Fortinet, Inc. (NASDAQ:FTNT) Shares Surge 11% on Service Pipeline Outlook

NEW YORK, July 29, 2026, 18:58 EDT — The U.S. cash session has ended, and extended-hours activity remains high.

Fortinet stock increased 11.1% after the close to $170.22, building on a 2.2% gain during regular trading.
Second-quarter revenue surpassed analysts’ forecasts by 8.4%. Adjusted earnings were 20% higher than consensus.
Service billings rose by 26%, compared to 14% growth in service revenue and a 17% rise in deferred revenue.

Shares of Fortinet climbed after the cybersecurity firm lifted its forecast for 2026. The increase came on the heels of a strong second-quarter performance, with results surpassing expectations for sales, billings and profit.

The hardware boom was topped by a clearer signal from investors. Service billings climbed 26%, close to double the 14% growth in service revenue.

Deferred revenue rose by 17%, indicating that fresh appliance sales are contributing to future support and subscription revenues.

During regular trading, the stock finished 1.2% under its July 22 closing price. In after-hours trading, it was 9.8% higher than that mark.

Market response on Wednesday

Security or index	Price	Move	Trading window
Fortinet	$153.22	rose 2.16%	Regular session
Fortinet	$170.22	climbed 11.10%	After hours, 18:50 EDT
Palo Alto Networks, Inc. NASDAQ:PANW	$314.15	down 1.54%	Regular session
CrowdStrike Holdings, Inc. NASDAQ:CRWD	$179.38	off 1.33%	Regular session
Check Point Software Technologies Ltd. NASDAQ:CHKP	$139.67	gained 1.71%	Regular session
S&P 500	7,316.15	fell 1.52%	Regular session

Fortinet’s final price and the S&P 500 figure reflect Wednesday’s trading. Closing values for peers are also from the close; Fortinet’s after-hours quote is for reference only.

Fortinet surpassed estimates by significant margins. Adjusted earnings topped expectations by 20%, and billings exceeded forecasts by 11%.

Results for the second quarter

Metric	Reported	Analyst estimate	Beat	Year-on-year
Revenue	$2.048 billion	$1.890 billion	8.4%	up 26%
Billings	$2.372 billion	$2.136 billion	11.1%	up 33%
Adjusted EPS	$0.90	$0.75	20.0%	up 41%

Analyst estimates are reflected in consensus values, not actual reported data. Both revenue and billings numbers are rounded.

Billings represent invoiced demand ahead of when all sales are recorded as revenue, making them a useful indicator for monitoring the conversion of upcoming services.

Product revenue totaled $773 million, while service revenue remained higher at $1.275 billion.

Path to growth

Metric	Second-quarter growth	Gap versus service revenue
Product revenue	+51.9%	+38.2 percentage points
Service billings	+26.0%	+12.3 percentage points
Deferred revenue	+17.0%	+3.3 percentage points
Service revenue	+13.7%	Baseline

Company-reported data was used to determine growth gaps. Management rounded figures for service billings and deferred-revenue growth.

Chief Financial Officer Christiane Ohlgart stated, “We believe the first quarter of 2026 marked a trough for our service revenue growth rate.” This outlook is backed by the gap in second-quarter billings. Revenue recognition is yet to come. MarketBeat

Secure Networking billings increased by 34%. Unified secure access service edge (SASE) billings climbed 35%. Billings for FortiSASE more than doubled.

Billings from operational technology surged over 55%. Management reported AI-driven Security Operations billings rose 25%.

CEO Ken Xie stated that customers appreciate Fortinet’s “SASE Firewall.” According to the company, this solution integrates networking and cloud security via FortiOS and FortiASIC. Fortinet, Inc.

Management increased guidance for revenue, billings and adjusted profit. The midpoint for billings climbed 5.6%, compared to 1.6% growth for service revenue.

Guidance update

Metric	New range	New midpoint	Benchmark	Midpoint difference
Q3 revenue	$2.010-$2.100 billion	$2.055 billion	$1.950 billion analyst estimate	+5.4%
Q3 billings	$2.250-$2.350 billion	$2.300 billion	$2.113 billion analyst estimate	+8.9%
Q3 adjusted EPS	$0.83-$0.87	$0.85	$0.76 analyst estimate	+11.8%
2026 revenue	$8.020-$8.180 billion	$8.100 billion	$7.790 billion prior guide	+4.0%
2026 service revenue	$5.180-$5.220 billion	$5.200 billion	$5.120 billion prior guide	+1.6%
2026 billings	$9.350-$9.550 billion	$9.450 billion	$8.950 billion prior guide	+5.6%
2026 adjusted EPS	$3.41-$3.47	$3.44	$3.13 prior guide	+9.9%

Consensus estimates are based on analyst benchmarks. Company outlook is forward-looking and subject to adjustment.

GAAP gross margin slipped by 50 basis points to 80.2% as a result of the hardware-focused mix. However, adjusted operating margin increased by 490 basis points to 38.0%. Free cash flow climbed to $966 million, up from $284 million.

With shares at $170.22, the newly adjusted EPS midpoint is priced at roughly 49.5 times. There is limited tolerance for any decline in service conversion.

Fortinet has not published any scheduled investor event for the upcoming week. The next event it is slated to attend is the Rosenblatt Technology Summit on August 17. The cash session on July 30 will initially assess whether the post-market repricing is sustained.

Risks: Product expansion may slow following a 52% surge. Services revenue rose just 14%. The after-hours increase could unwind, with outlook hinging on ongoing demand for SASE, operational technology, and AI.

TS2 TECH • EXTENDED COVERAGE

Further analysis

Editorial insight

How is Fortinet stock performing following its most recent earnings announcement?

FTNT ended trading on July 29 at $153.22, rising 2.16% over the session. Shares advanced further to $170.30 by 6:57 p.m. EDT in after-hours trade, up an additional 11.15%. That price came close to the 52-week intraday peak of $170.35. In comparison, the S&P 500 dropped 1.52% on Wednesday, underlining FTNT’s strong relative showing. Prices in extended trading are subject to significant changes prior to Thursday’s market open. MarketWatch

To what extent did second-quarter results surpass Wall Street forecasts?

Revenue for the second quarter totaled $2.048 billion, up 26% from a year earlier. Analysts had projected around $1.888 billion, resulting in an 8.5% outperformance. Adjusted EPS came in at $0.90, topping the $0.75 consensus, a 20% surprise. Billings amounted to $2.372 billion, around 11% higher than the $2.136 billion expected. Outperformance was seen across the board. Fortinet, Inc.

What segments of Fortinet’s operations contributed to the increase?

Product revenue soared 52% to $773 million, marking the primary driver of overall growth. Service revenue climbed 14% to $1.275 billion, accounting for 62% of total sales. Billings rose 33%, indicating robust demand that surpasses the quarter’s reported revenue. The breakdown indicates that appliances and infrastructure upgrades contributed significantly to gains. Management attributed performance partly to its integrated SASE Firewall and demand linked to security needs in the AI era. The statement did not provide a specific figure for replacement-cycle revenue. Fortinet, Inc.

By what amount did Fortinet increase its 2026 forecast?

Fortinet has increased its 2026 revenue outlook to a range of $8.02–$8.18 billion, up from the previous $7.71–$7.87 billion range, a midpoint rise of $310 million. The company now forecasts around 19% annual revenue growth. The midpoint for billings guidance is up $500 million to $9.45 billion. Adjusted EPS is now expected between $3.41 and $3.47, compared to the earlier range of $3.10–$3.16. Non-GAAP operating margin guidance has also been raised, now at 35%–37%. Fortinet, Inc.

Does the outlook for the third quarter indicate ongoing momentum?

The company forecasts third-quarter revenue between $2.01 billion and $2.10 billion, with a midpoint of $2.055 billion, marking a roughly 5% increase over pre-report consensus estimates. Billings are projected in the $2.25 billion to $2.35 billion range, with the midpoint about 9% above consensus. The adjusted EPS outlook is $0.83 to $0.87, ahead of the expected $0.76. Compared to Q3 2025, the midpoints point to a 19% rise in revenue and a 27% increase in billings. The business continues to show strong momentum. Fortinet, Inc.

Is profit growth and cash flow matching the increase in revenue?

GAAP operating margin rose to 33.7%, compared with 28.1% a year ago. Non-GAAP operating margin advanced to 38.0% from 33.1%. Free cash flow totaled $965.6 million, up from $284.1 million in the previous year. The free-cash-flow margin increased to 47.2%. Deferred revenue grew by $324.2 million during the quarter, boosting cash conversion. Cash conversion remained strong. Fortinet, Inc.

What is the current strength of Fortinet’s balance sheet and its share repurchase program?

Fortinet reported $2.935 billion in cash and $1.534 billion in investments, alongside total debt of approximately $497 million, resulting in net liquidity of nearly $3.97 billion. Share repurchases in the first half reached $972.8 million, more than twice the figure from the previous year. The number of diluted shares declined 4.2% year-over-year to 739.9 million, with buybacks delivering a significant boost to per-share growth. Fortinet, Inc.

Does FTNT remain appealing in valuation following the after-hours surge?

FTNT is valued at $170.30, equating to roughly 49.5 times the company’s projected 2026 adjusted EPS. Prior to the earnings surge, the stock’s trailing P/E during regular trading was about 59. These valuation multiples reflect distinct earnings calculations and should not be directly compared. Shares were up 92.95% for 2026 through Wednesday’s market close. The current valuation is high. Additional gains will depend on further guidance increases or the company maintaining premium multiples. MarketWatch

What key risks do Fortinet investors currently encounter?

Product growth could level off following two quarters of exceptionally fast gains. Service revenue increased by just 14%, trailing product growth. Q3 forecasts point to almost unchanged sequential revenue compared to Q2. Competition, prolonged enterprise sales cycles, and softer IT budgets remain significant risks. Elevated valuation amplifies potential downside if expectations are missed. Fortinet’s outlook remains solid, but there is limited room for execution missteps. Fortinet, Inc.

Based on available data, what is a plausible forecast for the FTNT share price?

Applying a mechanical 40x–50x multiple to projected 2026 adjusted EPS yields a range of $138–$172. In a more optimistic scenario, where EPS grows 15% in 2027 and the multiple is 45x, the result is around $178 per share. A more conservative 35x multiple on existing guidance suggests approximately $120. With shares at $170.30, investors are already valuing them near the upper limit for the year. These figures present different valuation scenarios and do not reflect revised analyst price targets. Changes to analyst estimates are still in process, as results were released just hours ago. Fortinet, Inc.

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Iwona Majkowska is a financial markets journalist at TS2.tech, specializing in stocks, artificial intelligence and technology. A graduate of the Warsaw School of Economics, she previously worked in equity research and financial analysis before focusing on market reporting. Her daily coverage helps investors follow major developments across U.S. and global markets. Follow Iwona Majkowska on Google News.