We maintain the Amended and Restated Fortinet, Inc. 2009 Equity Incentive Plan (the “Amended Plan”) pursuant to which we have granted RSUs, stock options and PSUs. As of March 31, 2025, there were a total of 48.8 million shares of common stock available for grant under the Amended Plan.

The following table summarizes the activity and related information for RSUs for the periods presented below (in millions, except per share amounts):


	Restricted Stock Units Outstanding
	Number of Shares	Weighted-Average Grant Date Fair Value per Share
Balance—December 31, 2024	8.4	$	64.70
Granted	2.0	110.02
Forfeited	(0.3)	70.79
Vested	(1.4)	58.23
Balance—March 31, 2025	8.7	$	75.85

Stock compensation expense is recognized on a straight-line basis over the vesting period of each RSU. As of March 31, 2025, total compensation expense related to unvested RSUs granted to employees and non-employees under the Amended Plan, but not yet recognized, was $605.6 million, with a weighted-average remaining vesting period of 3.0 years.

We grant market/performance-based PSUs under the Amended Plan to certain of our executives. Based on the achievement of the market/performance-based vesting conditions during the performance period, the final settlement of the PSUs will range between 0% and 200% of the target shares underlying the PSUs based on the percentile ranking of our total

stockholder return over one-, two-, three- and four-year periods among companies included in the S&P 500 Index. 20%, 20%, 20% and 40% of the PSUs vest over one-, two-, three- and four-year service periods, respectively.


	Three Months Ended
	March 31, 2025		March 31, 2024
Expected term in years	2.7		2.7
Volatility	41.5	%	45.5	%
Risk-free interest rate	4.2	%	4.5	%
Dividend rate	—	%	—	%

We granted approximately 0.1 million and 0.3 million shares of PSU awards with a weighted-average grant date fair value of $168.93 and $98.19 per share to certain of our executives during the three months ended March 31, 2025 and 2024, respectively. The grant date fair value of these awards was determined using a Monte Carlo simulation pricing model. Approximately 0.2 million and 0.1 million shares of PSU awards vested during the three months ended March 31, 2025 and 2024, respectively. None of these PSU awards were forfeited during the three months ended March 31, 2025 and 2024, respectively.

As of March 31, 2025, total compensation expense related to unvested PSUs that were granted to certain of our executives, but not yet recognized, was $40.0 million. This expense is expected to be amortized on a graded vesting method over a weighted-average vesting period of 2.4 years.

RSUs and PSUs settle into shares of common stock upon vesting. Upon the vesting of the RSUs and PSUs, we net-settle the RSUs and PSUs and withhold a portion of the shares to satisfy employee withholding tax requirements. The payment of the withheld taxes to the tax authorities is reflected as a financing activity within the condensed consolidated statements of cash flows.


	Three Months Ended
	March 31, 2025		March 31, 2024
Expected term in years	4.5		4.5
Volatility	41.6	%	42.9	%
Risk-free interest rate	4.2	%	4.3	%
Dividend rate	—	%	—	%

The following table summarizes the stock option activity and related information for the periods presented below (in millions, except exercise prices and contractual life):


	Options Outstanding
	Number of Shares	Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Life (Years)	Aggregate Intrinsic Value
Balance—December 31, 2024	8.7	$	37.81	3.1	$	493.8
Granted	0.5	110.02
Forfeited	—	65.88
Exercised	(1.1)	17.56
Balance—March 31, 2025	8.1	$	45.46
Options vested and expected to vest—March 31, 2025	8.1	$	45.46	3.4	$	418.1
Options exercisable—March 31, 2025	6.0	$	34.98	2.6	$	368.2

The aggregate intrinsic value represents the difference between the exercise price of stock options and the quoted market price of our common stock at the date of the balance sheet for all in-the-money stock options. Stock compensation expense is recognized on a straight-line basis over the vesting period of each stock option. As of March 31, 2025, total compensation expense related to unvested stock options granted to employees but not yet recognized was $61.3 million, with a weighted-average remaining vesting period of 2.8 years.


	Three Months Ended
	March 31, 2025		March 31, 2024
Weighted-average fair value per share granted	$	44.34	$	26.92
Intrinsic value of options exercised	$	102.3	$	51.8
Fair value of options vested	$	9.5	$	12.1

Stock-based compensation expense, including stock-based compensation expense related to awards classified as liabilities, is included in costs and expenses (in millions):


	Three Months Ended
	March 31, 2025		March 31, 2024
Cost of product revenue	$	0.5	$	0.5
Cost of service revenue	6.5		6.2
Research and development	23.0		19.8
Sales and marketing	26.5		26.7
General and administrative	10.4		9.8
Total stock-based compensation expense	$	66.9	$	63.0

The following table summarizes stock-based compensation expense, including stock-based compensation expense related to awards classified as liabilities, by award type (in millions):


	Three Months Ended
	March 31, 2025		March 31, 2024
RSUs	$	56.3	$	52.0
Stock options	6.6		7.3
PSUs	4.0		3.7
Total stock-based compensation expense	$	66.9	$	63.0

Total income tax benefit associated with stock-based compensation that is recognized in the condensed consolidated statements of income is (in millions):

In October 2024, our board of directors approved a $1.0 billion increase in the authorized stock repurchase amount under the Repurchase Program and extended the term of the Repurchase Program to February 28, 2026, bringing the aggregate amount authorized to be repurchased to $8.25 billion of our outstanding common stock through February 28, 2026. Share repurchases may be made by us from time to time in privately negotiated transactions or in open-market transactions. The Repurchase Program does not require us to purchase a minimum number of shares, and may be suspended, modified or discontinued at any time without prior notice.