Fortinet Is Down 28% YTD, But Its Free Cash Flow Just Hit a Record $2.21 Billion

"Full-year 2025 free cash flow hit a record $2.21 billion, billings grew 16% to $7.55 billion, and non-GAAP operating margin came in at 35.5%. That marks Fortinet's sixth consecutive year exceeding the "Rule of 45," where revenue growth rate plus operating margin exceeds 45."

"Fortinet is the only major vendor offering Sovereign SASE, an on-premises deployment option for enterprises. "We have probably doubled the total addressable market in the SASE market with Sovereign SASE," Xie said on the earnings call. The adoption data backs a real acceleration."

"The board authorized a $1 billion expansion of the share repurchase program in January 2026, leaving roughly $1.4 billion in remaining authorization. With $2.21 billion in annual free cash flow, the capacity is real. CFO Christiane Ohlgart called it "a disciplined shareholder-focused capital allocation strategy.""

Fortinet's stock has declined 28% over the past year to $77, yet underlying business metrics suggest stronger fundamentals. Q4 2025 results show record free cash flow of $2.21 billion, billings growth of 16% to $7.55 billion, and non-GAAP operating margin of 35.5%. The company has exceeded the Rule of 45 for six consecutive years and guides for a seventh in 2026. Unified SASE billings grew 40% in Q4 with FortiSASE ARR increasing over 90%. Fortinet's unique Sovereign SASE offering, providing on-premises deployment, has reportedly doubled the addressable market. The board authorized a $1 billion share repurchase expansion with $1.4 billion remaining authorization, supported by substantial free cash flow generation.

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