Fortinet, Inc. ALERT: Kirby McInerney LLP Reminds Fortinet, Inc. Investors of Important Deadline in Class Action Lawsuit Share NEW YORK--(BUSINESS WIRE)--If you have suffered a loss on your Fortinet, Inc. ("Fortinet†or the "Company†) (NASDAQ:FTNT) investment, contact Thomas W. Elrod of Kirby McInerney LLP by email at investigations@kmllp.com, or fill out the contact form below to discuss your rights or interests in the securities fraud class action lawsuit at no cost. Investors have until November 21, 202 ...

The cybersecurity company Fortinet sank as revenue in its service segment missed expectations https://t.co/3e1xG5vV2c ...

Fortinet (NasdaqGS:FTNT) Q3 2025 Earnings Call November 05, 2025 04:30 PM ET Company ParticipantsFatima Boolani - Managing DirectorShrenik Kothari - Sector Head DirectorShaul Eyal - Managing Director of Equity ResearchJohn Whittle - COORob Owens - Head of Technology ResearchGray Powell - Managing DirectorBrian Essex - Executive DirectorKen Xie - Founder, Chairman, and CEOBrad Zelnick - Managing DirectorChristiane Ohlgart - CFOIttai Kidron - Managing DirectorAnthony Luscri - VP of Investor RelationsConferenc ...

Financial Data and Key Metrics Changes - Total billings grew by 14% to $1.81 billion, with revenue increasing by 14% to $1.72 billion [11][13] - Unified SaaS billings grew 19%, while SecOps saw a 33% increase [11][12] - Operating margin reached a record 37%, with total gross margin at 81.6% [18][19] Business Line Data and Key Metrics Changes - Unified SaaS and SecOps now account for 26% and 11% of total billings, respectively, reflecting a combined increase of three percentage points [11] - Product revenue increased by 18% to $559 million, driven by strong performance in multi-product deals and operational technology security [14] - Service revenue grew by 13% to $1.17 billion, indicating a healthy demand for services [14] Market Data and Key Metrics Changes - EMEA led revenue growth, followed by APAC and the Americas [13] - The number of deals greater than $1 million increased by 26%, with their total dollar value growing by over 30% [12] Company Strategy and Development Direction - The company aims to become the number one SaaS market leader in the coming years, leveraging its unique integration of NextGen Firewall, SD-WAN, and SaaS on a single operating system [6][8] - Continued investment in cloud delivery infrastructure and strategic partnerships is planned to enhance market presence [23] - The rise of AI is expected to drive demand for Fortinet's solutions, particularly in securing AI workloads [23][106] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in meeting the rule of 45 for the sixth consecutive year, expecting continued growth in demand for cybersecurity solutions [22] - The company anticipates product revenue growth to remain solid, driven by multiple growth drivers including new features and customer upgrades [67][113] Other Important Information - Free cash flow reached $568 million, with adjusted free cash flow up to $646 million, representing a margin of 37% [18] - The company repurchased 23.3 million shares for an aggregate purchase price of $1.83 billion, reducing the total share count by approximately 3% [19] Q&A Session Summary Question: Product revenues went up 18%, below expectations. What are the drivers? - Management attributed growth to strong demand across various segments, including SaaS and operational technology, rather than end-of-service upgrades [27][30] Question: Why is the guidance for next quarter less inspiring? - Management indicated that service revenue is a leading indicator of future performance, and product revenue growth is expected to positively impact service revenue in the future [33][34] Question: What is the trajectory of services growth in the next 12 months? - Management expects service revenue growth to improve in the second half of 2026 due to increased product sales and customer behavior [41][42] Question: Can you elaborate on the eight-figure deal with the police force? - The deal involved a combination of product and services, with a focus on sovereign SaaS to meet local data governance requirements [47][48] Question: What is the rate of SaaS penetration from the SD-WAN install base? - Management noted that 15% of large enterprise customers are now using Fortinet SaaS, indicating strong adoption and growth potential [60][61] Question: How is the company positioned in the operational technology security market? - Management highlighted significant growth potential in OT security, with a unique approach to securing diverse devices across various industries [77] Question: What are the growth drivers for product revenue next year? - Management is confident in continued product growth driven by new features, customer upgrades, and strong demand in operational technology [67][113]

Financial Data and Key Metrics Changes - Total billings grew by 14% to $1.81 billion, with revenue increasing by 14% to $1.72 billion [11][12] - Operating margin reached a record 37%, with total gross margin at 81.6% [18] - Free cash flow was strong at $568 million, with year-to-date free cash flow reaching $1.63 billion, up $135 million [18] Business Line Data and Key Metrics Changes - Unified SaaS billings grew by 19%, with Fortinet SaaS billings growth exceeding 100% [5][11] - SecOps billings increased by 33%, contributing to overall growth [11] - Product revenue rose by 18% to $559 million, driven by strong performance in multi-product deals and operational technology security [13] Market Data and Key Metrics Changes - EMEA led revenue growth, followed by APAC and the Americas [12] - 15% of large enterprise customers are now using Fortinet SaaS, representing a 55% increase [6][11] - Operational technology solutions saw over 30% billing growth, indicating strong demand in that segment [10][12] Company Strategy and Development Direction - Fortinet aims to become the number one SaaS market leader in the coming years, leveraging its unique integration of NextGen Firewall, SD-WAN, and SaaS on a single operating system [5][6] - The company plans to continue investing in its go-to-market strategy, including cloud delivery infrastructure and strategic partnerships [23] - Fortinet's leadership in firewall and secure networking is supported by its proprietary ASIC technology, which enhances performance and reduces total cost of ownership [8][9] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in meeting the rule of 45 for the sixth consecutive year, expecting continued strong growth driven by increased cybersecurity spending and vendor consolidation [21][22] - The rise of AI is anticipated to further boost demand for Fortinet's solutions, particularly in securing AI workloads [23][60] - Management noted that product revenue growth is expected to remain solid, with multiple growth drivers identified [43][62] Other Important Information - The company repurchased 23.3 million shares for $1.83 billion in Q3, reducing the total share count by approximately 3% [19] - Infrastructure investments were $88 million, reflecting ongoing efforts to expand data center capabilities [18] Q&A Session Summary Question: What are the drivers behind the product revenue growth? - Management indicated strong demand across SaaS, SecOps, and operational technology as key growth drivers, with the end of service not being a significant factor [24][25] Question: Why is the guidance for next quarter considered uninspiring? - The guidance reflects the impact of service revenue, which is influenced by prior product revenue performance [28][29] Question: What is the trajectory of services revenue growth? - Management expects service revenue growth to improve in the second half of 2026, driven by stronger product revenue [31][32] Question: Can you elaborate on the eight-figure deal with the police force? - The deal involved a combination of SD-WAN and Sovereign SaaS, highlighting Fortinet's unique advantage in providing flexible deployment options [34][35] Question: How does Fortinet plan to leverage its SaaS business? - Fortinet aims to accelerate SaaS adoption by leveraging its existing customer base and enhancing the integration of its solutions [37][39] Question: What is the outlook for product revenue growth next year? - Management remains confident in continued product revenue growth, supported by new technology launches and market opportunities [43][62]

Financial Performance - Fortinet reported third-quarter revenue of $1.73 billion, exceeding the consensus estimate of $1.70 billion [2] - Total revenue increased by 14% year-over-year, with product revenue at $559.3 million (up 18% year-over-year) and service revenue totaling $1.17 billion [3] - Third-quarter billings rose 14% year-over-year to $1.81 billion [3] Earnings Results - The company posted adjusted earnings of 74 cents per share, surpassing analyst estimates of 63 cents per share [2] - Fortinet expects fourth-quarter revenue to range from $1.825 billion to $1.885 billion, compared to estimates of $1.876 billion [5] - Anticipated fourth-quarter adjusted earnings are projected to be between 73 cents and 75 cents per share, exceeding estimates of 67 cents per share [5] Guidance and Outlook - Fortinet narrowed its full-year 2025 revenue guidance to a range of $6.72 billion to $6.78 billion, against estimates of $6.75 billion [5] - The company raised its full-year 2025 adjusted earnings guidance to $2.66 to $2.70 per share, up from previous estimates of $2.47 to $2.53 per share [6] - Analysts are forecasting full-year earnings of $2.52 per share [6] Market Reaction - Following the earnings report, Fortinet shares fell by 10.11% in after-hours trading, priced at $77.30 [6]

Information, statements and projections contained in these presentation slides and related conference call concerning Fortinet's business outlook, the fourth quarter and full year 2025 guidance, and future prospects and expectations are forward-looking statements that involve risks and uncertainties. These forward-looking statements include statements regarding any indications related to future growth and market share gains, our strategy going forward, and guidance and expectations around future financial r ...

Core Insights - Fortinet reported strong financial results for Q3 2025, with a revenue increase of 14% year-over-year to $1.72 billion, driven by innovation and a customer-first culture [4][5] - The company has established itself as a leader in the SASE market with its FortiSASE solution, which has seen billings grow over 100% year-over-year [5][4] - Fortinet's operating margins reached record levels, with a GAAP operating margin of 32% and a Non-GAAP operating margin of 37% for the third quarter [4] Financial Performance - Revenue for Q3 2025 was $1.72 billion, up 14% from $1.51 billion in Q3 2024 [4][19] - Product revenue increased by 18% year-over-year to $559.3 million [4][19] - Billings grew 14% year-over-year to $1.81 billion [4] - Non-GAAP net income per share is projected to be between $0.73 and $0.75, with a diluted share count of 751 million to 755 million [4] Business Highlights - Fortinet was recognized as a leader in the 2025 Gartner Magic Quadrant for Hybrid Mesh Firewall, ranking highest in ability to execute [5] - The company launched the Secure AI Data Center solution, which offers high-capacity connectivity and up to 69% lower energy consumption compared to alternatives [5] - Fortinet has over 500 issued and pending AI patents, supporting more than 20 AI-driven solutions [5] Guidance - For Q4 2025, Fortinet expects revenue in the range of $1.825 billion to $1.885 billion and billings between $2.185 billion and $2.285 billion [4] - For the fiscal year 2025, revenue is projected to be between $6.720 billion and $6.780 billion, with service revenue expected to be between $4.575 billion and $4.595 billion [4]

Core Insights - Akamai is experiencing a surge in demand for its Inference Cloud platform, indicating a shift from experimentation to execution in AI applications across various industries [2][3] - The platform is designed to operationalize AI in real-world environments, facilitating use cases in video, personalization, customer support, and consumer products [3][4] Company Overview - Akamai is a cybersecurity and cloud computing company that provides solutions to power and protect businesses online [2][6] - The company leverages its expertise in globally distributed architectures and NVIDIA Blackwell AI infrastructure to enhance AI processing capabilities [4][6] Product Features - Akamai Inference Cloud enables low-latency, real-time edge AI processing, which is crucial for applications like live sports production and personalized video streaming [4][5] - The platform supports advanced functionalities such as transcoding 8K multi-camera feeds and generating AI-powered play summaries in real-time [4][5] Use Cases - Current applications of Akamai Inference Cloud include live sports production, personalized live streams, recommendation engines, assistive agents, AI-powered fit rooms, and AI-powered toys [5] - Companies like Monks and Harmonic are utilizing the platform to enhance video content delivery and user experiences [4][5]

Core Insights - Qualys reported a 10% year-over-year revenue growth to $169.9 million and non-GAAP EPS of $1.86, exceeding analyst expectations [1] - The stock rose approximately 20.2% following the earnings report [1] Financial Performance - Adjusted gross margin improved to 85% from 83% year-over-year, while adjusted operating margin increased to 47% from 43% [4] - The company raised its full-year revenue outlook to a range of $665.8 million to $667.8 million, indicating a growth of about 10% compared to 2024 [5] - Non-GAAP EPS outlook was also increased to a range of $6.93 to $7.00 [5] Strategic Developments - The Risk Operations Center offering is gaining traction, contributing to solid results and faster-than-expected deployments [3][6] - Qualys secured significant wins with federal and state agencies, enhancing its government business prospects [4][6] - The GovCloud Platform received FedRAMP High Authorization, further opening opportunities in government contracts [4] Market Position - Qualys stock trades at around 21 times the average analyst estimate for full-year adjusted earnings, reflecting an improved growth trajectory [6]