Fortinet Reports Strong Second Quarter 2026 Financial Results
Exceeds high end of second quarter guidance on revenue and profitability
Raises 2026 revenue guidance to 19% year over year growth
Highlights
- Revenue grew 26% year over year to $2.05 billion
- Product revenue grew 52% year over year to $773 million
- Billings grew 33% year over year to $2.37 billion1
- GAAP operating margin of 34%
- Non-GAAP operating margin of 38%1
- GAAP earnings per share grew 44% year over year to $0.82
- Non-GAAP earnings per share grew 41% year over year to $0.901
- Operating cash flow of $1.04 billion
- Free cash flow of $966 million1
SUNNYVALE, Calif., July 29, 2026 (GLOBE NEWSWIRE) -- Fortinet® (Nasdaq: FTNT), a global cybersecurity leader driving the convergence of networking and security, today announced financial results for the second quarter ended June 30, 2026.
We are very pleased with our excellent second quarter results, which reflect the differentiated value of our innovation in the AI Era, said Ken Xie, Founder, Chairman and Chief Executive Officer of Fortinet. Our results reflect that customers value Fortinets unique SASE Firewall, with leading firewall, SD-WAN and SASE functionality integrated together on our single FortiOS operating system and powered by our purpose-built FortiASIC, offering customers flexible deployment in a sovereign form factor, on-prem and in the cloud.
Recent Business Highlights
- Announced a strategic collaboration with Intel to develop Fortinet Security Processor 6 (SP6), combining Fortinets proprietary, purpose-built security processor expertise with Intels advanced design, development, packaging, and manufacturing capabilities to accelerate SP6 development while strengthening the resilience and diversity of Fortinets global supply chain.
- Launched the FortiGate 1200G series with FortiSASE Outpost, combining local enforcement and cloud-delivered security to address customers evolving sovereignty, performance, and AI infrastructure requirements. The convergence of firewall and SASE technologies creates a new SASE Firewall market built for the realities of todays hybrid world.
- Launched FortiSOC, a new cloud-delivered SOC platform that brings together six core security operations functions into a single AI SOC experience designed to simplify and scale modern security operations.
- Expanded FortiEndpoint converging multiple endpoint security innovations into one agent to help security teams safely enable AI adoption, strengthen data security, improve risk visibility, and simplify operations.
- Partnered with Anthropic on Project Glasswing (Mythos), OpenAI on Project Daybreak (GPT 5.5 Cyber), and NVIDIA as a founding member of its recently announced Open Secure AI Alliance for AI Safety and Security.
- Moodys Ratings upgraded Fortinets senior unsecured notes rating to A3 from Baa1 and its senior unsecured shelf rating to (P)A3 from (P)Baa1, the highest rating of any public cybersecurity company.
Guidance
For the third quarter of 2026, Fortinet currently expects:
- Revenue in the range of $2.010 billion to $2.100 billion
- Billings in the range of $2.250 billion to $2.350 billion
- Non-GAAP gross margin in the range of 79.0% to 81.0%
- Non-GAAP operating margin in the range of 35.0% to 37.0%
- Diluted non-GAAP net income per share in the range of $0.83 to $0.87, 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 $8.020 billion to $8.180 billion
- Service revenue in the range of $5.180 billion to $5.220 billion
- Billings in the range of $9.350 billion to $9.550 billion
- Non-GAAP gross margin in the range of 79.0% to 81.0%
- Non-GAAP operating margin in the range of 35.0% to 37.0%
- Diluted non-GAAP net income per share in the range of $3.41 to $3.47, assuming a non-GAAP effective tax rate of 18%. This assumes a diluted share count of 741 million to 745 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 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.
Third Quarter 2026 Conference Participation Schedule:
- Rosenblatt Technology Summit: The Age of AI
August 17, 2026
- Stifel Tech Executive Summit
August 24, 2026
- Deutsche Bank Technology Conference
August 27, 2026
- Goldman Sachs Communacopia + Technology Conference
September 8, 2026
- Kepler Cheuvreux Autumn Conference
September 10, 2026
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 third 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 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) | |||||||
| June 30, 2026 | December 31, 2025 | ||||||
| ASSETS | |||||||
| CURRENT ASSETS: | |||||||
| Cash and cash equivalents | $ | 2,934.9 | $ | 2,495.3 | |||
| Short-term investments | 1,134.7 | 1,087.2 | |||||
| Accounts receivablenet | 1,455.6 | 1,691.2 | |||||
| Inventory | 426.3 | 399.5 | |||||
| Prepaid expenses and other current assets | 256.8 | 227.0 | |||||
| Total current assets | 6,208.3 | 5,900.2 | |||||
| LONG-TERM INVESTMENTS | 399.1 | 339.7 | |||||
| PROPERTY AND EQUIPMENTNET | 1,699.5 | 1,619.0 | |||||
| DEFERRED CONTRACT COSTS | 785.1 | 735.5 | |||||
| DEFERRED TAX ASSETS | 1,319.4 | 1,314.9 | |||||
| GOODWILL AND OTHER INTANGIBLE ASSETSNET | 334.5 | 354.7 | |||||
| OTHER ASSETS | 113.3 | 125.2 | |||||
| TOTAL ASSETS | $ | 10,859.2 | $ | 10,389.2 | |||
| LIABILITIES AND STOCKHOLDERS EQUITY | |||||||
| CURRENT LIABILITIES: | |||||||
| Accounts payable | $ | 282.5 | $ | 230.8 | |||
| Accrued liabilities | 393.7 | 354.6 | |||||
| Accrued payroll and compensation | 322.8 | 312.9 | |||||
| Current portion of long-term debt | 499.7 | ||||||
| Deferred revenue | 3,841.8 | 3,636.0 | |||||
| Total current liabilities | 4,840.8 | 5,034.0 | |||||
| DEFERRED REVENUE | 3,833.9 | 3,479.8 | |||||
| LONG-TERM DEBT | 496.9 | 496.6 | |||||
| OTHER LIABILITIES | 136.5 | 141.3 | |||||
| Total liabilities | 9,308.1 | 9,151.7 | |||||
| COMMITMENTS AND CONTINGENCIES | |||||||
| STOCKHOLDERS EQUITY: | |||||||
| Common stock | 0.7 | 0.7 | |||||
| Additional paid-in capital | 1,895.9 | 1,770.1 | |||||
| Accumulated other comprehensive loss | (28.8 | ) | (25.4 | ) | |||
| Accumulated deficit | (316.7 | ) | (507.9 | ) | |||
| Total stockholders equity | 1,551.1 | 1,237.5 | |||||
| TOTAL LIABILITIES AND STOCKHOLDERS EQUITY | $ | 10,859.2 | $ | 10,389.2 | |||
| FORTINET, INC. | |||||||||||||||
| CONDENSED CONSOLIDATED STATEMENTS OF INCOME | |||||||||||||||
| (Unaudited, in millions, except per share amounts) | |||||||||||||||
| Three Months Ended | Six Months Ended | ||||||||||||||
| June 30, 2026 | June 30, 2025 | June 30, 2026 | June 30, 2025 | ||||||||||||
| REVENUE: | |||||||||||||||
| Product | $ | 773.0 | $ | 508.9 | $ | 1,418.1 | $ | 968.0 | |||||||
| Service | 1,274.9 | 1,121.1 | 2,479.4 | 2,201.7 | |||||||||||
| Total revenue | 2,047.9 | 1,630.0 | 3,897.5 | 3,169.7 | |||||||||||
| COST OF REVENUE: | |||||||||||||||
| Product | 233.8 | 165.9 | 442.1 | 315.8 | |||||||||||
| Service | 170.9 | 149.0 | 327.1 | 292.2 | |||||||||||
| Total cost of revenue | 404.7 | 314.9 | 769.2 | 608.0 | |||||||||||
| GROSS PROFIT: | |||||||||||||||
| Product | 539.2 |
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