What drove F5's first quarter revenue growth?

Revenue grew 7% to $822.5 million, led by an 11% increase in product revenue. Systems revenue, which rose 37% to $218 million, was the main driver, offsetting an 8% decline in software revenue. Global services grew 4% to $412 million.

Why did the company raise its fiscal 2026 outlook?

F5 raised its full-year revenue growth guidance to 5%-6% from 0%-4%, its non-GAAP operating margin guidance to 34%-35% from 33.5%-34.5%, and its non-GAAP EPS guidance to $15.65-$16.05 from $14.50-$15.50. The release attributes the strong first-quarter performance to durable demand from hybrid multicloud adoption, enterprise AI, and converged platforms. The release does not provide a detailed breakdown of the drivers behind the revised guidance.

Is the decline in operating cash flow a concern?

Operating cash flow fell to $159.2 million from $202.8 million. The main cause was a $79.4 million increase in accounts receivable, which reflects the timing of billings and collections rather than a change in earnings quality. Deferred revenue, which is a leading indicator of future revenue, rose by $62.4 million during the quarter, and total deferred revenue reached about $2.06 billion. Investors may want to monitor collections in the next quarter to confirm that the receivables build reverses.

What was the impact of the cyber incident on results?

The company recorded $17.5 million of cyber incident costs in operating expenses in the quarter, which reduced GAAP operating margin to 26.0% from 26.8%. These costs are excluded from non-GAAP results, so the non-GAAP operating margin rose to 38.2%. The filing does not provide further detail on the incident's scope or on any expected future costs.

How much did F5 return to shareholders, and how does it affect the balance sheet?

F5 repurchased $301.1 million of common stock in the quarter, compared with $125.0 million a year earlier. Cash and cash equivalents fell to $1.20 billion from $1.34 billion, and shareholders' equity declined to $3.54 billion from $3.59 billion. The company's balance sheet remains liquid, but sustained buybacks at this pace will continue to draw down cash balances.

FFIV 8-K: Earnings & Results

01—Abstract

Summary

Summary of the 8-K filed January 27, 2026. Cited figures are marked; the original filing is the authoritative source.

F5, Inc. (NASDAQ: FFIV) reported first quarter fiscal 2026 results (quarter ended December 31, 2025) with revenue of $822.5 million^a, up 7% year over year from $766.5 million, driven by 11% product revenue growth.

Systems revenue rose 37% to $218 million^b, while software revenue fell 8% to $192 million against a strong prior-year comparison and global services grew 4% to $412 million. Management highlighted this as the sixth consecutive quarter of double-digit product revenue growth. GAAP net income was $180.1 million ($3.10 diluted EPS) versus $166.4 million ($2.82) a year earlier, and non-GAAP EPS was $4.45 versus $3.84, a 16% increase.

GAAP operating margin was 26.0% and non-GAAP operating margin was 38.2%, up from 37.4%. GAAP results include $17.5 million^c of cyber incident costs, which are excluded from non-GAAP figures. F5 raised its fiscal 2026 outlook: revenue growth is now expected at 5% to 6% (previously 0% to 4%), non-GAAP operating margin at 34% to 35% (previously 33.5% to 34.5%), and non-GAAP EPS at $15.65 to $16.05 (previously $14.50 to $15.50).

For fiscal Q2 2026, the company guided revenue to $770 million to $790 million^d and non-GAAP EPS to $3.34 to $3.46. Note that the Q2 guidance range implies sequential revenue at or below Q1's $822 million, reflecting the lumpiness of systems and software revenue. Balance-sheet and cash-flow items warrant attention.

Operating cash flow was $159.2 million, down from $202.8 million, with a large increase in accounts receivable ($79.4 million outflow). Cash and equivalents declined to $1.20 billion from $1.34 billion, largely due to $301.1 million of share repurchases, which were more than double the prior-year pace.

Total shareholders' equity fell to $3.54 billion from $3.59 billion. Deferred revenue grew to $2.06 billion in total, a positive indicator of future revenue visibility.

02—Key points

Key Highlights

Revenue of $822.5M, up 7% YoY; product revenue up 11%, the sixth straight quarter of double-digit product growth.
Systems revenue surged 37% to $218M, while software revenue declined 8% to $192M against a tough comparison and services grew 4% to $412M.
Non-GAAP EPS of $4.45 rose 16% from $3.84; GAAP diluted EPS of $3.10 rose 10% from $2.82.
Non-GAAP operating margin expanded to 38.2% from 37.4%, while GAAP operating margin contracted to 26.0% from 26.8% due to $17.5M of cyber incident costs and $9.8M of acquisition-related charges.
FY2026 guidance raised across all metrics: revenue growth to 5%-6% (from 0%-4%), non-GAAP operating margin to 34%-35%, and non-GAAP EPS to $15.65-$16.05 (from $14.50-$15.50).
Q2 FY2026 guidance of $770M-$790M revenue and $3.34-$3.46 non-GAAP EPS; the midpoint sits below Q1's revenue level.
Share repurchases of $301M in the quarter drew cash down to $1.20B and operating cash flow fell to $159M from $203M, driven by higher receivables.

03—Questions

Frequently Asked Questions

What drove F5's first quarter revenue growth?
Revenue grew 7% to $822.5 million, led by an 11% increase in product revenue. Systems revenue, which rose 37% to $218 million, was the main driver, offsetting an 8% decline in software revenue. Global services grew 4% to $412 million.
Why did the company raise its fiscal 2026 outlook?
F5 raised its full-year revenue growth guidance to 5%-6% from 0%-4%, its non-GAAP operating margin guidance to 34%-35% from 33.5%-34.5%, and its non-GAAP EPS guidance to $15.65-$16.05 from $14.50-$15.50. The release attributes the strong first-quarter performance to durable demand from hybrid multicloud adoption, enterprise AI, and converged platforms. The release does not provide a detailed breakdown of the drivers behind the revised guidance.
Is the decline in operating cash flow a concern?
Operating cash flow fell to $159.2 million from $202.8 million. The main cause was a $79.4 million increase in accounts receivable, which reflects the timing of billings and collections rather than a change in earnings quality. Deferred revenue, which is a leading indicator of future revenue, rose by $62.4 million during the quarter, and total deferred revenue reached about $2.06 billion. Investors may want to monitor collections in the next quarter to confirm that the receivables build reverses.
What was the impact of the cyber incident on results?
The company recorded $17.5 million of cyber incident costs in operating expenses in the quarter, which reduced GAAP operating margin to 26.0% from 26.8%. These costs are excluded from non-GAAP results, so the non-GAAP operating margin rose to 38.2%. The filing does not provide further detail on the incident's scope or on any expected future costs.
How much did F5 return to shareholders, and how does it affect the balance sheet?
F5 repurchased $301.1 million of common stock in the quarter, compared with $125.0 million a year earlier. Cash and cash equivalents fell to $1.20 billion from $1.34 billion, and shareholders' equity declined to $3.54 billion from $3.59 billion. The company's balance sheet remains liquid, but sustained buybacks at this pace will continue to draw down cash balances.

04—Continue

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