third quarter 2026
Filed Oct 28, 2026AlphAI · Earnings readFTNT · third quarter 2026 · ended September 30, 2026
Fortinet Reports Strong Third Quarter 2026 Financial Results Raises 2026 revenue guidance to 20% year over year growth
✓Strong quarter
Third-quarter revenue grew 20% year over year to $2.08 billion, product revenue grew 37% year over year to $765 million, billings grew 29% year over year to $2.34 billion, and GAAP and non-GAAP operating margins expanded from the prior-year quarter. The company raised its 2026 revenue guidance.
Revenue
$2.08B
20% year over year y/y
Product
$765M
37% year over year y/y
Gross margin · GAAP
79.0%
EPS · non-GAAP
$0.91
fourth quarter of 2026 and fiscal year 2026 outlook
Fourth quarter of 2026: $2.155 billion to $2.245 billion; fiscal year 2026: $8.125 billion to $8.215 billion
GM Fourth quarter of 2026 non-GAAP gross margin: 78.0% to 80.0%; fiscal year 2026 non-GAAP gross margin: 79.7% to 80.3%
Key metrics
shortened, hover for the filing’s print| Metric | Value | q/q | y/y |
|---|---|---|---|
| Product revenue, three months ended September 30GAAP | $765M | – | 37% year over year |
| Service revenue, three months ended September 30GAAP | $1.31B | – | – |
| Total revenue, three months ended September 30GAAP | $2.08B | – | 20% year over year |
| Product revenue, nine months ended September 30GAAP | $2.18B | – | – |
| Service revenue, nine months ended September 30GAAP | $3.79B | – | – |
| Total revenue, nine months ended September 30GAAP | $5.98B | – | – |
| Total cost of revenue, three months ended September 30GAAP | $437.5M | – | – |
| Total gross profit, three months ended September 30GAAP | $1.64B | – | – |
| GAAP gross margin, three months ended September 30GAAP | 79.0% | – | – |
| Non-GAAP gross profit, three months ended September 30non-GAAP | $1.66B | – | – |
| Non-GAAP gross margin, three months ended September 30non-GAAP | 79.6% | – | – |
| Research and development expense, three months ended September 30GAAP | $213.4M | – | – |
| Sales and marketing expense, three months ended September 30GAAP | $665M | – | – |
| General and administrative expense, three months ended September 30GAAP | $59.6M | – | – |
| Total operating expenses, three months ended September 30GAAP | $936.6M | – | – |
| Operating income, three months ended September 30GAAP | $704.3M | – | – |
| GAAP operating margin, three months ended September 30GAAP | 33.9% | – | – |
| Non-GAAP operating income, three months ended September 30non-GAAP | $793.8M | – | – |
| Non-GAAP operating margin, three months ended September 30non-GAAP | 38.2% | – | – |
| Net income, three months ended September 30GAAP | $635.5M | – | – |
| Diluted net income per share, three months ended September 30GAAP | $0.86 | – | – |
| Non-GAAP net income, three months ended September 30non-GAAP | $678.6M | – | – |
| Non-GAAP net income per share, diluted, three months ended September 30non-GAAP | $0.91 | – | – |
| Net cash provided by operating activities, three months ended September 30GAAP | $946M | – | – |
| Free cash flow, three months ended September 30non-GAAP | $864.8M | – | – |
| Free cash flow margin, three months ended September 30non-GAAP | 41.6% | – | – |
| Adjusted free cash flow, three months ended September 30non-GAAP | $912.2M | – | – |
| Adjusted free cash flow margin, three months ended September 30non-GAAP | 43.9% | – | – |
| Total billings, three months ended September 30non-GAAP | $2.34B | – | 29% year over year |
| Operating income, nine months ended September 30GAAP | $1.97B | – | – |
| Net income, nine months ended September 30GAAP | $1.78B | – | – |
| Diluted net income per share, nine months ended September 30GAAP | $2.39 | – | – |
| Net cash provided by operating activities, nine months ended September 30GAAP | $3.07B | – | – |
Segments
| Segment | Revenue | q/q | y/y |
|---|---|---|---|
| ProductThe release cited strong execution and broad-based demand across Fortinet's entire portfolio. | $765M | – | 37% year over year |
| ServiceNo segment-specific driver was provided. | $1.31B | – | – |
fourth quarter of 2026 and fiscal year 2026 outlook
- RevenueFourth quarter of 2026: $2.155 billion to $2.245 billion; fiscal year 2026: $8.125 billion to $8.215 billion
- Gross marginFourth quarter of 2026 non-GAAP gross margin: 78.0% to 80.0%; fiscal year 2026 non-GAAP gross margin: 79.7% to 80.3%
- Tax rate18%
- NoteFourth quarter of 2026 billings: $2.775 billion to $2.925 billion
- NoteFourth quarter of 2026 non-GAAP operating margin: 35.5% to 37.5%
- NoteFourth quarter of 2026 diluted non-GAAP net income per share: $0.93 to $0.95
- NoteFourth quarter of 2026 diluted share count: 741 million to 745 million
- NoteFiscal year 2026 service revenue: $5.150 billion to $5.170 billion
- NoteFiscal year 2026 billings: $9.568 billion to $9.718 billion
- NoteFiscal year 2026 non-GAAP operating margin: 36.5% to 37.5%
- NoteFiscal year 2026 diluted non-GAAP net income per share: $3.54 to $3.58
- NoteFiscal year 2026 diluted share count: 741 million to 743 million
Capital returns
- Repurchase and retirement of common stock of $(972.8) million for the nine months ended September 30, 2026
- Share repurchase authorization increased by $1.2 billion
- Remaining authorization of $2 billion
- Repayment of senior notes of $(500.0) million for the nine months ended September 30, 2026
What drove it
- Strong execution and broad-based demand across Fortinet's entire portfolio
- Continued leadership in the AI era, according to management
- Product revenue grew 37% year over year to $765 million
- The company introduced FortiGuard Inline AI Security Service and FortiLink SASE service
- Fortinet cited selections by NVIDIA, Microsoft and Gartner recognition, as well as an Oracle collaboration
Concerns
- GAAP gross margin was 79.0%, compared with 80.8% in the prior-year quarter.
- Non-GAAP gross margin was 79.6%, compared with 81.6% in the prior-year quarter.
- Inventory was $591.2 million as of September 30, 2026, compared with $399.5 million as of December 31, 2025.
- The company identified risks including economic conditions, reduced information technology spending, large-deal timing, longer sales cycles, competition, pricing pressure, cybersecurity threats, geopolitical dynamics and tariffs.
What to watch
- Fourth-quarter revenue guidance of $2.155 billion to $2.245 billion
- Fourth-quarter billings guidance of $2.775 billion to $2.925 billion
- Fourth-quarter non-GAAP gross-margin guidance of 78.0% to 80.0%
- Fiscal-year 2026 service revenue guidance of $5.150 billion to $5.170 billion
- Fiscal-year 2026 billings guidance of $9.568 billion to $9.718 billion
- Execution on AI security, SASE and sovereign AI initiatives
Balance sheet and cash flow
- Cash and cash equivalents: $3,750.6 million as of September 30, 2026; $2,495.3 million as of December 31, 2025
- Short-term investments: $1,048.4 million as of September 30, 2026; $1,087.2 million as of December 31, 2025
- Long-term investments: $519.4 million as of September 30, 2026; $339.7 million as of December 31, 2025
- Inventory: $591.2 million as of September 30, 2026; $399.5 million as of December 31, 2025
- Deferred revenue, current: $3,961.0 million as of September 30, 2026; $3,636.0 million as of December 31, 2025
- Deferred revenue, non-current: $3,973.4 million as of September 30, 2026; $3,479.8 million as of December 31, 2025
- Long-term debt: $497.1 million as of September 30, 2026; $496.6 million as of December 31, 2025
- Net cash used in investing activities: $(302.4) million for the nine months ended September 30, 2026; $(552.8) million for the nine months ended September 30, 2025
- Net cash used in financing activities: $(1,509.0) million for the nine months ended September 30, 2026; $(2,298.8) million for the nine months ended September 30, 2025
- Cash and cash equivalents at end of period: $3,750.6 million for the nine months ended September 30, 2026; $1,995.7 million for the nine months ended September 30, 2025
Analysis
Fortinet reported a strong third quarter ended September 30, 2026. Total revenue was $2,078.4 million, compared with $1,724.9 million in the prior-year quarter, while the release described growth as 20% year over year. Product revenue was $765.0 million, compared with $559.3 million, and management reported product revenue growth of 37% year over year. Service revenue was $1,313.4 million, compared with $1,165.6 million. Billings were $2,336.3 million, compared with $1,807.7 million, and the release described billings growth as 29% year over year.
Management, verbatim
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 of Fortinet
Our strong momentum is driven by our continued leadership in the AI era.
Ken Xie, Founder, Chairman and Chief Executive Officer of Fortinet
Not in the filing
stated, not guessed- Previous outlook was not provided, so a comparison of actual results with prior guidance is unavailable.
- GAAP fourth-quarter and fiscal-year 2026 guidance was not provided.
- GAAP effective tax rate for the third quarter of 2026 was not provided.
- Third-quarter 2026 dividend information was not provided.
- Prior-quarter comparisons for reported third-quarter metrics were not provided.
Written by an AI language model from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure was checked against the filing text, and a metric whose value, prior period and change do not add up is dropped from the metrics. The model can still misread a table, in the metrics or in the text, so check a number in the filing before you rely on it. Consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.