01:14 PM EDT, 08/07/2024 (MT Newswires) -- Fortinet ( FTNT ) posted "solid" Q2 results, with an increase in subscription revenue and improved hardware demand, though a new firewall refresh cycle is needed for sustainable revenue growth, Oppenheimer said in a note emailed Wednesday.

The company's strong results were supported by notable margin performance due to normalizing inventory costs and a shift to higher-margin software/services revenue, the investment firm said.

However, Fortinet's ( FTNT ) Q3 billings guidance of about $1.57 billion in the midpoint missed estimates of $1.59 billion, while customers continue to face a challenging macro environment and uncertainty around elections, Oppenheimer said.

The firewall refresh cycle is now expected to materialize in 2025, versus the previous expectation of H2 of 2024, according to the note.

"Overall, we come away encouraged by the improving execution, although believe a new firewall refresh cycle is necessary to drive sustainable double-digit revenue growth," Oppenheimer said.

Oppenheimer maintained its perform rating on Fortinet's ( FTNT ) stock, with no price target.

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