Q3 2025 Fortinet Inc Earnings Call Transcript
Key Points
- Fortinet Inc (FTNT) reported a strong third quarter with a 14% increase in total billings, reaching $1.81 billion.
- The company achieved a record third quarter operating margin of 37%, showcasing strong operational efficiency.
- Fortinet Inc (FTNT) is recognized as a leader in the 2025 Gartner Magic Quadrant for SASE platforms, highlighting its competitive edge.
- The company saw significant growth in its Unified SASE and SecOps segments, with billings growth of 19% and 33%, respectively.
- Fortinet Inc (FTNT) continues to gain market share in secure networking, with a 10% growth in this segment, outperforming the overall market.
- Product revenue growth of 18% was below market expectations, which anticipated around 12%.
- Service revenue growth has decelerated for the ninth consecutive quarter, raising concerns about future service revenue trajectories.
- The guidance for the fourth quarter indicates a revenue growth of 12%, which is slightly below market expectations.
- There is a noted sequential decline in services billings, despite strong product results, indicating potential timing issues in service adoption.
- North America, particularly the U.S., showed weaker growth compared to other regions, raising questions about regional performance.
(audio in progress) via webcast on our Investor Relations website. The prepared remarks will also be posted on the quarterly earnings section of our Investor Relations website following today's call. Lastly, all references to growth are on a year-over-year basis, unless noted otherwise.
I'll now turn over the call to Ken.
Thank you, Anthony. Thank you to everyone joining our call. We are pleased with our excellent third quarter performance driven by strong execution and broad-based demand across the organization of our sites as we grow faster than the market in all 3 pillars of our business as shown on Slide 4. Building revenue both grew by 14% with a record third quarter operation margin of 37%. Unified SASE building grew 19%, driven by FortiSASE growth of over 100%, making us one of the fastest-growing SASE leader and scale.
Our strong growth driven by our key differentiated advantages. Fortinet is
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