Key Highlights

  • Fortinet shares are trading 21.56% lower at $136.54 on Thursday, October 29, 2026.
  • Third-quarter revenue grew 20% to $2.08 billion, and billings grew 29% to $2.34 billion.
  • Product revenue increased 37% to $765 million, well under the roughly 50% some investors had hoped for.
  • Adjusted EPS was $0.91 against $0.74 a year earlier, and GAAP EPS was $0.86 against $0.62.
  • Fourth-quarter revenue is guided to a range of $2.155 billion to $2.245 billion.

Fortinet Share Drop: Why Are Shares Trading 21.56% Lower Despite a Beat?

Fortinet (NASDAQ:FTNT) shares are trading 21.56% lower at $136.54 on Thursday, October 29, 2026, following third-quarter results released Wednesday, October 28. Revenue grew 20% to $2.08 billion and adjusted EPS was $0.91, yet the market zeroed in on slower product growth and a services shortfall. The implied prior close is about $174.07 (calculated).

Product revenue rose 37% to $765 million, against the roughly 50% that investors had hoped for, according to market reports. Services revenue missed estimates. A research firm, Jefferies, pointed to lower attach rates and said the quarter gained from pulled-forward demand that could cap growth.

Fortinet Quarter in Detail: How Solid Were Billings and Earnings?

Fortinet sells firewalls, secure networking and security services to enterprises and service providers. Billings climbed 29% to $2.34 billion. GAAP net income was $635.5 million, or $0.86 per diluted share, compared with $473.9 million, or $0.62, a year before.

GAAP operating margin was 33.9% against 31.7%. Adjusted EPS was $0.91 versus $0.74. The company said the slowdown marked a return to normalized growth after price increases and competition from AI frontier models had lifted first-half results.

Fortinet Reset in Expectations: How Does the Third Quarter Measure Against the Second?

Second-quarter revenue was $2.05 billion, up 26%, with product revenue rising 52% to $773 million and billings rising 33% to $2.37 billion. Third-quarter revenue growth of 20% and product growth of 37% therefore marked a clear slowdown in pace from one quarter to the next.

The earlier third-quarter outlook called for revenue of $2.01 billion to $2.10 billion and adjusted EPS of $0.83 to $0.87. Reported revenue of $2.08 billion fell in the upper half of that range, and adjusted EPS of $0.91 was above it.

Fortinet Outlook: What Do the Fourth-Quarter and Full-Year Targets Show?

Fortinet guided fourth-quarter revenue to $2.155 billion to $2.245 billion, billings to $2.775 billion to $2.925 billion, and adjusted EPS to $0.93 to $0.95. Full-year 2026 revenue is now expected at $8.125 billion to $8.215 billion, about 20% growth at the midpoint, compared with $8.02 billion to $8.18 billion after the second quarter.

Full-year billings are guided to $9.568 billion to $9.718 billion and adjusted EPS to $3.54 to $3.58, above the $3.41 to $3.47 range given in July.

At the midpoints, fourth-quarter revenue of $2.2 billion would be about 5.8% above the third quarter, and billings of $2.85 billion about 21.8% above it (calculated). How product and services contribute will shape the reading of that outlook.

Next Checkpoints: Fourth-Quarter Billings and Product Growth Pace

The fourth-quarter report is the next test, with billings guidance of $2.775 billion to $2.925 billion implying a seasonal step up from the quarter just reported. Product growth against the 37% just reported, services attach rates, and any further remarks on pulled-forward demand are the items to watch.