F5 INC (NASDAQ:FFIV) Reports Solid Q4 Earnings but Cautious Outlook Weighs on Shares

F5 INC (NASDAQ:FFIV) has reported financial results for its fourth quarter and fiscal year 2025, delivering a performance that largely met analyst expectations on the top line while exceeding on profitability. The company's outlook for the coming year, however, introduces a note of caution, which appears to be influencing investor sentiment in after-hours trading.

Earnings and Revenue Versus Estimates

The company's fourth-quarter results presented a mixed picture when held against Wall Street's projections. Revenue came in largely as anticipated, while earnings demonstrated notable strength.

• Q4 FY2025 Revenue: $810.1 million, compared to analyst estimates of approximately $809.3 million.
• Q4 FY2025 Non-GAAP EPS: $4.39, surpassing analyst estimates of $4.05.

For the full fiscal year 2025, F5 reported total revenue of $3.09 billion, representing a 10% annual growth rate. This performance was bolstered by a significant 42% year-over-year increase in systems revenue during the fourth quarter, highlighting a robust demand for the company's hardware products.

Market Reaction

Following the earnings release, F5's stock experienced a decline in after-market trading. This price action suggests that investors are focusing less on the quarter's earnings beat and more heavily on the company's guidance for the upcoming fiscal year. The market's reaction indicates a degree of concern over the near-term headwinds outlined by management.

Fiscal 2026 Outlook and Analyst Comparison

The company provided its financial outlook for fiscal year 2026, which appears to be the primary driver behind the negative market sentiment. F5's guidance reflects a significant deceleration in growth compared to the strong performance in FY2025, largely attributed to a recent security incident.

• FY2026 Revenue Guidance: 0% to 4% growth.
• Analyst FY2026 Revenue Estimate: Approximately $3.28 billion, which would represent roughly 6% growth.

This guidance implies a revenue range of approximately $3.09 billion to $3.21 billion for FY2026, with the midpoint falling below the current analyst consensus. The company anticipates that any disruption to sales cycles will be more pronounced in the first half of the year before normalizing in the second half.

On profitability, F5 guided to FY2026 non-GAAP EPS in the range of $14.50 to $15.50. The current analyst consensus for non-GAAP EPS sits at $15.81, placing the company's guidance slightly below expectations. For the first quarter of FY2026, F5 expects revenue between $730 million and $780 million and non-GAAP EPS between $3.35 and $3.85, which brackets the analyst estimates of $772.4 million in revenue and an EPS that would need to be clarified against the provided range.

Press Release Summary

Beyond the financial figures, the earnings report contained several key highlights and forward-looking statements from management:

• CEO François Locoh-Donou cited "transformative industry trends" and demand for application delivery and security solutions as core growth drivers.
• The company acknowledged a "recent security incident" and stated that its immediate priority is supporting affected customers. Management committed to "raising the bar on security across all aspects of our business."
• Strong profitability was a theme, with non-GAAP operating margin for the year expanding to 35.2%, up from 33.6% in the prior year.
• A leadership transition was announced, with the CEO set to assume the additional role of Chairman in March 2026.

Conclusion

F5 concludes its fiscal 2025 with a strong quarter that beat earnings estimates, capping a year of double-digit revenue growth. However, the market's reaction underscores the forward-looking nature of equity valuation. The company's conservative guidance for FY2026, tempered by expected near-term disruptions from a security incident, has introduced uncertainty and appears to have overshadowed the positive results from the past year. Investors will be closely monitoring the company's performance in the first half of FY2026 for signs of a rebound in growth as projected.

For a more detailed look at historical earnings and future analyst estimates for F5, you can review the data here.

Disclaimer: This article is for informational purposes only and does not constitute investment advice, nor does it recommend buying or selling any securities. Investors should conduct their own research and consult with a qualified financial advisor before making any investment decisions.