Fortinet Execs: Firewall Growth Is On The Rebound

The results from Q3 are ‘further validating our view that the firewall market is recovering,’ Fortinet CFO Keith Jensen said Thursday.

Fortinet is once again seeing growth from its firewall business after several quarters of decline in the cybersecurity vendor’s largest segment, executives said Thursday.

While specifics on the firewall growth were not disclosed, during the third quarter, ended Sept. 30, “secure networking returned to positive growth,” Fortinet Co-Founder and CEO Ken Xie said during the vendor’s quarterly call with analysts.

The rebound in firewall growth was reflected in the return of overall product revenue growth for Fortinet, which reported that product revenue climbed 1.7 percent from the same period a year ago, to reach $473.9 million during the third quarter.

Service revenue, meanwhile, grew 19.1 percent year-over-year to $1.03 billion. Total revenue rose 13 percent from the same quarter of 2023 to reach $1.51 billion, surpassing the analyst consensus estimate of $1.48 billion.

Fortinet’s stock price was down 3.6 percent to $80.65 a share in after-hours trading Thursday as revenue and billings forecasts were below Wall Street’s expectations.

Firewall Refresh Ahead

During the quarterly call Thursday, Fortinet CFO Keith Jensen said the current firewall recovery is also soon to be bolstered by a major refresh opportunity.

In terms of the recovery, Fortinet has continued to see strong metrics when it comes to registrations of FortiGuard contracts, which had previously “indicated the inventory digestion at end users was returning or had returned to normal,” Jensen said.

“In the third quarter, this metric was stable, further validating our view that the firewall market is recovering,” he said during the call Thursday.

Looking ahead to the next two years, Jensen said that 2026 will see a record number of FortiGate firewalls reach end-of-support status.

As a result, “we expect these customers to start the refresh cycle for these products sometime in 2025,” he said.

Ultimately, the total number of firewalls reaching end-of-life in 2026 is “by far the largest we've seen, probably ever, but certainly in the last five or six years,” Jensen said.

Typically, the bulk of the refresh cycle is focused on entry-level firewalls, he said — but “in 2026, we see a significant portion of that actually being in the mid-range firewalls as well. And that is a very unusual and positive situation.”