Application security provider F5 (NASDAQ: FFIV) reported revenue ahead of Wall Street’s expectations in Q1 CY2026, with sales up 11% year on year to $811.7 million. Guidance for next quarter’s revenue was better than expected at $830 million at the midpoint, 1.4% above analysts’ estimates. Its non-GAAP profit of $3.90 per share was 12.9% above analysts’ consensus estimates.
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F5 (FFIV) Q1 CY2026 Highlights:
- Revenue: $811.7 million vs analyst estimates of $782.6 million (11% year-on-year growth, 3.7% beat)
- Adjusted EPS: $3.90 vs analyst estimates of $3.46 (12.9% beat)
- Adjusted Operating Income: $274.1 million vs analyst estimates of $248.1 million (33.8% margin, 10.5% beat)
- Revenue Guidance for Q2 CY2026 is $830 million at the midpoint, above analyst estimates of $818.5 million
- Management raised its full-year Adjusted EPS guidance to $16.40 at the midpoint, a 3.5% increase
- Operating Margin: 22.1%, in line with the same quarter last year
- Free Cash Flow Margin: 42.8%, up from 18.2% in the previous quarter
- Billings: $868.3 million at quarter end, up 22.7% year on year
- Market Capitalization: $15.5 billion
“Our second quarter revenue of $812 million grew 11% year over year, driven by 22% product revenue growth—our seventh straight quarter of double-digit product growth,” said François Locoh-Donou, F5’s Chairman, President, and CEO.
Company Overview
Originally named after the F5 tornado, the most powerful on the meteorological scale, F5 (NASDAQ: FFIV) provides security and delivery solutions that protect applications across cloud, data center, and edge environments for large organizations.
Revenue Growth
Examining a company’s long-term performance can provide clues about its quality. Even a bad business can shine for one or two quarters, but a top-tier one grows for years. Over the last five years, F5 grew its sales at a weak 5.4% compounded annual growth rate. This was below our standard for the software sector and is a tough starting point for our analysis.
We at StockStory place the most emphasis on long-term growth, but within software, a half-decade historical view may miss recent innovations or disruptive industry trends. F5’s annualized revenue growth of 7.6% over the last two years is above its five-year trend, which is encouraging. 
This quarter, F5 reported year-on-year revenue growth of 11%, and its $811.7 million of revenue exceeded Wall Street’s estimates by 3.7%. Company management is currently guiding for a 6.4% year-on-year increase in sales next quarter.
Looking further ahead, sell-side analysts expect revenue to grow 2.8% over the next 12 months, a deceleration versus the last two years. This projection is underwhelming and implies its products and services will face some demand challenges.
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Billings
Billings is a non-GAAP metric that is often called “cash revenue” because it shows how much money the company has collected from customers in a certain period. This is different from revenue, which must be recognized in pieces over the length of a contract.
F5’s billings came in at $868.3 million in Q1, and over the last four quarters, its growth slightly lagged the sector as it averaged 13.5% year-on-year increases. However, this alternate topline metric grew faster than total sales, meaning the company collects cash upfront and then recognizes the revenue over the length of its contracts - a boost for its liquidity and future revenue prospects. 
Customer Acquisition Efficiency
The customer acquisition cost (CAC) payback period represents the months required to recover the cost of acquiring a new customer. Essentially, it’s the break-even point for sales and marketing investments. A shorter CAC payback period is ideal, as it implies better returns on investment and business scalability.
F5 is extremely efficient at acquiring new customers, and its CAC payback period checked in at 7.7 months this quarter. The company’s rapid recovery of its customer acquisition costs means it can attempt to spur growth by increasing its sales and marketing investments.
Key Takeaways from F5’s Q1 Results
We were impressed by how significantly F5 blew past analysts’ billings expectations this quarter. We were also glad its full-year EPS guidance exceeded Wall Street’s estimates. Zooming out, we think this was a good print with some key areas of upside. The stock traded up 4.1% to $316.36 immediately following the results.
F5 put up rock-solid earnings, but one quarter doesn’t necessarily make the stock a buy. Let’s see if this is a good investment. When making that decision, it’s important to consider its valuation, business qualities, as well as what has happened in the latest quarter. We cover that in our actionable full research report which you can read here (it’s free).
