F5, Inc. reported fiscal second‑quarter 2026 revenue of $812 million, an 11% year‑over‑year increase from $731 million in Q2 2025. The jump was driven by a 22% rise in product revenue and a 26% surge in systems revenue, the seventh consecutive quarter of double‑digit product growth. Subscription‑based software revenue grew 20% to $?? million, while services revenue increased 2% to $?? million, reflecting a shift toward higher‑margin recurring contracts.
The company’s non‑GAAP earnings per share reached $3.90, beating the consensus estimate of $3.47 by $0.43 and surpassing the prior‑quarter EPS of $3.42. The beat was largely a result of disciplined cost management and a favorable mix shift toward higher‑margin product and systems sales, which offset modest growth in services. Gross margin held at 81.4% and operating margin at 22.1%, both in line with the prior year, underscoring the company’s ability to maintain pricing power amid rising component costs.
Management lifted its full‑year revenue guidance to a 7%–8% growth range, up from the previous 5%–6% forecast, and raised adjusted EPS outlook to $16.25–$16.55, reflecting confidence in continued demand for its application delivery and security platform. The upgrade signals that the company expects the hybrid‑multicloud and AI‑workload markets to remain robust, and that the recurring‑revenue mix will continue to strengthen.
CEO François Locoh‑Donou said, “Our strong Q2 performance reflects those dynamics and F5’s alignment with where customers are headed.” He highlighted the record free‑cash‑flow generation and the company’s commitment to capital returns. CFO Cooper Werner noted that higher component costs, particularly memory, will put pressure on gross margins in the near term, a headwind that management expects to persist into FY2027.
The results also underscore F5’s strategic pivot to a software‑centric model. AI‑related sales totaled $50 million in the first half of fiscal 2026, with nearly 100 customers identified as AI adopters, and the company’s subscription‑based revenue mix is expanding. The strong systems revenue growth reflects customers upgrading to AI‑ready platforms for modernization and resiliency.
Market reaction was positive, driven by the EPS beat, the revenue beat, the raised full‑year guidance, and the robust product and systems growth. Analysts highlighted the company’s ability to sustain double‑digit product growth and the growing AI traction as key factors supporting the favorable outlook.
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