Fortinet (FTNT) Q4 2025 earnings summary

Executive summary

• Achieved strong Q4 and full-year growth, with Q4 billings up 18%, revenue up 15%, and product revenue up 20%, driven by broad-based demand in Secure Networking, Unified SASE, and OT security.

• Unified SASE billings surged 40% in Q4 and 24% for the year, now representing up to 27% of total billings, with strong adoption among large enterprises and significant ARR growth.

• Maintained industry leadership in security and networking, with over $7.6B in 2025 billings, 55% firewall unit market share, and consistent GAAP profitability since IPO.

• Operating margin reached 37% in Q4 and 35.5% for the year (non-GAAP), with gross margin above 80% and robust free cash flow generation.

• Large enterprise deals ($1M+) increased by over 30% in Q4, with total deal value up over 40%.

Financial highlights

• Q4 billings grew 18% to $2.37B; total revenue up 15% to $1.91B; product revenue up 20% to $691M; service revenue up 12% to $1.21B.

• Full-year billings up 16% to $7.55B; total revenue up 14% to $6.8B; product revenue up 16% to $2.22B; service revenue up 13% to $4.6B.

• Q4 gross margin 80.3%; operating margin 37.3%; free cash flow $577M (31% margin); adjusted free cash flow $589M.

• Full-year gross margin 81.3%; operating income $2.41B (up 16%); EPS up 16% to $2.76; record free cash flow $2.21B (33% margin).

• Deferred revenue at year-end was $5.03B, up from $4.06B a year earlier.

Outlook and guidance

• Q1 2026 billings expected at $1.77B–$1.87B; revenue $1.7B–$1.76B; non-GAAP EPS $0.59–$0.63.

• Full-year 2026 billings guidance $8.4B–$8.6B; revenue $7.5B–$7.7B; service revenue $5.05B–$5.15B.

• Non-GAAP gross margin 79%–81%; operating margin 33%–36%; EPS $2.94–$3.00; infrastructure investments $350M–$450M.

• Long-term targets reaffirmed: Rule of 45 to be maintained, with >12% CAGR for billings and revenue over 3–5 years.

• Service revenue growth expected to accelerate in H2 2026, following strong product revenue growth.