Fortinet raised its full-year forecast for the third time this year, yet the stock fell about 22% by 2:30 p.m. ET Thursday, its lowest level in nearly five months. Product revenue rose 37% year over year in the third quarter and total revenue climbed 20%, with billings up 29% to $2.3 billion. However, service revenue grew just 13%, and management trimmed its full-year service revenue forecast by under 1% at the midpoint. Investors worried that growth is cooling, especially after shares had climbed 120% this year before earnings. Management still expects billings to grow about 28% and revenue about 20% this year, and it lifted its full-year earnings forecast and expanded its buyback by $1.2 billion.
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