Fortinet, Inc.

Good day and thank you for standing by. Welcome to the Fortinet First Quarter 2022 Earnings Call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 1 on your telephone. And please be advised that today's conference is being recorded. If you require any further assistance, please press star 0. I would now like to hand the conference over to your speaker today, Peter Salkowski, Vice President of Investor Relations. Please go ahead, sir.

Thank you, Lori. Good afternoon, everyone. I'm pleased to welcome everyone to our call to discuss Fortinet's financial results for the first quarter of 2022. Speakers on today's call are Ken Zee, Fortinet's founder, chairman, and CEO, and Keith Jensen, our chief financial officer. This is a live call that will be available for replay via webcast on the Investor Relations website. Kendall will begin our call today by providing a high-level perspective on our business. Keith will then follow or then review our financial and operating results for the first quarter before providing guidance for the second quarter and updating the full year. We will then open the call for questions. During the Q&A session, we ask that you please keep your questions brief and limit yourself to one question to allow others to participate. Before we begin, I'd like to remind everyone that on today's call, we will be making forward-looking statements, and these forward-looking statements are subject to risks and uncertainties, which could cause actual results to differ materially from those projected. Please refer to our SEC filings, in particular the risk factors in our most recent Form 10-K and Form 10-Q for more information. All forward-looking statements reflect our opinions only as of the date of this presentation, and we undertake no obligation and specifically disclaim any obligation to update forward-looking statements. Also, all references to financial metrics that we make on today's call are non-GAAP unless stated otherwise. Our GAAP results and the GAAP to non-GAAP reconciliations is located in an earnings press release and in the presentation that accompanies today's remarks, both of which are posted on the Investor Relations website. Ken and Keith's prepared remarks today for the earnings call will be posted on the quarterly earnings section of our Investor Relations website immediately following today's call. Lastly, all references to growth are on a year-over-year basis unless noted otherwise. I will now turn the call over again.

Thanks, Peter, and thank you to everyone for joining today's call to review our outstanding first quarter 2022 results. Our better-than-expected first quarter results demonstrate the strong demand of our cybersecurity innovation. Total revenue growth of 34%, driven by record product revenue growth of 54%. Total buildings increased 36%. A strong result reflects new order that was significantly greater than anticipated, partially offset by an increase in backlog. As a result, bookings increased 50% year-over-year to $1,276,000,000, which included booking growth from ICD-1 of 54%, global 2000 growth of 61%, OT growth of 76%, For the quarter, net new backlog was 9% of bookings as we continue to navigate a challenging supply chain environment. We believe that the hybrid network are here for foreseeable future and Fortinet is pushing the boundary of what is possible with innovation to enable customers to successfully operate in today's elevated threat environment. Our solid performance and market share gains are being driven by our effort to make our customers' entire infrastructure more secure and integrated in a zero-trust network. Fortinet's secure streaming network approach converges networking functionality with security capability fueled by our powerful FortiASIC SPU to provide the best performance and reach functionality. The new FortiOS 7.2 offers multiple new and enhanced service across FortiGuard, FortiCare, and FortiTrust, such as ZTNA, Identity, In-Line Sandboxing, Advanced Device Protection for OT and IoT Environment, Associated Service, and In-Line CASB. N49 provides one of the broadest security service offerings on an average of half the cost compared to our main competitors. In addition, we have prioritized our most organic research and development efforts on integrating security products into our centralized 40OS fabric platform, which Gartner referred to as a cybersecurity mesh architecture. Today, we are now the new threat of FortiGate powered by our FortiASIC SPU. The FortiGate 3700F, 600F, and 70F deliver high-performance converged networking and security with security computer reaching of five times on average better performance than competitive offerings. During the quarter, we are pleased to receive the Gartner Peer Insight Customer Choice Award for both 1H Infrastructure and Next Generation Firewall for three years in a row. Our innovation positioned Fortinet as one of the most influential cybersecurity leaders. These growth drivers and organic innovation is accelerating our growth potential to a new level. 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. It is their collective effort and trust that will contribute to Fortnite's strong growth and market share gains.