FFIV

As the Q2 earnings season comes to a close, it’s time to take stock of this quarter’s best and worst performers in the content delivery industry, including F5 (NASDAQ:FFIV) and its peers. The amount of content on the internet is exploding, whether it is music, movies and or e-commerce stores. Consumer demand for this content creates network congestion, much like a digital traffic jam which drives demand for specialized content delivery networks (CDN) services that alleviate potential network bottlenecks. The 4 content delivery stocks we track reported a very strong Q2. As a group, revenues beat analysts’ consensus estimates by 3.6% while next quarter’s revenue guidance was 1.8% above. Amidst this news, share prices of the companies have had a rough stretch. On average, they are down 10% since the latest earnings results. Originally named after the F5 tornado, the most powerful on the meteorological scale, F5 (NASDAQ:FFIV) provides security and delivery solutions that protect applications across cloud, data center, and edge environments for large organizations. F5 reported revenues of $865.1 million, up 10.9% year on year. This print exceeded analysts’ expectations by 3.6%. Overall, it was an exceptional quarter for the company with a solid beat of analysts’ billings estimates and an impressive beat of analysts’ adjusted operating income estimates. “Q3 was another outstanding quarter with 19% product revenue growth driving 11% total revenue growth year over year,” said François Locoh-Donou, F5’s Chairman, President, and CEO. Investor expectations, however, were likely higher than Wall Street’s published projections, leaving some wishing for even better results (analysts’ consensus estimates are those published by big banks and advisory firms, not the investors who make buy and sell decisions). The stock is down 4.5% since reporting and currently trades at $389.69. Is now the time to buy F5? Access our full analysis of the earnings results here, it’s free. Taking its name from the core advantage it delivers to customers, Fastly (NASDAQ:FSLY) operates an edge cloud platform that processes, secures, and delivers web content as close to end users as possible, enabling faster digital experiences. Fastly reported revenues of $183.3 million, up 23.3% year on year, outperforming analysts’ expectations by 5.3%. The business had an exceptional quarter with EPS guidance for next quarter exceeding analysts’ expectations and a solid beat of analysts’ adjusted operating income estimates. Fastly scored the biggest analyst estimate beat, highest guidance raise, and highest full-year guidance raise in the group. Although it had a fine quarter compared to its peers, the market seems unhappy with the results as the stock is down 21.5% since reporting. It currently trades at $20.43. Is now the time to buy Fastly? Access our full analysis of the earnings results here, it’s free. With a massive distributed network spanning 4,100+ points of presence in nearly 130 countries, Akamai Technologies (NASDAQ:AKAM) provides a global distributed cloud platform that helps businesses deliver, secure, and optimize their digital experiences online. Akamai reported revenues of $1.1 billion, up 5.4% year on year, exceeding analysts’ expectations by 0.6%. Still, it was a slower quarter as it posted a miss of analysts’ adjusted operating income estimates and full-year revenue guidance meeting analysts’ expectations. Akamai delivered the weakest performance against analyst estimates, weakest guidance update, and slowest revenue growth among its peers. As expected, the stock is down 11% since the results and currently trades at $105.55. Read our full analysis of Akamai’s results here. With a massive network spanning more than 310 cities in over 120 countries, Cloudflare (NYSE:NET) provides a global network that delivers security, performance and reliability services to protect websites, applications, and corporate networks. Cloudflare reported revenues of $696.1 million, up 35.9% year on year. This result surpassed analysts’ expectations by 4.7%. Overall, it was an exceptional quarter as it also logged an impressive beat of analysts’ billings estimates and EPS guidance for next quarter exceeding analysts’ expectations. Cloudflare achieved the fastest revenue growth of the whole group. The stock is down 3.1% since reporting and currently trades at $275.75. Read our full, actionable report on Cloudflare here, it’s free. Over the past year, investors have been forced to repeatedly answer the same question: what is the market’s biggest risk? The answer has changed several times, and each shift has reshaped market leadership. Late in 2025 and early 2026, artificial intelligence became the market’s primary uncertainty. Investors questioned whether AI would erode software pricing power and weaken competitive moats as AI made it easier to replicate once-differentiated products. By the spring, technology took a back seat to geopolitics. The U.S. conflict with Iran briefly became the market’s dominant narrative, raising concerns about oil prices, inflation, and global growth. But as energy markets remained orderly and fears of a prolonged supply disruption faded, investors quickly turned their focus back to fundamentals. Want to invest in winners with rock-solid fundamentals? Check out our Strong Momentum Stocks and add them to your watchlist. These companies are poised for growth regardless of the political or macroeconomic climate.

A month has gone by since the last earnings report for Tenable (TENB). Shares have added about 15.6% in that time frame, outperforming the S&P 500. But investors have to be wondering, will the recent positive trend continue leading up to its next earnings release, or is Tenable due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the latest earnings report in order to get a better handle on the important drivers. Tenable Holdings reported strong second-quarter 2026 results, with non-GAAP earnings of 51 cents per share, up 50% year over year. The figure beat the Zacks Consensus Estimate of 47 cents by 8.51%. Revenues rose 8.6% year over year to $268.5 million and surpassed the consensus mark of $265 million by 1.32%.Results were driven by record adoption of the Tenable One platform, which represented 50% of new business during the quarter, up from 40% in the year-ago period. Revenue growth was supported by strong expansion within existing accounts and continued strength in renewals. Professional services also contributed ahead of expectations. Recurring revenues remained high at 95% of total revenues compared with 96% in the year-ago period.Tenable continued expanding its customer base, adding 381 new enterprise platform customers during the quarter, along with 32 net new six-figure customers. The net dollar expansion rate improved to 106% from 105% in the prior quarter, marking the first quarter-over-quarter increase in the metric since the first quarter of 2022. The heightened AI-driven threat environment following the Mythos development is accelerating customer demand for exposure management platforms capable of prioritizing and remediating cyber risk at speed. Tenable Hexa AI, the company's agentic engine within Tenable One, saw strong early traction, with more than 80% of users submitting prompts and nearly half using it to take action rather than simply consume information.The company also expanded its Tenable One AI Exposure offering to include coverage for Gemini alongside existing coverage for Claude, ChatGPT and Copilot. Tenable deepened its partnerships with Anthropic through Project Glasswing and with OpenAI through its Daybreak Cyber Partner Program during the quarter. Non-GAAP gross margin was 81.4% compared with 82% in the year-ago period, within the company's typical historical range. Non-GAAP operating income increased 38.8% year over year to $66.2 million. The non-GAAP operating margin expanded 540 basis points to 24.7%.GAAP income from operations was $12.4 million compared with a loss of $7.4 million in the year-ago quarter, while GAAP operating margin was 4.6% versus negative 3% a year earlier. The company ended the quarter with $298.2 million in cash and short-term investments, down from $360.3 million as of March 31, 2026, primarily reflecting share repurchase activity.Long-term debt was $353 million, down slightly on a sequential basis from $353.6 million as of March 31, 2026. Unlevered free cash flow was $45.3 million, or 16.9% of revenues compared with $44.3 million in the year-ago quarter. During the quarter, Tenable repurchased 5.2 million shares for $100 million and had $108 million remaining under its existing authorization. It turns out, estimates revision have trended upward during the past month. Currently, Tenable has a great Growth Score of A, though it is lagging a lot on the Momentum Score front with a D. Following the exact same course, the stock was allocated a score of D on the value side, putting it in the bottom 40% for this investment strategy. Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in. Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. Notably, Tenable has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months. Tenable is part of the Zacks Internet - Software industry. Over the past month, F5 Networks (FFIV), a stock from the same industry, has gained 5.5%. The company reported its results for the quarter ended June 2026 more than a month ago. F5 reported revenues of $865.08 million in the last reported quarter, representing a year-over-year change of +10.9%. EPS of $4.73 for the same period compares with $4.16 a year ago. For the current quarter, F5 is expected to post earnings of $4.24 per share, indicating a change of -3.4% from the year-ago quarter. The Zacks Consensus Estimate has changed +0.2% over the last 30 days. The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for F5. Also, the stock has a VGM Score of D. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Tenable Holdings, Inc. (TENB) : Free Stock Analysis Report F5, Inc. (FFIV) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

It has been about a month since the last earnings report for F5 Networks (FFIV). Shares have lost about 5.1% in that time frame, underperforming the S&P 500. But investors have to be wondering, will the recent negative trend continue leading up to its next earnings release, or is F5 due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts. F5 delivered better-than-expected third-quarter fiscal 2026 results. The company reported third-quarter fiscal 2026 non-GAAP earnings of $4.73 per share, which increased 14% year over year. The figure surpassed the Zacks Consensus Estimate by 18.8%. Revenues increased 11% year over year to $865 million and beat the consensus mark by 3.96%. Results benefited from 32% systems revenue growth, sustained hybrid multicloud demand and growing application security requirements. Product revenues advanced 19%, marking the eighth consecutive quarter of double-digit growth. Product revenues, representing 54% of total revenues, increased 19% year over year to $463 million. Systems revenues jumped 32% to $240 million as customers invested in higher-performance infrastructure, expanded data-center capacity and modernized environments for resiliency, digital sovereignty and AI workloads. Software revenues rose 7% to $223 million. Subscription-based software revenues increased 9% to $201 million and represented 90% of software revenues. Perpetual license revenues declined 4% to $22 million. Services revenues, accounting for 46% of total revenues, grew 3% to $402 million. Management highlighted expansion opportunities tied to hybrid multicloud adoption, including competitive displacements, platform consolidation and data-center buildouts. An energy and utilities provider expanded its BIG-IP footprint after moving workloads from an unstable cloud environment back to on-premises infrastructure. F5 also secured a competitive win at a Fortune 100 technology provider seeking to strengthen delivery and security for a storage service spanning 45 data centers. The customer selected BIG-IP to support the availability, resilience and security requirements of AI and data-intensive workloads. Non-GAAP gross margin expanded 110 basis points year over year to 84.2%, while non-GAAP operating margin increased 70 basis points to 35%.In the third quarter of fiscal 2026, FFIV generated $316 million in operating cash flow and $281 million in free cash flow. Cash and investments totaled $1.63 billion, up from $1.44 billion in the previous quarter. The company repurchased $100 million of shares and had $422 million remaining under its authorization. F5 expects fourth-quarter fiscal 2026 revenues between $870 million and $890 million, implying growth of nearly 9% at the midpoint. Non-GAAP earnings are projected in the range of $4.14-$4.26 per share. Non-GAAP gross margin is expected between 83% and 84%, reflecting a favorable mix of higher-performance systems and lower component-cost increases than initially anticipated. For fiscal 2026, management raised its revenue growth forecast to approximately 9-10% from 7-8%. The company continues to expect mid-single-digit software growth, double-digit systems growth and low-single-digit services growth. Non-GAAP earnings guidance was increased to $17.21-$17.33 per share from $16.25-$16.55. In the past month, investors have witnessed a upward trend in estimates revision. Currently, F5 has a nice Growth Score of B, a score with the same score on the momentum front. However, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy. Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in. Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. Interestingly, F5 has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months. F5 is part of the Zacks Internet - Software industry. Over the past month, Calix (CALX), a stock from the same industry, has gained 7.4%. The company reported its results for the quarter ended June 2026 more than a month ago. Calix reported revenues of $293.33 million in the last reported quarter, representing a year-over-year change of +21.3%. EPS of $0.47 for the same period compares with $0.33 a year ago. For the current quarter, Calix is expected to post earnings of $0.42 per share, indicating a change of -4.6% from the year-ago quarter. The Zacks Consensus Estimate remained unchanged over the last 30 days. The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for Calix. Also, the stock has a VGM Score of C. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report F5, Inc. (FFIV) : Free Stock Analysis Report Calix, Inc (CALX) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

F5’s second quarter marked a period of growth above Wall Street’s expectations, yet was followed by a negative market reaction. Management highlighted robust demand for application security and delivery, citing 19% product revenue growth and ongoing wins in hybrid multi-cloud environments. CEO François Locoh-Donou attributed the strong results to F5’s ability to address the rising complexity of securing distributed applications, particularly as customers accelerate investments in AI and shift workloads between cloud and on-premises infrastructure. He specifically noted, “We are converting hybrid multi-cloud adoption into expansion opportunities, competitive displacements, digital sovereignty wins and platform consolidation wins.” Is now the time to buy FFIV? Find out in our full research report (it’s free). Revenue: $865.1 million vs analyst estimates of $835 million (10.9% year-on-year growth, 3.6% beat) Adjusted EPS: $4.73 vs analyst estimates of $4.00 (18.3% beat) Adjusted Operating Income: $302.7 million vs analyst estimates of $279.5 million (35% margin, 8.3% beat) Revenue Guidance for Q3 CY2026 is $880 million at the midpoint, above analyst estimates of $858.5 million Management raised its full-year Adjusted EPS guidance to $17.27 at the midpoint, a 5.3% increase Operating Margin: 24.7%, in line with the same quarter last year Annual Recurring Revenue: $203.9 million (25.1% year-on-year growth) Billings: $939.5 million at quarter end, up 15.3% year on year Market Capitalization: $22.88 billion While we enjoy listening to the management’s commentary, our favorite part of earnings calls is the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention. Timothy Long (Barclays): Asked if AI-related customer growth would translate to proportional revenue growth. CEO François Locoh-Donou clarified that while AI customer count is rising quickly, revenue growth may not match at the same pace but momentum is strong in both direct and indirect AI opportunities. Joseph Cardoso (JPMorgan): Inquired about sustainability of high-performance hardware demand and software growth trajectory. CFO Cooper Werner said hardware demand is driven by AI and digital sovereignty, and software growth is expected to accelerate with improved renewal cohorts next year. George Notter (Wolfe Research): Questioned the progress and drivers behind the hardware refresh cycle. Werner explained refresh activity is consistent and expansion at refresh is increasing, while Locoh-Donou highlighted that security concerns and AI-related workloads are encouraging customers to modernize faster. Matthew Hedberg (RBC Capital Markets): Asked whether current growth is cyclical or likely to be sustained. Werner pointed to unique growth drivers—AI, digital sovereignty, and competitive takeouts—providing more stability than in past cycles, though some growth remains cyclical due to refreshes. Simon Leopold (Raymond James): Sought reasons for hardware outpacing software growth. Locoh-Donou attributed it to strong hardware innovation, customer repatriation of workloads for sovereignty, and consolidation trends, while software growth is expected to reaccelerate with better renewal opportunities ahead. In coming quarters, StockStory analysts will monitor (1) sustained adoption of F5’s AI-focused security and application delivery solutions, (2) the pace and mix of hardware refresh activity, particularly as regulatory and sovereignty concerns drive repatriation from public cloud to on-premises, and (3) progress in consolidating customer security platforms onto F5’s unified architecture. We will also track the impact of component cost fluctuations on margins and the rollout of new management and security features. F5 currently trades at $405, in line with $407.96 just before the earnings. At this price, is it a buy or sell? Find out in our full research report (it’s free for active Edge members). WHILE YOU’RE HERE: Top 9 Market-Beating Stocks. The best stocks don’t just beat the market once. They do it again. And again. Robust revenue growth, rising free cash flow, returns on capital that leave their competition in the dust. The market has already rewarded these businesses. But our AI platform says the party isn’t over. Find out which 9 stocks made the cut this week — FREE. Get Our Top 9 Market-Beating Stocks for Free HERE. Stocks that have made our list include now familiar names such as Nvidia (+1,460% between June 2020 and June 2025) as well as under-the-radar businesses like the once-micro-cap company Kadant (+214% between June 2020 and June 2025). Find your next big winner with StockStory today.

Application security provider F5 (NASDAQ:FFIV) reported Q2 CY2026 results topping the market’s revenue expectations , with sales up 10.9% year on year to $865.1 million. Guidance for next quarter’s revenue was optimistic at $880 million at the midpoint, 2.5% above analysts’ estimates. Its non-GAAP profit of $4.73 per share was 18.3% above analysts’ consensus estimates. Is now the time to buy FFIV? Find out in our full research report (it’s free). Revenue: $865.1 million vs analyst estimates of $835 million (10.9% year-on-year growth, 3.6% beat) Adjusted EPS: $4.73 vs analyst estimates of $4.00 (18.3% beat) Adjusted Operating Income: $302.7 million vs analyst estimates of $279.5 million (35% margin, 8.3% beat) Revenue Guidance for Q3 CY2026 is $880 million at the midpoint, above analyst estimates of $858.5 million Management raised its full-year Adjusted EPS guidance to $17.27 at the midpoint, a 5.3% increase Operating Margin: 24.7%, in line with the same quarter last year Annual Recurring Revenue: $203.9 million (25.1% year-on-year growth) Billings: $939.5 million at quarter end, up 15.3% year on year Market Capitalization: $23.18 billion F5’s second quarter marked a period of growth above Wall Street’s expectations, yet was followed by a negative market reaction. Management highlighted robust demand for application security and delivery, citing 19% product revenue growth and ongoing wins in hybrid multi-cloud environments. CEO François Locoh-Donou attributed the strong results to F5’s ability to address the rising complexity of securing distributed applications, particularly as customers accelerate investments in AI and shift workloads between cloud and on-premises infrastructure. He specifically noted, “We are converting hybrid multi-cloud adoption into expansion opportunities, competitive displacements, digital sovereignty wins and platform consolidation wins.” Looking forward, F5’s outlook is shaped by sustained demand for AI-driven application security, ongoing hardware refresh cycles, and the continued expansion of its platform in both cloud and on-premises settings. Management raised full-year adjusted profit guidance and expects revenue growth to benefit from both direct and indirect AI use cases, as well as increased customer prioritization of digital sovereignty and regulatory compliance. CFO Cooper Werner emphasized that “AI data delivery continues to see strong momentum,” while also cautioning that component cost dynamics and a changing pricing environment could influence future gross margins. Management identified several trends driving the quarter, including a surge in AI-related customer needs, continued hardware refresh activity, and customers prioritizing platform consolidation and security upgrades. AI momentum accelerating: F5 saw a significant increase in customers adopting its AI-focused solutions, particularly in AI data delivery and security for AI models. The company reported a 100% rise in AI security customers during the quarter, with growing demand for real-time protection against AI-driven cyberattacks. Hybrid multi-cloud adoption: Customers are increasingly deploying applications across multiple cloud and on-premises environments. F5 cited examples where clients expanded F5’s footprint to manage data sovereignty and compliance, especially in Europe and Asia, driving both hardware and software sales. Platform consolidation wins: F5 gained new business by replacing fragmented security toolsets with its unified application delivery and security platform, leading to operational simplification and cost reduction for customers. Hardware refresh cycle with expansion: The current refresh of the iSeries to rSeries hardware is driving not only replacements but also capacity expansions as customers address increased traffic and performance needs, often tied to AI workloads and regulatory requirements. Innovation in security and management: F5 launched new AI-powered features in its web application firewall (WAF) and introduced F5 Insight, a tool that helps customers manage software updates and security posture across their infrastructure. Early adoption rates have been strong, with customers shifting more solutions from monitor to blocking mode to counter zero-day threats. F5’s forward outlook emphasizes continued AI adoption, hybrid cloud expansion, and new product capabilities as key forces shaping revenue and profitability. AI-driven customer demand: Management expects further growth from direct AI use cases—such as secure data pipelines and AI model protection—as well as indirect demand, with increased traffic and workloads boosting hardware requirements. The company believes its position in the traffic path for AI applications will drive both hardware and software revenue. Secular shift to platform security: Customers are consolidating disparate security products into F5’s unified platform, motivated by the need for more effective defenses against rapidly evolving cyber threats. Management views this as a long-term trend supporting recurring revenue and customer retention. Margin pressure from component costs: While recent quarters benefited from favorable hardware mix and supply chain outcomes, CFO Werner noted that the pricing environment for memory and storage components remains volatile, potentially impacting future gross margins despite current strength. The company is diversifying suppliers to mitigate these risks. In coming quarters, StockStory analysts will monitor (1) sustained adoption of F5’s AI-focused security and application delivery solutions, (2) the pace and mix of hardware refresh activity, particularly as regulatory and sovereignty concerns drive repatriation from public cloud to on-premises, and (3) progress in consolidating customer security platforms onto F5’s unified architecture. We will also track the impact of component cost fluctuations on margins and the rollout of new management and security features. F5 currently trades at $403.53, down from $408.90 just before the earnings. In the wake of this quarter, is it a buy or sell? See for yourself in our full research report (it’s free for active Edge members). WHILE YOU’RE HERE: Top 9 Market-Beating Stocks. The best stocks don’t just beat the market once. They do it again. And again. Robust revenue growth, rising free cash flow, returns on capital that leave their competition in the dust. The market has already rewarded these businesses. But our AI platform says the party isn’t over. Find out which 9 stocks made the cut this week — FREE. Get Our Top 9 Market-Beating Stocks for Free HERE. Stocks that have made our list include now familiar names such as Nvidia (+1,460% between June 2020 and June 2025) as well as under-the-radar businesses like the once-micro-cap company Kadant (+214% between June 2020 and June 2025). Find your next big winner with StockStory today.

Our analysts just identified a stock with the potential to be the next Nvidia. Tell us how you invest and we'll show you why it's our #1 pick. Tap here. Delivered 19% product revenue growth, marking eight consecutive quarters of double-digit expansion driven by the intersection of hybrid multi-cloud adoption and AI-powered application demand. Performance attribution is heavily weighted toward 'refresh plus' dynamics, where customers are not only replacing legacy hardware but expanding capacity to handle surging application-layer traffic and AI workloads. Strategic positioning in 'sovereign-by-design' architectures is capturing a global trend of workload repatriation from public clouds to private data centers for compliance and reliability. The expanding threat landscape, specifically a 140% surge in application-layer attacks over three years, has increased the strategic relevance of F5's runtime security and automated API discovery. Market momentum is accelerating in direct AI use cases, with customer counts for AI data delivery, runtime security, and factory load balancing growing 50% in the third quarter alone. Platform consolidation is displacing fragmented point solutions as enterprises seek unified management across hybrid environments to reduce operational overhead and latency. Raised fiscal year 2026 revenue growth guidance to 9%-10% based on durable tailwinds from AI inference and the ongoing iSeries hardware refresh cycle. Software revenue is expected to reaccelerate to double-digit growth in fiscal year 2027, supported by a significantly stronger renewal cohort and the completion of legacy SaaS transitions. Guidance assumes continued demand for high-performance systems, which currently carry a more favorable gross margin profile than standard appliances. Management anticipates that 'post-quantum crypto' requirements may serve as a future catalyst for accelerating the next hardware product cycle, though timing remains speculative. The company is shifting to a monthly software hardening cadence, utilizing frontier AI models to discover and remediate vulnerabilities faster than traditional quarterly cycles. Gross margin guidance for fiscal year 2027 remains at 80%-82% despite recent outperformance, reflecting management's caution regarding a dynamic and volatile pricing environment for memory and storage components. The acquisition of SurePath AI this quarter strategically adds AI discovery and governance capabilities to the platform, addressing emerging customer needs for AI agent security. A discrete tax benefit in the third quarter lowered the non-GAAP effective tax rate to 12.4%, though the full-year rate is expected to normalize between 18% and 19%. The end of software support for iSeries in the second quarter of fiscal year 2027 is expected to drive an orderly but persistent acceleration in hardware migration over the next several quarters. One stock. Nvidia-level potential. 30M+ investors trust Moby to find it first. Get the pick. Tap here. Management attributes the shift to higher-performance units to the immediate need for customers to provision capacity for AI-driven traffic expansion. While these units carry better margins, F5 is maintaining its long-term margin floor to account for potential supply chain risks and fluctuating component costs. Management acknowledged that while the current 32% hardware growth includes a cyclical refresh component, secular trends like digital sovereignty and AI data delivery are permanently altering the hardware trajectory. Sovereignty trends are particularly strong in EMEA and APAC, where enterprises are moving workloads from global hyperscalers to local, F5-secured alternatives. F5's traffic management software can improve GPU utilization by 30% to 50%, significantly lowering the cost per token for AI operators. Initial traction is highest with 'Sovereign AI' providers (telcos) who are more cost-conscious regarding tokenomics than early-stage Neoscalers. 15% of Distributed Cloud WAF customers adopted AI-powered capabilities within one quarter of launch, with 75% of those running in 'blocking' rather than 'monitor' mode. This shift reflects a growing urgency to defend against zero-day attacks that bypass traditional static signatures.

F5, Inc. FFIV delivered better-than-expected third-quarter fiscal 2026 results. The company reported third-quarter fiscal 2026 non-GAAP earnings of $4.73 per share, which increased 14% year over year. The figure surpassed the Zacks Consensus Estimate by 18.8%. Revenues increased 11% year over year to $865 million and beat the consensus mark by 3.96%. Results benefited from 32% systems revenue growth, sustained hybrid multicloud demand and growing application security requirements. Product revenues advanced 19%, marking the eighth consecutive quarter of double-digit growth. Product revenues, representing 54% of total revenues, increased 19% year over year to $463 million. Systems revenues jumped 32% to $240 million as customers invested in higher-performance infrastructure, expanded data-center capacity and modernized environments for resiliency, digital sovereignty and AI workloads. Software revenues rose 7% to $223 million. Subscription-based software revenues increased 9% to $201 million and represented 90% of software revenues. Perpetual license revenues declined 4% to $22 million. Services revenues, accounting for 46% of total revenues, grew 3% to $402 million. F5, Inc. price-consensus-eps-surprise-chart | F5, Inc. Quote Management highlighted expansion opportunities tied to hybrid multicloud adoption, including competitive displacements, platform consolidation and data-center buildouts. An energy and utilities provider expanded its BIG-IP footprint after moving workloads from an unstable cloud environment back to on-premises infrastructure. F5 also secured a competitive win at a Fortune 100 technology provider seeking to strengthen delivery and security for a storage service spanning 45 data centers. The customer selected BIG-IP to support the availability, resilience and security requirements of AI and data-intensive workloads. Non-GAAP gross margin expanded 110 basis points year over year to 84.2%, while non-GAAP operating margin increased 70 basis points to 35%. In the third quarter of fiscal 2026, FFIV generated $316 million in operating cash flow and $281 million in free cash flow. Cash and investments totaled $1.63 billion, up from $1.44 billion in the previous quarter. The company repurchased $100 million of shares and had $422 million remaining under its authorization. F5 expects fourth-quarter fiscal 2026 revenues between $870 million and $890 million, implying growth of nearly 9% at the midpoint. Non-GAAP earnings are projected in the range of $4.14-$4.26 per share. Non-GAAP gross margin is expected between 83% and 84%, reflecting a favorable mix of higher-performance systems and lower component-cost increases than initially anticipated. The Zacks Consensus Estimate for fourth-quarter fiscal 2026 revenues and earnings is currently pegged at $854.33 million and $4.12 per share, respectively. For fiscal 2026, management raised its revenue growth forecast to approximately 9-10% from 7-8%. The company continues to expect mid-single-digit software growth, double-digit systems growth and low-single-digit services growth. Non-GAAP earnings guidance was increased to $17.21-$17.33 per share from $16.25-$16.55. The Zacks Consensus Estimate for fiscal 2026 revenues and earnings is currently pegged at $3.32 billion and $16.45 per share, respectively. Currently, F5 carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the broader Zacks Computer and Technology sector are Analog Devices ADI, Applied Materials AMAT and Cisco Systems CSCO, each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here. Shares of Analog Devices have rallied 37.1% year to date. The Zacks Consensus Estimate for ADI’s fiscal 2026 earnings is pegged at $12.42 per share, up by 10 cents over the past 30 days, indicating an increase of 59.4% year over year. Shares of Applied Materials have skyrocketed 101.1% year to date. The Zacks Consensus Estimate for AMAT’s fiscal 2026 earnings is pegged at $12.14 per share, up by 4 cents over the past 30 days, indicating a rise of 28.9% year over year. Cisco Systems shares have surged 48.7% year to date. The Zacks Consensus Estimate for CSCO’s fiscal 2026 earnings is pegged at $4.28 per share, unchanged over the past 30 days, indicating an increase of 12.3% year over year. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report F5, Inc. (FFIV) : Free Stock Analysis Report Analog Devices, Inc. (ADI) : Free Stock Analysis Report Cisco Systems, Inc. (CSCO) : Free Stock Analysis Report Applied Materials, Inc. (AMAT) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

This article first appeared on GuruFocus. Total Revenue: $865 million, up 11% year-over-year. Product Revenue: $463 million, increased 19% year-over-year. Services Revenue: $402 million, grew 3% year-over-year. Systems Revenue: $240 million, up 32% over Q3 FY25. Software Revenue: $223 million, grew 7% year-over-year. Subscription-based Software Revenue: $201 million, up 9% year-on-year. Perpetual License Software Revenue: $22 million, down 4% year-over-year. Recurring Revenue Contribution: 69% of total Q3 revenue. GAAP Gross Margin: 82.2%. Non-GAAP Gross Margin: 84.2%. GAAP Operating Margin: 24.7%. Non-GAAP Operating Margin: 35%. GAAP Net Income: $208 million or $3.62 per share. Non-GAAP Net Income: $272 million or $4.73 per share, reflecting 14% EPS growth. Cash Flow from Operations: $316 million. Free Cash Flow: $281 million. Deferred Revenue: $2.19 billion, up 12% from the year ago period. Share Repurchase: $100 million worth of shares at an average price of $299 per share. Employee Count: Approximately 6,600 employees. Q4 Revenue Guidance: $870 million to $890 million, reflecting just under 9% year-over-year growth at the midpoint. FY26 Revenue Growth Outlook: Approximately 9% to 10%, up from prior outlook of 7% to 8%. FY26 Non-GAAP EPS Guidance: $17.21 to $17.33, up from prior range of $16.25 to $16.55. Is FFIV fairly valued? Test your thesis with our free DCF calculator. Release Date: July 27, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. F5 Inc (NASDAQ:FFIV) reported 19% product revenue growth, contributing to an overall 11% total revenue growth for the quarter. The company has experienced eight consecutive quarters of double-digit product growth, indicating strong market alignment. F5 Inc (NASDAQ:FFIV) is capitalizing on the growing demand for application security and delivery, driven by the rise of AI-powered applications. The company is strategically positioned at the intersection of hybrid multi-cloud adoption, expanding threat landscapes, and AI inference inflection. F5 Inc (NASDAQ:FFIV) raised its fiscal year 2026 revenue growth outlook to approximately 9% to 10%, up from the previous 7% to 8%. APAC revenue was down 11% year-over-year, indicating regional challenges despite overall growth. The company faces a dynamic pricing environment for memory and storage components, which could impact future gross margins. F5 Inc (NASDAQ:FFIV) is not updating its FY27 gross margin guidance due to uncertainties in component cost fluctuations. The renewal cohort from 2023 was not strong, impacting software revenue growth expectations for the current year. There is a potential risk of increased component costs, which could affect future financial performance. Q: Can you provide an update on the growth of AI-related revenues and customer base? A: Francois Locoh-Donou, CEO, explained that while they have seen a 50% growth in AI-related customer base, this doesn't directly translate to revenue growth. The company has surpassed the $50 million revenue mark in AI use cases, with strong momentum in AI data delivery and AI security. The number of AI security customers grew 100% in the quarter, driven by demand for best-in-class security for AI models and applications. Q: What factors are driving the shift towards higher-performing systems, and is this trend sustainable? A: Edward Werner, CFO, noted that the demand for higher-performing systems is driven by expansion use cases, digital sovereignty, and AI-driven workloads. Customers are quickly provisioning higher-performance units to support these initiatives, which carry higher gross margins. This trend is expected to continue as these dynamics are still relatively early in their development. Q: How do you view the growth trajectory for software versus systems revenue, and when might software growth accelerate? A: Edward Werner, CFO, stated that the software pipeline looks strong, with growth expected to accelerate in fiscal 2027 due to a stronger renewal cohort and the completion of a transition in their SaaS and Managed Service business. This is expected to drive double-digit software growth next year. Q: What impact is the iSeries refresh having, and how is the Mythos effect influencing customer behavior? A: Edward Werner, CFO, reported that the iSeries refresh is proceeding as expected, with orderly and consistent activity. The Mythos effect is prompting customers to address technology debt and vulnerabilities, leading to increased refresh activity. Francois Locoh-Donou, CEO, added that the Mythos effect is also driving demand for runtime security, with strong uptake of their AI-powered Web Application Firewall. Q: How do you view the sustainability of system growth post-refresh cycle, and what are the secular drivers? A: Edward Werner, CFO, believes that growth will remain healthy post-refresh cycle due to new projects like digital sovereignty and AI-driven performance needs. Competitive takeouts and post-quantum crypto considerations could also drive earlier adoption of the next product cycle, supporting continued growth. For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Interested in F5, Inc.? Here are five stocks we like better. F5 reported strong third-quarter results: Revenue rose 11% year over year to $865 million, exceeding guidance, while non-GAAP EPS increased 14% to $4.73. Product revenue grew 19%, led by 32% growth in systems revenue. AI and security demand accelerated: Direct AI-use-case customers increased 50%, AI security customers doubled, and 15% of Distributed Cloud WAF customers adopted F5’s AI-powered capability. F5 raised its fiscal 2026 outlook: The company now expects full-year revenue growth of approximately 9% to 10%, up from 7% to 8%, and increased its non-GAAP EPS forecast to $17.21–$17.33. 3 Stocks to Buy While Others Stay on the Sidelines F5 (NASDAQ:FFIV) reported third-quarter fiscal 2026 revenue of $865 million, up 11% from a year earlier and above the high end of its guidance, as product revenue rose 19% and demand remained strong for application delivery, security and AI-related infrastructure. Chairman, President and CEO François Locoh-Donou said the company has now posted eight consecutive quarters of double-digit product growth. He attributed the performance to hybrid multi-cloud adoption, an expanding application-layer threat landscape and growing AI inference workloads. → MarketBeat Week in Review – 07/20- 07/24 As the Magnificent 7 Stalls, These 3 Stocks Are Gaining Momentum “Q3 was another outstanding quarter,” Locoh-Donou said, adding that customers are seeking to simplify and secure application delivery across on-premises, cloud and edge environments. Product revenue totaled $463 million in the quarter, while services revenue was $402 million, up 3% year over year. Systems revenue increased 32% to $240 million, while software revenue grew 7% to $223 million. Subscription-based software revenue rose 9% to $201 million and represented 90% of total software revenue. → Volatility Is Back and These 3 Market Tollbooths Are Best Positioned to Profit Texas Instruments' tepid revenue view drags down techs Recurring revenue sources accounted for 69% of total quarterly revenue. By geography, revenue in the Americas increased 11% and represented 55% of total revenue. EMEA revenue grew 27%, representing 30% of the total, while APAC revenue declined 11% against what Chief Financial Officer Cooper Werner described as a strong year-earlier comparison. Enterprise customers accounted for 71% of product bookings, government customers represented 19%, including 7% from U.S. federal customers, and service providers accounted for 11%. GAAP net income was $208 million, or $3.62 per share. Non-GAAP net income was $272 million, or $4.73 per share, up 14% from the prior-year period. GAAP operating margin was 24.7%, while non-GAAP operating margin was 35%. GAAP gross margin was 82.2%, and non-GAAP gross margin was 84.2%. Cash flow from operations totaled $316 million and free cash flow was $281 million. → 2 Stocks Built to Thrive If Inflation Refuses to Fade F5 ended the quarter with $1.63 billion in cash and investments and $2.19 billion in deferred revenue, up 12% year over year. The company repurchased $100 million of shares at an average price of $299 per share and had $422 million remaining under its authorization at quarter-end. Locoh-Donou said the company’s direct AI-use-case customer count increased 50% during the quarter. F5 identifies three direct AI opportunities: data delivery, runtime security and AI factory load balancing. He said the number of AI security customers doubled in the quarter. The CEO cited customer deployments involving AI data pipelines, protection for AI applications and models, and traffic management for sovereign AI factories. He also said AI-driven traffic is contributing indirectly to demand for the company’s application delivery controller systems, including higher-capacity hardware. F5 said 15% of its Distributed Cloud web application firewall customers have adopted its AI-powered WAF capability since its second-quarter launch. Of those adopters, 75% are using the capability in blocking mode rather than monitoring mode, according to Locoh-Donou. The company also moved to a monthly cadence for hardened software releases, from a prior quarterly cadence, and introduced fleet-management capabilities in F5 Insight intended to help customers assess software versions, security posture and update readiness across BIG-IP deployments. During the question-and-answer session, Werner said the company’s stronger near-term gross-margin outlook reflected increased adoption of higher-performance appliances and lower-than-expected component costs from certain suppliers. However, he said F5 was not changing its fiscal 2027 gross-margin outlook because pricing for memory and storage components remains dynamic. For the fourth quarter, F5 expects revenue of $870 million to $890 million, representing just under 9% year-over-year growth at the midpoint. The company projected non-GAAP gross margin of 83% to 84%, non-GAAP operating expenses of $430 million to $442 million, and non-GAAP earnings per share of $4.14 to $4.26. Based on its third-quarter performance and fourth-quarter outlook, F5 raised its full-year fiscal 2026 revenue-growth expectation to approximately 9% to 10%, from a prior outlook of 7% to 8%. Full-year non-GAAP gross margin is expected to be 83.5% to 84%. Full-year non-GAAP operating margin is expected to be 34.5% to 35.5%. Full-year non-GAAP EPS is expected to be $17.21 to $17.33, up from prior guidance of $16.25 to $16.55. F5 expects mid-single-digit software revenue growth, double-digit systems revenue growth and low-single-digit services revenue growth for fiscal 2026. Werner said the company expects full-year share repurchases to equal at least 50% of free cash flow. Looking beyond the current fiscal year, management said it sees continued demand from infrastructure refresh activity, data-center modernization, digital sovereignty initiatives, competitive displacements, platform consolidation and AI-related workloads. F5 Inc (NASDAQ:FFIV) specializes in application services and delivery networking, helping organizations ensure the availability, performance and security of their applications. The company's core offerings include advanced load balancing, traffic management and application security solutions designed to optimize user experiences and protect against threats such as distributed denial-of-service (DDoS) attacks and web application exploits. At the heart of F5's product portfolio is the BIG-IP platform, which provides a suite of software modules for local and global traffic management, secure web application firewalling and DNS service delivery. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "F5 Q3 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for July 2026.