Fortinet (FTNT) Q1 2025 earnings summary

Executive summary

• Q1 2025 revenue grew 14% year-over-year to $1.54 billion, with record operating margin of 34% (non-GAAP) and free cash flow of $783 million.

• Unified SASE billings rose 18% and AI-driven Security Operations billings surged 29%, together representing 35% of business.

• Large enterprise segment led growth, with deals over $1 million up 30% and three eight-figure deals closed.

• EMEA was the best-performing region, driven by OT and government sector strength, with Americas and APAC also contributing.

• Non-GAAP net income reached $452 million, with diluted EPS of $0.58.

Financial highlights

• Total billings up 14% to $1.6 billion; product revenue up 12% to $459 million; service revenue up 14% to $1.08 billion (70% of total revenue).

• Gross margin (non-GAAP) was 81.9%, with product gross margin up 1,200 bps to 67.7% and service gross margin at 87.8%.

• Free cash flow margin reached 51%; adjusted free cash flow was $839 million (54% margin).

• Deferred revenue ended at $6.42 billion, up from $6.36 billion in Q4 2024.

• Net income was $433 million (GAAP), up from $299 million year-over-year.

Outlook and guidance

• Q2 2025 billings expected at $1.685–$1.765 billion; revenue at $1.59–$1.65 billion.

• Full-year 2025 billings guidance $7.2–$7.4 billion; revenue $6.65–$6.85 billion; non-GAAP EPS $2.43–$2.49.

• Non-GAAP gross margin expected at 79–81% and operating margin at 31.5–33.5% for 2025.

• Infrastructure investments of $380–$430 million and cash taxes of $525–$575 million expected for the year.

• Service revenue for FY2025 expected between $4.575 billion and $4.725 billion.