Fortinet Q3 2026 revenue rises 20% to $2.08B
Full-year 2026 revenue guidance is $8.125 billion to $8.215 billion, and the remaining share repurchase authorization is $2 billion.
Sentiment and the balance of points
Rhea-AI Sentiment reads the wording of the document, how positive or negative its language is on a 1 to 5 scale. The balance of points shown with the takes weighs what the document actually discloses, so the two can disagree, for example when a trial that missed its main goal is described in upbeat language.
Form Type
8-K
Rhea-AI Filing Summary
Fortinet, Inc. (FTNT) reported third-quarter 2026 revenue of $2,078.4 million, up 20% year over year; product revenue was $765 million, up 37%. GAAP net income was $635.5 million versus $473.9 million a year earlier, and diluted GAAP earnings per share were $0.86 versus $0.62. Operating cash flow was $946 million and free cash flow was $864.8 million, compared with $655.2 million and $567.5 million, respectively, in the prior-year quarter. Billings were $2,336.3 million versus $1,807.7 million.
Fortinet currently expects full-year 2026 revenue of $8.125 billion to $8.215 billion and billings of $9.568 billion to $9.718 billion; fourth-quarter revenue guidance is $2.155 billion to $2.245 billion. It increased its share repurchase authorization by $1.2 billion, with $2 billion remaining. Fortinet also announced the FortiGuard Inline AI Security Service and FortiLink SASE service, and reported Q3 non-GAAP operating margin of 38.2% and diluted non-GAAP EPS of $0.91.
3 points · 0 major0 major · 0 points
How this balance works
Rhea-AI gives every point it takes from this document a weight. Minor counts 1, Moderate 3 and Major 9, so one Major point outweighs several Minor ones. The bar adds up the weights on each side, and when neither side holds more than 65% of the total the balance reads Mixed.
It reads the document as published, with the same rules for every company, and it does not look at what the market expected or at how the stock traded, so a point can be objectively good on a day the stock falls.
Rhea-AI Sentiment measures something else, the tone of the wording.
Positive
- Moderate pointRevenue reached $2,078.4 million, with 20% year-over-year growth.
- Moderate pointGAAP net income rose to $635.5 million from $473.9 million.
- Moderate pointOperating cash flow rose to $946 million from $655.2 million.
Negative
- None.
Filing Explained
For the third quarter, Fortinet's adjusted free cash flow included real-estate-related purchases while free cash flow excluded escrow proceeds.
This Form 8-K reports completed historical common-stock repurchases during the first nine months of 2026; the separately stated remaining authorization is not itself a completed purchase.
Fortinet defines free cash flow as operating cash provided less property and equipment purchases, excluding significant nonrecurring items; adjusted free cash flow adds cash payments for real-estate-related purchases.
For the third quarter, Fortinet deducted escrow-settlement proceeds to report free cash flow, then added real-estate-related purchases to report adjusted free cash flow.
8-K Event Classification
2 items: 2.02, 9.01
2 items
Item 2.02
Results of Operations and Financial Condition
Financial
Disclosure of earnings results, typically an earnings press release or preliminary financials.
Item 9.01
Financial Statements and Exhibits
Exhibits
Financial statements, pro forma financial information, or exhibit attachments filed with this report.
Key Figures
Revenue: $2,078.4 million
Product revenue: $765 million
GAAP net income: $635.5 million
+5 more
8 metrics
Revenue
$2,078.4 million
Three months ended September 30, 2026; up 20% year over year
Product revenue
$765 million
Third quarter 2026; up 37% year over year
GAAP net income
$635.5 million
Three months ended September 30, 2026; $473.9 million in the prior-year quarter
Diluted GAAP earnings per share
$0.86 per share
Three months ended September 30, 2026; $0.62 in the prior-year quarter
Operating cash flow
$946 million
Third quarter 2026; $655.2 million in the prior-year quarter
Free cash flow
$864.8 million
Third quarter 2026; $567.5 million in the prior-year quarter
Full-year 2026 revenue guidance
$8.125 billion to $8.215 billion
Fortinet currently expects
Share repurchase authorization remaining
$2 billion
Authorization increased by $1.2 billion
Key Terms
Billings, Free cash flow, Adjusted free cash flow, Non-GAAP operating margin
4 terms
Billings financial
"We define billings as revenue recognized in accordance with GAAP"
Billings represent the total amount of money a company is expected to receive from customers for products or services delivered during a specific period. Think of it as the sales that have been agreed upon or scheduled, even if the cash hasn't been received yet. For investors, billings are an important indicator of future revenue and business growth, showing how well a company is selling its offerings.
Free cash flow financial
"We define free cash flow as net cash provided by operating activities"
Free cash flow is the amount of money a company has left over after paying all its expenses and investing in its business, like buying equipment or updating facilities. It shows how much cash is available to reward shareholders, pay down debt, or save for future growth. This helps investors understand if a company is financially healthy and able to grow.
Adjusted free cash flow financial
"We define adjusted free cash flow as free cash flow plus cash payments"
Adjusted free cash flow is the amount of money a company generates from its operations after accounting for essential expenses and investments, like maintaining or upgrading equipment. It shows how much cash is truly available to grow the business, pay debts, or return to shareholders, helping investors see the company's financial health more clearly.
Non-GAAP operating margin financial
"Non-GAAP operating margin is defined as non-GAAP operating income divided by GAAP revenue"
Non-GAAP operating margin is a way companies show how much profit they make from their main business activities, excluding certain expenses or income they consider unusual or non-recurring. It helps investors see how well the company is performing in its normal operations, without the effects of one-time costs or gains that might distort the picture.
Earnings Snapshot
Revenue: $2,078.4 million · Guidance included
Third quarter ended September 30, 2026
Revenue
$2,078.4 million
20% year over year
Product revenue
$765 million
37% year over year
GAAP net income
$635.5 million
$473.9 million in the prior-year quarter
Diluted GAAP earnings per share
$0.86
$0.62 in the prior-year quarter
GAAP operating margin
33.9%
31.7% in the prior-year quarter
Operating cash flow
$946 million
$655.2 million in the prior-year quarter
Free cash flow
$864.8 million
$567.5 million in the prior-year quarter
Guidance
Fortinet currently expects Q4 2026 revenue of $2.155 billion to $2.245 billion, billings of $2.775 billion to $2.925 billion, non-GAAP gross margin of 78.0% to 80.0%, non-GAAP operating margin of 35.5% to 37.5%, and diluted non-GAAP EPS of $0.93 to $0.95. It currently expects FY 2026 revenue of $8.125 billion to $8.215 billion, service revenue of $5.150 billion to $5.170 billion, billings of $9.568 billion to $9.718 billion, non-GAAP gross margin of 79.7% to 80.3%, non-GAAP operating margin of 36.5% to 37.5%, and diluted non-GAAP EPS of $3.54 to $3.58. The EPS ranges assume an 18% non-GAAP effective tax rate; Q4 assumes 741 million to 745 million diluted shares and FY 2026 assumes 741 million to 743 million diluted shares.
FAQ
AI-generated questions and answers. How Rhea-AI works. Not financial advice.
How much revenue did FTNT report in Q3 2026?
Fortinet reported $2,078.4 million in revenue for the third quarter ended September 30, 2026, up 20% year over year. Product revenue was $765 million, up 37% year over year.
What were FTNT's Q3 2026 net income and diluted EPS?
Fortinet reported GAAP net income of $635.5 million and diluted GAAP EPS of $0.86 for Q3 2026, compared with $473.9 million and $0.62, respectively, for the three months ended September 30, 2025.
What is FTNT's 2026 financial guidance?
Fortinet currently expects full-year 2026 revenue of $8.125 billion to $8.215 billion, service revenue of $5.150 billion to $5.170 billion, and billings of $9.568 billion to $9.718 billion. It also expects non-GAAP operating margin of 36.5% to 37.5% and diluted non-GAAP EPS of $3.54 to $3.58.
What does FTNT expect for Q4 2026?
Fortinet currently expects fourth-quarter 2026 billings of $2.775 billion to $2.925 billion, non-GAAP gross margin of 78.0% to 80.0%, non-GAAP operating margin of 35.5% to 37.5%, and diluted non-GAAP EPS of $0.93 to $0.95. The EPS range assumes an 18% non-GAAP effective tax rate and 741 million to 745 million diluted shares.
AI-generated analysis. How Rhea-AI works. Not financial advice.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):
(Exact name of registrant as specified in its charter)
| (State or other jurisdiction of incorporation) | (Commission File Number) | (IRS Employer Identification No.) | ||||||||||||
(Address of principal executive offices, including zip code)
(408 ) 235-7700
(Registrant’s telephone number, including area code)
Not Applicable
(Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
| Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | |||||
| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | |||||
| Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | |||||
| Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) | |||||
Securities registered pursuant to Section 12(b) of the Exchange Act:
| (Title of each class) | (Trading Symbol) | (Name of exchange on which registered) | ||||||||||||
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 2.02 Results of Operations and Financial Condition.
On October 28, 2026, Fortinet, Inc. issued a press release reporting its financial results for the third quarter ended September 30, 2026. A copy of the press release is furnished herewith as Exhibit 99.1 and is incorporated herein by reference.
This information shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
| Exhibit No. | Description | |||||||
99.1 | Press release dated October 28, 2026 | |||||||
| 104 | Cover Page Interactive Data File - the cover page for this Current Report on Form 8-K is formatted in iXBRL | |||||||
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| Fortinet, Inc. | ||||||||
Date: October 28, 2026 | By: | /s/ JOHN WHITTLE | ||||||
| John Whittle | ||||||||
Chief Operating Officer | ||||||||
Press Release
Fortinet Reports Strong Third Quarter 2026 Financial Results
Raises 2026 revenue guidance to 20% year over year growth
Highlights
•Revenue grew 20% year over year to $2.08 billion
•Product revenue grew 37% year over year to $765 million
•Billings grew 29% year over year to $2.34 billion1
•GAAP operating margin of 34%
•Non-GAAP operating margin of 38%1
•GAAP earnings per share of $0.86
•Non-GAAP earnings per share of $0.911
•Operating cash flow of $946 million
•Free cash flow of $865 million1
•Share repurchase authorization increased by $1.2 billion; remaining authorization of $2 billion
SUNNYVALE, Calif. - October 28, 2026 - Fortinet® (Nasdaq: FTNT), a global cybersecurity leader driving the convergence of networking and security, today announced financial results for the third quarter ended September 30, 2026.
“We are very pleased with our excellent third quarter results, which reflect strong execution and broad-based demand across our entire portfolio, allowing us to raise our 2026 billings guidance for the third time this year,” said Ken Xie, Founder, Chairman and Chief Executive Officer of Fortinet. “Our strong momentum is driven by our continued leadership in the AI era. As AI introduces entirely new attack surfaces, Network Security remains the critical foundation of AI Security. Powered by our single FortiOS operating system and proprietary FortiASIC technology, our unified platform approach secures critical AI infrastructure while delivering industry-leading performance and a significantly lower total cost of ownership.”
Recent Business Highlights
•Announced the new FortiGuard Inline AI Security Service, delivering AI-specific inspection and guardrails to FortiGate customers through a cloud-delivered service, enabling organizations to gain deeper visibility into AI activity and stop AI threats and data exposure through the Fortinet solutions they already use.
•Announced the FortiLink SASE service, giving organizations a simpler way to secure small branch office, remote facilities, and other distributed locations without requiring a dedicated on-site firewall. By connecting local networks to FortiSASE, organizations can protect and manage wired and wireless devices through a simplified, cloud-delivered service while managing networking and security from a single console.
•Selected by NVIDIA as a top OpenShell Reference Architecture Partner to Secure AI.
•Oracle and Fortinet announced a collaboration to help enterprises securely accelerate AI adoption, combining OCI Enterprise AI with FortiAIGate to protect and govern AI applications and agents at scale while maintaining visibility and control.
•Selected by Microsoft to join its Sovereign Partner Ecosystem based on Fortinet’s sovereign solution strength, to together deliver trusted sovereign AI security solutions to highly regulated industries.
•Recognized as a Leader in the 2026 Gartner Magic Quadrant for Hybrid Mesh Firewall and positioned highest for Ability to Execute for the second consecutive year.
Guidance
For the fourth quarter of 2026, Fortinet currently expects:
•Revenue in the range of $2.155 billion to $2.245 billion
•Billings in the range of $2.775 billion to $2.925 billion
•Non-GAAP gross margin in the range of 78.0% to 80.0%
•Non-GAAP operating margin in the range of 35.5% to 37.5%
•Diluted non-GAAP net income per share in the range of $0.93 to $0.95, assuming a non-GAAP effective tax rate of 18%. This assumes a diluted share count of 741 million to 745 million.
For the fiscal year 2026, Fortinet currently expects:
•Revenue in the range of $8.125 billion to $8.215 billion
•Service revenue in the range of $5.150 billion to $5.170 billion
•Billings in the range of $9.568 billion to $9.718 billion
•Non-GAAP gross margin in the range of 79.7% to 80.3%
•Non-GAAP operating margin in the range of 36.5% to 37.5%
•Diluted non-GAAP net income per share in the range of $3.54 to $3.58, assuming a non-GAAP effective tax rate of 18%. This assumes a diluted share count of 741 million to 743 million.
These statements are forward looking and actual results may differ materially. Refer to the Forward-Looking Statements section below for information on the factors that could cause our actual results to differ materially from these forward-looking statements.
Our guidance with respect to non-GAAP financial measures excludes stock-based compensation, amortization of acquired intangible assets, gain on intellectual property matters, a gain from an escrow settlement and a tax adjustment required for an effective tax rate on a non-GAAP basis, which differs from the GAAP effective tax rate. We have not reconciled our guidance with respect to non-GAAP financial measures to the corresponding GAAP measures because certain items that impact these measures are uncertain or out of our control or cannot be reasonably predicted. Accordingly, a reconciliation of these non-GAAP financial measures to the corresponding GAAP measures is not available without unreasonable effort.
Conference Call Details
Fortinet will host a conference call today at 1:30 p.m. Pacific Time (4:30 p.m. Eastern Time) to discuss the earnings results. A live webcast of the conference call and supplemental slides will be accessible from the Investor Relations page of Fortinet’s website at https://investor.fortinet.com and a replay will be archived and accessible at https://investor.fortinet.com/events-and-presentations.
Fourth Quarter 2026 Conference Participation Schedule:
•BMO Technology and Innovation Leaders Conference
November 12, 2026
•UBS Global Technology and AI Conference
December 2, 2026
•Barclays Global Technology Conference
December 9, 2026
Members of Fortinet’s management team are expected to present at these conferences and discuss the latest company strategies and initiatives. Fortinet’s conference presentations are expected to be available via webcast on the company’s website. To access the most updated information, pre-register and listen to the webcast of each event, please visit the Investor Presentation & Events page of Fortinet’s website at https://investor.fortinet.com/events-and-presentations. The schedule is subject to change.
About Fortinet (www.fortinet.com)
Fortinet (Nasdaq: FTNT) is a driving force in the evolution of cybersecurity and the convergence of networking and security. Our mission is to secure people, devices and data everywhere, and today we deliver cybersecurity everywhere our customers need it with the largest integrated portfolio of over 50 enterprise-grade products. Over one million lifetime customers trust Fortinet’s solutions, which are among the most deployed, most patented and most validated in the industry. The Fortinet Training Institute, one of the largest and broadest training programs in the industry, is dedicated to making cybersecurity training and new career opportunities available to everyone. Collaboration with esteemed organizations from both the public and private sectors, including Computer Emergency Response Teams (“CERTs”), government entities, and academia, is a fundamental aspect of Fortinet’s commitment to enhance cyber resilience globally. FortiGuard Labs, Fortinet’s elite threat intelligence and research organization, develops and utilizes leading-edge machine learning and AI technologies to provide customers with timely and consistently top-rated protection and actionable threat intelligence. Learn more at https://www.fortinet.com, the Fortinet Blog or FortiGuard Labs.
Forward-Looking Statements
This press release contains forward-looking statements that involve risks and uncertainties. These forward-looking statements include statements regarding any indications related to future growth and market share gains, our strategy going forward, and guidance and expectations around future financial results, including guidance and expectations for the fourth quarter and full year 2026, and any statements regarding our market opportunity and market size, and business momentum. Although we attempt to be accurate in making forward-looking statements, it is possible that future circumstances might differ from the assumptions on which such statements are based such that actual results are materially different from our forward-looking statements in this release. Important factors that could cause results to differ materially from the statements herein include the following: general economic risks, including those caused by economic challenges, a possible economic downturn or recession and the effects of inflation or stagflation, changing interest rates or reduced information technology spending; supply chain challenges; negative impacts from global conflicts and their related macroeconomic effects; competitiveness in the security market; the dynamic nature of the security market and its products and services; specific economic risks worldwide and in different geographies, and among different customer segments; uncertainty regarding demand and increased business and renewals from existing customers; sales execution risks, including risks in connection with the timing and completion of large strategic deals; uncertainties around continued success in sales growth and market share gains; uncertainties in market opportunities and the market size; actual or perceived vulnerabilities in our supply chain, products or services, and any actual or
perceived breach of our network or our customers’ networks; longer sales cycles, particularly for larger enterprise, service providers, government and other large organization customers; the effectiveness of our salesforce and failure to convert sales pipeline into final sales; risks associated with successful implementation of multiple integrated software products and other product functionality risks; risks associated with integrating acquisitions and changes in circumstances and plans associated therewith, including, among other risks, changes in plans related to product and services integrations, product and services plans and sales strategies; sales and marketing execution risks; execution risks around new product development and introductions and innovation; litigation and disputes and the potential cost, distraction and damage to sales and reputation caused thereby or by other factors; cybersecurity threats, breaches and other disruptions; market acceptance of new products and services; the ability to attract and retain personnel; changes in strategy; risks associated with management of growth; lengthy sales and implementation cycles, particularly in larger organizations; technological changes that make our products and services less competitive, including advances in artificial intelligence; risks associated with the adoption of, and demand for, our products and services in general and by specific customer segments, including those caused by competition and pricing pressure; excess product inventory for any reason, including those caused by the effects of inflation and changing interest rates in certain geographies and the war in Ukraine, tensions between China and Taiwan or conflicts in the Middle East; risks associated with business disruption caused by natural disasters and health emergencies such as earthquakes, fires, power outages, typhoons, floods, health epidemics and viruses, and by manmade events such as civil unrest, labor disruption, international trade disputes, international conflicts such as the war in Ukraine, tensions between China and Taiwan or conflicts in the Middle East, terrorism, wars, and critical infrastructure attacks; tariffs, trade disputes and other trade barriers, and negative impact on sales based on geo-political dynamics and disputes and protectionist policies, including the impact of any future shutdowns of the U.S. government; and the other risk factors set forth from time to time in our most recent Annual Report on Form 10-K, our most recent Quarterly Report on Form 10-Q and our other filings with the Securities and Exchange Commission (“SEC”), copies of which are available free of charge at the SEC’s website at www.sec.gov or upon request from our investor relations department. All forward-looking statements herein reflect our opinions only as of the date of this release, and we undertake no obligation, and expressly disclaim any obligation, to update forward-looking statements herein in light of new information or future events.
Use of Non-GAAP Financial Measures
We believe that the presentation of non-GAAP financial information provides important supplemental information to management and investors regarding financial and business trends relating to our financial condition and results of operations. For further information regarding why we believe that these non-GAAP measures provide useful information to investors, the specific manner in which management uses these measures, and some of the limitations associated with the use of these measures, please refer to the “Explanation of Non-GAAP Financial Measures” section of this press release.
FORTINET, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited, in millions)
| September 30, 2026 | December 31, 2025 | ||||||||||
| ASSETS | |||||||||||
| CURRENT ASSETS: | |||||||||||
| Cash and cash equivalents | $ | 3,750.6 | $ | 2,495.3 | |||||||
Short-term investments | 1,048.4 | 1,087.2 | |||||||||
| Accounts receivable—net | 1,461.0 | 1,691.2 | |||||||||
| Inventory | 591.2 | 399.5 | |||||||||
| Prepaid expenses and other current assets | 256.8 | 227.0 | |||||||||
| Total current assets | 7,108.0 | 5,900.2 | |||||||||
| LONG-TERM INVESTMENTS | 519.4 | 339.7 | |||||||||
| PROPERTY AND EQUIPMENT—NET | 1,729.5 | 1,619.0 | |||||||||
| DEFERRED CONTRACT COSTS | 815.4 | 735.5 | |||||||||
| DEFERRED TAX ASSETS | 1,306.9 | 1,314.9 | |||||||||
| GOODWILL AND OTHER INTANGIBLE ASSETS—NET | 348.1 | 354.7 | |||||||||
| OTHER ASSETS | 115.5 | 125.2 | |||||||||
| TOTAL ASSETS | $ | 11,942.8 | $ | 10,389.2 | |||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||||||
| CURRENT LIABILITIES: | |||||||||||
| Accounts payable | $ | 430.3 | $ | 230.8 | |||||||
| Accrued liabilities | 380.3 | 354.6 | |||||||||
| Accrued payroll and compensation | 315.9 | 312.9 | |||||||||
| Current portion of long-term debt | — | 499.7 | |||||||||
| Deferred revenue | 3,961.0 | 3,636.0 | |||||||||
| Total current liabilities | 5,087.5 | 5,034.0 | |||||||||
| DEFERRED REVENUE | 3,973.4 | 3,479.8 | |||||||||
| LONG-TERM DEBT | 497.1 | 496.6 | |||||||||
| OTHER LIABILITIES | 138.0 | 141.3 | |||||||||
| Total liabilities | 9,696.0 | 9,151.7 | |||||||||
| COMMITMENTS AND CONTINGENCIES | |||||||||||
STOCKHOLDERS’ EQUITY: | |||||||||||
| Common stock | 0.7 | 0.7 | |||||||||
| Additional paid-in capital | 1,959.7 | 1,770.1 | |||||||||
| Accumulated other comprehensive loss | (32.4) | (25.4) | |||||||||
| Retained earnings (accumulated deficit) | 318.8 | (507.9) | |||||||||
Total stockholders’ equity | 2,246.8 | 1,237.5 | |||||||||
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | $ | 11,942.8 | $ | 10,389.2 | |||||||
FORTINET, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited, in millions, except per share amounts)
| Three Months Ended | Nine Months Ended | ||||||||||||||||||||||
| September 30, 2026 | September 30, 2025 | September 30, 2026 | September 30, 2025 | ||||||||||||||||||||
| REVENUE: | |||||||||||||||||||||||
| Product | $ | 765.0 | $ | 559.3 | $ | 2,183.1 | $ | 1,527.3 | |||||||||||||||
| Service | 1,313.4 | 1,165.6 | 3,792.8 | 3,367.3 | |||||||||||||||||||
| Total revenue | 2,078.4 | 1,724.9 | 5,975.9 | 4,894.6 | |||||||||||||||||||
| COST OF REVENUE: | |||||||||||||||||||||||
| Product | 272.6 | 180.7 | 714.7 | 496.5 | |||||||||||||||||||
| Service | 164.9 | 151.0 | 492.0 | 443.2 | |||||||||||||||||||
| Total cost of revenue | 437.5 | 331.7 | 1,206.7 | 939.7 | |||||||||||||||||||
| GROSS PROFIT: | |||||||||||||||||||||||
| Product | 492.4 | 378.6 | 1,468.4 | 1,030.8 | |||||||||||||||||||
| Service | 1,148.5 | 1,014.6 | 3,300.8 | 2,924.1 | |||||||||||||||||||
| Total gross profit | 1,640.9 | 1,393.2 | 4,769.2 | 3,954.9 | |||||||||||||||||||
| OPERATING EXPENSES: | |||||||||||||||||||||||
| Research and development | 213.4 | 202.4 | 652.4 | 610.5 | |||||||||||||||||||
| Sales and marketing | 665.0 | 583.5 | 1,970.4 | 1,718.2 | |||||||||||||||||||
| General and administrative | 59.6 | 61.4 | 176.9 | 176.1 | |||||||||||||||||||
Gain on intellectual property matters | (1.4) | (1.4) | (4.1) | (9.0) | |||||||||||||||||||
| Total operating expenses | 936.6 | 845.9 | 2,795.6 | 2,495.8 | |||||||||||||||||||
| OPERATING INCOME | 704.3 | 547.3 | 1,973.6 | 1,459.1 | |||||||||||||||||||
| INTEREST INCOME | 42.7 | 40.7 | 108.8 | 130.0 | |||||||||||||||||||
| INTEREST EXPENSE | (3.0) | (6.2) | (10.4) | (15.7) | |||||||||||||||||||
| OTHER INCOME—NET | 11.0 | 13.0 | 59.8 | 58.0 | |||||||||||||||||||
INCOME BEFORE INCOME TAXES AND GAIN (LOSS) FROM EQUITY METHOD INVESTMENTS | 755.0 | 594.8 | 2,131.8 | 1,631.4 | |||||||||||||||||||
PROVISION FOR INCOME TAXES | 119.5 | 120.7 | 356.5 | 294.3 | |||||||||||||||||||
GAIN (LOSS) FROM EQUITY METHOD INVESTMENTS | — | (0.2) | 1.0 | 10.3 | |||||||||||||||||||
NET INCOME | $ | 635.5 | $ | 473.9 | $ | 1,776.3 | $ | 1,347.4 | |||||||||||||||
Net income per share: | |||||||||||||||||||||||
| Basic | $ | 0.87 | $ | 0.63 | $ | 2.42 | $ | 1.77 | |||||||||||||||
| Diluted | $ | 0.86 | $ | 0.62 | $ | 2.39 | $ | 1.75 | |||||||||||||||
Weighted-average shares outstanding: | |||||||||||||||||||||||
| Basic | 734.2 | 755.5 | 735.3 | 763.1 | |||||||||||||||||||
| Diluted | 742.6 | 761.2 | 741.7 | 770.2 | |||||||||||||||||||
FORTINET, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited, in millions)
| Nine Months Ended | |||||||||||
| September 30, 2026 | September 30, 2025 | ||||||||||
| CASH FLOWS FROM OPERATING ACTIVITIES: | |||||||||||
Net income | $ | 1,776.3 | $ | 1,347.4 | |||||||
| Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||
| Stock-based compensation | 231.9 | 207.0 | |||||||||
| Amortization of deferred contract costs | 290.2 | 246.0 | |||||||||
| Depreciation and amortization | 120.6 | 112.5 | |||||||||
Amortization of investment discounts | (13.3) | (27.3) | |||||||||
| Other | (41.7) | (53.1) | |||||||||
Changes in operating assets and liabilities, net of impact of business combinations: | |||||||||||
| Accounts receivable—net | 231.1 | 308.7 | |||||||||
| Inventory | (208.7) | (109.1) | |||||||||
| Prepaid expenses and other current assets | (3.0) | (64.3) | |||||||||
| Deferred contract costs | (370.1) | (305.3) | |||||||||
| Deferred tax assets | 8.9 | 13.7 | |||||||||
| Other assets | (10.6) | (13.6) | |||||||||
| Accounts payable | 202.4 | 11.5 | |||||||||
| Accrued liabilities | 39.7 | (15.5) | |||||||||
| Accrued payroll and compensation | 3.0 | 16.3 | |||||||||
| Deferred revenue | 817.8 | 288.1 | |||||||||
| Other liabilities | (7.8) | 7.4 | |||||||||
| Net cash provided by operating activities | 3,066.7 | 1,970.4 | |||||||||
| CASH FLOWS FROM INVESTING ACTIVITIES: | |||||||||||
| Purchases of investments | (1,161.4) | (1,512.6) | |||||||||
Sales of investments | 118.4 | 5.7 | |||||||||
| Maturities of investments | 954.8 | 1,317.6 | |||||||||
| Purchases of property and equipment | (212.8) | (322.0) | |||||||||
Payments made in connection with business combinations, net of cash acquired | (9.8) | (41.6) | |||||||||
| Other | 8.4 | 0.1 | |||||||||
| Net cash used in investing activities | (302.4) | (552.8) | |||||||||
| CASH FLOWS FROM FINANCING ACTIVITIES: | |||||||||||
Repurchase and retirement of common stock | (972.8) | (2,232.6) | |||||||||
Repayment of senior notes | (500.0) | — | |||||||||
| Proceeds from issuance of common stock | 85.0 | 37.6 | |||||||||
| Taxes paid related to net share settlement of equity awards | (99.2) | (103.7) | |||||||||
| Other | (22.0) | (0.1) | |||||||||
Net cash used in financing activities | (1,509.0) | (2,298.8) | |||||||||
| EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS | — | 1.0 | |||||||||
| NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | 1,255.3 | (880.2) | |||||||||
| CASH AND CASH EQUIVALENTS—Beginning of period | 2,495.3 | 2,875.9 | |||||||||
| CASH AND CASH EQUIVALENTS—End of period | $ | 3,750.6 | $ | 1,995.7 | |||||||
Reconciliations of non-GAAP results of operations measures to the nearest comparable GAAP measures
(Unaudited, in millions, except per share amounts)
Reconciliation of GAAP to non-GAAP gross profit, gross margin, operating income, operating margin, net income and diluted net income per share
| Three Months Ended | |||||||||||
| September 30, 2026 | September 30, 2025 | ||||||||||
| Revenue | $ | 2,078.4 | $ | 1,724.9 | |||||||
| Reconciliation of non-GAAP gross profit: | |||||||||||
| GAAP gross profit | $ | 1,640.9 | $ | 1,393.2 | |||||||
| GAAP gross margin | 79.0 | % | 80.8 | % | |||||||
| Add back: | |||||||||||
| Stock‐based compensation | 8.6 | 7.5 | |||||||||
| Amortization of acquired intangible assets | 5.9 | 7.2 | |||||||||
| Non‐GAAP gross profit | $ | 1,655.4 | $ | 1,407.9 | |||||||
| Non‐GAAP gross margin | 79.6 | % | 81.6 | % | |||||||
| Reconciliation of non-GAAP operating income: | |||||||||||
| GAAP operating income | $ | 704.3 | $ | 547.3 | |||||||
| GAAP operating margin | 33.9 | % | 31.7 | % | |||||||
| Add back: | |||||||||||
| Stock‐based compensation | 82.0 | 72.2 | |||||||||
| Amortization of acquired intangible assets | 8.9 | 13.1 | |||||||||
Litigation related matters | — | 5.6 | |||||||||
Gain on intellectual property matters | (1.4) | (1.4) | |||||||||
| Non‐GAAP operating income | $ | 793.8 | $ | 636.8 | |||||||
| Non‐GAAP operating margin | 38.2 | % | 36.9 | % | |||||||
Reconciliation of non-GAAP net income: | |||||||||||
GAAP net income | $ | 635.5 | $ | 473.9 | |||||||
| Add back: | |||||||||||
| Stock‐based compensation | 82.0 | 72.2 | |||||||||
| Amortization of acquired intangible assets | 8.9 | 13.1 | |||||||||
Litigation related matters | — | 5.6 | |||||||||
Gain on intellectual property matters | (1.4) | (1.4) | |||||||||
Gain from escrow settlement (a) | (17.0) | — | |||||||||
Tax adjustment (b) | (29.4) | (2.4) | |||||||||
Non-GAAP net income | $ | 678.6 | $ | 561.0 | |||||||
Reconciliation of non-GAAP net income per share, diluted | |||||||||||
GAAP net income per share, diluted | $ | 0.86 | $ | 0.62 | |||||||
| Add back: | |||||||||||
Non-GAAP adjustments to net income per share | 0.05 | 0.12 | |||||||||
Non-GAAP net income per share, diluted | $ | 0.91 | $ | 0.74 | |||||||
| Shares used in diluted net income per share calculations | 742.6 | 761.2 | |||||||||
(a) To exclude a $17.0 million gain from the escrow settlement related to a prior business combination in the three months ended September 30, 2026.
(b) Non-GAAP financial information is adjusted to an effective tax rate of 18% in each period for the three months ended September 30, 2026 and 2025, on a non-GAAP basis, which differs from the GAAP effective tax rate.
Reconciliation of net cash provided by operating activities to adjusted free cash flow
| Three Months Ended | |||||||||||
| September 30, 2026 | September 30, 2025 | ||||||||||
| Net cash provided by operating activities | $ | 946.0 | $ | 655.2 | |||||||
| Less: Purchases of property and equipment | (64.2) | (87.7) | |||||||||
| Less: Proceeds from escrow settlement | (17.0) | — | |||||||||
| Free cash flow | $ | 864.8 | $ | 567.5 | |||||||
Add: Real estate related purchases | 47.4 | 78.4 | |||||||||
Adjusted free cash flow | $ | 912.2 | $ | 645.9 | |||||||
Free cash flow margin | 41.6 | % | 32.9 | % | |||||||
| Adjusted free cash flow margin | 43.9 | % | 37.4 | % | |||||||
| Net cash used in investing activities | $ | (112.1) | $ | (175.8) | |||||||
Net cash used in financing activities | $ | (18.2) | $ | (1,851.9) | |||||||
Reconciliation of total revenue to total billings
| Three Months Ended | |||||||||||
| September 30, 2026 | September 30, 2025 | ||||||||||
| Total revenue | $ | 2,078.4 | $ | 1,724.9 | |||||||
| Add: Change in deferred revenue | 258.7 | 82.8 | |||||||||
| Less: Deferred revenue balance acquired in business combination | (0.8) | — | |||||||||
| Total billings | $ | 2,336.3 | $ | 1,807.7 | |||||||
1 A reconciliation of GAAP to non-GAAP measures has been provided in the financial statement tables included in this press release. An explanation of these measures is also included below under the heading “Explanation of Non-GAAP Financial Measures”.
Explanation of Non-GAAP Financial Measures
We have provided in this release financial information that has not been prepared in accordance with U.S. Generally Accepted Accounting Principles (“GAAP”). These non-GAAP financial and liquidity measures are not based on any standardized methodology prescribed by GAAP and are not necessarily comparable to similar measures presented by other companies. We use these non-GAAP financial measures internally in analyzing our financial results and believe they are useful to investors, as a supplement to GAAP measures, in evaluating our ongoing operational performance. We believe that the use of these non-GAAP financial measures provides an additional tool for investors to use in evaluating ongoing operating results and trends and in comparing our financial results with peer companies, many of which present similar non-GAAP financial measures to investors.
Non-GAAP financial measures should not be considered in isolation from, or as a substitute for, financial information prepared in accordance with GAAP. Investors are encouraged to review the reconciliation of these non-GAAP financial measures to their most directly comparable GAAP financial measures provided in the financial statement tables below.
Billings (non-GAAP). We define billings as revenue recognized in accordance with GAAP plus the change in deferred revenue from the beginning to the end of the period less any deferred revenue balances acquired from business combination(s) during the period. We consider billings to be a useful metric for management and investors because billings drive current and future revenue as well as cash flows. There are a number of limitations related to the use of billings instead of GAAP revenue. First, billings are impacted by the term of security subscription and support agreements and do not provide an indication as to the timing of revenue being recognized from these service contracts. Second, we may calculate billings in a manner that is different from peer companies that report similar financial measures. Management accounts for these limitations by providing specific information regarding GAAP revenue and evaluating billings together with GAAP revenue.
Free cash flow (non-GAAP). We define free cash flow as net cash provided by operating activities minus purchases of property and equipment and excluding any significant non-recurring items, such as proceeds from escrow settlements. Free cash flow margin is defined as free cash flow divided by GAAP revenue. We believe free cash flow to be a liquidity measure that provides useful information to management and investors about the amount of cash generated by the business that, after capital expenditures, can be used for strategic opportunities, including repurchasing outstanding common stock, investing in our business, making strategic acquisitions and strengthening the balance sheet. A limitation of using free cash flow rather than the GAAP measures of cash provided by or used in operating activities, investing activities, and financing activities is that free cash flow does not represent the total increase or decrease in the cash and cash equivalents balance for the period because it excludes investing activities other than capital expenditures and cash flows from financing activities. Management accounts for this limitation by providing information about our capital expenditures and other investing and financing activities on the face of the cash flow statement and under the caption “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources” in our most recent Quarterly Report on Form 10-Q and Annual Report on Form 10-K and by presenting cash flows from investing and financing activities in our reconciliation of free cash flow. In addition, it is important to note that other companies, including companies in our industry, may not use free cash flow, may calculate free cash flow in a different manner than we do or may use other financial measures to evaluate their performance, all of which could reduce the usefulness of free cash flow as a comparative measure.
Adjusted free cash flow (non-GAAP). We define adjusted free cash flow as free cash flow plus cash payments associated with real estate related purchases. Adjusted free cash flow margin is defined as adjusted free cash flow divided by GAAP revenue.
Non-GAAP gross profit and gross margin. We define non-GAAP gross profit as gross profit plus stock-based compensation and amortization of acquired intangible assets. Non-GAAP gross margin is defined as non-GAAP gross profit divided by GAAP revenue.
Non-GAAP operating income and operating margin. We define non-GAAP operating income as operating income plus stock-based compensation and amortization of acquired intangible assets, and charges in connection with litigation settlements, less gain on intellectual property matters and, when applicable, other significant non-recurring items in a given quarter. Non-GAAP operating margin is defined as non-GAAP operating income divided by GAAP revenue.
We consider these non-GAAP financial measures to be useful metrics for management and investors because they exclude the items noted above so that our management and investors can compare our recurring core business gross profit, gross margin and operating results over multiple periods. There are a number of limitations related to the use of non-GAAP financial measurements instead of the measurements calculated in accordance with GAAP. First, these non-GAAP financial measures exclude the items noted above. Second, the components of the costs and gains that we exclude from our calculation of non-GAAP measures may differ from the components that peer companies exclude when they report their non-GAAP results of operations. Management accounts for these limitations by providing specific information regarding the GAAP amounts excluded from non-GAAP financial measures and evaluating non-GAAP operating income together with these measures calculated in accordance with GAAP.
Non-GAAP net income and diluted net income per share. We define non-GAAP net income as net income plus the items noted above under non-GAAP operating income and operating margin. In addition, we adjust non-GAAP net income and diluted net income per share for a gain from an escrow settlement and a tax adjustment required for an effective tax rate on a non-GAAP basis, which differs from the GAAP effective tax rate. We define non-GAAP diluted net income per share as non-GAAP net income divided by the diluted weighted-average shares outstanding. We consider these non-GAAP financial measures to be useful metrics for management and investors for the same reasons that we use non-GAAP operating income and non-GAAP operating margin. However, in order to provide a more complete picture of our recurring core business operating results, we include in non-GAAP net income and non-GAAP diluted net income per share, the tax adjustment required resulting in an effective tax rate on a non-GAAP basis, which often differs from the GAAP tax rate. We believe the non-GAAP effective tax rates we use are reasonable estimates of normalized tax rates for our current and prior fiscal years under our global operating structure. The same limitations described above regarding our use of non-GAAP operating income and non-GAAP operating margin apply to our use of non-GAAP net income and non-GAAP diluted net income per share. We account for these limitations by providing specific information regarding the GAAP amounts excluded from non-GAAP net income and non-GAAP diluted net income per share and evaluating non-GAAP net income and non-GAAP diluted net income per share together with net income and diluted net income per share calculated in accordance with GAAP.
# # #
Copyright © 2026 Fortinet, Inc. All rights reserved. The symbols ® and ™ denote respectively federally registered trademarks and common law trademarks of Fortinet, Inc., its subsidiaries and affiliates. Fortinet’s trademarks include, but are not limited to, the following: Fortinet, the Fortinet logo, FortiGate, FortiOS, FortiGuard, FortiCare, FortiAnalyzer, FortiManager, FortiASIC, FortiClient, FortiCloud, FortiCNAPP, FortiMail, FortiAP, FortiEDR, FortiNAC, FortiSwitch, FortiWeb, SECURITY FABRIC, Linksys and the Linksys logo. Other trademarks belong to their respective owners. Fortinet has not independently verified statements or certifications herein attributed to third parties and Fortinet does not independently endorse such statements. Notwithstanding anything to the contrary herein, nothing herein constitutes a warranty, guarantee, contract, binding specification or other binding commitment by Fortinet or any indication of intent related to a binding commitment, and performance and other specification information herein may be unique to certain environments.
FTNT-F
Gartner, Magic Quadrant for Hybrid Mesh Firewall, Rajpreet Kaur, Adam Hils, Odie Adesina, 7 September 2026.
GARTNER is a registered trademark and service mark of Gartner, Inc. and/or its affiliates in the U.S. and internationally. All rights reserved.
Gartner does not endorse any vendor, product, or service depicted in its research publications, and does not advise technology users to select only those vendors with the highest ratings or other designation. Gartner research publications consist of the opinions of Gartner’s research organization and should not be construed as statements of fact. Gartner disclaims all warranties, expressed or implied, with respect to this research, including any warranties of merchantability or fitness for a particular purpose.
| Investor Contact: | Media Contact: | |||||||
Anthony Luscri | Stephanie Lira | |||||||
| Fortinet, Inc. | Fortinet, Inc. | |||||||
408-235-7700 | 408-235-7700 | |||||||
investors@fortinet.com | pr@fortinet.com | |||||||