How Fortinet Performed After Recent Quarterly Earnings

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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!

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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.