F5 Stock Soars 9% as Q1 Earnings and Revenues Beat Estimates

F5, Inc. FFIV shares were trading 9.3% higher in the pre-market session today as the company reported better-than-expected first-quarter fiscal 2026 results. FFIV reported first-quarter non-GAAP earnings per share (EPS) of $4.45, which surpassed the Zacks Consensus Estimate by 22.21% and came ahead of management’s guidance of $3.35-$3.85 (midpoint of $3.60). The bottom line increased 15.9% year over year.

F5’s revenues of $822 million for the first quarter beat the consensus mark by 8.22%. The top line rose 7% on a year-over-year basis. Revenues also came ahead of management’s guidance of $730-$780 million (midpoint of $755 million).

FFIV’s Q1 Details

Product revenues (49.9% of total revenues), which comprise the Software and Systems subdivisions, increased 11% year over year to $410 million. Our model estimates for the Product segment revenues were pegged at $355.4 million.

This growth was primarily driven by a robust 37% year-over-year jump in Systems revenues, which totaled $218 million. Systems accounted for 53% of total Product revenues, showing continued momentum due to demand for infrastructure upgrades. Our model estimates for the Systems revenues were pegged at $159.8 million.

Weaknesses across the Software sub-segment partially offset the benefits of Systems revenue growth. Software revenues declined 8% year over year to $192 million. Our model estimates for the Software revenues were pegged at $195.6 million.

Global Services revenues (50.1% of total revenues) grew 4% year over year to $412 million. Our model estimates for the Global Services segment revenues were pegged at $399.4 million.

Non-GAAP gross profit increased 7.2% year over year to $689 million. The non-GAAP gross margin for the quarter came in at 83.8%, down 10 basis points from the year-ago quarter’s 83.9%. Non-GAAP operating income soared 9.8% to $314 million, while the margin improved 80 basis points to 38.2%.

F5’s Balance Sheet & Cash Flow

F5 ended the December quarter with cash and short-term investments of $1.22 billion, down from $1.36 billion in the previous quarter. The company generated an operating cash flow of $159 million during the reported quarter.

In the fiscal first quarter, F5 repurchased shares worth $300 million.

F5 Initiates Q2 Guidance & Updates FY26 View

For the second quarter of fiscal 2026, F5 expects revenues between $770 million and $790 million. The Zacks Consensus Estimate for second-quarter revenues is pegged at $747.2 million, suggesting year-over-year growth of approximately 2.2%.

The company projected a non-GAAP EPS in the range of $3.34-$3.46 (midpoint $3.40) for the second quarter of fiscal 2026. The Zacks Consensus Estimate for the second-quarter EPS stands at $3.36, indicating a year-over-year decrease of 1.8%.

F5 raises guidance for fiscal 2026. The company now anticipates that its fiscal 2026 revenues will grow in the 5-6% range, up from the earlier band of 0-4%. The Zacks Consensus Estimate for fiscal 2026 revenues is pegged at $3.16 billion, calling for year-over-year growth of 2.3%.

Non-GAAP EPS is now projected between $15.65 and $16.05, up from the previous guidance range of $14.50-$15.50. The Zacks Consensus Estimate for fiscal 2026 EPS stands at $15.14, implying a year-over-year decline of 4.2%.

FFIV’s Zacks Rank & Other Stocks to Consider

Currently, F5 carries a Zacks Rank #2 (Buy).

Amphenol APH, Micron Technology MU and Analog Devices ADI are some other top-ranked stocks that investors can consider in the Zacks Computer and Technology sector. Amphenol and Micron Technology each sport a Zacks Rank #1 (Strong Buy) at present, while Analog Devices carries a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for Amphenol’s 2026 earnings has been revised upward by 5 cents over the past seven days to $4.21 per share, calling for an increase of 27.2% year over year. Amphenol shares have surged 140.4% in the trailing 12 months.

The Zacks Consensus Estimate for Micron Technology’s fiscal 2026 earnings has moved southward by 7 cents in the past seven days to $33.01 per share, implying 298.2% year-over-year growth. Micron Technology shares have soared 360.9% over the past year.

The Zacks Consensus Estimate for Analog Devices’ fiscal 2026 earnings is pegged at $10.01 per share, revised upward by 22 cents over the past 30 days and suggests a year-over-year increase of 28.5%. Analog Devices shares have rallied 44.8% over the past year.

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