F5 to Report Q3 Earnings: What's in the Cards for the Stock?

F5 Inc. FFIV is scheduled to report third-quarter fiscal 2025 results on July 30, after market close.

For the third quarter of fiscal 2025, F5 projects non-GAAP earnings per share (EPS) in the range of $3.41-$3.53 (midpoint of $3.47). The Zacks Consensus Estimate for the same is pegged at $3.49, indicating a year-over-year increase of 8.28%. The figure has remained unchanged for the past 60 days

FFIV’s earnings surpassed the Zacks Consensus Estimate in each of the trailing four quarters, delivering an average earnings surprise of 10.95%. (Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)

FFIV projects its third-quarter non-GAAP revenues in the range of $740-$760 million. The Zacks Consensus Estimate for the same is pegged at $753.1 million, indicating year-over-year growth of 8.3%.

Factors Likely to Influence FFIV’s Q3 Results

FFIV’s Product segment performance in the fiscal third quarter is likely to have gained from the recovering demand for its software solutions as demand for its flexible solutions aligns with the hybrid and multi-cloud architectures. This trend is likely to have continued in the to-be-reported quarter. Our estimate for Software revenues is pegged at $202 million.

Technology activities by customers to refresh the VIPRION and iSeries offerings, which are coming to an end, are likely to have boosted the Systems segment sales in the third quarter. Our estimate for Systems revenues is pegged at $144.7 million.

Strong sales across the Software and Systems divisions are likely to have boosted the overall performance of the Product division. Our estimate for Product revenues is pegged at of $346.6 million.

The acceleration in BIG-IP and NGINX subscription software deals is expected to have remained a major growth driver. BIG-IP’s data point performance, automation capabilities and lower cost of ownership are likely to have helped F5 win multiple deals in the fiscal third quarter.

However, slower growth in perpetual software licenses due to IT budget cuts amid lingering macroeconomic uncertainties is likely to have offset the overall software revenues. However, there will be a net increase in its revenues in the to-be-reported quarter due to traction from new avenues, including AI adoption.

What Our Model Says

Our proven model does not conclusively predict an earnings beat for F5 this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. However, that’s not the case here.

FFIV has an Earnings ESP of -0.33% and a Zacks Rank of 3 at present. You can uncover the best stocks before they’re reported with our Earnings ESP Filter.

Stocks With the Favorable Combination

Here are some companies worth considering, as our model shows that these have the right combination of elements to beat on earnings in their upcoming releases:

Lam Research LRCX, Sensata Technologies ST and Electronic Arts EA are some stocks with favorable combinations.

Lam Research has an Earnings ESP of +1.87% and carries a Zacks Rank of 2 at present. Lam Research is slated to report its fourth-quarter fiscal 2025 results on July 30. You can seethe complete list of today’s Zacks #1 Rank stocks here.

Sensata Technologies has an Earnings ESP of +1.45% and a Zacks Rank of 2 at present. Sensata Technologies is set to report its second-quarter 2025 results on July 29.

Electronic Arts has an Earnings ESP of +53.06% and a Zacks Rank of 2 at present. Electronic Arts is set to report its second-quarter 2025 results on July 29.

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This article originally published on Zacks Investment Research (zacks.com).

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