Demand accelerated across Fortinet's business, with product revenue up 52% and customers purchasing larger hardware appliances to support AI infrastructure, higher network traffic, SD-WAN and OT security needs. Unified SASE grew 35% to roughly one-quarter of sales, while FortiSASE billings more than doubled. Fortinet is leveraging its existing SD-WAN customer base and combining cloud security with edge hardware to expand SASE adoption.
OT security and recurring services strengthened: OT billings rose 55%, service billings increased 26%, and remaining performance obligations reached $7.7 billion, supporting the company's longer-term growth outlook. Cybersecurity Stocks Are Holding Up as the AI Trade Starts to Crack Fortinet (NASDAQ:FTNT) CFO Christiane Ohlgart said the cybersecurity company's second-quarter performance was supported by broad-based global demand, accelerating hardware sales and growing adoption of secure networking and unified secure access service edge, or SASE, offerings. Speaking at a fireside chat, Ohlgart described the quarter as "fantastic," pointing to demand across geographies and multiple customer use cases.
She said growth in FortiGate hardware was particularly strong as organizations expanded networks and sought to improve security for operational technology, software-defined wide-area networking, and artificial intelligence infrastructure. → Applied Materials Beat Everything but Wall Street's Expectations for Margins Time to Sell? 3 Winners With Fading Technical Momentum "We see broad-based demand across all our geos," Ohlgart said. "We continue to see good demand for multiple use cases," including OT, SD-WAN improvements, AI infrastructure and AI-enabled networking. Ohlgart said Fortinet is benefiting from its installed base of SD-WAN customers as it seeks to extend those relationships into cloud-delivered SASE services.
The company reported that Unified SASE grew 35% and represented about one-quarter of sales, while FortiSASE billings more than doubled, according to the discussion. → Texas Roadhouse and Brinker International Have the Recipe Rivals Are Missing As AI Data Breaches Become More Common, This Cybersecurity ETF Is Surging The CFO said Fortinet's approach differs from a cloud-only SASE model by combining cloud security with hardware deployed at the network edge. This model is particularly relevant for customers seeking unified security for both in-network and remote users, she said. Ohlgart also cited sovereign SASE as an opportunity, especially in Europe, where regulations and customer requirements around control of infrastructure are becoming more important.
She said Fortinet's sovereign SASE pipeline is still developing and is currently smaller than its hybrid opportunity pipeline, but could be supported by telecommunications providers that want to build sovereign environments for customers such as public-sector organizations. → AirJoule Technologies: Short Squeeze Setup Amid Rising Risks Fortinet's recently introduced SD-WAN and SASE bundle includes services intended to improve SD-WAN functionality and security, along with a limited SASE license intended to give customers a way to test the cloud platform. Ohlgart said the bundle is designed as a starting point for future SASE upselling rather than an immediate driver of a major jump in billings or annual recurring revenue. About 90% of Fortinet's security service edge customers are already within its installed base, Ohlgart said, underscoring the role of existing SD-WAN deployments in the company's SASE expansion.
Fortinet reported product revenue growth of 52%, its second consecutive quarter of acceleration. Ohlgart said the increase was clearly demand-driven and required unit growth, but also reflected customers choosing larger hardware appliances. "Even if we normalize for price increases, we saw ASP increases for the hardware," she said, referring to average selling prices.
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