Fortinet (FTNT) Q3 2025 Financial Results Summary
Fortinet® (Nasdaq: FTNT) released its financial results for the third quarter ended September 30, 2025, on November 5, 2025. The company reported significant growth across multiple financial metrics compared to the same quarter of the previous year.
Financial Highlights
- Revenue: Grew by 14% year over year to $1.72 billion.
- Product Revenue: Increased by 18% year over year reaching $559.3 million.
- Billings: Rose by 14% year over year to $1.81 billion.
- GAAP Operating Margin: Achieved a record of 32%.
- Non-GAAP Operating Margin: Also a record at 37%.
Operational Insights
- Market Recognition: Fortinet was recognized as a Leader in the inaugural 2025 Gartner® Magic Quadrant™ for Hybrid Mesh Firewall, ranking highest in the ability to execute.
- FortiSASE Growth: Billings for FortiSASE grew over 100% year over year, benefiting from quick integration paths for existing SD-WAN customers.
- AI Initiatives: Launched the Secure AI Data Center solution, which claims to provide up to 69% lower energy consumption than other alternatives.
- Patents and R&D: More than 500 AI patents issued or pending, enhancing innovation in over 20 AI-driven solutions.
- Award Recognition: Ranked #16 among Newsweek’s Most Reliable Companies out of 300 across all industries.
Guidance for Q4 2025
Fortinet projects the following for the fourth quarter of 2025:
– Revenue: Expected to be between $1.825 billion and $1.885 billion.
– Billings: Anticipated range of $2.185 billion to $2.285 billion.
– Non-GAAP Gross Margin: Forecasted to be between 79.0% and 80.0%.
– Non-GAAP Operating Margin: Estimated to range from 34.5% to 35.5%.
– Diluted Non-GAAP Net Income Per Share: Expected to be between $0.73 and $0.75, presuming a non-GAAP effective tax rate of 18%.
Financial Metrics Comparison (Year-over-Year)
Income Statement Metrics (Q3 2025 vs. Q3 2024)
- Total Revenue: Increased by 14.4% from $1.51 billion to $1.72 billion.
- Cost of Revenue: Increased from $263.4 million to $331.7 million.
- Gross Profit: Grew by 12% to $1.39 billion.
- Total Operating Expenses: Increased by 9.3% from $773.8 million to $845.9 million.
- Operating Income: Increased by 16.3% from $470.9 million to $547.3 million.
- Net Income: Decreased by 12.2% from $539.9 million to $473.9 million.
- Diluted Net Income Per Share: Decreased from $0.70 to $0.62.
Cash Flow Metrics (Q3 2025 vs. Q3 2024)
- Net Cash from Operating Activities: Increased from $608.1 million to $655.2 million.
- Free Cash Flow: Slight decrease from $571.8 million to $567.5 million.
Shareholder Returns and Corporate Actions
- Share Repurchase: The company reported a significant share repurchase amounting to $2.23 billion during the quarter.
- Dividend: No quarterly dividend was declared.
Balance Sheet Highlights as of September 30, 2025
- Total Assets: Decreased from $9.76 billion to $9.36 billion year over year.
- Total Liabilities: Increased from $8.27 billion to $8.63 billion.
- Stockholders’ Equity: Decreased from $1.49 billion to $735.1 million year over year.
Summary
Fortinet’s Q3 2025 results indicate robust growth in revenue and product lines, although net income experienced a decrease. The company has also focused on integrating innovative solutions within its operations, further solidifying its position in the cybersecurity market. Looking ahead, Fortinet anticipates continued revenue growth and increased billings, signaling confidence in future performance.
| Three Months Ended | Three Months Ended | Nine Months Ended | Nine Months Ended | |
|---|---|---|---|---|
| September 30, 2025 | September 30, 2024 | September 30, 2025 | September 30, 2024 | |
| REVENUE: | ||||
| Product | $559.3 | $473.9 | $1,527.3 | $1,334.7 |
| Service | $1,165.6 | $1,034.2 | $3,367.3 | $2,961.0 |
| Total revenue | $1,724.9 | $1,508.1 | $4,894.6 | $4,295.7 |
| COST OF REVENUE: | ||||
| Product | $180.7 | $136.1 | $496.5 | $474.0 |
| Service | $151.0 | $127.3 | $443.2 | $369.1 |
| Total cost of revenue | $331.7 | $263.4 | $939.7 | $843.1 |
| GROSS PROFIT: | ||||
| Product | $378.6 | $337.8 | $1,030.8 | $860.7 |
| Service | $1,014.6 | $906.9 | $2,924.1 | $2,591.9 |
| Total gross profit | $1,393.2 | $1,244.7 | $3,954.9 | $3,452.6 |
| OPERATING EXPENSES: | ||||
| Research and development | $202.4 | $187.3 | $610.5 | $525.7 |
| Sales and marketing | $583.5 | $515.9 | $1,718.2 | $1,518.3 |
| General and administrative | $61.4 | $71.7 | $176.1 | $182.7 |
| Gain on intellectual property matters | $-1.4 | $-1.1 | $-9.0 | $-3.4 |
| Total operating expenses | $845.9 | $773.8 | $2,495.8 | $2,223.3 |
| OPERATING INCOME | $547.3 | $470.9 | $1,459.1 | $1,229.3 |
| INTEREST INCOME | $40.7 | $42.4 | $130.0 | $112.9 |
| INTEREST EXPENSE | $-6.2 | $-5.0 | $-15.7 | $-15.1 |
| OTHER INCOME—NET | $13.0 | $118.1 | $58.0 | $113.0 |
| INCOME BEFORE INCOME TAXES AND GAIN (LOSS) FROM EQUITY METHOD INVESTMENTS | $594.8 | $626.4 | $1,631.4 | $1,440.1 |
| PROVISION FOR INCOME TAXES | $120.7 | $81.2 | $294.3 | $197.2 |
| GAIN (LOSS) FROM EQUITY METHOD INVESTMENTS | $-0.2 | $-5.3 | $10.3 | $-23.9 |
| NET INCOME | $473.9 | $539.9 | $1,347.4 | $1,219.0 |
| Net income per share: | ||||
| Basic | $0.63 | $0.71 | $1.77 | $1.60 |
| Diluted | $0.62 | $0.70 | $1.75 | $1.58 |
| Weighted-average shares outstanding: | ||||
| Basic | 755.5 | 765.0 | 763.1 | 763.7 |
| Diluted | 761.2 | 771.9 | 770.2 | 770.8 |
| September 30, 2025 | December 31, 2024 | |
|---|---|---|
| ASSETS | ||
| CURRENT ASSETS: | ||
| Cash and cash equivalents | $1,995.7 | $2,875.9 |
| Short-term investments | $1,127.7 | $1,190.6 |
| Accounts receivable—net | $1,168.3 | $1,463.4 |
| Inventory | $426.6 | $315.5 |
| Prepaid expenses and other current assets | $195.2 | $126.1 |
| Total current assets | $4,913.5 | $5,971.5 |
| LONG-TERM INVESTMENTS | $289.1 | $— |
| PROPERTY AND EQUIPMENT—NET | $1,605.2 | $1,349.5 |
| DEFERRED CONTRACT COSTS | $682.2 | $622.9 |
| DEFERRED TAX ASSETS | $1,367.8 | $1,335.6 |
| GOODWILL AND OTHER INTANGIBLE ASSETS—NET | $368.5 | $350.4 |
| OTHER ASSETS | $135.0 | $133.2 |
| TOTAL ASSETS | $9,361.3 | $9,763.1 |
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||
| CURRENT LIABILITIES: | ||
| Accounts payable | $221.3 | $190.9 |
| Accrued liabilities | $330.6 | $337.9 |
| Accrued payroll and compensation | $274.3 | $255.7 |
| Current portion of long-term debt | $499.4 | $— |
| Deferred revenue | $3,460.5 | $3,276.2 |
| Total current liabilities | $4,786.1 | $4,060.7 |
| DEFERRED REVENUE | $3,189.9 | $3,084.7 |
| LONG-TERM DEBT | $496.5 | $994.3 |
| OTHER LIABILITIES | $153.7 | $129.6 |
| Total liabilities | $8,626.2 | $8,269.3 |
| COMMITMENTS AND CONTINGENCIES | ||
| STOCKHOLDERS’ EQUITY: | ||
| Common stock | $0.7 | $0.8 |
| Additional paid-in capital | $1,714.7 | $1,636.2 |
| Accumulated other comprehensive loss | $-21.8 | $-26.1 |
| Accumulated deficit | $-958.5 | $-117.1 |
| Total stockholders’ equity | $735.1 | $1,493.8 |
| TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | $9,361.3 | $9,763.1 |
