Live: Complete Earnings Coverage of Fortinet (FTNT)
Key Points
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Security services and SASE now account for 35% of total billings and are growing over 25% YoY.
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Management raised FY25 margin guidance following strong Q1 operating leverage.
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Firewall upgrade cycle is expected to accelerate in the second half of the year.
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Shares Keep Trending Down
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.
FTNT Is Wild After Hours
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's Quarter In Focus
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 Beats / EPS Beats
Revenue was slightly ahead of expectations at $1.63 billion but EPS of $.64 is a big beat.
Shares of FTNT Up 8%
Fortinet earnings are out and shares are immediately up 8%.
It's a Good Day for Tech Stocks
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.
How Fortinet Performed After Recent Quarterly Earnings
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.
| Quarter | EPS Surprise | 1-Day Move | 7-Day Move | 14-Day Move |
|---|---|---|---|---|
| Q1 2025 | +3.51% | –8.77% | –2.38% | –2.45% |
| Q4 2024 | 0.00% | +2.47% | +8.75% | +1.92% |
| Q3 2024 | +1.67% | +13.81% | +13.61% | +16.31% |
| Q2 2024 | +1.67% | +26.25% | +32.51% | +35.73% |
Fortinet (Nasdaq: FTNT) will report Q2 results after the close. Wall Street is looking for $1.63 billion in revenue and $0.59 in EPS, with improving product mix and expanding margins in focus. After raising its full-year operating margin forecast in Q1, management set expectations for a stronger firewall refresh cycle in H2 and continued growth in AI-powered SecOps and SASE adoption.
We’ll be updating this live blog with news and analysis right after Fortinet’s earnings hit the newswires. To receive updates, all you have to do is leave this page open, and updates will post automatically.
What to Expect
- Revenue: $1.63 billion
- EPS (Normalized): $0.59
- FY 2025 Revenue: $6.76 billion
- FY 2025 EPS: $2.49
These figures imply 13.4% YoY revenue growth and 3.7% EPS growth for the quarter.
Key Areas to Watch
Momentum in Unified SASE and SecOps
Management reported 18% YoY billing growth for Unified SASE and 29% growth in AI-driven SecOps, together accounting for 35% of total billings. Notably, ARR from these segments reached $1.6B, growing over 25%. Analysts will look for sustained expansion in both, especially given macro uncertainty.
Firewall Refresh Cycle Gaining Steam
While customers remain cautious, Fortinet reiterated that a record firewall upgrade cycle is expected to ramp in H2 2025. Management highlighted growing interest from enterprise customers replacing aging hardware and adopting integrated services.
Strong Operating Leverage and Margin Guidance
FTNT posted a 34.2% operating margin in Q1 — 320bps above guidance. Despite FX headwinds, the company raised the midpoint of full-year operating margin guidance, signaling confidence in efficiency and demand resiliency.
Geographic and Vertical Strength
EMEA led growth, especially in OT security and government contracts. Fortinet also closed three 8-figure deals in Q1, up from one YoY, with financial services and global governments as top-performing verticals.
Channel and Customer Expansion
Net new logos rose +14% YoY. While SMBs still tend to start with FortiGate deployments, management noted growing multi-product adoption in both new and existing accounts. Channel checks and incentives are expected to accelerate service revenue into H2.
SASE Differentiation and Competitive Displacement
Fortinet claimed it is replacing legacy VPNs and even other SASE players due to its single-OS platform, FortiASIC hardware, and Sovereign SASE capabilities — a trend expected to accelerate in regulated industries like healthcare and finance.
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