FTNT FY2025 Q4 Improving

Fortinet, Inc. earnings call

Feb 05, 2026 · 16:30 ET Anthony LuskeryChristiana OlgaardJohn Whittle earningscall_biz

Buzzberg read

Unified SASE billings grew 40%, fastest-growing leader at scale.

Fortinet delivered a strong Q4 2025 beat, driven by broad-based demand, with particularly strong growth in Unified SASE (40%) and OT security (25%+). Management issued confident 2026 guidance to maintain the Rule of 45, while navigating memory price pressures by raising prices and leveraging its ASIC cost advantage. Q4 billings grew 18% to $2.37B, exceeding expectations, with product revenue up 20%.

Buzzberg read Unified SASE billings grew 40%, fastest-growing leader at scale. Fortinet delivered a strong Q4 2025 beat, driven by broad-based demand, with particularly strong growth in Unified SASE (40%) and OT security (25%+). Management issued confident 2026 guidance to maintain the Rule of 45, while navigating memory price pressures by raising prices and leveraging its ASIC cost advantage. Q4 billings grew 18% to $2.37B, exceeding expectations, with product revenue up 20%. Read full analysisCollapse analysis

Unified SASE billings grew 40%, with FortiSASE ARR up over 90%, driven by the sovereign SASE opportunity and a 3-in-1 OS advantage.
Management proactively raised appliance prices by 5-20% to offset memory cost increases, leveraging six months of inventory.
Product revenue growth is seen as a leading indicator for service revenue, which is expected to re-accelerate in H2 2026.

Revenue$1.905BReported

EPS$0.81Reported

Gross margin79.57%Reported

Operating margin32.84%Reported

6 grounded callouts

What matters now

The highest-signal changes from the call.

SASE

Unified SASE billings grew 40%, fastest-growing leader at scale.

SASE

Sovereign SASE is a key differentiator, doubling addressable market.

Margins

Pricing increases of 5-20% on appliances to manage component costs.

Show 3 more callouts

Guidance

Product revenue seen as leading indicator for service growth.

AI revenue up 21%, with over 20 AI-powered solutions.

Demand

OT security billings grew over 25% with broad-based demand.

Reported period

Actuals

Metric	Reported	Change
Revenue	$1.905B	Reported
EPS	$0.81	Reported
Gross margin	79.57%	Reported
Operating margin	32.84%	Reported
Free cash flow	$0.5774B	Reported
Capex	$0.0428B	Reported

Forward-looking

Forward guidance

Metric	Period	Range	Midpoint	Status
Capex	FY2026	$0.35B–$0.45B	$0.4B	Guided
EPS	FY2026	$2.94–$3.00	$2.97	Guided
Operating margin	FY2026	33%–36%	34.5%	Guided
Revenue	FY2026	$7.5B–$7.7B	$7.6B	Guided

AI, capex & demand read

Management read

Tone

Confident

Management expressed confidence in growth drivers, competitive advantages, and reiterated mid-term targets, citing strong Q4 performance and broad-based demand.

Management AI read

Management believes AI is a significant opportunity for cybersecurity, both in securing AI data centers and protecting enterprises from AI-related threats like agentic AI and data leakage. They are investing in AI-powered solutions and have partnered with Nvidia to secure AI infrastructure. AI was up 21% and they see this as a long-term growth driver.

Capex

Investment and capacity

Infrastructure investments are planned at 350-450 million for 2026, down from the prior year's build-out, reflecting continued investment in FortiCloud and data center infrastructure to support SASE and AI growth. They also mentioned building out data center infrastructure as a factor in flat gross margins.

all 6 named companies below

Companiesreturns since call

Partners

NVDA +25.6%

Partners

Fortinet's partnership with Nvidia to use Bluefield 3 DPUs for securing AI infrastructure suggests a deepening technical integration that could expand Nvidia's reach in security workloads.

Evidence

“We also recently partnered with Nvidia to leverage their Bluefield 3 DPU to secure AI infrastructure.”

Ken Zee

Supply chain

DELL +305.8% HPE +131.5% JNPR

Supply chain

Memory price increases are creating a cost headwind, but Fortinet is proactively raising prices on specific appliances by 5-20% and has roughly six months of inventory to buffer supply chain shocks. — Fortinet's ability to raise prices and buffer inventory in a memory shortage could allow it to gain market share at the expense of competitors with thinner supply chains and less pricing power.

Evidence

“And also, we keep mentioning during the end of the day, we're maintaining a healthy margin supply. So we're adjusting some of the price based on our own margin.”

Ken Zee

PANW +136.7% CRWD +123.6%

Supply chain

The refresh cycle is shifting away from pure end-of-service (EOS) driven replacements to technology upgrades, with customers buying new features like SASE, OT security, and internal segmentation, which expands the attach rate per box. — This validates a durable product refresh cycle fueled by innovation rather than just a one-time upgrade, which could sustain Fortinet's growth and pressure competitors that lack an integrated hardware, software, and ASIC strategy.

Evidence

“I feel customers definitely more interested in if you have a better function and also kind of they can see the future of a long-term advantage.”

Ken Zee

External signals

Supply-chain alpha · 2returns since call

Memory price increases are creating a cost headwind, but Fortinet is proactively raising prices on specific appliances by 5-20% and has roughly six months of inventory to buffer supply chain shocks.

Ken Zee

DELL+305.8%HPE+131.5%JNPR

The refresh cycle is shifting away from pure end-of-service (EOS) driven replacements to technology upgrades, with customers buying new features like SASE, OT security, and internal segmentation, which expands the attach rate per box.

Ken Zee

PANW+136.7%CRWD+123.6%

Methodology & coverage

Management-only analysis. All 6 validated company mentions are shown. Reported actuals and forward guidance are kept separate. Public evidence is limited to eight short attributed quotes. AI-generated analysis can be incomplete or wrong; verify important claims against the original source.