F5, Inc.

What they do

F5 sells application delivery and security solutions across on-premises, cloud, and edge environments, spanning F5 BIG-IP, F5 NGINX, and F5 Distributed Cloud Services. Offerings are sold as packaged software (perpetual, subscription, usage-based), SaaS and managed services, high-performance hardware systems, and global services including maintenance, consulting, and training. The company organizes its business into three geographic regions: Americas; EMEA; and APAC, and fiscal years end September 30.

Revenue drivers

• Systems (hardware) — Q3 FY26 systems revenue was $240 million, up 32% year over year, the fastest-growing product line, though the company does not break out systems as a separate annual segment.
• Software — Q3 FY26 software revenue was $223 million, up 7% year over year, sold as perpetual, subscription, and usage-based licenses and as SaaS/managed services under BIG-IP, NGINX, and Distributed Cloud.
• Services — Q3 FY26 services revenue was $402 million, up 3% year over year, covering maintenance, consulting, training, and technical support; it is the largest single revenue line at roughly 46% of quarterly revenue.
• Geographic regions — Revenue is managed and reported across Americas, EMEA, and APAC, with customers including large enterprises, public sector institutions, governments, and service providers.

Recent performance

Q3 FY26 (ended June 30, 2026) revenue was $865 million, up 11% from $780 million a year earlier, with product revenue up 19%. Systems revenue of $240 million grew 32% and software revenue of $223 million grew 7%, while services revenue of $402 million grew 3%. GAAP gross margin rose to 82.2% from 81.0%, but GAAP operating margin slipped to 24.7% from 25.2% as operating expenses grew. GAAP net income was $208 million, or $3.62 per diluted share, versus $190 million, or $3.25, a year ago; non-GAAP net income was $272 million, or $4.73 per diluted share. Nine-month FY26 revenue was $2.50 billion with net income of $536 million.

Strategy

F5 positions its BIG-IP, NGINX, and Distributed Cloud Services families as an integrated portfolio covering legacy, modern, and AI-powered applications and APIs across data center, public cloud, and edge. Stated priorities include solving multicloud application delivery and security challenges, transforming customer experience through data and insights, digital sales, and SaaS-delivered capabilities, and embedding AI and machine learning in both current and future offerings. The company says it is the only provider capable of supporting customers' modern and legacy application delivery and security needs across any environment. Management describes a continuous defense model that uses AI to identify risk earlier, protect applications at runtime, and deliver hardened software faster.

Risks

• Cyber Incident fallout — F5 disclosed on October 15, 2025 that a threat actor maintained long-term persistent access to its systems and exfiltrated files, and the 10-K states the incident has had and may continue to have an adverse effect on business, reputation, customer, employee and partner relations, results of operations, financial condition and cash flows.
• Security and product failures — The 10-K states that security vulnerabilities or control failures in F5's IT infrastructure or its application delivery and security products, as well as unforeseen product errors, could materially harm the business, results, financial condition, and reputation.
• Supply chain dependence — F5 relies on contract manufacturers and third-party component sources, and the 10-K warns the business could suffer interruptions or delays in hardware supply or from loss of a single source of hardware assembly.
• Quarter-end sales execution — The 10-K notes reliance on fulfillment at the end of the quarter could cause revenue for a period to fall below expected levels, and that F5 has an unpredictable sales cycle.

Outlook

On July 27, 2026 F5 raised fiscal 2026 guidance to revenue growth of approximately 9% to 10%, up from 7% to 8% previously, and non-GAAP EPS of $17.21 to $17.33, up from $16.25 to $16.55. For Q4 FY26, the company guided revenue to $870 million to $890 million with non-GAAP earnings of $4.14 to $4.26 per diluted share. Management attributed the raised outlook to continued product momentum, citing eight consecutive quarters of double-digit product growth.