Fortinet Inc (FTNT) 2015 Q1 法說會逐字稿

Good day, ladies and gentlemen and welcome to your Fortinet Q1 2015 Earnings Financial Analyst Q& A.

女士們、先生們，美好的一天，歡迎來到 Fortinet 2015 年第一季財報財務分析師問答。

(Operator instructions)

（操作員說明）

As a reminder today's conference is being recorded. And now I would like to turn the program over to your host, Michelle Spolver.

提醒一下，今天的會議正在錄製中。現在我想把節目交給主持人米歇爾·斯波爾弗 (Michelle Spolver)。

Hi everybody. Thank you again for calling in again, and the purpose of this call, again, is to answer any remaining questions that you have pertaining to the call we held about an hour and a half ago. Before we dive into Q& A, it's all Q&A, I just want to remind you that disclaimer I mentioned during the first call related to forward-looking statements applies to any forward-looking statements that we make during today's call or during this call as well.

大家好。再次感謝您再次打電話，本次電話的目的再次是回答您與我們大約一個半小時​​前舉行的電話會議有關的任何剩餘問題。在我們深入問答之前，這都是問答，我只是想提醒您，我在第一次電話會議中提到的與前瞻性陳述相關的免責聲明適用於我們在今天的電話會議或本次電話會議期間所做的任何前瞻性陳述。

For that, John, you can go ahead and start the Q&A.

為此，約翰，您可以繼續開始問答。

Ladies and gentlemen, (Operator Instructions).

女士們、先生們，（操作員說明）。

First question, comes from Subbu Sabramaniam from the Judu Group.

第一個問題來自 Judu 集團的 Subbu Sabramaniam。

I have two questions. First one is for Drew.

我有兩個問題。第一個是給德魯的。

Drew, If you take some of the numbers you suggested for guidance and margin for the full year as well as margin for the current quarter it would suggest that OpEx and absolute numbers have some decline from June quarter levels in order to get to the 14% level. I know that question was asked before, but I wanted to make sure that are no factors that were missing as you look at what the OpEx trend needs to be to get to that 14% operating margin.

德魯，如果您採用您建議的全年指導和利潤率以及本季度利潤率的一些數字，那麼這表明運營支出和絕對數字較 6 月份季度水平有所下降，以達到 14%等級。我知道以前有人問過這個問題，但我想確保在了解要達到 14% 的營運利潤率所需的營運支出趨勢時，沒有遺漏任何因素。

No, Subbu. Obviously you can see the margins will have to ramp in the back half of the year. Obviously we are still in -- midway in some of these investments, and so that's the current quarter compression if you will in Q2, and Q1.

不，蘇布。顯然，你可以看到今年下半年的利潤率必須上升。顯然，我們仍處於其中一些投資的中間階段，因此，如果您願意在第二季和第一季進行投資，這就是當前季度的壓縮。

Obviously we haven't touched guidance for the year so I can see what you are saying mathematically, but qualitatively we are going to continue to invest and it's just so early in the year, and with all these new people it is a little hard to be too aggressive on the operating -- op margin line just yet.

顯然我們還沒有觸及今年的指導，所以我可以從數學上理解你在說什麼，但從質量上講，我們將繼續投資，而且現在還為時過早，對於所有這些新人來說，有點困難對營運利潤線過於激進。

The other thing, actually, Subbu, if I could add one thing and you may not know this from not covering us from before, there are -- Q1 from the seasonality perspective does tend to have more expenses that come in, related to benefits, pretty much, so that wouldn't, that doesn't transcend through the rest of the year. That's unique to Q1.

另一件事，實際上，Subbu，如果我可以補充一件事，你可能不會因為之前沒有報道過我們而知道這一點，那麼從季節性角度來看，第一季確實往往會產生更多與福利相關的費用，差不多，所以不會，這不會超越今年剩餘的時間。這是 Q1 獨有的。

Fair enough, I was just basing off the Q2 run rate but I totally understand the comment. And then on to graphic mix, given the strength in US Enterprise, the overall Americas have still been sort of relatively at a similar run rate as a percentage of revenues. Do you expect that to shift more from the Americas or are there areas within the Americas that are not growing as rapidly, which is leading to that being kind of flat as a percentage of revenues?

公平地說，我只是基於第二季的運行率，但我完全理解這個評論。然後是圖形組合，考慮到美國企業的實力，整個美洲的運行率佔收入的百分比仍然相對相似。您是否預計這一增長會更多地從美洲轉移，或者美洲是否存在增長速度不那麼快的地區，這導致其占收入的百分比持平？

Subbu, I am not sure we understand the question.

Subbu，我不確定我們是否理解這個問題。

The question was the strength in US enterprise, I would have expected Americas to grow as a percentage of revenues. It seems like it's been relatively stable as a percentage of revenues and I was just wondering how you expect that geographic mix to play out.

問題是美國企業的實力，我本來預計美洲的營收百分比會成長。它佔收入的百分比似乎相對穩定，我只是想知道您期望這種地理組合如何發揮作用。

You mean the geographic mix globally? The Americas revenue? Or --

您是指全球的地理組合嗎？美洲收入？或者 -

To grow as a percentage of revenue. It has been growing. I mean, I don't know if it -- I would have to go back looking at Q1 to Q2 in terms of the overall mix. Americas regionally has been growing very well, as we talked about the percentage growth in Q1. But as a mix of total revenue, if you look back over the last few years, it is actually -- and I don't have in front of me, but it's grown pretty significantly.

佔收入的百分比成長。它一直在增長。我的意思是，我不知道是否會這樣——我必須從整體組合的角度回顧第一季到第二季。正如我們談到第一季的成長百分比一樣，美洲地區的成長非常良好。但作為總收入的組合，如果你回顧過去幾年，它實際上是——我面前沒有，但它增長得相當顯著。

It's been in the low 40%s, and I think it is still probably there. I am not sure of the exact numbers of this quarter, you could look it up. But also keep in mind the billings were very good this quarter, and the billings don't translate into revenue in the quarter anymore, there's a bit deferred so it lags a bit.

它一直在 40% 左右，而且我認為它可能仍然存在。這個季度的具體數字我不太清楚，你可以查一下。但也要記住，本季度的帳單非常好，而且帳單不再轉化為該季度的收入，有一點延遲，所以有點滯後。

I would say the other thing, just looking, if you look at it mathematically, part of the issue on the mix is that EMEA has been doing so well, that they kind of carried the water for the globe outside of the US. APAC hasn't been performing as well as the US and EMEA. But that, APAC on the lower side, EMEA on the higher side, and Americas kind of in the middle and I think that kind of perpetuates the mix over time to someone in the low 40%s for right now.

我想說另一件事，如果你從數學上看，混合問題的一部分是歐洲、中東和非洲地區做得很好，他們把水輸送到了美國以外的全球。亞太地區的表現不如美國和歐洲、中東和非洲地區。但亞太地區處於較低水平，歐洲、中東和非洲處於較高水平，而美洲處於中等水平，我認為隨著時間的推移，這種混合對於目前處於低 40% 的人來說會持續下去。

But we are investing in the US and we hope -- we would like to grow that a little more.

但我們正在美國投資，我們希望——我們希望能再增加一點。

Also -- this is Ken -- I think if you look in the international [quarter] of EMEA APAC, a lot of sales in Eurasia you need to be like original or country-based, and the US probably is more vertical-based especially for certain enterprises, certain vertical markets. So we are a bit delayed on investing so the vertical space sort of work on the machine compared with some of the competitors so that once we start in the US in the sort of vertical space you can see the result. You can see the return of investment suddenly come back quickly, so that's where we keep our focus on.

另外——這是肯——我認為如果你看看歐洲、中東和非洲亞太地區的國際[季度]，歐亞大陸的許多銷售你需要像原創的或基於國家的，而美國可能更加垂直化，尤其是對於某些企業，某些垂直市場。因此，我們在投資方面有點延遲，因此與一些競爭對手相比，垂直空間在機器上發揮了作用，因此一旦我們在美國開始使用垂直空間，您就可以看到結果。你可以看到投資回報突然很快就回來了，所以這就是我們關注的重點。

But as going forward we do see America and especially the US has a, it's a big market, and we still have market share to be amassed somewhat from a competitor. We can keep gaining more market share in the US.

但展望未來，我們確實看到美國，尤其是美國有一個很大的市場，我們仍然可以從競爭對手那裡累積一定的市場份額。我們可以繼續在美國獲得更多的市場份額。

Got it. Final question -- on the ATP side, you talked about the FortiSandBox appliance getting good traction. Can you talk about how the customers are choosing between the appliance-based model versus your -- the cloud-based service you have and how you expect that to trend over the next few quarters?

知道了。最後一個問題——在 ATP 方面，您談到 FortiSandBox 設備獲得了良好的關注。您能否談談客戶如何在基於設備的模型與您擁有的基於雲端的服務之間進行選擇，以及您預計未來幾季的趨勢如何？

We do have a-- probably a majority is still more cloud-based, that's where the FortiGate you can offer the cloud-based ATP and that is [worthful] with them and the traffic through the cloud, and to do all of the analysis there. And now we also add a third piece, you can do an endpoint, so the endpoint also has offered the ATP capability, so you have a three way to do the ATP whether up high, so I'll go to the cloud in endpoint now. So that's the sense. The other part also - this ATP key also works nicely with the firewall.

我們確實有——可能大多數仍然更多地基於雲，這就是 FortiGate 可以提供基於雲的 ATP 的地方，這對它們和通過雲的流量來說是[有價值的]，並進行所有分析那裡。現在我們還添加了第三塊，你可以做一個端點，所以端點也提供了ATP能力，所以你有三種方式來做ATP，無論是在高處，所以我現在會在端點上雲。這就是意義所在。另一部分 - 此 ATP 金鑰也可以與防火牆很好地配合使用。

Because firewall is still the only device in line which can stop the attack, stop the intrusion, because today still most ATP is still like early days of intrusion technology, so more in the detection mode. They can not really prevent or stop the traffic and you notice the firewall and also they are years away being integrated with the current firewall technology, that is where the UTM and NG firewall is doing now.

因為防火牆仍然是唯一能夠阻止攻擊、阻止入侵的設備，因為今天仍然大多數ATP仍然像早期的入侵技術，所以更多處於偵測模式。它們無法真正阻止或阻止流量，您會注意到防火牆，而且它們距離當前防火牆技術整合還需要數年時間，這就是 UTM 和 NG 防火牆現在正在做的事情。

So that is where we see, it has to be working together with the firewall platform and also with the three form of ADP need to be also working together nicely, so that's where we keep improving.

這就是我們所看到的，它必須與防火牆平台一起工作，並且與 ADP 的三種形式也需要很好地一起工作，所以這就是我們不斷改進的地方。

Got it, thank you.

收到了。

Next, Melissa Gorham, Morgan Stanley.

接下來是摩根士丹利的梅麗莎戈勒姆。

Great, thanks for taking the questions. Just a follow-up on the earlier question on the Americas growth.

太好了，感謝您提出問題。只是之前關於美洲成長問題的後續。

You noted US enterprise grew 70% but overall Americas billings grew 33%,so just curious what within the Americas was an area of relative underperformance and is that something that was maybe a strategic decision on your part to maybe shift investments, or anything notable there?

您注意到美國企業成長了70%，但美洲的整體帳單成長了33%，所以只是好奇美洲的哪些領域表現相對較差，這是否可能是您的戰略決策，可能會轉移投資，或者那裡有什麼值得注意的事情？

Yes, you can look at it from the vertical space, the number we disclosed compared to one year ago, probably the carrier, service provider, is relatively flat, so we still see a lot of [attacking] but there is not a lot of movement there yet. And also the channel probably just a relatively, like a normal, compared to enterprise growth, we are about average.

是的，你可以從垂直空間看，我們披露的數字和一年前相比，可能運營商、服務商是比較持平的，所以我們還是看到很多[攻擊]但是沒有很多。而且通路可能只是一個相對的、正常的，與企業成長相比，我們大約是平均水準。

So that's where because we cover more broad in the US compared with some other competitors. We do have the top carrier. We also have the enterprise grow very fast. We also have the branch office SMB which is mostly channel-driven business there. So that's where the Enterprise is the fastest growing but the other part is a relatively slower compared with Enterprise.

這就是因為與其他一些競爭對手相比，我們在美國的覆蓋範圍更廣。我們確實擁有頂級營運商。我們的企業也成長得非常快。我們還有中小企業分支機構，主要是通路驅動的業務。所以這就是企業成長最快的地方，而其他部分與企業相比相對較慢。

Okay, thank you.

好的謝謝。

Drew just to follow-up on FX. So you noted the benefit from a weaker FX in Q1 but have you calculated what the impact would be for the full year? Assuming current rates hold?

德魯只是為了跟進FX。因此，您注意到第一季外匯疲軟的好處，但您是否計算過全年的影響？假設當前利率不變？

Melissa, it is reflected in our guidance.

梅麗莎，這反映在我們的指導上。

Okay.

好的。

But we have taken into account the downdraft and we've kind of re-measured at the current rates if you will.

但我們已經考慮到了下行趨勢，如果您願意的話，我們已經按當前匯率重新進行了衡量。

Okay. But you haven't quantified it?

好的。但你沒有量化過嗎？

No.

不。

Okay, thank you.

好的謝謝。

Next question, Gregg Moskowitz, Cowen and Company.

下一個問題，Gregg Moskowitz，Cowen and Company。

Thank you very much.

非常感謝。

I just want to go back if I could Drew to the bundling approach that you initiated in January. What is the real-world average sales increase, just on the price of those bundles? How should we be thinking about that?

我只是想回到你一月份發起的捆綁方法。僅根據這些捆綁包的價格，現實世界的平均銷售成長是多少？我們該如何思考這個問題？

Well the increase was 10% on our bundles.

我們的捆綁包增加了 10%。

But on the list price.

但在標價上。

On the list price. Right.

在標價上。正確的。

We give the channel discount.

我們給予通路折扣。

But the channel discount doesn't change.

但通路折扣沒有變化。

Okay, that's what I was wondering, okay perfect. And do you still expect cash flow from operations to grow roughly in line with net income in 2015?

好吧，這就是我想知道的，好吧，完美。您是否仍預期 2015 年營運現金流的成長將與淨利潤大致一致？

Yes.

是的。

Perfect and if I could ask one last one -- so this is -- and these are modest amounts relatively speaking, but it is the first time in six quarters in which you guys did not buy back any stock. Just wondering if this reflects a shifting of priorities in any way or was it just kind of more of a temporary dynamic?

完美，如果我可以問最後一個 - 就是這個 - 相對而言，這些金額是適度的，但這是六個季度以來你們第一次沒有回購任何股票。只是想知道這是否反映了優先事項的變化，或者只是暫時的動態？

No, I think a couple of things, really. Our capital strategy as we have said has been to invest in growth seems to be we feel like our investments are paying off in that sense and certainly the top line is doing well. And I think the return of value, you know, the top line growth is reflected I think in the share price, so you can't see the return of the capital strategy in terms of return of growth in that sense.

不，我真的認為有幾件事。正如我們所說，我們的資本策略是投資於成長，我們覺得我們的投資在這個意義上得到了回報，而且收入當然也表現良好。我認為價值回報，你知道，營收成長反映在股價中，所以從這個意義上說，你看不到資本策略在成長回報的回報。

I think what we also said was that we were going to buy back opportunistically and would buy more back at kind of lower prices. And if you look at history we were buying back really in the low $20s. Around $20 to somewhere between $20 and $25 if you look at the averages. We still have $122 million remaining, I believe, under the current authorization and I think nothing has changed there.

我認為我們也說過，我們將機會主義地回購，並以較低的價格回購更多。如果你回顧一下歷史，我們實際上是在 20 美元的低點回購的。如果你看一下平均值，大約是 20 美元到 20 美元到 25 美元之間。我相信，根據目前的授權，我們還剩下 1.22 億美元，而且我認為這方面沒有任何改變。

We would buy back opportunistically more towards low prices than high prices without sharing specific prices. But I think history is a pretty good indicator of the future certainly of the type of prices we were looking at, where it made more sense to buy more.

在不分享具體價格的情況下，我們會機會性地以低價回購而不是高價回購。但我認為歷史是未來的一個很好的指標，當然也反映了我們所關注的價格類型，在這種情況下，購買更多股票更有意義。

Okay, perfect, thanks very much.

好的，完美，非常感謝。

Next question, Michael Turits, Raymond James.

下一個問題是邁克爾·圖里茨，雷蒙德·詹姆斯。

Hey, guys, good evening.

嘿，夥計們，晚上好。

One thing just to come back to, I think it was Aaron's question, on why billings seems to be growing faster than product, and over time it seems as if billings is increasing relative to revenue as a percentage or ratio. So what is going on there? Is that just, Drew, what you were talking about in terms of a little bit more deferral around more bundling, or why is it that we are seeing faster billings growth than product growth?

回到一件事，我認為這是亞倫的問題，為什麼帳單似乎比產品增長得更快，並且隨著時間的推移，帳單相對於收入的百分比或比率似乎正在增加。那麼那裡發生了什麼事？德魯，這只是您所說的關於更多捆綁銷售的延遲，或者為什麼我們看到的賬單增長快於產品增長？

Well I think a couple of things. You see if you look at the components of billings, there's going to be some renewals in there which combined, which kind of continually uplift the ratio of services to product. And I think that explains part of the reason why you're going to, constantly in any growing company, you are going to see, constantly see services becoming a higher percentage of the revenue so to speak, right? Because you're benefiting from not only new sales but from renewals.

嗯，我想有幾件事。你會發現，如果你看一下帳單的組成部分，你會發現其中會有一些更新，這些更新結合在一起，會不斷提高服務與產品的比率。我認為這解釋了為什麼在任何成長型公司中，你會不斷看到服務在收入中所佔的比例不斷提高，可以這麼說，對嗎？因為您不僅受益於新銷售，還受益於續約。

I think if you look at Q1 in particular, I'm just looking back at the last several years, it was 43% in Q1 2013, 45% -- this is product -- it went from 43% to 45% to 46%. And so you see that increase billings, and so we are picking up some of that in the product, but again, a lot of it as you accelerate, a lot of it ends up getting deferred. And then I think the other thing that was kind of countervailing that, so to speak, was a little more carving out into the deferred revenue piece from the price increase.

我想如果你特別看第一季度，我只是回顧過去幾年，2013 年第一季是 43%，45%——這是產品——它從 43% 到 45% 再到 46% 。所以你會看到帳單增加了，所以我們在產品中吸收了其中的一些，但同樣，當你加速時，很多最終都會被推遲。然後我認為另一件事是一種抵消，可以說，是從價格上漲中更多地分配到遞延收入部分。

Okay. You talked about the vertical strategy and simply hiring more enterprise sales people, but anything else that you can be specific about in terms of how the organization has shifted to be more enterprise-focused in a way that's working?

好的。您談到了垂直策略並簡單地僱用了更多的企業銷售人員，但是您還可以具體說明組織如何以一種有效的方式轉變為更加以企業為中心嗎？

Yes, at the verticals, I think more marketing -- I think the way we spend on marketing and where we spend is more angled towards the enterprise, kind of mid-to large. And I think, Michael, we will continue that focus, I think I would characterize that we are kind of midway in that effort.

是的，在垂直領域，我認為更多的是行銷——我認為我們在行銷上的支出方式以及支出的地方更傾向於企業，某種中型到大型企業。我認為，邁克爾，我們將繼續關注這一點，我想我會說我們在這項努力中處於中途。

We will also do -- continue to build, scale out some sales capacity. We see some more opportunity just in general. And then we specifically see opportunity in some emerging markets -- we have done nicely, I mean the Middle East, I don't know if we called that out or not. But that's an area where we've done nicely over the last year or so, we've made some investments. Same in Asia. And then also Japan is an area of probably more investment versus relative to kind of the mean, if you will.

我們也將持續建立、擴大一些銷售能力。總的來說，我們看到了更多的機會。然後我們特別看到了一些新興市場的機會——我們做得很好，我指的是中東，我不知道我們是否指出了這一點。但這是我們在過去一年左右做得很好的領域，我們進行了一些投資。在亞洲也一樣。如果你願意的話，日本也是一個可能比平均投資更多的地區。

Did I get it right that you said that your renewal rate was 70%? And I'm sorry I don't recall what it has been. And retention rate was 90%? Can you clarify where these are?

你說的續約率是70%，我沒聽錯吧？很抱歉我不記得那是什麼了。保留率是90%？你能澄清一下這些在哪裡嗎？

Yes, they are two different things. So let's start with retention rate, I think that is simpler. Simply, retention rate is the number of customers renewed divided by the number of customers available for renewal, so to speak, right?

是的，它們是兩個不同的東西。那麼讓我們從保留率開始，我認為這更簡單。簡單來說，保留率就是續訂的客戶數量除以可續約的客戶數量，可以這麼說吧？

And we had a lot of customers because of the SMB space, and so at the lower end obviously you can -- customers may not renew for a variety of reasons, and so you haven't necessarily lost them, they just may not be renewing their support.

由於中小型企業空間，我們擁有很多客戶，因此顯然在低端客戶可能會因為各種原因而不會續訂，因此您不一定會失去他們，他們只是可能不會續訂他們的支援。

But you know that model is different than the enterprise, you know, which is -- and as you go up in the stack in terms of customer size, that retention rate actually increases well above 90%. So that's a good thing. That is just overall number of customers. And again, what I would say is it looks better as you go up in terms of customer size in terms of the enterprise.

但你知道該模型與企業不同，隨著客戶規模的增加，保留率實際上會增加到 90% 以上。所以這是一件好事。這只是客戶總數。再說一遍，我想說的是，隨著企業客戶規模的增加，它看起來會更好。

We also are putting other angles, really, the renewal rate we track in a device and the customer retention we track in the customer. So some customers, like [EFE] they upgrade the FortiGate they bought like 5 years ago to a new FortiGate, which would not count as a renewal, but we do count as a customer retention rate. So that's where - that's why the renewal rate is like a 70% because if you factor in the device on average would be in enterprise for 4 or 5 years so probably the highest one you can get is maybe just a couple of 80%s.

我們還從其他角度來看，實際上是我們在設備中追蹤的續訂率以及我們在客戶中追蹤的客戶保留率。因此，一些客戶，例如 [EFE]，他們將 5 年前購買的 FortiGate 升級為新的 FortiGate，這不算是續訂，但我們確實算作客戶保留率。這就是為什麼續約率約為 70%，因為如果考慮到設備平均在企業中使用 4 或 5 年，那麼您可以獲得的最高續約率可能只有 80%。

But on the customer retention is where we were tracking the customer, the enterprise customer, you can more easily track it, and then you can get like over 90% as that is the easiest one. Because sometimes we have the models indirect, also the channel goes to the partner, sometimes they report to the customer and sometimes they're not, so that's why in the past when we renew because they do update their signature update on the OS to the box, so we can track in that one easily. So that how the renew rate is not quite so other EIP software company where you can more easily track the customer.

但在客戶保留方面，我們追蹤的是客戶，企業客戶，你可以更輕鬆地追蹤它，然後你可以得到90%以上，因為這是最簡單的。因為有時我們有間接的模型，頻道也轉到合作夥伴，有時他們向客戶報告，有時則不報告，所以這就是為什麼在過去我們續訂時，因為他們確實將作業系統上的簽名更新更新為框，這樣我們就可以輕鬆地追蹤該框。因此，續訂率並不像其他 EIP 軟體公司那樣，您可以更輕鬆地追蹤客戶。

For us, we are more easy to track in the box. The customer than the enterprise.

對我們來說，我們在禁區裡更容易被追蹤。客戶高於企業。

And I think the other way to characterize it, Michael, the way we track it, and the customer retention is really important, Because it is an operational metric as well, think about it -- knowing who your customers are and when they are up for renewals is an important sales method. It's a sales funnel activity, right? You try to make sure that is being covered either through the channel or through our sales programs.

我認為用另一種方​​式來描述它，邁克爾，我們追蹤它的方式以及客戶保留率非常重要，因為它也是一個營運指標，請考慮一下 - 了解您的客戶是誰以及他們何時上線續約是一種重要的銷售方式。這是一個銷售漏斗活動，對吧？您嘗試確保透過管道或我們的銷售計劃涵蓋這一點。

Okay. So that's it, renewal rate includes anybody who switches a box, that's why it like that?

好的。就是這樣，續訂率包括任何更換盒子的人，這就是為什麼會這樣？

The problem with the renewal rate is you don't really, you don't account for the ones who have switched a box or something, so that's why it's in the mid-70%s and the customer renewal rate, or the retention rate is much higher.

續訂率的問題在於，你並沒有真正考慮到那些更換了盒子或其他東西的人，所以這就是為什麼它處於 70% 左右，而客戶續訂率或保留率高得多。

Okay great, thanks a lot guys.

好的，太好了，非常感謝大家。

Next question, Erik Suppiger, JMP Securities.

下一個問題是 JMP 證券公司的 Erik Suppiger。

Yes, first off can you just comment on any changes in the competitive landscape; can you specifically address Cisco, Juniper, Checkpoint and Palo Alto, how any changes you've seen relative to them individually?

是的，首先您能評論一下競爭格局的變化嗎？您能具體談談思科、瞻博網路、Checkpoint 和帕洛阿爾托嗎？

I would say different vertical different region, it's a little bit different competitor. The good part really we're competing much broader both in the geographic region and also on the vertical there.

我想說，不同的垂直領域，不同的競爭對手，有一點不同。好的方面是，我們在地理區域和垂直領域的競爭都更廣泛。

You can see the US enterprise, we definitely see like Palo Alto Checkpoint and also some old Cisco Juniper still there, but they are behind on integrating to what you call a NextGen function, which is more like an intrusion app control there. And I think Cisco is starting to catch up a little bit, but some other old ones still not quite there.

你可以看到美國企業，我們肯定看到像帕洛阿爾托檢查點和一些舊的思科瞻博網路仍然在那裡，但他們在整合你所說的下一代功能方面落後了，這更像是那裡的入侵應用程式控制。我認為思科已經開始迎頭趕上，但其他一些老牌公司還沒有完全趕上。

On the geographic wise, we are also doing well because some of the investment sales capacity we made in some international sites, we start to see some good results. And also like I said we tend to be a little bit more location focused sales team and that tends to work a little bit better on some other international countries compared to the US is more vertical-focused. Some sales base, and that's where we started to amass in the last couple of years. So that's where we started to see the run pop quickly in some of the vertical space, like Drew mentioned in the healthcare, in the finance service, in some other cloud data center area.

在地理方面，我們也做得很好，因為我們在一些國際網站上進行了一些投資銷售能力，我們開始看到一些好的結果。而且就像我說的那樣，我們的銷售團隊往往更注重地點，與更注重垂直領域的美國相比，這在其他一些國際國家的效果往往更好一些。一些銷售基礎，這就是我們在過去幾年開始累積的地方。因此，這就是我們開始看到一些垂直領域快速流行的地方，就像德魯在醫療保健、金融服務和其他一些雲端資料中心領域提到的那樣。

Lastly, once we address the sales capacity, the marketing and the lead gen initial, we can see the return because we have a much stronger product. Whenever there's a big customer that's where we win a lot, dominantly more in the carrier, in the Fortune 100 enterprise, we come -- most of the Fortune 100 enterprises are customers because they tend to do the big hardware, they do the testing before making a decision, compared to a lot of mean enterprises more depend on some marketing message, which we tend to behind. Now you have asking some marketing message and some sales capacity which we catch up quickly now.

最後，一旦我們解決了銷售能力、行銷和潛在客戶開發問題，我們就可以看到回報，因為我們擁有更強大的產品。每當有一個大客戶，我們就贏得了很多，主要是在運營商、財富100 強企業中，我們就會來——大多數財富100 強企業都是客戶，因為他們傾向於做大型硬件，他們在之前做測試做出一個決定，相比很多刻薄的企業更依賴一些行銷訊息，而這些訊息是我們往往背後的。現在您詢問一些行銷資訊和一些銷售能力，我們現在很快就能趕上。

Who are you displacing? In last year you've had a nice acceleration, have you been displacing any one vendor more than the others in the last year?

你要取代誰？去年你們取得了不錯的加速，去年你們是否比其他供應商更常取代了某個供應商？

We have not quite calculated, but it is also different vertical different region could be a different competitor.

我們還沒有完全計算過，但是不同垂直領域不同領域也可能有不同的競爭對手。

Okay.

好的。

Drew, on the CapEx you had said still looking for $40 million to $45 million. I think you only had around $5 million CapEx this quarter. How should we think about the linearity of the spend on that?

德魯，關於資本支出，您曾說過仍在尋求 4000 萬至 4500 萬美元。我認為本季您的資本支出只有 500 萬美元左右。我們應該如何考慮這方面支出的線性？

Yes, we don't guide by quarter and I mean we are very -- trying to think of a good way, I want to help you here without trying to give guidance. Let me just tell you kind of the two major tranches is we are buying --

是的，我們不按季度提供指導，我的意思是我們非常努力想出一個好方法，我想在這裡為您提供幫助，而不是試圖提供指導。讓我告訴你我們正在購買的兩大部分——

We are actually buying a couple of real estate properties and it is problematic because the way these things close is kind of hard to time them. We actually though one might close this quarter for instance and it will be in Q2. And then we are also working on the ERP.

我們實際上正在購買幾處房地產，這是有問題的，因為這些事情的結束方式很難確定時間。例如，我們實際上認為可能會在本季度關閉，並將在第二季度關閉。然後我們也在做ERP。

I would say it's probably going to be -- let me make sure I am right here when I say this. You know you are probably -- so we did $5 million. Yes. It's just so hard to predict.

我想說這可能是——讓我確保當我說這句話時我就在這裡。你知道你可能是——所以我們花了 500 萬美元。是的。這實在太難預測了。

We can just assume a linear progression from here?

我們可以假設從這裡開始是線性進展嗎？

Yes, and where I'm debating, I'm just looking at one thing and it depends on what the property goes for, like right at the end of June or the early July. You know, I probably loaded -- I think that's fair if you just load a little extra in Q2.

是的，我正在爭論的地方，我只是專注於一件事，這取決於房產的用途，例如六月底或七月初。你知道，我可能加載了——我認為如果你在第二季度加載一點額外的內容，那是公平的。

But can you tell us --?

但你能告訴我們──嗎？

Conservatively that might close in June and if it does for instance then that's what kind of drives that. If not it will close in Q3 so maybe the best way to do it is assume and maybe you go towards more like slightly south of $20 million and Q2 and spread the rest of it evenly.

保守地說，這可能會在六月結束，如果確實如此，那麼這就是驅動力。如果不是，它將在第三季結束，所以最好的方法可能是假設，也許你會朝著 2000 萬美元和第二季略南的方向前進，然後平均分配其餘部分。

Okay, all right that's very helpful.

好的，好的，這非常有幫助。

And then lastly just on the FortiGate versus the other products. Do think that you're going to exceed the 10% of -- other products will exceed 10% any time in the foreseeable future?

最後是 FortiGate 與其他產品的比較。您是否認為在可預見的未來任何時候您的產品都會超過 10%？

Can you give us a sense for how you think your non-FortiGate sales might progress?

您能否告訴我們您認為您的非 FortiGate 銷售可能會如何進展？

I do believe the FortiGate will be keeping taking market share with the over 10% of the market, because that's the best platform in the space. And also, that's the only platform which have salary by the ASIC and also working with the latest Intel CPU [sulfur activated] CPU there. Because we don't see any other competitors, pretty much they all solve for CPU-based for competing on the multifunction which we have a CPU is more difficult to work on the multifunction and also on the performance and also on the security.

我確實相信 FortiGate 將繼續佔據超過 10% 的市場份額，因為這是該領域最好的平台。而且，這是唯一一個由 ASIC 支付工資並與最新的英特爾 CPU [硫激活] CPU 一起使用的平台。因為我們沒有看到任何其他競爭對手，所以幾乎他們都解決了基於 CPU 的多功能競爭問題，而我們擁有的 CPU 更難以在多功能、效能和安全性方面工作。

That's where you can see today the press release from Fortinet and SSS and also in the slide presentation can see that's the box the FortiGate box we went not only on the intrusion provision test, but also the SandBox we also went on the next generation firewall test last year and also on the firewall test. So you don't see any other competitor had the one box, the single box, can win all three, three or four, in this intrusion and some other testing there. So that is where the FortiGate box, the platform has that capability both adding function and also with each new generation of share reporting and also improving the performance quickly.

今天您可以在這裡看到 Fortinet 和 SSS 的新聞稿，在幻燈片演示中還可以看到我們不僅進行了入侵防護測試的 FortiGate 盒子，還進行了下一代防火牆測試的 SandBox去年也對防火牆進行了測試。因此，在這次入侵和其他一些測試中，你看不到任何其他競爭對手擁有一個盒子，一個盒子，可以贏得所有三個、三個或四個。這就是 FortiGate 盒子的所在，該平台具有添加功能以及每一代新一代共享報告的能力，並且還可以快速提高效能。

I think I confused you. I was asking when would your non-FortiGate products maybe start to exceed 10% of your revenue? Sorry about the confusion.

我想我讓你困惑了。我問的是，你們的非 FortiGate 產品什麼時候可能會開始超過你們收入的 10%？很抱歉造成混亂。

Eric, it's Michelle.

埃里克，這是米歇爾。

I think it's growing. The non-FortiGate product revenue is growing The one thing to put into account though is that FortiGate is growing very fast as well. It's part of our long-term growth strategy, it's hard to say in terms of when it will actually exceed 10%, and it really is because if FortiGate was to not grow then obviously then the non-FortiGate could grow faster, but the FortiGate products are growing very fast as well.

我認為它正在增長。非 FortiGate 產品收入正在成長 不過需要考慮的一件事是 FortiGate 的成長也非常快。這是我們長期成長策略的一部分，很難說它何時會真正超過 10%，這確實是因為如果 FortiGate 不成長，那麼顯然非 FortiGate 可能會成長得更快，但 FortiGate產品成長也非常快。

But the other way to say really the majority of non-FortiGate is also FortiGate-related, right? But if you look at how the biggest one probably is more like FortiAnalyzer, FortiManager, which really are working with FortiGate, and now it's FortiClient and some other. It's really and also the 40AP, the Wi-Fi is using FortiGate as a controller, so it's kind of FortiGate related. That's where the FortiGate drives, you will keep and drive most of the business.

但換句話說，大多數非 FortiGate 也確實與 FortiGate 相關，對嗎？但如果你看看最大的一個可能更像是 FortiAnalyzer、FortiManager，它們確實與 FortiGate 一起工作，現在是 FortiClient 和其他一些。它確實是 40AP，Wi-Fi 使用 FortiGate 作為控制器，所以它與 FortiGate 相關。這就是 FortiGate 驅動的地方，您將保留並驅動大部分業務。

Okay. Thank you.

好的。謝謝。

Next question, Jeff Duvall, Northland.

下一個問題，傑夫·杜瓦爾，北國。

Yes, thank you. Two questions.

是的，謝謝。兩個問題。

One is a lot of the other players in the space will talk about a mix shift toward subscription revenue, that hasn't really been that big of a theme for you folks in recent quarters. And I am wondering if that is something that we should expect to emerge later in the year or next year or whether your strategy differs from that.

一是該領域的許多其他參與者都會談論向訂閱收入的混合轉變，這對你們來說最近幾季並不是一個大主題。我想知道這是否是我們應該期望在今年晚些時候或明年出現的事情，或者你們的策略是否與此不同。

Yes, I think qualitatively our strategy is similar. The concept -- what we are really trying to do is et as many FortiGates out there as possible. And then to sell the subscriptions. And I believe that we are doing more of that than we've done in past.

是的，我認為從品質上來說我們的策略是相似的。這個概念——我們真正想做的是盡可能多地提供 FortiGate。然後出售訂閱。我相信我們在這方面所做的比過去更多。

We've also raised prices on our bundles, which we mentioned earlier, which is another tailwind of that if you will. But as you get into, if you look at us historically, when you look kind of at the carrier and SMB space, the SMBs are less likely to buy as much of the subscription.

我們還提高了捆綁包的價格，我們之前提到過，如果你願意的話，這是另一個推動因素。但當你進入時，如果你回顧我們的歷史，當你審視營運商和中小型企業空間時，中小型企業不太可能購買那麼多的訂閱。

The enterprise is a richer opportunity in that respect, so I think you see us deferring more revenue, now, which is that the question -- I think the question was asked earlier several times about the disconnect between billings and revenue. And this is part of the answer. Because more billing is going to deferred more is being attributed to the virtual offerings, the subscriptions, if you will. And so you do see that happening and it is part of our strategy and then longer-term what we hope to do is continue to enrich in that offering.

在這方面，企業是一個更豐富的機會，所以我認為你現在看到我們推遲了更多的收入，這就是問題所在——我認為這個問題之前已經被問過好幾次了，關於賬單和收入之間的脫節。這是答案的一部分。因為更多的帳單將被推遲，更多的費用將被歸因於虛擬產品、訂閱（如果你願意的話）。所以你確實看到了這種情況的發生，這是我們策略的一部分，從長遠來看，我們希望做的是繼續豐富該產品。

Which is a great thing because it keeps you connected to the customers, it keeps them current, it provides a recurring revenue, and it's also higher margin than product.

這是一件很棒的事情，因為它讓你與客戶保持聯繫，讓他們保持最新狀態，提供經常性收入，利潤率也比產品更高。

But Jeff one thing too is that if you look back from a history standpoint, it's a bit different for FortiNet because when we came to market we came to market really with the multifunction solution whereas the majority of the services that we offer today, not all of them, but the majority of the core ones have been available in our products since the beginning. So we've always had a very healthy mix of product and subscription or services revenue.

但傑夫也有一件事是，如果你從歷史的角度回顧，FortiNet 有點不同，因為當我們進入市場時，我們真正進入市場的是多功能解決方案，而我們今天提供的大多數服務，並非全部其中，但大多數核心功能從一開始就已在我們的產品中提供。因此，我們的產品和訂閱或服務收入始終保持著非常健康的組合。

So we do have growth opportunities in the way of subscriptions and some of it is what you just mentioned in terms of we raise prices and that's going to help us, we are bringing on new customers, we have new services like our Advanced Threat Protection service. But we are not going -- we are not starting from Ground Zero here, we've always had a very good mix and good balance between products and services because our subscriptions have been with us since day one pretty much.

因此，我們確實在訂閱方面有成長機會，其中一些是您剛才提到的我們提高價格的方面，這將對我們有所幫助，我們正在吸引新客戶，我們有新服務，例如高級威脅防護服務。但我們不會——我們不會從零開始，我們在產品和服務之間一直有很好的組合和良好的平衡，因為我們的訂閱從第一天起就一直伴隨著我們。

Okay that makes sense.

好吧，這是有道理的。

Secondly and this may be for you Drew, and that is you have talked a decent amount about being midway through your sales capacity expansion, can you quantify that in any way or give us some color on that? Whether in terms of time, in terms of absolute dollars? How should we interpret that remark?

其次，這可能適合您，德魯，您已經談論了相當多的關於銷售能力擴張的中途情況，您能以任何方式量化這一點，或者給我們一些信息嗎？是否以時間而言，以絕對美元而言？我們該如何解讀這句話呢？

It's not just sales capacity, we say midway on go to market, and there are several dimensions. I think we're fairly well down the path on the verticals to be frank. There's a little bit left there. We also talk about continuing to scale out sales. You know just to have sales capacity in general as we grow and to continue our growth fulfill our growth. And then we talk about -- when I also said was emerging markets and I think the referenced Japan in particular, a couple of areas where we see opportunities, we feel like perhaps we could have invested more in the past and we don't want to miss those opportunities. So that's where were looking.

這不僅是銷售能力，我們說是進入市場的中途，還有幾個維度。坦白說，我認為我們在垂直領域已經走得很遠了。那裡還剩下一點點。我們也討論了繼續擴大銷售規模。您知道，隨著我們的成長，只有擁有一般的銷售能力，並繼續我們的成長，才能實現我們的成長。然後我們談論——當我也提到新興市場時，我認為特別是提到的日本，我們看到了機會的幾個領域，我們覺得也許我們可以在過去進行更多投資，但我們不希望錯過那些機會。這就是我們要尋找的地方。

I would say that we feel comfortable Jeff, because what is encouraging to us is that we see people on-boarding very well, we see their funnels building, we see their actual productivity very good relative to what we'd expect and so it seems like when we add more people they produce very well. And you also make when you do this you are also making investments in marketing so that our name is out there, people understand our products somewhat. You have the labs testing, messages out there.

我想說，傑夫，我們感到很舒服，因為對我們來說令人鼓舞的是，我們看到人們很好地入職，我們看到他們的頻道正在建立，我們看到他們的實際生產力相對於我們的期望非常好，所以看起來就像當我們增加更多的人時，他們會表現得很好。當你這樣做時，你也在行銷方面進行投資，這樣我們的名字就在那裡，人們在某種程度上了解我們的產品。你有實驗室測試，那裡有消息。

And also that we train them and our customers. And all of that takes an investment. And I say midway because I think we're getting quite honestly probably more right than needs to be adjusted, but a lot of this is still new and you want to give yourself room to adjust, you know some of our competitors have been doing this for a long time.

我們也培訓他們和我們的客戶。而所有這些都需要投資。我說「中途」是因為我認為說實話，我們可能比需要調整的情況更正確，但其中很多仍然是新的，你想給自己調整的空間，你知道我們的一些競爭對手一直在這樣做許久。

As we talked about just last question was about subscriptions and we're talking about well, traditionally we've been in the carrier and the SMB going into the enterprise is a different go-to-market motion, we have been investing in that for 1 year, 1.5 years, and it takes a little while to invest in that, build critical mass, adjust it, and get it right. And I still think we're in an adjustment state - some investment, some adjustment. And that's why we've guided margins where they are. Certainly in the early half of the year and 2014 for the year, and some of our longer-term statements we've made about certainly committing to margin improvement by 2017.

正如我們所討論的最後一個問題是關於訂閱的，我們正在討論，傳統上我們一直在運營商中，而中小企業進入企業是一種不同的進入市場運動，我們一直在投資這方面1 年、1.5年，需要一些時間來投資、建立臨界質量、調整它並使其正確。我仍然認為我們處於調整狀態——一些投資，一些調整。這就是為什麼我們將利潤率控制在當前水準。當然是在今年上半年和 2014 年，我們所做的一些長期聲明肯定會承諾到 2017 年提高利潤率。

That being said I just want to let you know we are very disciplined here. There is no relative increase as a percent of revenue on R&D or G&A. We are very efficient there. Very focused, we are pretty - I think we are very transparent about telling people where the investment is and I think it's very easy to see the payoff when you look at acceleration of growth into the mid-30% percent range.

話雖這麼說，我只是想讓你知道我們這裡非常有紀律。研發或一般管理費用佔收入的百分比沒有相對增長。我們在那裡非常有效率。非常專注，我們很漂亮——我認為我們在告訴人們投資在哪裡方面非常透明，而且我認為當你看到增長加速到 30% 左右的範圍時，很容易看到回報。

And so again, we feel very comfortable with that, feel like we are doing the right thing, and we can do some more and make it pay off even more.

再說一次，我們對此感到非常滿意，感覺我們正在做正確的事情，我們可以做更多的事情，讓它得到更多的回報。

Okay. When would you say that your period of investment really began? Would that be at the end of 2013?

好的。您認為您的投資時期真正開始於什麼時候？那會是2013年底嗎？

Yes, pretty much. Second half.

是的，差不多。下半場。

I think it looks to me like second half of 2013, roughly. I think really most profoundly over the last year.

我認為大概是 2013 年下半年。我對過去一年的思考確實最深刻。

Well that will help in terms of shaping 2016 expectations, thank you.

嗯，這將有助於塑造 2016 年的預期，謝謝。

Keep in mind that part of the reason we invested was because I think we clearly saw that with targets, you go back the year and talk about target, and saw the other things happening, clearly saw it would be a boardroom conversation. We saw the richness of the enterprise, we targeted it because we think our products fit there very well,.

請記住，我們投資的部分原因是因為我認為我們清楚地看到了目標，你回顧過去一年並談論目標，並看到其他事情發生，清楚地看到這將是一次董事會對話。我們看到了企業的豐富性，我們瞄準了它，因為我們認為我們的產品非常適合那裡。

We thought we could sell more subscriptions and we also know that landing -- you know, think about this way, it's the land and expand strategy. And you would much rather land in a Company, a bigger Company, there's more opportunity to expand than a smaller company. Clearly a doctor's office only needs so many FortiGates, right? Whereas a large bank needs many. Lots.

我們認為我們可以銷售更多的訂閱，我們也知道著陸 - 你知道，這樣想，這就是土地和擴張戰略。而且你更願意加入一家公司，一家更大的公司，比一家小公司有更多的擴張機會。顯然醫生辦公室只需要這麼多 FortiGate，對吧？而大銀行需要很多。很多。

And that's a much richer target, little more expensive upfront to go get it. But what is encouraging to us is One, we seem to be right on all that everything we measure seems to validate that that strategy was right a year ago, it was a good call, the growth certainly is coming through and we still see some opportunity so we are going to continue to invest. And we are very sensitive to what might change there so if we need to dial back we feel like we can see it and can but we feel like we've seen it right -- nobody has a crystal ball. But what we saw coming happened.

這是一個更豐富的目標，實現它的前期成本也更高。但令我們感到鼓舞的是，我們似乎在所有方面都是正確的，我們衡量的一切似乎都證明一年前的戰略是正確的，這是一個很好的決定，增長肯定正在實現，我們仍然看到一些機會所以我們將繼續投資。我們對那裡可能發生的變化非常敏感，所以如果我們需要回撥，我們感覺我們可以看到它並且可以，但我們感覺我們已經看到了它的正確性——沒有人有水晶球。但我們所看到的事情發生了。

Okay that's very helpful. Thank you both.

好的，這非常有幫助。謝謝你們倆。

Next question, [Taz Pijalkey] Deutsche Bank.

下一個問題，[Taz Pijalkey] 德意志銀行。

How are you? I want to ask again the question about the product, the billings, and the very disconnect. Because I getting had by people just trying to explore this issue a little bit further. So you explained the fact that the bundle is shifting your revenue base more towards subscriptions, so it's getting deferred more. SO I felt that. But then if I look at the revenue mix -- the performance of billings versus the performance of revenues, I don't even see performance on the subscription line.

你好嗎？我想再次問有關產品、帳單和脫節的問題。因為我被那些只是想進一步探討這個問題的人所吸引。所以你解釋了這樣一個事實，即該捆綁包正在將你的收入基礎更多地轉向訂閱，因此它被推遲了更多。所以我有這樣的感覺。但如果我看一下收入組合——帳單表現與收入表現，我甚至看不到訂閱線上的表現。

Se even if the revenue mix is shifting more toward subscription, we should see that somewhere in the income statement where your subscription line outperforms your product line. It does a really mix shift. But even that is not -- we are not seeing that. It's only billings are growing at 36% while revenues are growing in like the low 20% range. Was the quarter -- were the large deals more back-end lowered? Whas that the reason that you couldn't recognize that as billings?

即使收入結構更轉向訂閱，我們也應該在損益表中看到訂閱產品線的表現優於產品線。它確實實現了混合轉變。但即便如此，我們也沒有看到這一點。它的營業收入僅成長 36%，而收入成長則在 20% 左右。本季大型交易是否在後端有所下降？這就是為什麼你無法將其識別為比林斯的原因嗎？

Taz, even if you had it front-end loaded, you wouldn't get much of an uplift. You know you are only talking about so much amortization in the quarter. Unless you really closed everything on the first day of the quarter. Because you are really doing days amortization.

Taz，即使你前端加載了它，你也不會得到太大的提升。您知道您只談論了本季度的這麼多攤銷。除非你真的在季度的第一天就關閉了所有的東西。因為你實際上是在做天數攤銷。

But it is due, I mean we don't share attach rate, but clearly if you're deferring more there going to be less in the upfront. If it is not in the product it has to be in the services, right?

但這是到期的，我的意思是我們不分享附加費率，但顯然如果你推遲更多，那麼預付款就會減少。如果它不在產品中，那麼它必須在服務中，對嗎？

Right. But it has not turned up in services either, even if you look at the performance of the quarter.

正確的。但即使你看看本季的表現，它也沒有出現在服務業。

You are talking about revenue. Look at deferred revenue.

你說的是收入。看看遞延收入。

I mean that is the question, right? Why is it, I mean there's more being deferred, there has got to be more being recognized also on the subscription line, right? Unless that is happening more towards the back end of the quarter and there was not enough time. Enough days to recognize the income still.

我的意思是這就是問題，對吧？為什麼會這樣，我的意思是有更多的內容被推遲，在訂閱線上也必須有更多的內容被認可，對吧？除非這種情況在本季末發生得更多，而且沒有足夠的時間。足夠的天數仍然可以確認收入。

That is not correct. We've had normal -- we had a normal linearity quarter. I don't think that's right.

這是不正確的。我們有正常的——我們有正常的線性季度。我認為這是不對的。

Okay, got it. No problem. Thanks. And on

好，知道了。沒問題。謝謝。繼續

It's more being deferred for subscription.

更多的是延後訂閱。

On the US enterprise spread, what appliance is that driving, is that midrange or the high end? Because if I look at the mix of billings by appliances, you're actually, the mix actually shifted in favor of the low end and in the mid and the high end actually were flat or slightly down.

在美國企業傳播中，什麼設備在推動，是中階還是高端？因為如果我看一下電器的帳單組合，實際上，這種組合實際上轉向了低端，而中端和高端實際上持平或略有下降。

Hold on one second we are looking.

稍等一下，我們正在尋找。

Oh he is talking about -- let me take a shot at this.

哦，他正在談論——讓我來嘗試一下。

Taz, we are tending to do better at the higher end of the enterprise, but we also do well ay branch locations, which could explain some of the low-end product but that could be a large enterprise. Large retailers, large -- anybody who has a lot of branch offices that might be a large corporation could have more of a hub and spoke type of strategy and that is where you see some of the low-end product, that comes from -- sometimes those things actually go together.

Taz，我們傾向於在高端企業做得更好，但我們在分店也做得很好，這可以解釋一些低端產品，但這可能是一家大型企業。大型零售商，大型零售商，任何擁有大量分支機構的大型公司，都可以採取更多的中心輻射型策略，這就是你看到的一些低端產品的來源——有時這些事情實際上是在一起的。

Yes, a lot of times it does. As we shift more eared towards enterprise and larger deals. Some of those deals are a lot of low-end boxes but it's tied to-- is connected to a large box in other parts of the network too.

是的，很多時候確實如此。隨著我們更加關注企業和更大的交易。其中一些交易是很多低端盒子，但它也與網路其他部分的大型盒子相連。

Taz, just as I thought about that it reminded me of something that might help on your first question. Just taking into account that you do more renewals as you go forward too. In the quarter especially because Q1 carries - there's a lot of times will carry a Q4 renewal or something like that in a calendar year end and so if you float up in deferred revenue for that. And so the timing of when you bill may not perfectly overlap with when the termination occurs.

塔茲，正當我想到這一點時，我想起了一些可能對你的第一個問題有幫助的事情。只要考慮到您在前進的過程中也會進行更多的續訂。在本季度，特別是因為第一季度會進行 - 很多時候會在日曆年末進行第四季度續約或類似的事情，因此如果您為此增加遞延收入。因此，您計費的時間可能與終止發生的時間並不完全重疊。

And so there's a bit of a timing difference sometimes on the billings over time. And if people are just trying to go in there and model it one way that would be one thing they may want to somehow take into account. It wasn't like it was any extra effort on renewals or anything, I don't want to call it out from that perspective but more from a modeling perspective. I think you just want to be sure that you are thinking through that.

因此，隨著時間的推移，帳單有時會出現一些時間差異。如果人們只是試圖進入那裡並以一種方式建模，這將是他們可能想要以某種方式考慮的一件事。這並不是說在續訂或其他方面有任何額外的努力，我不想從這個角度來稱呼它，而是更多地從建模的角度來稱呼它。我想你只是想確定你正在考慮這個問題。

Okay that's helpful.

好的，這很有幫助。

On your revenue mix, within channel and direct can you remind me where you stand today? How much you sell directly and how much you sell through the channel?

關於您的收入組合、通路內和直接收入，您能提醒我您今天的處境嗎？直接銷售多少，透過通路銷售多少？

Everything goes through the channel but as you go up into larger size customers there is going to be more direct touch. that's where we have been investing. ANd you know if anything I think it has delivered a higher level of productivity by doing that.

一切都透過管道進行，但當你接觸規模較大的客戶時，將會有更直接的接觸。這就是我們一直在投資的地方。我認為這樣做可以提高生產力。

Got it. Just one last one. As you get into the large as you have more large deals is there more discounting going on to get those larger deals? I see your average pricing went down?

知道了。只剩下最後一張了當你進入大市場時，你有更多的大額交易，是否會有更多的折扣來獲得這些大額交易？我看到你們的平均價格下降了？

No. You know what is interesting I think the larger-- it depends on how you think about that. I think the larger enterprises are less price-sensitive if anything.

不，你知道什麼是有趣的，我認為更大的——這取決於你如何看待這一點。我認為較大的企業對價格的敏感度較低。

Anywhere you see price discounting you know I get -- to be frank it tends to be probably Asia is one area of opportunity it seems like continual negotiation if you will, and then sometimes on the lower end. But I think as you get up on the higher end and the more strategic deal where you're really looking at these land and expand type enterprises, there's not tons of price sensitivity. We are disruptive.

無論你在哪裡看到價格折扣，你都知道我得到了——坦白說，亞洲可能是一個充滿機會的領域，如果你願意的話，這似乎是持續的談判，有時甚至是低端談判。但我認為，當你真正關注這些土地和擴張型企業的高端和更具策略性的交易時，就不會有太多的價格敏感度。我們是破壞性的。

What I said earlier was correct, we think of ourselves as being very disruptive in terms of price performance and I'd refer you to the NFS labs testing which I think illustrate that very well when we are up in the upper right corner not only in terms of effectiveness but in terms of price performance.

我之前所說的是正確的，我們認為自己在性價比方面非常具有破壞性，我建議您參考 NFS 實驗室測試，我認為當我們不僅在右上角時，它很好地說明了這一點不僅注重效果，而且注重性價比。

Right. I am just looking at your large deal momentum and then the growth margin on the parks side going down, so I am trying to figure out if the large deal momentum has anything to do with your discounting more. And hence the decline in the product gross margin.

正確的。我只是關注您的大宗交易勢頭，然後公園方面的增長率下降，所以我試圖弄清楚大宗交易勢頭是否與您的折扣更多有關。因此產品毛利率下降。

No no.

不，不。

Got it. Thank you.

知道了。謝謝。

(Operator instructions)

（操作員說明）

Next question, Kelly Penn, Pantheon Capital

下一個問題，Kelly Penn，萬神殿資本

I wanted to know when you sign a subscription deal whether you pay the salesman their commissions up front or as part as the revenue is recognized?

我想知道當您簽署訂閱協議時，您是否預先向銷售人員支付佣金，還是作為收入確認的一部分？

Well, there's two questions there. One is a economic question and one is an accounting question. But it's convenient in our case that we do both at the same time which is up front.

嗯，有兩個問題。一個是經濟問題，一個是會計問題。但在我們的例子中，我們可以同時進行這兩項工作，這是很方便的。

Upfront, okay. And how much is the deferred revenue of subscriptions versus licensed or other kinds of revenue?

先說好啦訂閱的遞延收入與授權或其他類型的收入相比是多少？

I don't know the exact amount of product but it's small.

我不知道產品的具體數量，但它很小。

What a small?

多大啊？

We don't defer much product revenue at all. It's very little. It's all subscriptions.

我們根本不會延後太多產品收入。很少。都是訂閱的。

And maintenance? Well I am saying broadly subscription -- FortiCare is our support offering, which is more you are dial-in support and then the subscription is the FortiGuard the various FortiGuard and bundled offerings where we're talking about keeping customers up to date on intrusion protection, malware, the various web filtering et cetera. those things get updated constantly and then that's a subscription, that's right to that.

和維護？好吧，我說的是廣泛的訂閱——FortiCare 是我們的支援服務，更多的是撥入支持，然後訂閱是 FortiGuard，各種 FortiGuard 和捆綁產品，我們正在談論讓客戶了解最新的入侵防護、惡意軟體、各種網路過濾等等。這些東西會不斷更新，然後就是訂閱，沒錯。

Earlier you had talked about SMB customers having a higher -- I mean a lower retention rate. When you were explaining between the renewals of the boxes versus the customer retention rate. So is the 90% including the SMB customers?

早些時候您曾談到中小企業客戶的保留率較高——我的意思是較低。當您解釋盒子的續訂與客戶保留率之間的關係。那麼90%包括中小企業客戶嗎？

Yes, but I think perhaps I mischaracterized that. What I am saying is that the SMBs have different behavior. It's harder to get a line of sight to them.

是的，但我想也許我錯誤地描述了這一點。我想說的是，中小企業有不同的行為。很難看到他們。

So we may not actually see the renewal because it may go through several levels of channel for instance and it's just disguised. So it's hard to count it directly. When you have 225,000 customers you tend to lose sight of the lower end. The 90% is just those customers which we can count that either renews or bought another device.

因此，我們可能實際上看不到更新，因為它可能會經過多個層級的管道，而且它只是偽裝的。所以很難直接計算。當您擁有 225,000 名客戶時，您往往會忽略低端客戶。 90% 是我們可以統計的續約或購買另一台設備的客戶。

What I'm saying is that as they get larger it's easier to track, therefore we can see more, we can see them more clearly because think about it this way, are you going to be more focused on $10 or $10,000? And we are going to obviously be more focused up there and so we certainly spend more time tracking those. That being said, we do our best to get everything we can. But I think the 90%--we say 90% or better because that is what we can track.

我的意思是，隨著它們變得更大，更容易追踪，因此我們可以看到更多，我們可以更清楚地看到它們，因為這樣想，你會更關注 10 美元還是 10,000 美元？顯然，我們將更加專注於那裡，因此我們當然會花更多的時間來追蹤這些。話雖這麼說，我們盡最大努力獲得我們所能得到的一切。但我認為 90%——我們說 90% 或更好，因為這是我們可以追蹤的。

(Multiple speakers) but is the 90% across a certain base of your 200,000 customers or is a smaller set of them?

（多位發言者）但這 90% 是 20 萬名客戶中的某個特定群體，還是一小部分客戶？

No, it's all or customers.

不，一切都是客戶。

I see. Okay thank you.

我懂了。好的謝謝。

I am showing no further questions in the queue. I would like to turn the program back to Michelle Spolver.

我在隊列中沒有顯示任何其他問題。我想把這個節目轉回給 Michelle Spolver。

All right. Thank you everybody, I appreciate your participation in both calls today. I will be available if you have any questions, you can email me or call me and again we will be at RSA for those who will be attending we will be happy to see you there as well. That's it, and thank you very much.

好的。謝謝大家，我感謝你們參加今天的兩場電話會議。如果您有任何疑問，我會隨時為您服務，您可以給我發電子郵件或打電話給我，我們將在 RSA 為那些將要參加的人服務，我們也很高興在那裡見到您。就是這樣，非常感謝。

Okay ladies and gentlemen, this does conclude your conference you may now disconnect and have a great day.

好的，女士們先生們，您的會議到此結束，您現在可以斷開連接並度過美好的一天。