“we believe we are well positioned to achieve our 2025 billings target of $10 billion while generating an annual non-GAAP operating margin of at least 25% for each of the next three years.”

In context

“Ken Xie (Founder, Chairman and CEO): Thanks, Peter, and thank you to everyone for joining today's call to review our outstanding first quarter 2023 results. For the first quarter, revenue growth was 32% due to strong growth in both product and service revenue. With 35% product revenue growth, we continue to gain market share while being a leading product revenue company in the cybersecurity industry. This strong product revenue growth will help drive future service revenue growth. Quarterly service revenue grew over 30% for the first time in six years. We believe we have a significant opportunity to upsell value-added security services to our large installed base. In the first quarter, SD-WAN and OT bookings together continued to account for over 25% of total bookings, and our goal is to become number one in Network firewall, Secure SD-WAN, and OT security markets over the next couple of years. Fortinet is leading the trend of network and security convergence and cybersecurity consolidation. Gartner expects that by the year 2030, the secure networking market will be larger than traditional networking. Traditional networking lacks awareness and control of content, applications, users, devices, and location and is still using the same network protocol that was developed 50 years ago. Fortinet’s secure networking solution has expanded from Next Generation Firewalls to SD-WAN, SD-Branch, 5G, internal segmentation, ZTNA, and Universal SASE, and we believe the secure networking market can achieve double-digit growth annually for the foreseeable future. In today’s environment, organizations are looking to consolidate their multiple security vendors and functions that are deployed across their expanding attack surface to lower their total cost of ownership and management costs while improving visibility and automating real-time threat detection and response. Fortinet’s latest release of FortiOS 7.4 together with the FortiSP5 ASIC leads the industry with better integration and automation as well as faster acceleration while lowering total cost ownership. FortiOS enables organizations to deploy the Fortinet Security Fabric to every edge, allowing security to dynamically scale and adapt as the network evolves. Last month, we announced Universal SASE, which supports hybrid infrastructure and enables the same networking and security features that are available in our appliances to be delivered as a service, all within a single console. Many of our service provider partners are collaborating with us on this offering. Also, we announced enhancements to several of our Fortinet Security Fabric solutions, including endpoint security, cloud security, SoC, and SOAR. As networking and security continue to converge and as customers look to consolidate vendors and point products, we believe we are well positioned to achieve our 2025 billings target of $10 billion while generating an annual non-GAAP operating margin of at least 25% for each of the next three years. Before turning the call over to Keith, I would like to thank our employees, customers, partners, and suppliers worldwide for their continued support and hard work.”