Fortinet Q4 2025 Earnings Beat Estimates
Fortinet Q4 2025 earnings beat estimates, expanded its buyback authorization and issued fiscal 2026 guidance that could support shares and flows.
KEY TAKEAWAYS
- Q4 results beat estimates with revenue $1.9B, billings $2.4B and non-GAAP EPS $0.81.
- Raised buyback authorization by $1.0B to $10.25B and repurchased $57M.
- Set FY-2026 billings $8.4B-$8.6B and revenue $7.5B-$7.7B, citing Unified SASE.
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Fortinet Inc. (Nasdaq: FTNT) reported fourth-quarter 2025 earnings on Feb. 5, 2025, that exceeded analyst estimates. The company posted stronger revenue, billings, and non-GAAP profit, expanded its share-repurchase authorization, and issued fiscal 2026 guidance projecting continued growth in top-line revenue and billings.
Quarter Results and Cash Flow
Fortinet said in a press release that fourth-quarter revenue reached $1.9 billion, up 15.0% year-over-year, with product revenue rising 20.0% to $691 million. Billings increased 18.0% to $2.4 billion, and non-GAAP diluted earnings per share (EPS) came to $0.81, beating the $0.74 estimate.
The company reported a GAAP operating margin of 33.0%, representing operating income of $626 million, and a non-GAAP operating margin of 37.0%. Free cash flow for the quarter was $577 million.
For the full year 2025, revenue totaled $6.8 billion, up 14.0% year-over-year, with product revenue rising 16.0% to $2.2 billion. Full-year billings grew 16.0% to $7.6 billion. The non-GAAP operating margin was 35.0%, and free cash flow reached $2.2 billion.
Fortinet increased its share-repurchase authorization by $1.0 billion to $10.3 billion through 2027 and repurchased $57 million worth of shares (730,000 shares) during the quarter. The company said it exceeded the Rule of 45 metric, which combines GAAP revenue growth and non-GAAP operating margin, for the sixth consecutive year.
Guidance and Growth Drivers
On the earnings call, management provided first-quarter guidance calling for a non-GAAP operating margin between 30.0% and 32.0%, non-GAAP EPS of $0.59 to $0.63 on a share count of 746 million to 750 million, and planned infrastructure investments of $80 million to $120 million. They forecast a non-GAAP tax rate of 18.0% and cash taxes between $45 million and $50 million.
For fiscal 2026, the company set revenue targets of $7.5 billion to $7.7 billion and billings of $8.4 billion to $8.6 billion. Service revenue is projected at $5.05 billion to $5.15 billion, with acceleration in the second half. Management expects a non-GAAP gross margin of 79.0% to 81.0%, a non-GAAP operating margin of 33.0% to 36.0%, and non-GAAP EPS of $2.94 to $3.00 on a share count of 747 million to 753 million. Infrastructure spending is planned at $350 million to $450 million. The company aims to achieve the Rule of 45 for a seventh consecutive year and set a midterm product-revenue growth target of 10.0% to 15.0%.
Management attributed the quarter’s billings growth to Unified Secure Access Service Edge (SASE), which rose 40.0% year-over-year, operational technology (OT) security, up 25.0%, and strength in enterprise deals exceeding $1 million, which increased 30.0%. The company added 7,200 new organizations during the quarter.
