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F5, INC.

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Business Summary

F5 operates as a multicloud application delivery and security provider, enabling customers to optimize and secure every application and API anywhere, including on-premises, in the cloud, and at the network edge. The company's solutions are available in a range of deployment and consumption models, including perpetual, subscription, usage-based, SaaS, and managed services, and it sells high-performance systems as well as global services such as maintenance, consulting, and training. F5's customers include large enterprise businesses, public sector institutions, governments, and service providers, and the business is organized into three primary geographic regions: Americas; Europe, the Middle East, and Africa (EMEA); and the Asia Pacific region (APAC).

F5 competes against a range of vendors across application delivery, application security, and multicloud networking. Within application delivery, F5 BIG-IP offerings compete against Citrix and Broadcom, while F5 NGINX offerings compete against Amazon Web Services, Google Cloud Platform, Envoy, and HAProxy. In application security, competitors include Akamai, Cisco, Cloudflare, Fortinet, Juniper Networks, Palo Alto, Radware, and Thales (Imperva). For F5 Distributed Cloud Services, the company competes with traditional edge players including Akamai, Cloudflare and Fastly, networking vendors including Broadcom and Cisco, pure-play vendors like Aviatrix, and public cloud providers. F5 believes it competes favorably due to its robust solutions, ability to deliver and secure any application and API anywhere, and its platform approach, and it has introduced the F5 Application Delivery and Security Platform (ADSP) to provide a unified experience across all offerings.

F5 generates revenue through the sale of products and services. Product revenues are derived from application delivery and security solutions including F5 BIG-IP software and systems, F5 NGINX software, and F5 Distributed Cloud Services offerings, sold on subscription, perpetual, and usage-based consumption models. Services revenue includes annual maintenance contracts, training, and consulting services. The company sells primarily through multiple indirect sales channels including distributors, value-added resellers, managed service providers, and systems integrators, and its customer base consists largely of enterprise customers (Fortune 1000 or Business Week Global 1000 companies) in technology, financial services, transportation, education, manufacturing, healthcare, government, and service providers.

F5's product portfolio is organized into three primary product families. F5 Distributed Cloud Services is a unified SaaS-based security, networking, and application management service that leverages the F5 Global Network and includes offerings such as F5 Distributed Cloud WAAP (Web App and API Protection), which provides Advanced WAF, DDoS mitigation, API security, AI-enabled bot mitigation, and account takeover protection; F5 Distributed Cloud MCN (Multi-Cloud Networking) including Network Connect and App Connect; F5 Distributed Cloud DNS; F5 Distributed Cloud CDN; and F5 Distributed Cloud App Stack. F5 NGINX delivers a lightweight, agile ADC and API connectivity solution for modern, container-native, microservices-based applications, with offerings including F5 NGINX Plus, F5 NGINX One Console, F5 NGINX Ingress Controller, and F5 WAF for NGINX, all sold in subscription consumption models. F5 BIG-IP provides feature-rich application delivery and security solutions for legacy applications, including packaged software in subscription and perpetual models (BIG-IP Security, BIG-IP Application Delivery, BIG-IP Automation Tool Chain, BIG-IQ Centralized Management) and BIG-IP Systems (rSeries and VELOS chassis and blades) designed to enhance performance with custom FPGA logic and off-the-shelf silicon.

In September 2025, F5 completed the acquisition of CalypsoAI Corp. for $145.2 million in cash, which is expected to integrate into the F5 ADSP to create a complete solution for securing AI inference. During fiscal year 2025, F5 repurchased and retired 1,879,403 shares of common stock at an average price of $266.04 per share, and as of September 30, 2025, had $922.4 million remaining authorized to purchase shares. On October 25, 2024, the Board of Directors authorized an additional $1.0 billion for the common stock share repurchase program, incremental to the existing $6.4 billion program. The company also completed several other immaterial acquisitions in fiscal 2025 and prior years, and in the first and fourth fiscal quarters of 2025, recorded restructuring charges of $11.3 million and $14.3 million , respectively, related to reductions in workforce.

For fiscal year 2025, total net revenues were $3,088,072,000 , compared to $2,816,120,000 in fiscal 2024, representing an increase of 9.7%. Net income was $692,380,000 in fiscal 2025, compared to $566,778,000 in fiscal 2024. Diluted net income per share was $11.80 in fiscal 2025, versus $9.55 in fiscal 2024. Gross margin improved to 81.4% in fiscal 2025 from 80.2% in fiscal 2024. Income from operations was $765,949,000 in fiscal 2025, compared to $658,591,000 in fiscal 2024. Cash provided by operating activities was $949,666,000 in fiscal 2025, compared to $792,419,000 in fiscal 2024.

Business Outlook

F5 is pursuing growth through its multicloud application delivery and security strategy, centered on its F5 BIG-IP, F5 NGINX, and F5 Distributed Cloud Services product families. The company is investing in expanding its SaaS-based F5 Distributed Cloud Services, which includes a unified console that extends visibility and simplifies management for F5 BIG-IP and F5 NGINX customers, enabling them to optimize application deployment across public, private, and edge clouds. F5 is also leveraging AI through a four-pronged strategy: solving security and performance challenges for AI model training and inference, using AI models in its current data fabric to enhance existing products, innovating new offerings based on evolving application and data security landscapes, and pursuing partnerships with global leaders in AI to help deliver and secure AI workloads. In 2025, F5 introduced the F5 Application Delivery and Security Platform (ADSP) to unify high-performance traffic management with advanced application and API security across hybrid and multicloud environments, aiming to simplify complexity and enable key capabilities such as policy management, analytics, and automation.

F5 is focused on capturing growth in security and SaaS by continuing to invest in expanding its SaaS-based F5 Distributed Cloud Services. The company is also transforming how customers experience F5 by leveraging foundational capabilities in data and insights, digital sales, and SaaS-delivered capabilities to deliver consistent world-class customer experiences, including simple, integrated, and friction-free consumption of its solutions. F5 intends to enhance its digital customer experiences to deliver both growth and efficiency, and is leveraging AI to accelerate the strength of both its current and future offerings.However, the company has initiated restructuring plans in the first and fourth fiscal quarters of 2025 to better align strategic and financial objectives, optimize operations, and drive efficiencies for long-term growth and profitability, recording charges of $11.3 million and $14.3 million , respectively, related to reductions in workforce.

F5 outsources the manufacturing of its hardware products to various manufacturing partners, including its primary third-party manufacturer service provider, Flex Ltd., which manufactures hardware systems at facilities in Guadalajara, Mexico and Zhuhai, China. Systems built in Guadalajara are shipped to the Flex fulfillment center in Memphis, Tennessee for distribution primarily to distributors, value-added resellers, or end-users in the Americas and EMEA, while systems built and fulfilled in Zhuhai are distributed to partners and customers in APAC. The company's sales and operations planning cadence provides Flex and other partners with a rolling demand forecast to plan for appropriate stock levels and manufacturing line capacity. F5 has established a robust and resilient global hardware supply chain and continuously monitors areas of potential impact such as geopolitical, supplier, and other risk factors, proactively taking steps to minimize disruptions including securing alternate supply when applicable.

In fiscal year 2025, F5 invested $43.3 million in capital expenditures related to the expansion of its facilities to support operations worldwide, as well as investments in technology, including cloud hosting and software licenses, and equipment purchases to support core business activities. The company's stock-based compensation expense was $231.5 million for fiscal year 2025. As of September 30, 2025, F5 had $922.4 million remaining authorized under its share repurchase program. The company has not paid dividends and does not anticipate declaring dividends on its common stock in the foreseeable future.

F5 faces headwinds from the Cyber Incident disclosed on October 15, 2025, in which a threat actor maintained long-term, persistent access to F5 systems and exfiltrated certain files, including portions of BIG-IP source code and information about undisclosed vulnerabilities. The company anticipates near-term disruption to its sales cycles with demand impacts more pronounced in the early part of fiscal year 2026 and normalizing in the second half, and expects a near-term impact on its operating margin within fiscal year 2026. F5 also faces risks from macroeconomic conditions including inflation, tariffs and other duties, higher interest rates, slower growth, fluctuations in foreign exchange rates, and other changes in economic conditions that could adversely affect its results of operations and financial performance.

F5 faces structural headwinds from the evolving competitive landscape, including the transition to cloud-based and SaaS computing models, which presents competitive and execution risks as customers move to hybrid computing environments and new competitors emerge, including large cloud providers offering their own application delivery and security functionality. The company also faces risks from industry consolidation, as some competitors have made acquisitions or entered into partnerships to offer more comprehensive solutions, potentially creating more compelling product and service offerings with greater pricing flexibility. Additionally, F5 is subject to risks associated with international commerce, including greater difficulty in enforcing contracts, uncertainty of intellectual property protection, unexpected changes in regulatory practices, tariffs, and tax laws, fluctuations in exchange rates, and general economic and political conditions in foreign markets.

Risk Factors

The Cyber Incident, disclosed on October 15, 2025, in which a threat actor exfiltrated files including BIG-IP source code and information about undisclosed vulnerabilities, has had and may continue to have an adverse effect on F5's business, reputation, customer relations, results of operations, financial condition, and cash flows, with the company anticipating near-term disruption to sales cycles and a near-term impact on operating margin within fiscal year 2026. F5 faces significant competitive and execution risks from the transition to cloud-based and SaaS computing models, as customers move to hybrid computing environments and new competitors emerge, including large cloud providers offering their own application delivery and security functionality, which could reduce revenues or gross and operating margins. The company's business depends on its ability to timely develop new software and systems products and features in a market characterized by rapid technological change, evolving industry standards, and requirements for interoperability with technologies from other vendors, and any failure to identify, develop, and deploy new products on a timely basis could harm business and results of operations. F5 is exposed to risks associated with its international operations, as sales outside the Americas represented 44.2% of net revenues in fiscal 2025, and these operations are subject to risks including greater difficulty in enforcing contracts, uncertainty of intellectual property protection, unexpected changes in regulatory practices, tariffs, and tax laws, fluctuations in exchange rates, and general economic and political conditions in foreign markets. The company's reliance on a single contract manufacturer, Flex Ltd., for hardware assembly poses a risk, as the inability of this manufacturer to provide adequate supplies or the loss of this single source could cause delays in fulfilling orders and harm business, financial condition, and results of operations.

Management Priorities

Management's message emphasizes F5's role as a multicloud application delivery and security provider committed to bringing a better digital world to life, and highlights the company's strategy of solving multicloud application delivery and security challenges through its F5 BIG-IP, F5 NGINX, and F5 Distributed Cloud Services product families. Key strategic priorities include transforming how customers experience F5 by leveraging data and insights, digital sales, and SaaS-delivered capabilities; capturing growth in security and SaaS by continuing to invest in expanding F5 Distributed Cloud Services; and leveraging AI to accelerate the strength of both current and future offerings through a four-pronged strategy. Management also emphasizes the introduction of the F5 Application Delivery and Security Platform (ADSP) in 2025 to unify high-performance traffic management with advanced application and API security across hybrid and multicloud environments. Regarding the Cyber Incident, management states that to date, the incident has not had a material impact on operations, but anticipates near-term disruption to sales cycles with demand impacts more pronounced in the early part of fiscal year 2026 and normalizing in the second half, and expects a near-term impact on operating margin within fiscal year 2026.

View Source Annual Report on SEC.gov ↗

References

  1. [1] Item 1, Business — Acquisitions; Item 8, Note 3 — Business Combinations
  2. [2] Item 5, Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
  3. [3] Item 5, Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
  4. [4] Item 5, Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
  5. [5] Item 5, Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
  6. [6] Item 5, Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
  7. [7] Item 7, MD&A — Results of Operations; Item 8, Note 13 — Restructuring Charges
  8. [8] Item 7, MD&A — Results of Operations; Item 8, Note 13 — Restructuring Charges
  9. [9] Item 7, MD&A — Results of Operations; Item 8, Consolidated Income Statements
  10. [10] Item 7, MD&A — Results of Operations; Item 8, Consolidated Income Statements
  11. [11] Item 7, MD&A — Results of Operations; Item 8, Consolidated Income Statements
  12. [12] Item 7, MD&A — Results of Operations; Item 8, Consolidated Income Statements
  13. [13] Item 8, Consolidated Income Statements; Item 8, Note 11 — Net Income Per Share
  14. [14] Item 8, Consolidated Income Statements; Item 8, Note 11 — Net Income Per Share
  15. [15] Item 7, MD&A — Results of Operations
  16. [16] Item 7, MD&A — Results of Operations
  17. [17] Item 7, MD&A — Results of Operations; Item 8, Consolidated Income Statements
  18. [18] Item 7, MD&A — Results of Operations; Item 8, Consolidated Income Statements
  19. [19] Item 7, MD&A — Liquidity and Capital Resources; Item 8, Consolidated Statements of Cash Flows
  20. [20] Item 7, MD&A — Liquidity and Capital Resources; Item 8, Consolidated Statements of Cash Flows
  21. [21] Item 7, MD&A — Results of Operations; Item 8, Note 13 — Restructuring Charges
  22. [22] Item 7, MD&A — Results of Operations; Item 8, Note 13 — Restructuring Charges
  23. [23] Item 7, MD&A — Liquidity and Capital Resources
  24. [24] Item 8, Note 10 — Stock-based Compensation
  25. [25] Item 5, Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities; Item 8, Note 9 — Shareholders' Equity
  26. [26] Item 1, Business — Sales and Marketing
  27. [27] Item 7, MD&A — Results of Operations; Item 8, Consolidated Income Statements
  28. [28] Item 7, MD&A — Results of Operations; Item 8, Consolidated Income Statements
  29. [29] Item 7, MD&A — Results of Operations; Item 8, Consolidated Income Statements
  30. [30] Item 7, MD&A — Results of Operations; Item 8, Consolidated Income Statements
  31. [31] Item 8, Consolidated Income Statements; Item 8, Note 11 — Net Income Per Share
  32. [32] Item 8, Consolidated Income Statements; Item 8, Note 11 — Net Income Per Share
  33. [33] Item 7, MD&A — Results of Operations; Item 8, Consolidated Income Statements
  34. [34] Item 7, MD&A — Results of Operations; Item 8, Consolidated Income Statements
  35. [35] Item 7, MD&A — Results of Operations
  36. [36] Item 7, MD&A — Results of Operations
  37. [37] Item 7, MD&A — Results of Operations; Item 8, Consolidated Income Statements
  38. [38] Item 7, MD&A — Results of Operations; Item 8, Consolidated Income Statements
  39. [39] Item 7, MD&A — Liquidity and Capital Resources; Item 8, Consolidated Balance Sheets
  40. [40] Item 7, MD&A — Liquidity and Capital Resources; Item 8, Consolidated Balance Sheets
  41. [41] Item 7, MD&A — Liquidity and Capital Resources; Item 8, Note 6 — Debt Facilities
  42. [42] Item 7, MD&A — Results of Operations; Item 8, Consolidated Income Statements
  43. [43] Item 7, MD&A — Results of Operations; Item 8, Consolidated Income Statements
  44. [44] Item 7, MD&A — Results of Operations; Item 8, Consolidated Income Statements
  45. [45] Item 7, MD&A — Results of Operations
  46. [46] Item 7, MD&A — Results of Operations
  47. [47] Item 7, MD&A — Results of Operations; Item 8, Consolidated Income Statements

Analysis on 6/8/2026