Shares of F5 Inc. (NASDAQ: FFIV) surged substantially during after-hours trading on Tuesday following the release of its first quarter earnings report for fiscal year 2026. The technology firm exceeded market estimates in terms of both earnings per share and total revenue, marking a robust start to the year and providing optimism for its fiscal outlook.
F5 recorded quarterly earnings of $4.45 per share, outpacing the consensus estimate of $3.65 by approximately 21.88%, according to data from Benzinga Pro. This strong earnings performance reflects a combination of operational efficiency and favorable market conditions.
On the revenue front, the company reported total sales of $822.47 million. This figure also outstripped expectations, as the consensus revenue estimate stood at $758.08 million. The stronger-than-anticipated revenue demonstrates a dynamic market reception to F5's product and service offerings.
Breaking down revenue sources, the systems division generated $218 million, showing a remarkable year-over-year increase of 37%. In contrast, software revenue decreased by 8% to $192 million compared to the same quarter a year prior, which had benefited from strong results. Meanwhile, the global services segment sustained moderate growth, with revenue rising 4% to reach $412 million.
The company’s non-GAAP gross profit reached $689 million for the quarter, corresponding to a non-GAAP gross margin of 83.8%. This margin level underscores the company's ability to maintain profitability amidst revenue growth.
F5’s Chief Executive Officer, François Locoh-Donou, commented that the $822 million first quarter revenue, representing a 7% increase year over year, was led by an 11% rise in product revenue, notably driven by the 37% surge in systems revenue. He emphasized that this robust performance reflects the company's strategic positioning in the face of enduring market drivers. These include the growing shift toward hybrid multicloud architectures, expanding enterprise adoption of artificial intelligence technologies, and the increasing demand for integrated platform solutions.
Looking ahead, F5 has adjusted its fiscal year 2026 guidance upward. The adjusted earnings per share forecast now ranges between $15.65 and $16.05, exceeding the analyst consensus estimate of $15.11. Additionally, the company's revenue projection for the fiscal year has been raised to a range of $3.24 billion to $3.27 billion, surpassing the prior consensus of $3.15 billion. These revisions indicate confidence in continued growth and operational momentum throughout the remaining quarters.
Following the earnings announcement, FFIV stock responded positively, climbing approximately 13.76% to $307.65 in extended trading sessions. This substantial price movement highlights investor enthusiasm based on the company's strong financial results and optimistic guidance.
While F5’s quarterly results and outlook demonstrate significant strengths, the variability in software revenue and the company's reliance on sustained demand for systems and services segments remain factors investors will continue monitoring. The interplay of these elements will influence F5’s operational performance and stock valuation moving forward.