Fortinet, Inc. Rosenblatt's 6th Annual Technology Summit: The Age of AI (Part II)

Yes. No, I agree. It was a fantastic quarter. What stood out, and it really started, I would say last year already, but that we see broad-based demand across all our geos. Very successful across the world, and accelerating demand for hardware and build-out of networks. That is where some of the growth in FortiGate's hardware growth was extreme, I would say. Not that we have not had it years ago, but not lately. So it was a great quarter accelerating from prior quarters, and we continue to see good demand for multiple use cases that whether it is OT, whether it is the build-out of SD-WAN networks and improvements, whether it is the build-out for AI infrastructure and AI-enabled networking.

Also the fact that basically all our devices improve your security posture, even a switch or even an AP shows that this one OS and one security fabric is really resonating with our customers. I think that the Q2 showed nicely how it all comes together when demand is there.

We do have a large SD-WAN install base, and that's where we are benefiting because the customers have everything they need to extend it to their cloud platform. So get a unified posture for in-network and remote users. We continue to embark on that story and trying to sell more of the SASE, but also, depending on the needs of the customer, making it available with more functionality that allows them a unified SASE play. This is where Ken created that SASE firewall market, where he really wants to say it's not either/or. It is a big market. You need functionality at the edge of your network, which our OS can do that is similar to what you do in the cloud with the SASE platform. You don't always need to go out to the cloud.

As our competitors start selling hardware to improve their cloud SASE platforms, it's a big market that if you want to have unified security for your users, you need both. That's where we will continue to innovate and believe successful in the market. We were late with the cloud, but we've always had the hardware. Our competitors were faster with the cloud. Now they need some hardware. So it's playing all in our favors.

I think they signal different parts, what's going on in the business.

Yeah. Billings is current quarter activity.

It's also impacted by the mix of hardware and services. ARR gives you a good impression on how successfully we are selling services and growing our service portfolio in all the different stacks. It also gives you, in contrast to revenue and in contrast to billings, a little bit more of an idea, is this a more service-centric pillar or is this a more hardware-centric pillar? I think between all these metrics, you get good insights into what are we selling.

Yeah, I think the reasoning behind it is that we are seeing success in the combination of hardware and software or hardware and services, and with sovereign SASE being an important aspect in Europe, yeah, and more legislation around sovereignty. I think it's an important differentiator that SASE is not only a cloud-delivered service, but that SASE is a broader market that includes the firewall at the edge of the network in the data centers, not so much for SASE. Also our continued innovation and what do customers really need when they want to have a holistic security picture that also has low latency and good speed for security. If you heard about our press release that we launched in combination with earnings around the outpost functionality, it's actually very innovative.