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1. Company Snapshot

1.a. Company Description

F5, Inc.provides multi-cloud application security and delivery solutions for the security, performance, and availability of network applications, servers, and storage systems.The company's multi-cloud application security and delivery solutions enable its customers to develop, deploy, operate, secure, and govern applications in any architecture, from on-premises to the public cloud.


It offers application security and delivery products, including BIG-IP appliances and VIPRION chassis and related software modules and software-only Virtual Editions; Local Traffic Manager and DNS Services; Advanced Firewall Manager and Policy Enforcement Manager that leverage the unique performance characteristics of its hardware and software architecture; Application Security Manager and Access Policy Manager; NGINX Plus and NGINX Controller; Shape Defense and Enterprise Defense; Secure Web Gateway, and Silverline DDoS and Application security offerings; and online fraud and abuse prevention solutions.The company also provides a range of professional services, including consulting, training, installation, maintenance, and other technical support services.F5, Inc.


sells its products to large enterprise businesses, public sector institutions, governments, and service providers through distributors, value-added resellers, managed service providers, and systems integrators in the Americas, Europe, the Middle East, Africa, and the Asia Pacific region.It has partnerships with public cloud providers, such as Amazon Web Services, Microsoft Azure, and Google Cloud Platform.The company was formerly known as F5 Networks, Inc.


and changed its name to F5, Inc.in November 2021.F5, Inc.


was incorporated in 1996 and is headquartered in Seattle, Washington.

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1.b. Last Insights on FFIV

F5, Inc.'s recent performance was negatively impacted by a significant security breach, which compromised its core source code and caused customer confidence issues and sales disruptions. The company's Q4 results, although strong, were overshadowed by cautious guidance for the first quarter and fiscal 2026. Additionally, a securities fraud investigation was launched, and analysts slashed their forecasts following the Q4 results. The breach, attributed to Chinese-linked hackers, exploited F5's software vulnerabilities, prompting authorities to urge organizations to update their products.

1.c. Company Highlights

2. F5's Earnings Report: A Mixed Bag with Growth and Challenges Ahead

F5 reported exceptional fiscal year 2025 results, with revenue growing 10% to over $3 billion and operating profit exceeding $1 billion. The company's growth was driven by data center reinvestment, hybrid cloud adoption, and enterprise AI infrastructure demand. In the fourth quarter, revenue grew 8% to $810 million, with global services revenue of $396 million, up 2%, and product revenue of $414 million, up 16%. The actual EPS came out at $3.26, relative to estimates at $3.96, indicating a slight disappointment. The company's free cash flow was $906 million, up 19% compared to fiscal year 2024.

Publication Date: Oct -28

📋 Highlights
  • Annual Revenue & Profit Surge: FY2025 revenue hit $3.0B (+10%), operating profit surpassed $1.0B.
  • Record Free Cash Flow: Generated $906M (+19% YoY), with 50% allocated to share repurchases in 2026.
  • Security Revenue Dominance: Security sales reached $1.2B (39% of total revenue), driven by AI security runtime and CalypsoAI integration.
  • Q4 Systems Revenue Growth: Surged 42% to $186M, fueled by tech refresh and data center modernization.
  • AI-Related Revenue Expansion: Q4 AI wins and CalypsoAI acquisition boosted AI-focused offerings, though FY2026 guidance narrowed to 0–4% growth due to near-term disruptions.

Revenue Growth Drivers

The company's growth was driven by various factors, including product refresh cycles, competitive takeouts, and the maturation of its software model and go-to-market motions. The systems business saw strength in both product refresh and capacity expansion, with roughly 2/3 of the growth coming from tech refresh and 1/3 from data center capacity expansion. F5 secured new AI wins in Q4, including an AI data delivery use case with an asset manager in EMEA, a Government Ministry in EMEA for AI security runtime operations, and an AI factory load balancing use case with a North American service provider.

Guidance and Outlook

F5 guided for fiscal year 2026 revenue growth in the range of 0% to 4% and non-GAAP operating margin in the range of 33.5% to 34.5%. The company expects to continue using at least 50% of its free cash flow towards share repurchases in fiscal year 2026. The guidance takes into account three categories of disruptions: allocation of resources, delays in approvals or deals, and potential project cancellations due to a security incident. Analysts estimate next year's revenue growth at 3.5%.

Valuation Metrics

Looking at F5's valuation metrics, the P/E Ratio is 24.18, P/B Ratio is 4.66, and P/S Ratio is 7.32. The EV/EBITDA is 18.43, and the Free Cash Flow Yield is 5.72%. The ROIC is 13.94%, and the ROE is 20.34%. These metrics indicate that F5 is trading at a premium, but its strong financial performance and growth prospects may justify the valuation.

Security Incident and Mitigation

F5 is taking steps to ensure the security of its code, including setting up a trust center for customers to conduct penetration testing and leveraging AI for vulnerability hunting. The company is also enhancing its bug bounty program and working with CrowdStrike to implement EDR capabilities on BIG-IP. These efforts aim to make F5 best-in-class in security and mitigate the impact of the security incident.

3. NewsRoom

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F5 to Participate in Upcoming Financial Conference

Dec -04

Source: businesswire.com

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F5, Inc. $FFIV Shares Sold by Fisher Asset Management LLC

Dec -04

Source: defenseworld.net

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Bear Of The Day: F5 (FFIV)

Dec -02

Source: zacks.com

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STNE or FFIV: Which Is the Better Value Stock Right Now?

Dec -01

Source: zacks.com

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Creative Planning Has $2.46 Million Stake in F5, Inc. $FFIV

Nov -25

Source: defenseworld.net

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F5, Inc. (FFIV) Presents at Global Technology, Internet, Media & Telecommunications Conference 2025 Transcript

Nov -19

Source: seekingalpha.com

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F5, Inc. (FFIV) Faces Investor Scrutiny Amid Cybersecurity Incident Impact on Company's Business, Shares Slide Again – Hagens Berman

Nov -19

Source: globenewswire.com

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F5 Launches ADSP Partner Program With Leading Technology Companies to Revolutionize Application Delivery and Security

Nov -19

Source: businesswire.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (1.92%)

6. Segments

Services

Expected Growth: 1.8%

F5's 1.8% growth is driven by increasing demand for cloud-based application services, expansion of 5G networks, and rising need for security and analytics solutions. Additionally, the company's focus on software-centric offerings and strategic acquisitions have contributed to its growth.

Systems

Expected Growth: 2.2%

F5's 2.2% growth driven by increasing demand for cloud-based application security, rising adoption of 5G networks, and growing need for digital transformation. Additionally, F5's focus on software-centric solutions and strategic acquisitions have expanded its total addressable market, contributing to its growth momentum.

Software

Expected Growth: 1.9%

F5's software growth is driven by increasing demand for cloud-based application security, digital transformation, and rising adoption of 5G networks. Additionally, the company's focus on subscription-based models, expansion into new markets, and strategic acquisitions contribute to its growth. Furthermore, the growing need for organizations to protect against cyber threats and ensure application availability also fuels F5's software segment growth.

7. Detailed Products

BIG-IP

BIG-IP is a family of application delivery controllers that provide advanced traffic management, security, and acceleration capabilities.

NGINX

NGINX is a popular open-source web server software that provides high-performance, scalable, and secure web serving capabilities.

Shape Security

Shape Security is a comprehensive bot management solution that detects and mitigates automated attacks on web and mobile applications.

Volterra

Volterra is a distributed cloud platform that provides a unified, secure, and scalable infrastructure for modern applications.

F5 DNS

F5 DNS is a scalable and secure DNS solution that provides high availability, traffic management, and security for DNS infrastructure.

F5 SSL Orchestrator

F5 SSL Orchestrator is a centralized SSL/TLS management solution that provides visibility, control, and automation for SSL/TLS certificates.

8. F5, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

F5, Inc. operates in a niche market with limited substitutes, but the threat of substitutes is still present due to the emergence of new technologies and innovations.

Bargaining Power Of Customers

F5, Inc. has a diverse customer base, which reduces the bargaining power of individual customers. Additionally, the company's products and services are critical to its customers' operations, making it difficult for customers to negotiate prices.

Bargaining Power Of Suppliers

F5, Inc. has a diversified supply chain, which reduces the bargaining power of individual suppliers. The company also has a strong negotiating position due to its large scale of operations.

Threat Of New Entrants

The threat of new entrants is low due to the high barriers to entry in the application delivery controller market. New entrants would need to invest heavily in research and development, marketing, and sales to compete with established players like F5, Inc.

Intensity Of Rivalry

The application delivery controller market is highly competitive, with several established players competing for market share. F5, Inc. faces intense competition from companies like Citrix Systems, Inc. and A10 Networks, Inc.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 8.91%
Debt Cost 3.95%
Equity Weight 91.09%
Equity Cost 9.63%
WACC 9.13%
Leverage 9.79%

11. Quality Control: F5, Inc. passed 6 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
Amdocs

A-Score: 5.7/10

Value: 4.9

Growth: 4.9

Quality: 7.1

Yield: 4.0

Momentum: 3.0

Volatility: 10.0

1-Year Total Return ->

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F5

A-Score: 5.6/10

Value: 2.8

Growth: 4.8

Quality: 9.2

Yield: 0.0

Momentum: 9.0

Volatility: 7.7

1-Year Total Return ->

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Qualys

A-Score: 5.5/10

Value: 2.3

Growth: 7.9

Quality: 9.2

Yield: 0.0

Momentum: 6.0

Volatility: 7.7

1-Year Total Return ->

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Stock-Card
Gen Digital

A-Score: 5.4/10

Value: 3.5

Growth: 4.6

Quality: 7.0

Yield: 4.0

Momentum: 5.0

Volatility: 8.3

1-Year Total Return ->

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Stock-Card
GoDaddy

A-Score: 4.6/10

Value: 3.1

Growth: 8.7

Quality: 6.8

Yield: 0.0

Momentum: 2.0

Volatility: 7.3

1-Year Total Return ->

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Stock-Card
Varonis Systems

A-Score: 3.8/10

Value: 4.7

Growth: 6.9

Quality: 4.0

Yield: 0.0

Momentum: 4.0

Volatility: 3.0

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

243.33$

Current Price

243.33$

Potential

-0.00%

Expected Cash-Flows