Fortinet, Inc. Earnings Recaps
Fortinet shares fell 20.1% after earnings. The transcript gives no explicit explanation for the selloff, but it points to a potential concern: product revenue grew 37% while total revenue grew 20%, and the supplied remarks end before management completes its outlook discussion, so the full-year and fourth-quarter guidance cannot be assessed here.
Key takeaways
- Billings rose 29% to $2.34 billion; total revenue increased 20% to $2.08 billion.
- Product revenue grew 37% to $765 million, despite increasing lead times for certain components.
- SASE firewall billings grew 31%; OT billings grew nearly 40%, and billings from AI-driven security operations rose 15%.
- Deals valued above $1 million increased 51%, with an outsized contribution from U.S. large enterprise customers.
- Management said it raised 2026 billings and revenue guidance, but the transcript provided does not include the guidance figures or the fourth-quarter outlook.
Fortinet’s stock rallied 20.1% post-earnings, driven by billings growth well above expectations and a confident raised outlook, reflecting strong demand across its secure networking and AI-driven solutions.
Key takeaways
- Total billings surged 31% to $2.09 billion, led by 32% growth in secure networking and over 70% growth in operational technology (OT) security billings.
- Product revenue jumped 41% to $645 million, fueled by AI-related deployments and customer upgrades to higher-performance FortiGate hardware.
- Unified SASE billings grew 31%, with FortiSASE adoption expanding significantly within large enterprise accounts (18% penetration, +45% increase).
- Service revenue increased 11% to $1.21 billion, aided by accelerating service billings growth of 27% and deferred revenue up 15%.
- Operating margins remained strong, with GAAP margin at 31% and non-GAAP at 36%, supporting a 29% increase in GAAP EPS and $1 billion in free cash flow.
Fortinet reported strong third-quarter 2025 results, with total billings growing 14% year-over-year to $1.81 billion, driven by robust demand across its cybersecurity solutions, particularly in Unified SASE and SecOps.
Key takeaways
- Unified SASE billings surged 19%, with FortiSASE achieving over 100% growth, positioning Fortinet as a SASE market leader.
- Total revenue rose 14% to $1.72 billion, reflecting strong sales performance globally, particularly in EMEA and APAC.
- The number of large enterprise deals exceeding $1 million climbed by 26%, highlighting Fortinet's expanding footprint among larger clients.
- SecOps billing increased 33%, fueled by growing adoption of AI-driven security solutions as part of its comprehensive cybersecurity portfolio.
- Fortinet's operational technology solutions also saw more than 30% billing growth, showcasing its strength in critical infrastructure security.