“We expect our differentiated Unified SASE offering to become a leader in the SASE market.”

In context

“Ken Xie (Founder, Chairman and CEO): Okay. Thank you, Aaron, and thank you to everyone for joining our call. We are pleased with our strong execution in the second quarter as we successfully balanced growth and profitability. We achieved record operating margin, which increased 820 basis points to 35% and managed to build revenue in the high end of the guidance range, reaching our full year 2024 revenue and operating margin guidance while continuing to invest for growth. Gaining market share in secure networking and investing in the fast-growing Unified SASE and Secure Operations market. Secure networking customers are increasingly recognizing our FortiOS and FortiASIC technology offering 5 to 10 times better performance than our competitors while improving security effectiveness and providing a low total cost of ownership. For over 20 years, we have been leading the shift to networking and security convergence, and the industry's projections now indicate secure networking will surpass traditional networking by 2026, 4 years earlier than previously anticipated. In the second quarter, Unified SASE accounted for 23% of total billings, up 1 point. We expect our differentiated Unified SASE offering to become a leader in the SASE market. We believe we are the only company that has built all the SASE functions organically in a single operating system. We have a converged networking and security stack, including our market-leading SD-WAN, ZTNA, Secure Web Gateway, CASB, Firewall, and many other innovations. Our SASE offering provides flexible enforcement, delivering a better user experience while securing access to applications on-premise and in the cloud. Furthermore, we continue to build our own SASE delivery infrastructure, leveraging FortiGate technologies, providing us with a competitive long-term cost advantage. As announced earlier today, we acquired Next DLP, a next-generation cloud-native SaaS data protection platform, extending from endpoint to cloud. This will allow us to enter the stand-alone enterprise DLP market as well as enhance our market for the SASE solution. We also recently improved our position in the Gartner Magic Quadrant for single-vendor SASE and are the only vendor included in all 5 major network security Magic Quadrants: single-vendor SASE, network firewall, SD-WAN, secure service edge, and enterprise wide and wireless infrastructure. Each of the solutions runs on our single unified operating system for the OS with AI-powered FortiGuard secure service and unified management. AI-driven Secure Operations accounted for 10% of total billings in the second quarter, up 1 point. Our comprehensive Secure Operations portfolio, backed by over a decade of AI experience, offers the broadest range of sensors and advanced analytics to continuously access activity to identify signs of cyber threats. For AI harness generative AI to table chart our platform and help the security operations team make better informed decisions and respond to threats faster by simplifying the most complex tasks. Fortinet is available in FortiAnalyzer for the SIM and for storage and will soon be available in other Fortinet products. In addition, we are pleased to further expand our secured portfolio with the acquisition of Lacework and we believe that together, our solutions form one of the most comprehensive full-stack cloud security solutions available from a single vendor. Lacework's organically developed AI-driven cloud-native application protection platform will be combined with the power of the Fortinet security platform, ensuring broad protection across network, cloud, and endpoint. This acquisition increases our total addressable market by $10 billion and adds a team of talented engineers dedicated to cloud-native security while also expanding our sales force that can sell the entire Fortinet portfolio of solutions. Yesterday, we announced several enhancements to the Fortinet security platform, which are already recognized as the most comprehensive OT security platform on the market. Enhancements include newly recited plans, advanced secure networking capabilities, and expanded partnership with leading OT vendors, reflecting Fortinet's commitment to security for the growing cyber-physical system market. As further evidence of our innovation and commitment to excellence in OT, we recently earned a prestigious Red Dot product design award for the FortiGate Rugged 70G with Dual 5G model. Fortinet was the only security company to receive this recognition in the industry for next-generation firewalls. Before turning the call over to Keith, I wish to thank our employees, customers, partners, and suppliers worldwide for their continued support and hard work. Keith?”