Evercore ISI on Wednesday increased its price target for F5 Networks (NASDAQ:FFIV) to $320.00 from $280.00 while retaining an "In Line" rating on the shares, following the company’s quarterly report that beat several expectations.
For the December quarter, F5 recorded revenue of $822 million and earnings per share of $4.45. Those results topped Street estimates cited in the report, which included comparisons to $758 million in revenue and $3.66 in EPS in one set of estimates, and to $755.96 million and $3.65 in another mention. The company’s performance represented a material upside versus those forecasts, and the report noted an earnings surprise figure of 21.92% as highlighted by analysts.
Segment-level results were mixed. The Systems, or hardware, business expanded strongly, growing 37% in the quarter. By contrast, Software sales declined 8%, while Services revenue increased 4%.
Management emphasized an inflection point in enterprise AI adoption. According to the company, new AI-related customer wins in the first quarter equaled the total number secured during the entirety of fiscal 2025. Revenue attributable to direct AI use cases rose to the low double-digit millions, up from prior single-digit millions, indicating early but accelerating monetization from AI-specific workloads.
Geographically, F5’s EMEA region led growth with a 23% increase, driven by regulatory momentum and data sovereignty requirements cited by the company. The Americas grew 2% while APAC declined 1% in the period reported.
Profitability metrics remained strong. Gross margin was reported at 83.8%, and operating margin improved by 80 basis points year-over-year to 38.2%.
F5 raised its fiscal 2026 outlook alongside the results. The company now anticipates sales growth of 5-6%, versus Street sales growth expectations of 2% cited in the report. It also raised its EPS projection to $15.85, compared with a Street consensus of $15.00. The company did, however, flag a modest headwind to gross margins in the second half of the fiscal year, attributing the pressure primarily to rising memory costs.
The report reiterated that the quarter represented a strong showing for F5, with multiple metrics above consensus and early signs of ramping AI-related revenue. The upgrade to the price target by Evercore ISI reflects the firm’s reaction to those results while the maintained rating indicates expectations that the stock will perform broadly in line with the market over the near term.
Clear summary
Evercore ISI lifted its F5 Networks price target to $320 and kept an "In Line" rating after the company delivered a quarter with $822 million in revenue and $4.45 EPS, outpacing cited Street estimates. Hardware led growth, software declined, services edged up, and management pointed to accelerating enterprise AI wins and rising AI-related revenue. F5 raised fiscal 2026 guidance but warned of modest second-half margin pressure from higher memory costs.