Fortinet stock faces scrutiny as services growth lags products

Published on 10/31/2026 at 10:17 | Editorial responsibility: Rafael Müller, Editor-in-Chief AD HOC NEWS

Fortinet stock faces scrutiny after quarterly earnings beat estimates but services growth lagged product sales. Management points to improving billings.

Fortinet faces a services growth test

Fortinet's third-quarter earnings exceeded analyst expectations for adjusted earnings and revenue.
Services growth lagged product sales, leaving recurring-revenue momentum as the central investor question.
Management expects service revenue growth to improve after a weak first quarter.

Fortinet Inc., US34959E1091, Illustration mit AI erstellt.

Fortinet's third-quarter results beat analyst expectations, but slower services growth put recurring revenue in focus. In an October 30 analysis, Trefis said the company had reported its results after the close on Wednesday, October 28.

Services lagged product growth

According to Trefis, third-quarter revenue reached 2.08 billion US dollars, above the 2.06 billion US dollar analyst estimate. Adjusted earnings per share came to 0.91 US dollars, versus consensus of 0.86 US dollars.

The mix was less supportive. Services revenue increased 13 percent, while product revenue rose 37 percent. Total revenue growth was 20 percent, below the 25.6 percent pace of the prior quarter. Fortinet also lowered its full-year services revenue outlook while raising its overall outlook.

Management attributed part of the services slowdown to large enterprise customers activating services in stages. Trefis also cited expansion deals that transferred existing service contracts into broader enterprise agreements. Service billings still grew 26 percent, which management presented as evidence that the first quarter marked the low point for services growth.

Investors await recurring-revenue proof

For investors, the next test is whether stronger billings translate into faster recognized services revenue. Trefis said Fortinet is expected to report fourth-quarter 2026 results in February 2027, making services growth a key metric for the next earnings update.

Fortinet stock traded at 122.05 euros on Lang & Schwarz at 10:15 CET on Saturday, October 31, 2026.

Investors can follow the real-time quote of Fortinet stock for further trading updates.