Core Insights - Fortinet reported strong performance in Q3 2025, driven by technological innovation and customer-centric service, with widespread adoption of its solutions across various enterprise sizes [1] - The company highlighted its leadership in next-generation firewalls and SD-WAN, as well as the rapid growth of its FortiSASE product in the global secure access service edge market [1] Financial Summary - Revenue reached $1.72 billion, a 14% increase year-over-year [1] - Product revenue was $559.3 million, up 18% compared to the same period last year [1] - Billings amounted to $1.81 billion, reflecting a 14% year-over-year growth [1] - Q3 GAAP operating margin hit a record high of 32% [1] - Non-GAAP operating margin also set a record at 37% [1] Recent Business Highlights - FortiSASE achieved a remarkable 100% year-over-year growth in billings, attributed to its innovative "zero-friction migration" technology [2] - The company launched the industry's first secure AI data center solution, which supports high-capacity data transfer and reduces energy consumption by 69% compared to similar solutions [2] - Fortinet has invested heavily in AI research and development, with over 500 AI patents granted or applied for, enhancing its portfolio of over 20 AI solutions [2]

Table of Contents ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number: 001-34511 ______________________________________ FORTINET, INC. UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2025 or (Exact name of registrant as specified in its ...

Core Points - Rosen Law Firm is reminding purchasers of Fortinet, Inc. common stock from November 8, 2024, to August 6, 2025, about the lead plaintiff deadline on November 21, 2025 [1] - Investors who purchased Fortinet stock during the specified period may be entitled to compensation without any out-of-pocket fees through a contingency fee arrangement [2] Class Action Details - A class action lawsuit has been filed against Fortinet, and interested parties can join by submitting a form or contacting the law firm [3][7] - The lawsuit alleges that Fortinet made materially false and misleading statements regarding the business impact of a "record" round of FortiGate unit upgrades, claiming it would generate $400 million to $450 million in product revenue in 2025 and 2026 [5][6] Allegations Against Fortinet - The lawsuit claims that Fortinet misrepresented the potential of the refresh cycle, which consisted of older products that were a "small percentage" of the company's business [6] - It is alleged that Fortinet concealed the true number of FortiGate firewalls eligible for upgrades and misled investors about the momentum of the refresh cycle, which was pushed through rapidly in a short time frame [6]

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]

Qualcomm - Qualcomm reported an EPS of $3, exceeding the estimate of $2.87, representing a 14% increase year-over-year from $2.69 [2] - Revenue reached $11.27 billion, up 10% year-over-year, beating estimates by approximately $510 million [2][3] - Licensing revenue, primarily from Apple, declined by 7.4%, while QCT revenue increased by 18%, indicating ongoing diversification efforts [3] CarMax - CarMax's stock fell 13% following a lower EPS guidance, with the new adjusted range between 18 and 36 cents, down from 64 cents last quarter [5][6] - Comparable sales are expected to decline by 8 to 12%, alongside additional restructuring costs and layoffs [7] - The wholesale used vehicle market prices are decreasing, with total sales down 2% from August to September [9] Fortinet - Fortinet reported an EPS of 74 cents, surpassing the estimate of 63 cents, marking a 17% increase [10] - Topline sales reached $1.72 billion, a 14% increase, beating estimates by about $20 million [10] - The revenue guidance for the next quarter was widened to a range of $1.83 billion to $1.89 billion, which has put pressure on the shares [11]

Core Viewpoint - The Gross Law Firm has issued a notice to shareholders of Fortinet, Inc. regarding a class action lawsuit due to alleged false statements and misrepresentations made by the company during a specific class period [1]. Group 1: Allegations and Misrepresentations - The complaint alleges that Fortinet misrepresented the potential profitability of its product refresh cycle, claiming it would be more lucrative than it actually was, as it involved old products that constituted a "small percentage" of the company's business [1]. - It is claimed that Fortinet did not have a clear understanding of the actual number of FortiGate firewalls eligible for upgrades, misleading investors about the refresh gaining momentum over two years while it had already pushed through about half of the refresh in just a few months by the end of Q2 2025 [1]. Group 2: Class Action Participation - Shareholders who purchased shares of Fortinet during the class period from November 8, 2024, to August 6, 2025, are encouraged to register for the class action, with a deadline for lead plaintiff appointment set for November 21, 2025 [2]. - Once registered, shareholders will receive updates through a portfolio monitoring software regarding the status of the case, with no cost or obligation to participate [2].

Core Insights - Fortinet reported third-quarter earnings that exceeded estimates, with earnings rising 17% to $0.74 per share and revenue increasing 14% to $1.72 billion, although guidance for future quarters fell short of analyst expectations [2][3][4] Financial Performance - For Q3, Fortinet's earnings were $0.74 per share on an adjusted basis, surpassing analyst expectations of $0.63 per share [2] - Revenue for the quarter reached $1.72 billion, compared to analyst estimates of $1.704 billion [2] - Billings for Q2 rose 14% to $1.81 billion, slightly below the expected $1.804 billion [2] Guidance and Market Reaction - Fortinet's guidance for the upcoming quarter is revenue between $1.825 billion and $1.885 billion, below the estimate of $1.875 billion [3] - Expected billings for the next quarter are projected to be between $2.185 billion and $2.285 billion, also below the estimate of $2.231 billion [3] - Following the earnings report, Fortinet's stock fell over 10% to $76.82, reflecting investor concerns over weak guidance [4] Competitive Landscape - Fortinet operates in the firewall network security market, competing with companies like Palo Alto Networks and Check Point Software Technologies [5] - Palo Alto Networks is planning to acquire CyberArk for $25 billion, indicating ongoing consolidation in the cybersecurity sector [5] Strategic Focus - Fortinet is shifting focus towards the Secure Access Service Edge (SASE) market, which is seen as a new growth opportunity for the company [6][7] - Analysts suggest that investors should concentrate on Fortinet's growing SASE and platform businesses rather than the traditional firewall refresh cycle [7] Stock Ratings - Fortinet holds a Composite Rating of 76 out of a possible 99, indicating a relatively strong position in the market [7] - The stock has an Accumulation/Distribution Rating of B, suggesting moderate institutional buying activity [8]

Market Overview - US stock index futures are all up ahead of the market opening on November 6, with Dow futures up 0.02%, S&P 500 futures up 0.09%, and Nasdaq futures up 0.06% [1] - European indices show a decline, with Germany's DAX down 0.08%, UK's FTSE 100 down 0.37%, France's CAC40 down 0.44%, and the Euro Stoxx 50 down 0.04% [2][3] - WTI crude oil is up 0.64% at $59.98 per barrel, while Brent crude is up 0.49% at $63.83 per barrel [3][4] Market Sentiment - A report from SentimenTrader indicates that despite recent market stability, there are ominous signs suggesting potential weakness ahead, with the "Titanic Syndrome" appearing four times in the last five trading days [5] - Deutsche Bank is exploring ways to hedge its exposure to data center risks, including shorting a basket of AI-related stocks, amid concerns of a potential AI bubble [6] Economic Indicators - Federal Reserve Governor Milan emphasizes that current interest rates are too high and suggests further cuts may be necessary, citing limited job growth and declining wage increases [7] - The ongoing US government shutdown is impacting the airline industry, with plans to cut 10% of flights at 40 major airports due to air traffic control safety concerns [7] Company News - Tesla is facing a critical vote on Elon Musk's compensation plan, which could lead to significant stock price volatility depending on the outcome [8][9] - Arm reported a 34% increase in revenue to $1.14 billion for Q2, with a 155% increase in operating profit, exceeding market expectations [9] - Qualcomm's Q4 sales reached $11.27 billion, driven by demand for high-end smartphones, with a forecast for Q1 sales also above market expectations [10] - Snap's Q3 revenue grew 10% to $1.51 billion, with a significant partnership with Perplexity AI valued at $400 million [11] - AppLovin's Q3 revenue increased by 8.9% to $1.41 billion, with a strong cash flow and a $3.2 billion share buyback plan [12] - Robinhood's Q3 net revenue doubled to $1.274 billion, with a 271% increase in net profit, although cryptocurrency revenue fell short of expectations [12] - DoorDash's Q3 revenue grew 27% to $3.45 billion, but rising costs led to a decline in profit, causing a nearly 10% drop in pre-market trading [13] - IonQ's Q3 revenue surged 221.5% to $39.87 million, but the company reported significant losses due to acquisitions [14] - American Superconductor's Q2 revenue increased over 20% but fell short of expectations, leading to a drop in pre-market trading [15] - Fortinet's Q3 core business revenue growth hit a decade low, with a 14% increase in total revenue [15] Upcoming Events - Key speeches from Federal Reserve officials are scheduled, including remarks from New York Fed President Williams and Cleveland Fed President Mester [16]

Group 1 - Fortinet (FTNT.US) experienced a significant pre-market decline of nearly 10% following disappointing earnings results [1] - The company's service segment revenue for Q3 fell short of market expectations, leading to an unexpected downward revision of the revenue guidance for fiscal year 205 [1] - The largest business segment reported a year-over-year growth of 13% in Q3, reaching $1.17 billion, which was slightly below Wall Street analysts' average expectations [1] - This quarter marked the slowest growth rate for Fortinet's service revenue in at least a decade [1] Group 2 - The closing price for Fortinet on November 5 was $85.990, with a pre-market price of $77.500 on November 6, reflecting a drop of $8.490 or 9.87% [2] - The stock's trading volume was 8.7135 million, with a market capitalization of $65.891 billion [2] - The stock has a 52-week high of $114.820 and a low of $70.120, indicating significant volatility in its price [2]

Core Insights - Fortinet Inc. experienced a significant stock decline of over 12% after reporting earnings that fell short of market expectations, particularly in its services segment [1] - The company lowered its revenue guidance for the fiscal year 205, adjusting the upper limit from $6.83 billion to $6.78 billion [5] Financial Performance - For Q3, Fortinet's service revenue grew by 13% year-over-year to $1.17 billion, slightly below Wall Street's average expectations [1] - This growth rate marks the slowest quarterly increase in service revenue for Fortinet in at least a decade [4] - The total revenue for Q3 2025 was approximately $1.72 billion, reflecting a 14% year-over-year increase, with diluted earnings per share at $0.62 compared to $0.70 in the same period last year [1] Market Position and Strategy - Fortinet is recognized as a leading player in the enterprise network security and firewall sector, but it lags behind competitors like Palo Alto Networks and Zscaler in emerging areas such as cloud security, AI security, SASE, and XDR [6] - The company's business model focuses on a combination of hardware and subscription services, with core products including FortiGate firewalls, SD-WAN, and various security gateways [5]