Summary
F5 delivered a solid second quarter of fiscal 2025. Revenue rose 7.3% to $731.1 million. GAAP gross profit rose 9.2% to $590.2 million, and gross margin expanded 1.4 percentage points to 80.7%. GAAP operating income rose 13.5% to $158.9 million, with operating margin up 1.2 percentage points to 21.7%. GAAP net income rose 22.3% to $145.5 million, and diluted EPS rose 24.0% to $2.48. On a non-GAAP basis, gross profit was $607 million (83.1% margin), operating income was $233 million (31.9% margin), net income was $201 million, and EPS was $3.42. The company credited systems demand and a subscription software renewal base for the top-line gain.
Cash generation remained a strength. Operating cash flow for the six months ended March 31, 2025 rose 18.7% to $459.4 million. Capital expenditures for the same six-month period were $18.6 million, flat 0.4%. Deferred revenue rose 6.1% to $1.92 billion, and remaining performance obligations rose 5.6% to $1.90 billion. Those backlog measures suggest customers continue to commit to multi-year arrangements. The balance sheet also showed no outstanding borrowings when the revolving credit facility expired on January 31, 2025.
Guidance points to continued growth. For the third quarter of fiscal 2025, F5 expects revenue of $740 million to $760 million, representing 8% annual growth at the midpoint, and non-GAAP EPS of $3.41 to $3.53. For the full fiscal year 2025, management raised revenue growth guidance to 6.5% to 7.5% over fiscal year 2024, up from 6% to 7%. It also raised non-GAAP EPS growth expectations to 8% to 10%, up from 6.5% to 8.5%. On a tax-neutral basis, the midpoint of full-year non-GAAP EPS guidance reflects better than 10% growth year over year. The third-quarter outlook leans on a substantial subscription software renewal base and continued systems demand.
Risks remain familiar. F5 operates in a global market exposed to macroeconomic conditions, inflation, tariffs, higher interest rates, slower growth, and foreign exchange fluctuations. Supply chain disruptions could affect product availability or margins. Customer concentration is notable: Ingram Micro accounted for 16.9% and Synnex for 17.4% of total net revenue in the quarter. Competition, pricing pressure, and cybersecurity threats are ongoing concerns. The company also faces litigation and regulatory risks. Headcount changes show investment in research and development, where headcount rose to 2,023 from 1,981, while sales and marketing headcount fell to 2,151 from 2,166. Professional services headcount increased to 1,086 from 1,049, and general and administrative headcount decreased to 854 from 881. Those shifts align with a focus on product innovation and cost discipline.
Margins expanded on both GAAP and non-GAAP bases, and cash flow covered capital expenditures and share repurchases. The quarter showed healthy demand for F5's hybrid multicloud solutions. Execution on the new Application Delivery and Security Platform will be key to sustaining growth. The guidance implies confidence in the renewal pipeline, but macro and competitive pressures could test results.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q2 FY2025 | Q1 FY2025 | QoQ | Q2 FY2024 | YoY |
|---|---|---|---|---|---|
| Revenue | $731.1M | $766.5M | -4.6% | $681.4M | +7.3% |
| Gross profit | $590.2M | $626.0M | -5.7% | $540.2M | +9.2% |
| Gross margin | 80.7% | 81.7% | -1.0 pp | 79.3% | +1.4 pp |
| Research & development | $136.6M | $130.5M | +4.6% | $122.2M | +11.7% |
| Sales & marketing | $218.1M | $206.0M | +5.8% | $210.8M | +3.4% |
| General & administrative | $76.6M | $73.0M | +5.0% | $67.2M | +14.1% |
| Total operating expenses | $431.3M | $420.9M | +2.5% | $400.3M | +7.7% |
| Operating income (loss) | $158.9M | $205.1M | -22.5% | $140.0M | +13.5% |
| Operating margin | 21.7% | 26.8% | -5.0 pp | 20.5% | +1.2 pp |
| Net income (loss) | $145.5M | $166.4M | -12.6% | $119.0M | +22.3% |
| Net margin | 19.9% | 21.7% | -1.8 pp | 17.5% | +2.4 pp |
| Diluted EPS | $2.48 | $2.82 | -$0.34 | $2.00 | +$0.48 |
Risks
For the three months ended March 31, 2025, Ingram Micro, Inc. and Synnex Corporation accounted for 16.9% and 17.4% of total net revenue, respectively. A significant reduction in purchases by either distributor could materially affect revenue.
MD&A states that inflation, tariffs and other duties, higher interest rates, slower growth, and fluctuations in foreign exchange rates may adversely affect results. International revenues were 48.9% of total net revenues for the three months ended March 31, 2025, compared to 46.6% for the same period in the prior year.
The company has an unconditional purchase commitment with one component supplier for $10 million of inventory annually and total non-cancelable long-term purchase commitments of $10.0 million as of March 31, 2025. It also relies on a primary contract manufacturer and prepays for inventory, exposing it to component availability and pricing risk.
Product gross margin decreased to 24.1% for the three months ended March 31, 2025 from 28.4% in the prior-year period, even as total gross margin increased to 80.7%. The decline was tied to sales mix and component costs, and could pressure profitability if it continues.
Software revenues, a component of net product revenues, decreased 0.5% for the three months ended March 31, 2025 from the comparable period in the prior year, even as total product revenues increased 12.3%. Continued weakness in software could offset systems growth.
SaaS KPIs
All quarters →Non-GAAP Operating Margin
Summary, forecast, risks and KPIs are extracted from F5, INC.'s SEC filings for Q2 FY2025 (10-Q / 10-K and the 8-K earnings release); GAAP figures in the summary are checked against the reported XBRL data. They can contain errors; the filings are authoritative. Processed Oct 1, 2026.