01—Abstract
Summary
Summary of the 10-Q filed July 30, 2026. Cited figures are marked; the original filing is the authoritative source.
Fortinet, Inc. (FTNT) reported robust financial results for the second quarter and first half of 2026, demonstrating strong revenue growth and improved profitability.
Total revenue for the quarter reached $2.05 billiona, a 26% increase year-over-year, driven by a significant surge in product revenue (up 52%) alongside steady service revenue growth. This performance was sustained through the first half of the year with total revenue of $3.90 billion, a 23% increase. The company's operational efficiency is also notable, with operating income rising 51% year-over-year for the quarter to $689.3 million and operating margin expanding by 5.6 percentage points to 33.7%.
This expansion in profitability, despite a slight decrease in gross margin due to a shift in revenue mix towards lower-margin products, highlights effective expense management and operating leverage. Fortinet continues to invest in its Security Fabric, SASE, and SecOps offerings, positioning itself for sustained growth in the cybersecurity landscape. The company also reported strong cash flow generation, reinforcing its financial health and strategic flexibility.
02—Key points
Key Highlights
- Total revenue increased 26% year-over-year to $2.05 billion for the second quarter of 2026.
- Product revenue saw substantial growth of 52% year-over-year, reaching $773.0 million, indicating strong hardware and software licensing demand.
- Operating income grew by 51% year-over-year to $689.3 million, with operating margin expanding by 5.6 percentage points to 33.7%.
- Deferred revenue increased to $7.68 billion, signaling strong future revenue potential from existing contracts.
- Cash flow from operations remained robust, reaching $2.12 billion for the first six months of 2026, a 61% increase year-over-year.
- The company repurchased $972.8 million of its common stock in the first half of 2026, demonstrating a commitment to returning capital to shareholders.
- Significant investments in R&D and Sales & Marketing continue, indicating a focus on future innovation and market share expansion.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in Q2 FY2026, Fortinet, Inc. kept $0.30.
- Revenue$2.05B100.0%
- Cost of revenue−$404.7M19.8%
- Gross profit$1.64B80.2%
- Operating costs−$953.9M46.6%
- Operating income$689.3M33.7%
- Interest, other & tax−$83.0M4.1%
- Net income$606.3M29.6%
04—Financials
Financial Highlights
Figures from 10-QQ2 FY2026filed July 30, 2026Financial Statements
Q2 FY2026 against Q2 FY2025
| Line item | Q2 FY2026Q2 FY2025 | Change |
|---|---|---|
| Revenue | $2.05B$1.63B | +25.6% |
| Cost of Revenue | $404.70M$314.90M | +28.5% |
| Gross Profit | $1.64B$1.32B | +24.9% |
| R&D Expenses | $225.00M$209.50M | +7.4% |
| Operating Expenses | $953.90M$857.10M | +11.3% |
| Operating Income | $689.30M$458.00M | +50.5% |
| Net Income | $606.30M$440.10M | +37.8% |
| EPS (Basic) | $0.83$0.57 | +45.6% |
| EPS (Diluted) | $0.82$0.57 | +43.9% |
| Shares Outstanding (Basic) | 733.10M765.50M | −4.2% |
| Shares Outstanding (Diluted) | 739.90M772.70M | −4.2% |
05—Questions
Frequently Asked Questions
What is Fortinet's revenue growth for the quarter and how is it segmented?
Fortinet reported a 26% year-over-year increase in total revenue for the second quarter of 2026, reaching $2.05 billion. Product revenue grew significantly by 52% to $773.0 million, while service revenue increased by 14% to $1.27 billion.
How did Fortinet's profitability change in the quarter?
Fortinet demonstrated strong profitability improvements. Operating income increased by 51% year-over-year to $689.3 million, and the operating margin expanded by 5.6 percentage points to 33.7%. This was driven by revenue growth outpacing operating expense growth.
What is the significance of the company's deferred revenue balance?
Fortinet's deferred revenue balance grew to $7.68 billion as of June 30, 2026. This represents future revenue that has been invoiced but not yet recognized. A significant portion of this balance relates to security subscriptions and technical support services, indicating a strong pipeline of recurring revenue.
How is Fortinet managing its cash and capital allocation?
Fortinet generated $2.12 billion in cash from operating activities in the first six months of 2026, a substantial increase from the prior year. The company also repurchased $972.8 million of its common stock during the first half of the year, reflecting its strong liquidity and commitment to shareholder returns, while continuing to invest in its business and capital expenditures.
06—Continue