Fortinet and ServiceNow fall 25% and 17% as growth forecasts slow

Fortinet closed down 5.9% and then fell about 25% after hours. ServiceNow, with a new OpenAI deal in the same release, fell about 17% after guiding contracted revenue growth lower.

Fortinet raised its full year revenue guide by $70 million and cut its service guide by $40 million. The whole raise therefore sits in product, the line that slowed from 52% growth to 37%.

ServiceNow guided subscription revenue up and guided cRPO growth down. cRPO is current remaining performance obligations, the contracted revenue due in the next 12 months. Both stocks fell hard after hours on Wednesday 28 October, and the fourth quarter prints decide which fall was right.

At 8:42 pm New York time, Fortinet traded after hours at $130.73, down 24.9% from its $174.08 close. At about the same time, ServiceNow traded at $124.74, down 16.9% from its $150.13 close. These are after hours prints, not closes.

Fortinet's release shows 734.2 million weighted average basic shares. At the $174.08 close that is a $127.8 billion market value, and the fall to $130.73 removes about $32 billion of it. The reasons for the two falls differ. Fortinet's guide implies fourth quarter revenue growth of 15.5%, down from 20.5%, while ServiceNow's guide implies cRPO growth of 18.5%, down from 20.5%.

Fortinet's growth and guidance

Fortinet's third quarter release showed revenue of $2.08 billion, up 20%. Billings were $2.34 billion, up 29%. The non GAAP operating margin was 38.2% and free cash flow was $865 million.

Fortinet beat its own midpoints narrowly. Revenue topped the $2.055 billion midpoint by 1.1%, and billings topped the $2.3 billion midpoint by 1.6%. Chief executive Ken Xie said the quarter allowed the company "to raise our 2026 billings guidance for the third time this year".

The growth rates show the slowdown. Product revenue grew 37%, after 52% in the second quarter. Billings growth eased from 33% to 29%, and free cash flow fell from $966 million to $865 million.

Total revenue growth slid from 25.6% to 20.5%. The fourth quarter guide of $2.155 billion to $2.245 billion has a $2.2 billion midpoint. That is 15.5% above the $1.905 billion of a year earlier, from SEC filings.

The full year guide moved in two directions. Fortinet raised its revenue midpoint by $70 million to $8.17 billion. It cut its service revenue midpoint by $40 million to $5.16 billion, even though service revenue in the third quarter was $1.31 billion and the quarter beat.

The raise therefore sits in product, the line that is slowing. The product midpoint rises $110 million, to about $3.01 billion from $2.90 billion.

Nine months of product revenue are $2,183.1 million. The guide implies about $830 million in the fourth quarter, 8 to 9% above the third quarter's $765 million. The fourth quarter billings guide of $2.775 billion to $2.925 billion is the other number to hold Fortinet to.

ServiceNow's revenue and contracts

ServiceNow's release says it beat the high end of guidance across all topline and profitability metrics. Non GAAP earnings were $1.00 a share.

The guide is mixed, not falling. Fourth quarter subscription revenue is guided to $4.245 billion to $4.255 billion, up 22.5% to 23%. The third quarter grew 21%, and the full year subscription midpoint rose $15 million to $15.785 billion.

The softer number is cRPO. The fourth quarter guide is 18.5% growth, from 20.5% in the third quarter. That fall looks bigger than it is, because the company had guided third quarter cRPO growth to 19.5% and delivered 20.5%, a one point beat.

The 18.5% fourth quarter guide sits one point under the third quarter guide on the same reported basis. In constant currency, which strips out exchange rate moves, the step is 1.5 points, from 20% to 18.5%. A repeat of the one point beat would put the fourth quarter print near 19.5%.

The third quarter beat was small on revenue. Subscription revenue of $3.988 billion topped the high end of its guide by $8 million, or 0.2%. In the second quarter it had beaten the top of its range by 150 basis points.

The company cited US Federal on premise revenue pulled forward from the third quarter. That is why third quarter growth of 21% understates the run rate.

Demand data in the release was strong. Remaining performance obligations were $29.7 billion, up 22%. Deals above $5 million in net new annual contract value numbered 19, up more than 135%.

Free cash flow was $822 million, a 20% margin, and the full year target rose a point to 36%. Purchases of property and equipment fell to $91 million from $235 million a year earlier.

The OpenAI rollout

ServiceNow's announcement puts a plugin for ChatGPT in the OpenAI marketplace today. Enhanced capabilities follow by the end of 2026 and voice in the first quarter of 2027. OpenAI security capabilities reach early access in January 2027 and general availability in the second quarter of 2027. Codex joins the AI Workflow Factory in 2027.

The company says agentic AI consumption in production rose more than 13 times year on year. It also raised its year end AI annual contract value target to $1.7 billion from $1 billion at the start of the year. That is about 11% of full year subscription revenue, a different measure, since annual contract value is not recognised revenue.

Customers are still committing. Fortinet's billings ran $258 million above revenue, and ServiceNow's remaining performance obligations stand at $29.7 billion.

Figures and dates to watch

Both companies have set figures investors can check. Fortinet's guide implies fourth quarter product revenue near $830 million. A print under $800 million would make the product slowdown, not the service cut, the main story.

For ServiceNow, cRPO growth at or above 19.5% would repeat the third quarter pattern. A print at the 18.5% guide would confirm the step down.

The first public opportunity to hear management discuss these forecasts is 12 November. Fortinet presents at the BMO Technology and Innovation Leaders Conference that day, and ServiceNow's Josh Kahn speaks there at 7:00 am Pacific. Kahn also speaks at the RBC Global TIMT Conference on 17 November. All figures are from the company releases dated 22 July, 29 July and 28 October 2026.