F5 (FFIV) Q2 2026 earnings summary

Executive summary

• Q2 FY26 revenue reached $812 million, up 11% year-over-year, driven by robust product growth (22%) and strong international demand, especially in EMEA and APAC.

• Systems revenue rose 26% and software revenue increased 17% year-over-year; services revenue grew 2%.

• GAAP net income was $148 million ($2.58/share); non-GAAP net income $223 million ($3.90/share), both up year-over-year.

• Growth fueled by hybrid multi-cloud adoption, expanding cybersecurity threats, and rapid enterprise AI adoption.

• Significant innovation in AI-powered security and application delivery, including new AI WAF, Agentic Bot Defense, and AI Remediate solutions.

Financial highlights

• Q2 revenue was $812 million, with 51% from product and 49% from services; recurring revenue contributed 70%.

• Product revenue up 22% year-over-year; systems revenue up 26%; software revenue up 17%; subscription-based software revenue rose 20% and now represents 90% of software revenue.

• GAAP gross margin was 81.4%; non-GAAP gross margin 83.7%.

• GAAP net income was $148 million ($2.58/share); non-GAAP net income $223 million ($3.90/share), up 14% EPS year-over-year.

• Cash and investments at $1.46 billion; deferred revenue at $2.12 billion, up 10% year-over-year.

Outlook and guidance

• FY26 revenue growth outlook raised to 7%-8% (from 5%-6%); non-GAAP EPS guidance increased to $16.25-$16.55.

• Q3 FY26 revenue expected between $820 million-$840 million; non-GAAP EPS between $3.91-$4.03.

• FY26 non-GAAP gross margin expected at 82.5%-83.5%; operating margin at 34%-35%.

• Full-year share repurchases to be at least 50% of free cash flow.

• Anticipates higher component costs (mainly memory) will lower gross margins sequentially from Q3 to Q4.