F5, Inc. FFIV shares gained 7.7% during Wednesday’s extended trading session after the company reported better-than-expected results for the third quarter of fiscal 2025. An upbeat guidance for the full fiscal 2025 also turned investors optimistic about the company’s near-term prospects.
F5 reported third-quarter non-GAAP earnings of $4.16 per share, which surpassed the Zacks Consensus Estimate by 19.2% and came ahead of management’s guidance of $3.41-$3.53 (midpoint of $3.47). The bottom line increased 23.8% year over year.
F5’s revenues of $780 million for the third quarter beat the consensus mark by 3.6%. The top line rose 12.2% on a year-over-year basis. Revenues also came ahead of management’s guidance of $740-$760 million (midpoint of $750 million).
F5, Inc. Price, Consensus and EPS Surprise
F5, Inc. price-consensus-eps-surprise-chart | F5, Inc. Quote
FFIV’s Q3 2025 Details
Product revenues (49.8% of total revenues), which comprise the Software and Systems subdivisions, increased 26% year over year to $389 million. Our model estimates for the Product segment revenues were pegged at $346.7 million.
This growth was primarily driven by a robust 39% year-over-year jump in Systems revenues, which totaled $181 million. Systems accounted for approximately 46.5% of total Product revenues, showing continued momentum due to demand for infrastructure upgrades. Our model estimates for the Systems revenues were pegged at $144.7 million.
The Software sub-segment also contributed to the growth, with revenues rising 16% year over year to $208 million. Our model estimates for the Software revenues were pegged at $202 million.
Global Services revenues (50.2% of total revenues) grew 1% year over year to $392 million. Our model estimates for the Global Services segment revenues were pegged at $399.5 million.
Non-GAAP gross profit increased 12.3% year over year to $649 million. The non-GAAP gross margin for the quarter came in at 83.1%, flat on a year-over-year basis. Non-GAAP operating income soared 14.6% to $267 million, while the margin improved 90 basis points to 34.3%.
F5’s Balance Sheet & Cash Flow
F5 ended the June-ended quarter with cash and short-term investments of $1.44 billion, up from $1.26 billion in the previous quarter. The company generated an operating cash flow of $282 million during the quarter and $742 million in the first nine months of fiscal 2025.
In the fiscal third quarter, F5 repurchased shares worth $125 million. During the first nine months of fiscal 2025, the company repurchased shares worth $377 million.
F5 Raises Guidance for 2025
F5 anticipates that its fiscal 2025 revenues will grow in the range of approximately 9% at the midpoint compared with the previously projected revenue growth of 6.5-7.5%. The Zacks Consensus Estimate for fiscal 2025 revenues is pegged at $3.02 billion, indicating year-over-year growth of 7.3%.
Non-GAAP earnings per share are now projected to grow 14-15% compared with the earlier projected earnings growth of 8-10%. The Zacks Consensus Estimate for fiscal 2025 earnings stands at $14.59, implying year-over-year growth of 9.1%.
For the fourth quarter of fiscal 2025, F5 expects revenues between $780 million and $800 million. The Zacks Consensus Estimate for fourth-quarter revenues is pegged at $770.6 million, suggesting year-over-year growth of 3.2%.
The company projected a non-GAAP EPS in the range of $3.87-$3.99 for the fourth quarter of fiscal 2025. The Zacks Consensus Estimate for fourth-quarter fiscal 2025 revenues stands at $3.84, indicating a year-over-year increase of 4.6%.
FFIV’s Zacks Rank & Stocks to Consider
Currently, F5 carries a Zacks Rank #3 (Hold).
Arista Networks ANET, Bumble BMBL and MongoDB MDB are some top-ranked stocks that investors can consider in the broader Zacks Computer and Technology sector. Arista Networks, Bumble and MongoDB sport a Zacks Rank #1 (Strong Buy) each at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Arista Networks’ 2025 earnings has been revised upward by a penny to $2.58 per share over the past 30 days and suggests a year-over-year increase of 13.7%. Arista Networks shares have soared 10.4% year to date.
The Zacks Consensus Estimate for Bumble’s 2025 earnings has been revised upward by a penny to $1.05 per share in the past 30 days, suggesting a strong improvement from the loss of $4.61 reported in 2024. Bumble shares have declined 7% year to date.
The Zacks Consensus Estimate for MongoDB’s fiscal 2026 earnings has been revised upward 20.4% to $3.07 per share in the past 60 days, calling for a 16.1% year-over-year decline. MongoDB shares have risen 4.9% year to date.
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This article originally published on Zacks Investment Research (zacks.com).
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
