Fortinet Inc. filed a class action lawsuit on November 4, 2025, alleging that the company made false statements and concealed material information about its firewall refresh cycle, a key revenue driver for 2025‑2026.
The lawsuit claims that Fortinet misrepresented the potential revenue from the refresh, stating it would generate $400‑$450 million in product revenue and gain momentum in the second half of 2025, while in reality the refresh was largely completed by the end of Q2 2025 and the company had no clear picture of the number of FortiGate firewalls that could be upgraded. The suit also alleges that the refresh would not be as lucrative as represented because it consisted of older products that represented a small percentage of the company’s business.
Fortinet’s Q4 2024 results showed total revenue of $1.66 billion, up 17% year‑over‑year, with product revenue of $574 million, up 18% year‑over‑year. In Q1 2025, total revenue was $1.54 billion, up 13.8% year‑over‑year, and the company achieved a record non‑GAAP operating margin of 39% in Q4 2024. The company’s Unified SASE and Security Operations segments grew 28% and 32% respectively in Q4 2024, and SASE ARR grew 22% year‑over‑year in Q2 2025.
Management has stated that the company may have over‑discussed the refresh cycle and that the focus should be on helping customers upgrade to new security infrastructure. Fortinet operates in a competitive cybersecurity market that includes Cisco, Palo Alto Networks, Zscaler, and CrowdStrike, and it differentiates itself through its organically developed platform.
The lawsuit covers alleged securities fraud that occurred between November 8, 2024, and August 6, 2025. Fortinet disclosed that approximately 40‑50% of the firewall refresh cycle was complete by the end of Q2 2025 during its earnings call on August 6, 2025, a disclosure that triggered a wave of analyst downgrades.
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