Fortinet reports strong Q3 earnings; revenue up 14%
Key Points
- Revenue: $1.725 billion (+14% YoY) vs $1.508 billion in Q3 2024
- EPS (non-GAAP): $0.63 (versus $0.58 a year ago)
- Billings: $1.808 billion (+14% YoY)
- Product revenue: $559 million (+18% YoY)
- Service revenue: $1.166 billion (+13% YoY)
- Operating margin (non-GAAP): 36.9% vs 36.1% last year
- Adjusted free cash flow: $646 million (37% margin)
- Gross margin (non-GAAP): 81.6%
- Large deals (>$1 M): +32% YoY
Quarter Highlights
- Billings growth was driven by Unified SASE (+19%) and SecOps (+33%), showing momentum in AI-driven security operations.
- Regional performance: EMEA +19% YoY, APAC +16% YoY led growth.
- Unified SASE ARR grew 13% YoY to $1.223 billion; SecOps ARR rose 25% to $472 million.
- Operating efficiency and cost control helped sustain record margins despite product mix shifts.
- Fortinet continues leading across key security pillars—network security, SASE, and SecOps—with AI-driven platform integration.
CEO Statement & Outlook (From Guidance Slide)
- For Q4 2025, Fortinet expects:
- Revenue: $1.825 B – $1.885 B
- Non-GAAP EPS: $0.73 – $0.75
- Operating margin: 34.5% – 35.5%
- For FY 2025, outlook calls for:
- Revenue: $6.72 B – $6.78 B (+13% YoY midpoint)
- Billings: $7.37 B – $7.47 B
- Non-GAAP EPS: $2.66 – $2.70
- The company again targets exceeding its self-defined “Rule of 45” (revenue growth + operating margin).
Financial Summary
| Metric | Q3 2025 | Q3 2024 | YoY Change |
|---|---|---|---|
| Total Revenue | $1.725 B | $1.508 B | +14% |
| Product Revenue | $559 M | $474 M | +18% |
| Service Revenue | $1.166 B | $1.034 B | +13% |
| Billings | $1.808 B | $1.582 B | +14% |
| Non-GAAP Operating Margin | 36.9% | 36.1% | +80 bps |
| Non-GAAP Gross Margin | 81.6% | 83.2% | –160 bps |
| Adj. Free Cash Flow | $646 M | $605 M | +7% |
Capital Return
No share-repurchase or dividend details were disclosed in the presentation.
Key Takeaways
- Growth across SASE and SecOps shows Fortinet’s continued shift toward software and subscription models.
- Margins remain resilient despite lower product mix and higher hardware sales.
- AI-driven security and network convergence initiatives continue to differentiate Fortinet within the cybersecurity sector.
- Q4 guidance implies modest sequential growth and sustained profitability.