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FFIV Beats Q3 Earnings Estimates on Systems Strength, Raises View
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Key Takeaways
F5 beat third-quarter earnings and revenue estimates on strong systems and product revenue growth.
F5 benefited from growing application security needs and continued demand for AI-ready infrastructure.
FFIV raised fiscal 2026 revenue and earnings guidance following strong hybrid multicloud demand.
F5, Inc. (FFIV - Free Report) delivered better-than-expected third-quarter fiscal 2026 results. The company reported third-quarter fiscal 2026 non-GAAP earnings of $4.73 per share, which increased 14% year over year. The figure surpassed the Zacks Consensus Estimate by 18.8%.
Revenues increased 11% year over year to $865 million and beat the consensus mark by 3.96%. Results benefited from 32% systems revenue growth, sustained hybrid multicloud demand and growing application security requirements. Product revenues advanced 19%, marking the eighth consecutive quarter of double-digit growth.
FFIV's Q3 Segment Revenue Details
Product revenues, representing 54% of total revenues, increased 19% year over year to $463 million. Systems revenues jumped 32% to $240 million as customers invested in higher-performance infrastructure, expanded data-center capacity and modernized environments for resiliency, digital sovereignty and AI workloads.
Software revenues rose 7% to $223 million. Subscription-based software revenues increased 9% to $201 million and represented 90% of software revenues. Perpetual license revenues declined 4% to $22 million. Services revenues, accounting for 46% of total revenues, grew 3% to $402 million.
Management highlighted expansion opportunities tied to hybrid multicloud adoption, including competitive displacements, platform consolidation and data-center buildouts. An energy and utilities provider expanded its BIG-IP footprint after moving workloads from an unstable cloud environment back to on-premises infrastructure.
F5 also secured a competitive win at a Fortune 100 technology provider seeking to strengthen delivery and security for a storage service spanning 45 data centers. The customer selected BIG-IP to support the availability, resilience and security requirements of AI and data-intensive workloads.
F5 Maintains Solid Margins and Cash Flow
Non-GAAP gross margin expanded 110 basis points year over year to 84.2%, while non-GAAP operating margin increased 70 basis points to 35%.
In the third quarter of fiscal 2026, FFIV generated $316 million in operating cash flow and $281 million in free cash flow.
Cash and investments totaled $1.63 billion, up from $1.44 billion in the previous quarter. The company repurchased $100 million of shares and had $422 million remaining under its authorization.
FFIV Raises Fiscal 2026 Outlook
F5 expects fourth-quarter fiscal 2026 revenues between $870 million and $890 million, implying growth of nearly 9% at the midpoint. Non-GAAP earnings are projected in the range of $4.14-$4.26 per share. Non-GAAP gross margin is expected between 83% and 84%, reflecting a favorable mix of higher-performance systems and lower component-cost increases than initially anticipated.
The Zacks Consensus Estimate for fourth-quarter fiscal 2026 revenues and earnings is currently pegged at $854.33 million and $4.12 per share, respectively.
For fiscal 2026, management raised its revenue growth forecast to approximately 9-10% from 7-8%. The company continues to expect mid-single-digit software growth, double-digit systems growth and low-single-digit services growth. Non-GAAP earnings guidance was increased to $17.21-$17.33 per share from $16.25-$16.55.
The Zacks Consensus Estimate for fiscal 2026 revenues and earnings is currently pegged at $3.32 billion and $16.45 per share, respectively.
Shares of Analog Devices have rallied 37.1% year to date. The Zacks Consensus Estimate for ADI’s fiscal 2026 earnings is pegged at $12.42 per share, up by 10 cents over the past 30 days, indicating an increase of 59.4% year over year.
Shares of Applied Materials have skyrocketed 101.1% year to date. The Zacks Consensus Estimate for AMAT’s fiscal 2026 earnings is pegged at $12.14 per share, up by 4 cents over the past 30 days, indicating a rise of 28.9% year over year.
Cisco Systems shares have surged 48.7% year to date. The Zacks Consensus Estimate for CSCO’s fiscal 2026 earnings is pegged at $4.28 per share, unchanged over the past 30 days, indicating an increase of 12.3% year over year.
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FFIV Beats Q3 Earnings Estimates on Systems Strength, Raises View
Key Takeaways
F5, Inc. (FFIV - Free Report) delivered better-than-expected third-quarter fiscal 2026 results. The company reported third-quarter fiscal 2026 non-GAAP earnings of $4.73 per share, which increased 14% year over year. The figure surpassed the Zacks Consensus Estimate by 18.8%.
Revenues increased 11% year over year to $865 million and beat the consensus mark by 3.96%. Results benefited from 32% systems revenue growth, sustained hybrid multicloud demand and growing application security requirements. Product revenues advanced 19%, marking the eighth consecutive quarter of double-digit growth.
FFIV's Q3 Segment Revenue Details
Product revenues, representing 54% of total revenues, increased 19% year over year to $463 million. Systems revenues jumped 32% to $240 million as customers invested in higher-performance infrastructure, expanded data-center capacity and modernized environments for resiliency, digital sovereignty and AI workloads.
Software revenues rose 7% to $223 million. Subscription-based software revenues increased 9% to $201 million and represented 90% of software revenues. Perpetual license revenues declined 4% to $22 million. Services revenues, accounting for 46% of total revenues, grew 3% to $402 million.
F5, Inc. Price, Consensus and EPS Surprise
F5, Inc. price-consensus-eps-surprise-chart | F5, Inc. Quote
F5 Benefits From Hybrid Multicloud Demand
Management highlighted expansion opportunities tied to hybrid multicloud adoption, including competitive displacements, platform consolidation and data-center buildouts. An energy and utilities provider expanded its BIG-IP footprint after moving workloads from an unstable cloud environment back to on-premises infrastructure.
F5 also secured a competitive win at a Fortune 100 technology provider seeking to strengthen delivery and security for a storage service spanning 45 data centers. The customer selected BIG-IP to support the availability, resilience and security requirements of AI and data-intensive workloads.
F5 Maintains Solid Margins and Cash Flow
Non-GAAP gross margin expanded 110 basis points year over year to 84.2%, while non-GAAP operating margin increased 70 basis points to 35%.
In the third quarter of fiscal 2026, FFIV generated $316 million in operating cash flow and $281 million in free cash flow.
Cash and investments totaled $1.63 billion, up from $1.44 billion in the previous quarter. The company repurchased $100 million of shares and had $422 million remaining under its authorization.
FFIV Raises Fiscal 2026 Outlook
F5 expects fourth-quarter fiscal 2026 revenues between $870 million and $890 million, implying growth of nearly 9% at the midpoint. Non-GAAP earnings are projected in the range of $4.14-$4.26 per share. Non-GAAP gross margin is expected between 83% and 84%, reflecting a favorable mix of higher-performance systems and lower component-cost increases than initially anticipated.
The Zacks Consensus Estimate for fourth-quarter fiscal 2026 revenues and earnings is currently pegged at $854.33 million and $4.12 per share, respectively.
For fiscal 2026, management raised its revenue growth forecast to approximately 9-10% from 7-8%. The company continues to expect mid-single-digit software growth, double-digit systems growth and low-single-digit services growth. Non-GAAP earnings guidance was increased to $17.21-$17.33 per share from $16.25-$16.55.
The Zacks Consensus Estimate for fiscal 2026 revenues and earnings is currently pegged at $3.32 billion and $16.45 per share, respectively.
FFIV’s Zacks Rank and Stocks to Consider
Currently, F5 carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the broader Zacks Computer and Technology sector are Analog Devices (ADI - Free Report) , Applied Materials (AMAT - Free Report) and Cisco Systems (CSCO - Free Report) , each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Shares of Analog Devices have rallied 37.1% year to date. The Zacks Consensus Estimate for ADI’s fiscal 2026 earnings is pegged at $12.42 per share, up by 10 cents over the past 30 days, indicating an increase of 59.4% year over year.
Shares of Applied Materials have skyrocketed 101.1% year to date. The Zacks Consensus Estimate for AMAT’s fiscal 2026 earnings is pegged at $12.14 per share, up by 4 cents over the past 30 days, indicating a rise of 28.9% year over year.
Cisco Systems shares have surged 48.7% year to date. The Zacks Consensus Estimate for CSCO’s fiscal 2026 earnings is pegged at $4.28 per share, unchanged over the past 30 days, indicating an increase of 12.3% year over year.