Fortinet, Inc.
Information Technology · Systems Software
Structural read: Fortinet is the only major NGFW vendor running custom silicon (SPU ASIC) end-to-end, giving FortiGate a price/performance edge vs $PANW and $CSCO at the mid-market. The post-2023 firewall refresh cycle is unwinding - billings normalized, deferred revenue stays the leading indicator.
Optionality is the platform consolidation pitch (SecOps + SASE attach on top of FortiGate base).
- Custom ASIC moat - SPU silicon gives ~5-10x throughput/$ vs merchant-silicon competitors on stated benchmarks
- OT/ICS leadership - incumbency in industrial networks (manufacturing, utilities, oil & gas) where displacement risk is low
- Platform attach - FortiSASE + FortiSIEM + FortiEDR cross-sell into installed FortiGate base lifts ARPU without new logo acquisition
- Free-cash-flow profile - ~30%+ FCF margins, net cash balance sheet, consistent buyback
- Refresh tailwind - 3-5 year hardware cycle from 2020-2022 install base re-enters replacement window 2025-2027
- Hardware concentration - appliance-heavy mix means billings whiplash whenever enterprises pause capex (2024 reset case study)
- $PANW + $ZS platform competition - both bundling SASE/SSE aggressively, pressuring net-new SASE wins
- Channel-heavy go-to-market - MSP/distributor reliance limits direct visibility into end-customer health
- Mid-market exposure - SMB/mid-market cohort more macro-sensitive than pure enterprise peers
- AI-native security entrants ($CRWD, $S) winning greenfield SecOps deals where Fortinet platform attach has to compete with best-of-breed
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