F5 (FFIV) reports strong Q4 2025 results; addresses security incident

Earnings Release Date: October 27, 2025

Key Points

• Revenue: $810 million (vs $747 million Q4 FY24) — up 8% YoY and 3% QoQ.
• GAAP EPS: $3.26 (vs $2.80 last year), up 16% YoY.
• Non-GAAP EPS: $4.39 (vs $3.67), up 20% YoY, beating Street expectations of ~$4.25.
• GAAP operating margin: 25.4%; Non-GAAP operating margin: 37.0% (+255 bps YoY).
• Gross margin: 84.3% (+130 bps YoY).
• Net income (non-GAAP): $257 million (+19% YoY).
• Free cash flow: $906 million for FY25 (+19% YoY).
• Share repurchases: $125 million in Q4; 55% of FY25 free cash flow returned to shareholders.

Against Street Expectations:

• EPS $4.39 vs $4.25 est → beat by $0.14.
• Revenue $810 M vs $795 M est → beat by ~2%.

Quarter Highlights

• Systems revenue: $229 M (+10% YoY).
• Software revenue: $186 M (+42% YoY), with 87% from subscriptions as F5 continues its transition to recurring models.
• Global services revenue: $396 M (+2% YoY).
• Recurring revenue: $586 M (72% of total).
• Security-related revenue: $1.2 B for FY25 (+6% YoY); security now represents 39% of total revenue.
• Regional performance: Americas +7%, EMEA +7%, APAC +19% YoY.
• Cash and investments: $1.36 B (–$80 M QoQ due to Calypso AI acquisition).
• Deferred revenue: $1.999 B (+11% YoY).

CEO Statement and Security Incident Response

“Our fourth quarter capped a record year of revenue, profitability, and free cash flow,” said François Locoh-Donou, President and CEO of F5.

“Following the recent security incident, we acted immediately to contain the threat, investigate the breach, and strengthen our security posture across every aspect of our business. We are committed to learning from this event, sharing insights with customers and partners, and raising the bar for security in our industry.”

Company Response Summary (from press release):

1. Contained the threat actor and initiated a thorough investigation with external forensics support.
2. Delivered reliable software updates to address all undisclosed vulnerabilities in BIG-IP code.
3. Launched a comprehensive roadmap to enhance security controls across internal processes, environments, and products.
4. Estimated impact: ~$3.4 million in related expenses recognized in Q4.

Outlook and Guidance

Q1 FY26 Outlook:

• Revenue: $730 M – $780 M.
• Non-GAAP gross margin: 82.5% – 83.5%.
• Non-GAAP operating margin: 33.5% – 34.5%.
• Non-GAAP EPS: $3.35 – $3.85.

FY26 Outlook:

• Revenue growth: 0 – 4% YoY (≈ $3.1 B baseline).
• Non-GAAP gross margin: 83 – 83.5%.
• Non-GAAP EPS: $14.50 – $15.50 (vs $15.81 FY25).
• Free cash flow return target: ≥ 50% of annual FCF to shareholders.

Financial Summary

Capital Return

• Share repurchases: $125 M in Q4; $500 M for FY25.
• Dividend: None declared.
• Remaining authorization: $922 M under buyback program.

About F5, Inc.

F5 (NASDAQ: FFIV) is a global leader in multi-cloud application delivery and security. The company provides software and services that enable enterprises and service providers to securely deliver and optimize applications in on-premises, cloud, and edge environments. Headquartered in Seattle, Washington, F5 serves customers in over 80 countries through its BIG-IP, NGINX, and Distributed Cloud platforms.

Key Takeaways

• Strong execution: Revenue and EPS both beat expectations; margins reached record levels.
• Security incident transparency: F5 acknowledged cyber costs (~$3.4 M) and outlined comprehensive remediation actions.
• Software shift: Recurring revenue now 72% of total, driven by subscriptions and managed services.
• AI expansion: Acquisition of Calypso AI enhances AI runtime security portfolio.
• FY26 outlook cautious: Guidance slightly below FY25 profit levels, reflecting higher tax rate and integration costs.
• Overall: F5 delivered double-digit EPS growth and strong cash generation while taking decisive steps to reinforce trust and strengthen security after the recent breach.