Company Reports

We see Fortinet as a leader in the security space with solutions ranging from network security firewalls to security operations. As we look at the firm’s market opportunity, we believe Fortinet stands to materially benefit as secular tailwinds in security and vendor consolidation increase its value proposition to its clients. In our view, the firm’s established customer switching costs, buttressed by its increasingly potent network effect, will allow Fortinet to continuously gain and expand the number of clients and have already enabled it to build a wide economic moat around its business.

Fortinet closed out its second quarter with sales growing 26% to $2 billion and its adjusted operating margin expanding 5 points to 38%. The firm's nascent secure access service edge, or SASE, and SecOps offerings contributed 34% of total billings.

OpenAI revealed on July 21 that during an evaluation of its models' cyber capabilities, these models escaped the evaluation environment, discovered a never-before-seen (zero-day) exploit, and breached the infrastructure of the digital AI library Hugging Face to get answers for the evaluation test.

Fortinet began 2026 with solid financial results. The firm's sales grew 20% to $1.85 billion, and its adjusted operating margins expanded 160 basis points to 36%. The firm's newer offerings, secure access service edge, or SASE, and security operations, or SecOps, contributed 34% to total billings.

Anthropic confirmed the existence of an upcoming model after Fortune first reported plans for it on March 26. This new model, named either Mythos or Capybara, is reportedly much better than existing models at finding cyber vulnerabilities. This news sent our cyber coverage down 5% on average.

Over the last few months, investors have become increasingly worried about the future of software economic moats as fears of software disintermediation driven by artificial intelligence have grown.

We see Fortinet as a leader in the security space with solutions ranging from network security firewalls to security operations. As we look at the firm’s market opportunity, we believe Fortinet stands to materially benefit as secular tailwinds in security and vendor consolidation increase its value proposition to its clients. In our view, the firm’s established customer switching costs, buttressed by its increasingly potent network effect, will allow Fortinet to continuously gain and expand the number of clients and have already enabled it to build a wide economic moat around its business.

On Feb. 20, Anthropic released a vulnerability-scanning tool aimed at security applications, leading to an average drawdown of over 5% across our cybersecurity coverage as investors worry that Anthropic and other artificial intelligence labs could replace cybersecurity functions within companies.

Fortinet closed out 2025 with a strong quarter that included sales growing 15% to $1.91 billion and adjusted EPS growing 9% to $0.81. The firm's newer offerings—secure access service edge, or SASE, and security operations, or SecOps, continue to gain traction, and contributed 38% of total billings.

We see Fortinet as a leader in the security space with solutions ranging from network security firewalls to security operations. As we look at the firm’s market opportunity, we believe Fortinet stands to materially benefit as secular tailwinds in security and vendor consolidation increase its value proposition to its clients. In our view, the firm’s established customer switching costs, buttressed by its increasingly potent network effect, will allow Fortinet to continuously gain and expand the number of clients and has already enabled it to build a wide economic moat around its business.

Investors have become increasingly concerned about software valuations, and as they consider the possibility that artificial intelligence-driven software solutions will replace the incumbents in the software sector, the broader software sector is experiencing a material pullback.

Fortinet's solid third-quarter financial results included sales growing 14% to $1.7 billion and adjusted earnings per share growing 17% to $0.74. The firm's nascent secure access service edge and security operations solutions gained traction, contributing 37% of quarterly billings.

Fortinet reported solid second-quarter earnings, with revenue of $1.63 billion, up 14% year over year, and adjusted earnings per share of $0.64, up 11% year over year. The firm's SASE and SecOps offerings continue to drive sales, contributing 35% to the firm's billings in the quarter.

The Wall Street Journal reported that Palo Alto was in talks to acquire CyberArk, an identity security vendor, in a deal set to be worth more than $20 billion. CyberArk's stock traded up sharply on the news while Palo Alto's shares went down, highlighting potential investor concerns.

Fortinet started fiscal 2025 with a set of strong financial results, with sales and adjusted margins expanding 14% and 565 basis points year over year to $1.54 billion and 34.2%, respectively. The firm's more nascent SASE and SecOps solutions also continued to drive sales for the overall business.

After a spectacular market rout stemming from the imposition of tariffs by the new US administration, cybersecurity stocks have come under immense pressure, with our cybersecurity coverage's average week-to-date return being negative 11%.

Fortinet closed out fiscal 2024 with a strong set of financial results. The firm's sales grew 17% to $1.66 billion and its operating margins expanded 740 basis points to 34.6%.

We see Fortinet as a leader in the security space with solutions ranging from network security firewalls to security operations. As we look at the firm’s market opportunity, we believe Fortinet stands to materially benefit as secular tailwinds in security and vendor consolidation increase its value proposition to its clients. In our view, the firm’s established customer switching costs, buttressed by its increasingly potent network effect, will allow Fortinet to continuously gain and expand the number of clients and has already enabled it to build a wide economic moat around its business.

Fortinet hosted an analyst day on Nov. 18, during which management laid out its forward-looking plans to diversify Fortinet's top line beyond hardware firewalls. The firm also provided medium-term sales, billings, profitability, and adjusted free cash flow targets during the analyst day.

We see Fortinet as a leader in the security space with solutions ranging from network security firewalls to security operations. As we look at the firm’s market opportunity, we believe Fortinet stands to materially benefit as secular tailwinds in security and vendor consolidation increase its value proposition to its clients. In our view, the firm’s established customer switching costs, buttressed by its increasingly potent network effect, will allow Fortinet to continuously gain and expand the number of clients and has already enabled it to build a wide economic moat around its business.