Fortinet (FTNT) Q1 2026 earnings summary

Executive summary

• Q1 2026 revenue grew 20% year-over-year to $1.85 billion, with product revenue up 41% to $645 million and billings up 31% to $2.09 billion, exceeding guidance and driven by strong demand across customer segments and geographies.

• Record free cash flow of $1.01 billion and operating cash flow of $1.08 billion, with GAAP EPS up 29% to $0.72 and non-GAAP EPS up 41% to $0.82, highlighting operational efficiency.

• Operating margin reached 31.4% GAAP and 36% non-GAAP, with adjusted free cash flow margin at 57.6%.

• Key growth drivers included AI adoption, OT security (billings up over 70%), and Unified SASE (billings up 31%).

• Large enterprise deals over $1M grew over 60%, and the company maintained GAAP profitability every year since IPO.

Financial highlights

• Non-GAAP gross margin reached 81%, with non-GAAP operating margin at 35.8% and GAAP operating margin at 31.4%.

• Service revenue grew 11% to $1.21B, and deferred revenue increased 15% to $7.35B.

• Repurchased 10.6M shares for $827M in Q1, with $766M–$911.7M remaining in repurchase authorization.

• Adjusted free cash flow reached $1.07B, with a margin of 57.6%.

• Cash, cash equivalents, and investments totaled $3.63B at quarter-end.

Outlook and guidance

• Raised FY2026 guidance: billings expected at $8.8B–$9.1B, revenue at $7.71B–$7.87B, and service revenue at $5.09B–$5.15B.

• Q2 2026 guidance: billings $2.09B–$2.19B, revenue $1.83B–$1.93B, non-GAAP EPS $0.72–$0.76.

• FY2026 non-GAAP EPS expected at $3.10–$3.16; non-GAAP gross margin at 79%–81%; non-GAAP operating margin at 33%–36%.

• Capital expenditures for 2026 estimated at $350M–$550M.

• Cash paid for income taxes expected at $400M–$450M for 2026.