Key Highlights

  • FFIV shares are indicated down 6.61% at $429.00 in premarket, against a prior close of $459.36.
  • Q4 revenue of $917 million rose 13%, and non-GAAP EPS of $4.42 beat estimates.
  • Fiscal 2027 revenue growth is guided to 8% to 9%, a slowdown from fiscal 2026.
  • Q1 EPS guidance of $4.25 to $4.37 sits below the roughly $4.45 consensus.
  • The board authorized an additional $1.5 billion in buybacks.

F5 (NASDAQ:FFIV) shares are indicated down 6.61% at $429.00 in premarket after fiscal fourth-quarter results that beat estimates were paired with guidance that left some investors cautious. Revenue rose 13% to $917 million, above the $884 million estimate, and non-GAAP EPS of $4.42 topped the $4.24 estimate. Shares closed Tuesday at $459.36, down 0.49%, after a run of roughly 80% so far this year.

F5, headquartered in Seattle, provides multicloud application security and delivery solutions, including BIG-IP, NGINX and F5 Distributed Cloud Services, which cover load balancing, web app and API protection, DDoS defense and multicloud networking. It is led by CEO Francois Locoh-Donou.

Guidance Points to Slower Growth and Thinner Margins

Fiscal 2027 revenue growth is guided to 8% to 9%, against 11% for fiscal 2026 and $3.4 billion of revenue. Non-GAAP gross margin is guided to 80.5% to 82.5% on higher component costs, and non-GAAP operating margin to 33% to 35%. Full-year EPS is guided to $18.00 to $18.30.

First-quarter revenue is guided to $875 million to $895 million with EPS of $4.25 to $4.37, below the roughly $4.45 consensus. Management said operating cash flow will be affected by inventory builds and the November annual bonus payout.

Product and AI Demand Stay Strong

Product revenue grew 23% to $510 million, the ninth straight quarter of double-digit product growth, with systems up 29% and software up 19%. Non-GAAP operating margin was 33.7%.

Direct AI use case bookings exceeded $100 million for the year, up nearly 300%, and direct AI customers grew fourfold to more than 200. More than 300 customers deployed the AI-powered web application firewall, and EMEA revenue grew 31%. F5 plans to double its specialist AI security sellers in 2027.

Downgrade Tempers the Rally

Piper Sandler downgraded the stock to Neutral on valuation with a $461 target, while Morgan Stanley, Goldman Sachs and Barclays raised targets to $448, $435 and $428. Fourth-quarter free cash flow was $91 million, and the added $1.5 billion buyback authorization brings the total to $1.8 billion. F5 expects to repurchase at least 50% of fiscal 2027 free cash flow. The 52-week range runs from $223.76 to $483.30.