Key Highlights

  • F5 reported fiscal fourth quarter revenue of USD 917 million, up 13% year over year and above consensus estimates.
  • Non-GAAP diluted earnings per share were USD 4.42, while GAAP diluted earnings per share were USD 3.23.
  • Systems revenue grew 29% to USD 239 million and software revenue grew 19% to USD 271 million during the quarter.
  • The board authorized an additional USD 1.5 billion for share repurchases, incremental to USD 322 million remaining in the existing program.

Systems and Software Revenue Drive Growth

F5 (NASDAQ:FFIV) reported fiscal fourth quarter revenue of USD 917 million, up 13% from USD 810 million in the fourth quarter of fiscal 2025. Product revenue totaled USD 510 million, compared with USD 414 million a year earlier, with systems revenue of USD 239 million growing 29% and software revenue of USD 271 million growing 19%. Services revenue grew 3% to USD 408 million.

GAAP net income for the quarter was USD 186 million, or USD 3.23 per diluted share, compared with USD 190 million, or USD 3.26 per diluted share, a year earlier. Non-GAAP net income was USD 255 million, or USD 4.42 per diluted share, compared with USD 257 million, or USD 4.39 per diluted share, in the prior year quarter.

Margin Trends Show Modest Compression

Non-GAAP gross margin was 84.0% for the quarter, compared with 84.3% a year earlier, while non-GAAP operating margin was 33.7%, down from 37.0% in the prior year period. GAAP gross margin held steady at 82.2% in both periods, while GAAP operating margin declined to 23.1% from 25.4%.

For the full fiscal year 2026, revenue totaled USD 3,417 million, up 11% from USD 3,088 million in fiscal 2025, with non-GAAP earnings per diluted share of USD 17.49, compared with USD 15.81 a year earlier. Full year systems revenue grew 31% while software revenue grew 8%.

Capital Return Expansion

The board authorized an additional USD 1.5 billion for the company's common stock repurchase program, incremental to the USD 322 million remaining in the existing authorization. This expanded buyback capacity gives the company substantial flexibility for capital return heading into fiscal 2027.

Continued growth in systems and software revenue, which both outpaced services revenue this quarter, could support further margin recovery if that mix shift continues, while the non-GAAP operating margin decline from a year ago remains a trend worth monitoring relative to the company's cost structure.

Margin and Buyback Metrics to Track

Non-GAAP operating margin trends relative to the 33.7% reported this quarter, down from 37.0% a year ago, the pace of share repurchases under the newly expanded USD 1.5 billion authorization, and continued systems and software revenue growth relative to this quarter's 29% and 19% increases are among the items that may shape how fiscal 2027 compares with this result. Full year non-GAAP operating margin, which held roughly flat at 35.1% versus 35.2% a year earlier, is a broader profitability gauge investors may also continue to reference.