A class action lawsuit was filed on November 7, 2025 by Levi & Korsinsky, LLP against Fortinet, targeting investors who purchased shares between November 8, 2024 and August 6, 2025. The plaintiffs allege the company engaged in securities fraud by overstating the revenue potential and momentum of its firewall refresh cycle, a key growth driver for the business.
The complaint claims Fortinet misrepresented that the refresh would generate $400‑$450 million in product revenue over 2025‑2026 and that it would accelerate in the second half of 2025. In reality, the company admitted in its Q2 2025 earnings call that 40‑50 % of the refresh was already complete, and the product mix consisted largely of older FortiGate models that represented a small portion of the overall business. The lawsuit also alleges that Fortinet concealed its lack of a clear picture of how many firewalls could be upgraded, further undermining the projected revenue upside.
Fortinet’s Q3 2025 results provide context for the lawsuit’s timing. Total revenue rose 14 % to $1.72 billion, with product revenue up 18 % to $559.3 million. Earnings per share of $0.74 beat analyst expectations of $0.63 by $0.11, a 17.5 % beat, driven by strong demand in the Unified SASE and Security Operations segments and disciplined cost management. The company raised its full‑year 2025 adjusted earnings guidance to $2.66‑$2.70 per share from $2.47‑$2.53, and narrowed revenue guidance to $6.72‑$6.78 billion from $6.72‑$6.78 billion, signaling confidence in continued growth despite the refresh cycle’s accelerated completion.
Investors reacted cautiously to the earnings release. While the company beat both revenue and earnings estimates, analysts noted that the forward‑looking revenue guidance for Q4 2025—$1.825 billion to $1.885 billion—was below some estimates, and the rapid completion of the refresh cycle raised concerns about future growth momentum. The market’s muted response reflects a focus on the potential erosion of the refresh’s revenue contribution and the need for the company to sustain growth through other high‑margin segments.
Fortinet’s leadership emphasized the company’s strategic focus on AI‑driven security and the convergence of networking and security. CEO Ken Xie highlighted the strong performance of the Unified SASE platform and the company’s ability to maintain high operating margins, citing a record 36.9 % margin in Q3 2025. CFO Christiane Ohlgart noted that billings growth in SASE and SecOps continued to drive revenue, while the company maintained disciplined cost control to support margin expansion. The lawsuit’s allegations, however, underscore the importance of transparent guidance and the need for the company to manage investor expectations around the firewall refresh cycle’s future impact.
The lawsuit adds a new layer of uncertainty for Fortinet’s investors. While the company’s recent earnings demonstrate robust performance and a clear path to profitability, the allegations of misstatements about the firewall refresh cycle could prompt a restatement of earnings or a settlement. The outcome will likely influence investor confidence and the company’s ability to raise capital in the near term, as stakeholders weigh the potential financial liability against Fortinet’s strong market position and ongoing investment in AI and SASE solutions.
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