Fortinet's (FTNT) product revenue grew 52% year-over-year in the most recent period, a dramatic acceleration from a normalized historical growth rate above 10%, according to CEO and co-founder Ken Xie speaking at the Goldman Sachs Communacopia + Technology Conference 2026 on Tuesday, September 8.
Xie said Fortinet holds a majority share of global network security deployment, providing what he called "a lot of data to analyze at the global intrusion attack landscape." The company has since launched more than 20 AI-enabled products, primarily focused on secured operations. Fortinet develops its own expert models and operates its own infrastructure, including a global data center equipped with GPUs, Xie said.
Gross profit margin remained at 80% over the last twelve months, while the company's market capitalization stood at $115.6 billion. As of early September 2026, Fortinet shares had gained 97% year-to-date and 87% over six months. The stock closed at $156.07, down 1.75% ($2.78), trading at $156.86 after hours, up 0.51% ($0.79).
Management also highlighted pricing power in its new service bundles. The SD-WAN Service Bundle carries a 50% to 55% pricing uplift over the base firewall. FortiCare adds a standard 20% service premium, while the SD-WAN services component contributes roughly a 35% premium. Each bundle includes a FortiSASE starter license for 10 to 15 users depending on FortiGate size.
CFO Christiane Ohlgart emphasized the importance of moving quickly with neocloud providers, who make purchasing decisions "in months, not years" rather than traditional multi-year cycles. She cited one example where a Q1 neocloud deal expanded five to ten times by Q2. Mid-size neoclouds are particularly attractive customers because they do not rely on highly customized components. "The neocloud won't buy and put it on the shelves," Ohlgart said. "They will buy firewalls and related services as they deploy the data centers. It's critical for us to be in early, so that we can grow with them."
Supply chain conditions have shifted. Memory pricing for DDR4 and DDR5 stabilized after sharp increases about six months earlier, though high-bandwidth memory (HBM) remains costly due to limited suppliers. Fortinet maintains approximately six months of system-level inventory and about one year of inventory for proprietary ASIC components.
Despite the strong figures, guidance pointed to deceleration. Management is guiding quarter by quarter amid shifting deal timing, and product revenue growth is expected to slow from the 52% pace as comparisons harden. Q4 implied guidance suggests unit growth could fall into the single-digit range. The company also shortened its service registration window to 90 days from one year.
The backdrop for growth includes a structural shift in internet traffic: machine-to-machine traffic recently surpassed human-to-human and human-to-machine traffic globally for the first time, increasing demand for visibility and control over internal east-west traffic within data centers and enterprise networks. Thirty-seven analysts have recently revised earnings estimates upward for the upcoming period.
At the conference, Fortinet's FortiGate platform was discussed across the 1,000 and 3,000 series, spanning low-end, mid-range, and high-end variants, alongside its broader software stack built on FortiOS and custom ASICs.
