Shares of Fortinet Inc. dropped more than 12% in late trading today after the cybersecurity company fell short of expectations with its guidance and reported a miss on revenue in its fiscal 2025 first quarter.

For the quarter ended March 31, Fortinet reported adjusted earnings per share of 58 cents, up from 39 cents per share in the same quarter in 2024, on revenue of $1.54 billion, up 14% year-over-year. Earnings per share came in ahead of the 53 cents expected by analysts, but the company’s revenue figure fell just short of an expected $1.55 billion.

Through Fortinet’s product lines, product revenue rose 12%, to $459.1 million, and service revenue rose 14%, to $1.08 billion. Total billings rose 14%, to $1.6 billion. Fortinet ended the quarter with a remaining performance obligation of $6.49 billion, up 12% year-over-year.

Business highlights in the quarter included Fortinet’s expansion of its Operational Technology Security Platform to enhance protection for critical infrastructure. Announced in March, the update introduced deeper OT-specific threat visibility through the FortiGuard OT Security Service, which now supports over 3,300 OT protocol rules, 750 intrusion prevention system rules and 1,500 virtual patching rules.

Additionally, Fortinet unveiled ruggedized hardware, such as the FortiGate Rugged NGFWs and FortiSwitch Rugged models, designed for harsh industrial environments. The enhancements aim to provide comprehensive security solutions tailored for sectors like energy, transportation and manufacturing.

The company also introduced significant enhancements to FortiAnalyzer in February, a move described as transforming the service into a turnkey artificial intelligence-driven security operations platform. The updated FortiAnalyzer leverages a unified data lake, FortiGuard Labs threat intelligence and AI-driven capabilities to give midsized enterprises accelerated threat hunting and incident response.

“We continue to accelerate our growth strategy by investing in the rapidly expanding Unified SASE and Security Operations markets while strengthening our leadership in Secure Networking,” Ken Xie, founder, chairman and chief executive of Fortinet, said in the company’s earnings release. “Leveraging our deep expertise in networking and security convergence, a strong track record of AI-driven innovation and seamless product development and integration through our FortiOS operating system, we have established ourselves as the leader in organic innovation and will continue setting the industry standard in cybersecurity.”

For its fiscal second quarter, Fortinet expects adjusted earnings per share of 58 to 60 cents on revenue of $1.59 billion to $1.65 billion. At the midpoint, the revenue outlook fell short of an expected $1.63 billion.

For its full year, the company expects adjusted earnings per share of $2.43 to $2.49 on revenue of $6.65 billion to $6.85 billion. At the midpoint and ever so slightly, the full-year outlook fell short of the $6.76 billion revenue outlook expected by analysts.

Derek Manky, chief security strategist and global vice president of threat intelligence at Fortinet, spoke with theCUBE, SiliconANGLE Media’s livestreaming studio, earlier this month, when he discussed how Fortinet is tackling new cyberthreats that are powered by AI:

Photo: Fortinet