Fortinet ® (NASDAQ: FTNT), a global leader in cybersecurity and secure networking, reported robust financial results for the first quarter of 2025, with total revenue climbing to $1.54 billion, marking a 14% year-over-year increase. This growth was fueled by expanding demand for Fortinet’s advanced cybersecurity services and AI-enhanced security operations.
Services Lead the Way as Product Sales Continue Momentum
Service revenue rose 14.4% year over year, reaching $1.08 billion, compared to $944.4 million in Q1 2024, driven by surging demand for cloud-delivered and managed security offerings. Product revenue also delivered solid growth, increasing 12.3% to $459.1 million, highlighting continued investment in secure networking hardware and infrastructure protection.
Strategic Focus Pays Off: Unified SASE and Security Operations See Double-Digit Growth
Fortinet’s strategic initiatives in Unified SASE (Secure Access Service Edge) and AI-powered Security Operations are yielding significant results. Unified SASE Annual Recurring Revenue (ARR) jumped 25.7% to $1.15 billion, while Security Operations ARR soared 30.3% to $434.5 million, underscoring widespread customer adoption of Fortinet’s integrated cybersecurity platforms.
Record Operating Margins and Net Income Reflect Operational Excellence
Fortinet achieved a record GAAP operating margin of 29.5%, with operating income climbing to $453.8 million, up from $321.2 million in Q1 2024. On a non-GAAP basis, operating income reached $526.2 million, reflecting a 34.2% margin, compared to 28.5% the year before.
GAAP net income increased to $433.4 million ($0.56 per diluted share), while non-GAAP net income rose to $452.3 million ($0.58 per diluted share), up from $333.9 million and $0.43 per share in Q1 2024, respectively.
Cash Flow Hits Record Highs, Supporting Future Innovation and Shareholder Value
Fortinet generated a record $863.3 million in operating cash flow during Q1, including $14 million from an IP-related settlement. Free cash flow reached $782.8 million, a sharp increase from $608.5 million in Q1 2024, reinforcing the company’s ability to invest in R&D, expand go-to-market efforts, and return capital to shareholders.
Billings Growth and Contracted Revenue Provide Visibility Into Future Growth
Fortinet’s total billings for the quarter rose to $1.60 billion, up 13.5% year over year. The company’s remaining performance obligations (RPO) reached $6.49 billion, an 11.7% increase. Of this, $3.38 billion is expected to be recognized within the next 12 months—up 15.4% from the prior year—signaling strong visibility into near-term revenue.
Q2 2025 Outlook: Continued Momentum Expected Across Core Growth Areas
For the second quarter of 2025, Fortinet projects revenue between $1.59 billion and $1.65 billion, with billings between $1.685 billion and $1.765 billion. Non-GAAP operating margin is expected to range between 31.5% and 32.5%, with non-GAAP earnings per share (EPS) between $0.58 and $0.60.
Full-Year 2025 Forecast: Strong Growth Across All Key Metrics
Fortinet anticipates full-year 2025 revenue between $6.65 billion and $6.85 billion, with service revenue projected at $4.575 billion to $4.725 billion. Total billings are forecasted between $7.20 billion and $7.40 billion. The company expects a non-GAAP operating margin between 31.5% and 33.5%, and non-GAAP EPS between $2.43 and $2.49.
Leadership Commentary: Strategic Investments Yielding Strong Returns
“We are pleased to report another strong quarter, with our non-GAAP operating margin reaching a record 34%,” said Ken Xie, Founder, Chairman, and CEO of Fortinet. “This performance reflects solid growth across all business lines and the success of our strategic investments in high-growth areas like Unified SASE and advanced security operations.”
He added, “By leveraging our deep expertise in networking and security convergence, AI-driven innovation, and the unified FortiOS platform, we continue to set new industry standards and deliver scalable, effective cybersecurity solutions that meet the evolving needs of our global customers.”
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