Fortinet plunges ~25% after hours on Q3 earnings, cuts service revenue outlook, dragging cybersecurity peers lower
What happened
Fortinet reported third-quarter results after Wednesday's close that disappointed a market primed for big beats, sending the stock down about 25% in after-hours trading. Product revenue — firewalls and secure-networking hardware — came in at $765 million, up 37% year over year, a sharp deceleration from 52% growth in the second quarter. Service revenue (security subscriptions) of $1.31 billion missed the $1.33 billion FactSet consensus, and Fortinet cut its full-year service-revenue forecast to $5.15–$5.17 billion from $5.18–$5.22 billion. Billings of $36 billion beat the forecast midpoint by only ~2%, versus an 11% beat in Q2. CEO Ken Xie said on the call that Fortinet is 'leading the next frontier of cybersecurity by securing AI workflow.'
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Who’s affected
- Fortinet (FTNT) — shares set to shed about a quarter of their value in after-hours trading. Palo Alto Networks (PANW), Zscaler (ZS), SentinelOne (S) — each off more than 6% after hours. CrowdStrike (CRWD) and Okta (OKTA) — each off more than 5% after hours. Broader software/AI-infrastructure sentiment also dented, compounding ServiceNow's after-hours slide the same evening.
Sources