A month has gone by since the last earnings report for Fortinet (FTNT Quick QuoteFTNT - Free Report) . Shares have added about 5.8% in that time frame, outperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is Fortinet due for a pullback? Well, first let's take a quick look at its latest earnings report in order to get a better handle on the recent catalysts for Fortinet, Inc. before we dive into how investors and analysts have reacted as of late.

Fortinet Q3 Earnings & Revenues Surpass Estimates, Both Increase Y/Y

Fortinet reported excellent third-quarter 2025 results, wherein both earnings and revenues surpassed the Zacks Consensus Estimate and improved year over year.

Fortinet reported third-quarter 2025 non-GAAP earnings per share (EPS) of 74 cents, which beat the Zacks Consensus Estimate by 17.46%. The bottom line grew 17.5% from the year-ago quarter’s earnings of 63 cents per share.

Total revenues of $1.72 billion beat the consensus mark by 1.34% and improved 14.4% year over year, with growth led by EMEA, followed by strong contributions from APAC and the Americas.

Remaining performance obligations (RPO) rose 10.4% year over year to $6.72 billion, while current RPO increased 12% to $3.49 billion.

Total billings increased 14% year over year to $1.81 billion, led by 19% growth in Unified SASE, 33% growth in SecOps, expanding sales to large enterprises, and solid demand within OT and critical infrastructure markets.

FTNT’s Q3 in Detail

Segment-wise, Product revenues increased 18% year over year to $559.3 million, representing 32.4% of total revenues. The growth was driven by robust demand for multiproduct deals across a variety of use cases and strong momentum in operational technology (OT) security.

Service revenues of $1.17 billion grew 12.7% year over year, accounting for 67.6% of total revenues. Security subscription revenues rose 12.8%, and support and related service revenues increased 12.6%.

Recently, the company introduced its Secure AI Data Center solution, the industry’s first end-to-end framework purpose-built for AI workloads. The solution delivers exceptional high-capacity connectivity while achieving up to 69% lower energy consumption compared to alternative offerings.

Margins of FTNT

Total gross margin was 81.6%, contracting 160 basis points (bps) year over year but outperforming expectations, supported by disciplined cost management and strong operational execution.

Product gross margin declined 360 basis points year over year to 68%, while service gross margin slipped 40 basis points to 88.1%.

Operating margin expanded 80 basis points year over year to 36.9% in the third quarter. The increase was primarily driven by operational efficiencies and strong cost management.

FTNT’s Balance Sheet & Cash Flow

Fortinet exited the third quarter of 2025 with cash and cash equivalents and short-term investments of $3.12 billion, down from the $4.56 billion reported at the end of the second quarter of 2025.

Cash flow from operations was $655.2 million for the third quarter of 2025, up from $451.9 million in the previous quarter.

Free cash flow was $567.5 million for the second quarter of 2025, up from $284.1 million in the prior quarter.

FTNT’s Q4 & 2025 Guidance

Fortinet expects fourth-quarter revenues in the range of $1.825-$1.885 billion. Billings are estimated in the band of $2.185-$2.285 billion.

The non-GAAP gross margin is expected in the range of 79-80%, while the non-GAAP operating margin is anticipated between 34.5% and 35.5%. Non-GAAP EPS is projected in the band of 73-75 cents.

For 2025, FTNT predicts revenues in the range of $6.72-$6.78 billion. Services revenues are projected in the range of $4.575-$4.595 billion. Billings are expected in the band of $7.37-$7.47 billion.

The non-GAAP gross margin is expected in the range of 80.25-80.75%, and the operating margin is projected in the band of 34.5-35%. Non-GAAP EPS is anticipated to be between $2.66 and $2.7.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed a upward trend in estimates revision.

The consensus estimate has shifted 11.93% due to these changes.

VGM Scores

At this time, Fortinet has a nice Growth Score of B, however its Momentum Score is doing a bit better with an A. However, the stock has a grade of D on the value side, putting it in the bottom 40% for this investment strategy.

Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. Interestingly, Fortinet has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.

Performance of an Industry Player

Fortinet belongs to the Zacks Security industry. Another stock from the same industry, Qualys (QLYS Quick QuoteQLYS - Free Report) , has gained 1.8% over the past month. More than a month has passed since the company reported results for the quarter ended September 2025.

Qualys reported revenues of $169.88 million in the last reported quarter, representing a year-over-year change of +10.4%. EPS of $1.86 for the same period compares with $1.56 a year ago.

Qualys is expected to post earnings of $1.78 per share for the current quarter, representing a year-over-year change of +11.3%. Over the last 30 days, the Zacks Consensus Estimate remained unchanged.

Qualys has a Zacks Rank #1 (Strong Buy) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of F.