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F5 Inc. reported fiscal fourth-quarter 2026 results that surpassed Wall Street's revenue and earnings projections, but shares declined after the market closed as investors evaluated the company's strong performance against a cautious outlook. The security and application delivery firm disclosed adjusted earnings of $4.42 per share, exceeding the $4.26 estimate, and revenue of $917 million, surpassing the $884.03 million forecast.
F5's stock slipped 1.58% to $452.09 in after-hours trading, after closing the regular session at $459.36, down 0.48%. The company's product revenue increased 23% from a year earlier, marking its ninth consecutive quarter of double-digit growth. Management cited hybrid multi-cloud adoption, security requirements, and AI-related use cases driving demand.
Despite the beat, investors appeared to seek stronger guidance or higher upside, leading to the stock's decline. F5 forecasted fiscal 2026 revenue of approximately $3.4 billion, an 11% increase from the previous year. The company's recurring revenue accounted for 68% of quarterly sales, providing a more stable base. F5 also noted that its top 1,000 customers were increasingly utilizing multiple product families, indicating growing platform adoption.
Amid a rapidly evolving enterprise security landscape, F5 positioned itself as a provider of security and traffic management solutions across hybrid environments. Revenue for the quarter was $917 million, up 13% year over year. Adjusted earnings per share (EPS) were $4.42, surpassing the $4.26 expectation. Product revenue grew 23% to $510 million, while services revenue rose 3% to $408 million.
Systems revenue increased 29% to $239 million, and software revenue climbed 19% to $271 million. Recurring revenue made up 68% of quarterly sales. The company's gross margins stood at 84%, and operating margins at 33.7%. Despite the earnings beat, F5 shares experienced a 1.58% decline in after-hours trading, falling to $452.09 from the regular session's close of $459.36.
The stock was down about 2.06% from its prior close of $461.60. Analysts have revised their earnings estimates upward for F5, and the company maintains impressive gross profit margins of nearly 82%. However, the stock trades at premium multiples, with a P/E ratio of 36.7 and a PEG ratio of 3.35, suggesting it may be overvalued relative to its fair value.
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