Christiane will then review our financial results for the second quarter of 2026 before providing guidance for the third quarter and updating the full year. Our GAAP results and GAAP to non-GAAP reconciliations are located in our earnings press release and in the presentation that accompany today's remarks, both of which are posted 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.

We are very pleased with our excellent second quarter result, driven by our differentiated strategy and our innovation, strong execution, and broad-based demand. Billings growth 33%, while total revenue increased 26%, propelled by 52% growth in product revenue. In the second quarter, Fortinet SASE Firewall business growth 34% to over $2 billion, cementing our position as a top player in this space. As we announced yesterday, the new FortiGate 1200G, the next generation SASE firewall that combine local enforcement with cloud-delivered security to meet evolving customer demand for data privacy, performance, and AI infrastructure management.

We believe this have driven a strong product growth recently and has an addressable market that is approximately two to three times larger than the cloud-only SASE or competitor offering. We also see strong demand across our other strategic pillar, AI-driven SecOps, which had billings growth of 25%, supported by over 20 AI-enabled solutions on our platform. As organization deploy and using AI tools throughout their operations, they realize they must modernize their security to handle the complex, high-speed threat of AI era. We delivered a strong second quarter, exceeding the high end of our guidance across billings, total revenue, operating margin, and earnings per share.

What went well
  • Billings grew 33% to $2.37B and revenue rose 26% to $2.05B, propelled by product revenue up 52% to $773M on strong FortiGate unit growth and higher ASPs tied to AI-workload and OT demand.
  • Record second-quarter non-GAAP operating margin of 38% (up 490 bps) and GAAP operating margin of 33.7%; non-GAAP EPS rose 41% to $0.90 and GAAP EPS grew 44% to $0.82.
  • Service revenue growth improved to 14% with service billings up 26%, and management said Q1 2026 marked the trough for the service-growth rate, projecting a positive trajectory ahead.
  • Free cash flow more than tripled year-over-year to $966M (adjusted FCF $996M, 49% margin) on better linearity and working-capital discipline.
  • The new 'SASE firewall' framing resonated: that combined business grew 34% to over $2B, Unified SASE billings grew 35% with FortiSASE billings up over 100%, and OT billings rose over 55%; Fortinet again raised full-year 2026 guidance.
What went wrong
  • Service revenue growth (14%) continued to trail product revenue (52%) by a wide margin, leaving the recurring-revenue mix still catching up to the hardware surge.
  • The buyback pace slowed markedly to 1.9M shares / $146M in Q2 (versus $827M in Q1) as the stock ran to an average repurchase price around $78, and remaining authorization fell to roughly $766M.
  • Growth remained heavily dependent on the product/hardware upgrade cycle, raising questions about the durability of 50%+ product growth as comparisons toughen.
  • Despite the raise, guidance was managed quarter-by-quarter for the second half, signaling management caution about extrapolating the first-half surge.

More on Fortinet, Inc.

Reported 2026-07-29 · figures from the Fortinet, Inc. Q2 2026 earnings call.

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