Fortinet’s SASE momentum is strong, but services remain the key watchpoint

Transcript intelligence

What changed

Relative to the prior-quarter analysis, the company shifted from raised guidance and broad billings strength to maintained guidance with a modestly below-street Q4 revenue outlook. At the same time, FortiSASE billing growth accelerated to more than 100% year over year, operating margin reached a record 37%, and management added emphasis on Secure AI data centers, FortiASIC, and services recovery in H2 2026.

Guidance delta

Guidance was maintained. Q4 guidance calls for 12% revenue growth, modestly below street expectations; management still targets a Rule of 45 trajectory and expects services revenue to rebound in H2 2026.

Key takeaways

• Q3 billings grew 14% and operating margin reached a record 37%.
• FortiSASE billings grew more than 100% year over year, with adoption among large enterprises reaching 15%, up 55% year over year.
• Management highlighted AI-driven security, Secure AI data centers, FortiASIC performance, and sovereign SASE as growth drivers.
• Services revenue has declined for nine consecutive quarters and is expected to improve in the second half of 2026.
• The Q4 revenue outlook is modestly below street expectations, tempering an otherwise confident update.

Management priorities

• Expand FortiSASE, Unified SASE, SecOps, and AI-driven security offerings.
• Launch FortiOS 8.0 and a new MPA ASIC early next year.
• Expand the Secure AI data center portfolio and global cloud delivery infrastructure.
• Increase sales capacity to sustain Rule of 45 targets.
• Improve services revenue and attach rates as product billings translate into services.