F5 Stock Soars 8% as Q3 Earnings and Revenues Crush Estimates

F5, Inc. FFIV shares gained 7.7% during Wednesday’s extended trading session after the company reported better-than-expected results for the third quarter of fiscal 2025. An upbeat guidance for the full fiscal 2025 also turned investors optimistic about the company’s near-term prospects.

F5 reported third-quarter non-GAAP earnings of $4.16 per share, which surpassed the Zacks Consensus Estimate by 19.2% and came ahead of management’s guidance of $3.41-$3.53 (midpoint of $3.47). The bottom line increased 23.8% year over year.

F5’s revenues of $780 million for the third quarter beat the consensus mark by 3.6%. The top line rose 12.2% on a year-over-year basis. Revenues also came ahead of management’s guidance of $740-$760 million (midpoint of $750 million).

FFIV’s Q3 2025 Details

Product revenues (49.8% of total revenues), which comprise the Software and Systems subdivisions, increased 26% year over year to $389 million. Our model estimates for the Product segment revenues were pegged at $346.7 million.

This growth was primarily driven by a robust 39% year-over-year jump in Systems revenues, which totaled $181 million. Systems accounted for approximately 46.5% of total Product revenues, showing continued momentum due to demand for infrastructure upgrades. Our model estimates for the Systems revenues were pegged at $144.7 million.

The Software sub-segment also contributed to the growth, with revenues rising 16% year over year to $208 million. Our model estimates for the Software revenues were pegged at $202 million.

Global Services revenues (50.2% of total revenues) grew 1% year over year to $392 million. Our model estimates for the Global Services segment revenues were pegged at $399.5 million.

Non-GAAP gross profit increased 12.3% year over year to $649 million. The non-GAAP gross margin for the quarter came in at 83.1%, flat on a year-over-year basis. Non-GAAP operating income soared 14.6% to $267 million, while the margin improved 90 basis points to 34.3%.

F5’s Balance Sheet & Cash Flow

F5 ended the June-ended quarter with cash and short-term investments of $1.44 billion, up from $1.26 billion in the previous quarter. The company generated an operating cash flow of $282 million during the quarter and $742 million in the first nine months of fiscal 2025.

In the fiscal third quarter, F5 repurchased shares worth $125 million. During the first nine months of fiscal 2025, the company repurchased shares worth $377 million.

F5 Raises Guidance for 2025

F5 anticipates that its fiscal 2025 revenues will grow in the range of approximately 9% at the midpoint compared with the previously projected revenue growth of 6.5-7.5%. The Zacks Consensus Estimate for fiscal 2025 revenues is pegged at $3.02 billion, indicating year-over-year growth of 7.3%.

Non-GAAP earnings per share are now projected to grow 14-15% compared with the earlier projected earnings growth of 8-10%. The Zacks Consensus Estimate for fiscal 2025 earnings stands at $14.59, implying year-over-year growth of 9.1%.

For the fourth quarter of fiscal 2025, F5 expects revenues between $780 million and $800 million. The Zacks Consensus Estimate for fourth-quarter revenues is pegged at $770.6 million, suggesting year-over-year growth of 3.2%.

The company projected a non-GAAP EPS in the range of $3.87-$3.99 for the fourth quarter of fiscal 2025. The Zacks Consensus Estimate for fourth-quarter fiscal 2025 revenues stands at $3.84, indicating a year-over-year increase of 4.6%.

FFIV’s Zacks Rank & Stocks to Consider

Currently, F5 carries a Zacks Rank #3 (Hold).

Arista Networks ANET, Bumble BMBL and MongoDB MDB are some top-ranked stocks that investors can consider in the broader Zacks Computer and Technology sector. Arista Networks, Bumble and MongoDB sport a Zacks Rank #1 (Strong Buy) each at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for Arista Networks’ 2025 earnings has been revised upward by a penny to $2.58 per share over the past 30 days and suggests a year-over-year increase of 13.7%. Arista Networks shares have soared 10.4% year to date.

The Zacks Consensus Estimate for Bumble’s 2025 earnings has been revised upward by a penny to $1.05 per share in the past 30 days, suggesting a strong improvement from the loss of $4.61 reported in 2024. Bumble shares have declined 7% year to date.

The Zacks Consensus Estimate for MongoDB’s fiscal 2026 earnings has been revised upward 20.4% to $3.07 per share in the past 60 days, calling for a 16.1% year-over-year decline. MongoDB shares have risen 4.9% year to date.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

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

Zacks Investment Research