Raises 2026 eve ue guida ce to 20% yea ove yea g owth
- Reve ue g ew 20% yea ove yea to $2.08 billio
- P oduct eve ue g ew 37% yea ove yea to $765 millio
- Billi gs g ew 29% yea ove yea to $2.34 billio 1
- GAAP ope ati g ma gi of 34%
- No -GAAP ope ati g ma gi of 38%1
- GAAP ea i gs pe sha e of $0.86
- No -GAAP ea i gs pe sha e of $0.911
- Ope ati g cash flow of $946 millio
- F ee cash flow of $865 millio 1
- Sha e epu chase autho izatio i c eased by $1.2 billio ; emai i g autho izatio of $2 billio
SUNNYVALE, Calif., Oct. 28, 2026 (GLOBE NEWSWIRE) — Fo ti et® (Nasdaq: FTNT), a global cybe secu ity leade d ivi g the co ve ge ce of etwo ki g a d secu ity, today a ou ced fi a cial esults fo the thi d qua te e ded Septembe 30, 2026.
“We a e ve y pleased with ou excelle t thi d qua te esults, which eflect st o g executio a d b oad-based dema d ac oss ou e ti e po tfolio, allowi g us to aise ou 2026 billi gs guida ce fo the thi d time this yea ,” said Ke Xie, Fou de , Chai ma a d Chief Executive Office of Fo ti et. “Ou st o g mome tum is d ive by ou co ti ued leade ship i the AI e a. As AI i t oduces e ti ely ew attack su faces, Netwo k Secu ity emai s the c itical fou datio of AI Secu ity. Powe ed by ou si gle Fo tiOS ope ati g system a d p op ieta y Fo tiASIC tech ology, ou u ified platfo m app oach secu es c itical AI i f ast uctu e while delive i g i dust y-leadi g pe fo ma ce a d a sig ifica tly lowe total cost of ow e ship.”
- A ou ced the ew Fo tiGua d I li e AI Secu ity Se vice, delive i g AI-specific i spectio a d gua d ails to Fo tiGate custome s th ough a cloud-delive ed se vice, e abli g o ga izatio s to gai deepe visibility i to AI activity a d stop AI th eats a d data exposu e th ough the Fo ti et solutio s they al eady use.
- A ou ced the Fo tiLi k SASE se vice, givi g o ga izatio s a simple way to secu e small b a ch office, emote facilities, a d othe dist ibuted locatio s without equi i g a dedicated o -site fi ewall. By co ecti g local etwo ks to Fo tiSASE, o ga izatio s ca p otect a d ma age wi ed a d wi eless devices th ough a simplified, cloud-delive ed se vice while ma agi g etwo ki g a d secu ity f om a si gle co sole.
- Selected by NVIDIA as a top Ope Shell Refe e ce A chitectu e Pa t e to Secu e AI.
- O acle a d Fo ti et a ou ced a collabo atio to help e te p ises secu ely accele ate AI adoptio , combi i g OCI E te p ise AI with Fo tiAIGate to p otect a d gove AI applicatio s a d age ts at scale while mai tai i g visibility a d co t ol.
- Selected by Mic osoft to joi its Sove eig Pa t e Ecosystem based o Fo ti et’s sove eig solutio st e gth, to togethe delive t usted sove eig AI secu ity solutio s to highly egulated i dust ies.
- Recog ized as a Leade i the 2026 Ga t e Magic Quad a t fo Hyb id Mesh Fi ewall a d positio ed highest fo Ability to Execute fo the seco d co secutive yea .
Fo the fou th qua te of 2026, Fo ti et cu e tly expects:
- Reve ue i the a ge of $2.155 billio to $2.245 billio
- Billi gs i the a ge of $2.775 billio to $2.925 billio
- No -GAAP g oss ma gi i the a ge of 78.0% to 80.0%
- No -GAAP ope ati g ma gi i the a ge of 35.5% to 37.5%
- Diluted o -GAAP et i come pe sha e i the a ge of $0.93 to $0.95, assumi g a o -GAAP effective tax ate of 18%. This assumes a diluted sha e cou t of 741 millio to 745 millio .
Fo the fiscal yea 2026, Fo ti et cu e tly expects:
- Reve ue i the a ge of $8.125 billio to $8.215 billio
- Se vice eve ue i the a ge of $5.150 billio to $5.170 billio
- Billi gs i the a ge of $9.568 billio to $9.718 billio
- No -GAAP g oss ma gi i the a ge of 79.7% to 80.3%
- No -GAAP ope ati g ma gi i the a ge of 36.5% to 37.5%
- Diluted o -GAAP et i come pe sha e i the a ge of $3.54 to $3.58, assumi g a o -GAAP effective tax ate of 18%. This assumes a diluted sha e cou t of 741 millio to 743 millio .
These stateme ts a e fo wa d looki g a d actual esults may diffe mate ially. Refe to the Fo wa d-Looki g Stateme ts sectio below fo i fo matio o the facto s that could cause ou actual esults to diffe mate ially f om these fo wa d-looki g stateme ts.
Ou guida ce with espect to o -GAAP fi a cial measu es excludes stock-based compe satio , amo tizatio of acqui ed i ta gible assets, gai o i tellectual p ope ty matte s, a gai f om a esc ow settleme t a d a tax adjustme t equi ed fo a effective tax ate o a o -GAAP basis, which diffe s f om the GAAP effective tax ate. We have ot eco ciled ou guida ce with espect to o -GAAP fi a cial measu es to the co espo di g GAAP measu es because ce tai items that impact these measu es a e u ce tai o out of ou co t ol o ca ot be easo ably p edicted. Acco di gly, a eco ciliatio of these o -GAAP fi a cial measu es to the co espo di g GAAP measu es is ot available without u easo able effo t.
Fo ti et will host a co fe e ce call today at 1:30 p.m. Pacific Time (4:30 p.m. Easte Time) to discuss the ea i gs esults. A live webcast of the co fe e ce call a d suppleme tal slides will be accessible f om the I vesto Relatio s page of Fo ti et’s website at https://i vesto .fo ti et.com a d a eplay will be a chived a d accessible at https://i vesto .fo ti et.com/eve ts-a d-p ese tatio s.
BMO Tech ology a d I ovatio Leade s Co fe e ce Novembe 12, 2026
UBS Global Tech ology a d AI Co fe e ce Decembe 2, 2026
Ba clays Global Tech ology Co fe e ce Decembe 9, 2026
Membe s of Fo ti et’s ma ageme t team a e expected to p ese t at these co fe e ces a d discuss the latest compa y st ategies a d i itiatives. Fo ti et’s co fe e ce p ese tatio s a e expected to be available via webcast o the compa y’s website. To access the most updated i fo matio , p e- egiste a d liste to the webcast of each eve t, please visit the I vesto P ese tatio & Eve ts page of Fo ti et’s website at https://i vesto .fo ti et.com/eve ts-a d-p ese tatio s. The schedule is subject to cha ge.
Fo ti et (Nasdaq: FTNT) is a d ivi g fo ce i the evolutio of cybe secu ity a d the co ve ge ce of etwo ki g a d secu ity. Ou missio is to secu e people, devices a d data eve ywhe e, a d today we delive cybe secu ity eve ywhe e ou custome s eed it with the la gest i teg ated po tfolio of ove 50 e te p ise-g ade p oducts. Ove o e millio lifetime custome s t ust Fo ti et’s solutio s, which a e amo g the most deployed, most pate ted a d most validated i the i dust y. The Fo ti et T ai i g I stitute, o e of the la gest a d b oadest t ai i g p og ams i the i dust y, is dedicated to maki g cybe secu ity t ai i g a d ew ca ee oppo tu ities available to eve yo e. Collabo atio with esteemed o ga izatio s f om both the public a d p ivate secto s, i cludi g Compute Eme ge cy Respo se Teams (“CERTs”), gove me t e tities, a d academia, is a fu dame tal aspect of Fo ti et’s commitme t to e ha ce cybe esilie ce globally. Fo tiGua d Labs, Fo ti et’s elite th eat i tellige ce a d esea ch o ga izatio , develops a d utilizes leadi g-edge machi e lea i g a d AI tech ologies to p ovide custome s with timely a d co siste tly top- ated p otectio a d actio able th eat i tellige ce. Lea mo e at https://www.fo ti et.com, the Fo ti et Blog o Fo tiGua d Labs.
This p ess elease co tai s fo wa d-looki g stateme ts that i volve isks a d u ce tai ties. These fo wa d-looki g stateme ts i clude stateme ts ega di g a y i dicatio s elated to futu e g owth a d ma ket sha e gai s, ou st ategy goi g fo wa d, a d guida ce a d expectatio s a ou d futu e fi a cial esults, i cludi g guida ce a d expectatio s fo the fou th qua te a d full yea 2026, a d a y stateme ts ega di g ou ma ket oppo tu ity a d ma ket size, a d busi ess mome tum. Although we attempt to be accu ate i maki g fo wa d-looki g stateme ts, it is possible that futu e ci cumsta ces might diffe f om the assumptio s o which such stateme ts a e based such that actual esults a e mate ially diffe e t f om ou fo wa d-looki g stateme ts i this elease. Impo ta t facto s that could cause esults to diffe mate ially f om the stateme ts he ei i clude the followi g: ge e al eco omic isks, i cludi g those caused by eco omic challe ges, a possible eco omic dow tu o ecessio a d the effects of i flatio o stagflatio , cha gi g i te est ates o educed i fo matio tech ology spe di g; supply chai challe ges; egative impacts f om global co flicts a d thei elated mac oeco omic effects; competitive ess i the secu ity ma ket; the dy amic atu e of the secu ity ma ket a d its p oducts a d se vices; specific eco omic isks wo ldwide a d i diffe e t geog aphies, a d amo g diffe e t custome segme ts; u ce tai ty ega di g dema d a d i c eased busi ess a d e ewals f om existi g custome s; sales executio isks, i cludi g isks i co ectio with the timi g a d completio of la ge st ategic deals; u ce tai ties a ou d co ti ued success i sales g owth a d ma ket sha e gai s; u ce tai ties i ma ket oppo tu ities a d the ma ket size; actual o pe ceived vul e abilities i ou supply chai , p oducts o se vices, a d a y actual o pe ceived b each of ou etwo k o ou custome s’ etwo ks; lo ge sales cycles, pa ticula ly fo la ge e te p ise, se vice p ovide s, gove me t a d othe la ge o ga izatio custome s; the effective ess of ou salesfo ce a d failu e to co ve t sales pipeli e i to fi al sales; isks associated with successful impleme tatio of multiple i teg ated softwa e p oducts a d othe p oduct fu ctio ality isks; isks associated with i teg ati g acquisitio s a d cha ges i ci cumsta ces a d pla s associated the ewith, i cludi g, amo g othe isks, cha ges i pla s elated to p oduct a d se vices i teg atio s, p oduct a d se vices pla s a d sales st ategies; sales a d ma keti g executio isks; executio isks a ou d ew p oduct developme t a d i t oductio s a d i ovatio ; litigatio a d disputes a d the pote tial cost, dist actio a d damage to sales a d eputatio caused the eby o by othe facto s; cybe secu ity th eats, b eaches a d othe dis uptio s; ma ket accepta ce of ew p oducts a d se vices; the ability to att act a d etai pe so el; cha ges i st ategy; isks associated with ma ageme t of g owth; le gthy sales a d impleme tatio cycles, pa ticula ly i la ge o ga izatio s; tech ological cha ges that make ou p oducts a d se vices less competitive, i cludi g adva ces i a tificial i tellige ce; isks associated with the adoptio of, a d dema d fo , ou p oducts a d se vices i ge e al a d by specific custome segme ts, i cludi g those caused by competitio a d p ici g p essu e; excess p oduct i ve to y fo a y easo , i cludi g those caused by the effects of i flatio a d cha gi g i te est ates i ce tai geog aphies a d the wa i Uk ai e, te sio s betwee Chi a a d Taiwa o co flicts i the Middle East; isks associated with busi ess dis uptio caused by atu al disaste s a d health eme ge cies such as ea thquakes, fi es, powe outages, typhoo s, floods, health epidemics a d vi uses, a d by ma made eve ts such as civil u est, labo dis uptio , i te atio al t ade disputes, i te atio al co flicts such as the wa i Uk ai e, te sio s betwee Chi a a d Taiwa o co flicts i the Middle East, te o ism, wa s, a d c itical i f ast uctu e attacks; ta iffs, t ade disputes a d othe t ade ba ie s, a d egative impact o sales based o geo-political dy amics a d disputes a d p otectio ist policies, i cludi g the impact of a y futu e shutdow s of the U.S. gove me t; a d the othe isk facto s set fo th f om time to time i ou most ece t A ual Repo t o Fo m 10-K, ou most ece t Qua te ly Repo t o Fo m 10-Q a d ou othe fili gs with the Secu ities a d Excha ge Commissio (“SEC”), copies of which a e available f ee of cha ge at the SEC’s website at www.sec.gov o upo equest f om ou i vesto elatio s depa tme t. All fo wa d-looki g stateme ts he ei eflect ou opi io s o ly as of the date of this elease, a d we u de take o obligatio , a d exp essly disclaim a y obligatio , to update fo wa d-looki g stateme ts he ei i light of ew i fo matio o futu e eve ts.
We believe that the p ese tatio of o -GAAP fi a cial i fo matio p ovides impo ta t suppleme tal i fo matio to ma ageme t a d i vesto s ega di g fi a cial a d busi ess t e ds elati g to ou fi a cial co ditio a d esults of ope atio s. Fo fu the i fo matio ega di g why we believe that these o -GAAP measu es p ovide useful i fo matio to i vesto s, the specific ma e i which ma ageme t uses these measu es, a d some of the limitatio s associated with the use of these measu es, please efe to the “Expla atio of No -GAAP Fi a cial Measu es” sectio of this p ess elease.
| CURRENT ASSETS: | Cash a d cash equivale ts | $ | 3,750.6 | $ | 2,495.3 | Sho t-te m i vestme ts | 1,048.4 | 1,087.2 | Accou ts eceivable— et | 1,461.0 | 1,691.2 | I ve to y | 591.2 | 399.5 | P epaid expe ses a d othe cu e t assets | 256.8 | 227.0 | Total cu e t assets | 7,108.0 | 5,900.2 | LONG-TERM INVESTMENTS | 519.4 | 339.7 | PROPERTY AND EQUIPMENT—NET | 1,729.5 | 1,619.0 | DEFERRED CONTRACT COSTS | 815.4 | 735.5 | DEFERRED TAX ASSETS | 1,306.9 | 1,314.9 | GOODWILL AND OTHER INTANGIBLE ASSETS—NET | 348.1 | 354.7 | OTHER ASSETS | 115.5 | 125.2 | TOTAL ASSETS | $ | 11,942.8 | $ | 10,389.2 | CURRENT LIABILITIES: | Accou ts payable | $ | 430.3 | $ | 230.8 | Acc ued liabilities | 380.3 | 354.6 | Acc ued pay oll a d compe satio | 315.9 | 312.9 | Cu e t po tio of lo g-te m debt | — | 499.7 | Defe ed eve ue | 3,961.0 | 3,636.0 | Total cu e t liabilities | 5,087.5 | 5,034.0 | DEFERRED REVENUE | 3,973.4 | 3,479.8 | LONG-TERM DEBT | 497.1 | 496.6 | OTHER LIABILITIES | 138.0 | 141.3 | Total liabilities | 9,696.0 | 9,151.7 | COMMITMENTS AND CONTINGENCIES | STOCKHOLDERS’ EQUITY: | Commo stock | 0.7 | 0.7 | Additio al paid-i capital | 1,959.7 | 1,770.1 | Accumulated othe comp ehe sive loss | (32.4 | ) | (25.4 | ) | Retai ed ea i gs (accumulated deficit) | 318.8 | (507.9 | ) | Total stockholde s’ equity | 2,246.8 | 1,237.5 | TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | $ | 11,942.8 | $ | 10,389.2 |
| REVENUE: | P oduct | $ | 765.0 | $ | 559.3 | $ | 2,183.1 | $ | 1,527.3 | Se vice | 1,313.4 | 1,165.6 | 3,792.8 | 3,367.3 | Total eve ue | 2,078.4 | 1,724.9 | 5,975.9 | 4,894.6 | COST OF REVENUE: | P oduct | 272.6 | 180.7 | 714.7 | 496.5 | Se vice | 164.9 | 151.0 | 492.0 | 443.2 | Total cost of eve ue | 437.5 | 331.7 | 1,206.7 | 939.7 | GROSS PROFIT: | P oduct | 492.4 | 378.6 | 1,468.4 | 1,030.8 | Se vice | 1,148.5 | 1,014.6 | 3,300.8 | 2,924.1 | Total g oss p ofit | 1,640.9 | 1,393.2 | 4,769.2 | 3,954.9 | OPERATING EXPENSES: | Resea ch a d developme t | 213.4 | 202.4 | 652.4 | 610.5 | Sales a d ma keti g | 665.0 | 583.5 | 1,970.4 | 1,718.2 | Ge e al a d admi ist ative | 59.6 | 61.4 | 176.9 | 176.1 | Gai o i tellectual p ope ty matte s | (1.4 | ) | (1.4 | ) | (4.1 | ) | (9.0 | ) | Total ope ati g expe ses | 936.6 | 845.9 | 2,795.6 | 2,495.8 | OPERATING INCOME | 704.3 | 547.3 | 1,973.6 | 1,459.1 | INTEREST INCOME | 42.7 | 40.7 | 108.8 | 130.0 | INTEREST EXPENSE | (3.0 | ) | (6.2 | ) | (10.4 | ) | (15.7 | ) | OTHER INCOME—NET | 11.0 | 13.0 | 59.8 | 58.0 | INCOME BEFORE INCOME TAXES AND GAIN (LOSS) FROM EQUITY METHOD INVESTMENTS | 755.0 | 594.8 | 2,131.8 | 1,631.4 | PROVISION FOR INCOME TAXES | 119.5 | 120.7 | 356.5 | 294.3 | GAIN (LOSS) FROM EQUITY METHOD INVESTMENTS | — | (0.2 | ) | 1.0 | 10.3 | NET INCOME | $ | 635.5 | $ | 473.9 | $ | 1,776.3 | $ | 1,347.4 | Net i come pe sha e: | Basic | $ | 0.87 | $ | 0.63 | $ | 2.42 | $ | 1.77 | Diluted | $ | 0.86 | $ | 0.62 | $ | 2.39 | $ | 1.75 | Weighted-ave age sha es outsta di g: | Basic | 734.2 | 755.5 | 735.3 | 763.1 | Diluted | 742.6 | 761.2 | 741.7 | 770.2 |
| CASH FLOWS FROM OPERATING ACTIVITIES: | Net i come | $ | 1,776.3 | $ | 1,347.4 | Adjustme ts to eco cile et i come to et cash p ovided by ope ati g activities: | Stock-based compe satio | 231.9 | 207.0 | Amo tizatio of defe ed co t act costs | 290.2 | 246.0 | Dep eciatio a d amo tizatio | 120.6 | 112.5 | Amo tizatio of i vestme t discou ts | (13.3 | ) | (27.3 | ) | Othe | (41.7 | ) | (53.1 | ) | Cha ges i ope ati g assets a d liabilities, et of impact of busi ess combi atio s: | Accou ts eceivable— et | 231.1 | 308.7 | I ve to y | (208.7 | ) | (109.1 | ) | P epaid expe ses a d othe cu e t assets | (3.0 | ) | (64.3 | ) | Defe ed co t act costs | (370.1 | ) | (305.3 | ) | Defe ed tax assets | 8.9 | 13.7 | Othe assets | (10.6 | ) | (13.6 | ) | Accou ts payable | 202.4 | 11.5 | Acc ued liabilities | 39.7 | (15.5 | ) | Acc ued pay oll a d compe satio | 3.0 | 16.3 | Defe ed eve ue | 817.8 | 288.1 | Othe liabilities | (7.8 | ) | 7.4 | Net cash p ovided by ope ati g activities | 3,066.7 | 1,970.4 | CASH FLOWS FROM INVESTING ACTIVITIES: | Pu chases of i vestme ts | (1,161.4 | ) | (1,512.6 | ) | Sales of i vestme ts | 118.4 | 5.7 | Matu ities of i vestme ts | 954.8 | 1,317.6 | Pu chases of p ope ty a d equipme t | (212.8 | ) | (322.0 | ) | Payme ts made i co ectio with busi ess combi atio s, et of cash acqui ed | (9.8 | ) | (41.6 | ) | Othe | 8.4 | 0.1 | Net cash used i i vesti g activities | (302.4 | ) | (552.8 | ) | CASH FLOWS FROM FINANCING ACTIVITIES: | Repu chase a d eti eme t of commo stock | (972.8 | ) | (2,232.6 | ) | Repayme t of se io otes | (500.0 | ) | — | P oceeds f om issua ce of commo stock | 85.0 | 37.6 | Taxes paid elated to et sha e settleme t of equity awa ds | (99.2 | ) | (103.7 | ) | Othe | (22.0 | ) | (0.1 | ) | Net cash used i fi a ci g activities | (1,509.0 | ) | (2,298.8 | ) | EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS | — | 1.0 | NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | 1,255.3 | (880.2 | ) | CASH AND CASH EQUIVALENTS—Begi i g of pe iod | 2,495.3 | 2,875.9 | CASH AND CASH EQUIVALENTS—E d of pe iod | $ | 3,750.6 | $ | 1,995.7 |
| $ | 2,078.4 | $ | 1,724.9 | GAAP g oss p ofit | $ | 1,640.9 | $ | 1,393.2 | GAAP g oss ma gi | 79.0 | % | 80.8 | % | Stock‐based compe satio | 8.6 | 7.5 | Amo tizatio of acqui ed i ta gible assets | 5.9 | 7.2 | No ‐GAAP g oss p ofit | $ | 1,655.4 | $ | 1,407.9 | No ‐GAAP g oss ma gi | 79.6 | % | 81.6 | % | GAAP ope ati g i come | $ | 704.3 | $ | 547.3 | GAAP ope ati g ma gi | 33.9 | % | 31.7 | % | Stock‐based compe satio | 82.0 | 72.2 | Amo tizatio of acqui ed i ta gible assets | 8.9 | 13.1 | Litigatio elated matte s | — | 5.6 | Gai o i tellectual p ope ty matte s | (1.4 | ) | (1.4 | ) | No ‐GAAP ope ati g i come | $ | 793.8 | $ | 636.8 | No ‐GAAP ope ati g ma gi | 38.2 | % | 36.9 | % | GAAP et i come | $ | 635.5 | $ | 473.9 | Stock‐based compe satio | 82.0 | 72.2 | Amo tizatio of acqui ed i ta gible assets | 8.9 | 13.1 | Litigatio elated matte s | — | 5.6 | Gai o i tellectual p ope ty matte s | (1.4 | ) | (1.4 | ) | Gai f om esc ow settleme t (a) | (17.0 | ) | — | Tax adjustme t (b) | (29.4 | ) | (2.4 | ) | No -GAAP et i come | $ | 678.6 | $ | 561.0 | GAAP et i come pe sha e, diluted | $ | 0.86 | $ | 0.62 | No -GAAP adjustme ts to et i come pe sha e | 0.05 | 0.12 | No -GAAP et i come pe sha e, diluted | $ | 0.91 | $ | 0.74 | 742.6 | 761.2 |
(a) To exclude a $17.0 millio gai f om the esc ow settleme t elated to a p io busi ess combi atio i the th ee mo ths e ded Septembe 30, 2026.
(b) No -GAAP fi a cial i fo matio is adjusted to a effective tax ate of 18% i each pe iod fo the th ee mo ths e ded Septembe 30, 2026 a d 2025, o a o -GAAP basis, which diffe s f om the GAAP effective tax ate.
| Net cash p ovided by ope ati g activities | $ | 946.0 | $ | 655.2 | Less: Pu chases of p ope ty a d equipme t | (64.2 | ) | (87.7 | ) | Less: P oceeds f om esc ow settleme t | (17.0 | ) | — | F ee cash flow | $ | 864.8 | $ | 567.5 | Add: Real estate elated pu chases | 47.4 | 78.4 | Adjusted f ee cash flow | $ | 912.2 | $ | 645.9 | F ee cash flow ma gi | 41.6 | % | 32.9 | % | Adjusted f ee cash flow ma gi | 43.9 | % | 37.4 | % | Net cash used i i vesti g activities | $ | (112.1 | ) | $ | (175.8 | ) | Net cash used i fi a ci g activities | $ | (18.2 | ) | $ | (1,851.9 | ) |
| Total eve ue | $ | 2,078.4 | $ | 1,724.9 | Add: Cha ge i defe ed eve ue | 258.7 | 82.8 | Less: Defe ed eve ue bala ce acqui ed i busi ess combi atio | (0.8 | ) | — | Total billi gs | $ | 2,336.3 | $ | 1,807.7 |
We have p ovided i this elease fi a cial i fo matio that has ot bee p epa ed i acco da ce with U.S. Ge e ally Accepted Accou ti g P i ciples (“GAAP”). These o -GAAP fi a cial a d liquidity measu es a e ot based o a y sta da dized methodology p esc ibed by GAAP a d a e ot ecessa ily compa able to simila measu es p ese ted by othe compa ies. We use these o -GAAP fi a cial measu es i te ally i a alyzi g ou fi a cial esults a d believe they a e useful to i vesto s, as a suppleme t to GAAP measu es, i evaluati g ou o goi g ope atio al pe fo ma ce. We believe that the use of these o -GAAP fi a cial measu es p ovides a additio al tool fo i vesto s to use i evaluati g o goi g ope ati g esults a d t e ds a d i compa i g ou fi a cial esults with pee compa ies, ma y of which p ese t simila o -GAAP fi a cial measu es to i vesto s.
No -GAAP fi a cial measu es should ot be co side ed i isolatio f om, o as a substitute fo , fi a cial i fo matio p epa ed i acco da ce with GAAP. I vesto s a e e cou aged to eview the eco ciliatio of these o -GAAP fi a cial measu es to thei most di ectly compa able GAAP fi a cial measu es p ovided i the fi a cial stateme t tables below.
Billi gs ( o -GAAP). We defi e billi gs as eve ue ecog ized i acco da ce with GAAP plus the cha ge i defe ed eve ue f om the begi i g to the e d of the pe iod less a y defe ed eve ue bala ces acqui ed f om busi ess combi atio (s) du i g the pe iod. We co side billi gs to be a useful met ic fo ma ageme t a d i vesto s because billi gs d ive cu e t a d futu e eve ue as well as cash flows. The e a e a umbe of limitatio s elated to the use of billi gs i stead of GAAP eve ue. Fi st, billi gs a e impacted by the te m of secu ity subsc iptio a d suppo t ag eeme ts a d do ot p ovide a i dicatio as to the timi g of eve ue bei g ecog ized f om these se vice co t acts. Seco d, we may calculate billi gs i a ma e that is diffe e t f om pee compa ies that epo t simila fi a cial measu es. Ma ageme t accou ts fo these limitatio s by p ovidi g specific i fo matio ega di g GAAP eve ue a d evaluati g billi gs togethe with GAAP eve ue.
F ee cash flow ( o -GAAP). We defi e f ee cash flow as et cash p ovided by ope ati g activities mi us pu chases of p ope ty a d equipme t a d excludi g a y sig ifica t o – ecu i g items, such as p oceeds f om esc ow settleme ts. F ee cash flow ma gi is defi ed as f ee cash flow divided by GAAP eve ue. We believe f ee cash flow to be a liquidity measu e that p ovides useful i fo matio to ma ageme t a d i vesto s about the amou t of cash ge e ated by the busi ess that, afte capital expe ditu es, ca be used fo st ategic oppo tu ities, i cludi g epu chasi g outsta di g commo stock, i vesti g i ou busi ess, maki g st ategic acquisitio s a d st e gthe i g the bala ce sheet. A limitatio of usi g f ee cash flow athe tha the GAAP measu es of cash p ovided by o used i ope ati g activities, i vesti g activities, a d fi a ci g activities is that f ee cash flow does ot ep ese t the total i c ease o dec ease i the cash a d cash equivale ts bala ce fo the pe iod because it excludes i vesti g activities othe tha capital expe ditu es a d cash flows f om fi a ci g activities. Ma ageme t accou ts fo this limitatio by p ovidi g i fo matio about ou capital expe ditu es a d othe i vesti g a d fi a ci g activities o the face of the cash flow stateme t a d u de the captio “Ma ageme t’s Discussio a d A alysis of Fi a cial Co ditio a d Results of Ope atio s—Liquidity a d Capital Resou ces” i ou most ece t Qua te ly Repo t o Fo m 10-Q a d A ual Repo t o Fo m 10-K a d by p ese ti g cash flows f om i vesti g a d fi a ci g activities i ou eco ciliatio of f ee cash flow. I additio , it is impo ta t to ote that othe compa ies, i cludi g compa ies i ou i dust y, may ot use f ee cash flow, may calculate f ee cash flow i a diffe e t ma e tha we do o may use othe fi a cial measu es to evaluate thei pe fo ma ce, all of which could educe the useful ess of f ee cash flow as a compa ative measu e.
Adjusted f ee cash flow ( o -GAAP). We defi e adjusted f ee cash flow as f ee cash flow plus cash payme ts associated with eal estate elated pu chases. Adjusted f ee cash flow ma gi is defi ed as adjusted f ee cash flow divided by GAAP eve ue.
No -GAAP g oss p ofit a d g oss ma gi . We defi e o -GAAP g oss p ofit as g oss p ofit plus stock-based compe satio a d amo tizatio of acqui ed i ta gible assets. No -GAAP g oss ma gi is defi ed as o -GAAP g oss p ofit divided by GAAP eve ue.
No -GAAP ope ati g i come a d ope ati g ma gi . We defi e o -GAAP ope ati g i come as ope ati g i come plus stock-based compe satio a d amo tizatio of acqui ed i ta gible assets, a d cha ges i co ectio with litigatio settleme ts, less gai o i tellectual p ope ty matte s a d, whe applicable, othe sig ifica t o – ecu i g items i a give qua te . No -GAAP ope ati g ma gi is defi ed as o -GAAP ope ati g i come divided by GAAP eve ue.
We co side these o -GAAP fi a cial measu es to be useful met ics fo ma ageme t a d i vesto s because they exclude the items oted above so that ou ma ageme t a d i vesto s ca compa e ou ecu i g co e busi ess g oss p ofit, g oss ma gi a d ope ati g esults ove multiple pe iods. The e a e a umbe of limitatio s elated to the use of o -GAAP fi a cial measu eme ts i stead of the measu eme ts calculated i acco da ce with GAAP. Fi st, these o -GAAP fi a cial measu es exclude the items oted above. Seco d, the compo e ts of the costs a d gai s that we exclude f om ou calculatio of o -GAAP measu es may diffe f om the compo e ts that pee compa ies exclude whe they epo t thei o -GAAP esults of ope atio s. Ma ageme t accou ts fo these limitatio s by p ovidi g specific i fo matio ega di g the GAAP amou ts excluded f om o -GAAP fi a cial measu es a d evaluati g o -GAAP ope ati g i come togethe with these measu es calculated i acco da ce with GAAP.
No -GAAP et i come a d diluted et i come pe sha e. We defi e o -GAAP et i come as et i come plus the items oted above u de o -GAAP ope ati g i come a d ope ati g ma gi . I additio , we adjust o -GAAP et i come a d diluted et i come pe sha e fo a gai f om a esc ow settleme t a d a tax adjustme t equi ed fo a effective tax ate o a o -GAAP basis, which diffe s f om the GAAP effective tax ate. We defi e o -GAAP diluted et i come pe sha e as o -GAAP et i come divided by the diluted weighted-ave age sha es outsta di g. We co side these o -GAAP fi a cial measu es to be useful met ics fo ma ageme t a d i vesto s fo the same easo s that we use o -GAAP ope ati g i come a d o -GAAP ope ati g ma gi . Howeve , i o de to p ovide a mo e complete pictu e of ou ecu i g co e busi ess ope ati g esults, we i clude i o -GAAP et i come a d o -GAAP diluted et i come pe sha e, the tax adjustme t equi ed esulti g i a effective tax ate o a o -GAAP basis, which ofte diffe s f om the GAAP tax ate. We believe the o -GAAP effective tax ates we use a e easo able estimates of o malized tax ates fo ou cu e t a d p io fiscal yea s u de ou global ope ati g st uctu e. The same limitatio s desc ibed above ega di g ou use of o -GAAP ope ati g i come a d o -GAAP ope ati g ma gi apply to ou use of o -GAAP et i come a d o -GAAP diluted et i come pe sha e. We accou t fo these limitatio s by p ovidi g specific i fo matio ega di g the GAAP amou ts excluded f om o -GAAP et i come a d o -GAAP diluted et i come pe sha e a d evaluati g o -GAAP et i come a d o -GAAP diluted et i come pe sha e togethe with et i come a d diluted et i come pe sha e calculated i acco da ce with GAAP.
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Ga t e , Magic Quad a t fo Hyb id Mesh Fi ewall, Rajp eet Kau , Adam Hils, Odie Adesi a, 7 Septembe 2026.
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