Fortinet Inc.

FTNT
Financial Analysis · Updated May 12, 2026 · Coverage 2026-Q2
Latest Q Revenue
$1.9B
Q1 2026 · +20.1% YoY · Beat consensus by 2%
TTM ROIC
90%
FY2025 · NOPAT (non-GAAP Operating Income after 16% tax) / Invested Capital (Total Assets less Cash & Investments and Deferred Revenue) · WACC ~9.5% · Moat spread +80pp

Financial Snapshot

ticker: FTNT step: 04 generated: 2026-05-12 source: quick-research

Fortinet Inc. (FTNT) — Financial Snapshot

Income Statement Summary

Metric FY2022 FY2023 FY2024 FY2025 YoY (25v24)
Revenue $4.42B $5.30B $5.96B $6.80B +14%
Billings $5.59B $5.94B $6.36B $7.55B +16%
Gross Margin (non-GAAP) ~76% ~77% ~80% ~81% +130 bps
Operating Margin (non-GAAP) ~28% ~28% ~35% 35.5% +50 bps
Operating Income (non-GAAP) ~$1.25B ~$1.50B $2.08B $2.41B +16%
Net Income (GAAP) $850M $1.18B $1.75B $2.10B +20%
EPS (non-GAAP) $1.49 $1.47 $2.28 $2.76 +21%

Q1 FY2026 Print

  • Revenue: $1.85B (+20% YoY)
  • Product revenue: $645M (+41% YoY) — firewall refresh accelerating
  • Service revenue: ~$1.2B (+13% YoY)
  • Billings: $2.09B (+31% YoY)
  • Operating cash flow: $1.08B (record)
  • Non-GAAP EPS: $0.82 (+41% YoY)
  • GAAP operating margin: 31%; non-GAAP operating margin: 36%

Cash Flow & Balance Sheet (FY2025)

Metric Value
Operating Cash Flow ~$2.4B (FY2025)
Free Cash Flow ~$2.2B
Cash & Marketable Securities ~$4.5B
Total Debt ~$1.0B
Net Cash ~+$3.5B
Deferred Revenue Large (multi-year service contracts)

Capital Return

  • Active share buyback program — augmented after Q4 2025
  • No dividend
  • Free cash flow primarily returned via buybacks + maintained for tuck-in M&A

Key Ratios (approximate, May 2026)

  • P/E (TTM, non-GAAP fwd): ~25x | EV/EBITDA: ~22x | FCF Yield: ~3.3%
  • Revenue Growth (TTM): ~17% | Billings growth: 16–31% | Non-GAAP Operating Margin: ~35–36%
  • Service revenue mix: ~67% of total

Revenue Mix (FY2025)

  • Product revenue: 32% of total ($2.2B)
  • Service revenue: 68% of total ($4.58B)
  • SASE billings growth: +40% (27% of total billings in Q4 2025)
  • Unified SASE ARR: +30% YoY
  • Security Operations ARR: +35% YoY

Growth Profile

Fortinet is in the strongest cyclical setup it has seen in years:

  1. Firewall refresh tailwind — Multi-year refresh window through 2026/2027 driving product revenue +20–41% YoY
  2. SASE billings accelerating — Q3 2025 SASE billings +100% YoY; Q4 SASE billings ~40% growth becoming a meaningful portion of total mix
  3. Security Operations ARR +35% — Growing share of high-recurring revenue
  4. Operating leverage compounding — Non-GAAP operating margin from ~28% (2022) to 35.5% (2025) and tracking toward 36–37% in 2026

Q1 2026 firewall refresh strength (product revenue +41% YoY) signals the cycle is accelerating, not decelerating. Bull-side scenarios pencil in continued SASE growth + completion of firewall refresh + multiple re-rating; bear-side scenarios bake in hardware deceleration in late 2026/2027 before SASE is large enough to fully compensate.

Forward Estimates

2026 guidance (raised after Q1):

  • Total revenue $7.5–7.7B (~15% growth)
  • Billings $8.4–8.6B (~13% growth at midpoint)
  • Service revenue $5.05–5.15B (~11% growth)
  • Non-GAAP gross margin 79–81%
  • Non-GAAP operating margin 33–36%
  • Non-GAAP EPS $2.94–$3.00

Consensus 2026 EPS: ~$2.95–3.05. The 2026 setup requires the firewall refresh to continue + SASE billings >35% growth to sustain the bull thesis.

Deeper Financial Analysis

The fundamental tier adds 9 additional research dimensions for $FTNT.

Revenue Breakdown
Segment revenue, geographic mix, product-line contribution margins, and cohort dynamics.
Financial Trends
Quarter-over-quarter momentum, leading indicators, and inflection point analysis.
Balance Sheet
Debt structure, liquidity runway, dilution risk, and working capital dynamics.
Capital Allocation
Buyback cadence, M&A appetite, dividend policy, and reinvestment priorities.
Returns on Capital (ROIC)
Multi-year ROIC vs. WACC, marginal returns on reinvestment, sales-to-invested-capital efficiency, and moat spread.
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Markdown: /stocks/ftnt/financials/md · → thesis · → memo
Fortinet Inc. (FTNT) — Financial Analysis | Margin of Insight