Summary
Fortinet, Inc. reported strong financial results for the first quarter of 2026, demonstrating significant year-over-year growth across key metrics. Total revenue reached $1.85 billion, a 20% increase, driven by robust performance in both product and service segments. Product revenue saw a substantial 41% jump to $645.1 million, while service revenue grew 11% to $1.20 billion. This top-line growth translated into improved profitability, with operating income rising 28% to $580.0 million and operating margin expanding to 31.4%. The company also generated strong operating cash flow of $1.08 billion, highlighting operational efficiency and solid cash generation capabilities. While gross margin experienced a slight decrease of 0.7 percentage points to 80.3%, primarily due to a favorable shift in revenue mix towards product sales, the company's overall financial health remains robust. Fortinet continues to invest strategically in research and development and sales and marketing to support future growth. The company also actively returned capital to shareholders through a significant share repurchase program, demonstrating confidence in its financial position and future prospects.
Financial Highlights
53 data points| Revenue | $1.85B |
| Cost of Revenue | $364.50M |
| Gross Profit | $1.49B |
| R&D Expenses | $214.00M |
| Operating Expenses | $905.10M |
| Operating Income | $580.00M |
| Net Income | $534.50M |
| EPS (Basic) | $0.72 |
| EPS (Diluted) | $0.72 |
| Shares Outstanding (Basic) | 738.80M |
| Shares Outstanding (Diluted) | 742.80M |
Key Highlights
- 1Total revenue increased by 20% year-over-year to $1.85 billion, driven by a strong 41% growth in product revenue and 11% growth in service revenue.
- 2Operating income increased by 28% year-over-year to $580.0 million, with operating margin expanding to 31.4% from 29.5%.
- 3Cash flow from operations was robust at $1.08 billion, a 25% increase compared to the prior year's period.
- 4The company repurchased $826.9 million of its common stock during the quarter, demonstrating a commitment to returning capital to shareholders.
- 5Deferred revenue grew by 3% sequentially to $7.35 billion, indicating strong future revenue potential.
- 6Despite a slight decrease in gross margin to 80.3%, this was attributed to a favorable shift in revenue mix towards product sales, with product gross margin improving slightly.
- 7The company ended the quarter with a strong liquidity position, holding $3.63 billion in cash, cash equivalents, and investments.