F5 at Goldman Sachs Communacopia + Technology Conference 2026: growth broadens

On September 9, 2026, F5 (FFIV) presented its business growth at the Goldman Sachs Communacopia + Technology Conference 2026. The company attributed its success to strong demand for security, hybrid cloud, and AI solutions. However, the company also raised concerns about potential cost pressure in fiscal 2027 due to rising memory costs.

F5's growth was driven by three key trends: hybrid multi-cloud adoption, an increasing threat landscape, and rising AI inference activity. The company maintained full-year FY 2026 revenue guidance of a 9% to 10% growth increase, building on an eight-quarter streak of double-digit product growth.

Systems revenue increased 32% year-over-year in the latest quarter, propelled by the iSeries to rSeries refresh cycle and increasing demand for additional capacity. Distributed Cloud Services has now reached 1,700 customers, with 33% penetration among the top 1,000 customers – a notable 24% rise from the previous year. Management expects FY 2027 gross margins to fall in the 80% to 82% range, primarily due to memory cost headwinds.

F5 described its operating environment as exceptionally strong, positioning itself at the center of modern application traffic. The company serves 80% of the Fortune 500 and handles every request, API call, and increasingly, every agentic call that traverses enterprise systems.

The company's strategy is shaped by three primary forces: hybrid multi-cloud adoption, heightened security concerns, and AI inference deployment. Hybrid multi-cloud adoption is at 90% among organizations, using an average of 22 different environments. A 140% increase in application-layer attacks over the past year has amplified security burdens. AI inference deployment is also expanding as enterprises plan to scale their AI-powered applications.

F5's first half of fiscal 2026 demonstrated strong execution and validated its full-year outlook. The company has posted eight consecutive quarters of double-digit product growth and maintained its FY 2026 revenue guidance of a 9% to 10% growth increase. Systems revenue rose 32% in the most recent quarter, while software revenue is expected to grow in the mid-single digits in FY 2026 and accelerate to double-digit growth in FY 2027. Direct AI use cases generated roughly $50 million in bookings in the first half of the year.

The company's systems business is thriving due to a "refresh plus expansion" pattern. Customers are upgrading from the iSeries to the rSeries, but also adding extra capacity beyond replacements. This trend indicates both current workload growth and future AI demand preparation. The iSeries software support end date is scheduled for Q2 FY 2027, with the refresh cycle expected to continue beyond that date due to customer behavior's orderliness and remaining demand tail.

F5's software growth is driven mainly by expansion within existing customer bases. Most Global 2000 customers already utilize F5, with more adding new use cases, higher consumption, and additional product families at renewal time. Distributed Cloud Services has emerged as a major SaaS growth engine, boasting over 1,700 customers and 33% penetration among the top 1,000 customers, up from 24% the previous year.

Cross-selling between SaaS and on-premises offerings, as well as SaaS to SaaS, is proving beneficial for the company.