AI Takeaway
F5 (FFIV) delivered strong Q2 FY2026 results with revenue of $811.7M (+11.0% YoY) and gross margin expanding to 81.4%, driven by robust operating cash flow of $525.1M year-to-date, though net income growth of just 1.5% reflects higher operating expenses.
Revenue
$811.7M
++11.02% YoY
EPS (Basic)
$2.61
++3.98% YoY
Gross Margin
81.4%
++0.69% YoY
Operating Income
$179.02M
++12.66% YoY
Filed · Analysis updated · Source: SEC EDGAR 10-Q filing
Total revenue reached $811.7M in Q2 FY2026, up 11.0% YoY from $731.1M, reflecting strong demand across F5's product and services portfolio and marking a meaningful acceleration in top-line growth.
Source: Source: 10-Q Income Statement
Gross profit rose 12.0% YoY to $660.8M, with gross margin improving approximately 70 basis points to 81.4% from 80.7%, indicating favorable revenue mix shift likely toward higher-margin software and services.
Source: Source: 10-Q Income Statement
R&D expense grew 10.6% YoY to $151.0M, nearly matching the revenue growth rate, signaling continued investment in product innovation and next-generation application delivery and security solutions.
Source: Source: 10-Q Income Statement
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Upgrade to unlockDespite 11.0% revenue growth, net income grew only 1.5% YoY to $147.8M, suggesting rising operating costs—including a 10.6% increase in R&D—are compressing bottom-line profitability. If cost growth continues to outpace revenue, net margins could compress further from the current 18.2%.
Source: Source: 10-Q Income Statement
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Upgrade to unlockReported EPS of $3.90 versus the $3.53 analyst consensus — a +10.6% beat for Q2 FY2026.
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Revenue | $811.7M | $731.12M | +11.02% |
Cost of Revenue | $150.9M | $140.96M | +7.05% |
Gross Profit | $660.8M | $590.16M | +11.97% |
Operating Income | $179.02M | $158.9M | +12.66% |
Net Income | $147.75M | $145.53M | +1.53% |
EPS (Basic) | $2.61 | $2.51 | +3.98% |
EPS (Diluted) | $2.58 | $2.48 | +4.03% |
R&D Expense | $151.04M | $136.56M | +10.60% |
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Total Assets | $6.5B | $5.91B | +10.00% |
Current Assets | $2.7B | $2.34B | +15.68% |
Current Liabilities | $1.68B | $1.52B | +10.04% |
Cash & Equivalents | $1.44B | $1.26B | +14.57% |
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Operating Cash FlowYTD | $525.13M | $459.38M | +14.31% |
Investing Cash FlowYTD | $-29.23M | $-30.58M | +4.40% |
Financing Cash FlowYTD | $-396.28M | $-244.28M | -62.22% |
Share BuybacksYTD | $401.1M | $252.07M | +59.12% |
D&AYTD | $49.19M | $45.14M | +8.97% |
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Gross Margin | 81.4% | 80.7% | +0.69% |
Operating Margin | 22.1% | 21.7% | +0.32% |
Net Margin | 18.2% | — | — |
ROA | 2.3% | — | — |
Current Ratio | $1.611 | — | — |
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F5 reported Q2 FY2026 revenue of $811.7M, up 11.0% year-over-year, with gross margin expanding to 81.4%. Diluted EPS came in at $2.58, a 4.0% increase from the prior year period.
F5's 11.0% revenue growth in Q2 FY2026 was supported by strong demand for its application delivery and security solutions, with gross profit growing even faster at 12.0% YoY to $660.8M, suggesting a favorable shift toward higher-margin software and subscription revenues.
Yes — F5's year-to-date operating cash flow through Q2 FY2026 reached $525.1M, up 14.3% from the same period last year, significantly exceeding net income of $147.8M and reflecting high-quality earnings with strong cash conversion.
F5 has repurchased $401.1M of its own shares year-to-date in FY2026, a 59.1% increase compared to $252.1M in the same period last year, reflecting management's confidence and commitment to returning capital to shareholders.
Key risks include net income growing only 1.5% despite 11.0% revenue growth due to rising R&D and operating costs, the sustainability of F5's high gross margins if revenue mix shifts back toward hardware, and the financial flexibility implications of an accelerating $401M year-to-date buyback pace.