Fortinet stock tumbled Thursday amid first-quarter earnings that topped estimates while revenue and billings edged by Wall Street targets. June quarter revenue guidance came in slightly below views.
The cybersecurity firm reported earnings after the market close on Wednesday. Fortinet earnings in the March quarter rose 35% to 58 cents on an adjusted basis. Including acquisitions, revenue climbed 14% to $1.54 billion.
Analysts expected Fortinet earnings of 53 cents a share on sales of $1.538 billion.
Additionally, the Sunnyvale, Calif.-based firm said billings, a sales growth metric, rose 14% to $1.6 billion, compared with analyst estimates of $1.567 billion.
Fortinet Stock: Guidance Underwhelms
For the current June quarter, Fortinet forecast revenue of $1.62 billion at the midpoint of guidance versus estimates of $1.628 billion.
Also, Fortinet expects billings of $1.725 billion vs. estimates of $1.717 billion.
"Fortinet delivered a solid Q1 result, beating expectations on revenue and pro forma EPS. However, Q2 revenue guidance was below consensus despite mounting expectations for Fortinet's firewall refresh cycle to materialize," said William Blair analyst Jonathan Ho in a report. "We are perplexed as to why Fortinet's guidance does not imply a stronger ramp into a very large firewall replacement cycle. In our view, there is likely some conservatism embedded in the guidance given the challenges in predicting the timing and customer behavior."
Some analysts expected a cautious outlook given that Fortinet has a new chief financial officer, Christiane Ohlgart.
"Drivers remain solid, and we believe that growing macro uncertainty prevented management from raising guidance slightly," said TD Cowen analyst Shaul Eyal in a report. "Fortinet continues to benefit from a (firewall) refresh cycle as well as a shift to hybrid platforms as profitability improves."
On the stock market today, Fortinet stock fell 7.8% to 98.43 in early trading. Heading into the Fortinet earnings report, the cybersecurity stock was up 13% in 2025.
The company competes in the firewall network security market versus Palo Alto Networks, Check Point Software Technologies and others. Firewalls block online intrusions and monitor web-based apps.
Fortinet and many other cybersecurity firms are focused on a new growth market: Secure Access Service Edge. SASE offers a fast and cost-effective way of securing an organization's branch offices and remote workers.
Fortinet stock holds a Composite Rating of 99 out of a best-possible 99, according to IBD Stock Checkup.
The Computer Software-Security group ranks No. 11 out of 197 industry groups that IBD tracks.
Follow Reinhardt Krause on X, formerly Twitter, @reinhardtk_tech for updates on artificial intelligence, cybersecurity and cloud computing.
