FORTINET, INC.

SUPPLEMENTAL FINANCIAL INFORMATION

Non-GAAP Financial Measures

We have provided in this release financial information that has not been prepared in accordance with U.S. Generally Accepted Accounting Principles

("GAAP"). These non-GAAP financial and liquidity measures are not based on any standardized methodology prescribed by GAAP and are not

necessarily comparable to similar measures presented by other companies. We use these non-GAAP financial measures internally in analyzing our

financial results and believe they are useful to investors, as a supplement to GAAP measures, in evaluating our ongoing operational performance. We

believe that the use of these non-GAAP financial measures provides an additional tool for investors to use in evaluating ongoing operating results and

trends and in comparing our financial results with peer companies, many of which present similar non-GAAP financial measures to investors.

Non-GAAP financial measures should not be considered in isolation from, or as a substitute for, financial information prepared in accordance with GAAP.

Investors are encouraged to review the reconciliation of these non-GAAP financial measures to their most directly comparable GAAP financial measures

provided in the financial statement tables below.

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 as well as cash flows. There are a number of limitations related to the

use of billings instead of GAAP revenue. First, billings are impacted by the term of security subscription and support agreements and do not provide an

indication as to the timing of revenue being recognized from these service contracts. 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.

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 intellectual property matters. Free cash flow margin is defined as free cash flow

divided by GAAP revenue. 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 intellectual property 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 intellectual property matters, investing activities other than

capital expenditures and cash flows from financing activities. Management accounts for this limitation by providing information about our proceeds from

intellectual property matters, our capital expenditures and other investing and financing activities on the face of the cash flow statement and under the

caption "Management's Discussion and Analysis of Financial Condition and Results of Operations-Liquidity and Capital Resources" in our most recent

Quarterly Report on Form 10-Q and Annual Report on Form 10-K 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.

Adjusted free cash flow (non-GAAP).

We define adjusted free cash flow as free cash flow plus cash payments associated with real estate related

purchases. Adjusted free cash flow margin is defined as adjusted free cash flow divided by GAAP revenue.

Non-GAAP operating income and operating margin.

We define non-GAAP operating income as operating income plus stock-based compensation,

amortization of acquired intangible assets and charges in connection with litigation settlements, less gain on intellectual property matters and, when

applicable, other significant non-recurring items in a given quarter. Non-GAAP operating margin is defined as non-GAAP operating income divided by

GAAP revenue. We consider these non-GAAP financial measures to be useful metrics for management and investors because they exclude the items

noted above so that our management and investors can compare our recurring core business operating results over multiple periods. There are a

number of limitations related to the use of non-GAAP operating income instead of operating income calculated in accordance with GAAP. First, non-

GAAP operating income excludes the items noted above. Second, the components of the costs that we exclude from our calculation of non-GAAP

operating income may differ from the components that peer companies exclude when they report their non-GAAP results of operations. Management

accounts for these limitations by providing specific information regarding the GAAP amounts excluded from non-GAAP operating income and evaluating

non-GAAP operating income together with operating income calculated in accordance with GAAP.

Non-GAAP net income and diluted net income per share.

We define non-GAAP net income as net income plus the items noted above under non-GAAP

operating income and operating margin. In addition, we adjust non-GAAP net income and diluted net income per share for a gain on bargain purchase

related to acquisition, a gain from an equity method investment related to acquisition, a non-cash charge of impairment on an equity method investment

and a tax adjustment required for an effective tax rate on a non-GAAP basis, which differs from the GAAP effective tax rate. We define non-GAAP diluted

net income per share as non-GAAP net income divided by the non-GAAP diluted weighted-average shares outstanding. We consider these non-GAAP

financial measures to be useful metrics for management and investors for the same reasons that we use non-GAAP operating income and non-GAAP

operating margin. However, in order to provide a more complete picture of our recurring core business operating results, we include in non-GAAP net

income and non-GAAP diluted net income per share, the tax adjustment required resulting in an effective tax rate on a non-GAAP basis, which often

differs from the GAAP tax rate. We believe the non-GAAP effective tax rates we use are reasonable estimates of normalized tax rates for our current and

prior fiscal years under our global operating structure. The same limitations described above regarding our use of non-GAAP operating income and non-

GAAP operating margin apply to our use of non-GAAP net income and non-GAAP diluted net income per share. We account for these limitations by

providing specific information regarding the GAAP amounts excluded from non-GAAP net income and non-GAAP diluted net income per share and

evaluating non-GAAP net income and non-GAAP diluted net income per share together with net income and diluted net income per share calculated in

accordance with GAAP.

Fortinet, Inc.

Condensed Consolidated Statements Of Income - Fiscal Quarters

(Unaudited, in millions, except percentages and per share amounts)

Q1'24 Q2'24 Q3'24 Q4'24 Q1'25 Q2'25 Q3'25 Q4'25 Q1'26

Revenue:

Product $ 408.9 $ 451.9 $ 473.9 $ 574.0 $ 459.1 $ 508.9 $ 559.3 $ 691.1 $ 645.1

Service 944.4 982.4 1,034.2 1,086.1 1,080.6 1,121.1 1,165.6 1,213.9 1,204.5

Total revenue 1,353.3 1,434.3 1,508.1 1,660.1 1,539.7 1,630.0 1,724.9 1,905.0 1,849.6

Cost of revenue:

Product 182.8 155.1 136.1 178.0 149.9 165.9 180.7 228.9 208.3

Service 121.9 119.9 127.3 136.5 143.2 149.0 151.0 160.3 156.2

Total cost of revenue 304.7 275.0 263.4 314.5 293.1 314.9 331.7 389.2 364.5

Gross profit:

Product 226.1 296.8 337.8 396.0 309.2 343.0 378.6 462.2 436.8

Service 822.5 862.5 906.9 949.6 937.4 972.1 1,014.6 1,053.6 1,048.3

Total gross profit 1,048.6 1,159.3 1,244.7 1,345.6 1,246.6 1,315.1 1,393.2 1,515.8 1,485.1

Product gross margin 55.3% 65.7% 71.3% 69.0% 67.3% 67.4% 67.7% 66.9% 67.7%

Service gross margin 87.1% 87.8% 87.7% 87.4% 86.7% 86.7% 87.0% 86.8% 87.0%

Total gross margin 77.5% 80.8% 82.5% 81.1% 81.0% 80.7% 80.8% 79.6% 80.3%

Operating expenses:

Research and development 173.0 165.4 187.3 191.1 198.6 209.5 202.4 205.0 214.0

Sales and marketing 501.1 501.3 515.9 526.5 542.7 592.0 583.5 629.3 636.3

General and administrative 54.4 56.6 71.7 55.1 57.8 56.9 61.4 57.3 56.2

Gain on intellectual property matters (1.1) (1.2) (1.1) (1.2) (6.3) (1.3) (1.4) (1.4) (1.4)

Total operating expenses 727.4 722.1 773.8 771.5 792.8 857.1 845.9 890.2 905.1

Operating income 321.2 437.2 470.9 574.1 453.8 458.0 547.3 625.6 580.0

Research and development expense as a

percentage of revenue 12.8% 11.5% 12.4% 11.5% 12.9% 12.9% 11.7% 10.8% 11.6%

Sales and marketing expense as a

percentage of revenue 37.0% 35.0% 34.2% 31.7% 35.2% 36.3% 33.8% 33.0% 34.4%

General and administrative expense as a

percentage of revenue 4.0% 3.9% 4.8% 3.3% 3.8% 3.5% 3.6% 3.0% 3.0%

Operating margin 23.7% 30.5% 31.2% 34.6% 29.5% 28.1% 31.7% 32.8% 31.4%

Interest income 32.2 38.3 42.4 42.3 44.3 45.0 40.7 32.3 32.9

Interest expense (5.1) (5.0) (5.0) (4.9) (4.9) (4.6) (6.2) (4.4) (4.2)

Other income (expense)-net (2.9) (2.2) 118.1 6.9 26.1 18.9 13.0 (2.7) 47.9

Income before income taxes and gain (loss)

from equity method investments 345.4 468.3 626.4 618.4 519.3 517.3 594.8 650.8 656.6

Provision for income taxes 39.5 76.5 81.2 86.7 96.5 77.1 120.7 144.8 122.0

Gain (loss) from equity method investments (6.6) (12.0) (5.3) (5.5) 10.6 (0.1) (0.2) - (0.1)

Net income $ 299.3 $ 379.8 $ 539.9 $ 526.2 $ 433.4 $ 440.1 $ 473.9 $ 506.0 $ 534.5

Net income per share:

Basic $ 0.39 $ 0.50 $ 0.71 $ 0.69 $ 0.56 $ 0.57 $ 0.63 $ 0.68 $ 0.72

Diluted $ 0.39 $ 0.49 $ 0.70 $ 0.68 $ 0.56 $ 0.57 $ 0.62 $ 0.68 $ 0.72

Weighted-average shares outstanding:

Basic 762.4 763.8 765.0 766.5 768.3 765.5 755.5 743.1 738.8

Diluted 770.5 769.9 771.9 775.2 776.8 772.7 761.2 748.0 742.8

Fortinet, Inc.

Non-GAAP Condensed Consolidated Statements Of Income - Fiscal Quarters

(Unaudited, in millions, except percentages and per share amounts)

Q1'24 Q2'24 Q3'24 Q4'24 Q1'25 Q2'25 Q3'25 Q4'25 Q1'26

Revenue:

Product $ 408.9 $ 451.9 $ 473.9 $ 574.0 $ 459.1 $ 508.9 $ 559.3 $ 691.1 $ 645.1

Service 944.4 982.4 1,034.2 1,086.1 1,080.6 1,121.1 1,165.6 1,213.9 1,204.5

Total revenue 1,353.3 1,434.3 1,508.1 1,660.1 1,539.7 1,630.0 1,724.9 1,905.0 1,849.6

Cost of revenue:

Product 181.3 153.5 134.5 176.5 148.1 163.7 178.7 227.6 207.1

Service 114.6 112.2 118.5 123.6 131.3 136.4 138.3 147.9 143.9

Total cost of revenue 295.9 265.7 253.0 300.1 279.4 300.1 317.0 375.5 351.0

Gross profit:

Product 227.6 298.4 339.4 397.5 311.0 345.2 380.6 463.5 438.0

Service 829.8 870.2 915.7 962.5 949.3 984.7 1,027.3 1,066.0 1,060.6

Total gross profit 1,057.4 1,168.6 1,255.1 1,360.0 1,260.3 1,329.9 1,407.9 1,529.5 1,498.6

Product gross margin 55.7% 66.0% 71.6% 69.3% 67.7% 67.8% 68.0% 67.1% 67.9%

Service gross margin 87.9% 88.6% 88.5% 88.6% 87.8% 87.8% 88.1% 87.8% 88.1%

Total gross margin 78.1% 81.5% 83.2% 81.9% 81.9% 81.6% 81.6% 80.3% 81.0%

Operating expenses:

Research and development 153.2 144.1 165.4 168.2 175.6 184.4 177.0 179.8 188.9

Sales and marketing 473.5 474.5 487.2 496.8 511.1 556.4 547.6 592.1 599.9

General and administrative 44.6 46.4 57.8 44.1 47.4 49.3 46.5 47.7 47.7

Total operating expenses 671.3 665.0 710.4 709.1 734.1 790.1 771.1 819.6 836.5

Operating income 386.1 503.6 544.7 650.9 526.2 539.8 636.8 709.9 662.1

Research and development expense as a

percentage of revenue 11.3% 10.0% 11.0% 10.1% 11.4% 11.3% 10.3% 9.4% 10.2%

Sales and marketing expense as a

percentage of revenue 35.0% 33.1% 32.3% 29.9% 33.2% 34.1% 31.7% 31.1% 32.4%

General and administrative expense as a

percentage of revenue 3.3% 3.2% 3.8% 2.7% 3.1% 3.0% 2.7% 2.5% 2.6%

Operating margin 28.5% 35.1% 36.1% 39.2% 34.2% 33.1% 36.9% 37.3% 35.8%

Interest income 32.2 38.3 42.4 42.3 44.3 45.0 40.7 32.3 32.9

Interest expense (5.1) (5.0) (5.0) (4.9) (4.9) (4.6) (6.2) (4.4) (4.2)

Other income (expense)-net (2.9) (2.2) 11.8 6.9 (13.8) 18.9 13.0 (2.7) 47.9

Income before income taxes and loss from

equity method investments 410.3 534.7 593.9 695.2 551.8 599.1 684.3 735.1 738.7

Provision for income taxes 69.8 90.8 101.0 118.2 99.3 107.9 123.1 132.4 133.0

Loss from equity method investments (6.6) (4.0) (5.3) (5.5) (0.2) (0.1) (0.2) - (0.1)

Net income $ 333.9 $ 439.9 $ 487.6 $ 571.5 $ 452.3 $ 491.1 $ 561.0 $ 602.7 $ 605.6

Net income per share:

Basic $ 0.44 $ 0.58 $ 0.64 $ 0.75 $ 0.59 $ 0.64 $ 0.74 $ 0.81 $ 0.82

Diluted $ 0.43 $ 0.57 $ 0.63 $ 0.74 $ 0.58 $ 0.64 $ 0.74 $ 0.81 $ 0.82

Weighted-average shares outstanding:

Basic 762.4 763.8 765.0 766.5 768.3 765.5 755.5 743.1 738.8

Diluted 770.5 769.9 771.9 775.2 776.8 772.7 761.2 748.0 742.8

Fortinet, Inc.

Other Metrics - Fiscal Quarters

(Unaudited, in millions, except percentages and other information)

Disaggregation of revenue by type

Q1'24 Q2'24 Q3'24 Q4'24 Q1'25 Q2'25 Q3'25 Q4'25 Q1'26

Revenue:

Product $ 408.9 $ 451.9 $ 473.9 $ 574.0 $ 459.1 $ 508.9 $ 559.3 $ 691.1 $ 645.1

Service:

Security subscription 536.9 558.7 595.8 625.3 623.1 644.4 672.0 693.7 694.0

Technical support and other 407.5 423.7 438.4 460.8 457.5 476.7 493.6 520.2 510.5

Total service revenue 944.4 982.4 1,034.2 1,086.1 1,080.6 1,121.1 1,165.6 1,213.9 1,204.5

Total revenue $ 1,353.3 $ 1,434.3 $ 1,508.1 $ 1,660.1 $ 1,539.7 $ 1,630.0 $ 1,724.9 $ 1,905.0 $ 1,849.6

Product revenue as a percentage of total revenue 30.2% 31.5% 31.4% 34.6% 29.8% 31.2% 32.4% 36.3% 34.9%

Service revenue as a percentage of total revenue 69.8% 68.5% 68.6% 65.4% 70.2% 68.8% 67.6% 63.7% 65.1%

Disaggregation of revenue by geography

Q1'24 Q2'24 Q3'24 Q4'24 Q1'25 Q2'25 Q3'25 Q4'25 Q1'26

Revenue:

Americas $ 557.0 $ 595.3 $ 624.0 $ 665.9 $ 629.8 $ 658.8 $ 680.5 $ 731.3 $ 739.8

EMEA 539.4 565.2 599.3 692.3 628.4 667.1 713.7 825.1 784.8

APAC 256.9 273.8 284.8 301.9 281.5 304.1 330.7 348.6 325.0

Total revenue $ 1,353.3 $ 1,434.3 $ 1,508.1 $ 1,660.1 $ 1,539.7 $ 1,630.0 $ 1,724.9 $ 1,905.0 $ 1,849.6

Remaining performance obligations

Q1'24 Q2'24 Q3'24 Q4'24 Q1'25 Q2'25 Q3'25 Q4'25 Q1'26

Total remaining performance obligations $ 5,806 $ 5,916 $ 6,081 $ 6,420 $ 6,493 $ 6,642 $ 6,716 $ 7,183 $ 7,452

Current remaining performance obligations $ 2,926 $ 2,992 $ 3,119 $ 3,307 $ 3,382 $ 3,450 $ 3,493 $ 3,663 $ 3,763

Other information

Q1'24 Q2'24 Q3'24 Q4'24 Q1'25 Q2'25 Q3'25 Q4'25 Q1'26

Days sales outstanding 66 68 62 79 69 67 61 80 72

Inventory turns 1.2 1.4 1.7 2.3 1.7 1.6 1.7 2.4 2.2

Headcount 13,522 13,527 13,986 14,138 14,556 14,898 15,015 15,109 15,311

Fortinet, Inc.

Condensed Consolidated Balance Sheets - Fiscal Quarters

(Unaudited, in millions)

Q1'24 Q2'24 Q3'24 Q4'24 Q1'25 Q2'25 Q3'25 Q4'25 Q1'26

Assets

Current assets:

Cash and cash equivalents $ 1,926.3 $ 2,203.2 $ 2,489.3 $ 2,875.9 $ 3,596.6 $ 3,368.5 $ 1,995.7 $ 2,495.3 $ 2,223.8

Short-term investments 1,096.8 1,136.1 1,211.4 1,190.6 1,183.9 1,194.4 1,127.7 1,087.2 1,071.1

Accounts receivable-net 996.2 1,083.4 1,044.1 1,463.4 1,174.0 1,215.7 1,168.3 1,691.2 1,486.2

Inventory 439.5 383.2 354.3 315.5 362.7 405.2 426.6 399.5 369.6

Prepaid expenses and other current assets 100.9 113.4 121.5 126.1 125.4 162.5 195.2 227.0 181.9

Total current assets 4,559.7 4,919.3 5,220.6 5,971.5 6,442.6 6,346.3 4,913.5 5,900.2 5,332.6

Long-term investments - - - - 35.2 112.0 289.1 339.7 339.7

Property and equipment-net 1,247.4 1,242.7 1,273.4 1,349.5 1,403.8 1,544.8 1,605.2 1,619.0 1,691.5

Deferred contract costs 600.0 596.9 599.4 622.9 636.2 665.4 682.2 735.5 753.7

Deferred tax assets 942.5 998.5 1,300.4 1,335.6 1,411.6 1,457.2 1,367.8 1,314.9 1,304.5

Goodwill and other intangible assets-net 163.1 158.1 324.4 350.4 357.4 382.2 368.5 354.7 344.4

Other assets 149.4 137.4 133.8 133.2 120.2 133.5 135.0 125.2 117.1

Total assets $ 7,662.1 $ 8,052.9 $ 8,852.0 $ 9,763.1 $ 10,407.0 $ 10,641.4 $ 9,361.3 $ 10,389.2 $ 9,883.5

Liabilities and stockholders' equity (deficit)

Current liabilities:

Accounts payable $ 135.2 $ 132.1 $ 177.9 $ 190.9 $ 224.5 $ 245.2 $ 221.3 $ 230.8 $ 238.7

Accrued liabilities 538.7 400.6 376.6 337.9 415.0 339.1 330.6 354.6 366.1

Accrued payroll and compensation 214.5 217.3 248.2 255.7 250.2 281.3 274.3 312.9 292.4

Current portion of long-term debt - - - - 498.7 499.0 499.4 499.7 -

Deferred revenue 2,912.0 2,975.3 3,081.2 3,276.2 3,339.4 3,412.5 3,460.5 3,636.0 3,726.3

Total current liabilities 3,800.4 3,725.3 3,883.9 4,060.7 4,727.8 4,777.1 4,786.1 5,034.0 4,623.5

Deferred revenue 2,877.9 2,920.9 2,930.5 3,084.7 3,079.0 3,155.1 3,189.9 3,479.8 3,625.2

Long-term debt 992.8 993.3 993.8 994.3 496.2 496.3 496.5 496.6 496.8

Other liabilities 128.5 125.2 135.7 129.6 141.1 152.5 153.7 141.3 148.3

Total liabilities 7,799.6 7,764.7 7,943.9 8,269.3 8,444.1 8,581.0 8,626.2 9,151.7 8,893.8

Commitments and contingencies

Stockholders' equity (deficit):

Common stock 0.8 0.8 0.8 0.8 0.8 0.8 0.7 0.7 0.7

Additional paid-in capital 1,448.9 1,499.0 1,568.6 1,636.2 1,668.7 1,715.9 1,714.7 1,770.1 1,798.7

Accumulated other comprehensive loss (24.8) (29.0) (18.0) (26.1) (22.9) (20.7) (21.8) (25.4) (27.7)

Retained earnings (accumulated deficit) (1,562.4) (1,182.6) (643.3) (117.1) 316.3 364.4 (958.5) (507.9) (782.0)

Total stockholders' equity (deficit) (137.5) 288.2 908.1 1,493.8 1,962.9 2,060.4 735.1 1,237.5 989.7

Total liabilities and stockholders' equity

(deficit) $ 7,662.1 $ 8,052.9 $ 8,852.0 $ 9,763.1 $ 10,407.0 $ 10,641.4 $ 9,361.3 $ 10,389.2 $ 9,883.5

Fortinet, Inc.

Condensed Consolidated Statements Of Cash Flows - Fiscal Quarters

(Unaudited, in millions)

Q1'24 Q2'24 Q3'24 Q4'24 Q1'25 Q2'25 Q3'25 Q4'25 Q1'26

Cash flows from operating activities:

Net income $ 299.3 $ 379.8 $ 539.9 $ 526.2 $ 433.4 $ 440.1 $ 473.9 $ 506.0 $ 534.5

Adjustments to reconcile net income to net

cash provided by operating activities:

Stock-based compensation 62.3 63.9 65.9 65.8 66.1 69.1 71.8 72.5 72.5

Amortization of deferred contract costs 72.0 72.7 73.6 75.4 78.0 82.0 86.0 90.3 94.2

Depreciation and amortization 28.6 29.2 29.8 35.2 35.8 38.3 38.4 39.5 39.8

Amortization of investment discounts (12.2) (12.7) (12.4) (11.5) (10.3) (9.1) (7.9) (6.4) (4.8)

Other 9.9 15.7 (111.3) (6.4) (35.5) (9.3) (8.3) 0.4 (44.9)

Changes in operating assets and liabilities,

net of impact of business combinations:

Accounts receivable-net 405.6 (86.7) 57.6 (421.9) 303.9 (41.2) 46.0 (524.6) 205.2

Inventory 36.5 48.7 19.7 26.3 (34.1) (45.5) (29.5) 18.5 23.6

Prepaid expenses and other current assets (0.1) (12.2) 3.3 (4.7) 3.4 (35.5) (32.2) (31.6) 62.8

Deferred contract costs (66.5) (69.5) (76.2) (98.9) (91.3) (111.2) (102.8) (143.7) (112.4)

Deferred tax assets (73.9) (56.4) (57.3) (35.6) (30.0) (45.3) 89.0 52.5 11.0

Other assets (6.2) (1.4) (1.2) (2.2) 1.5 (13.2) (1.9) (2.6) (5.4)

Accounts payable (61.6) (5.6) 35.2 21.8 24.6 22.2 (35.3) 16.4 (26.0)

Accrued liabilities 105.0 (129.9) (47.4) (34.4) 63.7 (73.4) (5.8) 28.8 12.5

Accrued payroll and compensation (27.4) 3.1 16.4 7.9 (8.2) 31.1 (6.6) 38.7 (20.6)

Deferred revenue 54.8 106.9 72.7 343.4 57.0 147.8 83.3 466.1 235.7

Other liabilities 4.3 (3.6) (0.2) (8.8) 5.3 5.0 (2.9) (0.6) (0.6)

Net cash provided by operating

activities 830.4 342.0 608.1 477.6 863.3 451.9 655.2 620.2 1,077.1

Cash flows from investing activities:

Purchases of investments (436.1) (538.2) (511.0) (463.3) (503.0) (473.5) (536.1) (483.5) (350.7)

Sales of investments - - - 0.5 2.8 2.9 - 4.9 115.9

Maturities of investments 393.4 511.2 478.1 509.0 466.9 402.7 448.0 475.1 299.7

Purchases of property and equipment (221.9) (23.1) (36.3) (97.6) (66.5) (167.8) (87.7) (42.8) (70.6)

Payments made in connection with business

combinations, net of cash acquired (5.7) - (241.3) (28.5) (11.2) (30.4) - - -

Purchases of marketable equity securities - - (16.7) - - - - - -

Other - - 0.1 - 0.2 (0.1) - - -

Net cash used in investing activities (270.3) (50.1) (327.1) (79.9) (110.8) (266.2) (175.8) (46.3) (5.7)

Cash flows from financing activities:

Repurchase and retirement of common stock - - (0.6) - - (401.1) (1,831.5) (57.2) (823.0)

Repayment of senior notes - - - - - - - - (500.0)

Proceeds from issuance of common stock 13.4 6.2 20.1 23.4 20.2 11.1 6.3 7.1 17.6

Taxes paid related to net share settlement of

equity awards (42.9) (20.2) (16.5) (21.3) (52.9) (24.1) (26.7) (22.6) (36.3)

Other (0.8) - - (10.9) - (0.1) - - (1.2)

Net cash provided by (used in)

financing activities (30.3) (14.0) 3.0 (8.8) (32.7) (414.2) (1,851.9) (72.7) (1,342.9)

Effect of exchange rate changes on cash and

cash equivalents (1.4) (1.0) 2.1 (2.3) 0.9 0.4 (0.3) (1.6) -

Net increase (decrease) in cash and cash

equivalents 528.4 276.9 286.1 386.6 720.7 (228.1) (1,372.8) 499.6 (271.5)

Cash and cash equivalents-Beginning of period 1,397.9 1,926.3 2,203.2 2,489.3 2,875.9 3,596.6 3,368.5 1,995.7 2,495.3

Cash and cash equivalents-End of period $ 1,926.3 $ 2,203.2 $ 2,489.3 $ 2,875.9 $ 3,596.6 $ 3,368.5 $ 1,995.7 $ 2,495.3 $ 2,223.8

Supplemental information

Q1'24 Q2'24 Q3'24 Q4'24 Q1'25 Q2'25 Q3'25 Q4'25 Q1'26

Cash paid for income taxes, net $ 31.1 $ 252.1 $ 139.8 $ 155.9 $ 26.8 $ 237.2 $ 69.9 $ 117.6 $ 47.0

Fortinet, Inc.

GAAP to Non-GAAP Reconciliations - Fiscal Quarters

(Unaudited, in millions, except percentages and per share amounts)

Reconciliation of net cash provided by operating activities to adjusted free cash flow

Q1'24 Q2'24 Q3'24 Q4'24 Q1'25 Q2'25 Q3'25 Q4'25 Q1'26

Net cash provided by operating activities $ 830.4 $ 342.0 $ 608.1 $ 477.6 $ 863.3 $ 451.9 $ 655.2 $ 620.2 $ 1,077.1

Less: Purchases of property and equipment (221.9) (23.1) (36.3) (97.6) (66.5) (167.8) (87.7) (42.8) (70.6)

Less: Proceeds from intellectual property

matter - - - - (14.0) - - - -

Free cash flow

(1)

$ 608.5 $ 318.9 $ 571.8 $ 380.0 $ 782.8 $ 284.1 $ 567.5 $ 577.4 $ 1,006.5

Add: Real estate related purchases 212.1 5.1 33.0 78.5 56.2 143.8 78.4 11.3 58.5

Adjusted free cash flow

(2)

$ 820.6 $ 324.0 $ 604.8 $ 458.5 $ 839.0 $ 427.9 $ 645.9 $ 588.7 $ 1,065.0

Free cash flow margin 45.0% 22.2% 37.9% 22.9% 50.8% 17.4% 32.9% 30.3% 54.4%

Adjusted free cash flow margin 60.6% 22.6% 40.1% 27.6% 54.5% 26.3% 37.4% 30.9% 57.6%

(1) Free Cash Flow is a non-GAAP measure that we define as net cash provided by operating activities minus purchases of property and equipment and excluding any significant non-recurring items,

such as proceeds from an intellectual property matter.

(2) Adjusted Free Cash Flow is a non-GAAP measure that we define as Free Cash Flow plus cash payments associated with real estate related purchases.

Reconciliation of total revenue to total billings

Total revenue $ 1,353.3 $ 1,434.3 $ 1,508.1 $ 1,660.1 $ 1,539.7 $ 1,630.0 $ 1,724.9 $ 1,905.0 $ 1,849.6

Add: Change in deferred revenue 54.9 106.3 115.5 349.2 57.5 149.2 82.8 465.4 235.7

Less: Deferred revenue balance acquired in

business acquisitions (1.0) - (41.4) (6.8) - (0.8) - - -

Total billings $ 1,407.2 $ 1,540.6 $ 1,582.2 $ 2,002.5 $ 1,597.2 $ 1,778.4 $ 1,807.7 $ 2,370.4 $ 2,085.3

Q1'24 Q2'24 Q3'24 Q4'24 Q1'25 Q2'25 Q3'25 Q4'25 Q1'26

Reconciliation of GAAP to non-GAAP results of operations measures

GAAP product gross profit $ 226.1 $ 296.8 $ 337.8 $ 396.0 $ 309.2 $ 343.0 $ 378.6 $ 462.2 $ 436.8

Stock

-

based compensation 0.5 0.4 0.5 0.5 0.5 0.5 0.6 0.6 0.6

Amortization of acquired intangible assets 1.0 1.2 1.1 1.0 1.3 1.7 1.4 0.7 0.6

Non

-

GAAP product gross profit $ 227.6 $ 298.4 $ 339.4 $ 397.5 $ 311.0 $ 345.2 $ 380.6 $ 463.5 $ 438.0

GAAP service gross profit $ 822.5 $ 862.5 $ 906.9 $ 949.6 $ 937.4 $ 972.1 $ 1,014.6 $ 1,053.6 $ 1,048.3

Stock

-

based compensation 6.2 6.5 6.3 6.4 6.5 7.0 6.9 6.7 7.1

Amortization of acquired intangible assets 1.1 1.2 2.5 6.5 5.4 5.6 5.8 5.7 5.2

Non

-

GAAP service gross profit $ 829.8 $ 870.2 $ 915.7 $ 962.5 $ 949.3 $ 984.7 $ 1,027.3 $ 1,066.0 $ 1,060.6

GAAP total gross profit $ 1,048.6 $ 1,159.3 $ 1,244.7 $ 1,345.6 $ 1,246.6 $ 1,315.1 $ 1,393.2 $ 1,515.8 $ 1,485.1

Stock

-

based compensation 6.7 6.9 6.8 6.9 7.0 7.5 7.5 7.3 7.7

Amortization of acquired intangible assets 2.1 2.4 3.6 7.5 6.7 7.3 7.2 6.4 5.8

Non

-

GAAP total gross profit $ 1,057.4 $ 1,168.6 $ 1,255.1 $ 1,360.0 $ 1,260.3 $ 1,329.9 $ 1,407.9 $ 1,529.5 $ 1,498.6

GAAP research and development expense $ 173.0 $ 165.4 $ 187.3 $ 191.1 $ 198.6 $ 209.5 $ 202.4 $ 205.0 $ 214.0

Stock

-

based compensation (19.8) (21.3) (21.9) (22.9) (23.0) (25.1) (25.4) (25.2) (25.1)

Non

-

GAAP research and development expense $ 153.2 $ 144.1 $ 165.4 $ 168.2 $ 175.6 $ 184.4 $ 177.0 $ 179.8 $ 188.9

GAAP sales and marketing expense $ 501.1 $ 501.3 $ 515.9 $ 526.5 $ 542.7 $ 592.0 $ 583.5 $ 629.3 $ 636.3

Stock

-

based compensation (26.7) (25.9) (27.0) (25.7) (26.5) (29.7) (30.0) (31.0) (31.9)

Amortization of acquired intangible assets (0.9) (0.9) (1.7) (4.0) (5.1) (5.9) (5.9) (6.2) (4.5)

Non

-

GAAP sales and marketing expense $ 473.5 $ 474.5 $ 487.2 $ 496.8 $ 511.1 $ 556.4 $ 547.6 $ 592.1 $ 599.9

GAAP general and administrative expense $ 54.4 $ 56.6 $ 71.7 $ 55.1 $ 57.8 $ 56.9 $ 61.4 $ 57.3 $ 56.2

Stock

-

based compensation (9.8) (10.2) (10.7) (11.0) (10.4) (7.6) (9.3) (9.6) (8.5)

Litigation related matters - - (3.2) - - - (5.6) - -

Non

-

GAAP general and administrative expense $ 44.6 $ 46.4 $ 57.8 $ 44.1 $ 47.4 $ 49.3 $ 46.5 $ 47.7 $ 47.7

GAAP total operating expense $ 727.4 $ 722.1 $ 773.8 $ 771.5 $ 792.8 $ 857.1 $ 845.9 $ 890.2 $ 905.1

Stock

-

based compensation (56.3) (57.4) (59.6) (59.6) (59.9) (62.4) (64.7) (65.8) (65.5)

Amortization of acquired intangible assets (0.9) (0.9) (1.7) (4.0) (5.1) (5.9) (5.9) (6.2) (4.5)

Litigation related matters - - (3.2) - - - (5.6) - -

Gain on IP matters 1.1 1.2 1.1 1.2 6.3 1.3 1.4 1.4 1.4

Non

-

GAAP total operating expense $ 671.3 $ 665.0 $ 710.4 $ 709.1 $ 734.1 $ 790.1 $ 771.1 $ 819.6 $ 836.5

GAAP operating income $ 321.2 $ 437.2 $ 470.9 $ 574.1 $ 453.8 $ 458.0 $ 547.3 $ 625.6 $ 580.0

Stock

-

based compensation 63.0 64.3 66.4 66.5 66.9 69.9 72.2 73.1 73.2

Amortization of acquired intangible assets 3.0 3.3 5.3 11.5 11.8 13.2 13.1 12.6 10.3

Litigation related matters - - 3.2 - - - 5.6 - -

Gain on IP matters (1.1) (1.2) (1.1) (1.2) (6.3) (1.3) (1.4) (1.4) (1.4)

Non

-

GAAP operating income $ 386.1 $ 503.6 $ 544.7 $ 650.9 $ 526.2 $ 539.8 $ 636.8 $ 709.9 $ 662.1

GAAP provision for income taxes $ 39.5 $ 76.5 $ 81.2 $ 86.7 $ 96.5 $ 77.1 $ 120.7 $ 144.8 $ 122.0

Tax adjustments related to the above 30.3 14.3 19.8 31.5 2.8 30.8 2.4 (12.4) 11.0

Non

-

GAAP provision for income taxes $ 69.8 $ 90.8 $ 101.0 $ 118.2 $ 99.3 $ 107.9 $ 123.1 $ 132.4 $ 133.0

Non

-

GAAP effective tax rate

17% 17% 17% 17% 18% 18% 18% 18% 18%

GAAP net income $ 299.3 $ 379.8 $ 539.9 $ 526.2 $ 433.4 $ 440.1 $ 473.9 $ 506.0 $ 534.5

Stock

-

based compensation 63.0 64.3 66.4 66.5 66.9 69.9 72.2 73.1 73.2

Amortization of acquired intangible assets 3.0 3.3 5.3 11.5 11.8 13.2 13.1 12.6 10.3

Litigation related matters - - 3.2 - - - 5.6 - -

Gain on IP matters (1.1) (1.2) (1.1) (1.2) (6.3) (1.3) (1.4) (1.4) (1.4)

Gain on bargain purchase - - (106.3) - (39.9) - - - -

Tax adjustment (30.3) (14.3) (19.8) (31.5) (2.8) (30.8) (2.4) 12.4 (11.0)

Gain from equity method investment - - - - (10.8) - - - -

Non-cash charge on equity method investment - 8.0 - - - - - - -

Non-GAAP net income $ 333.9 $ 439.9 $ 487.6 $ 571.5 $ 452.3 $ 491.1 $ 561.0 $ 602.7 $ 605.6

GAAP net income per share, diluted $ 0.39 $ 0.49 $ 0.70 $ 0.68 $ 0.56 $ 0.57 $ 0.62 $ 0.68 $ 0.72

Stock

-

based compensation 0.08 0.08 0.09 0.09 0.09 0.09 0.09 0.10 0.10

Amortization of acquired intangible assets - 0.01 0.01 0.01 0.01 0.02 0.02 0.02 0.01

Litigation related matters - - - - - - 0.01 - -

Gain on IP matters - - - - (0.01) - - (0.01) -

Gain on bargain purchase - - (0.14) - (0.05) - - - -

Tax adjustment (0.04) (0.02) (0.03) (0.04) (0.01) (0.04) - 0.02 (0.01)

Gain from equity method investment - - - - (0.01) - - - -

Non-cash charge on equity method investment - 0.01 - - - - - - -

Non-GAAP net income per share, diluted $ 0.43 $ 0.57 $ 0.63 $ 0.74 $ 0.58 $ 0.64 $ 0.74 $ 0.81 $ 0.82

Shares used in diluted net income per share calculations 770.5 769.9 771.9 775.2 776.8 772.7 761.2 748.0 742.8

Q1'24 Q2'24 Q3'24 Q4'24 Q1'25 Q2'25 Q3'25 Q4'25 Q1'26