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Equity Plans and Share Repurchase Program | 9 Months Ended
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Sep. 30, 2025
Share-Based Payment Arrangement [Abstract] |
EQUITY PLANS AND SHARE REPURCHASE PROGRAM | EQUITY PLANS AND SHARE REPURCHASE PROGRAM Stock-Based Compensation Plans We maintain the Amended and Restated Fortinet, Inc. 2009 Equity Incentive Plan (the “Amended Plan”) pursuant to which we have granted RSUs, stock options and PSUs. As of September 30, 2025, there were a total of 48.8 million shares of common stock available for grant under the Amended Plan. Restricted Stock Units The following table summarizes the activity and related information for RSUs for the periods presented below (in millions, except per share amounts):
| Restricted Stock Units Outstanding
| Number of Shares |  | Weighted-Average Grant Date Fair Value per Share
Balance—December 31, 2024 | 8.4 |  |  | $ | 64.70 |
Granted | 2.9 |  |  | 104.05 |
Forfeited | (0.7) |  |  | 74.80 |
Vested | (2.8) |  |  | 60.50 |
Balance—September 30, 2025 | 7.8 |  |  | $ | 80.32 |
Stock compensation expense is recognized on a straight-line basis over the vesting period of each RSU. As of September 30, 2025, total compensation expense related to unvested RSUs granted to employees and non-employees under the Amended Plan, but not yet recognized, was $535.6 million, with a weighted-average remaining vesting period of 2.7 years. Market/Performance-Based PSUs We grant market/performance-based PSUs under the Amended Plan to certain of our executives. Based on the achievement of the market/performance-based vesting conditions during the performance period, the final settlement of the PSUs will range between 0% and 200% of the target shares underlying the PSUs based on the percentile ranking of our total stockholder return over one-, two-, three- and four-year periods among companies included in the S&P 500 Index. 20%, 20%, 20% and 40% of the PSUs vest over one-, two-, three- and four-year service periods, respectively. The following table summarizes the activity and related information for PSUs for the periods presented below (in millions, except per share amounts):
| Performance Stock Units Outstanding
| Number of Shares |  | Weighted-Average Grant Date Fair Value per Share
Balance—December 31, 2024 | 0.4 |  |  | $ | 94.93 |
Granted | 0.1 |  |  | 165.91 |
Forfeited | (0.1) |  |  | 113.36 |
Vested | (0.2) |  |  | 91.19 |
Balance—September 30, 2025 | 0.2 |  |  | $ | 117.94 |
As of September 30, 2025, total compensation expense related to unvested PSUs that were granted to certain of our executives, but not yet recognized, was $25.6 million. This expense is expected to be amortized on a graded vesting method over a weighted-average vesting period of 2.1 years. RSUs and PSUs settle into shares of common stock upon vesting. Upon the vesting of the RSUs and PSUs, we net-settle the RSUs and PSUs and withhold a portion of the shares to satisfy employee withholding tax requirements. The payment of the withheld taxes to the tax authorities is reflected as a financing activity within the condensed consolidated statements of cash flows. The following summarizes the number and value of the shares withheld for employee taxes (in millions):
| Three Months Ended |  | Nine Months Ended
| September 30, 2025 |  | September 30, 2024 |  | September 30, 2025 |  | September 30, 2024
Shares withheld for taxes | 0.3 |  |  | 0.3 |  |  | 1.0 |  |  | 1.2 |
Amount withheld for taxes | $ | 26.6 |  |  | $ | 16.5 |  |  | $ | 103.8 |  |  | $ | 79.6 |
Employee Stock Options The following table summarizes the weighted-average assumptions relating to our employee stock options:
| Three Months Ended |  | Nine Months Ended
| September 30, 2025 |  | September 30, 2024 |  | September 30, 2025 |  | September 30, 2024
Expected term in years | 4.5 |  | 4.5 |  | 4.5 |  | 4.5
Volatility | 42.2 | % |  | 41.7 | % |  | 41.7 | % |  | 42.8 | %
Risk-free interest rate | 3.8 | % |  | 3.7 | % |  | 4.2 | % |  | 4.3 | %
Dividend rate | — | % |  | — | % |  | — | % |  | — | %
The following table summarizes the stock option activity and related information for the periods presented below (in millions, except exercise prices and contractual life):
| Options Outstanding
| Number of Shares |  | Weighted- Average Exercise Price |  | Weighted- Average Remaining Contractual Life (Years) |  | Aggregate Intrinsic Value
Balance—December 31, 2024 | 8.7 |  |  | $ | 37.81 |  |  | 3.1 |  | $ | 493.8 |
Granted | 0.7 |  |  | 105.38 |  |  |  |  |
Forfeited | (0.1) |  |  | 72.16 |  |  |  |  |
Exercised | (1.8) |  |  | 21.11 |  |  |  |  |
Balance—September 30, 2025 | 7.5 |  |  | $ | 47.80 |  |  |  |  |
Options vested and expected to vest—September 30, 2025 | 7.5 |  |  | $ | 47.80 |  |  | 3.1 |  | $ | 290.0 |
Options exercisable—September 30, 2025 | 5.8 |  |  | $ | 37.84 |  |  | 2.4 |  | $ | 268.3 |
The aggregate intrinsic value represents the difference between the exercise price of stock options and the quoted market price of our common stock at the date of the balance sheet for all in-the-money stock options. Stock compensation expense is recognized on a straight-line basis over the vesting period of each stock option. As of September 30, 2025, total compensation expense related to unvested stock options granted to employees but not yet recognized was $52.3 million, with a weighted-average remaining vesting period of 2.6 years. Additional information related to our stock options is summarized below (in millions, except per share amounts):
| Three Months Ended |  | Nine Months Ended
| September 30, 2025 |  | September 30, 2024 |  | September 30, 2025 |  | September 30, 2024
Weighted-average fair value per share granted | $ | 31.84 |  |  | $ | 29.86 |  |  | $ | 42.39 |  |  | $ | 27.05 |
Intrinsic value of options exercised | $ | 17.5 |  |  | $ | 42.6 |  |  | $ | 148.7 |  |  | $ | 112.5 |
Fair value of options vested | $ | 5.7 |  |  | $ | 6.4 |  |  | $ | 20.7 |  |  | $ | 25.0 |
Stock-Based Compensation Expense Stock-based compensation expense, including stock-based compensation expense related to awards classified as liabilities, is included in costs and expenses (in millions):
| Three Months Ended |  | Nine Months Ended
| September 30, 2025 |  | September 30, 2024 |  | September 30, 2025 |  | September 30, 2024
Cost of product revenue | $ | 0.6 |  |  | $ | 0.5 |  |  | $ | 1.6 |  |  | $ | 1.4 |
Cost of service revenue | 6.9 |  |  | 6.3 |  |  | 20.4 |  |  | 19.0 |
Research and development | 25.4 |  |  | 21.9 |  |  | 73.5 |  |  | 63.0 |
Sales and marketing | 30.0 |  |  | 27.0 |  |  | 86.2 |  |  | 79.6 |
General and administrative | 9.3 |  |  | 10.7 |  |  | 27.3 |  |  | 30.7 |
Total stock-based compensation expense | $ | 72.2 |  |  | $ | 66.4 |  |  | $ | 209.0 |  |  | $ | 193.7 |
The following table summarizes stock-based compensation expense, including stock-based compensation expense related to awards classified as liabilities, by award type (in millions):
| Three Months Ended |  | Nine Months Ended
| September 30, 2025 |  | September 30, 2024 |  | September 30, 2025 |  | September 30, 2024
RSUs | $ | 60.8 |  |  | $ | 54.8 |  |  | $ | 177.9 |  |  | $ | 160.8 |
Stock options | 6.7 |  |  | 6.9 |  |  | 20.1 |  |  | 21.3 |
PSUs | 4.7 |  |  | 4.7 |  |  | 11.0 |  |  | 11.6 |
Total stock-based compensation expense | $ | 72.2 |  |  | $ | 66.4 |  |  | $ | 209.0 |  |  | $ | 193.7 |
Total income tax benefit associated with stock-based compensation that is recognized in the condensed consolidated statements of income is (in millions):
| Three Months Ended |  | Nine Months Ended
| September 30, 2025 |  | September 30, 2024 |  | September 30, 2025 |  | September 30, 2024
Income tax benefit associated with stock-based compensation | $ | 15.9 |  |  | $ | 14.7 |  |  | $ | 45.9 |  |  | $ | 42.9 |
Share Repurchase Program In August 2025, our board of directors approved a $1.0 billion increase in the authorized stock repurchase amount under the Repurchase Program and extended the term of the Repurchase Program to February 28, 2027, bringing the aggregate amount authorized for repurchases to $9.25 billion of our outstanding common stock through February 28, 2027. Share repurchases may be made by us from time to time in privately negotiated transactions or in open-market transactions. The Repurchase Program does not require us to purchase a minimum number of shares, and may be suspended, modified or discontinued at any time without prior notice. During the three months ended September 30, 2025, we repurchased 23.3 million shares of our common stock under the Repurchase Program in open-market transactions, at a weighted-average price of $78.32 per share, for an aggregate purchase price of $1.83 billion, which excludes a $17.7 million accrual related to the 1% excise tax imposed by the Inflation Reduction Act of 2022. During the nine months ended September 30, 2025, we repurchased 27.9 million shares of our common stock under the Repurchase Program in open-market transactions, at a weighted-average price of $79.88 per share, for an aggregate purchase price of $2.23 billion, which excludes a $18.5 million accrual related to the 1% excise tax imposed by the Inflation Reduction Act of 2022. As of September 30, 2025, approximately $795.9 million remained available for future share repurchases under the Repurchase Program.

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