Overview
Evercore ISI left F5 Networks (NASDAQ:FFIV) at an In Line rating and maintained a $320 price target after the company reported December-quarter results that topped most expectations. Trading near $287.24 at the time of the report, F5 is flagged as slightly undervalued per InvestingPro Fair Value estimates and carries an overall financial health rating of "GREAT."
Quarterly results in detail
F5 recorded $822 million in revenue and $4.45 in earnings per share for the December quarter. Those results exceeded analyst projections cited in different reports - one set of expectations placed revenue at roughly $758 million with EPS forecast at $3.66, while other market estimates referenced $755.96 million in revenue and $3.65 in EPS. The company’s Systems segment posted impressive growth of 37%, Services rose 4%, and Software declined 8% year-over-year.
InvestingPro data included in the reporting highlights an 81.4% gross profit margin and a price-to-earnings ratio of 24.4 for F5. Later margin metrics reported for the period showed gross margins at 83.8%, largely flat on a year-over-year basis, and operating margins that expanded by 80 basis points to 38.2%.
AI traction and revenue mix
Management emphasized a notable inflection in enterprise AI adoption. New AI-related customer wins in the first quarter matched the total for all of fiscal 2025. Revenue attributable to direct AI use cases rose to the low double-digit millions from prior single-digit millions, and the company described the mix of AI-related revenue as balanced between data delivery and AI runtime security. InvestingPro noted that this AI momentum is a contributor to F5’s 8.8% revenue growth over the last twelve months.
Geographic performance and margin outlook
By region, EMEA led with 23% growth, supported by regulatory momentum and data sovereignty mandates. The Americas grew modestly by 2%, while APAC declined 1%. Despite healthy top-line results, F5 warned of a modest headwind to gross margins in the second half of the fiscal year, attributing the pressure primarily to rising memory costs.
Guidance and market reaction
Following the quarter, F5 raised its fiscal 2026 outlook, setting expected sales growth at 5-6% versus analyst forecasts centered on 2%. The company also set FY26 EPS at $15.85 compared with a $15.00 analyst consensus. Market responses included upward revisions to price targets by several firms: RBC Capital increased its target to $345 and Piper Sandler to $325, while Evercore ISI’s maintained $320 target reflects continued confidence in the company’s recent operating momentum.
Balance-sheet profile and valuation context
With a market capitalization near $16.2 billion, F5 is characterized in the InvestingPro analysis as holding more cash than debt on its balance sheet, a point highlighted in the platform’s financial-health metrics. The reported P/E of 24.4 is noted as relatively low when compared to the company’s near-term earnings growth outlook.
Other items
The company reported first-quarter fiscal 2026 results that topped the market and subsequently raised full-year guidance, increasing revenue expectations and boosting EPS guidance by $0.85. The filing and analyst commentary also referenced a security incident that occurred in October 2025; analysts observed the incident had minimal impact on results, a factor that contributed to the generally optimistic reception among analysts.
Note: The article presents reported financial and operational data, analyst reactions, and guidance adjustments as disclosed by the company and cited research services.