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Thu, 29 Oct 2026
BreakingEarnings

Fortinet lifts its 2026 revenue outlook but cuts its service-revenue forecast

Shares were down 25.55% in still-moving after-hours trade at 6:07 PM ET on 28 October. Q3 revenue rose 20% to $2.08bn and non-GAAP EPS of $0.91 topped Fortinet's own $0.83-$0.87 guide.

By AI markets desk·Sources: 4 sources·Published ·AI-generated·2 min read
Key facts
  • Revenue · Q3 20262.08 $bn +20% year on year
  • Billings (non-GAAP) · Q3 20262.34 $bn +29% year on year
  • Diluted EPS (non-GAAP) · Q3 20260.91 $ Guide was $0.83-$0.87
  • 2026 revenue guidance · Guidance issued 28 October 20268.125-8.215 $bn Was $8.020bn-$8.180bn (29 July)
  • 2026 service revenue guidance · Guidance issued 28 October 20265.150-5.170 $bn Was $5.180bn-$5.220bn (29 July)
What changed
Items2026 outlook of 29 July 20262026 outlook of 28 October 2026
Revenue$8.020bn-$8.180bn$8.125bn-$8.215bn
Service revenue$5.180bn-$5.220bn$5.150bn-$5.170bn
Billings (non-GAAP)$9.350bn-$9.550bn$9.568bn-$9.718bn
Diluted EPS (non-GAAP)$3.41-$3.47$3.54-$3.58

Fortinet raised its full-year forecasts for revenue, billings (non-GAAP) and non-GAAP EPS in its third-quarter release, furnished to the SEC at 4:09 PM ET (21:09 CET) on 28 October 2026, against the ranges in its July release. It also raised and narrowed its non-GAAP operating margin forecast to 36.5%-37.5%, from 35%-37%, and narrowed its non-GAAP gross margin forecast to 79.7%-80.3%, from 79%-81%. One line went the other way: service revenue is now expected at $5.150bn to $5.170bn, below the $5.180bn to $5.220bn range it gave in July. The company did not explain the lower service figure in the release.

Third-quarter revenue rose 20% to $2.08bn ($2,078.4m), inside the $2.010bn to $2.100bn range Fortinet had guided in July. Product revenue grew 37% to $765m, while service revenue rose to $1,313.4m from $1,165.6m a year earlier, about 13% by Polstob's calculation, and made up about 63% of the total. Billings (non-GAAP) grew 29% to $2.34bn, also inside the July range of $2.250bn to $2.350bn. GAAP diluted EPS was $0.86, against $0.62 a year earlier, and non-GAAP diluted EPS $0.91, against $0.74, above the $0.83 to $0.87 range the company had guided. The GAAP operating margin was 34% and the non-GAAP margin 38%.

“We are very pleased with our excellent third quarter results, which reflect strong execution and broad-based demand across our entire portfolio, allowing us to raise our 2026 billings guidance for the third time this year.”

Ken Xie, Founder, Chairman and Chief Executive Officer, Fortinet · sec.gov

For the fourth quarter, Fortinet guides to revenue of $2.155bn to $2.245bn, billings (non-GAAP) of $2.775bn to $2.925bn and non-GAAP diluted EPS of $0.93 to $0.95. Operating cash flow was $946m in the third quarter and free cash flow (non-GAAP) $865m. Fortinet increased its share repurchase authorization by $1.2bn, leaving $2bn available, according to the release.

Fortinet shares were down 25.55% at $129.60 in after-hours trading as of 6:07 PM ET (23:07 CET) on 28 October, according to Nasdaq.com, against a regular-session close of $174.08, down 5.90%. The price was still moving: it was down 25.77% at 4:59 PM ET. CNBC reported that third-quarter non-GAAP gross margin of 79.6% fell short of the 80.1% analysts polled by LSEG expected, while revenue and earnings beat estimates. Investor's Business Daily said billings growth had underwhelmed investors. Investing.com, which records the non-GAAP $0.91 as Fortinet's EPS, lists forecasts of $0.86 for EPS and $2.06bn for revenue.