Q3 2026 results
| Metric | Result | Change |
|---|---|---|
| Total Billings | $2.34 billion | up 29% |
| Total Revenue | $2.08 billion | up 20% |
| Product Revenue | $765 million | up 37% |
| Service Revenue | $1.31 billion | up 13% |
| Non-GAAP EPS | $0.91 | up 23% |
| Free Cash Flow | $865 million | up 52% |
Guidance and outlook
- Q4 billings in the range of $2.775 billion to $2.925 billion.
- Q4 revenue in the range of $2.155 billion to $2.245 billion.
- Full year billings in the range of $9.568 billion to $9.718 billion.
- Full year revenue in the range of $8.125 billion to $8.215 billion.
- Full year non-GAAP earnings per share of $3.54 to $3.58.
How management sounded
Positive (+6 on our -10 to +10 scale). Management raised full-year guidance for the third time this year, citing strong execution and broad-based demand, despite acknowledging some supply chain constraints. Management sounded more upbeat than on 8% of the 190 calls we cover; most companies sound positive on their own calls, so the comparison says more than the label.
Q&A summary
AI and Network Security
Asked: Shaul Eyar from TD Cowen asked about the criticality of network security in the age of AI and where Fortinet addresses these use cases.
Answer: Ken Xie explained that network security is the foundation of AI security, noting that Fortinet is seeing strong demand for high-end units for internal segmentation and that their global network security leadership provides better visibility.
Service Revenue Growth
Asked: Shaul Eyar from TD Cowen asked about the service revenue growth trajectory and if the recent performance was a timing issue.
Answer: Christiane Ohlgart clarified that the service revenue performance is a timing issue related to large enterprise deals with ramped service activations, rather than a structural problem.
Supply Chain and Product Growth
Asked: Saket Kalia from Barclays asked about the outlook for product growth in 2027 and the current supply chain environment.
Answer: Ken Xie noted that while demand remains strong, lead times for components have increased and the company is treating inventory management as normal rather than relying on previous on-hand buffers.
Large Enterprise Deals
Asked: Gabriela Borges from Goldman Sachs asked about the impact of large enterprise deals on service revenue recognition.
Answer: Christiane Ohlgart explained that large new expansion deals often come with delayed service activation, which impacts revenue recognition in the short term but reflects healthy customer adoption.
What to watch before the next call
- Supply chain lead times and component availability for product manufacturing.
- Conversion of service billings into revenue for large enterprise deals.
- Adoption rates of new FortiGuard AI security services.
