Fortinet reported strong Q2 2025 financial results with total billings growing 15% to $1.78 billion and revenue increasing 14% to $1.63 billion.
Free cash flow was $284 million, adjusted free cash flow was $428 million, up $104 million, with strong cash generation of $1.27 billion year-to-date.
Gross margin improved by 10 basis points to 81.6%, with product gross margin up 180 basis points and service gross margin down 80 basis points.
Infrastructure investments increased to $168 million, up $145 million year-over-year, supporting FortiSASE, FortiCloud, and other services.
Non-GAAP operating margin was 33.1%, slightly above guidance despite a 200 basis point year-over-year decline due to investments and FX headwinds.
Product revenue grew 13% to $509 million, driven by upgrade buying and operational technology growth, while service revenue increased 14% to $1.12 billion.
Shift in Service Revenue Growth Due to Maritime Broadband Transition and PNT Revenue Delay
Service revenue outlook revised from 5-7% to 3-5% for 2025, primarily due to faster-than-expected maritime broadband conversions to companion services, USID funding reductions, and delayed PNT revenue recognition to 2026.
Maritime broadband remains a key service, especially as a backup solution for Starlink and VSAT, with new Iridium Certus GMDSS terminals expected to support long-term maritime revenue.
PNT revenue, critical for addressing GPS vulnerabilities, has been pushed into 2026, with management confident in its growth potential and industry adoption, especially in autonomous systems and critical infrastructure protection.
Dafinchi