Fortinet ($FTNT) Misleading Firewall Refresh Cycle and Upgrade Forecasts Case

Court: N.D. California

Case: 5:25-cv-08037

• FTNT investors filed a claim against Fortinet for misleading statements about a major product upgrade cycle, overstating its revenue potential, and concealing the limited scope of the refresh.
• After Fortinet admitted it had already pushed through nearly half of the two-year upgrade cycle in just one quarter, FTNT dropped over 22% on August 7, 2025.
• FTNT investors can join this case to be notified about potential recovery.

Case Details:

Between November 8, 2024, and August 6, 2025, Fortinet repeatedly promoted a “record” refresh cycle, claiming that approximately 650,000 of its FortiGate firewall units would reach end-of-support by 2026—about one-quarter of all deployed units. Executives projected this cycle would generate $400M–$450M in product revenue and create strong cross-selling opportunities. They told investors this cycle would “gain momentum” in the second half of 2025 and continue into 2026.

However, behind the scenes, Fortinet executives allegedly knew that the opportunity was far more limited. Many of the units slated for upgrade were 12–15 years old, sold when the company was much smaller. The pool of eligible upgrades was therefore narrow. In addition, internal tracking of device usage and end-customer upgrade activity was unreliable—especially among smaller business clients. Fortinet also failed to disclose that it had aggressively front-loaded the refresh, pushing through nearly half of the total upgrades by the end of Q2 2025.

On August 6, 2025, during its Q2 earnings call, Fortinet revealed the refresh cycle was 40% to 50% complete, undermining previous claims of sustained growth. Executives admitted the refresh had limited financial impact, contradicting earlier guidance. They also cited “excess capacity” from past purchases and older products with low replacement value.

The next day, on August 7, 2025, Fortinet stock fell over 22%.

Based on these events, FTNT investors filed a claim against Fortinet, alleging the company:

• It overstated the size and impact of its 2026 firewall refresh cycle.
• It concealed that it had already completed a large portion of the refresh early in 2025.
• It misled investors about the predictability and revenue contribution of the upgrade opportunity.

Investors argue Fortinet misled the market about the scale, sustainability, and financial benefit of its firewall refresh cycle—causing significant losses when the truth emerged.