Fortinet (FTNT) slips on soft Q4 outlook after Q3 beat; price targets trimmed as company unveils “Secure AI Data Center”

6 November 2025

Q3 beat: Fortinet posted revenue of ~$1.72B (+14% y/y), adjusted EPS of $0.74, and billings of ~$1.81B (+14%), topping consensus. Management highlighted a record non‑GAAP operating margin of ~36.9% for the third quarter. ^[1]
Guidance underwhelms: For Q4, Fortinet guided revenue to $1.825B–$1.885B and non‑GAAP EPS to $0.73–$0.75; FY25 EPS pegged at $2.66–$2.70. Shares traded lower on the softer‑than‑hoped outlook. ^[2]
Analyst reaction today: A wave of price‑target cuts followed the print (e.g., UBS to $80, RBC to $85, and several others trimming to the $72–$100 range while maintaining neutral/hold‑type stances). ^[3]
Strategy & product update (Nov. 5): Fortinet launched a “Secure AI Data Center” framework featuring the FortiGate 3800G; the company says the design delivers ultra‑low latency and ~69% average power savings versus traditional approaches. ^[4]
Legal watch: Multiple firms issued class‑action reminders for FTNT holders tied to alleged misstatements about the firewall refresh cycle. ^[5]

Earnings snapshot: strong quarter, but guidance cools sentiment

What happened: Fortinet’s September‑quarter (Q3 FY25) revenue rose ~14% to ~$1.72B with adjusted EPS at $0.74 (vs. ~$0.63 expected). Billings—a forward demand proxy—also climbed ~14% to ~$1.81B. After the report, investors focused on the softer Q4 guide, which ran a touch below consensus and drove the shares lower in late trading. ^[6]

Profitability: Management cited a record Q3 non‑GAAP operating margin of ~36.9% (GAAP operating margin also a third‑quarter record, per the release). That efficiency was a bright spot despite the cautious near‑term revenue view. ^[7]

Q4 & FY25 outlook: Fortinet now sees Q4 revenue of $1.825B–$1.885B and non‑GAAP EPS of $0.73–$0.75. For FY25, the company guided revenue to $6.72B–$6.78B and non‑GAAP EPS to $2.66–$2.70. ^[8]

Market reaction and today’s narrative

At publication time, FTNT was trading around the mid‑$80s after the after‑hours drop last night. Coverage today framed the quarter as a “beat‑but‑guide” story: results outperformed estimates, but the December‑quarter outlook landed slightly shy, prompting renewed debate on service‑revenue momentum. Bloomberg noted service‑revenue growth slowed to the weakest pace in at least a decade, intensifying attention on 2026 re‑acceleration. ^[9]

What Wall Street is saying on Nov. 6

Post‑earnings, sell‑side desks moved quickly:

UBS: Target to $80 (Neutral).
RBC: Target to $85 (Sector Perform).
Additional trims from Capital One, Piper Sandler, Baird, Barclays, Jefferies, Mizuho, Bernstein, Deutsche Bank, Morgan Stanley, Citi kept ratings largely Neutral/Hold/Underweight.

These calls reflect the near‑term growth debate—particularly around service revenue—while acknowledging solid margins and SASE progress. ^[10]

Product & strategy: Fortinet’s new “Secure AI Data Center”

Yesterday, Fortinet introduced the Secure AI Data Center framework to protect the full AI stack—from data‑center fabric to LLMs—headlined by the ASIC‑powered FortiGate 3800G. The company says the approach achieves ultra‑low latency and ~69% average power reductions versus traditional designs, targeting security and efficiency needs in GPU‑dense environments. ^[11]

Management and third‑party summaries also flagged continuing SASE momentum (including FortiSASE billings up >100% y/y in Q3), a vector many analysts view as key to smoothing growth while firewall cycles normalize. ^[12]

Legal & risk docket

Class‑action reminders circulated today, inviting FTNT shareholders from the relevant 2024–2025 period to consider participation; the filings focus on alleged statements about the firewall upgrade cycle. While such notices are common after sharp drawdowns, they underscore headline risk for the name. ^[13]

How the quarter stacks up (quick facts)

Revenue: ~$1.72B (+14% y/y)
Billings: ~$1.81B (+14% y/y)
Adj. EPS: $0.74
Non‑GAAP op. margin: ~36.9% (Q3 record)
Q4 revenue guide: $1.825B–$1.885B
FY25 EPS guide: $2.66–$2.70
Sources: company release and coverage. ^[14]

What to watch next

Service‑revenue trajectory into 1H–2H26 as prior billings roll through the P&L. ^[15]
SASE wins/ARR growth and cross‑sell from SD‑WAN into SASE—management highlighted momentum here. ^[16]
AI‑data‑center uptake of FortiGate 3800G and power/latency claims with early customers. ^[17]
Analyst estimate drift after today’s target cuts and model tweaks.

Methodology & sources

This article synthesizes same‑day reporting and official materials published on Nov. 6, 2025 (and the company’s Nov. 5 releases) including: Investor’s Business Daily’s earnings wrap, Fortinet’s Q3 FY25 press materials and prepared remarks, transcript/summary coverage, third‑party reports on the AI data‑center launch, and multiple real‑time analyst‑action digests. Citations appear inline after key facts. ^[18]

Disclosure: This content is for informational purposes only and is not investment advice.

Security Using AI with Fortinet

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References

1. www.investors.com, 2. www.fortinet.com, 3. in.marketscreener.com, 4. www.fortinet.com, 5. www.businesswire.com, 6. www.investors.com, 7. www.investing.com, 8. www.fortinet.com, 9. www.bloomberg.com, 10. in.marketscreener.com, 11. www.fortinet.com, 12. via.ritzau.dk, 13. www.businesswire.com, 14. www.investors.com, 15. www.bloomberg.com, 16. via.ritzau.dk, 17. www.fortinet.com, 18. www.investors.com

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Mateusz Kaczmarek Latest posts

A technology and finance expert writing for TS2.tech. He analyzes developments in satellites, telecommunications, and artificial intelligence, with a focus on their impact on global markets. Author of industry reports and market commentary, often cited in tech and business media. Passionate about innovation and the digital economy.

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