Fortinet lifts full-year guidance after strong quarter

Fortinet reported third-quarter 2026 revenue of USD $2.08 billion and raised its full-year revenue guidance.

Revenue rose 20 per cent from a year earlier, while product revenue increased 37 per cent to USD $765 million. Billings climbed 29 per cent to USD $2.34 billion.

GAAP operating margin was 34 per cent and non-GAAP operating margin was 38 per cent. GAAP earnings per share were USD $0.86, while non-GAAP earnings per share reached USD $0.91.

Cash generation remained strong during the quarter. Operating cash flow was USD $946 million and free cash flow was USD $865 million.

The board also increased the company's share repurchase authorisation by USD $1.2 billion, leaving USD $2 billion remaining under the programme.

Ken Xie, Founder, Chairman and Chief Executive Officer of Fortinet, linked the results to demand across the business and said the company had again lifted its billings outlook for the year.

"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. Our strong momentum is driven by our continued leadership in the AI era. As AI introduces entirely new attack surfaces, Network Security remains the critical foundation of AI Security. Powered by our single FortiOS operating system and proprietary FortiASIC technology, our unified platform approach secures critical AI infrastructure while delivering industry-leading performance and a significantly lower total cost of ownership," Xie said.

Guidance raised

For the fourth quarter, Fortinet expects revenue of between USD $2.155 billion and USD $2.245 billion. It forecast billings of USD $2.775 billion to USD $2.925 billion, with diluted non-GAAP net income per share in a range of USD $0.93 to USD $0.95.

For the full 2026 financial year, Fortinet raised its revenue guidance to a range of USD $8.125 billion to USD $8.215 billion, implying annual growth of about 20 per cent.

Full-year service revenue is expected to be between USD $5.150 billion and USD $5.170 billion. Fortinet also forecast full-year billings of USD $9.568 billion to USD $9.718 billion and diluted non-GAAP net income per share of USD $3.54 to USD $3.58.

AI and Network security

Alongside the financial results, Fortinet pointed to a series of recent product and partnership announcements tied to AI security and distributed network protection.

These included the launch of the FortiGuard Inline AI Security Service, which adds AI-specific inspection and controls to FortiGate through a cloud-delivered service. It also introduced FortiLink SASE, aimed at securing small branch offices, remote facilities and other distributed sites without an on-site firewall.

Fortinet also highlighted its selection by NVIDIA as an OpenShell Reference Architecture Partner to Secure AI. It cited separate collaborations with Oracle and Microsoft as part of its push into AI-related security offerings for enterprise and regulated sectors.

Market position

Fortinet said it had been recognised as a Leader in the 2026 Gartner Magic Quadrant for Hybrid Mesh Firewall and was positioned highest for Ability to Execute for the second consecutive year.

The latest quarter suggests Fortinet continues to benefit from customer spending on network security products as organisations respond to risks linked to AI adoption and more widely distributed IT environments.

Product revenue growth outpaced overall revenue growth in the period, indicating stronger sales of hardware and related offerings alongside the larger services business. At the same time, the high level of operating cash flow and free cash flow gives the company room to support buybacks while maintaining investment in products and go-to-market activity.

Fortinet expects fourth-quarter non-GAAP operating margin in the range of 35.5 per cent to 37.5 per cent, and full-year non-GAAP operating margin of 36.5 per cent to 37.5 per cent.