Fortinet Reports Third Quarter 2025 Financial Results
Highlights
- Revenue grew 14% year over year to $1.72 billion
- Product revenue grew 18% year over year to $559.3 million
- Billings grew 14% year over year to $1.81 billion1
- Record third quarter GAAP operating margin of 32%
- Record third quarter Non-GAAP operating margin of 37%1
SUNNYVALE, Calif., Nov. 05, 2025 (GLOBE NEWSWIRE) -- 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, 2025.
We are pleased with our excellent third quarter results, driven by our leading innovation and customer-first culture resulting in broad-based demand for our solutions across organizations of all sizes, said Ken Xie, Founder, Chairman and Chief Executive Officer of Fortinet. Building on our leadership in Firewall and SD-WAN through our unified FortiOS operating system, FortiSASE has quickly emerged as one of the fastest growing leaders in the SASE market. Fortinet has natively developed the key SASE functions, tightly integrating Next-Generation Firewall, SD-WAN, and SASE functionality into one unified New Generation SASE Firewall solution, providing our customers with maximum flexibility to deploy security access at the edge and giving us a sustainable competitive advantage.
Recent Business Highlights
- Recognized as a Leader in the inaugural 2025 Gartner® Magic Quadrant for Hybrid Mesh Firewall, ranking highest in ability to execute.
- FortiSASE is the fastest-growing SASE solution at scale, with third quarter billings increasing by over 100% year over year, driven by an easy migration path that allows existing SD-WAN customers to enable SASE in minutes.
- Launched the Secure AI Data Center solution, the industrys first end-to-end framework designed specifically for AI workloads, delivering high-capacity connectivity and up to 69% lower energy consumption than alternative solutions.
- Achieved rapid adoption in AI add-on solutions, supported by continued R&D investment and more than 500 issued and pending AI patents, powering over 20 AI-driven solutions.
- Recognized as one of Newsweeks Most Reliable Companies, ranking #16 out of 300 companies across all industries.
Guidance
For the fourth quarter of 2025, Fortinet currently expects:
- Revenue in the range of $1.825 billion to $1.885 billion
- Billings in the range of $2.185 billion to $2.285 billion
- Non-GAAP gross margin in the range of 79.0% to 80.0%
- Non-GAAP operating margin in the range of 34.5% to 35.5%
- Diluted non-GAAP net income per share in the range of $0.73 to $0.75, assuming a non-GAAP effective tax rate of 18%. This assumes a diluted share count of 751 million to 755 million.
For the fiscal year 2025, Fortinet currently expects:
- Revenue in the range of $6.720 billion to $6.780 billion
- Service revenue in the range of $4.575 billion to $4.595 billion
- Billings in the range of $7.370 billion to $7.470 billion
- Non-GAAP gross margin in the range of 80.25% to 80.75%
- Non-GAAP operating margin in the range of 34.5% to 35.0%
- Diluted non-GAAP net income per share in the range of $2.66 to $2.70, assuming a non-GAAP effective tax rate of 18%. This assumes a diluted share count of 764 million to 768 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, settlements of litigation related matters, gain on intellectual property matters, gain on bargain purchase related to acquisition, gain from an equity method investment 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 Fortinets website at https://investor.fortinet.com and a replay will be archived and accessible at https://investor.fortinet.com/events-and-presentations.
Fourth Quarter 2025 Conference Participation Schedule:
- Wells Fargo TMT Summit
November 18, 2025
- UBS Global Technology and AI Conference
December 2, 2025
- Nasdaq Investor Conference
December 10, 2025
- Barclays Global Technology Conference
December 11, 2025
Members of Fortinets management team are expected to present at these conferences and discuss the latest company strategies and initiatives. Fortinets conference presentations are expected to be available via webcast on the companys 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 Fortinets 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. Well over half a million customers trust Fortinets 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 Fortinets commitment to enhance cyber resilience globally. FortiGuard Labs, Fortinets 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 2025, 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, rising interest rates or reduced information technology spending; supply chain challenges; negative impacts from the ongoing war in Ukraine and its related macroeconomic effects and our decision to reduce operations in Russia; 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 increased inflation and interest rates in certain geographies and the war in Ukraine; 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 or tensions between China and Taiwan, 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 SECs 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, 2025 | December 31, 2024 | ||||||
| ASSETS | |||||||
| CURRENT ASSETS: | |||||||
| Cash and cash equivalents | $ | 1,995.7 | $ | 2,875.9 | |||
| Short-term investments | 1,127.7 | 1,190.6 | |||||
| Accounts receivablenet | 1,168.3 | 1,463.4 | |||||
| Inventory | 426.6 | 315.5 | |||||
| Prepaid expenses and other current assets | 195.2 | 126.1 | |||||
| Total current assets | 4,913.5 | 5,971.5 | |||||
| LONG-TERM INVESTMENTS | 289.1 | ||||||
| PROPERTY AND EQUIPMENTNET | 1,605.2 | 1,349.5 | |||||
| DEFERRED CONTRACT COSTS | 682.2 | 622.9 | |||||
| DEFERRED TAX ASSETS | 1,367.8 | 1,335.6 | |||||
| GOODWILL AND OTHER INTANGIBLE ASSETSNET | 368.5 | 350.4 | |||||
| OTHER ASSETS | 135.0 | 133.2 | |||||
| TOTAL ASSETS | $ | 9,361.3 | $ | 9,763.1 | |||
| LIABILITIES AND STOCKHOLDERS EQUITY | |||||||
| CURRENT LIABILITIES: | |||||||
| Accounts payable | $ | 221.3 | $ | 190.9 | |||
| Accrued liabilities | 330.6 | 337.9 | |||||
| Accrued payroll and compensation | 274.3 | 255.7 | |||||
| Current portion of long-term debt | 499.4 | ||||||
| Deferred revenue | 3,460.5 | 3,276.2 | |||||
| Total current liabilities | 4,786.1 | 4,060.7 | |||||
| DEFERRED REVENUE | 3,189.9 | 3,084.7 | |||||
| LONG-TERM DEBT | 496.5 | 994.3 | |||||
| OTHER LIABILITIES | 153.7 | 129.6 | |||||
| Total liabilities | 8,626.2 | 8,269.3 | |||||
| COMMITMENTS AND CONTINGENCIES | |||||||
| STOCKHOLDERS EQUITY: | |||||||
| Common stock | 0.7 | 0.8 | |||||
| Additional paid-in capital | 1,714.7 | 1,636.2 | |||||
| Accumulated other comprehensive loss | (21.8 | ) | (26.1 | ) | |||
| Accumulated deficit | (958.5 | ) | (117.1 | ) | |||
| Total stockholders equity | 735.1 | 1,493.8 | |||||
| TOTAL LIABILITIES AND STOCKHOLDERS EQUITY | $ | 9,361.3 | $ | 9,763.1 | |||
| FORTINET, INC. CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited, in millions, except per share amounts) | |||||||||||||||
| Three Months Ended | Nine Months Ended | ||||||||||||||
| September 30, 2025 | September 30, 2024 | September 30, 2025 | September 30, 2024 | ||||||||||||
| REVENUE: | |||||||||||||||
| Product | $ | 559.3 | $ | 473.9 | $ | 1,527.3 | $ | 1,334.7 | |||||||
| Service | 1,165.6 | 1,034.2 | 3,367.3 | 2,961.0 | |||||||||||
| Total revenue | 1,724.9 | 1,508.1 | 4,894.6 | 4,295.7 | |||||||||||
| COST OF REVENUE: | |||||||||||||||
| Product | 180.7 | 136.1 | 496.5 | 474.0 | |||||||||||
| Service | 151.0 | 127.3 | 443.2 | 369.1 | |||||||||||
| Total cost of revenue | 331.7 | 263.4 | 939.7 | 843.1 | |||||||||||
| GROSS PROFIT: | |||||||||||||||
| Product | 378.6 | 337.8 | 1,030.8 | 860.7 | |||||||||||
| Service |
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