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Fortinet (FTNT) Ken Xie on Q1 2016 Results - Earnings Call Transcript

Q1 2016 Earnings Call

April 26, 2016 6:30 pm ET

Executives

Michelle Spolver - VP-Corporate Communications & Investor Relations

Andrew H. Del Matto - Chief Financial Officer

Ken Xie - Founder, Chairman of the Board and Chief Executive Officer

Analysts

Jeremy Benatar - Raymond James & Associates, Inc.

Gregg Moskowitz - Cowen & Co. LLC

Saket Kalia - Barclays Capital, Inc.

Walter H. Pritchard - Citigroup Global Markets, Inc. (Broker)

Gabriela Borges - Goldman Sachs & Co.

Fatima Aslam Boolani - UBS Securities LLC

Melissa A. Gorham - Morgan Stanley & Co. LLC

Sterling Auty - JPMorgan Securities LLC

Catharine A. Trebnick - Dougherty & Co. LLC

Ken Talanian - Evercore ISI

Imtiaz Koujalgi - Deutsche Bank Securities, Inc.

Erik L. Suppiger - JMP Securities LLC

Rohit Chopra - The Buckingham Research Group, Inc.

Hendi Susanto - Gabelli & Company

Operator

Good day, ladies and gentlemen, and welcome to the Fortinet First Quarter 2016 Earnings Financial Analyst Q&A Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session, and instructions will be given at that time. As a reminder, today's program is being recorded.

I would now like to introduce your host for today's program Michelle Spolver. Please go ahead.

Michelle Spolver - VP-Corporate Communications & Investor Relations

Thanks, Jonathan. Hi, everyone again. Thanks for calling in. I have Ken Xie and Drew Del Matto with me here, and it's all a full Q&A session, but I think before we launch into the first question, just a reminder that the Safe Harbor and cautionary statement is that we made in our prior call affect any content that we deliver during this call as well.

So with that, Jonathan, you can take the first question.

Question-and-Answer Session

Operator

Certainly. And our first question comes from the line of Jeremy Benatar from Raymond James.

Jeremy Benatar - Raymond James & Associates, Inc.

Yes. Just quick housekeeping question. I think last quarter you guys guided to cash taxes between $25 million and $29 million for the year. Any change in that?

Andrew H. Del Matto - Chief Financial Officer

No change there, $25 million to $29 million.

Jeremy Benatar - Raymond James & Associates, Inc.

Got it. Okay. That's it from me. Thanks, guys.

Operator

Thank you. Our next question comes from the line of Gregg Moskowitz from Cowen & Company. Your question please.

Gregg Moskowitz - Cowen & Co. LLC

Okay. Thanks very much. Hi, guys. So, with the Q1 out of the way, are there any potential transition issues that you would say are associated or could be associated with the unified global sales model that we should be aware of or is this pretty much in the rearview mirror as far as you're concerned?

Andrew H. Del Matto - Chief Financial Officer

Well, we called it out, as still the changes have been made. Somebody asked if we had some new people still to come in, we're always going to have some new people come in and not all, so maybe a few places to fill, if you will, but the structures are in place, the alignment is there. Gregg, I think the big caution is that there is some remapping that occurred in the rearview mirror. But when you transition, there is always six months to nine months of sell cycle, maybe even longer than nine months in some cases that we need to be cautious about and we reflect that in our guidance.

Gregg Moskowitz - Cowen & Co. LLC

Exactly, perfect. And Ken, last quarter, I think you said that there were some larger enterprises that were taking a little longer to make decisions. Has that dynamic continued or has that changed one way or another?

Ken Xie - Founder, Chairman of the Board and Chief Executive Officer

Not particularly.

Michelle Spolver - VP-Corporate Communications & Investor Relations