Latest quarter
Fortinet reported Q2 FY2026 revenue of $2.0 billion, up 25.6% from a year earlier, while adjusted EPS as the consensus counts it was $0.90 versus the consensus of $0.75. The company’s reported revenue as the consensus counts it was $2.0 billion, compared with the consensus of $1.9 billion.
The filing said product revenue rose 52% to $773.0 million, driven by higher hardware shipments, higher average selling prices, demand for higher-performance products and recent pricing actions. It said service revenue increased 14%, supported by security subscriptions, technical support and other services. The filing reported gross margin of 80.2%, down 0.4 percentage points from Q2 FY2025 as product revenue made up a larger share of sales. Operating margin was 33.7%, up 5.6 percentage points, as revenue growth exceeded operating-expense growth. Fortinet generated $965.6 million in free cash flow, up 239.9% from a year earlier.
| Q2 FY2026 | Q2 FY2025 | Change | |
|---|---|---|---|
| Revenue | $2.0 billion | $1.6 billion | 25.6% |
| Diluted EPS | $0.82 | $0.57 | 43.9% |
| Gross margin | 80.2% | 80.7% | −0.4 percentage points |
| Operating margin | 33.7% | 28.1% | 5.6 percentage points |
| Free cash flow | $965.6 million | $284.1 million | 239.9% |
| Against the consensus | Reported | Consensus | Result |
|---|---|---|---|
| Adjusted EPS | $0.90 | $0.75 | Beat by 20.0% |
| Revenue | $2.0 billion | $1.9 billion | Beat by 8.62% |
Adjusted EPS is the figure the consensus estimates, not the GAAP EPS above.
What management said on the call
Ken Xie said Fortinet’s billings growth reflected demand related to AI, SASE and operational-technology security. He said AI applications were generating more traffic inside enterprises and data centers, increasing customers’ requirements for visibility, control and network-security capacity. Xie said the company combined secure networking and unified SASE under the term “SASE firewall” because both operate on FortiOS.
Christiane Ohlgart said Q2 billings grew 33% to $2.37 billion, with secure-networking billings up 34%, unified-SASE billings up 35% and AI-driven security-operations billings up 25%. She attributed product-revenue growth to FortiGate unit growth and customers shifting toward higher-performing models, including investments to secure AI workloads. Ohlgart said service-revenue growth improved from the prior quarter and that Fortinet anticipated a positive trajectory in its service growth rates.
On pricing, Ohlgart said the company’s second-half billings assumptions included an approximately high-single-digit impact that depended on product mix, since increases did not apply to every product and service. Xie said Fortinet adjusted prices in response to component costs with the objective of maintaining gross margin, and said memory prices had stabilized in recent weeks or months.
In response to questions about whether demand could persist, Xie said the company viewed its growth as long term and pointed to AI-driven security needs, its ASIC technology, infrastructure and research and development. He said customers required local processing and data privacy in some deployments, which cloud-only SASE offerings could not meet. In response to questions on the following year, Ohlgart said the company would provide its numbers in January or February rather than quantify 2027 growth on the call.
Ohlgart said Fortinet was managing the remainder of 2026 quarter by quarter while raising its full-year outlook. The company said it expected service revenue to grow year over year for the remainder of 2026, while its filing said full-year product and service gross margins could decline because of mix, hardware-component costs and data-center and cloud-capacity expansion.
Guidance
Ohlgart said Fortinet raised its FY2026 outlook across billings, revenue, service revenue, non-GAAP operating margin and non-GAAP EPS. Fortinet now expects FY2026 revenue of $8.0 billion to $8.2 billion, bookings of $9.4 billion to $9.6 billion and service revenue of $5.2 billion to $5.2 billion. The company expects non-GAAP operating margin of 35.0% to 37.0% and non-GAAP EPS of $3.41 to $3.47.
| Metric | For | Guide | Previous guide | Change |
|---|---|---|---|---|
| Units, Diluted Shares | FY2026 | 741,000,000–745,000,000 | — | — |
| Tax rate, non-GAAP | FY2026 | 18.0% | — | New |
| EPS, non-GAAP | FY2026 | $3.41–$3.47 | — | New |
| Operating margin, non-GAAP | FY2026 | 35.0%–37.0% | — | New |
| Gross margin, non-GAAP | FY2026 | 79.0%–81.0% | — | New |
| Bookings | FY2026 | $9.4 billion–$9.6 billion | — | New |
| Revenue, Service | FY2026 | $5.2 billion–$5.2 billion | — | New |
| Revenue | FY2026 | $8.0 billion–$8.2 billion | — | New |
| Units, Diluted Shares | Q3 FY2026 | 741,000,000–745,000,000 | — | — |
| Tax rate, non-GAAP | Q3 FY2026 | 18.0% | — | New |
| EPS, non-GAAP | Q3 FY2026 | $0.83–$0.87 | — | New |
| Operating margin, non-GAAP | Q3 FY2026 | 35.0%–37.0% | — | New |
| Gross margin, non-GAAP | Q3 FY2026 | 79.0%–81.0% | — | New |
| Bookings | Q3 FY2026 | $2.3 billion–$2.4 billion | — | New |
| Revenue | Q3 FY2026 | $2.0 billion–$2.1 billion | — | New |
| Tax rate | FY2026 | 18.0% | — | New |
| EPS | FY2026 | $3.41–$3.47 | — | New |
| Operating margin | FY2026 | 35.0%–37.0% | — | New |
| Gross margin | FY2026 | 79.0%–81.0% | — | New |
| Revenue, Services | FY2026 | $5.2 billion–$5.2 billion | — | New |
| Tax rate | Q3 2026 | 18.0% | — | New |
| Gross margin | Q3 2026 | 79.0%–81.0% | — | New |