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Record Fourth Quarter Attributed to Global Demand for WatchGuard Security Solutions

SEATTLE – January 31, 2011. Privately-held WatchGuard Technologies, a global leader of business security solutions, today announced that it attained a record-breaking 2010 fourth quarter for revenue. This quarter stands out as the top-grossing quarter ever earned in the company's history. Additionally, the company notes double-digit sequential growth from Q4 over Q3, and that 2010 marked another year of consecutive annual growth since going private in 2006.

"WatchGuard is the leading security solutions provider for SMB and mid-market enterprises," said Joe Wang, CEO, WatchGuard Technologies. "Today's businesses all have a common need – having affordable and effective security solutions stop a myriad of threats, such as spam, viruses, malware, spyware, as well as protect against rogue applications, hackers and identity thieves. As evidenced by the company's aggressive growth, WatchGuard continues to innovate and offer businesses with unbeatable network, application and data protection."

Record-breaking WatchGuard Revenue Growth Seen Worldwide

For this calendar quarter ending December 31, 2010, WatchGuard broke all historic quarterly revenue records due to numerous countries around the world achieving significant, top-line revenue growth. Growth for WatchGuard security solutions was broad-based across all regions. The following markets achieved notable Q4 year-over-year growth:

• China – 176.3 percent
• India – 82.3 percent
• Japan – 26.4 percent
• Southern Europe – 21.3 percent
• Canada – 19.4 percent
• Latin America – 18.2 percent
• Hong Kong/Taiwan – 18.2 percent

As well, global revenue for WatchGuard grew 18 percent sequentially over Q3, 2010, indicating accelerated growth moving into 2011.

Several factors contributed to WatchGuard's record growth. First, WatchGuard notes an increase overall among SMB purchases, as well as substantially improved demand from mid-market and enterprise organizations. This indicates broader industry adoption in favor of multifunction security appliances and a shift away from single purpose appliances.

Second, WatchGuard notes a substantial increase of add-on services purchased along with WatchGuard XTM appliances. Since 2006, the attach rate of adding multiple security services on individual WatchGuard appliances continues to dramatically increase. This trend further supports the view that more businesses are consolidating security functions into one, easy to manage and lower total cost of ownership security appliance from WatchGuard.

Currently, WatchGuard offers seven add on security services for XTM appliances, including: Application Control, WebBlocker, Gateway Antivirus, Reputation Enabled Defense, spamBlocker, Intrusion Prevention and LiveSecurity. These services can be purchased as a bundle or individually to best meet customer needs.

Lastly, emerging markets in Asia Pacific, Latin America, Europe, Africa and the Middle East showed strong demand for WatchGuard's next generation security solutions. This corresponds with recent emerging market growth trends.

Wang concludes, "Businesses today face unprecedented challenges in keeping data safe; no longer is a traditional firewall capable at protecting critical business assets. With WatchGuard, businesses gain an evolving security platform that scales with their growth. WatchGuard XTM and XCS appliances are dynamically designed to stop today's threats as well as tomorrow's next-generation attacks."