Fortinet Inc. (NASDAQ:FTNT) surged 12.33% in premarket trading Thursday after reporting first-quarter results that exceeded Wall Street expectations and raising its guidance for the year.
The cybersecurity company benefited from broad-based demand across its product portfolio and geographic markets.
Earnings, revenue and billings beat expectations
Fortinet posted adjusted earnings of $0.82 per share, surpassing the analyst consensus estimate of $0.62 by $0.20.
Revenue climbed 20% year-over-year to $1.85 billion, ahead of expectations of $1.73 billion.
Product revenue jumped 41% from the prior year to $645 million, while billings increased 31% to $2.09 billion.
“We are very pleased with our excellent first quarter results, exceeding the high end of our guidance through strong execution and broad-based demand across our portfolio and geographies,” said Ken Xie, Founder, Chairman and Chief Executive Officer of Fortinet.
Company raises second-quarter and full-year guidance
For the second quarter of 2026, Fortinet expects revenue between $1.83 billion and $1.93 billion. The midpoint of $1.88 billion is above the analyst consensus estimate of $1.82 billion.
The company also projected adjusted earnings per share in the range of $0.72 to $0.76, compared with analyst expectations of $0.70 per share.
Fortinet increased its full-year fiscal 2026 revenue forecast to between $7.71 billion and $7.87 billion, representing approximately 15% year-over-year growth at the midpoint.
The updated midpoint of $7.79 billion exceeded the consensus estimate of $7.6 billion.
Full-year adjusted earnings guidance of $3.10 to $3.16 per share also came in ahead of the analyst estimate of $2.98.
Cash flow and margins reach record levels
During the quarter, Fortinet generated record operating cash flow of $1.08 billion and free cash flow of $1.01 billion.
GAAP operating margin reached 31%, while adjusted operating margin came in at 36%.
Analysts point to AI demand and pricing actions
Analysts at Jefferies, led by Joseph Gallo, said the company’s significantly improved 2026 outlook compared with the previous quarter is likely to raise questions among bearish investors regarding potential pull-forward demand benefits.
However, they noted that accelerating service billings growth, increasing AI data center demand, and another planned price increase aimed at offsetting higher memory costs should continue supporting business momentum.
“FTNT is giving customers the same lead time of 30 days to honor quotes it did with the first increase meaning that the benefit from the 2nd price increase will not truly benefit growth until 3Q,” they added.
More about Fortinet
Fortinet is a cybersecurity company specializing in network security, firewall solutions, cloud security, and AI-driven threat protection. Its products and services are used by enterprises, governments, and service providers to secure networks, data centers, cloud environments, and connected devices worldwide.