Cybersecurity company Fortinet Inc. (FTNT) delivered a strong Q1 2026 earnings report in May, helping push the stock about 56% higher year-to-date to a 52-week high. The company exceeded revenue estimates and raised its full-year guidance, driven by growing demand for data center, AI and OT security.
Ken Xie, Fortinet’s co-founder, chairman and CEO, tied the company’s Q1 outperformance to demand for secure networking, unified Secure Access Service Edge (SASE) and AI-driven security operations. He also highlighted record free cash flow and strong activity among large enterprise customers.
Fortinet reported particularly strong momentum in AI data centers, with customers investing in FortiGate firewalls to support higher throughput, segmentation and security requirements. Management said the company continues to benefit from organizations building AI infrastructure and deploying AI internally.
Xie highlighted several trends shaping Fortinet’s data center strategy, including rising demand for AI infrastructure, growth in sovereign SASE environments and continued investment in proprietary ASIC technology for high-performance data center deployments.
Customer adoption of Fortinet solutions for AI infrastructure helped drive a 41% Y-o-Y increase in product revenue. Executives also noted that the market for sovereign data centers and sovereign SASE is approaching the scale of traditional cloud-based SASE.
The company also introduced new hardware, including the FortiGate 3500G and FortiGate 400G, which are designed to improve performance for modern data center environments and support growing volumes of encrypted traffic.
In addition, Fortinet announced several product and partnership updates:
- FortiOS 8.0, the latest version of the operating system powering the Fortinet Security Fabric, featuring new AI-driven security, next-generation SASE and quantum-safe capabilities.
- Expanded FortiGate G Series offerings with the FortiGate 3500G and FortiGate 400G, designed to improve performance and support growing volumes of encrypted traffic.
- Collaborations with AI companies, including Anthropic, OpenAI and others.
“AI-driven security operations billings grew 23%, highlighting our continued platform expansion within our installed base,” Xie said during the earnings call.
“We see when a customer starts to leverage AI, we feel it’s an opportunity for a security company [like us] to help the customer to really use AI to secure AI, and we feel we’re ahead of most of our competitors with all our long-term investment.”
Xie also said OT security accelerated during the quarter, with OT billing growth exceeding 70%, which he described as an area of “very, very strong growth.”
Fortinet reported Q1 2026 revenue of approximately $1.85 billion, up 20% year over year, while total billings grew 31% to $2.09 billion. Product revenue increased 41% to $645 million, and service revenue rose 11% to $1.21 billion.
Chief Accounting Officer, CFO and Principal Financial & Accounting Officer Christiane Ohlgart said total billings grew 31% to $2.09 billion and total revenue grew 20% to $1.85 billion, while product revenue increased 41% to $645 million and service revenue grew 11% to $1.21 billion.
For the fiscal year 2026, Fortinet management expects:
- Revenue between $7.710 billion and $7.870 billion.
- Service revenue between $5.090 billion and $5.150 billion.
- Billings between $8.800 billion and $9.100 billion.
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