FFIV Q2 Earnings Surpass Expectations, Revenues Rise Y/Y

F5, Inc. FFIV reported second-quarter fiscal 2025 non-GAAP earnings of $3.42 per share, which surpassed the Zacks Consensus Estimate by 10.3% and came ahead of management’s guidance of $3.02-$3.14 (midpoint of $3.08). The bottom line increased 17.5% year over year.

F5’s revenues of $731 million for the second quarter of fiscal 2025 surpassed the consensus mark by 2%. The top line increased 7.3% on a year-over-year basis. Revenues also came ahead of management’s guidance of $705-$725 million (midpoint of $715 million).

FFIV’s Q2 2025 Details

Product revenues (46.1% of total revenues), which comprise the Software and Systems subdivisions, increased 12% year over year to $337.2 million. This growth was primarily driven by a robust 27% year-over-year increase in Systems revenues, which totaled $179 million.

However, this was partially offset by flat Software revenues, which remained at $158 million compared to the year-ago period. Systems accounted for approximately 53.1% of total Product revenues, showing continued momentum due to demand for infrastructure upgrades.

F5, Inc. Price, Consensus and EPS Surprise

F5, Inc. price-consensus-eps-surprise-chart | F5, Inc. Quote

Global Services revenues (53.9% of total revenues) grew 3% year over year to $393.9 million, supported by sustained pricing strength implemented in prior periods.

Non-GAAP gross margin for the quarter expanded 100 basis points to 83.1% from 82.1% a year ago.

F5’s Balance Sheet & Cash Flow

F5 ended the March-ended quarter with cash and short-term investments of $1.26 billion, up from $1.16 billion in the previous quarter. The company generated operating cash flow of $257 million during the quarter, up from $203 million reported in the previous quarter.

In the fiscal second quarter, F5 repurchased shares worth $252.1 million, maintaining its commitment to return a significant portion of free cash flow to shareholders.

F5 Raises Guidance for 2025

F5 anticipates its fiscal 2025 revenues to grow in the range of 6.5-7.5% compared with the previously projected revenue growth of 6-7%. The Zacks Consensus Estimate for fiscal 2025 revenues is pegged at $3 billion, indicating year-over-year growth of 6.5%.

Non-GAAP earnings per share are now projected to grow 8-10% compared with the earlier projected earnings growth of 6.5-8.5%. The Zacks Consensus Estimate for fiscal 2025 earnings is pegged at $14.33, indicating year-over-year growth of 7.2%.

For third-quarter fiscal 2025, F5 expects revenue between $740 million and $760 million. The Zacks Consensus Estimate for third-quarter fiscal 2025 revenues is pegged at $3 billion, indicating year-over-year growth of 6.5%.

The company projected a non-GAAP EPS in the range of $3.41-$3.53 for the third quarter of fiscal 2025. The Zacks Consensus Estimate for third-quarter fiscal 2025 revenues is pegged at $3.55, indicating a year-over-year increase of 5.7%. (Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)

Zacks Rank and Stocks to Consider

Currently, FFIV carries a Zacks Rank #4 (Sell).

Affirm AFRM, Super Micro Computer SMCI and Paycom Software PAYC are some better-ranked stocks that investors can consider in the broader Zacks Computer & Technology sector. ACIW, SMCI and ACMR sport a Zacks Rank #1 (Strong Buy) each at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

AFRM shares have gained 4% for the past year. The Zacks Consensus Estimate for AFRM’s full-year 2025 earnings is pegged at a loss of 6 cents per share, up by 7 cents over the past 60 days, suggesting a growth of 96.7% from the year-ago quarter’s reported figure.

SMCI shares have plunged 56.4% in the past year. The Zacks Consensus Estimate for SMCI’s full-year fiscal 2025 earnings have been revised downward to $2.52 in the past seven days reflecting a year-over-year growth of 14%.

PAYC shares have gained 6% over the past year. The Zacks Consensus Estimate for PAYC’s full-year 2025 earnings is pegged at $8.72 per share, implying a rise of 6.21% from the year-ago quarter’s levels.

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

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