TLDR
- Fortinet (FTNT) stock traded at $127.70 in premarket Thursday, down about 27% from Wednesday’s close of $174.08.
- Q3 adjusted earnings were 91 cents a share on $2.08 billion in revenue, both above estimates.
- Product revenue grew 37% to $765 million, short of the roughly 50% investors hoped for.
- Jefferies flagged a services revenue miss and possible pull-forward deals.
- Fortinet raised its Q4 and full-year guidance, including billings for the third time this year.
Fortinet (FTNT) stock was trading at $127.70 in premarket on Thursday, down about 27% from Wednesday’s close of $174.08. The drop followed a third-quarter report that beat estimates.
A beat and a raise usually keeps traders happy. Not this time.
The stock had already closed down 6% on Wednesday before the results came out after the bell. Premarket trading then took the losses much further.
$FTNT -25% after hours despite beating Q3 estimates and raising its FY26 revenue & EPS outlook.
Q3 revenue grew 20%, billings 29%, and product sales 37%.
But services grew just 13%, and Fortinet cut FY26 service revenue guidance to $5.15B-$5.17B from $5.18B-$5.22B. https://t.co/DGxiuvuF9O pic.twitter.com/CBVqHqvPYP
— Wall St Engine (@wallstengine) October 28, 2026
Adjusted earnings came in at 91 cents a share, ahead of the 86 cents Wall Street expected. Revenue rose about 20% to $2.08 billion, compared with forecasts of $2.06 billion.
Net income climbed to $635.5 million, or 86 cents per diluted share. A year earlier it was $473.9 million, or 62 cents per share.
Adjusted earnings rose from 74 cents a year ago. The GAAP operating margin widened to 33.9% from 31.7%.
Product Growth Slows Down
Product revenue jumped 37% to $765 million. That beat estimates, but investors had hoped for growth near 50%.
Management called the slowdown a return to normal growth. It said impending price increases and competition from AI frontier models led to a surge in the first half.
Jefferies analysts pointed to a miss in services revenue. They said it raised concerns about how often customers buy extra products and how long growth can last.
The analysts also said third-quarter results may have gotten a lift from deals pulled forward. In a note, they said that could hurt growth, particularly in the middle of 2027.
Billings, a measure that can point to future revenue growth, rose 29% to $2.34 billion. Fortinet has now raised its billings guidance three times this year.
Outlook for the Fourth Quarter and Year
For the fourth quarter, Fortinet expects adjusted earnings of 93 cents to 95 cents a share. Analysts were looking for 88 cents.
Revenue is forecast at $2.155 billion to $2.245 billion, versus the $2.16 billion expected. Billings are seen at $2.775 billion to $2.925 billion.
For the full year, the company sees adjusted earnings of $3.54 to $3.58 a share. Analysts had expected $3.45.
Full-year revenue is guided to $8.125 billion to $8.215 billion, roughly 20% growth at the midpoint. Billings are seen at $9.568 billion to $9.718 billion.
CEO Ken Xie said AI creates new attack surfaces, and network security remains the foundation of AI security. He said demand allowed the billings guidance raise.
Fortinet also highlighted new services that help customers monitor AI activity and prevent data exposure. It cited work with Oracle and Microsoft on secure AI adoption.
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