Preliminary brief— based on press release only. Full analysis including management tone and Q&A will be added when the transcript is available.

FFIV · Q2 2026 Earnings

F5, Inc.

Reported April 28, 2026

30-second summary

F5 printed Q2 revenue of $811.7M (+11% YoY), beating the $770–790M guide by $22M at the high end, with non-GAAP EPS of $3.90 vs. $3.34–3.46 guided — a 12.7% beat. Software returned to +17% growth, fully reversing Q1's -8% print, and management raised FY26 revenue growth to 7–8% from 5–6% — the second consecutive quarterly raise after the 0–4% post-incident guide from October. The narrative arc is complete: the security incident is now a non-event, and management is pre-positioning a longer-duration AI/hybrid multicloud story ahead of a May analyst event.

Headline numbers

EPS

Q2 FY2026

$3.90

Revenue

Q2 FY2026

$0.81B

+11.0% YoY

Gross margin

Q2 FY2026

81.4%

Operating margin

Q2 FY2026

22.1%

Key financials

Q2 FY2026

Metric	Q2 FY2026	YoY	Q1 FY2026	QoQ
Revenue	$0.81B	+11.0%	$0.82B	-1.3%
EPS	$3.90	—	$4.45	-12.4%
Gross margin	81.4%	—	81.5%	-10bps
Operating margin	22.1%	—	26.0%	-390bps

Guidance

Guidance is issued for both next quarter and the full year. Both may appear below.

Actuals vs prior guidance

Metric	Period	Prior guide	Actual	Δ	Result
Revenue	Q2 FY2026	$770 million to $790 million	$811.7 million	+$21.7M to +$41.7M above guide	Beat
Non-GAAP EPS	Q2 FY2026	$3.34 to $3.46	$3.90	+$0.44 to +$0.56 above guide	Beat
Non-GAAP Gross Margin	Q2 FY2026	82.5% to 83%	83.7%	+0.7 to +1.2 percentage points above guide	Beat
Non-GAAP Operating Margin	Q2 FY2026	not explicitly guided for Q2	33.8%	—	Beat

New guidance

Metric	Period	Guide	YoY
Revenue	Q3 FY2026	$820 million to $840 million	+5.1% to +7.7% YoY
Non-GAAP EPS	Q3 FY2026	$3.91 to $4.03	—

Changes to prior guidance

Metric	Period	Prior guide	New guide	Δ	Result
Revenue Growth (FY basis)	FY 2026	5% to 6%	7% to 8%	+2 percentage points (both low and high end raised)	Raised
Non-GAAP EPS	FY 2026	$15.65 to $16.05	$16.25 to $16.55	+$0.60 to +$0.90 (midpoint +$0.60)	Raised
Non-GAAP Effective Tax Rate	FY 2026	21% to 22%	20% to 21%	-1 percentage point (both low and high end lowered)	Lowered

Reaffirmed unchanged this quarter: Non-GAAP Gross Margin (82.5% to 83.5%), Non-GAAP Operating Margin (34% to 35%), Share Repurchase (at least 50% of free cash flow)

Product revenue

Q2 FY2026

Segment	Q2 FY2026	YoY
Products	$0.411B	+22.0%
Systems	$0.226B	+26.0%
Software	$0.184B	+17.0%
Services	$0.401B	+2.0%

Management tone

Narrative arc: Hardware reacceleration → Security incident damage control → AI inflection + regulatory tailwind → Secular re-rating with AI quantified.

Management's framing of AI shifted from inflection-disclosure to operating reality. Three quarters ago AI was named in POC counts; two quarters ago Francois called Q1 "as many AI customer adds as all of FY25"; this quarter the company put a dollar figure on it for the first time. From the call: "we had approximately $50 million in sales in the first half of the year on these use cases. That's up more than 200% year on year. And we're now approaching about 100 customers that are using F5 for their AI use cases." The progression from POC count → customer count → dollar contribution inside three quarters is the cleanest evidence that AI is now a planning input rather than a narrative — and it explains why management felt comfortable raising the FY revenue growth guide by 200bps a single quarter after the prior raise.

The hybrid multicloud framing escalated again. Last quarter management tied it to regulatory mandate (DORA, NIST 2); this quarter Francois moved it further: "Hybrid multicloud was by default. Customers needed the flexibility to put their application in different environments. But now we're seeing it being more of a strategic architecture that is by design, and customers are implementing that for digital sovereignty reasons." The shift from "by default" to "by design" is the difference between a procurement category and an architectural commitment — the latter is much harder to displace and supports the platform consolidation thesis F5 has been building for four quarters.

Security positioning shifted from incident-recovery to existential industry frame. Francois, on the call: "We are now in an era where the window of time for an enterprise to patch their applications has closed." Two quarters ago F5 was the company whose patch event triggered industry-wide customer remediation; this quarter the company is positioning runtime security (where patches are too slow) as the durable answer to AI-accelerated attack velocity. That repositioning takes the October 2025 incident and converts it into a TAM-expanding argument — a remarkable narrative reversal in six months.

Software cadence introduced a forward unlock. Cooper, distinguishing this raise from a one-quarter blip: "we do expect to see an inflection in the growth rate [for software into FY27]...we have a larger base coming up for renewal next year. And so with the expansion we would anticipate against that larger renewal base, we feel pretty confident about a higher growth rate into FY27." Last quarter the FY26 software story was defensive (mid-single-digit framework defended after a -8% print); this quarter it's offensive (FY27 inflection telegraphed). Management is now selling duration, not just the current cycle.

Hedging language remains, but pointed at H2 component costs and FY27 supply visibility — not demand. Memory cost pressure on Q4 gross margins and elevated memory prices through much of FY27 are the named risks. Demand confidence is rising; supply-side confidence is falling further out the curve.

Recurring themes management leaned on this quarter:

Hybrid multicloud as strategic imperative, not tactical flexibilityAI inference inflection creating new revenue streams (data delivery, runtime security, AI factory load balancing)Threat landscape expansion driven by AI-powered attacks at higher volume and sophisticationRefresh plus expansion dynamic with higher customer retention and wallet share gainsCompetitive displacement in hybrid multicloud environments where competitors lack breadthPlatform consolidation trend replacing point products across on-prem and cloud environments

Risks management surfaced:

Memory and component cost inflation impacting Q4 gross margins (expected step-down from Q3)Cyclicality of refresh cycles and potential normalization after strong performanceLonger-term memory price elevation expected through much of FY27Services revenue headwinds near-term due to legacy appliance replacement lag in maintenance revenueVisibility challenges four to five quarters out for supply planning despite near-term confidence

Answers to last quarter's watch list

Whether software revenue returns to positive YoY growth in Q2. Total software grew +17% YoY to $184M, a 25-point swing from Q1's -8%. The perpetual-comp pressure has cleared and the renewal cohort is performing as the FY26 framework required.

Resolved positively

Q2 non-GAAP gross margin landing inside the 82.5–83% guide. Q2 printed 83.7% — 70bps above the high end of the guide. Memory cost pressure has not yet flowed through; management now flags Q4 as the step-down quarter and reaffirmed the FY 82.5–83.5% range. Status: Resolved positively in-period; structural watch persists into Q4

Whether AI customer adds in Q2 maintain the Q1 pace. Management quantified H1 FY26 at ~$50M in AI use case sales (+200% YoY) and approximately 100 customers. That's a per-quarter run rate consistent with — likely above — the Q1 add cadence, with the data-delivery vs. security mix that Francois flagged in Q1 now balanced.

Resolved positively

Systems revenue holding the Q1 run rate. Q2 Systems printed $226M (+26% YoY), up $8M sequentially from Q1's $218M (+37% YoY). The YoY growth rate decelerated but the absolute run rate stepped up — the seventh consecutive quarter of double-digit product growth.

Resolved positively

Any update on the multi-year software agreement growth rate. F5 did not separately disclose the multi-year software agreement growth rate this quarter. Three consecutive quarters of non-disclosure on what was the cleanest platform-stickiness signal in Q4 FY25.

Not resolved

H2 implied growth trajectory. With the FY guide raised to 7–8% and H1 having printed roughly +9%, the implied H2 is now roughly +5–7% — a meaningful step down from H1 but not the steep deceleration the 5–6% prior framework implied. The Q3 guide of $820–840M (+5–8% YoY) anchors the first leg of that path. Status: Resolved — H2 deceleration is structurally lighter than the prior guide framework projected

What to watch into next quarter

Q3 revenue landing at or above the $830M midpoint. The new FY 7–8% guide implies H2 growth roughly tracking the Q3 guide range; a print below the low end would force a mid-year retreat on the second consecutive raise.

Whether software sustains double-digit YoY growth in Q3. Q2's +17% was the swing factor in the FY raise. A reversion to mid-single-digits would re-open the question of whether the recovery was renewal-timing rather than expansion-driven.

AI revenue contribution sized at the May analyst event. Management's $50M H1 / 100-customer disclosure sets up a more formal AI segment framework at the upcoming analyst event. Watch whether F5 commits to an FY26 AI revenue figure or a multi-year run-rate target — that's the disclosure step that converts the narrative into a model input.

Q4 non-GAAP gross margin guide. Management telegraphed memory-cost pressure stepping into Q4 with FY27 supply visibility low. The Q3 guide of 82.5–83.5% holds the FY range; a Q4 guide below 82% would confirm the cost pressure is harder than the FY framework implies.

Disclosure of the multi-year software agreement growth rate. Three consecutive quarters without this number against a now-recovering software line is the data point we'd most want clarified.

Services revenue acceleration off the +2% base. Services grew +2% YoY for the second consecutive quarter — management has flagged near-term headwinds from legacy appliance replacement lag in maintenance. Watch whether the post-refresh maintenance attach catches up in H2.

Sources

F5 Q2 FY2026 earnings release, April 28, 2026 — https://www.sec.gov/Archives/edgar/data/1048695/000104869526000042/ex991-q226earningsreleasef.htm
F5 Q2 FY2026 prepared remarks (Cooper and Francois commentary on AI revenue contribution, hybrid multicloud framing, FY26 guidance raise, and FY27 software inflection)

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