Fortinet - Fortinet (NC - FTNT) managed to deliver Q3 results that showed some improvement in their network security category. Revenues of $1.508B (+13%) were aided by a solid contribution from services revenue of $1.03B (+19%). As noted FTNT's product revenue (which includes Firewall) was up 1.7% yr/yr in Q3 the first increase since Q2 2023. Reported FCF was $571.8m in Q3.

FTNT set the Q4 guide with billings of $1.9B - $2.0B (+5% at the mid-point) revenues in the range of $1.56B - $1.62B (+12% at the mid-point) and EPS $0.58-$0.62. Management established a conservative Q4 guide given the status of some of large transactions that exist in the pipeline.

FTNT's management had previously alluded to a Firewall refresh cycle in 2025. The company indicated on last night's earnings call that a number of Firewalls will EOL in the 2H 2026 but FTNT expects customers to refresh before the EOL. The Firewall refresh will encompass the SMB and mid-range products.

FTNT demonstrated progress with its other major product categories; SASE and SecOps. The SASE product drove 14% yr/yr billings growth in Q3 while SecOps billings grew 32% in Q3. Management outlined their enthusiasm around the SASE space which is notable as this market segment remains very competitive.

FTNT

Fortinet Inc

CyberSecurity

FTNT Q3 Earnings Look to the Future w/ product cycle, Firewall refresh

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