Fortinet and ServiceNow shares plunge following earnings reports

Cybersecurity firm Fortinet and enterprise software giant ServiceNow experienced significant stock declines following their third-quarter financial results.

Fortinet shares fell 25% in after-hours trading after reporting third-quarter product revenue growth of 37%, which was a notable deceleration from the 52% growth seen in the previous quarter. While total revenue rose 20% to $2.08 billion, service revenue of $1.31 billion fell slightly below analyst estimates. The company revised its full-year service revenue outlook downward, despite raising its overall revenue guidance.

ServiceNow shares dropped 18% after-hours as earnings per share of $1.00 missed the analyst expectation of $1.02. Although the company reported quarterly revenue of $4.11 billion, a 20.5% annual increase, its fourth-quarter revenue guidance of $4.25 billion to $4.26 billion was lower than the $4.36 billion anticipated by analysts. Despite the stock decline, ServiceNow reported strong demand for AI-driven products, noting a 65% annual growth in new contract value from AI tools.