Fortinet, Inc. Files 2023 Annual Report on Form 10-K

TL;DR

<b>Fortinet, Inc. has filed its 2023 10-K report detailing financial performance and business operations.</b>

AI Summary

Fortinet, Inc. (FTNT) filed a Annual Report (10-K) with the SEC on February 26, 2024. Fortinet, Inc. filed its 2023 Form 10-K on February 26, 2024, reporting on its fiscal year ended December 31, 2023. The filing covers financial data and business operations for the fiscal year 2023. Key financial statement information, including balance sheets and income statements, is presented for the fiscal years 2023, 2022, and 2021. The report details segment information for products and services. Shareholder equity components such as Common Stock, Additional Paid-In Capital, Accumulated Other Comprehensive Income, Retained Earnings, and Noncontrolling Interest are detailed as of December 31, 2023, 2022, and 2021.

Why It Matters

For investors and stakeholders tracking Fortinet, Inc., this filing contains several important signals. This 10-K filing provides a comprehensive overview of Fortinet's financial health and operational results for the fiscal year 2023, crucial for investors to assess performance and future outlook. The detailed financial statements and segment reporting allow stakeholders to understand revenue streams and profitability drivers, aiding in investment decisions.

Risk Assessment

Risk Level: medium — Fortinet, Inc. shows moderate risk based on this filing. The filing is a standard 10-K, which is a routine annual report. While it contains detailed financial information, it does not inherently signal immediate positive or negative developments beyond the company's disclosed performance.

Analyst Insight

Investors should review the detailed financial statements and management discussion within the 10-K to understand Fortinet's performance drivers and any disclosed risks or opportunities.

Revenue Breakdown

Key Numbers

• 2023 — Fiscal Year (Reporting period for the 10-K.)
• 2022 — Fiscal Year (Comparative period in financial statements.)
• 2021 — Fiscal Year (Comparative period in financial statements.)

Key Players & Entities

• Fortinet, Inc. (company) — Filer of the 10-K report.
• 2023-12-31 (date) — Fiscal year end date.
• 2024-02-26 (date) — Filing date of the 10-K.
• 909 KIFER ROAD (address) — Business and mailing address.
• SUNNYVALE (location) — City of business and mailing address.
• CA (location) — State of business and mailing address.
• 94086 (postal_code) — ZIP code of business and mailing address.
• 408-235-7700 (phone_number) — Business phone number.

FAQ

Key Dates

• 2023-12-31: Fiscal Year End — End of the reporting period for the 10-K.
• 2024-02-26: Filing Date — Date Fortinet, Inc. filed its 10-K report.

Key Financial Figures

• $0.001 — ange on which registered Common Stock, $0.001 Par Value FTNT The Nasdaq Stock Market
• $5.30 billion — 31, 2023, we generated total revenue of $5.30 billion and net income of $1.15 billion. See Pa
• $1.15 billion — enue of $5.30 billion and net income of $1.15 billion. See Part II, Item 8 of this Annual Rep

Filing Documents

• ftnt-20231231.htm (10-K) — 2487KB
• ftnt-ex42_20231231xk.htm (EX-4.2) — 26KB
• ftnt-ex211_20231231xk.htm (EX-21.1) — 31KB
• ftnt-ex231_20231231xk.htm (EX-23.1) — 2KB
• ftnt-ex311_20231231xk.htm (EX-31.1) — 10KB
• ftnt-ex312_20231231xk.htm (EX-31.2) — 9KB
• ftnt-ex321_20231231xk.htm (EX-32.1) — 10KB
• ftnt-ex971_20231231xk.htm (EX-97.1) — 61KB
• ftnt-20231231_g1.jpg (GRAPHIC) — 56KB
• 0001262039-24-000014.txt (&nbsp;) — 12656KB
• ftnt-20231231.xsd (EX-101.SCH) — 77KB
• ftnt-20231231_cal.xml (EX-101.CAL) — 127KB
• ftnt-20231231_def.xml (EX-101.DEF) — 415KB
• ftnt-20231231_lab.xml (EX-101.LAB) — 1056KB
• ftnt-20231231_pre.xml (EX-101.PRE) — 718KB
• ftnt-20231231_htm.xml (XML) — 1922KB

Risk Factors

Item 1A. Risk Factors 8

Unresolved Staff Comments

Item 1B. Unresolved Staff Comments 43 Item 1C. C ybersecurity 43

Properties

Item 2. Properties 45

Legal Proceedings

Item 3. Legal Proceedings 46

Mine Safety Disclosures

Item 4. Mine Safety Disclosures 46 Part II

Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 46

[Reserved]

Item 6. [Reserved] 48

Management's Discussion and Analysis of Financial Condition and Results of Operations

Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations 49

Quantitative and Qualitative Disclosures about Market Risk

Item 7A. Quantitative and Qualitative Disclosures about Market Risk 66

Financial Statements and Supplementary Data

Item 8. Financial Statements and Supplementary Data 68

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 107

Controls and Procedures

Item 9A. Controls and Procedures 107

Other Information

Item 9B. Other Information 109

Disclosure Regarding Foreign Jurisdictions that Prevents Inspections

Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevents Inspections 109 Part III

Directors, Executive Officers and Corporate Governance

Item 10. Directors, Executive Officers and Corporate Governance 109

Executive Compensation

Item 11. Executive Compensation 109

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters 109

Certain Relationships and Related Transactions, and Director Independence

Item 13. Certain Relationships and Related Transactions, and Director Independence 110

Principal Accounting Fees and Services

Item 14. Principal Accounting Fees and Services 110 Part IV

Exhibits and Financial Statement Schedules

Item 15. Exhibits and Financial Statement Schedules 111 Exhibit Index 112

Form 10-K Summary

Item 16. Form 10-K Summary 114

Signatures

Signatures 115 Table of Contents Summary of Risk Factors Our business is subject to numerous risks and uncertainties, including those described in Part I, Item 1A, "Risk Factors" in this Annual Report on Form 10-K. 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, increasing or decreasing interest rates, instability in the global banking system or reduced information technology 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, as a result, may be required to accept or pay for components and finished goods regardless of our level of sales in a particular period, which may negatively impact our operating results and financial condition. Our billings, revenue, and free cash flow growth may slow further or may not continue, and our operating margins may decline. Our real estate investments, including construction, acquisitions, sales, or strategy changes, and ongoing maintenance and management of office buildings, warehouses, data centers and points of presence, as well as data center expansions or enhancements, could involve significant risks to our business. Our backlog has fluctuated over past quarters and any decrease in growth or negative growth of in-quarter billings and revenue may not be reflected by o

Business

ITEM 1. Business Overview Fortinet is a leader in cybersecurity and 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 Secure Access Service Edge ("SASE") and AI-driven security operations to deliver cybersecurity where our customers need it. As of December 31, 2023, over a half million customers trusted our solutions, including enterprises such as in the financial services, retail and operational technology market verticals, communication and security service providers, government organizations and small and medium-sized businesses. As a global company headquartered in Sunnyvale, California with a large international customer base, the majority of our research and development is in the United States and Canada with a global footprint of support and centers of excellence around the world. As of December 31, 2023, we held 957 U.S. patents and 1,299 global patents and we are recognized in over 80 enterprise analyst reports demonstrating both our vision and execution across networking and security products. Secure Networking —Our Secure Networking solutions focus on the convergence of networking and security via our network firewall and our switches, access points and other secure connectivity solutions. FortiOS is our networking and security operating system that is consistent across our firewalls and secure connectivity solutions and supports over 30 functions that can be delivered via a physical, virtual, cloud or Software as a Service ("SaaS") solution. When delivered via our network firewall appliances, functionality is accelerated through our proprietary Application-Specific Integrated Circuits ("ASIC") technology. These proprietary ASICs, combined with off-the-shelf central processing units ("CPUs") and ASICs, allow our systems to scale, run multiple applications at higher performance, lower power consumption and pe

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View this 10-K filing on SEC EDGAR