Key Highlights

  • Revenue was $917 million, up 13% from $810 million, with product revenue up 23% to $510 million.
  • Non-GAAP EPS was $4.42 versus $4.39, and GAAP EPS was $3.23 versus $3.26.
  • Fiscal 2027 guidance calls for revenue growth of 8% to 9% and non-GAAP EPS of $18.00 to $18.30.
  • First-quarter fiscal 2027 guidance is revenue of $875 million to $895 million and non-GAAP EPS of $4.25 to $4.37.
  • Operating cash flow for fiscal 2026 was $959.5 million, and the company paid $601.1 million for repurchases.

F5 Earnings: Did 23% Product Growth Offset Thinner Margins?

F5 (NASDAQ:FFIV) reported fiscal fourth-quarter results after the market close on Tuesday, October 27, with revenue of $917 million, up 13% from $810 million. Non-GAAP EPS was $4.42 against $4.39, and as screened the estimate was $4.26. Revenue topped the top end of the company's own guidance of $870 million to $890 million, and EPS topped the $4.14 to $4.26 range.

Fiscal 2027 guidance is revenue growth of 8% to 9% and non-GAAP EPS of $18.00 to $18.30, compared with $17.49 for fiscal 2026. That is calculated growth of about 3% to 5%, so profit is guided to grow more slowly than revenue.

Applied to fiscal 2026 revenue of $3,417 million, the revenue range implies roughly $3.69 billion to $3.72 billion, a calculated figure.

Product Mix: Why Did Systems Revenue Grow 29%?

Product revenue rose 23% to $510 million, with systems revenue up 29% to $239 million and software revenue up 19% to $271 million. Services revenue was $408 million, up 3% from $396 million.

For the full year, revenue was $3,417 million, up 11%. Product revenue rose 19% to $1,793 million, systems revenue rose 31% to $923 million and software revenue rose 8% to $870 million. Management pointed to nine consecutive quarters of double-digit product revenue growth.

Demand drivers cited were hybrid multicloud complexity, an intensifying threat environment and AI-driven change, including attack surfaces expanding through APIs and AI agents.

Margins and Cash: What Do the Fourth-Quarter Details Show?

Non-GAAP gross margin was 84.0% versus 84.3%, and non-GAAP operating margin was 33.7% versus 37.0%. GAAP operating margin was 23.1% versus 25.4%. Stock-based compensation was $67.5 million versus $57.2 million, and acquisition-related charges were $10.3 million versus $7.6 million.

Fiscal 2026 non-GAAP EPS was $17.49 versus $15.81, and GAAP EPS was $12.52 versus $11.80. Operating cash flow was $959.5 million, capital spending was $90.5 million (up from $43.3 million) and free cash flow was about $869 million, a calculated figure.

Cash was $1,590.5 million, inventories rose to $261.9 million from $77.2 million, and total deferred revenue was $2,204.4 million. The company recorded $28.0 million of cyber incident costs for the year, offset by $10.0 million of insurance recoveries.

Buybacks and First-Quarter Targets: What Comes Next?

The company paid $601.1 million for repurchases in fiscal 2026, had $322 million left on its program and announced an additional $1.5 billion. Shares outstanding fell to 56.8 million from 57.7 million. First-quarter fiscal 2027 guidance is revenue of $875 million to $895 million and non-GAAP EPS of $4.25 to $4.37, the next test of the margin trend and systems demand.