Fortinet (NASDAQ:FTNT) Releases Earnings Results, Beats Estimates By $0.15 EPS

Key Points

• Fortinet beat quarterly expectations: Adjusted EPS was $0.90 versus the $0.75 consensus, while revenue rose 25.6% year over year to $2.05 billion, exceeding the $1.89 billion estimate.
• Growth and cash generation were strong: Billings increased 33% to $2.37 billion, product revenue surged 52%, and free cash flow more than tripled to $966 million, supported by broad demand across networking, SASE, security operations and OT solutions.
• The company raised its 2026 outlook: Fortinet now expects full-year adjusted EPS of $3.41–$3.47 and revenue of $8.02–$8.18 billion. Despite the strong results, its elevated valuation and a consensus analyst rating of “Hold” remain potential risks.

Fortinet (NASDAQ:FTNT - Get Free Report) released its quarterly earnings results on Wednesday. The software maker reported $0.90 EPS for the quarter, beating the consensus estimate of $0.75 by $0.15, FiscalAI reports. Fortinet had a net margin of 27.49% and a return on equity of 160.08%. The firm had revenue of $2.05 billion during the quarter, compared to the consensus estimate of $1.89 billion. During the same quarter in the prior year, the firm earned $0.64 EPS. Fortinet's revenue for the quarter was up 25.6% on a year-over-year basis. Fortinet updated its FY 2026 guidance to 3.410-3.470 EPS and its Q3 2026 guidance to 0.830-0.870 EPS.

Here are the key takeaways from Fortinet's conference call:

• Strong second-quarter performance: Billings increased 33% to $2.37 billion, revenue rose 26% to $2.05 billion, and product revenue surged 52%. Free cash flow more than tripled year over year to $966 million.
• Broad-based demand across strategic pillars: Secure Networking billings grew 34%, Unified SASE grew 35% with FortiSASE billings more than doubling, and AI-driven Security Operations billings increased 25%. OT billings also rose more than 55%, supported by demand from critical infrastructure and industrial customers.
• Raised full-year outlook: Fortinet increased its 2026 guidance for billings to $9.35 billion-$9.55 billion, revenue to $8.02 billion-$8.18 billion, service revenue to $5.18 billion-$5.22 billion, and non-GAAP EPS to $3.41-$3.47.
• Exceptional profitability and capital returns: Non-GAAP operating margin reached a second-quarter record of 38%, while non-GAAP EPS rose 41% to $0.90. The company repurchased $973 million of stock year to date and had approximately $766 million remaining under its authorization.
• Management is positioning its integrated “SASE firewall” as a long-term growth opportunity: Fortinet argues that combining firewall, SASE, SD-WAN, and sovereign/on-premises capabilities on FortiOS can address AI, data privacy, and high-throughput security needs. Executives described the opportunity as potentially larger than cloud-only SASE, though adoption and future growth remain dependent on customer and service-provider investment.

Fortinet Price Performance

Shares of Fortinet stock traded up $3.24 during trading on Wednesday, reaching $153.22. The company's stock had a trading volume of 12,317,816 shares, compared to its average volume of 6,415,523. The business has a 50 day moving average price of $148.98 and a 200-day moving average price of $107.66. Fortinet has a 12-month low of $70.12 and a 12-month high of $170.35. The company has a market capitalization of $112.26 billion, a P/E ratio of 59.16, a price-to-earnings-growth ratio of 4.14 and a beta of 1.09. The company has a quick ratio of 1.07, a current ratio of 1.15 and a debt-to-equity ratio of 0.50.

Trending Headlines about Fortinet

Here are the key news stories impacting Fortinet this week:

• Positive Sentiment: Q2 results surpassed estimates. Fortinet reported $2.05 billion in revenue, up 26% year over year and above the $1.89 billion consensus estimate. Adjusted EPS was $0.90 versus expectations of $0.75, while GAAP diluted EPS rose to $0.82 from $0.57 a year earlier. Fortinet Surpasses Q2 Earnings and Revenue Estimates
• Positive Sentiment: Product momentum accelerated. Product revenue jumped 52% to $773 million, billings increased 33% to $2.37 billion, and the company generated $1.04 billion in operating cash flow and $966 million in free cash flow. Management cited strong enterprise demand amid rising cybersecurity threats. Fortinet lifts annual revenue forecast on strong cybersecurity demand
• Positive Sentiment: Fortinet raised its 2026 outlook. Full-year revenue guidance increased to $8.02 billion-$8.18 billion, compared with the prior outlook of approximately $8.0 billion-$8.2 billion as reported in the company’s updated guidance, and the company projected adjusted EPS of $3.41-$3.47 versus the $3.08 analyst consensus. Third-quarter revenue guidance of $2.01 billion-$2.10 billion and EPS guidance of $0.83-$0.87 also exceeded consensus estimates. Fortinet Reports Strong Second Quarter 2026 Financial Results
• Neutral Sentiment: Fortinet also expanded its FortiGate G Series with the 1200G and FortiSASE Outpost, supporting its strategy of combining networking, firewall and cloud-delivered security services. Fortinet Expands FortiGate G Series
• Negative Sentiment: Valuation remains a risk after the strong rally: Fortinet trades at a high earnings multiple, and Wells Fargo maintained a Sell rating. In addition, reported insider activity showed executives selling shares without recorded purchases in the past six months, which may temper bullish sentiment.

Insiders Place Their Bets

In other Fortinet news, VP Michael Xie sold 3,907 shares of the firm's stock in a transaction on Wednesday, June 3rd. The stock was sold at an average price of $146.44, for a total value of $572,141.08. Following the completion of the sale, the vice president owned 9,923,610 shares of the company's stock, valued at approximately $1,453,213,448.40. This trade represents a 0.04% decrease in their ownership of the stock. The transaction was disclosed in a legal filing with the Securities & Exchange Commission, which can be accessed through the SEC website. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, COO John Whittle sold 146,015 shares of the business's stock in a transaction on Thursday, May 21st. The stock was sold at an average price of $128.41, for a total transaction of $18,749,786.15. Following the sale, the chief operating officer owned 94,724 shares in the company, valued at $12,163,508.84. The trade was a 60.65% decrease in their ownership of the stock. The disclosure for this sale is available in the SEC filing. Over the last quarter, insiders sold 318,387 shares of company stock worth $43,403,063. 17.60% of the stock is owned by corporate insiders.

Institutional Trading of Fortinet

A number of institutional investors have recently added to or reduced their stakes in the stock. State Street Corp increased its holdings in Fortinet by 1.6% in the third quarter. State Street Corp now owns 29,660,558 shares of the software maker's stock valued at $2,493,860,000 after buying an additional 477,397 shares in the last quarter. Invesco Ltd. boosted its stake in shares of Fortinet by 17.0% during the 3rd quarter. Invesco Ltd. now owns 10,816,519 shares of the software maker's stock worth $909,453,000 after acquiring an additional 1,568,337 shares in the last quarter. First Trust Advisors LP boosted its stake in shares of Fortinet by 4.4% during the 4th quarter. First Trust Advisors LP now owns 7,907,686 shares of the software maker's stock worth $627,949,000 after acquiring an additional 332,024 shares in the last quarter. UBS AM a distinct business unit of UBS ASSET MANAGEMENT AMERICAS LLC grew its holdings in shares of Fortinet by 4.0% in the 4th quarter. UBS AM a distinct business unit of UBS ASSET MANAGEMENT AMERICAS LLC now owns 6,615,443 shares of the software maker's stock worth $525,332,000 after acquiring an additional 251,449 shares during the period. Finally, Dimensional Fund Advisors LP increased its stake in Fortinet by 13.4% in the 4th quarter. Dimensional Fund Advisors LP now owns 4,361,390 shares of the software maker's stock valued at $346,359,000 after purchasing an additional 515,226 shares in the last quarter. Hedge funds and other institutional investors own 83.71% of the company's stock.

Wall Street Analysts Forecast Growth

FTNT has been the topic of several recent research reports. Morgan Stanley upgraded Fortinet from an "underweight" rating to an "outperform" rating and boosted their price target for the company from $80.00 to $133.00 in a research report on Tuesday, July 21st. Cantor Fitzgerald reissued a "neutral" rating and issued a $165.00 target price (up from $110.00) on shares of Fortinet in a report on Thursday, July 23rd. Wall Street Zen downgraded Fortinet from a "buy" rating to a "hold" rating in a report on Sunday. TD Cowen reiterated a "buy" rating and issued a $215.00 price objective (up from $160.00) on shares of Fortinet in a research report on Monday, July 13th. Finally, Compass Point set a $100.00 price objective on shares of Fortinet in a research report on Monday, May 4th. Two analysts have rated the stock with a Strong Buy rating, seven have assigned a Buy rating, twenty-four have issued a Hold rating and four have assigned a Sell rating to the company. Based on data from MarketBeat, the stock currently has an average rating of "Hold" and a consensus price target of $123.61.

Fortinet Company Profile

Fortinet, Inc NASDAQ: FTNT is a multinational cybersecurity company that develops and delivers integrated security solutions for enterprise, service provider and government customers worldwide. Founded in 2000 and headquartered in Sunnyvale, California, the company was co‑founded by Ken Xie and Michael Xie. Ken Xie serves as chairman and chief executive officer, and the company operates through a global sales, channel and services organization to support customers across the Americas, EMEA and Asia‑Pacific.

Fortinet's product portfolio centers on network security appliances and software, with its FortiGate next‑generation firewalls and the FortiOS operating system forming a core platform.

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