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FY2026 Q2
Raised
F5, Inc. earnings call
Buzzberg read
FY26 revenue outlook raised to 7-8% from 5-6%
F5 reported a strong Q2 with 11% revenue growth, driven by robust double-digit growth in systems and software, and raised its full-year guidance. Management highlighted accelerating demand from hybrid multicloud adoption, an expanding threat landscape, and a significant inflection in AI inference, with AI-specific sales up over 200% year-over-year. They also provided color on mitigating memory cost headwinds and a deepening partnership with NVIDIA. F5 raised FY26 revenue growth outlook to 7-8% from 5-6% and raised EPS guidance to $16.25-$16.55.
Buzzberg read FY26 revenue outlook raised to 7-8% from 5-6% F5 reported a strong Q2 with 11% revenue growth, driven by robust double-digit growth in systems and software, and raised its full-year guidance. Management highlighted accelerating demand from hybrid multicloud adoption, an expanding threat landscape, and a significant inflection in AI inference, with AI-specific sales up over 200% year-over-year. They also provided color on mitigating memory cost headwinds and a deepening partnership with NVIDIA. F5 raised FY26 revenue growth outlook to 7-8% from 5-6% and raised EPS guidance to $16.25-$16.55. Read full analysisCollapse analysis
F5 reported a strong Q2 with 11% revenue growth, driven by robust double-digit growth in systems and software, and raised its full-year guidance. Management highlighted accelerating demand from hybrid multicloud adoption, an expanding threat landscape, and a significant inflection in AI inference, with AI-specific sales up over 200% year-over-year. They also provided color on mitigating memory cost headwinds and a deepening partnership with NVIDIA. F5 raised FY26 revenue growth outlook to 7-8% from 5-6% and raised EPS guidance to $16.25-$16.55.
- Q2 product revenue grew 22%, with systems up 26% and software up 17%.
- AI-specific sales reached ~$50 million in H1 FY26, up over 200% y/y, with nearly 100 customers.
- The company is experiencing a 'refresh plus' cycle, with customers recommitting to hardware and expanding deployments, including ~$60 million in sales from recommitted customers.
Revenue$0.8117B-1% QoQ
EPS$3.90-12% QoQ
Gross margin82.82%Reported
Operating margin22.02%Reported
6 grounded callouts
What matters now
The highest-signal changes from the call.
AI
AI revenue more than doubles in H1 to $50M
Software
See a stronger software growth inflection in FY27
Show 3 more callouts
Hardware
Customers recommitting to hardware, $60M sales from re-committed customers
Margins
Memory costs will pressure gross margins in Q4
Competition
Competitive takeout rate up materially on hybrid multi-cloud
Reported period
Actuals
| Metric | Reported | Change |
|---|---|---|
| Revenue | $0.8117B | -1% QoQ |
| EPS | $3.90 | -12% QoQ |
| Gross margin | 82.82% | Reported |
| Operating margin | 22.02% | Reported |
| Free cash flow | $0.3476B | Reported |
| Capex | $0.0183B | Reported |
Forward-looking
Forward guidance
| Metric | Period | Range | Midpoint | Status |
|---|---|---|---|---|
| EPS | FY2026 | $16.25–$16.55 | $16.40 | Raised |
| EPS | FY2026 Q3 | $3.91–$4.03 | $3.97 | Guided |
| Gross margin | FY2026 Q3 | 82.5%–83.5% | 83% | Guided |
| Revenue | FY2026 | $0B | $0B | Raised |
| Revenue | FY2026 Q3 | $0.82B–$0.84B | $0.83B | Guided |
AI, capex & demand read
Management read
Upbeat
Management expressed confidence in durable secular tailwinds and raised FY26 guidance due to strong demand, while detailing robust growth in key areas.
Management AI read
Management highlighted AI inference inflection as a key secular driver, with approximately $50 million in AI-related sales in H1, up over 200% year-over-year, approaching 100 customers. They see AI driving demand for traffic management, AI data delivery, AI factory load balancing, and AI runtime security.
all 1 named companies below
Companiesreturns since call
Supply chain
Supply chain
Cooper Warner
Rising memory costs are a headwind for F5, but management mitigated the impact by building inventory early. They expect the higher costs to flow through starting in Q3 and hit full run-rate in Q4, but they expect relief 'several quarters out'. — The granularity on memory cost pass-through and inventory strategy provides a read on the memory supply-demand balance and its impact on downstream hardware margins.
Evidence
“we're now starting to see some of the later purchases that we have been doing at higher price points are going to start to flow through into the model. And it'll start to flow into Q3, but it'll be kind of more at full run rate in Q4.”
External signals
Supply-chain alpha · 3returns since call
F5 is seeing strong global government spending, particularly in defense and for air-gapped environments, which is a durable trend contributing to its growth.
Evidence
“I think you're seeing that generally different spending across the globe has been growing. And we are a beneficiary of that trend, in part because, generally defense customers are investing more in security, in part also because those cust…”
Rising memory costs are a headwind for F5, but management mitigated the impact by building inventory early. They expect the higher costs to flow through starting in Q3 and hit full run-rate in Q4, but they expect relief 'several quarters out'.
F5 is seeing customers 'recommitting to hardware' and has generated about $60 million in sales from such customers in the first half of the fiscal year, signaling a potential shift back to on-premise infrastructure.
Evidence
“And we have seen in the first half, just to give you a data point, we generated about $60 million in sales from customers who had previously kind of stopped buying hardware and recommitted to hardware.”
Methodology & coverage
Management-only analysis. All 1 validated company mentions are shown. Reported actuals and forward guidance are kept separate. Public evidence is limited to eight short attributed quotes. AI-generated analysis can be incomplete or wrong; verify important claims against the original source.