Fortinet Inc (FTNT) 2022 Q3 法說會逐字稿

Welcome to the Fortinet's Third Quarter Earnings Conference Call. (Operator Instructions) Please be advised that today's conference is being recorded.

歡迎參加 Fortinet 第三季財報電話會議。 （操作員指示）請注意，今天的會議正在錄製中。

And without further ado, I will now hand the conference over to your first speaker, Peter Salkowski, Vice President of Investor Relations at Fortinet. Peter, please go ahead.

言歸正傳，我現在將會議交給第一位發言人，Fortinet 投資者關係副總裁 Peter Salkowski。彼得，請繼續。

Thank you, Eric. Good afternoon, everyone. This is Pete Salkowski, Vice President of Investor Relations at Fortinet. I am pleased to welcome everyone to our call to discuss Fortinet's discounts for the third quarter of 2022. Speakers on today's call are Ken Xie, Fortinet's Founder, Chairman and CEO; and Keith Jensen, our Chief Financial Officer. It's a live call that will be available for replay via webcast or Investor Relations website.

謝謝你，埃里克。大家下午好。我是 Pete Salkowski，Fortinet 投資者關係副總裁。我很高興歡迎大家參加我們的電話會議，討論 Fortinet 2022 年第三季的折扣。和我們的財務長 Keith Jensen。這是一場現場電話會議，可透過網路廣播或投資者關係網站重播。

Ken will begin today's call by providing a high-level perspective on our business, then follow with a review of our financial and operating results for the third quarter, providing guidance for the fourth quarter and updating the full year. We'll then open the call for questions. (Operator Instructions)

肯將在今天的電話會議中首先對我們的業務進行高層次的展望，然後回顧我們第三季度的財務和營運業績，為第四季度提供指導並更新全年情況。然後我們將開始提問。 （操作員說明）

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 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.

在開始之前，我想提醒大家，在今天的電話會議上，我們將做出前瞻性聲明，這些前瞻性聲明受到風險和不確定性的影響，可能導致實際結果與預測有重大差異。請參閱我們向 SEC 提交的文件，特別是我們最近的 10-K 和 10-Q 表中的風險因素，以了解更多資訊。所有前瞻性陳述僅反映我們截至本簡報發布之日的觀點，我們不承擔任何義務，並特別聲明不承擔任何更新前瞻性陳述的義務。

Also, all references to financial metrics that we make on today's call are non-GAAP, unless stated otherwise. Our GAAP results and our GAAP to non-GAAP reconciliations are located in our earnings press release and in the presentation that accompany today's remarks, both of which are posted on the Investor Relations website.

此外，除非另有說明，我們在今天的電話會議中提到的所有財務指標均非公認會計準則。我們的 GAAP 業績以及我們的 GAAP 與非 GAAP 調整表位於我們的收益新聞稿和今天演講隨附的簡報中，兩者均發佈在投資者關係網站上。

Ken and Keith's prepared remarks today -- for today's earnings call will be posted on the quarterly earnings section of the Investor Relations website immediately following today's call.

肯和基斯今天為今天的收益電話會議準備的演講將在今天的電話會議後立即發佈在投資者關係網站的季度收益部分。

Lastly, all references to growth are on a year-over-year basis unless noted otherwise.

最後，除非另有說明，所有提及的成長都是年增長。

I will now turn the call over to Ken.

我現在會把電話轉給肯。

Thanks, Peter, and thank you to everyone for joining today's call to review our outstanding third quarter 2022 results. Revenue for the quarter grew 33%, significantly outpacing the inventory growth rate. We believe that customer recognition of the exceptional value proposition we provided by a high performance for the ASIC technology and integrate FortiOS. operation system is driving our ability to take cybersecurity market share.

謝謝 Peter，也謝謝大家參加今天的電話會議，回顧我們 2022 年第三季的優秀業績。該季度營收成長 33%，明顯超過庫存成長率。我們相信，客戶認可我們透過高效能 ASIC 技術和整合 FortiOS 提供的卓越價值主張。作業系統正在推動我們佔領網路安全市場份額的能力。

Product revenue growth was very strong at 39%, extending our position as a product revenue leader in the cybersecurity industry. Our product revenue performance reflects the strong demand we have built over the past 18 months across our security solutions along with the successful execution of our internal team in managing the supply chain challenges. 3 growth drivers, the heightened threat environment, the convergence of security and networking and the consolidation of security functionality and vendors together with the opportunity to upsell additional security services to a significant installed base are expected to drive future growth.

產品收入成長非常強勁，達到 39%，擴大了我們作為網路安全產業產品收入領導者的地位。我們的產品營收表現反映了過去 18 個月對我們的安全解決方案的強勁需求，以及我們內部團隊在管理供應鏈挑戰方面的成功執行。 3 個成長驅動因素、威脅環境的加劇、安全性和網路的整合、安全功能和供應商的整合，以及向大量安裝基礎追加銷售額外安全服務的機會，預計將推動未來的成長。

First, the threat landscape, including ransomware, continue to expand an evolving targeting company of our size, location and industries. To counter the threat landscape, we are implementing a unique universal ZTNA across a wide range of customers, driving triple-digit growth for this product and delivering a comprehensive approach to zero trust that is consistent for any user anywhere on any device and supporting today's hybrid workforce.

首先，包括勒索軟體在內的威脅情勢持續擴大我們規模、地點和產業中不斷發展的目標公司。為了應對威脅情勢，我們正在為廣大客戶實施獨特的通用ZTNA，推動該產品實現三位數成長，並提供全面的零信任方法，該方法對於任何用戶在任何地方、任何裝置上都是一致的，並支持當今的混合勞動力。

Second, for years, Fortinet has lead strategy around convergence of networking and security. We estimate the total addressable market for networking and security will increase from $54 billion today to $73 billion in 2026. Convergence accelerate digital transformation and substantially reduce our operation costs and combining networking modernization with dynamic security not (inaudible) spend every part of the network, especially now that many companies are merging SOC and IOC operation together. Fortinet is leading the convergence trend with a wide range of technologies, including network firewall segmentation, Secure SD-WAN, OT security and 5G in a single operation system, which can be deployed as hardware, software, cloud and as a service.

其次，多年來，Fortinet 一直主導網路和安全融合戰略。我們估計網路和安全的潛在市場總額將從目前的540 億美元增加到2026 年的730 億美元。聽不清楚）花費網路的每個部分，特別是現在許多公司正在將 SOC 和 IOC 業務合併在一起。 Fortinet 憑藉廣泛的技術引領融合趨勢，包括網路防火牆分段、安全性 SD-WAN、OT 安全性和單一作業系統中的 5G，可部署為硬體、軟體、雲端和服務。

Fortinet continues to gain Secure SD-WAN market share as our integrated Secure SD-WAN solution delivers better security, performance and efficiency over more traditional offerings. In the quarter, SD-WAN and OT bookings grow over 45% and 75%, respectively, and together accounted for over 25% of total bookings. We believe we can achieve #1 market share in SD-WAN in the next couple of years.

Fortinet 繼續獲得安全 SD-WAN 市場份額，因為我們的整合安全 SD-WAN 解決方案比更傳統的產品提供更好的安全性、效能和效率。本季度，SD-WAN 和 OT 預訂量分別成長超過 45% 和 75%，合計佔總預訂量超過 25%。我們相信，未來幾年我們可以在 SD-WAN 領域實現第一的市佔率。

Today, we announced a FortiGate 1000F, our latest innovation in converging networking and security, powered by our new NP7 SPU, the 1000F delivered 5 to 10x higher performance across 6 major network security functions by consuming 80% less power versus competitive solutions. The lower power consumption was a contributing factor in our top 2% ranking in S&P Global Corporate Sustainability Assessment.

今天，我們發布了FortiGate 1000F，這是我們在融合網路和安全方面的最新創新產品，由我們的新型NP7 SPU 提供支持，1000F 的6 個主要網路安全功能的效能提高了5 至10 倍，與競爭解決方案相比，功耗降低了80%。較低的功耗是我們在標準普爾全球企業永續發展評估中排名前 2% 的因素。

Our third growth driver is the consolidation of our vendors and product functionality with FortiASIC huge computing power advantage, FortiOS can integrate most security function than our competitors, together with over 30 key products ranging from endpoint to network to the cloud security, Fortinet provides our customer with easier operation while lower the management cost and the total cost of ownership. Additionally, we are very focused on upselling value-added security services to a significant customer base.

我們的第三個成長動力是我們的供應商和產品功能的整合，憑藉FortiASIC龐大的運算能力優勢，FortiOS可以比我們的競爭對手整合大多數安全功能，以及從端點到網路到雲端安全的30多個關鍵產品，Fortinet為我們的客戶提供操作更簡單，同時降低管理成本和總擁有成本。此外，我們非常注重向重要的客戶群追加銷售加值安全服務。

According to IDC's second quarter unit share data, Fortinet hold the #1 market share position for unit shipped and 43%, up 210 basis points. We expect to reach [50%] market share in the next few years. This leadership position and the substantial installed base creates attractive economy of scale and an opportunity to upsell additional security services.

根據 IDC 第二季單位佔有率數據，Fortinet 的出貨量市佔率排名第一，為 43%，成長了 210 個基點。我們預計未來幾年市佔率將達到 [50%]。這種領先地位和龐大的安裝基礎創造了有吸引力的規模經濟和追加銷售額外安全服務的機會。

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.

在將電話轉給 Keith 之前，我要感謝我們全球的員工、客戶、合作夥伴和供應商的持續支持和辛勤工作。

All right. Thank you, Ken, and good afternoon, everyone. Let's start with an overview of our strong third quarter performance.

好的。謝謝你，肯，大家下午好。讓我們先概述一下我們強勁的第三季業績。

Revenue of $1.15 billion was another quarterly record for Fortinet, increasing 33% year-over-year and 12% sequentially, our highest third quarter sequential growth rate in 11 years. We continue to deliver better-than-industry average top line growth and generate strong profitability. Our operating margin exceeded guidance is over 28%, driving the adjusted free cash flow margin to 40%.

11.5 億美元的營收再創 Fortinet 季度記錄，年增 33%，季增 12%，是 11 年來最高的第三季環比成長率。我們繼續實現高於行業平均水平的收入成長並產生強勁的盈利能力。我們的營業利益率超過指導值 28% 以上，使調整後的自由現金流利潤率達到 40%。

Our history as a public company has revolved around the Rule of 40, measured as the combined total of revenue growth and operating margin. Impressively, the Q3 total came in at over 60. We continue to see success in our strategy for expanding further into the large enterprise segment. The number of deals over $1 million increased over 80% to 153 deals.

我們作為一家上市公司的歷史一直圍繞著 40 法則，以收入成長和營業利潤率的總和來衡量。令人印象深刻的是，第三季總數超過 60。 100 萬美元以上的交易數量增加了 80% 以上，達到 153 筆。

The total billings value of deals over $1 million more than doubled driven by a record number of deals over $5 million. And G2000 bookings increased over 40%. Our strong third quarter results reflect solid customer demand across both our core and enhanced platform technologies and the exceptional performance of the team in a challenging supply chain environment.

由於超過 500 萬美元的交易數量創紀錄，超過 100 萬美元的交易總帳單價值增加了一倍多。 G2000 的預訂量增加了 40% 以上。我們強勁的第三季業績反映了客戶對我們的核心和增強平台技術的強勁需求，以及團隊在充滿挑戰的供應鏈環境中的卓越表現。

We believe the investments we've made in building our platform and our go-to-market engine enables our customers' digital transformation journey.

我們相信，我們在建立平台和上市引擎方面所做的投資能夠幫助客戶實現數位轉型之旅。

Our platform strategy allows customers to converge networking functionality with security capabilities while consolidating cybersecurity products, providing security across their entire digital infrastructure while lowering their operating costs.

我們的平台策略讓客戶將網路功能與安全功能整合在一起，同時整合網路安全產品，為整個數位基礎設施提供安全性，同時降低營運成本。

Recently, The Forrester Wave: Enterprise Firewalls report acknowledged the success of our investment strategy, placing Fortinet as a leader for the first time in its history. According to Forrester, "Fortinet excels the performance for value and offers a wide array of adjacent services. Long known for its bang-for-the-buck approach to network security, Fortinet has built a flexible and capable platform with its flagship product, the FortiGate Firewall."

最近，Forrester Wave：企業防火牆報告承認了我們投資策略的成功，使 Fortinet 歷史上首次成為領導者。 Forrester 表示，“Fortinet 的性能卓越，並提供廣泛的相鄰服務。Fortinet 長期以來以其物超所值的網絡安全方法而聞名，通過其旗艦產品——Fortinet 構建了一個靈活且功能強大的平台” 。

Taking a closer look at the income statement. Product revenue grew 39%. Product revenue growth for our core and enhanced technology platform products increased 29% and 51%, respectively. The product revenue growth rate accelerated over 4 points sequentially, especially impressive given it is our toughest year-over-year comparison in over 10 years.

仔細看看損益表。產品收入成長39%。我們的核心和增強技術平台產品的產品收入成長分別成長 29% 和 51%。產品收入成長率連續加快超過 4 個百分點，尤其令人印象深刻，因為這是我們 10 多年來最艱難的同比比較。

Service revenue was up 28%, accelerating 3 points sequentially driven by strong product revenue growth and 7 consecutive quarters of increasing short-term deferred revenue growth rates. Support and related service revenue was up 28%, accelerating over 2 points sequentially to $311 million. While security subscription service revenue was up 29%, accelerating 4 points sequentially to $370 million.

在產品收入強勁成長和短期遞延收入成長率連續 7 個季度上升的推動下，服務收入成長 28%，季增 3 個百分點。支援和相關服務收入成長 28%，比上一季成長 2 個百分點以上，達到 3.11 億美元。安全訂閱服務收入成長 29%，較上一季成長 4 個百分點，達到 3.7 億美元。

Total revenue in the Americas increased 34%. EMEA revenue increased 37% and APAC posted revenue growth of 23%. Total gross margin at 76.2% exceeded the high end of our guidance range. Product gross margin of 61% was up 30 basis points year-over-year. Services gross margin of 86.6% was flat year-over-year, but up 70 basis points sequentially.

美洲地區的總收入成長了 34%。歐洲、中東和非洲地區營收成長 37%，亞太地區營收成長 23%。 76.2% 的總毛利率超出了我們指導範圍的上限。產品毛利率為61%，較去年成長30個基點。服務毛利率為 86.6%，與去年同期持平，但較上季成長 70 個基點。

Operating margin of 28.3% was up 250 basis points, benefiting from FX and the operating margin leverage that comes with higher revenues.

受惠於外匯和收入增加帶來的營業利潤槓桿，營業利潤率為 28.3%，成長了 250 個基點。

Shifting to billings. Billings of $1.4 billion were up 33%, representing the sixth consecutive quarter of billings growth in excess of 30%. Core platform billings were up 27% and accounted for 67% of total billings.

轉移到比林斯。營業額成長 33%，達 14 億美元，連續第六個季度營業額成長超過 30%。核心平台的帳單增加了 27%，佔總帳單的 67%。

As shown on Slide 6, we entry-level FortiGates posted very strong growth with the mix shifting 16 points in their favor, driven by demand and as we expected, improved supply. Enhanced platform technology billings were up 45% and accounted for 33% of total billings, a positive mix shift of 3 points. Average contract term was flat year-over-year at 29 months.

如投影片 6 所示，我們的入門級 FortiGates 實現了非常強勁的成長，在需求的推動下，以及正如我們預期的那樣，供應量有所改善，其組合變化了 16 個百分點。增強型平台技術的銷售額成長了 45%，佔總銷售額的 33%，正向組合轉變為 3 個百分點。平均合約期限為 29 個月，與去年同期持平。

Looking at the statement of cash flow summarized on Slide 7 and 8. Free cash flow was $395 million. Adjusted free cash flow, which excludes real estate investments, was $464 million, representing a 40% adjusted free cash flow margin. DSOs were down 5 days sequentially while increasing 12 days year-over-year to 75 days.

請參閱投影片 7 和 8 中總結的現金流量表。調整後自由現金流（不含房地產投資）為 4.64 億美元，調整後自由現金流利潤率為 40%。 DSO 環比下降 5 天，較去年同期增加 12 天至 75 天。

Cash taxes were $69 million. Capital expenditures were $88 million, including $69 million for real estate investments. We repurchased 10.2 million shares of our common stock for a cost of $500 million, bringing the year-to-date totals to 36 million shares at a total cost of $2 billion. The remaining repurchase authorization totals $530 million.

現金稅為 6900 萬美元。資本支出為 8,800 萬美元，其中 6,900 萬美元用於房地產投資。我們以 5 億美元的價格回購了 1,020 萬股普通股，使年初至今的總股本達到 3,600 萬股，總成本為 20 億美元。剩餘的回購授權總額為5.3億美元。

Regarding backlog, the backlog at the end of the third quarter was up slightly from the end of the prior quarter, with FortiGate Firewalls accounting for just 1/3 of total backlog. We expect fourth quarter ending backlog to be relatively consistent with the third quarter backlog as we are seeing early signs of a transition back to more normalized customer buying behaviors. Moving to guidance.

在積壓方面，第三季末的積壓量較上季末略有上升，其中FortiGate防火牆僅佔總積壓量的1/3。我們預計第四季末的積壓訂單將與第三季的積壓訂單相對一致，因為我們看到了客戶購買行為回歸更正常化的早期跡象。轉向指導。

Moving to guidance. The current environment favors a Fortinet style platform that offers integrated solutions and strong security capabilities and an attractive cost of ownership. To enhance our ability to capture our share of the large market opportunity, we plan to continue to invest in innovation across our integrated platform offerings.

轉向指導。目前的環境有利於 Fortinet 風格的平台，它提供整合的解決方案和強大的安全功能以及有吸引力的擁有成本。為了增強我們抓住巨大市場機會的能力，我們計劃繼續投資於我們的整合平台產品的創新。

Now I'd like to review our outlook for the fourth quarter, summarized on Slide 9, which is subject to disclaimers regarding forward-looking information that Peter provided at the beginning of the call. And to start, as part of the Q4 guidance setting process, we considered several factors, including the greater macro uncertainty today and with it, the increased risk of forecasting the timing of certain larger transactions.

現在，我想回顧一下投影片 9 中總結的我們對第四季度的展望，該展望受到有關彼得在電話會議開始時提供的前瞻性資訊的免責聲明的約束。首先，作為第四季度指導制定過程的一部分，我們考慮了幾個因素，包括當前更大的宏觀不確定性以及隨之而來的預測某些大型交易時間的風險增加。

The transition to more normalized customers buying behaviors, which means there is less of an emphasis on ordering to get a place online. And for comparison, in the fourth quarter of 2021, when supply was tighter, backlog increased over $120 million and contributed to 49% bookings growth.

客戶購買行為更加標準化，這意味著不再那麼強調線上訂購。相較之下，在供應緊張的 2021 年第四季度，積壓訂單增加了超過 1.2 億美元，促成了 49% 的預訂成長。

And lastly, elevated year early year top line comparisons that include certain onetime items adding a couple of points to service revenue growth and fully cycling the Alaxala acquisition. In response, we have slightly widened our top line guidance ranges. For the fourth quarter, we expect to again reach the Rule of 60. And with that, the key metrics include billings in the range of $1.665 billion to $1.720 billion, which at the midpoint represents growth of 30%.

最後，年初營收比較有所提高，其中包括某些一次性項目，為服務收入成長增加了幾個百分點，並全面循環了 Alaxala 收購。作為回應，我們略微擴大了營收指引範圍。對於第四季度，我們預計將再次達到 60 法則。

Revenue in the range of $1.275 billion to $1.315 billion, which represents growth of 34%. Non-GAAP gross margin of 75% to 76%, non-GAAP operating margin of 30% to 31%, non-GAAP earnings per share of $0.38 to $0.40, which assumes a share count of between 795 million and 805 million.

營收在 12.75 億美元至 13.15 億美元之間，成長 34%。非 GAAP 毛利率為 75% 至 76%，非 GAAP 營業利潤率為 30% 至 31%，非 GAAP 每股盈餘為 0.38 美元至 0.40 美元（假設股票數量介於 7.95 億至 8.05 億股之間）。

We expect capital expenditures of $75 million to $85 million. We expect a non-GAAP tax rate of 17%. And for the full year, we expect billings and revenue growth to exceed 30% for the second consecutive year. Billings in the range of $5.540 billion to $5.595 billion, which at the midpoint represents 33%, revenue in the range of $4.410 billion to $4.450 billion, which represents growth of 33%.

我們預計資本支出為 7500 萬至 8500 萬美元。我們預期非 GAAP 稅率為 17%。對於全年，我們預計帳單和收入成長將連續第二年超過 30%。營業額在 55.40 億美元到 55.95 億美元之間，中間值佔 33%，營收在 44.10 億美元到 44.50 億美元之間，成長 33%。

Perhaps for context, we should note at the midpoint, these full year billings and revenue growth rates are 3 points higher than the initial growth rates we provided in early February, despite the start of the war in Ukraine in late February, significant increases in interest rates and increasing uncertainty in the macro environment, and importantly, full year backlog is expected to be above the February estimate of $350 million.

也許就背景而言，我們應該在中點注意到，這些全年帳單和收入成長率比我們在 2 月初提供的初始成長率高出 3 個百分點，儘管烏克蘭戰爭於 2 月底開始，利息大幅增加利率和宏觀環境不確定性的增加，更重要的是，全年積壓預計將高於2 月估計的3.5 億美元。

Total service revenue in the range of $2.645 billion to $2.655 billion, which represents growth of 27% and implies full year product revenue growth of 42%. The non-GAAP gross margin of 75% to 76%; non-GAAP operating margin of 26% to 27% at the midpoint a year-over-year increase of 30 basis points. And again, for context, at the midpoint, gross and operating margin expectations were 50 and 100 basis points above the February guide, respectively.

總服務收入在 26.45 億美元至 26.55 億美元之間，成長 27%，意味著全年產品收入成長 42%。非公認會計準則毛利率為75%至76%；非美國通用會計準則營業利潤率為 26% 至 27% 的中位數，較去年同期成長 30 個基點。同樣，就背景而言，在中點，毛利率和營業利潤率預期分別比 2 月份指導值高 50 和 100 個基點。

Non-GAAP earnings per share of $1.13 to $1.15, which assumes a share count of between 800 million and 810 million. We expect full year capital expenditures of $325 million to $335 million. We expect our non-GAAP tax rate to be 17%. We expect cash taxes to be $265 million.

非公認會計準則每股收益為 1.13 美元至 1.15 美元，假設股票數量在 8 億至 8.1 億之間。我們預計全年資本支出為 3.25 億至 3.35 億美元。我們預期非 GAAP 稅率為 17%。我們預計現金稅為 2.65 億美元。

Before wrapping up, I'd like to offer some preliminary thoughts on 2023 and our midterm targets on the heels of a very strong set of growth in 2021 -- in 2022. We continue to successfully balance growth and profitability, while investing in longer-term innovation and go-to-market initiatives to fuel future growth. The strength of our business model includes its diversification, margins that provide capacity for future investment and a rich mix of higher-margin recurring service revenues.

在結束演講之前，我想對 2023 年以及繼 2021 年和 2022 年強勁增長之後的中期目標提出一些初步想法。來推動未來的成長。我們業務模式的優勢包括多元化、為未來投資提供能力的利潤率以及高利潤率經常性服務收入的豐富組合。

As we saw in the highs of pandemic, the diversification helps mitigate the risk of economic slowdowns. Specifically, in 2020, we delivered operating margins of nearly 27%, adjusted free cash flow margin of over 38% and top line growth of 20%. And during the past 12 months, we have really exceeded our operating margin targets, while increasing our engineering headcount by about 20% and significantly increasing our future sales capacity by over 25%, including a greater than 50% increase in new nontenured salespeople.

正如我們在疫情最嚴重時期看到的那樣，多元化有助於減輕經濟放緩的風險。具體來說，2020 年，我們的營業利潤率接近 27%，調整後的自由現金流利潤率超過 38%，營收成長 20%。在過去的12 個月裡，我們確實超越了營業利潤目標，同時將我們的工程人員數量增加了約20%，並將我們的未來銷售能力顯著增加了25% 以上，其中新的非終身製銷售人員增加了50% 以上。

While we will provide more detailed 2023 guidance when we report our fourth quarter results, it's worth leaning that service revenue accounts for 60% of total revenue, with gross margins hovering above 85%. We see continued service revenue growth driven by 2 years of very strong product revenue growth and 7 consecutive quarters accelerating short-term deferred revenue growth.

雖然我們將在報告第四季業績時提供更詳細的 2023 年指引，但值得一提的是，服務收入佔總收入的 60%，毛利率徘徊在 85% 以上。我們認為，由於產品收入連續兩年強勁成長以及短期遞延收入成長連續 7 個季度加速，服務收入將持續成長。

With a strong business model and the history of being able to execute, we are confident that our momentum will continue and point to our key growth drivers, including strategic investments, the heightened threat environment, the convergence of networking and security, the cybersecurity consolidation. Cyber securities are not immune to economic slowdowns -- is expected to remain a relatively safe harbor.

憑藉強大的業務模式和執行能力的歷史，我們相信我們的勢頭將持續下去，並指出我們的關鍵成長動力，包括策略投資、威脅環境加劇、網路和安全的整合、網路安全整合。網路證券無法免受經濟放緩的影響——預計仍將是一個相對安全的港灣。

As such, we remain on track to achieve all of our medium-term financial targets from our May 2022 Analyst Day, including $10 billion in billings and $8 billion in revenue in 2025, each representing a 22% 3 year CAGR from the midpoint of our 2022 guidance. The targets also included an average non-GAAP operating margin of at least 25% for the 4 years from 2022 to 2025.

因此，我們仍有望實現2022 年5 月分析師日起的所有中期財務目標，包括到2025 年實現100 億美元的營業額和80 億美元的收入，每項目標均代表從我們的中點算起的3 年複合年增長率為22% 2022 年指導。這些目標還包括 2022 年至 2025 年 4 年間平均非公認會計準則營業利潤率至少達到 25%。

And the 2025 adjusted free cash flow margin in the -- in the mid- to high 30% range. Illustrating our long focus for balancing growth and profitability, our targets remain committed to low-40 or better.

2025 年調整後的自由現金流利潤率在 30% 的中高範圍內。我們的目標仍然致力於低 40 或更高，這說明了我們對平衡成長和獲利能力的長期關注。

I'll now hand the call back over to Peter to begin the Q&A.

我現在將把電話轉回給 Peter 開始問答。

Thank you, Keith. (Operator Instructions) Eric, we are ready for Q&A.

謝謝你，基斯。 （操作員說明）Eric，我們已準備好進行問答。

(Operator Instructions) And our first question comes from Fatima Boolani at Citi.

（操作員說明）我們的第一個問題來自花旗銀行的 Fatima Boolani。

Keith, this one's for you, just with respect to the 4Q guidance and the outlook. I appreciate you kind of breaking down the 3 principal factors that went into that. But I wanted to dig in specifically on the comment you made about normalized buying behavior as it relates to the backlog build. So I think what I inferred from your comments is that while the backlog is going to be sequentially up and sort of higher than what you initially pointed out to be maybe $350 million of ending backlog. That's certainly below the $500 million that you were previously telegraphing. So I just wanted to better understand sort of the modulation downward on the backlog there and how the sort of normalized buying behavior contributes to that? And then I'll ask my follow-up.

基思，這個是給你的，只是關於第四季的指導和前景。我很欣賞你分解了其中的 3 個主要因素。但我想具體深入探討您對正常化購買行為的評論，因為它與積壓訂單相關。因此，我認為我從您的評論中推斷出，積壓訂單將連續增加，並且比您最初指出的最終積壓訂單可能為 3.5 億美元還要高。這肯定低於您之前電報的 5 億美元。所以我只是想更了解那裡的積壓情況是如何向下調整的，以及這種標準化的購買行為是如何對此做出貢獻的？然後我會問我的後續行動。

Okay. I think when we talk about normalized buying behavior, I think that we certainly saw some enterprise customers in the U.S. doing the supply chain challenges. They were placing orders to get in line -- to hold their place in line for when the inventory is available.

好的。我認為，當我們談論正常化的購買行為時，我認為我們肯定看到美國的一些企業客戶正在面臨供應鏈挑戰。他們下訂單是為了排隊——以便在庫存可用時保持排隊狀態。

And I think, say, a year ago or so that, that was an appropriate behavior when there was a lot of uncertainty around the supply chain and maybe they're planning for what we're going to do in 2022. I think that somewhat in general now, and maybe Ken will talk more about this, I think people are getting the sense that the -- certainly, we are -- that the supply chain is a little bit easier to forecast and somewhat easier to manage. I don't mean by any stretch easy, but I do think its easier.

我認為，比如說，大約一年前，當供應鏈存在許多不確定性時，這是一種適當的行為，也許他們正在計劃我們在 2022 年要做的事情。總的來說，也許肯會更多地談論這一點，我認為人們已經感覺到——當然，我們是——供應鏈更容易預測，也更容易管理。我並不是說任何拉伸都很容易，但我確實認為它更容易。

And with that, I think you're starting to see the market drift back towards the emphasis start to what I would call more traditional buying, which is when they need it, they're placing the order.

就這樣，我認為你開始看到市場開始轉向我所說的更傳統的購買，當他們需要時，他們就會下訂單。

Yes. And also look at the composition of our backlog, it's only 1/3 or less related to our network security platform, FortiGate, more than half related to like a switch in AP, which is a networking equipment which is kind of an industry problem in the networking side because device tends to be more changeable, more standard driven.

是的。再看看我們的積壓工作的組成，只有 1/3 或更少與我們的網路安全平台 FortiGate 有關，超過一半與 AP 中的交換機有關，這是一種網路設備，這是一個行業問題。 ，因為設備往往更加多變，更加標準驅動。

So a lot of customers, sometimes double, triple order try to get ahead of whatever the supply chain issue and also some of them can easily cancel once they got the product. So that's why we feel probably keeping track in the backlog may not be the best way to forecast the business, and we should be more focused on security, security related, especially driving the future service based on huge FortiGate installation base.

因此，許多客戶（有時是雙重、三重訂單）試圖提前解決供應鏈問題，其中一些客戶在收到產品後可以輕鬆取消。因此，我們認為追蹤積壓工作可能不是預測業務的最佳方式，我們應該更加關注安全性、安全相關性，尤其是基於龐大的 FortiGate 安裝基礎來推動未來的服務。

And Keith, just a clarification on the services revenue trajectory and more broadly thinking about next year. So we saw the reacceleration this quarter in services revenue. So wondering if you can give us a quick update on how the delayed registrations from earlier in the year and transactions from earlier in the year are trending and how we should think about that filtering and flowing into our models for next year?

基斯（Keith）只是對服務收入軌跡進行了澄清，並對明年進行了更廣泛的思考。因此，我們看到本季服務收入重新加速。因此，您是否可以向我們快速介紹今年早些時候的延遲註冊和今年早些時候的交易趨勢，以及我們應該如何考慮過濾和流入我們明年的模型？

Yes. I think we've been messaging throughout the quarter at various conferences that -- and even in the prior quarter that we had a clear expectation that service revenue growth has accelerated. So we're very pleased to see that. I think there's a number of things that are providing a tailwind into that.

是的。我認為我們在整個季度的各種會議中一直在傳達這樣的訊息——甚至在上一季我們也明確預期服務收入成長將會加速。所以我們很高興看到這一點。我認為有很多因素對此提供了推動力。

Customer registering units is part of that. I think also the price increase is making its way first into orders and deferred revenue and now into the income statement. Keeping in mind that we have contracts of sometimes or as long as 5 years, that will give you a sense of how long the tailwind may relate to price increases as we will continue to cycle through renewals at old prices and replace them with new contracts. So I think we feel good about the direction of the service revenue and the margins that it provides, together with the fact that it's 60% of our business.

客戶註冊單位是其中的一部分。我認為價格上漲首先反映在訂單和遞延收入中，現在又反映在損益表中。請記住，我們的合約有時或長達 5 年，這會讓您了解價格上漲可能會持續多長時間，因為我們將繼續以舊價格續約並用新合約取代它們。因此，我認為我們對服務收入的方向及其提供的利潤感到滿意，而且事實上它占我們業務的 60%。

Our next question comes from Saket Kalia at Barclays.

我們的下一個問題來自巴克萊銀行的 Saket Kalia。

Okay. Great. Keith, maybe just to start with you. I'd love to just zero in on product revenue growth a little bit for this year. Can you just maybe talk about some of the growth drivers for product revenue this year that aren't expected to repeat next year. Again, very helpful detail kind of thinking about total billings for kind of following years. But for product, what are some of the one-off things that we should be keeping in mind like in Alaxala, like price adjustments, just to sort of think about what normalized growth in product might look as we start to think about falling -- the falling years.

好的。偉大的。基思，也許只是從你開始。我希望今年的產品收入成長稍微為零。您能否談談今年產品收入的一些成長動力，預計明年不會再出現。同樣，對接下來幾年的總帳單進行非常有用的詳細思考。但對於產品來說，我們應該記住一些一次性的事情，就像在阿拉克薩拉一樣，例如價格調整，只是想一下當我們開始考慮下降時，產品的正常增長可能會是什麼樣子——墜落的歲月。

Yes. I think Alaxala is probably the easiest one to talk about in terms of providing numbers. We've talked about the fact that their revenue stream was probably something in the order of $130 million to $140 million when we acquired them. And reminded people that they are a March 31 year-end, so their fourth quarter is a little bit off cycle. I think that it's growth single digits. So I think that probably gives people a good level of expectation. Reminder there that our interest in Alaxala is a lot to run at the IP and some opportunities that we have there to do things more longer term, if you will.

是的。我認為就提供數字而言，Alaxala 可能是最容易談論的一個。我們已經討論過，當我們收購他們時，他們的收入來源可能約為 1.3 億至 1.4 億美元。並提醒人們，他們的年終日期是 3 月 31 日，所以他們的第四季有點偏離週期。我認為成長是個位數。所以我認為這可能會給人們帶來良好的期望。提醒一下，我們對 Alaxala 的興趣在於在 IP 上運行，如果您願意的話，我們有一些機會可以做更長期的事情。

In terms of other unique things about product during the quarter, I mean, I think that as the backlog comes into revenue -- as we go through the end of 2022 here and certainly into 2023, it's going to provide, again, a fairly significant tailwind to what the product revenue growth will be in 2023, assuming we get that drawdown in backlog that we may see.

就本季產品的其他獨特之處而言，我的意思是，我認為，隨著積壓訂單轉化為收入——當我們在這裡度過2022 年底，當然也進入2023 年時，它將再次提供相當重要的收入。

Yes. Also, we believe the growth driver, especially the converged network and security. We don't think that's a slowdown. We'll be keeping driving the product revenue growth in the next 5 to 10 years. You can see the Secure SD-WAN and OT both has a pretty healthy growth. And at the same time, we will continue to grow in the next 5 to 10 years in a huge market potential.

是的。此外，我們相信成長動力，尤其是融合網路和安全。我們認為這並不是經濟放緩。未來5到10年，我們將持續推動產品收入成長。您可以看到安全性 SD-WAN 和 OT 都有相當健康的成長。同時，我們將在未來5到10年持續成長，市場潛力巨大。

Got it. Got it. Maybe for my follow-up, really for both of you, I'll make a jump ball here. I think in Q3, we had operating margins of about 28%. I think the guide for Q4 is for margins a little bit higher. When I think that long-term guide out to 25 -- of at least 25%, it feels like you're doing a lot better than that here in the near term. Maybe the question is, how do you sort of think about that balance, right, in terms of growth, maybe moderating or normalizing as we mentioned, versus sort of that long-term margin?

知道了。知道了。也許為了我的後續行動，真的為了你們倆，我會在這裡跳一個球。我認為第三季我們的營業利潤率約為 28%。我認為第四季度的指引是利潤率略高一些。當我認為長期指導目標是 25——至少 25% 時，感覺你在短期內做得比現在好得多。也許問題是，你如何看待這種平衡，對吧，在成長方面，也許是我們提到的放緩或正常化，而不是長期利潤？

I think that's where -- if you look at the [13-year] history, we as a public company, we always balance the growth and with the margin. So that's where we feel the 25% above is a healthy margin and then we can also give the money to invest in that growth and become a leader in the space. That's where we're continuing to balance, but if the growth slowed down definitely will be more helping in the margin. So that's why we keeping saying the Rule of 40, probably in the last few quarters, we kind of even reached the Rule of 60 now. So that's where -- also when the growth slowed down and sometimes the service revenue has a higher margin, which can also help in the margin, but we do expect the growth will continue in the next few years with the 3 growth drivers I mentioned and plus additional service revenue to our big installation base, a lot of them are not quite able the security service revenue yet.

我認為這就是——如果你看看[13年]的歷史，我們作為一家上市公司，我們總是在成長和利潤之間取得平衡。因此，我們認為上述 25% 是一個健康的利潤率，然後我們也可以提供資金投資於這種成長並成為該領域的領導者。這就是我們繼續保持平衡的地方，但如果成長放緩，肯定會對利潤率產生更大的幫助。這就是為什麼我們一直說 40 法則，可能在過去幾個季度，我們現在甚至達到了 60 法則。因此，這就是當成長放緩時，有時服務收入的利潤率較高，這也有助於提高利潤率，但我們確實預計，在我提到的3 個成長驅動因素的推動下，未來幾年成長將持續下去加上我們龐大的安裝基礎的額外服務收入，其中許多人還不太能夠獲得安全服務收入。

Yes. I would probably -- certainly agree with Ken and I will put just a little more detail on it. Keeping in mind that our -- we sell in U.S. dollars -- so there's really not a direct FX impact there. On the revenue line, obviously, you can get into certain countries where the pressure on discounting, if you will, because of exchange rates can be a little more intense. But on the OpEx, because 30% of our business is the U.S. and the rest is international. We do get a tailwind from OpEx from the strength of the U.S. dollar. And I think you're seeing that in Q3 and you're seeing that in Q4.

是的。我可能——當然同意肯的觀點，我會對此提供更多細節。請記住，我們以美元出售，因此實際上並沒有直接的外匯影響。在收入方面，顯然，如果你願意的話，你可以進入某些國家，因為匯率的原因，折現壓力可能會更大一些。但在營運支出上，因為我們 30% 的業務在美國，其餘的是國際業務。美元走強確實為我們帶來了營運支出的推動。我認為您在第三季和第四季都看到了這一點。

And probably why it's important is that we've talked for a number of years now around and made reference to 25% operating margin. If you go back 4 years ago, 5 years ago, it was probably a target to get to 25% operating margin.

也許它之所以重要是因為我們已經討論了很多年並提到了 25% 的營業利潤率。如果你回到 4 年前、5 年前，營運利潤率可能是達到 25% 的目標。

And since then, we've talked about averaging 25%, so I think floor of 25%. It has certainly served us well as a way to help other people understand about how we invest in the business, and as Ken makes reference to it. as we have funds available over that 25% operating margin, it creates opportunities for some, not necessarily all that you're seeing currently of those margin dollars to be reinvested back in innovation and back into our go-to-market strategy.

從那時起，我們就討論了平均 25%，所以我認為下限為 25%。正如肯所提到的那樣，它確實為我們提供了很好的幫助其他人了解我們如何投資業務的方式。由於我們的可用資金超過 25% 的營業利潤，因此它為一些（不一定是您目前看到的全部）利潤創造了機會，將其重新投資於創新和我們的上市策略。

And the next question comes from Hamza Fodderwala at Morgan Stanley.

下一個問題來自摩根士丹利的 Hamza Fodderwala。

Keith, on the backlog, I appreciate, look, sometimes you have too many metrics that creates too many noise. And on the supply chain front, it seems like it's getting a bit clearer. But could you give us any more granularity on how that backlog and that booking trajectory looked relative to your guidance, which I think when you guided to it, you were saying about 36% growth at the midpoint for bookings. So just curios how that shook out in Q3.

Keith，關於積壓工作，我很欣賞，有時你有太多的指標，會產生太​​多的噪音。在供應鏈方面，情況似乎變得更加清晰了。但您能否更詳細地說明積壓訂單和預訂軌跡相對於您的指導的情況，我認為當您指導時，您說預訂量的中點增長約為 36％。所以只是好奇第三季的情況如何。

Yes. I think I'll come back to kind of Ken's commentary around backlog, which is really what kind of drives the conversation about bookings. I think a year ago, when we introduced the backlog metric, there was a lot of uncertainty around what the supply chain crisis was going to look like and how it might impact our business and the purpose of providing that -- the backlog disclosure and the booking disclosure then was to kind of round out and help investors understand more about our business model as we go forward.

是的。我想我會回到 Ken 關於積壓的評論，這確實是推動有關預訂的討論的原因。我認為一年前，當我們引入積壓指標時，對於供應鏈危機將會是什麼樣子、它可能如何影響我們的業務以及提供這一指標的目的存在很多不確定性——積壓披露和預訂披露是為了完善並幫助投資者在我們前進的過程中更多地了解我們的商業模式。

And as we heard in the question earlier -- from one of the questions, at the beginning of the year, what kind of swag -- that kind of swag backlog growth of $350 million in the first quarter and then it came back and said, in the second quarter, we it's going to get closer to $500 million for the full year. And now I think we're looking at a number that's going to be less than that, something in the floors probably seems reasonable from where we're at.

正如我們之前在問題中聽到的那樣——從今年年初的一個問題中聽到，是什麼樣的贈品——第一季度積壓的贈品增長了 3.5 億美元，然後它回來說，第二季度，我們全年的收入將接近5 億美元。現在我認為我們正在考慮的數字將低於這個數字，從我們目前的情況來看，樓層中的某些內容可能看起來是合理的。

And I think with net-net, the message -- there's 2 messages. So one is I think we're becoming much more comfortable with our ability to execute in this environment and maybe some easing in the environment itself. And then secondly, I think that it was always our intention. I think we messaged this that these would be short-term metrics that we provide. And I think they have served us and our investors well for an extended period of time, but it's probably time now that we feel that we've gotten a better control on it to bring us more -- to bring us back online, if you will, with what our industry competitors are disclosing and not disclosing.

我認為對於網路網路來說，有兩個訊息。因此，我認為我們對在這種環境中執行的能力越來越滿意，也許環境本身也有所放鬆。其次，我認為這始終是我們的意圖。我認為我們傳達的訊息是，這些將是我們提供的短期指標。我認為他們在很長一段時間內為我們和我們的投資者提供了良好的服務，但現在可能是我們覺得我們已經更好地控制它的時候了，可以為我們帶來更多——讓我們重新上線，如果你將會，以及我們的行業競爭對手正在披露和未披露的內容。

Makes total sense. Just to follow up really quickly. I mean, is it fair to say that your bookings growth is still higher than your billings growth. Obviously, your backlog grew. So you're still expecting underlying bookings to be higher than 30% this year.

完全有道理。只是為了快速跟進。我的意思是，可以公平地說，您的預訂成長仍然高於帳單成長嗎？顯然，您的積壓訂單增加了。因此，您仍然預計今年的基本預訂量將高於 30%。

Yes. We're not going down to the detail of talking specifically about bookings, (inaudible) I just mentioned, going forward, our backlog more than what we've given to this point.

是的。我們不會具體討論預訂的細節，（聽不清楚）我剛才提到，展望未來，我們的積壓訂單比我們目前所提供的還要多。

Our next question comes from Rob Owens at Piper Sandler.

我們的下一個問題來自 Piper Sandler 的 Rob Owens。

Just one from me. Curious with the supply chain getting a little bit easier, how you're thinking of margin, both kind of in the short term as well as the medium term.

只有我的一份。我很好奇供應鏈變得更加容易，您如何看待短期和中期的利潤率。

I think the component and also the cost continue to go up. So that's where -- and also, we still have a pretty tight inventory to make most shipments shipping by air instead of by ocean. So that's where -- so we'll keep it adjusted by all these costs and probably some of the (inaudible) ourselves, some of them we may do some price increase, but we also feel, even some price increase, we continue to have a price advantage compared to competitive industry average with our own products. So that's where the margin we feel probably will be more stabilized. And that's probably -- the overall supply probably keep improving.

我認為組件和成本都在繼續上漲。因此，我們的庫存仍然相當緊張，無法透過空運而不是海運來運送大部分貨物。因此，我們將根據所有這些成本以及可能的一些（聽不清楚）我們自己的成本對其進行調整，其中一些我們可能會提高一些價格，但我們也覺得，即使是一些價格上漲，我們仍然會繼續這樣做與我們自己的產品的競爭行業平均水平相比，具有價格優勢。因此，我們認為利潤率可能會更加穩定。總體供應量可能會持續改善。

Yes. Again, spot on with that. I -- probably a couple -- a little more granularity. I think if you maybe look at it between product gross margin and services gross margin, the product win is the one that's probably more volatile related to what we're seeing. We've certainly heard commentary that maybe things are easing a little bit with the chip manufacturers, but I would say that there's no indication of any sort of cost reduction or savings that are coming from either chip manufacturers or the component suppliers. So we'll see how that plays out.

是的。再次強調這一點。我——可能是一對——粒度更細一些。我認為，如果您在產品毛利率和服務毛利率之間進行比較，您會發現產品的勝利可能與我們所看到的情況有關，波動性更大。我們當然聽過這樣的評論，即晶片製造商的情況可能會有所緩解，但我想說的是，沒有跡象表明晶片製造商或零件供應商有任何形式的成本降低或節省。所以我們將看看結果如何。

Our strategy has been, and Ken alluded to this, is that we came into this economical cycle a year ago, believing that we had a price performance advantage and that we could raise prices and our target was really to pass along most but not all the price increases, call it plus or minus 1% margin. It's kind of our target every quarter. It doesn't fall that way every quarter because of various variables.

肯提到，我們的策略是，我們在一年前進入這個經濟週期，相信我們具有性價比優勢，我們可以提高價格，我們的目標實際上是傳遞大部分但不是全部的價格。為正負1% 的利潤。這是我們每季的目標。由於各種變數，它不會每季都這樣下降。

And I would imagine that to the extent that prices can remain to be elevated as we move into 2020, that's kind of the starting point for our pricing strategy into 2023 as well. Again, because we have not seen signs that we've lost the pricing performance advantage. In fact, we continue to win that way.

我想，進入 2020 年，價格仍能保持在較高水平，這也是我們 2023 年定價策略的起點。同樣，因為我們還沒有看到我們失去定價優勢的跡象。事實上，我們繼續以這種方式獲勝。

Service is a little bit different. I mean, the largest cost components in service is labor. And if you look back, we're a company that has its annual merit increases in the first or second month of the year, so you kind of get a rather immediate jolt on the COGS line from those -- from compensation increases, which is certainly appropriate -- and then you have to grow the service revenue into it. And I think that's part of the conversation about why you saw the reference to sequential margin increases.

服務有點不同。我的意思是，服務中最大的成本組成部分是勞動力。如果你回顧一下，我們是一家每年第一個月或第二個月都會增加績效的公司，所以你會立即對銷售成本線產生震動——來自薪酬的增加，即當然合適——然後你必須將服務收入納入其中。我認為這就是為什麼您看到連續利潤率增加的討論的一部分。

On the revenue side, it gets fairly complex. -- well, maybe not complex. But thinking through how price increases that started about a year ago and kind of at a quarterly pace, if you will, how those price increases will make their way first onto the balance sheet and deferred revenue and to what extent each item is going to reflect all those price increases and then how it will come off the balance sheet in future periods. So you will get tailwind from the price increases. And I would expect that, that particular tailwind should continue to -- for an extended period of time.

在收入方面，情況變得相當複雜。 ——嗯，也許並不複雜。但是，想想大約一年前開始的價格上漲，以及每季一次的上漲，如果你願意的話，這些價格上漲將如何首先進入資產負債表和遞延收入，以及每個項目將在多大程度上反映所有這些價格上漲以及未來將如何從資產負債表中扣除。因此，您將從價格上漲中獲得順風車。我預計，這種特殊的順風應該會持續很長一段時間。

Our next question, just connecting the line now, comes from Shaul Eyal at Cowen.

我們的下一個問題（現在剛接通）來自 Cowen 的 Shaul Eyal。

Keith, question on APAC, softest performance in, I think, like 2 years, what was driving that? And I have a follow-up.

Keith，關於亞太地區的問題，我認為是兩年來最疲軟的表現，是什麼推動了這種情況？我有一個後續行動。

Yes. I think we've made a leadership change there around the end of June, beginning of July, we had a retirement. And I think that's just kind of the transition of leaders, if you will, if one was exiting into retirement and we brought somebody on. But I think we feel very, very good about in terms of their abilities. And I think the other part of it is you're starting to see the lapping effect of Alaxala because all of Alaxala is in APAC. And so you're going to see that now as we roll up on basically the full quarter comparisons of that impact.

是的。我認為我們在六月底、七月初左右進行了領導層變動，我們退休了。我認為這只是領導者的過渡，如果你願意的話，如果一個人即將退休，而我們又任命了一個人。但我認為我們對他們的能力感覺非常非常好。我認為另一部分是你開始看到 Alaxala 的研磨效應，因為整個 Alaxala 都在亞太地區。因此，當我們匯總該影響的基本完整季度比較時，您現在將會看到這一點。

Understood. Understood. And on FortiGate sales, maybe looking at it from a tier perspective, it was slightly more mixed than prior quarters, entry level actually representing most growth versus the mid-range and high end. So any color on that front?

明白了。明白了。在 FortiGate 銷售方面，也許從層級角度來看，它比前幾季的情況稍微複雜一些，入門級實際上代表了與中端和高端相比的大部分成長。那麼前面有什麼顏色嗎？

That's where the -- we see pretty strong growth related to the SD-WAN and OT, which more you see in the low-end unit and at the same time, the supply chain improvements help a little bit. That's where the -- we'll be able to shipping more product in the low-end side. We still have some backlog in the middle high end, but it's a low end had some improvement by redesign some of the products and also better supply chain right now.

這就是我們看到與 SD-WAN 和 OT 相關的相當強勁的成長，您在低端單元中看到的更多，同時，供應鏈的改進也有所幫助。這就是我們將能夠運送更多低端產品的地方。我們在中高端仍有一些積壓，但透過重新設計一些產品和更好的供應鏈，低端已經有了一些改善。

Yes. Ken has talked about this in the past, the ability to introduce the new 70F product in the second quarter. We were a little bit hamstrung in Q2 and the beginning of Q3, even back Q1, really, on the low end. And I think we kind of messaged a bit in our conversations over the last quarter or so that we expected low end supply availability to really jump, if you will, in the third quarter, and we did see that. So it's really more of a supply conversation in some ways as much as it is a demand conversation.

是的。 Ken過去曾談到，有能力在第二季推出新的70F產品。我們在第二季度和第三季度初有點受挫，甚至在第一季度，真的，處於低端。我認為我們在上個季度左右的對話中傳達了一些訊息，因此我們預計低端供應量將在第三季度真正躍升，如果你願意的話，我們確實看到了這一點。因此，從某些方面來說，這實際上更像是供給對話，就像需求對話一樣。

Okay. We're just bringing our caller live. Okay, that caller is Shrenik Kothari Robert Baird.

好的。我們只是讓來電者直播。好的，那個來電者是 Shrenik Kothari Robert Baird。

Okay. Let's go to the next. Brad Zelnick from Deutsche Bank.

好的。讓我們進入下一個。德意志銀行的布拉德·澤爾尼克。

Ken, just a big picture question for you to start out with. You mentioned Fortinet success is in part coming from the industry trend of vendor and product consolidation. Why is Fortinet so well positioned as a platform for consolidation? And how does this inform your product and corporate development road map in terms of the need for even more product breadth to compete with other platform competitors out there that keep adding additional functionality.

肯，這只是一個大問題，需要你先回答。您提到 Fortinet 的成功部分來自於供應商和產品整合的產業趨勢。為什麼 Fortinet 作為整合平台具有如此優越的地位？這如何為您的產品和企業開發路線圖提供信息，說明您需要更多的產品廣度，以便與不斷添加附加功能的其他平台競爭對手競爭。

I think we have a few unique advantage. The first from day 1 we developed the FortiASIC, which have a huge computing power increase compared to using traditional CPU, but also FortiASIC also working side by side with the CPU. So that's the huge computing power advantage comes from FortiASIC give us more computing power for the FortiOS to run more function, more security function including a lot of networking function. So that advantage is none of our competitors have that. So that's making us keeping driving the market share and also the unit shipment, I mentioned, we like 43% of our market shareholder unit shipment there.

我認為我們有一些獨特的優勢。從第一天開始，我們就開發了 FortiASIC，與使用傳統 CPU 相比，它的運算能力有了巨大的提升，而且 FortiASIC 還可以與 CPU 並行工作。這就是來自 FortiASIC 的巨大運算能力優勢，為我們的 FortiOS 提供了更多的運算能力來運行更多的功能、更多的安全功能，包括許多網路功能。所以這個優勢是我們的競爭對手都沒有的。因此，這使我們繼續推動市場份額和單位出貨量，我提到，我們喜歡那裡 43% 的市場股東單位出貨量。

So that's what we keeping -- give us a long-term growth going forward because also on the convergence of security networking the secure computing power is must have a huge need to address both security and networking function there. Second, the FortiOS is well integrated together with more functions, leveraged security and power. So that's also kind of a huge advantage for us compared to some other competitor, whether they have to use like a different blade or different functions or they have to load some different parts or even to the cloud to address some secure computing power there. And then third one, we also have about 30 different products, mostly home developed and integrate, automate well together.

這就是我們所保留的——為我們帶來長期的未來成長，因為在安全網路的整合上，安全運算能力必須有巨大的需求來解決那裡的安全和網路功能。其次，FortiOS 整合良好，功能更多，安全性更強。因此，與其他競爭對手相比，這對我們來說也是一個巨大的優勢，無論他們是否必須使用不同的刀片或不同的功能，或者他們是否必須加載一些不同的部件，甚至加載到雲端來解決那裡的一些安全計算能力。第三，我們還有大約 30 種不同的產品，大部分是自行開發和整合的，自動化程度很高。

So that's also what's helping drive -- we call the vendor Security Fabric, Gartner called a mesh network. So that's also helping the customer to lower the management cost and total cost of ownership. I think all these 3 factors we're keeping driving Fortinet better position for the consolidation, both on the product functionality and also on different products into a single vendor platform strategy.

所以這也是幫助推動的因素——我們稱之為供應商安全結構，Gartner 稱之為網狀網路。這也有助於客戶降低管理成本和總擁有成本。我認為這 3 個因素都在推動 Fortinet 更好地進行整合，無論是在產品功能上還是在將不同產品整合到單一供應商平台策略上。

Ken. And it's clearly working by your strategy. Maybe Keith just for you, you've disclosed quite a bit of information so much so that I have a very simple question that I just might have missed. But can you just very clearly explain for the reduction in the full year billings guidance for -- that you've given us now the update on -- with these results.

肯.很明顯，它正在按照你的策略發揮作用。也許基思只是為了你，你已經透露了很多信息，所以我有一個非常簡單的問題，我可能錯過了。但是，您能否透過這些結果非常清楚地解釋一下全年帳單指南的減少（您現在已經向我們提供了最新資訊）。

Yes. I think you're talking about full year fourth quarter, one of the same at this point. And I would really just point to the macro environment and what we've seen really in the -- over the last 90 days in terms of economic activity, if you will, I think when you look at how that manifests for us somewhat specifically, I think I'm getting a little more cautious in some of the forecasting of close timing on some of the very large deals.

是的。我認為您談論的是全年第四季度，此時也是如此。我真的只想指出宏觀環境以及我們在過去 90 天的經濟活動方面所看到的情況，如果你願意的話，我想當你具體地看看這對我們有何影響時，我認為我在預測一些非常大的交易的成交時間時變得更加謹慎。

We've been very successful over the last few years, and you saw some of the numbers about enterprise penetration with our growth in the enterprise. And the deals have actually gotten significantly larger as we've gone forward. And I think it's appropriate in that environment to be a little more cautious on what we expect the close rates to be.

過去幾年我們非常成功，隨著我們在企業中的成長，您也看到了一些有關企業滲透的數字。隨著我們的不斷前進，交易實際上變得越來越大。我認為在這種環境下，對我們預期的收盤價更加謹慎是適當的。

The business itself is very healthy. If I look at the end of the spectrum, the -- the small enterprise part of the business, for example, it actually outgrew the other 2 parts of the business in the last quarter by -- it took about 1 point of mix, I think, from the other 2. So I feel -- feel good about the business, but just a little cautious about the macro environment as we go forward, how to forecast what's coming from the sales team.

業務本身非常健康。如果我看一下範圍的末端，例如，業務的小型企業部分，它實際上在上個季度超過了業務的其他兩個部分，大約需要 1 個點的混合，我認為，從其他2. 所以我覺得- 對業務感覺良好，但在我們前進時對宏觀環境有點謹慎，如何預測銷售團隊的情況。

It makes total sense and in line with a lot of other data points that we're all seeing out there. I guess just maybe as you think about what contributes to that, is there -- it doesn't sound like it's anything competitive, but what are the customers doing? Are they shrinking deal sizes? Are they just taking more time and sweating out their existing assets? Any other color on that would be helpful.

這是完全有道理的，並且與我們看到的許多其他數據點一致。我想也許當你思考是什麼促成了這一點時，是不是——聽起來沒有什麼競爭力，但客戶在做什麼？他們正在縮小交易規模嗎？他們只是花費更多時間並耗盡現有資產嗎？任何其他顏色都會有幫助。

Yes. I don't think we're going to see deal sizes getting smaller [for them] because we're moving into the enterprise. If we were more established there and it was just kind of the same routine over and over. The fact that we're growing in the enterprise, and again, you saw the numbers is going to by itself, increase our average deal size. I certainly do feel that there's caution, as corporate America and the rest of the world is probably going through their budgeting cycles right now and looking at what they're planning for, not only the end of 2022 and 2023. I think the other aspect of that, and again, I think this is fairly consistent with the other comments we probably heard. I don't think it's a good time to really get in a position of forecasting some sort of significant budget flush in the fourth quarter. If it develops, that would be fantastic. But I think prudence is a little bit appropriate here.

是的。我認為我們不會看到[對他們來說]交易規模變小，因為我們正在進入企業領域。如果我們在那裡更穩固的話，那就只是一遍又一遍地重複同樣的例行公事。事實上，我們在企業中不斷成長，而且你再次看到這些數字本身就會增加我們的平均交易規模。我確實覺得需要謹慎，因為美國企業界和世界其他地方現在可能正在經歷他們的預算週期，並考慮他們的計劃，而不僅僅是 2022 年底和 2023 年。與我們可能聽到的其他評論相當一致。我認為現在並不是真正預測第四季出現某種重大預算充裕的好時機。如果它發展起來，那就太棒了。但我認為謹慎在這裡有點合適。

And next up, we have Shrenik Kothari from Robert Baird.

接下來是來自 Robert Baird 的 Shrenik Kothari。

Okay. We will move on to the next question. Tal Liani at Bank of America.

好的。我們將繼續下一個問題。美國銀行的塔爾·利亞尼。

It is Madeline on for Tal today. Just 2 quick ones for me, and I apologize if this has already been mentioned (inaudible) between a few earnings right now. But just to be -- just as very pointed about it, last quarter, we heard bookings, the annual bookings was a little bit softer than expected.

今天是瑪德琳來塔爾。對我來說，只有兩個快速的，如果現在在一些收益之間已經提到了這一點（聽不清楚），我深表歉意。但正如非常尖銳的那樣，上個季度，我們聽到了預訂情況，年度預訂情況比預期要軟一些。

This quarter, no disclosure in bookings. And again, I apologize, if this was already mentioned. But just want to get -- keep from your perspective directly, why no bookings for this quarter after a weaker quarter of booking last quarter?

本季沒有揭露預訂情況。如果已經提到過這一點，我再次表示歉意。但只是想直接從您的角度來看，為什麼在上個季度預訂疲軟之後，本季沒有預訂？

Yes. We've talked (inaudible) this before you jumped on the call and for everybody's benefit, I'll just quickly kind of go through it. I think when we got into this conversation a year ago, we felt the backlog, which is really the driver of the bookings conversation was something that we thought was important to investors to understand and be able to track how we're performing as a business and what they're seeing in the drivers. As we've moved forward, I think that if you fast forward a year later, I think we feel more comfortable now about some of the backlog forecasting.

是的。在您接聽電話之前我們已經討論過（聽不清楚）這一點，為了每個人的利益，我將快速瀏覽一下。我認為，當我們一年前進行這次對話時，我們感受到了積壓，這確實是預訂對話的驅動因素，我們認為這對於投資者了解並能夠跟踪我們作為一家企業的表現非常重要以及他們在司機身上看到的東西。隨著我們的前進，我認為如果快進一年後，我認為我們現在對一些積壓預測感到更加放心。

And earlier, we made reference that backlog may exit the year, something closer to 400 or a little bit north of that. And so with that in mind, I think we're bringing ourselves back into what I would call industry norms, where nobody else really discloses this information, but we thought it was appropriate for the first year. I would also offer 1 comment about backlog that's important, and we get a lot of conversations around cancellation rates. Our cancellation rate has been extremely consistent at about 4% each and every quarter.

早些時候，我們提到積壓訂單可能會在今年結束，接近 400 或稍高。因此，考慮到這一點，我認為我們正在讓自己回到我所說的行業規範，沒有其他人真正披露這些信息，但我們認為這對於第一年來說是合適的。我還想就積壓問題提出 1 則評論，這一點很重要，我們就取消率進行了很多對話。我們的取消率非常穩定，每季約為 4%。

Also, the composition of backlog is kind of different now compared to 1 year ago, which is 1 year ago, I have to say, majority (inaudible) related to the FortiGate and now FortiGate is less than 1/3 of the whole backlog and the majority of backlog actually that come from the switch and AP WiFi, which is also kind of a more industry problem, which switch and AP more easily customer can change in different vendor compared to the security product, they have to design in, they have to a -- very high switching cost. So that's where we feel the backlog sometime is unpredictable and with the majority comes from switch and AP.

此外，與1 年前相比，現在的積壓工作的組成有所不同，我不得不說，一年前，大多數（聽不清楚）與FortiGate 有關，現在FortiGate 不到整個積壓工作的1/3 ，大部分積壓實際上來自交換器和 WiFi AP，這也是一個更行業的問題，與安全產品相比，客戶可以更輕鬆地在不同供應商中更改哪些交換機和 AP，他們必須進行設計，他們有非常高的轉換成本。因此，我們覺得積壓的情況有時是不可預測的，其中大部分來自交換器和存取點。

And just one follow-up question there, too. You guys just mentioned having a little bit of prudence for going into next year and just your guidance. I'm also just wondering on the visibility side, are you seeing less visibility, the same visibility? Can you just talk to the trends that you're seeing there in your pipeline?

還有一個後續問題。你們剛才提到對明年要保持一點謹慎，只是你們的指導。我也只是想知道能見度方面，你看到的能見度是否較低，能見度相同嗎？您能談談您在管道中看到的趨勢嗎？

I think the pipeline visibility is very good. And the pipeline growth is very strong. And I think that one of the things that we did at the end of the prepared remarks was we went back to the midterm guidance numbers that we gave, I think, a $10 billion booking company in 2025 and $8 million of revenue and margins of 25% or more and basically reiterated that. And I think we're doing that, which requires a 22% CAGR from this point forward. We're doing that with the -- after looking at our pipeline, looking at the strength of our pipeline so that it makes sense to us.

我認為管道能見度非常好。而且管道成長非常強勁。我認為，我們在準備好的發言結束時所做的一件事是，我們回到了我們給出的中期指導數字，我認為，2025 年預訂公司將達到100 億美元，收入為800 萬美元，利潤率為25 ％或更多，並且基本上重申了這一點。我認為我們正在這樣做，這需要從現在開始實現 22% 的複合年增長率。我們正在這樣做——在查看了我們的管道之後，查看了我們管道的強度，以便它對我們有意義。

Our next caller is Keith Bachman at BMO.

我們的下一個來電者是 BMO 的 Keith Bachman。

I also had 2, Keith, to start with you. I wanted to go back to the billings commentary for Q4. Just so on the revenue base is essentially the same, and therefore, it's a DR impact that you're guiding lower. As you mentioned that you're expecting backlog to be less than the $500 million and maybe 4 and 4 and change. Did some of that backlog -- is it actually then flowing into the billings, and therefore, the billings guide down is even a little bit worse than it actually appears? And any other context you could draw out on where specifically that billings weakness is in Europe or what have you, but if you could flesh those out, then I had a follow-up for Ken, please.

我還有 2 個，基思，從你開始。我想回到第四季的比林斯評論。就收入基礎而言，本質上是相同的，因此，您將降低災難復原影響。正如您所提到的，您預計積壓訂單將少於 5 億美元，也許是 4 美元和 4 美元，還有變化。是否有一些積壓的訂單實際上流入了帳單，因此，帳單指南的下降甚至比實際出現的情況還要糟糕？你可以得出任何其他背景，具體說明比林斯的弱點在歐洲或你有什麼，但如果你能充實這些內容，那麼我有肯的後續行動。

Yes. I want to be clear, we are expecting backlog to actually increase from Q3 to Q4, not significantly, but slightly. So...

是的。我想澄清的是，我們預計積壓訂單實際上會從第三季到第四季增加，不是顯著增加，而是略有增加。所以...

Okay. So therefore, none of that backlog then is flowing into that billings in Q4, as anticipated, right?

好的。因此，正如預期的那樣，所有積壓的訂單都不會流入第四季度的帳單，對嗎？

Correct. I mean you're always going to get some existing backlog that flows in the billings, which you're going to get new backlog, net-net, it's going to be an add in total to it for the year. And I think the -- and it's a good question about Europe. I don't want to [crossover] that. Europe, it's performance, you saw the revenue numbers and what we don't disclose it. I would say the billings numbers -- Europe performed very, very well in the quarter, and their pipeline remains extremely strong as we go forward.

正確的。我的意思是，你總是會得到一些現有的積壓訂單，這些積壓訂單會流入帳單，你會得到新的積壓訂單，淨淨的，這將是今年的總計。我認為這是一個關於歐洲的好問題。我不想[交叉]那個。歐洲，這是業績，你看到了收入數字以及我們沒有披露的內容。我想說的是，歐洲在本季的表現非常非常好，隨著我們的前進，他們的管道仍然非常強勁。

Now we'll see as we get through and get closer to 2023, and I certainly would really agree that there are certain tailwinds that are appropriate for Europe. But to this point, they've done very, very well.

現在，隨著 2023 年的臨近，我們將拭​​目以待，我當然同意存在某些適合歐洲的有利因素。但到目前為止，他們已經做得非常非常好了。

Okay. Ken, for you, then it relates to that -- very directly relates. As we think about Europe in calendar year '23, the currency, as you alluded to, is a headwind. So I was just in Europe and customers view that the prices, since you price in dollars, have actually gone up quite a bit. So is there a risk? Or how should we think about is there a risk of prices actually needing to come down because of the dollar-based pricing and therefore, the significant price increase, if you will, felt by the Europeans -- is there a risk that prices need to come specifically down for currency next year? And/or would you see any risk more broad, whether it's currency or otherwise, whereby because supply and demand is coming back into balance sometime during CY '23 that there is some risk rather than getting price increases that we might be in a situation where prices actually start to move lower?

好的。肯，對你來說，這與此相關——非常直接的相關。當我們考慮 23 日曆年的歐洲時，正如您所提到的，貨幣是一種逆風。所以我當時在歐洲，客戶認為價格，因為你以美元定價，實際上已經上漲了很多。那麼有風險嗎？或者我們應該如何考慮，由於基於美元的定價，是否存在價格實際上需要下降的風險，因此，如果你願意的話，歐洲人會感受到價格的大幅上漲——是否存在價格需要下降的風險？專門降價嗎？和/或您是否會看到任何更廣泛的風險，無論是貨幣還是其他方面，因為供需在CY '23 期間的某個時候恢復平衡，因此存在一些風險，而不是價格上漲，我們可能處於這樣的情況：價格實際上開始走低？

I think first about our price policies really, we -- when there's a cost increase like components and other, we do like -- take some ourself. And then some others we probably have to pass to the customer partner. But even with -- like price increase, we're still leading the industry on the price performance on the function and the service. So that's where so far we don't see -- in the last year because of pricing. And actually, we're keeping gaining market share because we have a leading price performance especially in a lot of what we call it convergence area and also like SD-WAN, OT, this a very, very fast-growing area.

我首先想到的是我們的價格政策，當零件和其他成本增加時，我們確實喜歡自己採取一些措施。然後我們可能必須將其他一些傳遞給客戶合作夥伴。但即使價格上漲，我們在功能和服務的性價比方面仍然領先業界。這就是我們去年由於定價原因尚未看到的情況。事實上，我們正​​在不斷獲得市場份額，因為我們擁有領先的性價比，尤其是在許多我們稱之為融合的領域，以及 SD-WAN、OT，這是一個成長非常非常快的領域。

So it's all our price advantage compared to competitors. And also, we do see a lot of potential to drive additional service because our service charge probably average about half of our some of competitor charging, some of them offer free, some of them charging less, some of them sell as a bundle. So we do see a lot of potential growth area in the service, which also have higher margins.

所以這都是我們與競爭對手相比的價格優勢。而且，我們確實看到了推動額外服務的巨大潛力，因為我們的服務費可能平均約為我們一些競爭對手收費的一半，其中一些提供免費，一些收費較低，一些作為捆綁銷售。因此，我們確實看到該服務有很多潛在的成長領域，而且利潤率也更高。

Okay. Just pulling up our next caller. And it's Gregg Moskowitz from Mizuho.

好的。剛剛接聽我們的下一個來電。我是瑞穗銀行的格雷格‧莫斯科維茲（Gregg Moskowitz）。

Okay. Keith, I know that you had experienced a bit of a pause in the first 10 days of June. With that in mind, how was linearity in the Q3 period? Were there any air pockets or anything that you would call out?

好的。 Keith，我知道您在 6 月的前 10 天經歷了一些停頓。考慮到這一點，第三季的線性度如何？是否有氣穴或任何你會指出的東西？

Yes. I don't think -- we didn't see anything like we saw in the first -- good question. We didn't see anything like the 2-week pause or 10 days pause. We saw the first part of June in the Q3. I think that -- when we look at linearity, you can see the DSOs, and I think it's a pretty good reflection of where we're at with linearity. It has not and probably will never be a 1/3, 1/3, 1/3 business in terms of linearity. You're always going to get about 50% of your business in the final month of the quarter. But nothing really unusual about the activity there.

是的。我不認為——我們沒有看到任何像我們在第一個中看到的那樣——好問題。我們沒有看到任何類似 2 週暫停或 10 天暫停的情況。我們在第三季看到了六月的上半部。我認為，當我們觀察線性度時，您可以看到 DSO，而且我認為它很好地反映了我們在線性度方面的狀況。就線性度而言，它沒有而且可能永遠不會是 1/3、1/3、1/3 業務。您總是會在該季度的最後一個月獲得大約 50% 的業務。但那裡的活動並沒有什麼異常之處。

Okay. And just as a follow-up, we're getting quite a few questions about that billings guidance for the Q4. You outlined earlier to -- in response to Brad's question, the (inaudible) that's sort of going into the Q4 guidance and the prudence with respect to the possibility for sales cycles to be elongated. I do just want to be fair, though, on that point. As it relates to the Q3 period and perhaps even the month of October, are you seeing any changes as it relates to average sales cycle?

好的。作為後續行動，我們收到了很多關於第四季度帳單指引的問題。您之前在回答布拉德的問題時概述了（聽不清楚）第四季度的指導以及對延長銷售週期可能性的謹慎態度。不過，在這一點上我只是想公平一點。由於它與第三季甚至十月份有關，您是否看到與平均銷售週期相關的任何變化？

We still have a very strong pipeline, actually stronger than before. And at the same time, we built pretty healthy, strong sales capacity to meet out the demand. Keith mentioned some tenure like have about 50% of sales force actually has a tenure, probably not reach the tenure yet, which we believe will become more productive in the next 6 to 12 months, which also will helping drive both the top line bottom line.

我們仍然擁有非常強大的管道，實際上比以前更強大。同時，我們建立了相當健康、強大的銷售能力來滿足需求。 Keith 提到了一些任期，例如大約50% 的銷售人員實際上擁有任期，可能還沒有達到任期，我們相信這將在未來6 到12 個月內變得更加富有成效，這也將有助於推動營收和利潤。

So just so I don't confuse Ken because I've already done that. So tenure is up about 50%, tenured people. We didn't have given the mix number, but it runs about 30% of the mix. So it's a significant number of people that we increased that are starting new to the organization.

所以我不會讓肯感到困惑，因為我已經這樣做了。所以終身職位的人增加了大約 50%。我們沒有給出混合數量，但它運行了大約 30% 的混合。因此，我們增加的大量人員都是新加入組織的。

And that all make sense. I'm just wondering if there were any changes perhaps that you noticed that were -- might have been macro-related affecting sales cycles over the past 3 to 4 months or so, if possible. It would just be very helpful to get a brief commentary on that as well.

這一切都是有道理的。我只是想知道您是否注意到有任何變化可能與宏觀相關，影響了過去 3 到 4 個月左右的銷售週期（如果可能的話）。如果能得到對此的簡短評論也會非常有幫助。

I just think that, as I said earlier in the conversation, as we started to see some -- our deal size is getting larger in the enterprise, we're certainly subject to more inspection perhaps than we -- the 8-figure deals are certainly much more inspection than the 7-figure deals were.

我只是認為，正如我在談話中早些時候所說的，當我們開始看到一些——我們的企業交易規模越來越大時，我們肯定會受到比我們更多的檢查——8位數的交易當然，檢查次數比 7 位數的交易多得多。

Adam Tindle at Raymond James is our next caller.

Raymond James 的 Adam Tindle 是我們的下一個來電者。

Keith, I wanted to start to appreciate that you gave a little bit of color on 2023 on services growth acceleration, obviously, an exciting catalyst. I think the flip side of that is we're just kind of really unsure how to think about puts and takes to the other line item on product revenue growth. Not asking, obviously, for specific guidance, but I'm thinking about these tough comps.

Keith，我想開始欣賞您對 2023 年服務成長加速的看法，這顯然是一個令人興奮的催化劑。我認為另一方面是我們真的不確定如何考慮產品收入成長的其他項目的看跌期權和索取期權。顯然，我並不是在尋求具體指導，但我正在考慮這些艱難的比較。

You just had very strong growth in one of the toughest comps that you've ever experienced in Q3. Your exit rate billings guidance is coming down. I think there's worry that the cancellation rates are at 4%, but could that ultimately increase with supply chain visibility. So a lot of fear on how bad product revenue growth could ultimately be and certainty on services revenue growth. So anything you could maybe point us to for a realistic view of how to think about puts and takes of product revenue growth in '23.

你們在第三季經歷過的最艱難的比賽之一中取得了非常強勁的成長。您的退出率帳單指示正在下降。我認為人們擔心 4% 的取消率，但隨著供應鏈的可見度最終會增加。因此，人們非常擔心產品收入成長最終會有多糟糕，以及服務收入成長的確定性。因此，您可能會向我們指出如何考慮 23 年產品收入成長的實際情況。

Yes, kind of covering some all the ground here. I don't mean that negatively. One, I would just -- again, the fact that we reiterated the midterm guidance, which is a 22% CAGR is probably a good indicator of how we think about it. I think that investors and analysts and ourselves are trying to understand the timing of when the backlog is going to reverse and actually go through the income statement and have an impact on product revenue. And it's going to provide -- when it does happen, I think it will provide some elevated product revenue numbers as we look forward to it. Yes, I don't have another point to that, and I kind of lost my train of thought. I apologize.

是的，有點涵蓋了這裡的所有內容。我的意思並不是消極的。一，我想再次重申，我們重申了中期指導，即 22% 的複合年增長率，這可能是我們如何看待這個問題的一個很好的指標。我認為投資者、分析師和我們自己都在試圖了解積壓訂單何時扭轉，並實際查看損益表並對產品收入產生影響。當它確實發生時，我認為它將提供一些更高的產品收入數字，正如我們所期望的那樣。是的，我沒有別的觀點了，我有點失去了思路。我道歉。

Yes, the growth driver we feel has not changed, like the convergence, like all the consolidation, also elevate like a threat environment. That's how we're keeping driving the product growth. And also the service also -- I think the product revenue is really the leading indicator of service revenue. So it's a pretty strong product revenue growth in the last 2, 3 years, we do see the service revenue continue to improving.

是的，我們感覺到的成長動力沒有改變，就像融合，就像所有的整合，也像威脅環境一樣提升。這就是我們不斷推動產品成長的方式。還有服務——我認為產品收入確實是服務收入的領先指標。因此，在過去的兩三年裡，產品收入成長相當強勁，我們確實看到服務收入持續改善。

Yes. And I would come back and just talk a little bit about the cancellation rate comment that concern, again, it has been remarkably consistent at 4%, not suggesting there's something there that would be a challenge. And certainly, I think the firewall part of that, which is roughly 1/3 is probably very specific to us and not really a commodity. There's other metrics that we've provided in the past, and we can certainly kind of go through them again over 90% to 95% of all backlog is with existing customers. It's not as if there's people coming off the street trying to order from us because they're trying to double order or something like that. That's just not plausible about it. And uplift in backlog, I think, again, over 50% -- I'm looking at Peter nod (inaudible) that he agrees with me, that's been partially delivered.

是的。我會回來談談有關取消率的評論，再次強調，取消率一直非常穩定地保持在 4%，並不意味著有什麼挑戰。當然，我認為其中大約 1/3 的防火牆部分可能是我們特有的，而不是真正的商品。我們過去提供了其他指標，我們當然可以再次檢查它們，90% 到 95% 的積壓訂單都來自現有客戶。並不是有人從街上走來試圖向我們訂購，因為他們試圖重複訂購或類似的事情。這是不合理的。我想，積壓訂單的增加再次超過 50%——我看到彼得點頭（聽不清楚），他同意我的觀點，這已經部分交付了。

So it's unlikely they're going to cancel something. So as backlog got older, do we have more concerns about it. I mean we're actually aging a little bit. Yes, we did, but now we're starting to see a bit of a plateau here in terms of what the backlog increases are and certainly from the easing around -- to be on the horizon around the supply chain environment. So -- while we do watch the cancellation rates very, very closely, we are not seeing indicators of concern there.

所以他們不太可能取消某些事情。隨著積壓的時間越來越長，我們是否對此有更多的擔憂？我的意思是我們實際上有點老了。是的，我們做到了，但現在我們開始看到積壓的成長出現了一些停滯狀態，當然也來自於供應鏈環境的寬鬆政策。因此，雖然我們確實非常非常密切地關注取消率，但我們沒有看到令人擔憂的跡象。

Yes. I think one other stat. I think if I'm recalling the numbers correctly, I have to look (inaudible), but I think the top 20 deals in backlog accounts for like 8% of backlog.

是的。我認為還有一項統計數據。我認為如果我正確地回憶了這些數字，我必須查看（聽不清楚），但我認為積壓中的前 20 筆交易約佔積壓的 8%。

Yes. That's what it was. Yes.

是的。就是這樣。是的。

Got it. Maybe I can sneak in a quick follow-up. Just to get all the fear out there because aftermarket move suggests there's a lot of fear. On -- from a billings basis, you're mixing towards larger deals, which is obviously a good thing for the business, but your average contract term is flat at 29 months. A number of software companies are seeing durations decline in a large in particular on those large multiyear deals. How do you think about potentially controlling for this so that duration doesn't become a headwind to billings growth?

知道了。也許我可以快速跟進。只是為了消除所有的恐懼，因為售後市場的走勢顯示有許多恐懼。從帳單來看，您正在轉向更大的交易，這顯然對企業來說是一件好事，但您的平均合約期限持平於 29 個月。許多軟體公司的工期大幅縮短，尤其是那些大型的多年期交易。您如何看待對此進行控制，以使持續時間不會成為比林斯增長的阻力？

Yes. I think as we continue -- we've said for several years that as we continue to expand into the enterprise segment, we expect that that's going to bring with the longer-term contracts. And it has shown that. If you go back a couple of years, I think average contract rates were closer to 24 or 25 months, and you're seeing that continued pressure. And I absolutely continue to believe that as we continue to have success expanding the enterprise, and that continues to be a larger part of our business, it will continue to put a bit of tailwind, if you will, on average contract term. I think also SD-WAN has shown to clearly be a longer-term contract that when customers come to the party. So we're not seeing that. I'm happy to see the last few quarters that we've kind of ended that 28%, 29% month and staying at that level. I was actually a little concerned that it was going to continue to grow and get into the low 30s.

是的。我認為，隨著我們繼續——我們已經說過幾年了，隨著我們繼續擴展到企業領域，我們預計這將帶來長期合約。它已經表明了這一點。如果你回顧幾年，我認為平均合約利率接近 24 或 25 個月，你會看到持續的壓力。我絕對仍然相信，隨著我們繼續成功地擴展企業，並且這仍然是我們業務的很大一部分，如果您願意的話，它將繼續為平均合約期限帶來一些推動力。我認為 SD-WAN 也已明顯表明，當客戶參加聚會時，它是一份長期合約。所以我們沒有看到這一點。我很高興看到過去幾季我們已經結束了 28%、29% 的月增長率並保持在這個水平。事實上，我有點擔心它會繼續增長並進入 30 多歲。

Okay. We have our last question for the session. Michael Turits at KeyBanc.

好的。我們有本次會議的最後一個問題。 KeyBanc 的 Michael Turits。

To the extent you can, can you talk about whether or not it seems realistic for backlog to continue to rise after this quarter? Or is that the point you think that starts to go down -- and at a fundamental level, where do you think we are relative to demand and, if you will, a refresh cycle around data centers that may have been neglected during COVID.

您能否盡可能談談積壓訂單在本季之後繼續增加是否現實？或者是你認為開始下降的點——從根本上講，你認為我們相對於需求的位置，如果你願意的話，圍繞數據中心的更新周期在新冠疫情期間可能被忽視。

Probably were not using the refresh because I feel in the last like couple of years, its some change in the network security landscape. So I probably more using the convergence, especially we see the strong growth, stong Secure SD-WAN, OT and also internal segmentation, (inaudible) data center security which security is starting to deploy into the position traditionally network security, not deployed. So that's actually we plan most of the growth from that area. We do get into some big enterprise. They're also looking at how to do the consolidation like whether networking security, working with the other part of the infrastructure security there.

可能沒有使用刷新，因為我覺得在過去的幾年裡，網路安全格局發生了一些變化。因此，我可能更多地使用融合，特別是我們看到強勁的成長、強勁的安全SD-WAN、OT 以及內部分段、（聽不清楚）資料中心安全性，其中安全性開始部署到傳統網絡安全性的位置，而不是部署的位置。所以這實際上是我們計劃該領域的大部分成長。我們確實進入了一些大企業。他們也正在研究如何進行整合，例如網路安全、與基礎設施安全的其他部分合作。

And we also see a lot of very growth for our business in the big enterprise there also. So that's probably not the time really deploying in the new area and not only the environment is very, very fast and also a lot of like working from home remotely, but also a lot of new areas drive a lot of new deployment. So that's where probably we're not kind of looking at refresh, replacing some of the old network security device, but it's more in the new area, we see will be get the growth for a while long time in the next 5 to 10 years.

我們也看到那裡的大企業的業務也有很大的成長。因此，這可能不是真正在新區域進行部署的時間，不僅環境非常非常快，而且很像遠端在家工作，而且許多新區域推動了許多新部署。因此，我們可能不會考慮更新，更換一些舊的網路安全設備，但更多的是在新領域，我們看到在未來 5 到 10 年內將在很長一段時間內獲得成長。

And Keith on backlog?

基斯還有積壓的訂單嗎？

I'm sorry, on backlog?

抱歉，積壓了嗎？

Yes. (inaudible)

是的。 （聽不清楚）

I think the last quarter and then maybe in the fourth quarter it would -- the inference would be that we're at a bit of a plateau.

我認為上個季度，然後也許是第四季度，我們會得出這樣的結論：我們正處於平台期。

Still going to depend on supply, though, which is still the (inaudible)

不過，仍然取決於供應，這仍然是（聽不清楚）

Yes.

是的。

At this time, I would like to turn it back to Peter Salkowski, Vice President of Investor Relations for closing remarks.

現在，我想請投資人關係副總裁 Peter Salkowski 致閉幕詞。

Thank you, Eric. I'd like to thank everyone for joining today's call. Fortinet will be attending investor conferences hosted by Barclays, Stifel and Wells Fargo during the fourth quarter. Fireside chat webcast links will be posted on the Events and Presentations section of our website. If you have any follow-up questions, please (inaudible). Thank you very much.

謝謝你，埃里克。我要感謝大家參加今天的電話會議。 Fortinet 將參加第四季由巴克萊銀行、Stifel 和富國銀行主辦的投資者會議。爐邊聊天網路廣播連結將發佈在我們網站的活動和演示部分。如果您有任何後續問題，請（聽不清楚）。非常感謝。

And this concludes our program. You may now disconnect. Thank you.

我們的計劃到此結束。您現在可以斷開連線。謝謝。