Fortinet Raises 2026 Outlook and Adds $1.2 Billion to Buyback as Product Sales Jump 37%

Fortinet raised its 2026 revenue outlook to about 20% growth on Wednesday after third-quarter product sales jumped 37%, and the cybersecurity company added $1.2 billion to its share buyback authorization.

Total revenue rose 20% to $2.08 billion from $1.72 billion a year earlier, while billings grew 29% to $2.34 billion, according to the earnings release Fortinet filed with an 8-K on Wednesday. Founder, Chairman and CEO Ken Xie said the results allowed the company to raise its 2026 billings guidance "for the third time this year."

Product sales lead

Product revenue climbed 37% to $765 million from $559 million, outpacing service revenue, which rose to $1.31 billion from $1.17 billion.

"Our strong momentum is driven by our continued leadership in the AI era," Xie said in the release. "As AI introduces entirely new attack surfaces, Network Security remains the critical foundation of AI Security."

Net income increased to $635.5 million, or $0.86 a diluted share, from $473.9 million, or $0.62, a year earlier. Non-GAAP EPS rose to $0.91 from $0.74. The company posted a GAAP operating margin of 34% and a non-GAAP operating margin of 38%.

Operating cash flow was $946 million, and free cash flow was $865 million.

Total gross profit rose to $1.64 billion from $1.39 billion. Deferred revenue on the balance sheet, which reflects contracts billed but not yet recognized, totaled about $7.93 billion at Sept. 30, combining $3.96 billion in current and $3.97 billion in long-term deferred revenue, up from about $7.12 billion at the end of 2025. Cash and cash equivalents climbed to $3.75 billion from $2.50 billion.

Updated full-year targets

Fortinet now expects 2026 revenue of $8.125 billion to $8.215 billion and billings of $9.568 billion to $9.718 billion. It projects service revenue of $5.150 billion to $5.170 billion, a non-GAAP operating margin of 36.5% to 37.5%, and non-GAAP EPS of $3.54 to $3.58.

For the fourth quarter, the company guided to revenue of $2.155 billion to $2.245 billion, billings of $2.775 billion to $2.925 billion, and non-GAAP EPS of $0.93 to $0.95.

More room for buybacks

The board increased the share repurchase authorization by $1.2 billion, leaving $2 billion available. Fortinet spent $972.8 million repurchasing and retiring stock in the first nine months of the year, compared with $2.23 billion in the same period of 2025, according to its cash flow statement. It also repaid $500 million of senior notes during the period.

Diluted weighted-average shares outstanding fell to 742.6 million in the quarter from 761.2 million a year earlier.

AI security push

Among recent business highlights, Fortinet said it launched a FortiGuard Inline AI Security Service that adds AI-specific inspection and guardrails for FortiGate customers, and announced a collaboration with Oracle to protect and govern AI applications and agents.

Sources

1. Fortinet Form 8-K with third-quarter 2026 earnings release (Exhibit 99.1), filed Oct. 28, 2026 (accession 0001262039-26-000024)

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