Fortinet Sees Surging Hardware, SASE Demand as AI and OT Security Fuel Growth

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Mon, August 17, 2026 at 8:02 PM GMT+3 6 min read

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Key Points

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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.

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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.

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"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.

Unified SASE Growth Reflects Hardware and Cloud Strategy

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.

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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.

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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.

Hardware Demand Includes Larger Appliances

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. Customers are moving toward "a little bit bigger boxes," a trend the company has observed since the fourth quarter, she added.

Ohlgart said AI is contributing to this demand, not only through security needs around AI deployments but also because customers expect increased network traffic and are upgrading their infrastructure for greater performance.

The company has also adjusted hardware prices in response to component costs, including memory. Ohlgart said the impact of price increases on billings growth was in the high-single-digit percentage range. While memory prices have stabilized, she said availability remains constrained in some cases, potentially requiring expedited purchasing for certain components. Fortinet evaluates pricing on a product-by-product basis while seeking to remain competitive, she said.

Security, Networking and OT Remain Key Areas

Ohlgart said Fortinet's secure-networking strategy is gaining traction as customers look to consolidate technology, reduce operating complexity and improve their security posture. Fortinet's switches can be controlled by a FortiGate through its FortiLink technology, enabling security inspection at the entry point to a network, she said.

Customers are increasingly looking beyond the cost of outside technology vendors and considering the internal staffing costs associated with managing fragmented infrastructure, Ohlgart said. Consolidated systems can help organizations operate network and security functions with fewer resources.

Fortinet also reported that OT billings accelerated 55% year over year. Ohlgart said demand spans public-sector organizations, manufacturers and other customers as awareness rises around the security risks facing critical infrastructure and increasingly digitized systems, including electric-vehicle charging stations.

The company uses OT specialists to support its account managers and works with industry partners including Rockwell, Honeywell, Siemens and Schneider Electric, according to Ohlgart.

Addressing concerns around disclosed vulnerabilities, or CVEs, Ohlgart said Fortinet's large installed base makes it a frequent target and a subject of competitor criticism. She said the company aims to identify vulnerabilities in its own code, disclose them transparently and issue patches quickly. Fortinet is also working on measures such as virtual patching through its intrusion prevention system engine to protect devices before customers apply patches, she said.

Services and Future Growth

Ohlgart said service billings grew 26%, while total deferred revenue increased 17% and service revenue rose 14%. She explained that service revenue is largely recognized from the balance sheet, while service billings reflect current-quarter selling activity, including renewals, services attached to hardware and service-only transactions.

Fortinet reported remaining performance obligations of $7.7 billion, up 16% year over year, and current RPO growth of 12%. Ohlgart said average service duration was about 30 months in the second quarter.

Looking toward 2027, Ohlgart said Fortinet sees new markets as the larger potential contributor to growth, including opportunities within its existing customer base as well as markets where it competes against other vendors.

About Fortinet (NASDAQ:FTNT)

Fortinet, Inc (NASDAQ: FTNT) is a multinational cybersecurity company that develops and delivers integrated security solutions for enterprise, service provider and government customers worldwide. Founded in 2000 and headquartered in Sunnyvale, California, the company was co‑founded by Ken Xie and Michael Xie. Ken Xie serves as chairman and chief executive officer, and the company operates through a global sales, channel and services organization to support customers across the Americas, EMEA and Asia‑Pacific.

Fortinet's product portfolio centers on network security appliances and software, with its FortiGate next‑generation firewalls and the FortiOS operating system forming a core platform.

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The article "Fortinet Sees Surging Hardware, SASE Demand as AI and OT Security Fuel Growth" was originally published by MarketBeat.

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