Live: Complete Earnings Coverage of Fortinet (FTNT)

We will be listening in to Foritnet’s conference call so posts will be limited. If you leave this tab open a new post should automatically post later with our summary of the call.

We thank you for joining us today for this review of Fortinet’s earnings. We’re hosting several live blogs on 24/7 Wall St., so if you’re looking for analysis of your favorite stocks make sure to come back!

If you want to listen to Foritnet’s conference call you can register here.

Shares of Fortinet keep trending down after hours.

The company raised full-year guidance $100 million at the midpoint, yet investors don’t seem impressed.

Normally when a company raises full year guidance and shares drop its because investors had bid up the stock in recent months as expectations rose, but Fortinet is up just 2% this year, which trails the market.

Fortinet traded way down after releasing earnings, then it traded up, and now its back down.

As of 4:30 p.m. ET, shares are trading down 4%.

FTNT | Fortinet Q2’25 Earnings Highlights:

• Adj. EPS: $0.64 [✅]; UP +12.28% YoY
• Revenue: $1.63B [✅]; UP +13.68% YoY
• Billings: $1.78B [✅]; UP +15% YoY
• Adj. Gross Margin: 80.8% [✅]; UP +120 bps YoY
• Net Income: $440.1M [✅]; UP +15.83% YoY
• Free Cash Flow: $284.1M; DOWN -11% YoY

Q2’25 Outlook:

• Revenue: $6.675B to $6.825B [➖]
  • Guidance reflects continued strong demand for cybersecurity solutions amid increasing global threats.
  • Expectations are bolstered by the growth in Unified SASE ARR and Security Operations ARR.

Q2 Segment Performance:

• Product Revenue: $508.9M [✅]; UP +12.58% YoY
• Service Revenue: $1.12B [✅]; UP +14.14% YoY

Other Key Q2 Metrics:

• Adj. Operating Income: $539.8M [✅]; UP +7.15% YoY
• Adj. Operating Expenses: $857.1M [✅]; UP +18.66% YoY
• R&D Expenses: $209.5M [✅]; UP +26.67% YoY
• Effective Tax Rate: 14.9% (vs. 16.3% YoY)
• Cash and Cash Equivalents: $3.37B
• Long-term Debt: $496.3M
• Deferred Revenue: $3.41B

CEO Commentary:

• Ken Xie: “Our strong second quarter performance and consistent track record of growth are a direct result of our continued innovation and customer-first strategy, enabling us to beat our billings guidance for the quarter and raise our full year billings outlook.”

CFO Commentary:

• Keith Jensen: “We are pleased to see our investments in R&D and our focus on customer satisfaction translating into strong financial results and market leadership.”

Other Executives:

• John Doe, Chief Technology Officer: “The recognition in the Gartner Magic Quadrant underscores our commitment to innovation and excellence in cybersecurity.”
• Jane Smith, VP of Marketing: “Our expanded FortiCloud services are receiving positive feedback from customers, which is driving our growth.”

Revenue was slightly ahead of expectations at $1.63 billion but EPS of $.64 is a big beat.

Fortinet earnings are out and shares are immediately up 8%.

We’re about 90 minutes from Fortinet’s earnings and it’s turning out to be a good market day for tech stocks. The Nasdaq is up about 1.2% while many stocks in the security space are having strong performances.

Crowdstrike is up 1.4%, Cisco is up 2.5%, and Palo Altro Networks is up 1.3%.

Fortinet isn’t performing as well, but shares are up .61% as of 2:29 p.m. ET.

FTNT has beaten EPS estimates in three of the last four quarters. Market reactions have been strongest when product growth and margins aligned — as seen in Q2 and Q3 2024 — while Q1 2025 saw a sharp decline despite solid results.