Fortinet, Inc.FTNT

Fortinet, Inc. Segments Disclosure

10-KFiled Feb 25, 20263 min read
SEGMENT INFORMATION
Operating segments are determined based on the financial information that is regularly reviewed by the Chief Operating Decision Maker (“CODM”) to allocate resources and assess performance. The Company’s Chief Operating Decision Maker is our Chief Executive Officer, who reviews financial information presented on a consolidated basis, accompanied by information about revenue by geographic region. We have one operating and reportable segment. Our CODM uses consolidated net income as a measure to monitor actual results versus budget and historical performance of our reportable segment. The measure of the segment assets is reported on the consolidated balance sheets as total consolidated assets.

The following table reflects certain financial data for our reportable segment (in millions):
 Year Ended December 31,
202520242023
Total revenue$6,799.6 $5,955.8 $5,304.8 
Less:
Cost of product revenue725.4 652.0 763.6 
Cost of service revenue603.5 505.6 473.6 
Research and development expenses
815.5 716.8 613.8 
Adjusted sales and marketing expenses (1)
1,900.9 1,654.9 1,635.3 
Commission expense446.6 389.9 370.7 
General and administrative expenses
233.4 237.8 211.3 
Provision for income taxes439.1 283.9 143.8 
Add: Other segment items (2)
218.2 230.3 55.1 
Net income
$1,853.4 $1,745.2 $1,147.8 
(1) Excludes commission expense.
(2) The following table presents other segment items (in millions):
Year Ended December 31,
202520242023
Gain on intellectual property matters
$10.4 $4.6 $4.6 
Interest income
162.3 155.2 119.7 
Interest expense
(20.1)(20.0)(21.0)
Other income (expense)—net
55.3 119.9 (6.1)
Gain (loss) from equity method investments
10.3 (29.4)(42.1)
Total other segment items
$218.2 $230.3 $55.1 

The following table presents other segment information (in millions):
 Year Ended December 31,
202520242023
Significant non-cash items:
Stock‐based compensation expense
$279.5 $257.9 $249.0 
Depreciation and amortization expense
152.0 122.8 113.4 
Total assets
$10,389.2 $9,763.1 $7,258.9 
Purchases of property and equipment$364.8 $378.9 $204.1 
Revenue by geographic region is based on the billing address of our customers. The following tables set forth revenue and property and equipment—net by geographic region (in millions):
 Year Ended December 31,
Revenue202520242023
Americas:
United States$1,929.5 $1,778.9 $1,605.9 
Other Americas770.9 663.3 569.3 
Total Americas2,700.4 2,442.2 2,175.2 
EMEA
2,834.3 2,396.2 2,072.9 
APAC
1,264.9 1,117.4 1,056.7 
Total revenue$6,799.6 $5,955.8 $5,304.8 

Property and Equipment—net
December 31,
2025		December 31,
2024
Americas:
United States$1,000.8 $993.5 
Canada329.2 216.8 
Latin America4.9 4.4 
Total Americas1,334.9 1,214.7 
EMEA211.3 73.3 
APAC72.8 61.5 
Total property and equipment—net$1,619.0 $1,349.5 

The following distributor customers accounted for 10% or more of our revenue:
Year Ended December 31,
202520242023
Distributor A28 %29 %28 %
Distributor B15 %15 %15 %
Distributor C12 %13 %13 %


The following distributor customers accounted for 10% or more of net accounts receivable:
20252024
Distributor A32 %31 %
Distributor B12 %14 %
Distributor C9 %10 %
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Historical Timeline

Fiscal YearFiled
2025Feb 25, 2026Showing above
2024Feb 21, 2025
2023Feb 26, 2024
2022Feb 24, 2023
2021Feb 25, 2022
2020Feb 19, 2021
2019Feb 26, 2020
2018Feb 27, 2019
2017Feb 26, 2018
2016Mar 1, 2017
2015Feb 26, 2016

About Segments Disclosures

Segment disclosures break a company into its reportable operating units, revealing revenue, profit, and asset allocation that consolidated financial statements obscure. Under ASC 280, segments must match how the chief operating decision maker views the business, providing a window into internal management structure and resource allocation priorities.

Key signals: compare segment margins to identify which units drive profitability and which destroy value. Watch for changes in the number of reportable segments — segment aggregation or disaggregation often coincides with strategic shifts or attempts to obscure declining performance. Intersegment elimination patterns reveal internal pricing practices. The reconciliation between segment totals and consolidated figures exposes corporate overhead allocation and unallocated items. Geographic revenue concentration highlights regulatory and currency exposure. Compare segment-level capital expenditure against segment revenue to assess where management is investing for future growth versus harvesting existing assets.

Other Available Disclosures

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