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Fortinet and Palo Alto Networks both offer cybersecurity exposure, but their latest results point to different investment cases. Fortinet’s June 2026 quarter showed strong product and billings growth alongside substantial cash generation; Palo Alto Networks’ July 2026 quarter delivered faster revenue growth and sharp growth in next-generation security annual recurring revenue (NGS ARR), while its GAAP results differed markedly from its adjusted figures. A third-party snapshot dated October 2, 2026, also put Palo Alto at a higher forward price-to-earnings multiple. None of those facts makes one stock a universal winner: fit depends on the price you pay, your time horizon, risk tolerance, and what your portfolio already owns.
What each company’s latest results show
The reporting periods are not aligned: Fortinet’s latest figures here cover the quarter ended June 30, 2026, while Palo Alto Networks’ cover the quarter and fiscal year ended July 31, 2026. Their growth measures also describe different things, so compare the underlying business signals rather than treating every percentage as directly equivalent.
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Fortinet: strong product growth and cash generation
Fortinet describes its Security Fabric as spanning secure networking, unified Secure Access Service Edge (SASE), and AI-driven security operations (SecOps). For the second quarter of fiscal 2026, it reported revenue of $2.05 billion, up 26% year over year; product revenue of $773 million, up 52%; and billings of $2.37 billion, up 33%. GAAP operating margin was 34%, compared with a non-GAAP margin of 38%. GAAP diluted EPS was $0.82, compared with non-GAAP diluted EPS of $0.90. Operating cash flow was $1.04 billion and free cash flow was $966 million. Fortinet’s Q2 FY2026 results
For context on its annual scale, Fortinet’s FY2025 filing reported $6.80 billion in revenue, $5.47 billion in gross profit, $2.08 billion in operating income, a 30.7% operating margin, and $2.21 billion in free cash flow. Fortinet SEC filings
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Fortinet’s July 2026 FY2026 outlook was revenue of $8.020 billion to $8.180 billion, billings of $9.350 billion to $9.550 billion, non-GAAP operating margin of 35% to 37%, and non-GAAP diluted EPS of $3.41 to $3.47. These are guidance ranges, not achieved results. Fortinet said the non-GAAP outlook excludes stock-based compensation, acquired intangible amortization, intellectual-property-related gains, and tax adjustments; it did not reconcile the forward non-GAAP measures to GAAP because some items could not be reasonably predicted. Fortinet’s Q2 FY2026 results
Palo Alto Networks: faster quarterly growth, with a wide GAAP-adjusted gap
Palo Alto Networks describes offerings across Network, Cloud, Security Operations, AI, and Identity, and identifies Network & AI Security, Cortex, and Idira platforms. In Q4 FY2026, it reported $3.41 billion in revenue, up 34% year over year; $9.10 billion in NGS ARR, up 63%; and $21.2 billion in remaining performance obligations (RPO), up 34%. NGS ARR and RPO provide different views of contracted or recurring business; neither is the same measure as quarterly revenue. Palo Alto Networks FY2026 results
For FY2026, Palo Alto reported revenue of $11.480 billion, up from $9.221 billion in FY2025. GAAP operating income was $695 million and GAAP net income was $307 million, compared with $1.243 billion and $1.134 billion, respectively, in FY2025. The company reported $4.414 billion in adjusted free cash flow, a 38.4% adjusted free cash flow margin. Palo Alto Networks FY2026 results
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The difference between adjusted and GAAP earnings deserves attention. Q4 GAAP operating income was $172 million, versus $1.0 billion non-GAAP operating income, and the company reported a Q4 GAAP net loss of $282 million. Its FY2026 reconciliation added back $1.712 billion in share-based compensation-related charges, $295 million in acquisition-related costs, and $638 million in acquired-intangible amortization. Those adjustments do not by themselves determine the company’s value, but they affect how much weight an investor should put on adjusted margins and earnings. Palo Alto Networks FY2026 earnings release and reconciliation
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Issued September 1, 2026, Palo Alto’s FY2027 guidance called for revenue of $14.10 billion to $14.20 billion, NGS ARR of $11.075 billion to $11.175 billion, a 29.5% non-GAAP operating margin, and a 38.0% adjusted free cash flow margin. These are management forecasts, not reported FY2027 outcomes. The company said its non-GAAP outlook excludes share-based compensation, acquisition costs, acquired intangible amortization, litigation, and other adjustments; management did not reconcile those forward measures to GAAP. Palo Alto Networks FY2026 results
How the stocks compare on price
At the October 2, 2026 market close, Stock Analysis reported Fortinet (NASDAQ: FTNT) at $180.95, with a $132.77 billion market capitalization and a forward P/E of 51.56. It reported Palo Alto Networks (NASDAQ: PANW) at $403.24, with a $329.85 billion market capitalization and a forward P/E of 96.26. On that provider’s dated snapshot, PANW traded at the higher forward earnings multiple. Stock Analysis FTNT statistics Stock Analysis PANW statistics
These are third-party, estimate-dependent figures, not a fixed measure of value: share prices and earnings forecasts change, and providers can report different multiples. A forward P/E is not a forecast of investment returns. The comparison also uses company-defined non-GAAP outlooks, and the companies exclude different items from those measures, so a headline multiple alone cannot establish which stock is cheaper on a comparable basis.
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Fortinet’s operating and investment risks
Fortinet’s 2025 filing says investment in sales and marketing, product development, and data-center capacity may compress near-term operating margins. It also identifies possible exposure to component costs, tariffs, supply-chain disruption, changing customer demand, competition, and longer enterprise sales cycles. Fortinet SEC filings
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Palo Alto Networks’ execution and accounting risks
Palo Alto’s FY2026 release identifies competition, customer vendor-consolidation behavior, revenue-recognition timing, customer usage optimization, product vulnerabilities and security incidents, acquisitions, AI developments, third-party dependencies, dilution, and execution as risks. It also cautions that non-GAAP measures exclude recurring items such as stock-based compensation and may not be directly comparable with similarly named measures from other companies. Palo Alto Networks FY2026 results
A practical way to decide which fits your portfolio
Use the comparison to test a thesis, not to treat one quarter or one valuation multiple as a buy signal. Consider these questions before deciding:
- Which growth signal matters to your thesis? Fortinet’s product revenue and billings growth indicate momentum in different parts of its business than Palo Alto’s revenue, NGS ARR, and RPO. Avoid comparing those measures as if they were interchangeable.
- How much weight do you put on GAAP results? Compare GAAP operating income, net income, and cash flow with each company’s adjusted measures. For Palo Alto, examine the scale and nature of the adjustments; for Fortinet, note that its stated FY2026 EPS outlook is non-GAAP and was not reconciled to GAAP.
- What price and expectations are you accepting? Refresh valuation data before acting, examine the earnings assumptions behind a forward multiple, and consider whether expected growth justifies the price under your own assumptions.
- Can your portfolio absorb the risks? Review each company’s stated risks alongside your time horizon, ability to tolerate volatility, and existing concentration in cybersecurity or technology stocks. Company results cannot determine your personal suitability.
Neither company’s reported growth, cash generation, or management guidance guarantees future results. The comparison is most useful when you decide which operating measures, accounting trade-offs, and risks you are willing to own—and then assess the stock at the price available to you.
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