Fortinet targets 20% revenue growth in 2026 after third-quarter increase
Key Facts
Fortinet reported revenue of $2,078.4 million for the quarter ended September 30, 2026, up 20% year over year, according to a company statement. Billings, the amounts associated with customer orders, rose 29% to $2.34 billion in the same period. The company raised its forecast for revenue growth in fiscal 2026 to 20% and set an annual revenue range of $8.125 billion to $8.215 billion. It also set an annual billings range of $9.568 billion to $9.718 billion. The guidance followed a quarter in which revenue and billings increased, while Investing.com reported that the stock fell 25.6% in after-hours trading after the results were released.
Third-quarter revenue was split between products and services, with products growing faster. Product revenue rose 37% to $765 million compared with the same period a year earlier. Services revenue was $1,313.4 million, compared with $1,165.6 million in the third quarter of 2025. In the second quarter of 2026, product revenue had risen 52% to $773 million year over year. The comparison shows a slower rate of product revenue growth between the two quarters, while its year-over-year increase continued in the third quarter.
Diluted earnings per share were $0.86 under generally accepted accounting principles and $0.91 on the adjusted basis reported by the company. Operating margin was 34% under the first measure and 38% on the adjusted basis. The official results did not include a documented analyst estimate for comparison with these figures. The company also reported operating cash flow of $946 million and free cash flow of $865 million. Separately, it said the quarter included a $17 million gain from a warranty settlement related to a previous acquisition, an item excluded from net income under the adjusted measure.
Fortinet's revenue totaled $5,975.9 million in the nine months ended September 30, 2026, compared with $4,894.6 million in the same period of 2025. The company reported full-year revenue of $6.80 billion in 2025, up 14% from 2024. In the second quarter of 2026, revenue grew 26% to $2.05 billion, while billings rose 33% to $2.37 billion. By comparison, revenue growth slowed to 20% in the third quarter, while billings growth eased to 29%. Chief Executive Ken Xie said the results reflected "strong execution and broad-based demand across our entire portfolio," adding that artificial intelligence is creating new attack surfaces.
Investing.com reported that the stock fell 25.6% in after-hours trading on October 28, 2026. The report linked the pressure on the stock to reports of a cyber breach disclosure, as well as a reaction it described as "sell the news." On the same day, the company announced a $1.2 billion increase in its share repurchase authorization. The increase brought the remaining repurchase authorization to $2 billion. The repurchase announcement coincided with the release of the results and new annual guidance.
For the fourth quarter of 2026, the company expects revenue of $2.155 billion to $2.245 billion and billings of $2.775 billion to $2.925 billion. It also set a range of $0.93 to $0.95 for adjusted diluted earnings per share. Fortinet listed three investor conferences on its calendar, starting with the "BMO Technology & Innovation Conference" on November 12, 2026. It will be followed by the "UBS Global Technology and AI Conference" on December 2, then the "Barclays Global Technology Conference" on December 9, 2026. These are the next events listed on the company's investor calendar.