Fortinet Q4 Earnings & Revenues Beat Estimates, Increase Y/Y

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

Fortinet reported fourth-quarter 2025 non-GAAP earnings per share (EPS) of 81 cents, which beat the Zacks Consensus Estimate by 9.46% and grew 9.5% year over year.

Total revenues of $1.9 billion beat the consensus mark by 2.54% and improved 15% year over year, driven by broad-based demand across the portfolio, strong execution in enterprise and robust traction in Unified SASE and Security Operations markets. 

Total deferred revenues (current + long-term portions combined) came in at $7.12 billion, while the current portion was $3.63 billion as of Dec. 31, 2025.

Total billings increased 18% year over year to $2.37 billion, led by 40% growth in Unified SASE, expanding sales to large enterprises, and solid demand within operational technology (OT) and critical infrastructure markets.

Fortinet, Inc. Price, Consensus and EPS Surprise

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

FTNT's Q4 in Detail

Segment-wise, Product revenues increased 20% year over year to $691.1 million, representing 36.3% of total revenues. The growth was driven by robust demand for multiproduct deals across a variety of use cases, strong momentum in OT security, and continued product refresh cycles.

Service revenues of $1.21 billion grew 12% year over year, accounting for 63.7% of total revenues. The company added 7,200 new organizations to its customer base in the quarter, demonstrating strong market penetration and expanding adoption of its Security Fabric platform. Management highlighted significant wins with large enterprises and expanding traction in AI-driven security solutions, with AI-related billings growing 6% in the fourth quarter and 22% for the full year.

Margins of FTNT

Total gross margin was 79.6%, contracting 160 basis points (bps) year over year but maintaining strong profitability through disciplined cost management and operational excellence. Product gross margin declined to 66.9%, while service gross margin held steady at 86.8%. Operating margin expanded 90 bps year over year to 33% in the fourth quarter on a GAAP basis. On a non-GAAP basis, the operating margin was 37.3%, reflecting strong operational leverage and efficient cost management despite increased investments in growth areas.

FTNT's Balance Sheet & Cash Flow

Fortinet exited the fourth quarter of 2025 with cash and cash equivalents and short-term investments of $3.58 billion, up from $3.12 billion reported at the end of the third quarter of 2025.

Cash flow from operations was $620.2 million for the fourth quarter of 2025, down from $655.2 million in the previous quarter. Free cash flow was $577.4 million for the fourth quarter of 2025, up from $567.5 million in the prior quarter. For 2025, free cash flow reached $2.21 billion.

FTNT's Q1 & 2026 Guidance

Fortinet expects first-quarter revenues in the range of $1.7-$1.76 billion. Billings are estimated in the band of $1.77-$1.87 billion. The non-GAAP gross margin is expected to be in the range of 80-81%, while the non-GAAP operating margin is anticipated between 30% and 32%. Non-GAAP EPS is projected in the band of 59-63 cents.

For 2026, FTNT predicts revenues in the range of $7.50-$7.70 billion. Services revenues are projected in the range of $5.05-$5.15 billion. Billings are expected in the band of $8.4-$8.6 billion. The non-GAAP gross margin is expected in the range of 79-81%, and the operating margin is projected in the band of 33-36%. Non-GAAP EPS is anticipated to be between $2.94 and $3.

FTNT’s Zacks Rank and Stocks to Consider

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

Some better-ranked stocks in the broader Zacks Computer and Technology sector include Amkor Technology AMKR, Arista Networks ANET and Advanced Energy AEIS. While Amkor Technology sports a Zacks Rank #1 (Strong Buy), Arista Networks and Advanced Energy carry a Zacks Rank of 2 (Buy) each at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Amkor Technology shares have surged 97.6% in the trailing six-month period. Amkor Technology is set to report fourth-quarter 2025 results on Feb. 9.

Shares of Arista Networks have gained 6.1% in the trailing six-month period. Arista Networks is set to report fourth-quarter 2025 results on Feb. 12.

Shares of Advanced Energy have surged 82.1% in the trailing six-month period. Advanced Energy is slated to report fourth-quarter 2025 results on Feb. 10.

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This article originally published on Zacks Investment Research (zacks.com).

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