10-Q · May 7, 2026
Fortinet (FTNT) reported robust Q1 2026 results, with total revenue rising 20% year-over-year to $1.85 billion, exceeding expectations. The company achieved an EPS of $0.82, also above estimates, while maintaining a…
Earnings analysis · 10-Q
FTNT earnings analysis
Filed October 29, 2026 · Our reading of the company's report
The latest report
Fortinet delivered Q3 revenue of $2.0784 billion and EPS of $0.91, beating consensus while revenue grew 20% year over year and billings rose 29% to $2.3363 billion. Free cash flow remained substantial at $864.8 million,…
Read full summary
Fortinet delivered Q3 revenue of $2.0784 billion and EPS of $0.91, beating consensus while revenue grew 20% year over year and billings rose 29% to $2.3363 billion. Free cash flow remained substantial at $864.8 million, although it declined sequentially from $966 million. The principal negatives are concentration in distributors and Taiwanese manufacturing, together with newly emphasized memory-chip shortages and increased inventory commitments. Numeric guidance was not included in the supplied 10-Q text; the prior 8-K reported raised FY2026 outlook.
Gross and operating margin
How much of each revenue dollar the business keeps.
One point per quarterly or annual filing. Both margins are shares of that report's revenue.
How we read each report
Our analysis across the last few reports.
Our model's reading of each filing, not the share price or the market's reaction. Annual and quarterly reports each occupy one position.
Reported figures
- Earnings per share
- $0.91
What stood out
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Revenue growth and consensus beat
Q3 revenue was $2.0784 billion, up 20% year over year from approximately $1.72 billion and 1.4% sequentially from $2.05 billion in Q2. Revenue exceeded the $2.0631 billion consensus estimate by approximately $15.3 million.
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EPS exceeded estimates
Reported EPS was $0.91 versus the $0.84 consensus estimate, a $0.07 beat. EPS increased from $0.82 in Q2 and $0.62 in the prior-year quarter.
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Billings growth accelerated
Billings increased 29% year over year to $2.3363 billion, outpacing revenue growth and supporting future deferred-revenue conversion.
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Strong but lower sequential cash flow
Free cash flow was $864.8 million, compared with $966 million in Q2 and $568 million in the prior-year quarter. Cash generation remained strong, although sequential FCF declined by approximately 10.5%.
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Working-capital concentration disclosed
Management reported that one distributor represented 26% of net accounts receivable, while six distributor customers represented 63% in aggregate as of September 30, 2026.
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Expanded capital-return authorization
The company expanded its repurchase authorization by $1.23 billion in October 2026, bringing total authorization to $11.48 billion through February 28, 2028; approximately $2.0 billion remained available as of October 29, 2026.
What to watch
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AI-driven memory-chip shortage
The filing identifies a global memory-chip shortage linked to the rapid build-out of AI infrastructure. Fortinet states that it is experiencing availability constraints and has increased inventory purchase commitments, creating risk of higher costs, delays, excess inventory and margin compression.
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Heavy Taiwan manufacturing exposure
Approximately 83% of hardware was manufactured in Taiwan during the three months ended September 30, 2026. Escalating China-Taiwan tensions or restrictions on Taiwanese supply could materially disrupt manufacturing and product availability.
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Distributor and receivables concentration
Six distributor customers accounted for 63% of total net accounts receivable, and the largest distributor accounted for 26% individually. Financial distress, delayed payment or loss of these channel partners could adversely affect cash flow, revenue and operating results.
Management's outlook
The supplied 10-Q text does not include quantitative revenue or EPS guidance. Numeric FY2026 and Q4 outlook was provided in the prior 8-K/earnings release, including FY2026 revenue of $8.125-$8.215 billion and non-GAAP EPS of $3.54-$3.58.
Earlier filings 4
10-K · February 25, 2026
Fortinet reports 2025 revenue of $6.80 billion and net income of $1.85 billion, driven by its Fortinet Security Fabric platform, broad product suite (secure networking, Unified SASE, SecOps) and AI investment (1,405…
10-Q · November 7, 2025
Fortinet reported quarterly revenue of $1,724.9 million (up $216.8M or +14.4% YoY and up $94.9M or +5.8% sequentially) with total gross profit of $1,393.2 million (gross margin 80.8%) and operating income of $547.3…
10-Q · May 8, 2025
Fortinet reported Q1 2025 revenue of $1,539.7M, up $186.4M (+13.8% YoY) versus $1,353.3M a year ago but down $120.3M (-7.3% QoQ) from $1.66B. Gross margin remained strong at 81.0% and operating income rose to $453.8M…
This is our reading of a public filing, not the filing itself. Analysis can contain errors; check the source document for full context.