F5 (NASDAQ:FFIV) Reports Robust Q4 CY2025 Results, Shares Surge 13.3%

F5 Surpasses Expectations in Q4 CY2025

F5 (NASDAQ:FFIV), a leader in application security, delivered fourth-quarter results for CY2025 that exceeded analyst forecasts. The company reported revenue of $822.5 million, marking a 7.3% increase compared to the same period last year. Notably, F5’s revenue outlook for the next quarter stands at $780 million (midpoint), which is 4.7% higher than what market experts anticipated. Adjusted earnings per share reached $4.45, outperforming consensus estimates by 21.9%.

Curious if F5 is a smart investment at this point?

Highlights from F5’s Q4 CY2025 Performance

• Total Revenue: $822.5 million, beating analyst expectations of $755.7 million (7.3% year-over-year growth, 8.8% above estimates)
• Adjusted EPS: $4.45, surpassing the $3.65 forecast (21.9% higher than expected)
• Adjusted Operating Income: $313.8 million, compared to the $261.7 million estimate (38.2% margin, 19.9% beat)
• Q1 CY2026 Revenue Guidance: $780 million (midpoint), exceeding the $745.2 million analyst projection
• Full-Year Adjusted EPS Guidance: Raised to $15.85 (midpoint), a 5.7% increase
• Operating Margin: 26%, consistent with the prior year’s quarter
• Free Cash Flow Margin: 18.2%, down from 23.7% in the previous quarter
• Billings: $884.9 million at quarter’s end, a 3.3% decrease year over year
• Market Cap: $15.19 billion

About F5

Named after the most intense category of tornado, F5 (NASDAQ:FFIV) specializes in safeguarding and optimizing application delivery for large enterprises. Its solutions span cloud, data center, and edge environments, ensuring robust protection and performance for mission-critical applications.

Examining Revenue Trends

Assessing a company’s long-term growth is key to understanding its overall strength. While any business can have a strong quarter, sustained expansion is a hallmark of quality. Over the past five years, F5’s revenue has grown at a modest compound annual rate of 5.4%, which falls short of typical software industry benchmarks and serves as a cautious starting point for evaluation.

F5 Quarterly Revenue

At StockStory, we prioritize long-term growth, but recognize that recent innovations or industry shifts may not be reflected in five-year averages. F5’s annualized revenue growth rate over the last two years was 5.9%, closely matching its five-year trend and indicating consistently modest demand.

F5 Year-On-Year Revenue Growth

This quarter, F5 achieved 7.3% year-over-year revenue growth, with its $822.5 million in sales surpassing Wall Street’s projections by 8.8%. Management forecasts a 6.7% increase in sales for the upcoming quarter. Looking ahead, analysts expect revenue to remain flat over the next year, signaling potential challenges in sustaining demand for F5’s offerings.

Spotlight on Billings

Billings, often referred to as “cash revenue,” represents the total amount collected from customers during a specific period, differing from revenue, which is recognized gradually over contract terms.

In Q4, F5’s billings reached $884.9 million. Over the past year, billings growth averaged 9.5% annually, mirroring the company’s overall sales performance. This suggests that heightened competition may be making it harder for F5 to attract and retain clients.

F5 Billings

Customer Acquisition Efficiency

The customer acquisition cost (CAC) payback period measures how long it takes for a company to recover its investment in gaining a new customer. This metric is crucial for evaluating the effectiveness of sales and marketing efforts.

F5 demonstrated strong efficiency in this area, with a CAC payback period of just 21.5 months this quarter. This rapid recovery enables the company to consider boosting its sales and marketing spend to drive further growth.

Summary of F5’s Q4 Results

F5’s performance this quarter notably exceeded analyst expectations for billings, and its full-year EPS guidance was also higher than anticipated. These positive results were reflected in the stock’s immediate 13.3% jump to $306.17 following the earnings announcement.

While F5 delivered a strong quarter, investors should consider the broader context before making decisions. A single quarter’s results are only part of the picture—evaluating long-term business quality and valuation is essential.

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