Fortinet Q3 Earnings & Revenues Surpass Estimates, Both Increase Y/Y

Fortinet Inc. FTNT reported excellent third-quarter 2025 results, wherein both earnings and revenues surpassed the Zacks Consensus Estimate and improved year over year.

Fortinet reported third-quarter 2025 non-GAAP earnings per share (EPS) of 74 cents, which beat the Zacks Consensus Estimate by 17.46%. The bottom line grew 17.5% from the year-ago quarter’s earnings of 63 cents per share.

Total revenues of $1.72 billion beat the consensus mark by 1.34% and improved 14.4% year over year, with growth led by EMEA, followed by strong contributions from APAC and the Americas.

Remaining performance obligations (RPO) rose 10.4% year over year to $6.72 billion, while current RPO increased 12% to $3.49 billion.

Fortinet, Inc. Price, Consensus and EPS Surprise

Fortinet, Inc. price-consensus-eps-surprise-chart | Fortinet, Inc. Quote

Total billings increased 14% year over year to $1.81 billion, led by 19% growth in Unified SASE, 33% growth in SecOps, expanding sales to large enterprises, and solid demand within OT and critical infrastructure markets.

FTNT’s Q3 in Detail

Segment-wise, Product revenues increased 18% year over year to $559.3 million, representing 32.4% of total revenues. The growth was driven by robust demand for multiproduct deals across a variety of use cases and strong momentum in operational technology (OT) security.

Service revenues of $1.17 billion grew 12.7% year over year, accounting for 67.6% of total revenues. Security subscription revenues rose 12.8%, and support and related service revenues increased 12.6%.

Recently, the company introduced its Secure AI Data Center solution, the industry’s first end-to-end framework purpose-built for AI workloads. The solution delivers exceptional high-capacity connectivity while achieving up to 69% lower energy consumption compared to alternative offerings.

Margins of FTNT

Total gross margin was 81.6%, contracting 160 basis points (bps) year over year but outperforming expectations, supported by disciplined cost management and strong operational execution.

Product gross margin declined 360 basis points year over year to 68%, while service gross margin slipped 40 basis points to 88.1%.

Operating margin expanded 80 basis points year over year to 36.9% in the third quarter. The increase was primarily driven by operational efficiencies and strong cost management.

FTNT’s Balance Sheet & Cash Flow

Fortinet exited the third quarter of 2025 with cash and cash equivalents and short-term investments of $3.12 billion, down from the $4.56 billion reported at the end of the second quarter of 2025.

Cash flow from operations was $655.2 million for the third quarter of 2025, up from $451.9 million in the previous quarter.

Free cash flow was $567.5 million for the second quarter of 2025, up from $284.1 million in the prior quarter.

FTNT’s Q4 & 2025 Guidance

Fortinet expects fourth-quarter revenues in the range of $1.825-$1.885 billion. Billings are estimated in the band of $2.185-$2.285 billion.

The non-GAAP gross margin is expected in the range of 79-80%, while the non-GAAP operating margin is anticipated between 34.5% and 35.5%. Non-GAAP EPS is projected in the band of 73-75 cents.

For 2025, FTNT predicts revenues in the range of $6.72-$6.78 billion. Services revenues are projected in the range of $4.575-$4.595 billion. Billings are expected in the band of $7.37-$7.47 billion.

The non-GAAP gross margin is expected in the range of 80.25-80.75%, and the operating margin is projected in the band of 34.5-35%. Non-GAAP EPS is anticipated to be between $2.66 and $2.7.

FTNT’s Zacks Rank & Stocks to Consider

Currently, Fortinet carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the broader Computer and Technology sector are Analog Devices ADI, CoreWeave Inc. CRWV and Flux Power FLUX, each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Analog Devices shares have returned 11.1% year to date.  ADI is set to report its fourth-quarter fiscal 2025 results on Nov. 25.

CoreWeave shares have surged 187% year to date. CRWV is set to report its third-quarter 2025 results on Nov. 10.

Flux Power shares have rallied 52.5% year to date. FLUX is set to report its fiscal first-quarter 2026 results on Nov. 13.

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