Fortinet, Inc. 10-Q

Financial Statements (unaudited)

ITEM 1. Financial Statements FORTINET, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited, in millions, except per share amounts) March 31, 2026 December 31, 2025 ASSETS CURRENT ASSETS: Cash and cash equivalents $ 2,223.8 $ 2,495.3 Short-term investments 1,071.1 1,087.2 Accounts receivable—net 1,486.2 1,691.2 Inventory 369.6 399.5 Prepaid expenses and other current assets 181.9 227.0 Total current assets 5,332.6 5,900.2 LONG-TERM INVESTMENTS 339.7 339.7 PROPERTY AND EQUIPMENT—NET 1,691.5 1,619.0 DEFERRED CONTRACT COSTS 753.7 735.5 DEFERRED TAX ASSETS 1,304.5 1,314.9 GOODWILL 257.4 257.4 OTHER INTANGIBLE ASSETS—NET 87.0 97.3 OTHER ASSETS 117.1 125.2 TOTAL ASSETS $ 9,883.5 $ 10,389.2 LIABILITIES AND STOCKHOLDERS’ EQUITY CURRENT LIABILITIES: Accounts payable $ 238.7 $ 230.8 Accrued liabilities 366.1 354.6 Accrued payroll and compensation 292.4 312.9 Current portion of long-term debt — 499.7 Deferred revenue 3,726.3 3,636.0 Total current liabilities 4,623.5 5,034.0 DEFERRED REVENUE 3,625.2 3,479.8 LONG-TERM DEBT 496.8 496.6 OTHER LIABILITIES 148.3 141.3 Total liabilities 8,893.8 9,151.7 COMMITMENTS AND CONTINGENCIES (Note 10) STOCKHOLDERS’ EQUITY: Common stock, $ 0.001 par value— 1,500.0 shares authorized; 734.0 and 743.0 shares issued and outstanding on March 31, 2026 and December 31, 2025, respectively 0.7 0.7 Additional paid-in capital 1,798.7 1,770.1 Accumulated other comprehensive loss ( 27.7 ) ( 25.4 ) Accumulated deficit ( 782.0 ) ( 507.9 ) Total stockholders’ equity 989.7 1,237.5 TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY $ 9,883.5 $ 10,389.2 See notes to condensed consolidated financial statements. 4 Table of Contents FORTINET, INC. CONDENSED CONSOLIDATED STATEMENTS OF INCOME (unaudited, in millions, except per share amounts) Three Months Ended March 31, 2026 March 31, 2025 REVENUE: Product $ 645.1 $ 459.1 Service 1,204.5 1,080.6 Total revenue 1,849.6 1,539.7 COST OF REVENUE: Product 208.3 149.9 Service 156.2 143.2 Total cost of revenue 364.5 293.1 GROSS PROFIT: Product 436.8 309.2 Service 1,048.3 937.4 Total gross profit 1,485.1 1,246.6 OPERATING EXPENSES: Research and development 214.0 198.6 Sales and marketing 636.3 542.7 General and administrative 56.2 57.8 Gain on intellectual property matters ( 1.4 ) ( 6.3 ) Total operating expenses 905.1 792.8 OPERATING INCOME 580.0 453.8 INTEREST INCOME 32.9 44.3 INTEREST EXPENSE ( 4.2 ) ( 4.9 ) OTHER INCOME—