Core Insights - Fortinet (FTNT) reported strong fourth-quarter 2025 results, with both earnings and revenues exceeding expectations and showing year-over-year growth [2][9] Financial Performance - Non-GAAP earnings per share (EPS) for Q4 2025 was 81 cents, surpassing the Zacks Consensus Estimate by 9.46% and increasing by 9.5% year over year [2][9] - Total revenues reached $1.9 billion, beating the consensus mark by 2.54% and growing 15% year over year, driven by strong demand across its portfolio [3][9] - Total billings increased by 18% year over year to $2.37 billion, with Unified SASE leading the growth at 40% [4][9] Revenue Breakdown - Product revenues rose 20% year over year to $691.1 million, accounting for 36.3% of total revenues, supported by strong demand for multiproduct deals and operational technology security [5] - Service revenues grew 12% year over year to $1.21 billion, making up 63.7% of total revenues, with 7,200 new organizations added to the customer base [6] Margins and Profitability - Total gross margin was 79.6%, a decrease of 160 basis points year over year, while product gross margin fell to 66.9% and service gross margin remained at 86.8% [7] - Operating margin improved by 90 basis points year over year to 33% on a GAAP basis, with a non-GAAP operating margin of 37.3% [7] Balance Sheet and Cash Flow - Fortinet ended Q4 2025 with cash and cash equivalents of $3.58 billion, an increase from $3.12 billion at the end of Q3 2025 [8] - Cash flow from operations was $620.2 million for Q4 2025, down from $655.2 million in the previous quarter, while free cash flow increased to $577.4 million [8] Guidance - For Q1 2026, Fortinet expects revenues between $1.7 billion and $1.76 billion, with billings estimated between $1.77 billion and $1.87 billion [10] - For the full year 2026, revenues are projected to be between $7.50 billion and $7.70 billion, with billings expected in the range of $8.4 billion to $8.6 billion [11]

Core Insights - Fortinet reported strong quarterly earnings of 81 cents per share, exceeding the consensus estimate of 74 cents [2] - Quarterly revenue reached $1.91 billion, surpassing the Street estimate of $1.86 billion [2] Financial Performance - Product revenue increased by 20% year-over-year to $691 million [4] - Total billings grew by 18% to $2.37 billion [4] - Unified SASE billings experienced significant growth of 40% [4] - Non-GAAP operating margin stood at 37% [4] Future Outlook - For fiscal 2026, Fortinet anticipates adjusted EPS in the range of $2.94 to $3, aligning with the $2.94 estimate [3] - Revenue expectations for fiscal 2026 are set between $7.5 billion and $7.7 billion, compared to the $7.51 billion estimate [3] Market Reaction - Following the earnings report, Fortinet's stock rose by 2.69% to $81.62 in extended trading [4]

| . | | --- | | . | | = . | | . | | . 1 ロ | | ロ . - | | . | Q4 2025 Earnings Presentation February 5, 2026 Safe Harbor Statement Information, statements and projections contained in these presentation slides and related conference call concerning Fortinet's business outlook, the first quarter and full year 2026 guidance, and future prospects and expectations are forward-looking statements that involve risks and uncertainties. These forward-looking statements include statements regarding any indications rela ...

Core Insights - Fortinet (FTNT) is focusing on Unified SASE as a key growth strategy, leveraging its architectural advantages to stand out in a competitive security market [1] - The company’s SASE platform is built on FortiOS, integrating next-generation firewall, SD-WAN, and SASE capabilities, allowing for rapid deployment and reduced complexity compared to multi-vendor solutions [1][2] - Fortinet's Sovereign SASE offering provides deployment flexibility for government and large enterprises, addressing data privacy and regulatory compliance needs [2] Deployment and Growth - As of Q3 2025, 15% of large enterprise customers are using FortiSASE, reflecting a 55% growth, with Unified SASE accounting for 26% of total billings [2] - FortiSASE has shown billings growth exceeding 100%, indicating strong momentum in enterprise adoption [2] - The Zacks Consensus Estimate for Fortinet's 2026 revenues is $7.48 billion, representing a year-over-year growth of 10.8% [3][7] Competitive Landscape - Fortinet faces significant competition in the SASE market from Cisco and Zscaler, with Cisco utilizing a multi-product approach and Zscaler focusing on a cloud-only model [4] - Fortinet's hybrid deployment flexibility contrasts with Zscaler's cloud-exclusive offerings, targeting enterprises that prefer unified management solutions [4] Financial Performance and Valuation - Fortinet shares have decreased by 21.2% over the past six months, underperforming the Zacks Security industry's decline of 9.1% [5] - The company is perceived as overvalued, trading at a price-to-book ratio of 84.25, significantly higher than the sector average of 10.79 [9] - The Zacks Consensus Estimate for Fortinet's earnings in 2026 is $2.89 per share, indicating a year-over-year growth of 7.3% [11]

Core Insights - CrowdStrike and Fortinet are leading companies in the cybersecurity sector, focusing on protecting organizations from cyberattacks [1][2] - The cybersecurity market is projected to grow at a CAGR of 12.45% from 2025 to 2030, driven by increasing cyber threats [2] CrowdStrike Overview - CrowdStrike's Falcon platform is a cloud-native security solution that secures various environments and endpoints [4] - The platform offers 29 cloud modules under a SaaS subscription model, with subscription sales increasing from 72% in fiscal 2017 to 95% in fiscal 2025 [5] - The Falcon Flex subscription model has been a key driver of customer growth, with 48% of subscription customers using six or more modules by the end of Q2 fiscal 2026 [6] - In Q2, CrowdStrike added $221 million in net new annual recurring revenues (ARR), bringing total ARR to $4.66 billion, a 20% increase year-over-year [7] - The company expects revenues for fiscal 2026 and 2027 to be $4.78 billion and $5.80 billion, respectively, indicating a year-over-year increase of around 21% [9][10] Fortinet Overview - Fortinet's Q3 2025 results showed a 14% year-over-year growth in both billings and revenues, with a record operating margin of 37% [11] - The company's SASE business saw significant growth, with Unified SASE billings increasing by 19% and FortiSASE billings rising over 100% [12] - Fortinet's product revenues grew by 18%, driven by demand for hardware upgrades and operational technology security [13] - However, service revenues grew only 13%, indicating slower growth compared to product revenues [14] - For full-year 2025 and 2026, Fortinet's revenue estimates are $6.75 billion and $7.50 billion, reflecting year-over-year increases of approximately 13.3% and 11% [15][16] Price Performance and Valuation - Year-to-date, CrowdStrike shares have increased by 43.4%, while Fortinet shares have decreased by 16.6% [17] - CrowdStrike is trading at a forward sales multiple of 21.97, while Fortinet is at 7.91, indicating higher growth expectations for CrowdStrike [19] - CrowdStrike's strong revenue visibility and growth prospects justify its higher valuation compared to Fortinet [22] Conclusion - CrowdStrike is recommended as a strong buy due to its leadership in the cybersecurity space and robust growth potential, while Fortinet is suggested for holding or waiting for better entry points [22][23]

Core Insights - Fortinet Inc. reported strong third-quarter 2025 results, with both earnings and revenues exceeding expectations and showing year-over-year improvement [1][8] - Non-GAAP EPS for Q3 2025 was 74 cents, surpassing the Zacks Consensus Estimate by 17.46% and growing 17.5% from 63 cents in the same quarter last year [1][8] - Total revenues reached $1.72 billion, beating the consensus mark by 1.34% and reflecting a 14.4% year-over-year increase [2][8] Revenue Breakdown - Total billings increased by 14% year over year to $1.81 billion, driven by 19% growth in Unified SASE and 33% growth in SecOps [3][8] - Product revenues rose 18% year over year to $559.3 million, accounting for 32.4% of total revenues, supported by strong demand for multiproduct deals [4] - Service revenues grew 12.7% year over year to $1.17 billion, making up 67.6% of total revenues, with security subscription revenues increasing by 12.8% [4] Operational Performance - Total gross margin was 81.6%, down 160 basis points year over year but better than expectations, aided by effective cost management [6] - Operating margin expanded by 80 basis points year over year to 36.9%, primarily due to operational efficiencies [6][8] Financial Position - Fortinet ended Q3 2025 with cash and cash equivalents of $3.12 billion, a decrease from $4.56 billion at the end of Q2 2025 [7] - Cash flow from operations was $655.2 million for Q3 2025, up from $451.9 million in the previous quarter [7] Future Guidance - For Q4 2025, Fortinet expects revenues between $1.825 billion and $1.885 billion, with billings estimated between $2.185 billion and $2.285 billion [9] - For the full year 2025, revenues are projected to be in the range of $6.72 billion to $6.78 billion, with non-GAAP EPS anticipated between $2.66 and $2.70 [10]

Core Insights - Fortinet's geographic mix is shifting, with EMEA becoming a crucial growth driver, showing an 18% year-over-year revenue increase in Q2 2025, compared to 11% growth in the Americas and APAC [1][9] - The demand for advanced cybersecurity and secure networking solutions is rising, particularly in EMEA, driven by hybrid work models and stricter data-sovereignty regulations [2] - Fortinet is investing in regional infrastructure, exemplified by a €40 million high-security data center in Spain to enhance its services in key European markets [3] Revenue Growth Projections - The Zacks model forecasts continued momentum, projecting 2025 revenue growth of 13% for EMEA, 12% for the Americas, and 14% for APAC, indicating a balanced expansion strategy [4] Competitive Landscape - Palo Alto Networks generates 67% of its revenues from the Americas, with EMEA at 21% and APAC at 13%, indicating a reliance on the U.S. market but also showing international growth potential [5] - Zscaler has a strong international presence with 55% of revenues from the Americas, 29% from EMEA, and 16% from APAC, demonstrating superior scalability and growth in cloud-first regions [6] Stock Performance and Valuation - Year-to-date, Fortinet shares have declined by 10.1%, underperforming the Zacks Security industry's 21.2% gain and the Zacks Computer and Technology sector's 22.4% rise [7] - Fortinet appears overvalued with a forward 12-month price-to-sales ratio of 8.85, exceeding the sector average of 7.1 [10] - The consensus estimate for 2025 earnings is $2.52 per share, reflecting a 6.33% year-over-year growth [13]

Core Insights - Fortinet (FTNT) is experiencing significant growth among large enterprise customers, with deals exceeding $1 million increasing over 50% year-over-year, driven by innovation and rising demand for integrated cybersecurity solutions [1][10] - The company's revenue profile is being reshaped by larger, multi-product contracts, with total billings rising 15% year-over-year in Q2 2025, and projected growth of 14% in 2025 and 11% in 2026 [2][4] Revenue and Growth - The preference for bundled solutions integrating firewalls, SD-WAN, SASE, and managed services is a major catalyst for growth, with Fortinet's Unified SASE and Security Operations businesses now accounting for approximately 35% of total billings [3][10] - Management has raised the full-year billings midpoint by $100 million, projecting revenues for 2025 to be between $6.67 billion and $6.82 billion, indicating a 13.3% growth at the midpoint [4][5] Competitive Landscape - Palo Alto Networks (PANW) competes with Fortinet in large enterprise deals, leveraging its AI-driven platforms and strong integration capabilities [6] - CrowdStrike Holdings (CRWD) also poses a challenge with its AI-native Falcon platform, enhancing its position through strategic partnerships and integrated deployments with Fortinet [7] Valuation and Performance - Year-to-date, Fortinet shares have declined by 15.2%, underperforming the Zacks Security industry's gain of 12.5% and the Computer and Technology sector's rise of 16% [8] - Fortinet's current Price/Book ratio stands at 29.85X, which is higher than the industry's 21.12X, indicating a potentially overvalued position [11] Earnings Estimates - The consensus estimate for 2025 earnings is $2.51 per share, reflecting a year-over-year growth of 5.91% [14]

Core Insights - Fortinet (FTNT) is experiencing significant growth driven by the rising demand for Unified SASE and SecOps, with Unified SASE billings increasing by 21% year over year and SecOps billings rising by 31% in Q2 2025, together accounting for approximately 35% of total billings [1][10] - The company has raised its full-year billings outlook midpoint by $100 million, reflecting strong enterprise adoption and demand for cloud-delivered services [3][10] - Fortinet's unique position as the only vendor to develop all core SASE capabilities within a single operating system, FortiOS, enhances its competitive edge by reducing cost and complexity [4] Financial Performance - Projected revenues for 2025 are expected to grow by 12.8% year over year to $6.72 billion, with total billings anticipated to increase by 13.9% to $7.44 billion, highlighting the momentum from SASE and SecOps as long-term growth drivers [5] - The consensus estimate for 2025 earnings is $2.51 per share, indicating a year-over-year growth of 5.91% [14] Competitive Landscape - Cisco Systems (CSCO) leverages its network dominance to provide integrated security solutions, focusing on large enterprises with advanced threat protection and scalability, contrasting with Fortinet's cost-effective approach [6] - Check Point Software (CHKP) is recognized for its Infinity Platform and emphasizes real-time threat prevention, often outperforming Fortinet in malware and phishing benchmarks, thus strengthening its market position [7] Market Performance - Year to date, FTNT shares have declined by 19%, underperforming the Zacks Security industry's gain of 8.6% and the Zacks Computer and Technology sector's rise of 11.8% [8][11]

Core Insights - Fortinet (FTNT) is experiencing strong momentum, with billings growing 15% year-over-year in Q2 to $1.78 billion, following a 13.5% increase in Q1, indicating a robust demand pipeline and positive outlook for future quarters [1][9] - Unified SASE and Security Operations (SecOps) solutions are key contributors to this growth, expanding 21% and 31% year-over-year, respectively, and now accounting for approximately 35% of total billings [2][9] - Management has raised the full-year billings outlook for fiscal 2025 to a range of $7.325-$7.475 billion, reflecting confidence in ongoing demand driven by cloud security and enterprise adoption [3][4][9] Financial Performance - For fiscal 2025, Fortinet's billings guidance suggests a 13.3% growth at the midpoint, supported by strong cloud security demand and a healthy renewal cycle [4] - Services billings increased by 17% year-over-year, marking the strongest growth in six quarters, which enhances the long-term revenue base [3] Competitive Landscape - Fortinet faces significant competition from Palo Alto Networks (PANW), which is enhancing its market position with advanced security solutions, reporting a 34% increase in cloud ARR to $5.09 billion [5] - Check Point Software (CHKP) is also solidifying its position in network security, experiencing double-digit growth in product and license revenues due to strong demand for its solutions [6] Valuation and Market Performance - Year-to-date, Fortinet shares have declined by 14.6%, underperforming the Zacks Security industry's 7.2% gain and the Zacks Computer and Technology sector's 13.7% rise [7] - Fortinet's current Price/Book ratio is 30X, which is higher than the industry average of 20.15X, indicating potential overvaluation [10] - The consensus estimate for fiscal 2025 earnings is $2.51 per share, reflecting a 5.91% year-over-year growth [12]