gaap:EMEAMember 2025-04-01 2025-06-30 0001262039 us-gaap:EMEAMember 2024-04-01 2024-06-30 0001262039 us-gaap:EMEAMember 2025-01-01 2025-06-30 0001262039 us-gaap:EMEAMember 2024-01-01 2024-06-30 0001262039 srt:AsiaPacificMember 2025-04-01 2025-06-30 0001262039 srt:AsiaPacificMember 2024-04-01 2024-06-30 0001262039 srt:AsiaPacificMember 2025-01-01 2025-06-30 0001262039 srt:AsiaPacificMember 2024-01-01 2024-06-30 0001262039 country:US 2025-06-30 0001262039 country:US 2024-12-31 0001262039 country:CA 2025-06-30 0001262039 country:CA 2024-12-31 0001262039 srt:LatinAmericaMember 2025-06-30 0001262039 srt:LatinAmericaMember 2024-12-31 0001262039 srt:AmericasMember 2025-06-30 0001262039 srt:AmericasMember 2024-12-31 0001262039 us-gaap:EMEAMember 2025-06-30 0001262039 us-gaap:EMEAMember 2024-12-31 0001262039 srt:AsiaPacificMember 2025-06-30 0001262039 srt:AsiaPacificMember 2024-12-31 0001262039 ftnt:DistributorAMember us-gaap:CustomerConcentrationRiskMember us-gaap:SalesRevenueNetMember 2025-04-01 2025-06-30 0001262039 ftnt:DistributorAMember us-gaap:CustomerConcentrationRiskMember us-gaap:SalesRevenueNetMember 2024-04-01 2024-06-30 0001262039 ftnt:DistributorAMember us-gaap:CustomerConcentrationRiskMember us-gaap:SalesRevenueNetMember 2025-01-01 2025-06-30 0001262039 ftnt:DistributorAMember us-gaap:CustomerConcentrationRiskMember us-gaap:SalesRevenueNetMember 2024-01-01 2024-06-30 0001262039 ftnt:DistributorBMember us-gaap:CustomerConcentrationRiskMember us-gaap:SalesRevenueNetMember 2025-04-01 2025-06-30 0001262039 ftnt:DistributorBMember us-gaap:CustomerConcentrationRiskMember us-gaap:SalesRevenueNetMember 2024-04-01 2024-06-30 0001262039 ftnt:DistributorBMember us-gaap:CustomerConcentrationRiskMember us-gaap:SalesRevenueNetMember 2025-01-01 2025-06-30 0001262039 ftnt:DistributorBMember us-gaap:CustomerConcentrationRiskMember us-gaap:SalesRevenueNetMember 2024-01-01 2024-06-30 0001262039 ftnt:DistributorCMember us-gaap:CustomerConcentrationRiskMember us-gaap:SalesRevenueNetMember 2025-04-01 2025-06-30 0001262039 ftnt:DistributorCMember us-gaap:CustomerConcentrationRiskMember us-gaap:SalesRevenueNetMember 2024-04-01 2024-06-30 0001262039 ftnt:DistributorCMember us-gaap:CustomerConcentrationRiskMember us-gaap:SalesRevenueNetMember 2025-01-01 2025-06-30 0001262039 ftnt:DistributorCMember us-gaap:CustomerConcentrationRiskMember us-gaap:SalesRevenueNetMember 2024-01-01 2024-06-30 0001262039 ftnt:DistributorAMember us-gaap:CustomerConcentrationRiskMember us-gaap:AccountsReceivableMember 2025-01-01 2025-06-30 0001262039 ftnt:DistributorAMember us-gaap:CustomerConcentrationRiskMember us-gaap:AccountsReceivableMember 2024-01-01 2024-12-31 0001262039 ftnt:DistributorBMember us-gaap:CustomerConcentrationRiskMember us-gaap:AccountsReceivableMember 2025-01-01 2025-06-30 0001262039 ftnt:DistributorBMember us-gaap:CustomerConcentrationRiskMember us-gaap:AccountsReceivableMember 2024-01-01 2024-12-31 0001262039 ftnt:DistributorCMember us-gaap:CustomerConcentrationRiskMember us-gaap:AccountsReceivableMember 2025-01-01 2025-06-30 0001262039 ftnt:DistributorCMember us-gaap:CustomerConcentrationRiskMember us-gaap:AccountsReceivableMember 2024-01-01 2024-12-31 0001262039 us-gaap:SubsequentEventMember srt:MinimumMember 2025-07-04 2025-07-04 0001262039 us-gaap:SubsequentEventMember srt:MaximumMember 2025-07-04 2025-07-04 0001262039 us-gaap:SubsequentEventMember 2025-07-04 2025-07-04 0001262039 ftnt:ShareRepurchaseProgramMember us-gaap:SubsequentEventMember 2025-07-01 2025-08-07 0001262039 ftnt:ShareRepurchaseProgramMember us-gaap:SubsequentEventMember 2025-08-07 0001262039 ftnt:KeithJensenMember 2025-04-01 2025-06-30 Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2025 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number: 001-34511 ______________________________________ FORTINET, INC. (Exact name of registrant as specified in its charter) ______________________________________ Delaware 77-0560389 (State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.) 909 Kifer Road Sunnyvale , California 94086 (Address of principal executive offices, including zip code) ( 408 ) 235-7700 (Registrant’s telephone number, including area code) Securities registered pursuant to Section 12(b) of the Exchange Act: Title of each class Trading Symbol Name of each exchange on which registered Common Stock, $0.001 Par Value FTNT The Nasdaq Stock Market LLC Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 (“Exchange Act”) during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐ Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐ Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act. Table of Contents Large accelerated filer ☒ Accelerated filer ☐ Non-accelerated filer ☐ Smaller reporting company ☐ Emerging growth company ☐ If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐ Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No ☒ As of August 5, 2025, there were 766,266,033 shares of the registrant’s common stock outstanding. FORTINET, INC. QUARTERLY REPORT ON FORM 10-Q For the Quarter Ended June 30, 2025 Table of Contents Page PART I — FINANCIAL INFORMATION Item 1. Financial Statements (unaudited) 3 Condensed Consolidated Balance Sheets 3 Condensed Consolidated Statements of Income 4 Condensed Consolidated Statements of Comprehensive Income 5 Condensed Consolidated Statements of Stockholders’ Equity (Deficit) 6 Condensed Consolidated Statements of Cash Flows 8 Notes to Condensed Consolidated Financial Statements 9 Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations 28 Item 3. Quantitative and Qualitative Disclosures about Market Risk 45 Item 4. Controls and Procedures 46 PART II—OTHER INFORMATION Item 1. Legal Proceedings 47 Item 1A. Risk Factors 47 Item 2. Unregistered Sales of Equity Securities, Use of Proceeds and Issuer Purchases of Equity Securities 84 Item 5. Other Information 84 Item 6. Exhibits 85 Exhibit Index 85 Signatures 86 Summary of Risk Factors Our business is subject to numerous risks and uncertainties, including those described in Part II, Item 1A, “Risk Factors” in this Quarterly Report on Form 10-Q. You should carefully consider these risks and uncertainties when investing in our common stock. Some of the principal risks and uncertainties include: • Our operating results are likely to vary significantly and be unpredictable. • Adverse economic conditions, such as a possible economic downturn or recession, and possible impacts of inflation or stagflation, tariffs, trade policies or other trade disruptions, changing interest rates, changes in government spending or regulation or reduced information technology (“IT”) spending, including firewall spending, may adversely impact our business. • We have been, and may in the future be, susceptible to supply chain constraints, supply shortages and disruptions, long or less predictable lead times for components and finished goods and supply changes because some of the key components in our products come from limited sources of supply. • As a result of supply chain disruptions in previous periods, we increased our purchase order commitments in previous periods and were in some instances required to and may in the future be required to accept or pay for components and finished goods regardless of our level of sales in a particular period, which may negatively or unpredictably impact our operating results and financial condition. • Our billings, revenue, and free cash flow growth may slow or may not continue to grow, and our operating margins may decline. • Our real estate assets, including construction, acquisitions, improvements, leasing activity, and ongoing maintenance and management of office buildings, warehouses, data centers and points of presence (“PoPs”), as well as data center operations, expansions or enhancements, could involve significant risks to our business. • Any weakness in sales strategy, productivity, personnel, retention and execution could negatively impact our results of operations. • We are dependent on the continued services and performance of our senior management, as well as our ability to hire, retain and motivate qualified personnel. • We rely on third-party channel partners for substantially all of our billings, revenue, and a small number of distributors represents a large percentage of our revenue and accounts receivable. • Reliance on a concentration of shipments at the end of the quarter or changes in shipping terms could cause our billings and revenue to fall below expected levels. • We rely significantly on revenue from FortiGuard and other security subscriptions and FortiCare technical support services, and revenue from these services may decline or fluctuate in manners that could adversely impact our results of operations. • We face intense competition in our market and we may not maintain or improve our competitive position. • We are susceptible to defects or vulnerabilities, including critical vulnerabilities, in our products or services, as well as reputational harm from the failure or misuse of our products or services, and any actual or perceived defects or vulnerabilities, including critical vulnerabilities, in our products or services, failure of our products or services to detect or prevent a security incident or to cause a disruption to operations, failure of our customers to implement preventative actions such as updates to one of our deployed solutions or failure to help secure our customers, could cause our products or services to allow unauthorized access to our customers’ networks and harm our operational results and reputation more significantly as compared to other companies. Our Product Security Incident Response Team publicly posts on our FortiGuard Labs website known product vulnerabilities, including critical vulnerabilities, and methods for customers to mitigate the risk of vulnerabilities. However, there can be no assurance that such posts will be sufficiently timely, accurate or complete or that those customers will see such posts or take steps to mitigate the risk of vulnerabilities, and certain customers may be negatively impacted. 1 • If our internal enterprise IT networks, our operational networks, our research and development networks, our back-end labs and cloud stacks hosted in our data centers or PoPs, colocation vendors or public cloud providers are compromised, public perception of our products and services may be harmed, our customers may be breached and harmed, we may become subject to liability, and our business, operating results and stock price may be adversely impacted. • We have incurred indebtedness and may incur other debt in the future, which may adversely affect our financial condition and future financial results. • We generate a majority of billings, revenue and cash flow from sales outside of the United States. • Our backlog may fluctuate over quarters. If we experience supply chain shortages and cannot fulfill orders or if customers cancel or delay delivery of orders, our backlog may be affected, which will negatively impact our aggregate backlog to billings conversion and revenue in such quarter. Generally, a reduction to backlog increases our aggregate billings and revenue during the quarter when delivered. • We may not be successful in executing our strategy to increase our sales to large- and medium-sized end-customers. • A portion of our revenue is generated by sales to government organizations and other customers, which are subject to a number of regulatory requirements, their own supply chain constraints and contractual requirements, challenges and risks, including impacts from political dynamics. • We order components and finished goods from third-party manufacturers based on our forecasts of future demand and targeted inventory levels, which exposes us to the risk of product shortages, tariffs, may result in lost sales, higher expenses and inventory excesses which may lead to inventory charges and costs related to future purchase commitments, possibly requiring us to sell our products at discounts or offer various other incentives. • We depend on third parties to provide various components for our products and build our products and are susceptible to manufacturing delays, capacity constraints, cost increases, and changes in the geopolitical environment. • Our inability to successfully acquire and integrate other businesses, products or technologies, or to successfully invest in and form successful strategic alliances with other businesses, could seriously harm our competitive position and could negatively affect our financial condition and results of operations. • Investors’, activists’ and regulators’ expectations of our investments and performance relating to operational sustainability factors may impose additional costs and expose us to new risks. • We are exposed to fluctuations in currency exchange rates, which could negatively affect our financial condition and results of operations. • Our proprietary rights may be difficult to enforce and we may be subject to claims by others that we infringe their proprietary technology. • The trading price of our common stock may be volatile, which volatility may be exacerbated by share repurchases under our Share Repurchase Program (the “Repurchase Program”). • Anti-takeover provisions contained in our certificate of incorporation and bylaws, as well as provisions of Delaware law, could impair a takeover attempt. • Global economic uncertainty can weaken and harm our financial position. • Weakening product demand caused by political instability, changes in trade agreements, wars and foreign conflicts, such as the war in Ukraine or tensions between China and Taiwan, could adversely affect our business and financial performance. 2 Table of Contents PART I—FINANCIAL INFORMATION ITEM 1. Financial Statements FORTINET, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited, in millions, except per share amounts) June 30, 2025 December 31, 2024 ASSETS CURRENT ASSETS: Cash and cash equivalents $ 3,368.5 $ 2,875.9 Short-term investments 1,194.4 1,190.6 Accounts receivable—net 1,215.7 1,463.4 Inventory 405.2 315.5 Prepaid expenses and other current assets 162.5 126.1 Total current assets 6,346.3 5,971.5 LONG-TERM INVESTMENTS 112.0 — PROPERTY AND EQUIPMENT—NET 1,544.8 1,349.5 DEFERRED CONTRACT COSTS 665.4 622.9 DEFERRED TAX ASSETS 1,457.2 1,335.6 GOODWILL 258.9 235.4 OTHER INTANGIBLE ASSETS—NET 123.3 115.0 OTHER ASSETS 133.5 133.2 TOTAL ASSETS $ 10,641.4 $ 9,763.1 LIABILITIES AND STOCKHOLDERS’ EQUITY CURRENT LIABILITIES: Accounts payable $ 245.2 $ 190.9 Accrued liabilities 339.1 337.9 Accrued payroll and compensation 281.3 255.7 Current portion of long-term debt 499.0 — Deferred revenue 3,412.5 3,276.2 Total current liabilities 4,777.1 4,060.7 DEFERRED REVENUE 3,155.1 3,084.7 LONG-TERM DEBT 496.3 994.3 OTHER LIABILITIES 152.5 129.6 Total liabilities 8,581.0 8,269.3 COMMITMENTS AND CONTINGENCIES (Note 10) STOCKHOLDERS’ EQUITY: Common stock, $ 0.001 par value— 1,500.0 shares authorized; 765.6 and 767.0 shares issued and outstanding on June 30, 2025 and December 31, 2024, respectively 0.8 0.8 Additional paid-in capital 1,715.9 1,636.2 Accumulated other comprehensive loss ( 20.7 ) ( 26.1 ) Retained earnings (accumulated deficit) 364.4 ( 117.1 ) Total stockholders’ equity 2,060.4 1,493.8 TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY $ 10,641.4 $ 9,763.1 See notes to condensed consolidated financial statements. 3 Table of Contents FORTINET, INC. CONDENSED CONSOLIDATED STATEMENTS OF INCOME (unaudited, in millions, except per share amounts) Three Months Ended Six Months Ended June 30, 2025 June 30, 2024 June 30, 2025 June 30, 2024 REVENUE: Product $ 508.9 $ 451.9 $ 968.0 $ 860.8 Service 1,121.1 982.4 2,201.7 1,926.8 Total revenue 1,630.0 1,434.3 3,169.7 2,787.6 COST OF REVENUE: Product 165.9 155.1 315.8 337.9 Service 149.0 119.9 292.2 241.8 Total cost of revenue 314.9 275.0 608.0 579.7 GROSS PROFIT: Product 343.0 296.8 652.2 522.9 Service 972.1 862.5 1,909.5 1,685.0 Total gross profit 1,315.1 1,159.3 2,561.7 2,207.9 OPERATING EXPENSES: Research and development 209.5 165.4 408.1 338.4 Sales and marketing 592.0 501.3 1,134.7 1,002.4 General and administrative 56.9 56.6 114.7 111.0 Gain on intellectual property matters ( 1.3 ) ( 1.2 ) ( 7.6 ) ( 2.3 ) Total operating expenses 857.1 722.1 1,649.9 1,449.5 OPERATING INCOME 458.0 437.2 911.8 758.4 INTEREST INCOME 45.0 38.3 89.3 70.5 INTEREST EXPENSE ( 4.6 ) ( 5.0 ) ( 9.5 ) ( 10.1 ) OTHER INCOME (EXPENSE)—NET 18.9 ( 2.2 ) 45.0 ( 5.1 ) INCOME BEFORE INCOME TAXES AND GAIN (LOSS) FROM EQUITY METHOD INVESTMENTS 517.3 468.3 1,036.6 813.7 PROVISION FOR INCOME TAXES 77.1 76.5 173.6 116.0 GAIN (LOSS) FROM EQUITY METHOD INVESTMENTS ( 0.1 ) ( 12.0 ) 10.5 ( 18.6 ) NET INCOME $ 440.1 $ 379.8 $ 873.5 $ 679.1 Net income per share (Note 8): Basic $ 0.57 $ 0.50 $ 1.14 $ 0.89 Diluted $ 0.57 $ 0.49 $ 1.13 $ 0.88 Weighted-average shares outstanding: Basic 765.5 763.8 766.9 763.1 Diluted 772.7 769.9 774.8 770.2 See notes to condensed consolidated financial statements. 4 Table of Contents FORTINET, INC. CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (unaudited, in millions) Three Months Ended Six Months Ended June 30, 2025 June 30, 2024 June 30, 2025 June 30, 2024 Net income $ 440.1 $ 379.8 $ 873.5 $ 679.1 Other comprehensive income (loss): Change in foreign currency translation 2.5 ( 4.2 ) 5.9 ( 9.4 ) Change in unrealized gains (losses) on investments ( 0.3 ) — ( 0.6 ) ( 0.9 ) Less: tax benefit related to items of other comprehensive income (loss) — — ( 0.1 ) ( 0.2 ) Other comprehensive income (loss) 2.2 ( 4.2 ) 5.4 ( 10.1 ) Comprehensive income $ 442.3 $ 375.6 $ 878.9 $ 669.0 See notes to condensed consolidated financial statements. 5 Table of Contents FORTINET, INC. CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (DEFICIT) (unaudited, in millions) Three Months Ended June 30, 2025 Common Stock Additional Paid-In Capital Accumulated Other Comprehensive Loss Retained Earnings Total Stockholders’ Equity Shares Amount BALANCE—March 31, 2025 769.2 $ 0.8 $ 1,668.7 $ ( 22.9 ) $ 316.3 $ 1,962.9 Issuance of common stock in connection with equity incentive plans - net of tax withholding 1.0 — ( 12.0 ) — — ( 12.0 ) Repurchase and retirement of common stock ( 4.6 ) — ( 9.1 ) — ( 392.0 ) ( 401.1 ) Excise tax on net stock repurchases — — ( 0.8 ) — — ( 0.8 ) Stock-based compensation expense — — 69.1 — — 69.1 Net unrealized loss on investments - net of tax — — — ( 0.3 ) — ( 0.3 ) Foreign currency translation adjustment — — — 2.5 — 2.5 Net income — — — — 440.1 440.1 BALANCE—June 30, 2025 765.6 $ 0.8 $ 1,715.9 $ ( 20.7 ) $ 364.4 $ 2,060.4 Three Months Ended June 30, 2024 Common Stock Additional Paid-In Capital Accumulated Other Comprehensive Loss Accumulated Deficit Total Stockholders’ Equity (Deficit) Shares Amount BALANCE—March 31, 2024 763.2 $ 0.8 $ 1,448.9 $ ( 24.8 ) $ ( 1,562.4 ) $ ( 137.5 ) Issuance of common stock in connection with equity incentive plans - net of tax withholding 1.0 — ( 13.8 ) — — ( 13.8 ) Stock-based compensation expense — — 63.9 — — 63.9 Foreign currency translation adjustment — — — ( 4.2 ) — ( 4.2 ) Net income — — — — 379.8 379.8 BALANCE—June 30, 2024 764.2 $ 0.8 $ 1,499.0 $ ( 29.0 ) $ ( 1,182.6 ) $ 288.2 See notes to condensed consolidated financial statements. 6 Table of Contents Six Months Ended June 30, 2025 Common Stock Additional Paid-In Capital Accumulated Other Comprehensive Loss Retained Earnings (Accumulated Deficit) Total Stockholders’ Equity Shares Amount BALANCE—December 31, 2024 767.0 $ 0.8 $ 1,636.2 $ ( 26.1 ) $ ( 117.1 ) $ 1,493.8 Issuance of common stock in connection with equity incentive plans - net of tax withholding 3.2 — ( 45.6 ) — — ( 45.6 ) Repurchase and retirement of common stock ( 4.6 ) — ( 9.1 ) — ( 392.0 ) ( 401.1 ) Excise tax on net stock repurchases — — ( 0.8 ) — — ( 0.8 ) Stock-based compensation expense — — 135.2 — — 135.2 Net unrealized loss on investments - net of tax — — — ( 0.5 ) — ( 0.5 ) Foreign currency translation adjustment — — — 5.9 — 5.9 Net income — — — — 873.5 873.5 BALANCE—June 30, 2025 765.6 $ 0.8 $ 1,715.9 $ ( 20.7 ) $ 364.4 $ 2,060.4 Six Months Ended June 30, 2024 Common Stock Additional Paid-In Capital Accumulated Other Comprehensive Loss Accumulated Deficit Total Stockholders’ Equity (Deficit) Shares Amount BALANCE—December 31, 2023 761.0 $ 0.8 $ 1,416.4 $ ( 18.9 ) $ ( 1,861.7 ) $ ( 463.4 ) Issuance of common stock in connection with equity incentive plans - net of tax withholding 3.2 — ( 43.6 ) — — ( 43.6 ) Stock-based compensation expense — — 126.2 — — 126.2 Net unrealized loss on investments - net of tax — — — ( 0.7 ) — ( 0.7 ) Foreign currency translation adjustment — — — ( 9.4 ) — ( 9.4 ) Net income — — — — 679.1 679.1 BALANCE—June 30, 2024 764.2 $ 0.8 $ 1,499.0 $ ( 29.0 ) $ ( 1,182.6 ) $ 288.2 See notes to condensed consolidated financial statements. 7 Table of Contents FORTINET, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited, in millions) Six Months Ended June 30, 2025 June 30, 2024 CASH FLOWS FROM OPERATING ACTIVITIES: Net income $ 873.5 $ 679.1 Adjustments to reconcile net income to net cash provided by operating activities: Stock-based compensation 135.2 126.2 Amortization of deferred contract costs 160.0 144.7 Depreciation and amortization 74.1 57.8 Amortization of investment discounts ( 19.4 ) ( 24.9 ) Other ( 44.8 ) 25.6 Changes in operating assets and liabilities, net of impact of business combinations: Accounts receivable—net 262.7 318.9 Inventory ( 79.6 ) 85.2 Prepaid expenses and other current assets ( 32.1 ) ( 12.3 ) Deferred contract costs ( 202.5 ) ( 136.0 ) Deferred tax assets ( 75.3 ) ( 130.3 ) Other assets ( 11.7 ) ( 7.6 ) Accounts payable 46.8 ( 67.2 ) Accrued liabilities ( 9.7 ) ( 24.9 ) Accrued payroll and compensation 22.9 ( 24.3 ) Deferred revenue 204.8 161.7 Other liabilities 10.3 0.7 Net cash provided by operating activities 1,315.2 1,172.4 CASH FLOWS FROM INVESTING ACTIVITIES: Purchases of investments ( 976.5 ) ( 974.3 ) Sales of investments 5.7 — Maturities of investments 869.6 904.6 Purchases of property and equipment ( 234.3 ) ( 245.0 ) Payments made in connection with business combinations, net of cash acquired ( 41.6 ) ( 5.7 ) Other 0.1 — Net cash used in investing activities ( 377.0 ) ( 320.4 ) CASH FLOWS FROM FINANCING ACTIVITIES: Repurchase and retirement of common stock ( 401.1 ) — Proceeds from issuance of common stock 31.3 19.6 Taxes paid related to net share settlement of equity awards ( 77.0 ) ( 63.1 ) Other ( 0.1 ) ( 0.8 ) Net cash used in financing activities ( 446.9 ) ( 44.3 ) EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS 1.3 ( 2.4 ) NET INCREASE IN CASH AND CASH EQUIVALENTS 492.6 805.3 CASH AND CASH EQUIVALENTS—Beginning of period 2,875.9 1,397.9 CASH AND CASH EQUIVALENTS—End of period $ 3,368.5 $ 2,203.2 SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION: Cash paid for income taxes—net $ 264.0 $ 283.2 Operating lease liabilities arising from obtaining right-of-use assets $ 24.3 $ 21.6 NON-CASH INVESTING AND FINANCING ACTIVITIES: Transfers of evaluation units and equipment from inventory to property and equipment $ 14.7 $ 12.0 Liability for purchase of property and equipment $ 19.4 $ 23.0 See notes to condensed consolidated financial statements. 8 Table of Contents FORTINET, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited) 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation and Preparation —The unaudited condensed consolidated financial statements of Fortinet, Inc. and its subsidiaries (collectively, “we,” “us” or “our”) have been prepared in accordance with generally accepted accounting principles in the United States (“GAAP”) for interim financial information, as well as the instructions to Form 10-Q pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (the “SEC”). Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements, and should be read in conjunction with our audited consolidated financial statements as of and for the year ended December 31, 2024, contained in our Annual Report on Form 10-K filed with the SEC on February 21, 2025. In the opinion of management, all adjustments, which include normal recurring adjustments, considered necessary for a fair presentation, have been included. The results of operations for the three and six months ended June 30, 2025 are not necessarily indicative of the results to be expected for the full year or for any future periods. The condensed consolidated balance sheet as of December 31, 2024 is derived from the audited consolidated financial statements for the year ended December 31, 2024. Amounts previously reported as gain on bargain purchase are included in other income (expense)—net in prior periods to conform with current period presentation in our condensed consolidated statements of income. Amounts previously reported as loss from equity method investments and gain on bargain purchase are included in other in prior periods to conform with current period presentation in section of net cash provided by operating activities in our condensed consolidated statements of cash flows. The condensed consolidated financial statements include the accounts of Fortinet, Inc. and its subsidiaries. We consolidate all legal entities in which we have an absolute controlling financial interest. All intercompany balances and transactions have been eliminated in consolidation. The preparation of the condensed consolidated financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the amounts reported in the condensed consolidated financial statements and accompanying notes. Actual results could differ materially from those estimates. There have been no material changes to our significant accounting policies as of and for the six months ended June 30, 2025, as compared to the significant accounting policies described in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024 filed with the SEC. Recent Accounting Standards Not Yet Effective Income Taxes In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which includes amendments that further enhance income tax disclosures, primarily through standardization and disaggregation of rate reconciliation categories and income taxes paid by jurisdiction. The amendments are effective for our annual period beginning fiscal year 2025, with early adoption permitted, and should be applied prospectively. We are currently evaluating the ASU to determine its impact on our disclosures. Income Statement In November 2024, the FASB issued ASU 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses (ASU 2024-03), and in January 2025, the FASB issued ASU No. 2025-01, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Clarifying the Effective Date, which clarified the effective date of ASU 2024-03. ASU 2024-03 enhances the disclosures required for expense disaggregation in our annual and interim consolidated financial statements. The amendments are effective for our annual reporting period beginning fiscal year 2027, with early adoption permitted, and can be applied prospectively or retrospectively. We are currently evaluating the ASU to determine its impact on our disclosures. 9 Table of Contents FORTINET, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued) 2. REVENUE RECOGNITION Disaggregation of Revenue The following table presents our revenue disaggregated by major product and service lines (in millions): Three Months Ended Six Months Ended June 30, 2025 June 30, 2024 June 30, 2025 June 30, 2024 Product $ 508.9 $ 451.9 $ 968.0 $ 860.8 Service: Security subscription 644.4 558.7 1,267.5 1,095.6 Technical support and other 476.7 423.7 934.2 831.2 Total service revenue 1,121.1 982.4 2,201.7 1,926.8 Total revenue $ 1,630.0 $ 1,434.3 $ 3,169.7 $ 2,787.6 Deferred Revenue During the three and six months ended June 30, 2025, we recognized $ 876.8 million and $ 1.85 billion in revenue that was included in the deferred revenue balance as of December 31, 2024, respectively. During the three and six months ended June 30, 2024, we recognized $ 764.3 million and $ 1.62 billion in revenue that was included in the deferred revenue balance as of December 31, 2023, respectively. Transaction Price Allocated to the Remaining Performance Obligations As of June 30, 2025, the aggregate amount of the transaction price allocated to remaining performance obligations was $ 6.64 billion, which was substantially comprised of deferred security subscription and technical support services revenue as well as unbilled contract revenue from non-cancellable contracts that will be recognized in future periods. We expect to recognize approximately $ 3.45 billion as revenue over the next 12 months, $ 2.61 billion in years two and three, and the remainder thereafter. Deferred Contract Costs Amortization of deferred contract costs during the three months ended June 30, 2025 and 2024 was $ 82.0 million and $ 72.7 million, respectively. Amortization of deferred contract costs during the six months ended June 30, 2025 and 2024 was $ 160.0 million and $ 144.7 million, respectively. 10 Table of Contents FORTINET, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued) 3. FINANCIAL INSTRUMENTS AND FAIR VALUE Short-Term and Long-Term Investments Our short-term and long-term investments comprised of available-for-sale investments and marketable equity securities. The following tables summarize our short-term and long-term investments (in millions): June 30, 2025 Amortized Cost Unrealized Gains Unrealized Losses Fair Value U.S. government and agency securities $ 514.5 $ 0.1 $ ( 0.1 ) $ 514.5 Commercial paper 433.2 — ( 0.1 ) 433.1 Corporate debt securities 177.6 — ( 0.1 ) 177.5 Certificates of deposit and term deposits 97.3 — — 97.3 Total available-for-sale investments 1,222.6 0.1 ( 0.3 ) 1,222.4 Marketable equity securities 84.0 Total short-term and long-term investments $ 1,222.6 $ 0.1 $ ( 0.3 ) $ 1,306.4 December 31, 2024 Amortized Cost Unrealized Gains Unrealized Losses Fair Value U.S. government and agency securities $ 469.1 $ 0.4 $ — $ 469.5 Commercial paper 428.7 0.2 ( 0.2 ) 428.7 Corporate debt securities 166.4 0.1 ( 0.1 ) 166.4 Certificates of deposit and term deposits 61.8 — — 61.8 Total available-for-sale investments 1,126.0 0.7 ( 0.3 ) 1,126.4 Marketable equity securities 64.2 Total short-term and long-term investments $ 1,126.0 $ 0.7 $ ( 0.3 ) $ 1,190.6 The following tables show the gross unrealized losses and the related fair values of our available-for-sale investments that have been in a continuous unrealized loss position (in millions): June 30, 2025 Less Than 12 Months 12 Months or Greater Total Fair Value Unrealized Losses Fair Value Unrealized Losses Fair Value Unrealized Losses U.S. government and agency securities $ 393.7 $ ( 0.1 ) $ — $ — $ 393.7 $ ( 0.1 ) Commercial paper 355.1 ( 0.1 ) — — 355.1 ( 0.1 ) Corporate debt securities 119.1 ( 0.1 ) — — 119.1 ( 0.1 ) Certificates of deposit and term deposits 19.3 — — — 19.3 — Total available-for-sale investments $ 887.2 $ ( 0.3 ) $ — $ — $ 887.2 $ ( 0.3 ) 11 Table of Contents FORTINET, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued) December 31, 2024 Less Than 12 Months 12 Months or Greater Total Fair Value Unrealized Losses Fair Value Unrealized Losses Fair Value Unrealized Losses U.S. government and agency securities $ 27.8 $ — $ — $ — $ 27.8 $ — Commercial paper 149.4 ( 0.2 ) — — 149.4 ( 0.2 ) Corporate debt securities 63.5 ( 0.1 ) — — 63.5 ( 0.1 ) Certificates of deposit and term deposits 10.9 — — — 10.9 — Total available-for-sale investments $ 251.6 $ ( 0.3 ) $ — $ — $ 251.6 $ ( 0.3 ) The contractual maturities of our available-for-sale investments were (in millions): June 30, 2025 December 31, 2024 Due within one year $ 1,110.4 $ 1,126.4 Due within one to three years 112.0 — Total $ 1,222.4 $ 1,126.4 Available-for-sale investments are reported at fair value, with unrealized gains and losses and the related tax impact included as a separate component of stockholders’ equity and in comprehensive income. We do not intend to sell any of the securities in an unrealized loss position and it is not more likely than not that we would be required to sell these securities before recovery of their amortized cost basis, which may be at maturity. Realized gains and losses on available-for-sale investments were insignificant in the periods presented. The changes in fair value of our marketable equity securities are recorded in other income (expense)—net on the condensed consolidated statements of income. We recognized an $ 11.3 million gain and $ 3.4 million loss during the three and six months ended June 30, 2025, respectively. We recognized a $ 0.2 million loss and $ 0.1 million gain during the three and six months ended June 30, 2024, respectively. 12 Table of Contents FORTINET, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued) Assets Measured at Fair Value on a Recurring Basis The following table presents the fair value of our financial assets measured at fair value on a recurring basis (in millions): June 30, 2025 December 31, 2024 Aggregate Fair Value Quoted Prices in Active Markets For Identical Assets Significant Other Observable Remaining Inputs Significant Other Unobservable Remaining Inputs Aggregate Fair Value Quoted Prices in Active Markets For Identical Assets Significant Other Observable Remaining Inputs Significant Other Unobservable Remaining Inputs (Level 1) (Level 2) (Level 3) (Level 1) (Level 2) (Level 3) Cash equivalents: Money market funds $ 251.7 $ 251.7 $ — $ — $ 296.1 $ 296.1 $ — $ — Commercial paper 36.3 — 36.3 — 59.7 — 59.7 — Corporate debt securities 2.0 — 2.0 — — — — — Total cash equivalents 290.0 251.7 38.3 — 355.8 296.1 59.7 — Short-term investments: U.S. government and agency securities 454.0 450.5 3.5 — 469.5 464.5 5.0 — Commercial paper 433.1 — 433.1 — 428.7 — 428.7 — Corporate debt securities 126.0 — 126.0 — 166.4 — 166.4 — Certificates of deposit and term deposits 97.3 — 97.3 — 61.8 — 61.8 — Marketable equity securities 84.0 84.0 — — 64.2 64.2 — — Total short-term investments 1,194.4 534.5 659.9 — 1,190.6 528.7 661.9 — Long-term investments: U.S. government and agency securities 60.5 55.2 5.3 — — — — — Corporate debt securities 51.5 — 51.5 — — — — — Total long-term investments 112.0 55.2 56.8 — — — — — Total $ 1,596.4 $ 841.4 $ 755.0 $ — $ 1,546.4 $ 824.8 $ 721.6 $ — There were no transfers between Level 1 and Level 2 of the fair value hierarchy during the six months ended June 30, 2025 and year ended December 31, 2024. 4. INVENTORY Inventory, net of reserves, consisted of (in millions): June 30, 2025 December 31, 2024 Raw materials $ 72.0 $ 90.9 Work in process 4.8 4.1 Finished goods 328.4 220.5 Inventory $ 405.2 $ 315.5 The excess and obsolete inventory reserve was $ 146.4 million and $ 144.8 million as of June 30, 2025 and December 31, 2024, respectively. Inventory write-downs related to excess and obsolete inventory were immaterial during the three and six months ended June 30, 2025, respectively, and were $ 10.7 million and $ 28.8 million during the three and six 13 Table of Contents FORTINET, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued) months ended June 30, 2024, respectively. These were recorded in cost of product revenue on the condensed consolidated statements of income. 5. PROPERTY AND EQUIPMENT—Net Property and equipment—net consisted of (in millions): June 30, 2025 December 31, 2024 Land $ 560.5 $ 500.6 Buildings and improvements 934.0 801.4 Computer equipment and software 307.5 279.1 Leasehold improvements 63.4 64.3 Evaluation units 34.8 31.8 Furniture and fixtures 37.2 36.4 Construction-in-progress 62.2 52.0 Total property and equipment 1,999.6 1,765.6 Less: accumulated depreciation ( 454.8 ) ( 416.1 ) Property and equipment—net $ 1,544.8 $ 1,349.5 During the three months ended March 31, 2025, we purchased certain real estate property in Germany totaling $ 54.5 million, to be used predominantly for data center operations and as office space. The purchase was accounted for under the asset acquisition method, with $ 16.8 million allocated to land and $ 37.7 million allocated to buildings and improvements, based on their relative fair values. During the three months ended June 30, 2025, we purchased certain real estate properties in Canada, the United States and the Netherlands for an aggregate purchase price of $ 130.5 million, to be used predominantly for data center operations, office space and warehouse operations. The purchases were accounted for under the asset acquisition method, with $ 43.0 million allocated to land and $ 87.5 million allocated to buildings and improvements, based on their relative fair values. Depreciation expense was $ 25.1 million and $ 25.9 million during the three months ended June 30, 2025 and 2024, respectively. Depreciation expense was $ 49.1 million and $ 51.5 million during the six months ended June 30, 2025 and 2024, respectively. 6. BUSINESS COMBINATIONS 2025 Acquisitions Linksys Holdings, Inc. In 2021, we invested $ 160.0 million in cash for shares of the Series A Preferred Stock of Linksys for a 50.8 % ownership interest in the outstanding equity of Linksys. On January 31, 2025 ( “ Linksys Acquisition Date ”) , we acquired all of the remaining outstanding Series A Preferred Stock of Linksys for $ 20.8 million in cash and now own 100 % of the outstanding equity of Linksys. Our pre-existing equity method investment in Linksys of 50.8 % ownership interest was remeasured to the fair value of $ 21.5 million at the Linksys Acquisition Date, which resulted in a $ 10.8 million gain recorded in gain (loss) from equity method investments on the condensed consolidated statements of income. Therefore, the aggregate purchase consideration for Linksys’ equity equaling the fair value of the previously owned stock and the purchase price for the remaining stock acquired was $ 42.3 million. This acquisition was accounted for as a business combination using the acquisition method of accounting. Of the aggregate purchase price, $ 17.5 million was allocated to identifiable intangible assets acquired, and $ 64.7 million was allocated to other net assets acquired which predominantly included deferred tax asset of $ 45.8 million, inventory of $ 21.4 million, and cash of $ 8.8 million, offset by $ 11.3 million of net other assets and liabilities assumed. The excess of the fair values of the net assets acquired over the net purchase consideration was recorded as a gain on bargain purchase of $ 39.9 million within other income (expense) — net on the condensed consolidated statements of income. The gain on bargain purchase occurred primarily due to the recognition of the deferred tax assets. The deferred tax assets were comprised primarily of pre-acquisition federal net 14 Table of Contents FORTINET, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued) operating loss carryforwards with an indefinite carryforward period. In addition, we had previously recorded a deferred tax asset of $ 30.6 million for an outside basis difference in our investment in Linksys when it was accounted for under the equity method. As a result of the acquisition of the remaining shares, we now account for our investment in Linksys under the consolidation method, and therefore we have derecognized this deferred tax asset. The charge is included in the provision for income taxes on the condensed consolidated statements of income. Acquisition-related costs related to this acquisition were not material and were recorded as general and administrative expense. Other acquisitions During the three months ended June 30, 2025 , we completed other acquisitions for total purchase consideration of $ 38.3 million in cash. We have accounted for the transactions as business combinations and recorded goodwill of $ 21.9 million, among which $ 8.6 million of goodwill is expected to be deductible and $ 13.3 million of goodwill is not deductible for income tax purposes. Acquisition-related costs were not material and were recorded as general and administrative expense. 2024 Acquisitions Perception Point Ltd. On December 5, 2024, we acquired certain assets and liabilities of Perception Point Ltd., a business specializing in advanced collaboration and email security paid in cash. This acquisition was accounted for as a business combination using the acquisition method of accounting. Of the $ 33.7 million purchase price, $ 24.5 million was allocated to goodwill, $ 9.5 million was allocated to developed technology intangible asset, $ 6.5 million was allocated to customer relationships intangible asset, and $ 6.8 million was allocated to other net liabilities assumed, which predominantly include deferred revenue. Goodwill recorded in connection with this acquisition is primarily attributable to the assembled workforce acquired and the anticipated operational synergies. All acquired goodwill is expected to be deductible for tax purposes. Acquisition-related costs were not material and were recorded as general and administrative expense. Next DLP Holdings Limited On August 5, 2024 ( “ Next DLP Acquisition Date ”) , we acquired Next DLP Holdings Limited (“Next DLP”), a privately held insider risk and data loss prevention (“DLP”) company, for approximately $ 105.0 million in cash. We acquired Next DLP in an effort to improve our position in the standalone enterprise DLP market and strengthen our leadership in integrated DLP markets within endpoint and unified Secure Access Service Edge (“SASE”) . This acquisition was accounted for as a business combination using the acquisition method of accounting. T he total preliminary purchase price was allocated to Next DLP’s identifiable tangible and intangible assets acquired and liabilities assumed based on their estimated fair values using management’s best estimates and assumptions to assign fair value as of the acquisition date. Of the total preliminary purchase price, $ 82.6 million was allocated to goodwill, $ 13.5 million was allocated to developed technology intangible asset, $ 10.5 million was allocated to customer relationships intangible asset, offset by $ 1.6 million of net liabilities assumed, which predominantly included deferred revenue and deferred tax liabilities. Goodwill recorded in connection with this acquisition represents the value we expect to be created through expansion into markets within our existing business, and the anticipated operational synergies, and goodwill is expected to be deductible for U.S. tax purposes. Acquisition-related costs related to this acquisition were not material and were recorded as general and administrative expense. Our estimates and assumptions are subject to change within the measurement period, which is up to 12 months after the Next DLP Acquisition Date. The allocation of the purchase price has been prepared on a preliminary basis and changes to the allocation of certain assets and liabilities may occur as additional information becomes available. The primary areas of the purchase price that are not yet finalized are related to income taxes and the valuation of acquired assets and assumed liabilities. Lacework Inc. On August 1, 2024 ( “Lacework Acquisition Date ”), we acquired Lacework Inc. (“Lacework”), a privately held data-driven cloud security company, for $ 152.3 million in cash. We acquired Lacework with a goal of offering its Cloud-Native Application Protection Platform solution separately as well as integrated with our existing portfolio, forming a comprehensive, artificial intelligence (“AI”)-driven cloud security platform available from a single vendor, which will help customers identify, prioritize, and remediate risks and threats in complex cloud-native infrastructure from code to cloud. This acquisition was accounted for as a business combination using the acquisition method of accounting. T he total preliminary purchase price was allocated to Lacework’s identifiable tangible and intangible assets acquired and liabilities 15 Table of Contents FORTINET, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued) assumed based on their estimated fair values using management’s best estimates and assumptions to assign fair value as of the acquisition date. Of the total preliminary purchase price, $ 244.4 million was allocated to deferred tax assets, $ 61.3 million allocation to identifiable intangible assets, and $ 6.2 million cash, offset by net other assets and liabilities assumed of $ 53.3 million, which predominantly included deferred revenue and other current liabilities. The excess of the fair values of the net assets acquired over the net purchase consideration was recorded as a gain on bargain purchase of $ 106.3 million within other income (expense) —net on the condensed consolidated statements of income. The gain on bargain purchase occurred primarily due to the recognition of the deferred tax assets. The deferred tax assets were comprised primarily of pre-acquisition federal net operating loss carryforwards with an indefinite carryforward period. Acquisit ion-related costs related to this acquisition were not material and were recorded as general and administrative expense. Of the total identified intangible assets acquired $ 39.5 million was developed technology, $ 10.0 million was backlog, $ 7.5 million was customer relationships and $ 4.3 million was trade name. Our estimates and assumptions are subject to change within the measurement period, which is up to 12 months after the Lacework Acquisition Date. The allocation of the purchase price for this acquisition has been prepared on a preliminary basis and changes to the allocation of certain assets and liabilities may occur as additional information becomes available. The primary area of the purchase price that is not yet finalized is related to income taxes. Additional acquisition-related information The operating results of the acquired companies are included in our condensed consolidated statements of income from the respective dates of acquisition. Acquisition-related costs related to each acquisition were not material. The operating results of the acquired companies were not material in the years of acquisition. Pro forma information has not been presented, as the impact of these acquisitions, individually and in the aggregate, in each period were not material to our condensed consolidated financial statements. 7. GOODWILL AND OTHER INTANGIBLE ASSETS—Net Goodwill The following table presents the changes in the carrying amount of goodwill (in millions): Amount Balance—December 31, 2024 $ 235.4 Additions due to business combinations 21.9 Foreign currency translation adjustments 1.6 Balance—June 30, 2025 $ 258.9 There were no impairments to goodwill during the six months ended June 30, 2025 or during prior periods. 16 Table of Contents FORTINET, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued) Other Intangible Assets—Net The following tables present other intangible assets—net (in millions, except years): June 30, 2025 Weighted-Average Useful Life (in Years) Gross Accumulated Amortization Net Other intangible assets—net: Finite-lived intangible assets: Developed technologies 4.3 $ 160.6 $ 86.6 $ 74.0 Customer relationships 5.3 67.5 33.4 34.1 Trade name 7.1 11.6 2.7 8.9 Backlog 2.4 13.8 7.5 6.3 Total other intangible assets—net $ 253.5 $ 130.2 $ 123.3 December 31, 2024 Weighted-Average Useful Life (in Years) Gross Accumulated Amortization Net Other intangible assets—net: Finite-lived intangible assets: Developed technologies 4.4 $ 141.9 $ 73.7 $ 68.2 Customer relationships 5.5 53.9 23.0 30.9 Trade name 7.5 8.8 1.8 7.0 Backlog 2.5 13.5 4.6 8.9 Total other intangible assets—net $ 218.1 $ 103.1 $ 115.0 Amortization expense was $ 13.2 million and $ 3.3 million during the three months ended June 30, 2025 and 2024, respectively. Amortization expense was $ 25.0 million and $ 6.3 million during the six months ended June 30, 2025 and 2024, respectively. The following table summarizes estimated future amortization expense of finite-lived intangible assets—net (in millions): Amount Years: 2025 (the remainder of 2025) $ 23.7 2026 35.4 2027 28.2 2028 21.4 2029 10.4 Thereafter 4.2 Total $ 123.3 8. NET INCOME PER SHARE Basic net income per share is computed by dividing net income by the weighted-average number of shares of common stock outstanding during the period. Diluted net income per share is computed by dividing net income by the weighted-average number of shares of common stock outstanding during the period, plus the dilutive effects of restricted stock units (“RSUs”), stock options and performance stock units (“PSUs”). Dilutive shares of common stock are determined by applying the treasury stock method. 17 Table of Contents FORTINET, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued) A reconciliation of the numerator and denominator used in the calculation of basic and diluted net income per share is (in millions, except per share amounts): Three Months Ended Six Months Ended June 30, 2025 June 30, 2024 June 30, 2025 June 30, 2024 Numerator: Net income $ 440.1 $ 379.8 $ 873.5 $ 679.1 Denominator: Basic shares: Weighted-average common stock outstanding-basic 765.5 763.8 766.9 763.1 Diluted shares: Weighted-average common stock outstanding-basic 765.5 763.8 766.9 763.1 Effect of potentially dilutive securities: RSUs 2.6 1.5 3.0 2.1 Stock options 4.0 4.5 4.3 4.8 PSUs 0.6 0.1 0.6 0.2 Weighted-average shares used to compute diluted net income per share 772.7 769.9 774.8 770.2 Net income per share Basic $ 0.57 $ 0.50 $ 1.14 $ 0.89 Diluted $ 0.57 $ 0.49 $ 1.13 $ 0.88 The following weighted-average shares of common stock were excluded from the computation of diluted net income per share for the periods presented, as their effect would have been antidilutive (in millions): Three Months Ended Six Months Ended June 30, 2025 June 30, 2024 June 30, 2025 June 30, 2024 RSUs 2.1 — 1.5 — Stock options 0.6 3.6 0.5 3.4 PSUs — 0.2 — 0.1 Total 2.7 3.8 2.0 3.5 9. DEBT 2026 and 2031 Senior Notes On March 5, 2021, we issued $ 1.0 billion aggregate principal amount of senior notes (collectively, the “Senior Notes”), consisting of $ 500.0 million aggregate principal amount of 1.0 % notes due March 15, 2026 (the “2026 Senior Notes”) and $ 500.0 million aggregate principal amount of 2.2 % notes due March 15, 2031 (the “2031 Senior Notes”), in an underwritten registered public offering. The Senior Notes are senior unsecured obligations and rank equally with each other in right of payment and with our other outstanding obligations. We may redeem the Senior Notes at any time in whole or in part for cash, at specified redemption prices that include accrued and unpaid interest, if any, and a make-whole premium. However, no make-whole premium will be paid for redemptions of the 2026 Senior Notes on or after February 15, 2026, or the 2031 Senior Notes on or after December 15, 2030. Interest on the Senior Notes is payable on March 15 and September 15 of each year, beginning on September 15, 2021. The 2026 Senior Notes were recorded as current portion of long-term debt and the 2031 Senior Notes were recorded as long-term debt as of June 30, 2025 and both of the Senior Notes were recorded as long-term debt as of December 31, 2024, net of discount and issuance costs, which are amortized to interest expense over the respective contractual terms of these notes using the effective interest method. 18 Table of Contents FORTINET, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued) The total outstanding debt is summarized below (in millions, except percentages): Maturity Coupon Rate Effective Interest Rate June 30, 2025 December 31, 2024 Debt 2026 Senior Notes March 2026 1.0 % 1.3 % $ 500.0 $ 500.0 2031 Senior Notes March 2031 2.2 % 2.3 % 500.0 500.0 Total debt 1,000.0 1,000.0 Less: Unamortized discount and debt issuance costs 4.7 5.7 Less: Current portion of long-term debt $ 499.0 $ — Total long-term debt $ 496.3 $ 994.3 As of June 30, 2025 and December 31, 2024, we accrued interest payable of $ 4.7 million, and there are no financial covenants with which we must comply. During the three months ended June 30, 2025 and 2024, we recorded $ 4.5 million of total interest expense in relation to these Senior Notes in each period. During the six months ended June 30, 2025 and 2024, we recorded $ 9.0 million of total interest expense in relation to these Senior Notes in each period. No interest costs were capitalized for the six months ended June 30, 2025 and 2024, as the costs that qualified for capitalization were not material. The total estimated fair value of the outstanding Senior Notes was approximately $ 933.1 million, including accrued and unpaid interest, as of June 30, 2025. The fair value was determined based on observable market prices of identical instruments in less active markets. The estimated fair values are based on Level 2 inputs. 10. COMMITMENTS AND CONTINGENCIES The following table summarizes our inventory purchase commitments as of June 30, 2025 (in millions): Total 2025 Thereafter Inventory purchase commitments $ 714.4 $ 537.2 $ 177.2 Inventory Purchase Commitments —We purchase components of our inventory from certain suppliers and use several independent contract manufacturers to provide manufacturing services for our products. During the normal course of business, in order to manage manufacturing lead times and help ensure adequate component supply, we enter into agreements with contract manufacturers and suppliers that allow them to procure inventory based upon criteria as defined by us or establish the parameters defining our requirements. A significant portion of our reported purchase commitments arising from these agreements consists of firm, non-cancelable and unconditional commitments. Certain of these inventory purchase commitments with contract manufacturers and suppliers relate to arrangements to secure supply and pricing for certain product components for multi-year periods. In certain instances, these agreements allow us the option to reschedule and adjust our requirements based on our business needs prior to firm orders being placed. As of June 30, 2025, we had $ 714.4 million of non-cancelable inventory purchase commitments with our independent contract manufacturers. We recorded a liability for these purchase commitments for quantities in excess of our future estimated demand forecasts, consistent with the valuation of our excess and obsolete inventory. As of June 30, 2025 and December 31, 2024, the liability for these inventory purchase commitments was $ 41.9 million and $ 54.0 million, respectively, and was recorded in accrued liabilities on our condensed consolidated balance sheets. The expense related to such accrued liability for inventory purchase commitments is recorded in cost of product revenue on the condensed consolidated statements of income. It was immaterial during the three and six months ended June 30, 2025, and was $ 7.0 million and $ 38.6 million during the three and six months ended June 30, 2024, respectively. Other Contractual Commitments and Open Purchase Orders —In addition to commitments with contract manufacturers, we have open purchase orders and contractual obligations in the ordinary course of business for which we have not received goods or services. A significant portion of our reported purchase commitments consist of non-cancelable commitments. In certain instances, contractual commitments allow us the option to cancel, reschedule and adjust our requirements based on our business needs prior to firm orders being placed. As of June 30, 2025, we had $ 102.7 million in other contractual commitments having a remaining term in excess of one year that are non-cancelable. 19 Table of Contents FORTINET, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued) As of June 30, 2025, we had $ 93.4 million in contractual commitments related to payments for operating leases. Litigation —We are involved in disputes, litigation, and other legal actions. For lawsuits where we are the defendant, we are in the process of defending these litigation matters, and while there can be no assurances and the outcome of certain of these matters is currently not determinable and not predictable, we currently are unaware of any existing claims or proceedings that we believe are likely to have a material adverse effect on our financial position. There are many uncertainties associated with any litigation and these actions or other third-party claims against us may cause us to incur costly litigation fees, costs and substantial settlement charges, and possibly subject us to damages and other penalties. In addition, the resolution of any intellectual property (“IP”) litigation may require us to make royalty payments, which could adversely affect our gross margins in future periods. If any of those events were to occur, our business, financial condition, results of operations, and cash flows could be adversely affected. Litigation is unpredictable and the actual liability in any such matters may be materially different from our current estimates, which could result in the need to adjust any accrued liability and record additional expenses. We accrue for contingencies when we believe that a loss is probable and that we can reasonably estimate the amount of any such loss. These accruals are generally based on a range of possible outcomes that require significant management judgement. If no amount within a range is a better estimate than any other, we accrue the minimum amount. Litigation loss contingency accruals associated with outstanding cases were not material as of June 30, 2025 and December 31, 2024. On March 21, 2019, we were sued by Alorica Inc. (“Alorica”) in Santa Clara County Superior Court in California. Alorica alleged breach of warranty and misrepresentation claims, which we denied. After trial, a jury returned a verdict fully in favor of us and against Alorica on October 4, 2024. Alorica has filed a notice of appeal. We believe that the ultimate outcome of this matter will not materially impact our financial position, results of operations or cash flows. However, any further legal proceedings, including Alorica’s appeal, would be subject to inherent uncertainties, and a future unfavorable ruling could occur. No loss accrual had been recorded as of June 30, 2025 or December 31, 2024 related to this litigation. Indemnification and Other Matters —We enter into indemnification provisions in the ordinary course of business with other companies such as partners, customers, and vendors, where we agree to indemnify, hold harmless, and reimburse the indemnified party for certain losses suffered or incurred by the indemnified party as a result of our activities, including defending against third-party claims asserting various allegations such as product defects, breach of representations or covenants, and infringement of certain IP rights, which may include patents, copyrights, trademarks or trade secrets, and to pay judgments entered on such claims. In some contracts, our exposure under these indemnification provisions is limited by the terms of the contracts to certain defined limits, such as the total amount paid by our customer under the agreement. However, certain agreements include covenants, penalties and indemnification provisions including and beyond indemnification for third-party claims of IP infringement that could potentially expose us to losses in excess of the amount received under the agreement, and in some instances to potential liability that is not contractually limited. Although from time to time there are indemnification claims asserted against us and currently there are pending indemnification claims, to date there have been no material awards under such indemnification provisions. Similar to other security companies and companies in other industries, we have experienced and may experience in the future, cybersecurity threats, malicious activity directed against our information technology infrastructure or unauthorized attempts to gain access to our and our customers’ sensitive information and systems. We currently are unaware of any claims or proceedings related to these types of matters that we believe are likely to have a material adverse effect on our financial position. 11. EQUITY PLANS AND SHARE REPURCHASE PROGRAM Stock-Based Compensation Plans We maintain the Amended and Restated Fortinet, Inc. 2009 Equity Incentive Plan (the “Amended Plan”) pursuant to which we have granted RSUs, stock options and PSUs. As of June 30, 2025, there were a total of 48.9 million shares of common stock available for grant under the Amended Plan. 20 Table of Contents FORTINET, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued) Restricted Stock Units The following table summarizes the activity and related information for RSUs for the periods presented below (in millions, except per share amounts): Restricted Stock Units Outstanding Number of Shares Weighted-Average Grant Date Fair Value per Share Balance—December 31, 2024 8.4 $ 64.70 Granted 2.3 108.63 Forfeited ( 0.5 ) 73.71 Vested ( 2.1 ) 59.07 Balance—June 30, 2025 8.1 $ 78.72 Stock compensation expense is recognized on a straight-line basis over the vesting period of each RSU. As of June 30, 2025, total compensation expense related to unvested RSUs granted to employees and non-employees under the Amended Plan, but not yet recognized, was $ 574.6 million, with a weighted-average remaining vesting period of 2.9 years. Market/Performance-Based PSUs We grant market/performance-based PSUs under the Amended Plan to certain of our executives. Based on the achievement of the market/performance-based vesting conditions during the performance period, the final settlement of the PSUs will range between 0 % and 200 % of the target shares underlying the PSUs based on the percentile ranking of our total stockholder return over one -, two -, three - and four-year periods among companies included in the S&P 500 Index. 20 %, 20 %, 20 % and 40 % of the PSUs vest over one -, two -, three - and four-year service periods, respectively. The following table summarizes the activity and related information for PSUs for the periods presented below (in millions, except per share amounts): Performance Stock Units Outstanding Number of Shares Weighted-Average Grant Date Fair Value per Share Balance—December 31, 2024 0.4 $ 94.93 Granted 0.1 168.93 Forfeited ( 0.1 ) 113.36 Vested ( 0.2 ) 91.19 Balance—June 30, 2025 0.2 $ 118.43 As of June 30, 2025, total compensation expense related to unvested PSUs that were granted to certain of our executives, but not yet recognized, was $ 30.0 million. This expense is expected to be amortized on a graded vesting method over a weighted-average vesting period of 2.3 years. RSUs and PSUs settle into shares of common stock upon vesting. Upon the vesting of the RSUs and PSUs, we net-settle the RSUs and PSUs and withhold a portion of the shares to satisfy employee withholding tax requirements. The payment of the withheld taxes to the tax authorities is reflected as a financing activity within the condensed consolidated statements of cash flows. 21 Table of Contents FORTINET, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued) The following summarizes the number and value of the shares withheld for employee taxes (in millions): Three Months Ended Six Months Ended June 30, 2025 June 30, 2024 June 30, 2025 June 30, 2024 Shares withheld for taxes 0.2 0.3 0.7 0.9 Amount withheld for taxes $ 23.4 $ 20.2 $ 77.2 $ 63.1 Employee Stock Options The following table summarizes the weighted-average assumptions relating to our employee stock options: Three Months Ended Six Months Ended June 30, 2025 June 30, 2024 June 30, 2025 June 30, 2024 Expected term in years 4.5 4.5 4.5 4.5 Volatility 41.4 % 41.9 % 41.6 % 42.8 % Risk-free interest rate 4.1 % 4.4 % 4.2 % 4.3 % Dividend rate — % — % — % — % The following table summarizes the stock option activity and related information for the periods presented below (in millions, except exercise prices and contractual life): Options Outstanding Number of Shares Weighted- Average Exercise Price Weighted- Average Remaining Contractual Life (Years) Aggregate Intrinsic Value Balance—December 31, 2024 8.7 $ 37.81 3.1 $ 493.8 Granted 0.6 108.90 Forfeited ( 0.1 ) 71.07 Exercised ( 1.5 ) 20.63 Balance—June 30, 2025 7.7 $ 46.82 Options vested and expected to vest—June 30, 2025 7.7 $ 46.82 3.3 $ 458.5 Options exercisable—June 30, 2025 5.8 $ 36.34 2.5 $ 404.9 The aggregate intrinsic value represents the difference between the exercise price of stock options and the quoted market price of our common stock at the date of the balance sheet for all in-the-money stock options. Stock compensation expense is recognized on a straight-line basis over the vesting period of each stock option. As of June 30, 2025, total compensation expense related to unvested stock options granted to employees but not yet recognized was $ 57.3 million, with a weighted-average remaining vesting period of 2.8 years. Additional information related to our stock options is summarized below (in millions, except per share amounts): Three Months Ended Six Months Ended June 30, 2025 June 30, 2024 June 30, 2025 June 30, 2024 Weighted-average fair value per share granted $ 41.05 $ 24.93 $ 43.83 $ 26.79 Intrinsic value of options exercised $ 28.9 $ 18.1 $ 131.2 $ 69.9 Fair value of options vested $ 5.5 $ 6.5 $ 15.0 $ 18.6 22 Table of Contents FORTINET, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued) Stock-Based Compensation Expense Stock-based compensation expense, including stock-based compensation expense related to awards classified as liabilities, is included in costs and expenses (in millions): Three Months Ended Six Months Ended June 30, 2025 June 30, 2024 June 30, 2025 June 30, 2024 Cost of product revenue $ 0.5 $ 0.4 $ 1.0 $ 0.9 Cost of service revenue 7.0 6.5 13.5 12.7 Research and development 25.1 21.3 48.1 41.1 Sales and marketing 29.7 25.9 56.2 52.6 General and administrative 7.6 10.2 18.0 20.0 Total stock-based compensation expense $ 69.9 $ 64.3 $ 136.8 $ 127.3 The following table summarizes stock-based compensation expense, including stock-based compensation expense related to awards classified as liabilities, by award type (in millions): Three Months Ended Six Months Ended June 30, 2025 June 30, 2024 June 30, 2025 June 30, 2024 RSUs $ 60.8 $ 54.0 $ 117.1 $ 106.0 Stock options 6.8 7.1 13.4 14.4 PSUs 2.3 3.2 6.3 6.9 Total stock-based compensation expense $ 69.9 $ 64.3 $ 136.8 $ 127.3 Total income tax benefit associated with stock-based compensation that is recognized in the condensed consolidated statements of income is (in millions): Three Months Ended Six Months Ended June 30, 2025 June 30, 2024 June 30, 2025 June 30, 2024 Income tax benefit associated with stock-based compensation $ 15.3 $ 14.3 $ 30.0 $ 28.2 Share Repurchase Program In October 2024, our board of directors approved a $ 1.0 billion increase in the authorized stock repurchase amount under the Repurchase Program and extended the term of the Repurchase Program to February 28, 2026, bringing the aggregate amount authorized to be repurchased to $ 8.25 billion of our outstanding common stock through February 28, 2026. Share repurchases may be made by us from time to time in privately negotiated transactions or in open-market transactions. The Repurchase Program does not require us to purchase a minimum number of shares, and may be suspended, modified or discontinued at any time without prior notice. During the three and six months ended June 30, 2025, we repurchased 4.6 million shares of our common stock under the Repurchase Program in open-market transactions, at a weighted-average price of $ 87.89 per share, for an aggregate purchase price of $ 401.1 million, which excludes a $ 0.8 million accrual related to the 1% excise tax imposed by the Inflation Reduction Act of 2022. As of June 30, 2025, approximately $ 1.63 billion remained available for future share repurchases under the Repurchase Program. 12. INCOME TAXES Our effective tax rate was 15 % for the three months ended June 30, 2025, compared to an effective tax rate of 16 % for the same period last year. Our effective tax rate was 17 % for the six months ended June 30, 2025, compared to an effective tax rate of 14 % for the same period last year. The tax rates for the three months ended June 30, 2025 and 2024 were comprised of U.S. federal and state taxes, withholding taxes and foreign taxes that amounted to $ 114.6 million and $ 109.9 million, 23 Table of Contents FORTINET, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued) respectively. The tax rate for the three months ended June 30, 2025 included a tax benefit of $ 25.1 million from the foreign-derived intangible income (“FDII”) deduction, and excess tax benefits from stock-based compensation expense of $ 12.4 million. The tax rate for the three months ended June 30, 2024 was impacted by a tax benefit of $ 27.2 million from the FDII deduction, and excess tax benefits from stock-based compensation expense of $ 6.2 million. The tax rates for the six months ended June 30, 2025 and 2024 were composed of U.S. federal and state taxes, withholding taxes and foreign taxes that amounted to $ 243.2 million and $ 191.3 million, respectively. The tax rate for the six months ended June 30, 2025 included a tax provision of $ 30.6 million related to the derecognition of deferred tax assets from the business combination with Linksys, a tax benefit of $ 50.9 million from the FDII deduction, and excess tax benefits from stock-based compensation expense of $ 49.3 million. The tax rate for the six months ended June 30, 2024 was impacted by a tax benefit of $ 50.8 million from the FDII deduction, and excess tax benefits from stock-based compensation expense of $ 24.5 million. As of June 30, 2025 and December 31, 2024, unrecognized tax benefits were $ 83.0 million and $ 75.9 million, respectively. If recognized, $ 67.6 million of the unrecognized tax benefits as of June 30, 2025 would favorably affect our effective tax rate. It is our policy to include accrued interest and penalties related to unrecognized tax benefits in income tax expense. As of June 30, 2025 and December 31, 2024, accrued interest and penalties were $ 10.8 million and $ 8.8 million, respectively. We file income tax returns in the U.S. federal jurisdiction and in various U.S. state and foreign jurisdictions. Generally, we are no longer subject to examination by U.S federal income tax authorities for tax years prior to 2020 and by U.S. state and foreign tax authorities in our significant jurisdictions for tax years prior to 2016. We currently have ongoing tax audits in the United Kingdom, Canada, Germany and several other foreign jurisdictions. The focus of these audits is the inter-company profit allocation. On January 4, 2022, the U.S. Treasury published another tranche of final regulations regarding the foreign tax credit. These final regulations impose new requirements that a foreign tax must meet in order to be creditable against U.S. income taxes, and generally apply to tax years beginning on or after December 28, 2021. On July 26, 2022, the U.S. Treasury released corrections to the final regulations. On July 21, 2023, the Internal Revenue Service (“IRS”) released a notice that suspended the application of significant portions of the final regulations regarding the foreign tax credit for tax years 2022 and 2023. The notice released in July 2023 favorably impacted our ability to claim foreign tax credits in the United States for certain taxes imposed by certain foreign jurisdictions. On December 11, 2023, the IRS released a notice that extended the suspension of significant portions of the final regulations beyond December 31, 2023, until further guidance is issued. In December 2021, the Organisation for Economic Co-operation and Development (the “OECD”) enacted model rules for a new global minimum tax framework (“BEPS Pillar Two”), and various governments around the world have enacted, or are in the process of enacting, legislation on this. The OECD continues to release additional guidance on these rules. Based on the enacted laws, BEPS Pillar Two has no impact to our effective tax rate or cash flows for the six months ended June 30, 2025. We will continue to evaluate the impact of these tax law changes on future reporting periods. 13. DEFINED CONTRIBUTION PLANS Our tax-deferred savings plan under our 401(k) Plan permits participating U.S. employees to contribute a portion of their pre-tax or after-tax earnings. In Canada, we have a Group Registered Retirement Savings Plan Program (the “RRSP”), which permits participants to make pre-tax contributions. Our board of directors approved 50 % matching contributions on employee contributions up to 4 % of each employee’s eligible earnings. Our matching contributions to our 401(k) Plan and the RRSP for the three months ended June 30, 2025 and 2024 were $ 5.1 million and $ 4.3 million, respectively. Our matching contributions to our 401(k) Plan and the RRSP for the six months ended June 30, 2025 and 2024 were $ 10.7 million and $ 10.6 million, respectively. 14. SEGMENT INFORMATION Operating segments are defined as components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision maker in deciding how to allocate resources and in assessing performance. Our chief operating decision maker is our chief executive officer. Our chief executive officer reviews financial information presented on a consolidated basis, accompanied by information about revenue by geographic region for purposes of allocating resources and evaluating financial performance. We have one business activity, and there are no segment managers 24 Table of Contents FORTINET, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued) who are held accountable for operations, operating results and plans for levels or components below the consolidated unit level. Accordingly, we have determined that we have one operating segment, and therefore, one reportable segment. The following table reflects certain financial data for our reportable segment (in millions): Three Months Ended Six Months Ended June 30, 2025 June 30, 2024 June 30, 2025 June 30, 2024 Total revenue $ 1,630.0 $ 1,434.3 $ 3,169.7 $ 2,787.6 Less: Cost of product revenue 165.9 155.1 315.8 337.9 Cost of service revenue 149.0 119.9 292.2 241.8 Research and development expense 209.5 165.4 408.1 338.4 Other sales and marketing expense (1) 483.7 403.2 923.4 815.8 Commission expense 108.3 98.1 211.3 186.6 General and administrative expense 56.9 56.6 114.7 111.0 Other segment items (2) 60.5 20.3 142.9 39.0 Provision for income taxes 77.1 76.5 173.6 116.0 Net income $ 440.1 $ 379.8 $ 873.5 $ 679.1 (1) Excludes commission expense. (2) The following table presents other segment items (in millions): Three Months Ended Six Months Ended June 30, 2025 June 30, 2024 June 30, 2025 June 30, 2024 Gain on intellectual property matters $ 1.3 $ 1.2 $ 7.6 $ 2.3 Interest income 45.0 38.3 89.3 70.5 Interest expense ( 4.6 ) ( 5.0 ) ( 9.5 ) ( 10.1 ) Other income (expense)—net 18.9 ( 2.2 ) 45.0 ( 5.1 ) Gain (loss) from equity method investments ( 0.1 ) ( 12.0 ) 10.5 ( 18.6 ) Total other segment items $ 60.5 $ 20.3 $ 142.9 $ 39.0 The following table presents other segment information (in millions): Three Months Ended Six Months Ended June 30, 2025 June 30, 2024 June 30, 2025 June 30, 2024 Significant non-cash items: Stock‐based compensation expense $ 69.9 $ 64.3 $ 136.8 $ 127.3 Depreciation and amortization expense 38.3 29.2 74.1 57.8 Total assets $ 10,641.4 $ 8,052.9 $ 10,641.4 $ 8,052.9 Purchases of property and equipment $ 167.8 $ 23.1 $ 234.3 $ 245.0 25 Revenue by geographic region is based on the billing address of our customers. The following tables set forth revenue and property and equipment—net by geographic region (in millions): Three Months Ended Six Months Ended Revenue June 30, 2025 June 30, 2024 June 30, 2025 June 30, 2024 Americas: United States $ 473.0 $ 435.7 $ 928.4 $ 842.8 Other Americas 185.8 159.6 360.2 309.5 Total Americas 658.8 595.3 1,288.6 1,152.3 Europe, Middle East and Africa (“EMEA”) 667.1 565.2 1,295.5 1,104.6 Asia Pacific (“APAC”) 304.1 273.8 585.6 530.7 Total revenue $ 1,630.0 $ 1,434.3 $ 3,169.7 $ 2,787.6 Property and Equipment — net June 30, 2025 December 31, 2024 Americas: United States $ 1,009.6 $ 993.5 Canada 316.2 216.8 Latin America 4.1 4.4 Total Americas 1,329.9 1,214.7 EMEA 145.2 73.3 APAC 69.7 61.5 Total property and equipment—net $ 1,544.8 $ 1,349.5 The following distributors accounted for 10% or more of our revenue: Three Months Ended Six Months Ended June 30, 2025 June 30, 2024 June 30, 2025 June 30, 2024 Distributor A 27 % 30 % 27 % 29 % Distributor B 15 % 16 % 15 % 15 % Distributor C 12 % 14 % 12 % 13 % The following distributors accounted for 10% or more of net accounts receivable: June 30, 2025 December 31, 2024 Distributor A 27 % 31 % Distributor B 13 % 14 % Distributor C 9 % 10 % 15. SUBSEQUENT EVENTS One Big Beautiful Bill Act On July 4, 2025, H.R. 1, An Act to Provide for Reconciliation Pursuant to Title II of House Concurrent Resolution 14 (the “Act”), commonly referred to as the One Big Beautiful Bill Act, was enacted. The Act makes permanent certain elements of the Tax Cuts and Jobs Act, including immediate expensing of U.S. research and development expenditures, immediate expensing of certain eligible assets, and various modifications to the international tax framework. We are evaluating the impact of the Act on our consolidated financial statements, but our preliminary analysis indicates that our cash tax payments for 2025 could be reduced by approximately $ 100 million to $ 150 million and our GAAP effective tax rate for 2025 could increase by approximately 1 point as a result of the provisions of the Act. 26 Table of Contents FORTINET, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued) Share Repurchase Program Subsequent to June 30, 2025 through the filing of this Quarterly Report on Form 10-Q, we repurchased 1.0 million shares of our common stock at an average price of $ 72.29 per share, for an aggregate purchase price of $ 71.2 million, under the Repurchase Program. As of the filing of this Quarterly Report on Form 10-Q, approximately $ 1.56 billion remained available for future share repurchases through February 28, 2026 under the Repurchase Program. 27 Table of Contents ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations In addition to historical information, this Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities and Exchange Act of 1934, as amended (the “Exchange Act”). These statements include, among other things, statements concerning our expectations regarding: • continued growth and market share gains; • variability in sales in certain product and service categories from year to year and between quarters; • expected impact of sales from certain products and services; • increasing or decreasing inflation or stagflation, and changing interest rates in many geographies and changes in currency exchange rates and currency regulations; • competition in our markets; • macroeconomic, geopolitical factors and other disruption on our manufacturing or sales, including tariffs or other trade disruptions, public health issues, wars, natural disasters and economic growth; • government regulation and other policies; • drivers of long-term growth and operating leverage, such as pricing of our products and services, sales productivity, pipeline and capacity, functionality, value and technology improvements in our product and service offerings; • growing our solution sales through channel partners to businesses, service providers and government organizations, our ability to execute these sales and the complexity of providing solutions to all segments (including the increased competition and unpredictability of timing associated with sales to larger enterprises), the impact of sales to these organizations on our long-term growth, expansion and operating results, and the effectiveness of our sales organization; • our ability to successfully anticipate market changes, including those related to cloud-based and AI solutions and to sell, support and meet service level agreements related to cloud-based solutions; • growth expectations for the secure networking market; • supply chain constraints, component availability and other factors affecting our manufacturing capacity, delivery, cost and inventory management; • forecasts of future demand and targeted inventory levels, including changing market drivers and demands; • the effect of backlog from current or prior quarters, including its effect on growth of in-quarter billings and revenue; • our ability to hire properly qualified and effective sales, support and engineering employees; • risks and expectations related to acquisitions and equity interests in private and public companies, including integration issues related to go-to-market plans, product plans, employees of such companies, controls and processes and the acquired technology, and risks of negative impact by such acquisitions and equity investments on our financial results; • trends in revenue, cost of revenue and gross margin, including expectations regarding product revenue, service revenue and inventory related charges; • trends in our operating expense, including sales and marketing expense, research and development expense, general and administrative expense, and expectations regarding these expenses; 28 Table of Contents • expected impact of plans and strategy for the acceleration of our data center footprint and our PoPs deployment; • expectations regarding our gross margins and operating expenses for 2025; • expectations that proceeds from the exercise of stock options in future years will be adversely impacted by the increased mix of restricted stock units and performance stock units versus stock options granted or a decline in our stock price; • uncertain tax benefits and our effective domestic and global tax rates, the impact of interpretations of or changes to tax law, and the timing of tax payments; • expectations regarding spending related to real estate assets, acquisitions and development, including data centers and points of presence, office building and warehouse investments, as well as other capital expenditures and to the impact on free cash flow and expenses; • estimates of a range of 2025 spending on capital expenditures; • expansions, development, improvements, operating, subleasing and other real property holdings activities; • expected outcomes and liabilities in litigation; • our intentions regarding share repurchases and the sufficiency of our existing cash, cash equivalents and investments to meet our cash needs, including our debt servicing requirements, for at least the next 12 months; • other statements regarding our future operations, financial condition and prospects and business strategies; and • adoption and impact of new accounting standards. These forward-looking statements are subject to certain risks and uncertainties that could cause our actual results to differ materially from those reflected in the forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those discussed in this Quarterly Report on Form 10-Q and, in particular, the risks discussed under the heading “Risk Factors” in Part II, Item 1A of this Quarterly Report on Form 10-Q and those discussed in other documents we file with the SEC. We undertake no obligation, and specifically disclaim any obligation, to revise or publicly release the results of any revision to these and any other forward-looking statements. Given these risks and uncertainties, readers are cautioned not to place undue reliance on such forward-looking statements. Business Overview Fortinet is a leader in cybersecurity, driving the convergence of networking and security. Our mission is to secure people, devices and data everywhere. Our integrated platform, the Fortinet Security Fabric, spans secure networking, unified SASE and AI-driven security operations (“SecOps”). As of June 30, 2025, our end-customers were located in over 100 countries and included enterprises across a wide variety of market verticals, including financial services, retail, healthcare and operational technology (“OT”) market verticals, communication and security service providers, and government organizations. As a global company headquartered in Sunnyvale, California, our research and development is centered in the United States and Canada with a global footprint of support and centers of excellence around the world. As of June 30, 2025, we held 1,067 U.S. patents and 1,401 global patents, including 288 AI-related patents. We have been recognized in over 140 enterprise analyst reports demonstrating both our vision and execution across security and networking products. Our competitive differentiation lies in our core technologies, which together provide performance, security, flexibility and integration across diverse environments. • FortiOS —FortiOS enables the convergence of security and networking to enforce consistent security policies across form factors and edges. As the foundation of the Fortinet Security Fabric, FortiOS empowers organizations to unify management and analytics for comprehensive network visibility and control at scale. To further validate our strategy, FortiOS has been recognized across five Gartner Magic Quadrants, including Firewall, Software-Defined Wide-Area 29 Table of Contents Network (“SD-WAN”), Security Service Edge (“SSE”), SASE Platforms and Wired and Wireless Local Area Network (“LAN”). • FortiASIC —Our Application-Specific Integrated Circuit (“ASIC”)-based SPUs increase the speed, scale, efficiency and value of our solutions while improving user experience, reducing footprint and power requirements. From branch and campus to data center solutions, SPU-powered Fortinet appliances deliver superior Security Compute Ratings versus industry alternatives. • FortiCloud —Our organically built global cloud infrastructure provides customers with global reach, flexible connectivity, and cost savings. FortiCloud is our private cloud software as a service (“SaaS”) platform, powered by FortiStack, and leveraging software and hardware to optimize and secure all layers. • FortiAI —FortiAI includes FortiAI-Protect, which defends against emerging AI-driven threats and ensures secure AI usage; FortiAI-Assist, our generative AI product with agentic AI, automates Security Operations Center (“SOC”) and Network Operations Center (“NOC”) operations; and FortiAI-SecureAI, which safeguards AI infrastructure and prevents data leakage into large language models. FortiAI helps security teams make faster, educated decisions while integrating into products like FortiAnalyzer, FortiManager, FortiSIEM, and FortiSOAR to streamline threat investigation, response, and automation. • FortiEndpoint —FortiEndpoint converges secure connectivity, endpoint protection and advanced capabilities like endpoint detection and response and extended detection and response (“XDR”), into a single agent. It simplifies management and enhances visibility while reducing costs and complexity. The solution gives IT teams the visibility and control they need, while security teams benefit from automated threat detection and response. This minimizes the need for manual intervention and provides faster remediation of threats across all environments. • OT Security —The Fortinet Security Fabric enables security for converged IT/OT ecosystems. It also provides an OT Security Platform with features and products to extend Security Fabric capabilities to OT networks in many areas, including factories, plants, remote locations and ships. To help alleviate security risks across the organization, we have continued to enhance our OT Security Platform offerings. These innovations range from edge products to NOC and SOC tools and services to provide effective and efficient networking and cybersecurity performance and operation. These competitive differentiators provide networking and security professionals with a comprehensive cyber security platform comprised of over 50 products across three solution pillars: • Secure Networking —Our Secure Networking solutions focus on the convergence of networking and security via FortiOS, our networking and security operating system that is the foundation of our Fortinet Security Fabric platform and supports over 30 functions that can be delivered via a physical, virtual, cloud or SaaS solutions. When delivered through our network firewall appliances, functionality is accelerated through our proprietary ASIC technology. These proprietary ASICs, allow our systems to scale, run multiple applications at higher performance, lower power consumption and perform more processor-intensive operations, such as inspecting encrypted traffic, including streaming video. Our network firewall offerings consist of a FortiGate data center, hyperscale and distributed firewalls, as well as encrypted applications (secure sockets layer inspection, virtual private network and Internet Protocol Security connectivity). Our ability to converge networking and security also enables the ethernet to become an extension of our customers’ security infrastructure through FortiSwitch and FortiLink. Our wireless LAN solution leverages secure networking to provide secure wireless access for the enterprise LAN edge. FortiExtender secures 5G/LTE and remote ethernet extenders to connect and secure any branch environment. Our Secure Connectivity solution includes FortiSwitch secure ethernet switches, FortiAP wireless local area network access points and FortiExtender 5G connectivity gateways. • Unified Secure Access Service Edge (SASE) —As applications move to the cloud and hybrid workforce is now the norm, enabling secure access for users with zero trust framework becomes important. The Fortinet Unified SASE solution includes a single-vendor SASE solution that includes firewall, SD-WAN, secure web gateway, cloud access services broker, DLP and zero trust network access to deliver flexible secure access for all users. We are one of the few vendors to deliver consistent convergence and AI-powered security across Secure SD-WAN and SSE to enable a single-vendor SASE framework with a cloud-centric architecture powered by FortiOS. Our global and scalable cloud network includes over 150 PoPs to deliver the seamless secure access experience. Given this, we believe we are well positioned to support customers expanding from SD-WAN to a single-vendor SASE platform. Additionally, we offer a full suite of comprehensive, integrated cloud security solutions that enable customers to secure their applications from code to cloud. Our solutions include application security that includes our web application firewalls, cloud network security with virtualized firewalls and cloud-native firewalls, cloud-native application protection and code security. We deliver a holistic approach to cloud security, offering a single unified platform, consolidating protection across multiple disparate tools, including coding, deploying, and running applications across hybrid and multi-clouds. Additionally, we also offer flexible consumption licensing programs that enable organizations to dynamically optimize 30 Table of Contents their cloud security needs and investments as well as readily meet their cloud minimum spend commitment obligations with Cloud Service Providers. • AI-Driven Security Operations (SecOps) —Our AI-Driven SecOps portfolio provides a comprehensive suite of cybersecurity solutions that identify, protect, detect, respond and recover from threats, all integrated within the Fortinet Security Fabric. At the core is FortiAnalyzer, which serves as the central SOC platform with its unified data lake that provides built-in Security information and event management (“SIEM”), Security, orchestration, automation, and response (“SOAR”), XDR and threat intelligence, enabling centralized visibility, analytics and automation with complete control. FortiSIEM delivers robust security information and event management for more advanced SOC requirements, while FortiSOAR enables automated orchestration and playbook-driven response. This solution set also includes FortiEDR, FortiXDR, FortiNDR, FortiSandbox, FortiDeceptor, FortiDLP and FortiRecon, helping organizations achieve defense in depth, ensuring attackers face multiple layers of detection and mitigation across endpoints, networks, and applications. To bolster their security posture, organizations contending with staff shortages can tap into FortiGuard services, including SOC-as-a-Service, Managed detection and response, Security Posture Assessment and Incident Response. Finally, FortiAI generative AI assistance streamlines operations, helping security teams stay ahead of an ever-evolving threat landscape. FortiGuard Labs is our cybersecurity threat intelligence and research organization comprised of experienced threat hunters, researchers, analysts, engineers and data scientists who develop and utilize Machine Learning (“ML”) and AI technologies to provide timely protection updates and actionable threat intelligence for the benefit of our customers. Using millions of global network sensors, FortiGuard Labs monitors the worldwide attack surface and employs AI to mine that data for new threats. FortiGuard and Other Security Services are a suite of AI-powered security capabilities that are natively integrated as part of the Fortinet Security Fabric to deliver coordinated detection and enforcement across the entire attack surface. The portfolio consists of FortiGuard application security services, content security services, device security services, NOC/SOC security services and web security services. FortiCare Technical Support Service is a per-device technical support service, which provides customers access to experts to ensure efficient and effective operations and maintenance of their Fortinet capabilities. Global technical support is offered 24x7 with flexible add-ons, including enhanced service-level agreements and priority hardware replacement through in-country and local depots. Organizations have the flexibility to procure different levels of service for different devices based on their availability needs. We offer three per-device support options tailored to the needs of our enterprise customers: FortiCare Elite, FortiCare Premium and FortiCare Essential. The FortiCare Elite service aims to provide a 15-minute response time for key product families. In addition to FortiCare device level services, Advanced Support service options are available per account. These services are available for regional account support in three options: Core, Pro and Pro Plus, and can be available or provided on a global basis at the Pro and Pro Plus levels. Advanced Support brings support directly to each account, helping account holders to make their operations more effective and to plan and manage their solution lifecycle. Additionally, we are committed to addressing the cybersecurity skills shortage through training and certification programs for customers, partners and employees. The Fortinet Training Institute’s ecosystem of public and private partnerships around the world extend to industry, academia, government and nonprofits to ensure we are reaching and increasing access of our cybersecurity certifications and training to all populations. The Fortinet Training Institute has issued approximately two million certifications to date. Financial Highlights • Total revenue was $1.63 billion and $3.17 billion during the three and six months ended June 30, 2025, an increase of 14% in each period, compared to $1.43 billion and $2.79 billion in the same periods last year. Product revenue was $508.9 million and $968.0 million during the three and six months ended June 30, 2025, an increase of 13% and 12%, respectively, compared to $451.9 million and $860.8 million in the same periods last year. Service revenue was $1.12 billion and $2.20 billion during the three and six months ended June 30, 2025, an increase of 14% in each period, compared to $982.4 million and $1.93 billion in the same periods last year. • Total gross profit was $1.32 billion and $2.56 billion during the three and six months ended June 30, 2025, an increase of 13% and 16%, respectively, compared to $1.16 billion and $2.21 billion in the same periods last year. • Total gross margin was 80.7% and 80.8% during the three and six months ended June 30, 2025, a decrease of 0.1 percentage points and an increase of 1.6 percentage points, respectively, compared to 80.8% and 79.2% in the same periods last year. 31 Table of Contents • Operating income was $458.0 million and $911.8 million and during the three and six months ended June 30, 2025, an increase of 5% and 20%, respectively, compared to $437.2 million and $758.4 million in the same periods last year. • Operating margin was 28.1% and 28.8% during the three and six months ended June 30, 2025, a decrease of 2.4 percentage points and an increase of 1.6 percentage points, respectively, compared to 30.5% and 27.2% in the same periods last year. • Cash, cash equivalents, short-term and long-term investments were $4.67 billion as of June 30, 2025. • Deferred revenue was $6.57 billion, including short-term deferred revenue of $3.41 billion, as of June 30, 2025. • Cash flows from operating activities were $1.32 billion during the six months ended June 30, 2025, an increase of $142.8 million, or 12%, compared to the same period last year. Revenue continues to be diversified globally, which remains a key strength of our business. During the three months ended June 30, 2025, the EMEA region, the Americas region and the APAC region contributed 41%, 40% and 19% of our total revenue, respectively, and increased 18%, 11% and 11% compared to the same period last year, respectively. During the six months ended June 30, 2025, EMEA, the Americas and APAC regions contributed 41%, 41% and 18% of our total revenue, respectively, and increased by 17%, 12% and 10% compared to the same period last year, respectively. Product revenue increased 13% and 12% during the three and six months ended June 30, 2025, respectively, compared to the same periods last year. We experienced product revenue growth across our hardware products and software licensing, mainly benefited from growth in secure networking hardware products and term licenses. We expect our product revenue to continue to grow for the remainder of 2025. Service revenue growth during the three and six months ended June 30, 2025 was 14% in each period, as compared to the same periods last year, primarily driven by the strength of our security subscription revenue, which grew 15% and 16%, respectively. The increase was primarily due to the recognition of service revenue from our growing deferred revenue balance related to FortiGuard and other security subscriptions delivered to on-premise and cloud-based environments and strength in unified SASE and SecOps. We expect our service revenue to continue to grow for the remainder of 2025, with growth opportunities that include unified SASE and SecOps offerings as well as the year over year increase in current deferred revenue. Our billings were diversified on a geographic basis. During the three months ended June 30, 2025, seven countries represented approximately 50% of our billings and the remaining approximately 50% in the aggregate were from over 100 countries that each individually contributed less than 3% of our billings. Total gross margin decreased 0.1 percentage points during the three months ended June 30, 2025 compared to the same period last year, primarily driven by increased cloud service costs, partially offset by the benefit from normalized inventory related reserves expense in comparison to elevated levels we saw in the same period in 2024. Total gross margin increased 1.6 percentage points during the six months ended June 30, 2025 compared to the same period last year, primarily driven by increased product gross margin benefiting from lower impact of inventory reserves expense in comparison to the first half of 2024. Our overall gross margin for the full year of 2025 will be impacted by service and product revenue mix and their respective gross margins. We do not expect our product gross margin to significantly change for the full year 2025 as compared to 2024. We expect our service gross margin to decrease for the full year of 2025 compared to 2024, as we expand our data center footprint and colocation and cloud hosting capacity to support the growth in our unified SASE and SecOps offerings. We currently do not expect the U.S. tariffs to have a meaningful impact on our gross margin. If tariffs increase in the future, we expect any resulting impact on our gross margin to mostly be on our hardware sales to U.S. customers. Operating expenses as a percentage of revenue increased 2.3 and 0.1 percentage points during the three and six months ended June 30, 2025, respectively, compared to the same periods last year, mainly driven by an increase in personnel-related costs in research and development and sales and marketing. Headcount increased to 14,898 employees as of June 30, 2025, a 10% increase compared to 13,527 as of June 30, 2024. Operating margin decreased 2.4 percentage points during the three months ended June 30, 2025, as a result of increase in operating expenses as a percentage of revenue and decreased gross margin. Operating margin increased 1.6 percentage points during the six months ended June 30, 2025, as a result of improvement in gross margin. We expect our operating margin to decrease for the full year of 2025 compared to 2024 as we grow our sales and marketing and research and development workforce organically and through acquisitions , increase our product development investments, and expand our data center footprint and our colocation and cloud hosting capacity to support business growth. In addition, we expect higher operating 32 Table of Contents expenses driven in part by the weakening of the U.S. dollar compared to foreign currencies, as a portion of our expenses are incurred and paid in currencies other than the U.S. dollar. Impact of Macroeconomic and Geopolitical Developments Our overall performance depends in part on worldwide economic and geopolitical conditions, such as trade policies and tariffs, GDP growth or contraction (both domestically and internationally), geopolitical instability and uncertainty, the war in Ukraine or tensions between China and Taiwan, and their impact on customer behavior. Worsening economic conditions, including tariffs, inflation, changing interest rates and other trade disruptions, slower growth, any recession, fluctuations in foreign exchange rates and other changes in economic conditions, may result in decreased sales productivity, lower growth and adversely affect our results of operations and financial performance. We have seen, and could continue to see, certain impacts on our business, results of operations, financial condition, cash flows, liquidity and capital and financial resources such as longer sales cycles, delayed purchases and increased commitments with certain suppliers and increased inventory and inventory purchase commitment reserves. For example, earlier this year the United States announced tariffs on imported goods from most countries, some of which have been temporarily suspended or adjusted from time to time. U.S. tariffs, and any new or additional retaliatory tariffs that could be imposed by other countries in response to such U.S. tariffs could have a material adverse impact on global trade, supply chains worldwide, and other worldwide economic and geopolitical conditions, which could increase our product costs for the remainder of 2025 and beyond, and also affect customer sentiment in deciding whether to purchase our products. We continue to monitor the impact of tariffs on our business. Worsening economic conditions may have a material negative impact on our results in future periods and may negatively impact our billings, revenue and costs, and may decrease growth and profitability. The extent of the impact of economic conditions on our operational and financial performance will depend on ongoing developments, including those discussed above and others identified in Part II, Item 1A “Risk Factors” in this Form 10-Q. Given the dynamic nature of these circumstances, the full impact of worsening economic conditions on our business and operations, results of operations, financial condition, cash flows, liquidity and capital and financial resources cannot be reasonably estimated at this time. Business Model We typically sell our security solutions to distributors that sell to networking security focused resellers and to certain service providers and managed security service providers (“MSSPs”), who, in turn, sell to end-customers or use our products and services to provide hosted solutions to other enterprises. At times, we also sell directly to enterprise customers, service providers, systems integrators and large enterprises. We also sell our software licenses and cloud delivered services via different cloud service provider platforms, both directly and through our channel partners. Our end-customers are located in over 100 countries and include small, medium and large enterprises and government organizations across a wide range of industries, including financial services, government, healthcare, manufacturing, retail, technology and telecommunications. An end-customer deployment may involve as few as one or as many as thousands of secure networking, unified SASE and security operations technology products or users, depending on the end-customer’s size and security requirements. Our customers purchase our hardware products, software licenses, SaaS subscriptions and cloud-delivered solutions, including our FortiGuard security subscriptions and FortiCare technical support services. Depending on the solution, these may be sold in a bundle or standalone as part of a solution sale. We generally invoice at the time of our sale for the total price of the products and services. Standard payment terms are generally no more than 60 days, though we may offer extended payment terms to certain distributors or large enterprises. We offer our products hosted in our own data centers, PoPs, and through colocations and major cloud service providers, including Amazon Web Services, Microsoft Azure and Google Cloud. Key Metrics We monitor several key metrics, including the key financial metrics set forth below, in order to help us evaluate growth trends, establish budgets, measure the effectiveness of our sales and marketing efforts, and assess operational efficiencies. The following table summarizes revenue, deferred revenue, billings (non-GAAP), net cash provided by operating activities, and free cash flow (non-GAAP). We discuss revenue below under “Results of Operations,” and we discuss net cash 33 Table of Contents provided by operating activities below under “—Liquidity and Capital Resources.” Deferred revenue, billings (non-GAAP), and free cash flow (non-GAAP) are discussed immediately below the following table: Three Months Ended Or As Of June 30, 2025 June 30, 2024 (in millions) Revenue $ 1,630.0 $ 1,434.3 Deferred revenue $ 6,567.6 $ 5,896.2 Billings (non-GAAP) $ 1,778.4 $ 1,540.6 Net cash provided by operating activities $ 451.9 $ 342.0 Free cash flow (non-GAAP) $ 284.1 $ 318.9 Deferred revenue. Our deferred revenue consists of amounts that have been invoiced but that have not yet been recognized as revenue. The majority of our deferred revenue balance consists of the unrecognized portion of service revenue from FortiGuard and other security subscriptions and FortiCare technical support service contracts, which is recognized as revenue ratably over the service term. We monitor our deferred revenue balance, short-term and total deferred revenue growth and the mix of short-term and long-term deferred revenue because deferred revenue represents a significant portion of free cash flow and of revenue to be recognized in future periods. Deferred revenue was $6.57 billion as of June 30, 2025, an increase of $206.7 million, or 3%, from December 31, 2024. Short-term deferred revenue was $3.41 billion as of June 30, 2025, an increase of $136.3 million, or 4%, from December 31, 2024. Billings (non-GAAP). We define billings as revenue recognized in accordance with GAAP plus the change in deferred revenue from the beginning to the end of the period less any deferred revenue balances acquired from business combination(s) during the period. We consider billings to be a useful metric for management and investors because billings drive current and future revenue, which is an important indicator of the health and viability of our business and cash flows. There are a number of limitations related to the use of billings instead of GAAP revenue. First, billings include amounts that have not yet been recognized as revenue and are impacted by the term of security and support agreements. Second, we may calculate billings in a manner that is different from peer companies that report similar financial measures. Management accounts for these limitations by providing specific information regarding GAAP revenue and evaluating billings together with GAAP revenue. Total billings were $1.78 billion for the three months ended June 30, 2025, an increase of 15% compared to $1.54 billion in the same period last year. Our backlog may fluctuate over quarters. A reduction to backlog increases our aggregate billings and revenue during the quarter when delivered. If we experience supply chain shortages and cannot fulfill orders or if customers cancel or delay delivery of orders, our backlog may be affected, which will negatively impact our aggregate backlog to billings conversion and revenue in such quarter. A reconciliation of revenue, the most directly comparable financial measure calculated and presented in accordance with GAAP, to billings is provided below: Three Months Ended June 30, 2025 June 30, 2024 (in millions) Billings: Revenue $ 1,630.0 $ 1,434.3 Add: Change in deferred revenue 149.2 106.3 Less: Deferred revenue balance acquired in business combinations (0.8) — Total billings (non-GAAP) $ 1,778.4 $ 1,540.6 Free cash flow (non-GAAP). We define free cash flow as net cash provided by operating activities minus purchases of property and equipment and excluding any significant non-recurring items, such as proceeds from IP matters. We believe free cash flow to be a liquidity measure that provides useful information to management and investors about the amount of cash generated by the business that, after capital expenditures and net of proceeds from IP matters, can be used for strategic opportunities, including repurchasing outstanding common stock, investing in our business, making strategic acquisitions and strengthening the balance sheet. A limitation of using free cash flow rather than the GAAP measures of cash provided by or used in operating activities, investing activities, and financing activities is that free cash flow does not represent the total increase or decrease in the cash and cash equivalents balance for the period because it excludes cash flows from significant non-recurring items, such as proceeds from IP matters, investing activities other than capital expenditures and cash flows from 34 Table of Contents financing activities. Management accounts for this limitation by providing information about our proceeds from IP matters, our capital expenditures and other investing and financing activities on the condensed consolidated statements of cash flows and under “—Liquidity and Capital Resources” and by presenting cash flows from investing and financing activities in our reconciliation of free cash flow. In addition, it is important to note that other companies, including companies in our industry, may not use free cash flow, may calculate free cash flow in a different manner than we do or may use other financial measures to evaluate their performance, all of which could reduce the usefulness of free cash flow as a comparative measure. A reconciliation of net cash provided by operating activities, the most directly comparable financial measure calculated and presented in accordance with GAAP, to free cash flow is provided below: Three Months Ended June 30, 2025 June 30, 2024 (in millions) Free Cash Flow: Net cash provided by operating activities $ 451.9 $ 342.0 Less: Purchases of property and equipment (167.8) (23.1) Free cash flow (non-GAAP) $ 284.1 $ 318.9 Net cash used in investing activities $ (266.2) $ (50.1) Net cash used in financing activities $ (414.2) $ (14.0) Critical Accounting Policies and Estimates Our discussion and analysis of our financial condition and results of operations are based upon our financial statements, which have been prepared in accordance with GAAP. These principles require us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenue, cost of revenue and expenses, and related disclosures. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances. To the extent that there are material differences between these estimates and our actual results, our future financial statements will be affected. There were no material changes to our critical accounting policies and estimates as of and for the six months ended June 30, 2025, as compared to the critical accounting policies and estimates described in our Annual Report on Form 10-K filed with the SEC on February 21, 2025 (the “Form 10-K”). See Note 1 of the notes to condensed consolidated financial statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q for information regarding recent accounting pronouncements. 35 Table of Contents Results of Operations Three Months Ended June 30, 2025 and 2024 Revenue Three Months Ended June 30, 2025 June 30, 2024 Amount % of Revenue Amount % of Revenue Change % Change (in millions, except percentages) Revenue: Product $ 508.9 31 % $ 451.9 32 % $ 57.0 13 % Service 1,121.1 69 982.4 68 138.7 14 Total revenue $ 1,630.0 100 % $ 1,434.3 100 % $ 195.7 14 % Revenue by geography: Americas $ 658.8 40 % $ 595.3 42 % $ 63.5 11 % EMEA 667.1 41 565.2 39 101.9 18 APAC 304.1 19 273.8 19 30.3 11 Total revenue $ 1,630.0 100 % $ 1,434.3 100 % $ 195.7 14 % Total revenue increased $195.7 million, or 14%, during the three months ended June 30, 2025 compared to the same period last year. We continued to experience diversification of revenue geographically, and across customer and industry verticals. Revenue from all regions grew, with EMEA contributing the largest portion of the increase on an absolute dollar basis and on a percentage basis. Product revenue increased $57.0 million, or 13%, during the three months ended June 30, 2025 compared to the same period last year. We experienced product revenue growth across our hardware products and software licensing, mainly driven by growth in secure networking hardware products and term licenses. Service revenue increased $138.7 million, or 14%, during the three months ended June 30, 2025 compared to the same period last year. Security subscription revenue increased $85.7 million, or 15%, and technical support and other services revenue increased $53.0 million, or 13%, during the three months ended June 30, 2025 compared to the same period last year. The increase was primarily due to the reco gnition of revenue from our growing deferred revenue balance related to FortiGuard and other security subscriptions delivered to on-premise and cloud-based environments and growth in SaaS solutions, including unified SASE and SecOps. Of the service revenue recognized during the three months ended June 30, 2025, 90% was included in the deferred revenue balance as of March 31, 2025. Of the service revenue recognized during the three months ended June 30, 2024, 90% was included in the deferred revenue balance as of March 31, 2024 . 36 Table of Contents Cost of revenue and gross margin Three Months Ended June 30, 2025 June 30, 2024 Change % Change (in millions, except percentages) Cost of revenue: Product $ 165.9 $ 155.1 $ 10.8 7 % Service 149.0 119.9 29.1 24 Total cost of revenue $ 314.9 $ 275.0 $ 39.9 15 % Gross margin (%): Product 67.4 % 65.7 % Service 86.7 87.8 Total gross margin 80.7 % 80.8 % Total gross margin decreased 0.1 percentage points during the three months ended June 30, 2025 compared to the same period last year, primarily driven by decreased service gross margin, partially offset by increased product gross margin. Product gross margin increased 1.7 percentage points during the three months ended June 30, 2025 compared to the same period last year, as inventory related reserves expense normalized from the elevated levels we saw in the first half of 2024. Cost of product revenue was comprised primarily of third-party contract manufacturers’ costs, and costs of materials used in production. Service gross margin decreased 1.1 percentage points during the three months ended June 30, 2025 compared to the same period last year, primarily driven by an increase in cloud service costs as a result of our acquisitions and investment in data centers, partially offset by service revenue growth outpacing labor, replacement, and repair costs increase. Cost of service revenue was comprised primarily of personnel-related costs, replacement and repair costs, cloud services costs from data centers, colocation provider and cloud providers, infrastructure, software and delivery costs, and facility-related costs. Operating expenses Three Months Ended Change % Change June 30, 2025 June 30, 2024 Amount % of Revenue Amount % of Revenue (in millions, except percentages) Operating expenses: Research and development $ 209.5 13 % $ 165.4 12 % $ 44.1 27 % Sales and marketing 592.0 36 501.3 35 90.7 18 General and administrative 56.9 4 56.6 4 0.3 1 Gain on intellectual property matters (1.3) — (1.2) — (0.1) 8 Total operating expenses $ 857.1 53 % $ 722.1 50 % $ 135.0 19 % Percentages have been rounded for presentation purposes and may differ from unrounded results. Research and development Research and development expense increased $44.1 million, or 27%, during the three months ended June 30, 2025 compared to the same period last year, primarily due to an increase of $31.3 million in personnel-related costs as a result of increased headcount and compensation rates to support the development of new products and continued enhancements to our existing products and the impact of the recent acquisitions. In addition, non-personnel-related product development costs increased $12.1 million. We currently intend to continue investing in our research and development organization, and expect research and development expense to increase in absolute dollars year over year during the remainder of 2025. 37 Table of Contents Sales and marketing Sales and marketing expense increased $90.7 million, or 18%, during the three months ended June 30, 2025 compared to the same period last year, primarily due to an increase of $71.8 million in personnel-related costs, an increase of $7.0 million in marketing program and related expenses and unfavorable impact of foreign currency fluctuations. We currently intend to continue to make investments in sales and marketing resources, which are critical to support our future growth, and expect our sales and marketing expense to increase in absolute dollars year over year during the remainder of 2025. General and administrative General and administrative expense remained flat during the three months ended June 30, 2025 compared to the same period last year. We currently expect general and administrative expense to increase in absolute dollars year over year during the remainder of 2025. Operating income and margin We generated operating income of $458.0 million during the three months ended June 30, 2025, an increase of $20.8 million, or 5%, compared to $437.2 million in the same period last year. Operating margin was 28.1% during the three months ended June 30, 2025, compared to 30.5% in the same period last year. The 2.4 percentage points decrease in operating margin was primarily due to 1.4 and 1.3 percentage points increases in research and development expense and sales and marketing expense as a percentage of revenue, respectively, and 0.1 percentage points decrease in gross margin, partially offset by 0.4 percentage points decrease in general and administrative expense as a percentage of revenue. Interest income, interest expense and other income (expense) — net Three Months Ended June 30, 2025 June 30, 2024 Change % Change (in millions, except percentages) Interest income $ 45.0 $ 38.3 $ 6.7 17 % Interest expense $ (4.6) $ (5.0) $ 0.4 (8) % Other income (expense)—net $ 18.9 $ (2.2) $ 21.1 (959) % Interest income increased $6.7 million during the three months ended June 30, 2025 compared to the same period last year, primarily as a result of higher investment balances. Interest income varies depending on our average investment balances during the period, types and mix of investments, and interest rates. Interest expense remained comparatively flat during the three months ended June 30, 2025 compared to the same period last year. The $21.1 million change in other income (expense)—net during the three months ended June 30, 2025 compared to the same period last year, was primarily due to a $11.6 million gain on marketable equity securities and a $7.6 million increase in foreign currency exchange gains. Provision for income taxes Three Months Ended Change % Change June 30, 2025 June 30, 2024 (in millions, except percentages) Provision for income taxes $ 77.1 $ 76.5 $ 0.6 1 % Effective tax rate (%) 15 % 16 % Our effective tax rate was 15% for the three months ended June 30, 2025 compared to an effective tax rate of 16% for the same period last year. The provision for income taxes for the three months ended June 30, 2025 was primarily comprised of U.S. federal and state taxes, withholding taxes and foreign taxes totaling $114.6 million, which was favorably affected by a tax benefit of $25.1 million from the foreign-derived intangible income deduction (the “FDII deduction”) and excess tax benefits from stock-based compensation expense of $12.4 million. The provision for income taxes for the three months ended June 30, 2024 was comprised of U.S. federal and state taxes, withholding taxes, and foreign taxes totaling $109.9 million, which were favorably affected by a tax benefit of $27.2 million from the FDII deduction and excess tax benefits from stock-based compensation expense of $6.2 million. 38 Table of Contents On July 4, 2025, H.R. 1, the Act, commonly referred to as the One Big Beautiful Bill Act, was enacted. The Act makes permanent certain elements of the Tax Cuts and Jobs Act, including immediate expensing of U.S. research and development expenditures, immediate expensing of certain eligible assets, and various modifications to the international tax framework. We are evaluating the impact of the Act on our consolidated financial statements, but our preliminary analysis indicates that our cash tax payments for 2025 could be reduced by approximately $100 million to $150 million and our GAAP effective tax rate for 2025 could increase by approximately 1 point as a result of the provisions of the Act. Loss from equity method investments Three Months Ended Change % Change June 30, 2025 June 30, 2024 (in millions, except percentages) Loss from equity method investments $ (0.1) $ (12.0) $ 11.9 (99) % Loss from equity method investments decreased $11.9 million during the three months ended June 30, 2025 compared to the same period last year was primarily driven by an $8.0 million other-than-temporary impairment (“OTTI”) charge and a $3.8 million loss due to our proportionate share of Linksys’ financial results including our share of the amortization of the basis differences during the three months ended June 30, 2024. Six Months Ended June 30, 2025 and 2024 Revenue Six Months Ended June 30, 2025 June 30, 2024 Amount % of Revenue Amount % of Revenue Change % Change (in millions, except percentages) Revenue: Product $ 968.0 31 % $ 860.8 31 % $ 107.2 12 % Service 2,201.7 69 1,926.8 69 274.9 14 Total revenue $ 3,169.7 100 % $ 2,787.6 100 % $ 382.1 14 % Revenue by geography: Americas $ 1,288.6 41 % $ 1,152.3 41 % $ 136.3 12 % EMEA 1,295.5 41 1,104.6 40 190.9 17 APAC 585.6 18 530.7 19 54.9 10 Total revenue $ 3,169.7 100 % $ 2,787.6 100 % $ 382.1 14 % Total revenue increased $382.1 million, or 14%, during the six months ended June 30, 2025 compared to the same period last year. We continued to experience diversification of revenue geographically, and across customer and industry verticals. Revenue from all regions grew, with EMEA contributing the largest portion of the increase on an absolute dollar basis and on a percentage basis. Product revenue increased $107.2 million, or 12%, during the six months ended June 30, 2025 compared to the same period last year. We experienced product revenue growth across our hardware products and software licensing mainly benefited from growth in secure networking hardware products and term licenses. Service revenue increased $274.9 million, or 14%, during the six months ended June 30, 2025 compared to the same period last year. Security subscription revenue increased $171.9 million, or 16%, and technical support and other services revenue increased $103.0 million, or 12%, during the six months ended June 30, 2025 compared to the same period last year. The increase was primarily due to the recognition of revenue from our growing deferred revenue balance related to FortiGuard and other security subscriptions delivered to on-premise and cloud -based environments and growth in SaaS solutions, including unified SASE and SecOps. 39 Table of Contents Of the service revenue recognized during the six months ended June 30, 2025, 84% was included in the deferred revenue balance as of December 31, 2024. Of the service revenue recognized during the six months ended June 30, 2024, 84% was included in the deferred revenue balance as of December 31, 2023. Cost of revenue and gross margin Six Months Ended June 30, 2025 June 30, 2024 Change % Change (in millions, except percentages) Cost of revenue: Product $ 315.8 $ 337.9 $ (22.1) (7) % Service 292.2 241.8 50.4 21 Total cost of revenue $ 608.0 $ 579.7 $ 28.3 5 % Gross margin (%): Product 67.4 % 60.7 % Service 86.7 87.5 Total gross margin 80.8 % 79.2 % Total gross margin increased 1.6 percentage points during the six months ended June 30, 2025 compared to the same period last year, primarily driven by increased product gross margin. Product gross margin increased 6.7 percentage points during the six months ended June 30, 2025 compared to the same period last year, as inventory related reserves expense normalized from the elevated levels we saw in the first half of 2024. Cost of product revenue was comprised primarily of third-party contract manufacturers’ costs and costs of materials used in production. Service gross margin decreased 0.8 percentage points during the six months ended June 30, 2025 compared to the same period last year, primarily due to an increase in cloud service costs, partially offset by service revenue growth outpacing labor, replacement, and repair costs increase. Cost of service revenue was comprised primarily of personnel-related costs, replacement and repair costs, cloud services costs from data centers, colocation provider and cloud providers, infrastructure, software and delivery costs, and facility-related costs. 40 Table of Contents Operating expenses Six Months Ended Change % Change June 30, 2025 June 30, 2024 Amount % of Revenue Amount % of Revenue (in millions, except percentages) Operating expenses: Research and development $ 408.1 13 % $ 338.4 12 % $ 69.7 21 % Sales and marketing 1,134.7 36 1,002.4 36 132.3 13 General and administrative 114.7 4 111.0 4 3.7 3 Gain on intellectual property matters (7.6) — (2.3) — (5.3) 230 Total operating expenses $ 1,649.9 52 % $ 1,449.5 52 % $ 200.4 14 % Percentages have been rounded for presentation purposes and may differ from unrounded results. Research and development Research and development expense increased $69.7 million, or 21%, during the six months ended June 30, 2025 compared to the same period last year, primarily due to an increase of $52.0 million in personnel-related costs as a result of increased headcount and compensation rates to support the development of new products and continued enhancements to our existing products and the impact of the recent acquisitions. In addition, non-personnel-related product development costs increased $19.3 million. Sales and marketing Sales and marketing expense increased $132.3 million, or 13%, during the six months ended June 30, 2025 compared to the same period last year, primarily due to an increase of $100.2 million in personnel-related costs. In addition, marketing program and related expenses increased $12.5 million and amortization expense of certain intangible assets increased $9.2 million. General and administrative General and administrative expense increased $3.7 million, or 3%, during the six months ended June 30, 2025 compared to the same period last year, primarily due to an increase of $2.7 million in personnel-related costs and an increase of $1.0 million in subscriptions and other expense. Operating income and margin We generated operating income of $911.8 million during the six months ended June 30, 2025, an increase of $153.4 million, or 20%, compared to $758.4 million in the same period last year. Operating margin was 28.8% during the six months ended June 30, 2025, compared to 27.2% in the same period last year. The 1.6 percentage points increase in operating margin was primarily due to 1.6 percentage points increase in gross margin. Interest income, interest expense and other income (expense) — net Six Months Ended June 30, 2025 June 30, 2024 Change % Change (in millions, except percentages) Interest income $ 89.3 $ 70.5 $ 18.8 27 % Interest expense $ (9.5) $ (10.1) $ 0.6 (6) % Other income (expense)—net $ 45.0 $ (5.1) $ 50.1 (982) % Interest income increased $18.8 million during the six months ended June 30, 2025 compared to the same period last year, primarily as a result of investment balances. Interest income varies depending on our average investment balances during the period, types and mix of investments, and interest rates. Interest expense remained comparatively flat during the six months 41 Table of Contents ended June 30, 2025 compared to the same period last year. The $50.1 million change in other income (expense)—net during the six months ended June 30, 2025 compared to the same period last year, was primarily due to a gain on bargain purchase of $39.9 million related to our acquisition of Linksys in the first quarter of 2025 and a $12.1 million increase in foreign currency exchange gains. Provision for income taxes Six Months Ended Change % Change June 30, 2025 June 30, 2024 (in millions, except percentages) Provision for income taxes $ 173.6 $ 116.0 $ 57.6 50 % Effective tax rate (%) 17 % 14 % Our effective tax rate was 17% for the six months ended June 30, 2025 compared to an effective tax rate of 14% for the same period last year. The provision for income taxes for the six months ended June 30, 2025 was primarily comprised of U.S. federal and state taxes, withholding taxes and foreign taxes that were $243.2 million and a tax provision of $30.6 million related to the derecognition of deferred tax assets from the business combination with Linksys. This provision for income taxes was favorably affected by a tax benefit of $50.9 million from the FDII deduction, and excess tax benefits from stock-based compensation expense of $49.3 million. The provision for income taxes for the six months ended June 30, 2024 was comprised of U.S. federal and state taxes, withholding taxes, and foreign taxes that were $191.3 million, which were favorably affected by a tax benefit of $50.8 million from the FDII deduction, and excess tax benefits from stock-based compensation expense of $24.5 million. Gain (loss) from equity method investments Six Months Ended Change % Change June 30, 2025 June 30, 2024 (in millions, except percentages) Gain (loss) from equity method investments $ 10.5 $ (18.6) $ 29.1 (156) % The $29.1 million change in gain (loss) from equity method investments during the six months ended June 30, 2025 compared to the same period last year was primarily driven by a $10.8 million gain related to our acquisition of Linksys in the first quarter of 2025 and a $10.2 million loss due to our proportionate share of Linksys’ financial results including our share of the amortization of the basis differences and an OTTI charge of $8.0 million during the six months ended June 30, 2024. 42 Table of Contents Liquidity and Capital Resources As of June 30, 2025 December 31, 2024 (in millions) Cash and cash equivalents $ 3,368.5 $ 2,875.9 Short-term investments 1,194.4 1,190.6 Long-term investments 112.0 — Total cash, cash equivalents and investments $ 4,674.9 $ 4,066.5 Working capital $ 1,569.2 $ 1,910.8 Six Months Ended June 30, 2025 June 30, 2024 (in millions) Net cash provided by operating activities $ 1,315.2 $ 1,172.4 Net cash used in investing activities (377.0) (320.4) Net cash used in financing activities (446.9) (44.3) Effect of exchange rate changes on cash and cash equivalents 1.3 (2.4) Net increase in cash and cash equivalents $ 492.6 $ 805.3 Liquidity and capital resources are primarily impacted by our operating activities, as well as real estate purchases, other capital expenditures and business acquisitions, repurchases of our common stock, payment of taxes in connection with the net settlement of equity awards and proceeds from the issuance of common stock and investment grade debt.