A better-than-expected third quarter did nothing to stop shares in network security company Fortinet Inc. from falling about 26% in after-hours trading today.

Tenable Holdings Inc., which also topped forecasts, was caught in the selloff that followed across cybersecurity stocks. Shares in consumer security company Gen Digital Inc. rose instead, after its own results came in ahead of expectations.

For its third quarter, which ended on Sept. 30, Fortinet reported adjusted earnings of 91 cents per share, up from 74 cents a year earlier, on revenue of $2.08 billion, up 20% year-over-year. Analysts were expecting 86 cents per share on revenue of $2.06 billion.

Product revenue, which tracks demand for the company’s FortiGate firewalls, rose 37%, to $765 million. Services grew more slowly, up 13% at $1.31 billion, while billings climbed 29% to $2.34 billion. Fortinet posted unadjusted net income of $635.5 million against $473.9 million a year earlier, and free cash flow came in at $865 million.

Business highlights in the quarter included the August acquisition of artificial intelligence runtime protection startup Virtue AI Inc. for an undisclosed sum Fortinet described as immaterial. The startup’s runtime protection and automated validation tools complement Fortinet’s existing FortiAIGate product. FortiEndpoint also picked up new controls in July that track employee use of AI tools and stop sensitive data from leaking into them.

Founder and Chief Executive Ken Xie said in the company’s earnings release that demand was broad enough for Fortinet to raise its billings guidance “for the third time this year.” As AI opens up new attack surfaces, he argued, “Network security remains the critical foundation of AI security.”

Fortinet expects fourth-quarter revenue of $2.155 billion to $2.245 billion, billings of $2.775 billion to $2.925 billion and adjusted earnings of 93 to 95 cents per share. Full-year revenue guidance moved up to $8.125 billion to $8.215 billion from $8.02 billion to $8.18 billion previously. Billings are now forecast at $9.568 billion to $9.718 billion for the year and adjusted earnings at $3.54 to $3.58 per share.

With the share price having more than doubled this year going into the report, investors behind the after-hours slide “appear to be hung up on revenue growth and guidance,” according to Benzinga. Sales growth had been running at 26% as recently as the second quarter, against 20% this time.

Fortinet also cut its full-year service revenue forecast to $5.15 billion to $5.17 billion from the $5.18 billion to $5.22 billion it gave three months earlier. Palo Alto Networks Inc., CrowdStrike Holdings Inc. and Zscaler Inc. all gave up 6% to 7% after-hours as well.

Tenable

Exposure management company Tenable posted adjusted earnings of 63 cents per share in its third quarter, up from 42 cents a year earlier, on revenue of $276.4 million, up 9.5% year-over-year. Analysts were expecting 51 cents per share on revenue of $271.6 million.

Unadjusted net income rose to $11.3 million from $2.3 million and free cash flow was $64.2 million. Tenable signed 413 new enterprise platform customers in the quarter, and buybacks ran to $223.8 million for 6.8 million shares, most of them tied to an upsized $800 million convertible notes offering.

Anthropic PBC’s Claude Mythos model now powers Tenable One Adversary View, a feature inside Tenable’s exposure management platform that surfaces hidden attack paths and how to remediate them. Co-Chief Executive Steve Vintz said in the earnings release that the quarter exceeded “every one of our guided metrics.”

Fourth-quarter guidance calls for revenue of $277 million to $280 million and adjusted earnings of 56 to 58 cents per share, against the 50 cents analysts had modeled. Tenable raised its full-year revenue outlook to $1.084 billion to $1.087 billion from $1.075 billion to $1.081 billion, and its adjusted earnings outlook to $2.16 to $2.19 per share from $1.95 to $2.

None of that spared the stock, which closed the regular session flat and then gave up more than 5% in extended trading.

Gen Digital

Gen Digital, the company behind the Norton, Avast and LifeLock consumer security brands, reported adjusted earnings of 74 cents per share, up from 62 cents a year earlier, on revenue of $1.37 billion, up 12% year-over-year. Analysts were expecting 72 cents per share on revenue of $1.34 billion.

Bookings rose 10%, to $1.35 billion, and unadjusted net income more than doubled to $287 million. Customer numbers reached a record, according to Chief Executive Vincent Pilette, who called the period Gen’s “sixth consecutive quarter of double-digit bookings growth.”

Gen now expects fiscal 2027 revenue of $5.465 billion to $5.515 billion, up from $5.375 billion to $5.475 billion, and adjusted earnings of $2.93 to $2.98 per share, up from $2.87 to $2.97. Analysts had been looking for $5.44 billion in revenue for the year. Third-quarter guidance is for revenue of $1.365 billion to $1.39 billion and adjusted earnings of 73 to 75 cents per share.

Gen Digital shares gained almost 6% after hours.

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