Fortinet (NASDAQ:FTNT – Get Free Report) released its quarterly earnings data on Wednesday. The software maker reported $0.90 earnings per share for the quarter, beating analysts’ consensus estimates of $0.75 by $0.15, FiscalAI reports. Fortinet had a net margin of 27.49% and a return on equity of 160.08%. The company had revenue of $2.05 billion during the quarter, compared to analysts’ expectations of $1.89 billion. During the same quarter in the previous year, the company earned $0.64 earnings per share. The firm’s revenue for the quarter was up 25.6% on a year-over-year basis. Fortinet updated its FY 2026 guidance to 3.410-3.470 EPS and its Q3 2026 guidance to 0.830-0.870 EPS.
Here are the key takeaways from Fortinet’s conference call:
- Strong second-quarter performance: Billings increased 33% to $2.37 billion, revenue rose 26% to $2.05 billion, and product revenue surged 52%. Free cash flow more than tripled year over year to $966 million.
- Broad-based demand across strategic pillars: Secure Networking billings grew 34%, Unified SASE grew 35% with FortiSASE billings more than doubling, and AI-driven Security Operations billings increased 25%. OT billings also rose more than 55%, supported by demand from critical infrastructure and industrial customers.
- Raised full-year outlook: Fortinet increased its 2026 guidance for billings to $9.35 billion-$9.55 billion, revenue to $8.02 billion-$8.18 billion, service revenue to $5.18 billion-$5.22 billion, and non-GAAP EPS to $3.41-$3.47.
- Exceptional profitability and capital returns: Non-GAAP operating margin reached a second-quarter record of 38%, while non-GAAP EPS rose 41% to $0.90. The company repurchased $973 million of stock year to date and had approximately $766 million remaining under its authorization.
- Management is positioning its integrated “SASE firewall” as a long-term growth opportunity: Fortinet argues that combining firewall, SASE, SD-WAN, and sovereign/on-premises capabilities on FortiOS can address AI, data privacy, and high-throughput security needs. Executives described the opportunity as potentially larger than cloud-only SASE, though adoption and future growth remain dependent on customer and service-provider investment.
Fortinet Price Performance
FTNT traded up $3.24 on Wednesday, reaching $153.22. 12,317,816 shares of the company’s stock were exchanged, compared to its average volume of 4,446,108. Fortinet has a twelve month low of $70.12 and a twelve month high of $170.35. The stock has a market cap of $112.26 billion, a PE ratio of 56.17, a P/E/G ratio of 4.08 and a beta of 1.09. The company has a debt-to-equity ratio of 0.50, a current ratio of 1.15 and a quick ratio of 1.07. The stock’s fifty day moving average price is $148.98 and its 200-day moving average price is $107.66.
Key Fortinet News
- Positive Sentiment: Q2 results surpassed estimates. Fortinet reported $2.05 billion in revenue, up 26% year over year and above the $1.89 billion consensus estimate. Adjusted EPS was $0.90 versus expectations of $0.75, while GAAP diluted EPS rose to $0.82 from $0.57 a year earlier. Fortinet Surpasses Q2 Earnings and Revenue Estimates
- Positive Sentiment: Product momentum accelerated. Product revenue jumped 52% to $773 million, billings increased 33% to $2.37 billion, and the company generated $1.04 billion in operating cash flow and $966 million in free cash flow. Management cited strong enterprise demand amid rising cybersecurity threats. Fortinet lifts annual revenue forecast on strong cybersecurity demand
- Positive Sentiment: Fortinet raised its 2026 outlook. Full-year revenue guidance increased to $8.02 billion-$8.18 billion, compared with the prior outlook of approximately $8.0 billion-$8.2 billion as reported in the company’s updated guidance, and the company projected adjusted EPS of $3.41-$3.47 versus the $3.08 analyst consensus. Third-quarter revenue guidance of $2.01 billion-$2.10 billion and EPS guidance of $0.83-$0.87 also exceeded consensus estimates. Fortinet Reports Strong Second Quarter 2026 Financial Results
- Neutral Sentiment: Fortinet also expanded its FortiGate G Series with the 1200G and FortiSASE Outpost, supporting its strategy of combining networking, firewall and cloud-delivered security services. Fortinet Expands FortiGate G Series
- Negative Sentiment: Valuation remains a risk after the strong rally: Fortinet trades at a high earnings multiple, and Wells Fargo maintained a Sell rating. In addition, reported insider activity showed executives selling shares without recorded purchases in the past six months, which may temper bullish sentiment.
Insider Buying and Selling at Fortinet
In other Fortinet news, VP Michael Xie sold 3,907 shares of the firm’s stock in a transaction on Wednesday, June 3rd. The stock was sold at an average price of $146.44, for a total value of $572,141.08. Following the completion of the sale, the vice president directly owned 9,923,610 shares of the company’s stock, valued at $1,453,213,448.40. This trade represents a 0.04% decrease in their position. The sale was disclosed in a legal filing with the Securities & Exchange Commission, which is available through this hyperlink. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, CEO Ken Xie sold 160,632 shares of Fortinet stock in a transaction on Tuesday, June 2nd. The stock was sold at an average price of $145.58, for a total value of $23,384,806.56. Following the transaction, the chief executive officer owned 52,972,372 shares in the company, valued at approximately $7,711,717,915.76. This represents a 0.30% decrease in their position. The disclosure for this sale is available in the SEC filing. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. In the last quarter, insiders sold 318,387 shares of company stock worth $43,403,063. Insiders own 17.60% of the company’s stock.
Institutional Investors Weigh In On Fortinet
Hedge funds and other institutional investors have recently bought and sold shares of the company. Wexford Capital LP acquired a new position in Fortinet in the 3rd quarter valued at about $25,000. Palisade Asset Management LLC acquired a new stake in shares of Fortinet during the 3rd quarter worth approximately $28,000. Quarry LP acquired a new stake in shares of Fortinet during the 3rd quarter worth approximately $33,000. Swiss RE Ltd. purchased a new stake in shares of Fortinet during the 4th quarter valued at approximately $38,000. Finally, GW&K Investment Management LLC raised its position in shares of Fortinet by 31.4% during the 4th quarter. GW&K Investment Management LLC now owns 515 shares of the software maker’s stock valued at $41,000 after buying an additional 123 shares during the period. 83.71% of the stock is currently owned by institutional investors and hedge funds.
Analyst Ratings Changes
A number of analysts have recently commented on the stock. Rosenblatt Securities boosted their target price on shares of Fortinet from $105.00 to $125.00 and gave the stock a “buy” rating in a research note on Thursday, May 7th. BTIG Research lifted their price objective on Fortinet from $150.00 to $186.00 and gave the stock a “buy” rating in a report on Friday, July 10th. Scotiabank boosted their price objective on Fortinet from $85.00 to $110.00 and gave the stock a “sector perform” rating in a research note on Thursday, May 7th. Morgan Stanley raised Fortinet from an “underweight” rating to an “outperform” rating and increased their target price for the company from $80.00 to $133.00 in a report on Tuesday, July 21st. Finally, Piper Sandler raised their target price on Fortinet from $90.00 to $110.00 and gave the company a “neutral” rating in a research report on Thursday, May 7th. Two investment analysts have rated the stock with a Strong Buy rating, seven have given a Buy rating, twenty-four have issued a Hold rating and four have issued a Sell rating to the company’s stock. According to MarketBeat, the stock presently has an average rating of “Hold” and a consensus price target of $123.61.
Check Out Our Latest Report on Fortinet
Fortinet Company Profile
Fortinet, Inc (NASDAQ: FTNT) is a multinational cybersecurity company that develops and delivers integrated security solutions for enterprise, service provider and government customers worldwide. Founded in 2000 and headquartered in Sunnyvale, California, the company was co‑founded by Ken Xie and Michael Xie. Ken Xie serves as chairman and chief executive officer, and the company operates through a global sales, channel and services organization to support customers across the Americas, EMEA and Asia‑Pacific.
Fortinet’s product portfolio centers on network security appliances and software, with its FortiGate next‑generation firewalls and the FortiOS operating system forming a core platform.
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