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Fortinet reports first quarter 2025 financial results

Issued by Fortinet
Johannesburg, 12 May 2025

Highlights

  • Total revenue of $1.54 billion, up 14% year over year.
  • Product revenue of $459 million, up 12% year over year.
  • Billings of $1.60 billion, up 14% year over year.
  • Unified SASE ARR up 26% and security operations ARR up 30% year over year.
  • Record first quarter GAAP operating margin of 29%.
  • Record first quarter non-GAAP operating margin of 34%.
  • Record cashflow from operations of $863 million.
  • Record free cashflow of $783 million.

Fortinet, a global cyber security leader driving the convergence of networking and security, today announced financial results for the first quarter ended 31 March 2025.

Ken Xie, Founder, Chairman and Chief Executive Officer of Fortinet.
Ken Xie, Founder, Chairman and Chief Executive Officer of Fortinet.

“We are pleased to report another strong quarter as non-GAAP operating margin increased 570 basis points year over year to a first quarter record of 34%, while billings grew 14% year over year,” said Ken Xie, Founder, Chairman and Chief Executive Officer of Fortinet. “We continue to accelerate our growth strategy by investing in the rapidly expanding unified SASE and security operations markets, while strengthening our leadership in secure networking. Leveraging our deep expertise in networking and security convergence, a strong track record of AI-driven innovation and seamless product development and integration through our FortiOS operating system, we have established ourselves as the leader in organic innovation and will continue setting the industry standard in cyber security.”

Financial highlights for the first quarter of 2025

  • Revenue: Total revenue was $1.54 billion for the first quarter of 2025, an increase of 13.8% compared to $1.35 billion for the same quarter of 2024.
  • Product revenue: Product revenue was $459.1 million for the first quarter of 2025, an increase of 12.3% compared to $408.9 million for the same quarter of 2024.
  • Service revenue: Service revenue was $1.08 billion for the first quarter of 2025, an increase of 14.4% compared to $944.4 million for the same quarter of 2024.
  • Billings: Total billings were $1.60 billion for the first quarter of 2025, an increase of 13.5% compared to $1.41 billion for the same quarter of 2024.
  • Remaining performance obligations: Remaining performance obligations were $6.49 billion as of 31 March 2025, an increase of 11.7% compared to $5.81 billion as of 31 March 2024. The company expects to recognise approximately $3.38 billion as revenue over the next 12 months, an increase of 15.4% compared to $2.93 billion as of 31 March 2024.
  • Unified SASE ARR: Unified SASE ARR was $1.15 billion as of 31 March 2025, an increase of 25.7% compared to $914.7 million as of 31 March 2024.
  • Security operations ARR: Security operations ARR was $434.5 million as of 31 March 2025, an increase of 30.3% compared to $333.5 million as of 31 March 2024.
  • GAAP operating income and margin: GAAP operating income was $453.8 million for the first quarter of 2025, representing a GAAP operating margin of 29.5%. GAAP operating income was $321.2 million for the same quarter of 2024, representing a GAAP operating margin of 23.7%.
  • Non-GAAP operating income and margin: Non-GAAP operating income was $526.2 million for the first quarter of 2025, representing a non-GAAP operating margin of 34.2%. Non-GAAP operating income was $386.1 million for the same quarter of 2024, representing a non-GAAP operating margin of 28.5%.
  • GAAP net income and diluted net income per share: GAAP net income was $433.4 million for the first quarter of 2025, compared to GAAP net income of $299.3 million for the same quarter of 2024. GAAP diluted net income per share was $0.56 for the first quarter of 2025, based on 776.8 million diluted weighted-average shares outstanding, compared to GAAP diluted net income per share of $0.39 for the same quarter of 2024, based on 770.5 million diluted weighted-average shares outstanding.
  • Non-GAAP net income and diluted net income per share: Non-GAAP net income was $452.3 million for the first quarter of 2025, compared to non-GAAP net income of $333.9 million for the same quarter of 2024. Non-GAAP diluted net income per share was $0.58 for the first quarter of 2025, based on 776.8 million diluted weighted-average shares outstanding, compared to $0.43 for the same quarter of 2024, based on 770.5 million diluted weighted-average shares outstanding.
  • Cashflow: Cashflow from operations was $863.3 million for the first quarter of 2025, compared to $830.4 million for the same quarter of 2024. Cashflow from operations for the first quarter of 2025 includes $14.0 million proceeds from an intellectual property matter.
  • Free cashflow: Free cashflow was $782.8 million for the first quarter of 2025, compared to $608.5 million for the same quarter of 2024.

Guidance

For the second quarter of 2025, Fortinet currently expects:

  • Revenue in the range of $1.590 billion to $1.650 billion.
  • Billings in the range of $1.685 billion to $1.765 billion.
  • Non-GAAP gross margin in the range of 80.0% to 81.0%.
  • Non-GAAP operating margin in the range of 31.5% to 32.5%.
  • Diluted non-GAAP net income per share in the range of $0.58 to $0.60, assuming a non-GAAP effective tax rate of 18%. This assumes a diluted share count of 773 million to 777 million.

For the fiscal year 2025, Fortinet currently expects:

  • Revenue in the range of $6.650 billion to $6.850 billion.
  • Service revenue in the range of $4.575 billion to $4.725 billion.
  • Billings in the range of $7.200 billion to $7.400 billion.
  • Non-GAAP gross margin in the range of 79.0% to 81.0%.
  • Non-GAAP operating margin in the range of 31.5% to 33.5%.
  • Diluted non-GAAP net income per share in the range of $2.43 to $2.49, assuming a non-GAAP effective tax rate of 18%. This assumes a diluted share count of 769 million to 779 million.

These statements are forward-looking and actual results may differ materially. Refer to the forward-looking statements section below for information on the factors that could cause Fortinet's actual results to differ materially from these forward-looking statements.

Fortinet's guidance with respect to non-GAAP financial measures excludes stock-based compensation, amortisation of acquired intangible assets, gain on intellectual property matters, gain on bargain purchase related to acquisition, gain from an equity method investment and a tax adjustment required for an effective tax rate on a non-GAAP basis, which differs from the GAAP effective tax rate. Fortinet has not reconciled its guidance with respect to non-GAAP financial measures to the corresponding GAAP measures because certain items that impact these measures are uncertain or out of its control, or cannot be reasonably predicted. Accordingly, a reconciliation of these non-GAAP financial measures to the corresponding GAAP measures is not available without unreasonable effort.

(1) A reconciliation of GAAP to non-GAAP measures has been provided in the financial statement tables included in this press release. An explanation of these measures is also included below under the heading “Non-GAAP Financial Measures”.

(2) Annual recurring revenue or ARR is defined as the annualised value of renewable/recurring customer agreements as of the measurement date, assuming any contract that expires during the next 12 months is renewed at its existing value.

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