Fortinet, Inc. FTNT

Fortinet reported strong growth in Unified SASE and Secure Operations, with security service edge (SSE) billings growing 85% and Unified SASE growth at 13%, accounting for 23% of the business. AI-driven secure operations contributed 11% of total billings, and ARR for SecOps grew 32%. The company emphasizes its single-vendor SASE strategy, leveraging FortiOS and FortiASIC technology for integrated networking and security, delivering enhanced user experience and performance.

Fortinet continues to lead in secure networking, with its convergence and consolidation strategy. The company is the #1 secure networking vendor, securing over half of global firewalls. FortiOS is utilized across five Gartner Magic Quadrants, offering 5x to 10x better performance than competitors. New products like the FortiGate 40G, 50G, and 7G next-generation firewalls were introduced for SMB and distributed enterprises, offering enhanced security and throughput.

The acquisition of Perception Point strengthens Fortinet's end-to-end cybersecurity by extending protection to email and collaboration security. Additionally, Fortinet acquired the remaining shares of Linx, a connectivity solution provider, to expand enterprise-grade security to remote workers, home businesses, and consumers. These acquisitions are expected to contribute to billings and revenue growth but will have a minor dilutive impact on operating margins in the near term.

The company is anticipating a significant firewall upgrade opportunity, particularly as end-of-service dates approach in 2026 and 2027. Early upgrade movement was observed in Q4 FY24, especially among large enterprises. Fortinet is implementing sales plays, expanding account plans, and collaborating with channel partners to maximize this upsell potential for SASE, switches, access points, and SecOps solutions, expecting a more gradual rather than spiky upgrade cycle.

Fortinet highlighted its AI solutions across various domains. FortiGuard AI-powered security services combat known and emerging AI-based threats. FortiAIOps reduces network diagnosis time by using machine learning to monitor network trends. FortiAI, integrated into seven network and security operation products, uses natural language and generative AI to guide and automate analyst activities. AI-based DLP services actively identify and block sensitive information from being shared with AI systems.

The SMB segment was Fortinet's top-performing customer segment, growing over 30%. This success is attributed to a mature channel program, increased collaboration with channel partners, and targeted incentive programs. Fortinet's technology advantage, including its single OS and ASIC-accelerated functions, provides a unique benefit to SMB customers, making deployment and management easier and offering better protection compared to competitors.

EMEA was the best-performing geography, driven by over 25% growth from international emerging markets. Among the top five verticals, worldwide government and service provider segments both grew over 20%. The financial services sector faced challenges due to difficult year-over-year comparisons, impacted by several large deals in Q4 FY23. Latin America and Canada represent about 15% of total business, and potential tariff impact^🌐s are being closely monitored.

Keith Jensen announced his retirement after 11 years at Fortinet and a 4-decade career in finance, effective May 15, 2025, with a transition period through June 30. Christiane Ohlgart, who has served in various roles at Fortinet for almost six years, will take over as CFO upon his step down in May, as part of the company's succession plan.