Summary
F5 closed its fiscal 2025 third quarter with revenue of $780.37 million, up 12.2% from $695.50 million in the prior-year quarter. Product demand did the heavy lifting. Product revenue grew 26%, with systems revenue up 39% and software revenue up 16%. Services revenue rose 1%. International revenue represented 47.3% of total revenue in the quarter. Two distributors dominate the sales mix: Ingram Micro accounted for 17.0% of third-quarter revenue and Synnex accounted for 18.4%. That concentration is a persistent risk if either partner shifts strategy or loses share. Backlog metrics improved. Deferred revenue reached $1.96 billion, up 10.4% from $1.77 billion in the prior-year quarter. Remaining performance obligations were $2.00 billion, up 11.1% from $1.80 billion.
Margins expanded. GAAP gross profit was $631.74 million, up 13.0% from $559.07 million, with GAAP gross margin of 81.0%, up 0.6 percentage points from 80.4%. GAAP operating income was $196.32 million, up 20.4% from $163.09 million, and GAAP operating margin was 25.2%, up 1.7 percentage points from 23.4%. GAAP net income was $189.91 million, up 31.8% from $144.08 million. GAAP diluted earnings per share was $3.25, up 33.2% from $2.44. The non-GAAP picture was similarly strong. Non-GAAP gross margin was 83.1%, flat with the prior-year quarter. Non-GAAP operating margin was 34.3% versus 33.4%. Non-GAAP net income was $243 million, or $4.16 per diluted share, compared with $199 million, or $3.36 per diluted share, a year earlier. The gap between GAAP and non-GAAP results remains wide, largely because of stock-based compensation and intangible amortization, which are real costs that management excludes.
Year-to-date figures show the same pattern. Revenue for the first nine months of fiscal 2025 was $2.28 billion, up 10.1% from $2.07 billion in the prior-year period. GAAP net income was $501.89 million, up 25.0% from $401.48 million. GAAP diluted EPS was $8.54, up 26.5% from $6.75. GAAP gross margin was 81.1%, up 1.1 percentage points from 80.0%. GAAP operating margin was 24.6%, up 2.0 percentage points from 22.6%. Operating cash flow for the first nine months was $741.60 million, up 35.8% from $545.91 million. Third-quarter operating cash flow was $282.22 million, up 77.5% from $158.96 million. Capital expenditures were $8.54 million in the quarter, up 46.1% from $5.85 million, and $27.12 million year to date, up 11.4% from $24.35 million. These are cash outflows, so the increases reflect higher investment, not higher cash generation.
Guidance points to continued momentum. For the fiscal fourth quarter, F5 expects revenue of $780 million to $800 million and non-GAAP earnings of $3.87 to $3.99 per diluted share. For the full fiscal year 2025, the fourth-quarter guidance implies revenue growth of approximately 9% at the midpoint, up from prior guidance of 6.5% to 7.5%. It also implies full-year non-GAAP earnings per share growth of 14% to 15% over fiscal 2024, up from prior guidance of 8% to 10%. The company credits tech refresh demand, data center modernization, and adoption of its Application Delivery and Security Platform. Risks include macroeconomic uncertainty, tariffs, inflation, higher interest rates, foreign exchange fluctuations, supply chain disruptions, customer acceptance of new offerings, competition, pricing pressure, increased sales discounts, cybersecurity attacks, and litigation. The high customer concentration with Ingram Micro and Synnex adds another layer of risk. F5 also faces execution risk as it pushes software and subscription models, which can shift revenue timing. Nothing in the quarter changes the central story: product demand is strong, margins are expanding, and cash flow is improving, but the company still depends on a narrow set of channel partners and a favorable IT spending environment.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q3 FY2025 | Q2 FY2025 | QoQ | Q3 FY2024 | YoY |
|---|---|---|---|---|---|
| Revenue | $780.4M | $731.1M | +6.7% | $695.5M | +12.2% |
| Gross profit | $631.7M | $590.2M | +7.0% | $559.1M | +13.0% |
| Gross margin | 81.0% | 80.7% | +0.2 pp | 80.4% | +0.6 pp |
| Research & development | $136.3M | $136.6M | -0.2% | $124.4M | +9.6% |
| Sales & marketing | $220.4M | $218.1M | +1.1% | $205.6M | +7.2% |
| General & administrative | $78.7M | $76.6M | +2.6% | $66.0M | +19.3% |
| Total operating expenses | $435.4M | $431.3M | +1.0% | $396.0M | +10.0% |
| Operating income (loss) | $196.3M | $158.9M | +23.5% | $163.1M | +20.4% |
| Operating margin | 25.2% | 21.7% | +3.4 pp | 23.4% | +1.7 pp |
| Net income (loss) | $189.9M | $145.5M | +30.5% | $144.1M | +31.8% |
| Net margin | 24.3% | 19.9% | +4.4 pp | 20.7% | +3.6 pp |
| Diluted EPS | $3.25 | $2.48 | +$0.77 | $2.44 | +$0.81 |
Risks
Two distributors account for a large and rising share of revenue: Ingram Micro was 17.0% and Synnex 18.4% of total net revenue for the three months ended June 30, 2025, up from 15.7% and 15.9% in the prior-year quarter. Receivables are similarly concentrated, with Ingram Micro at 16.8% and Synnex at 16.6% of total receivables as of June 30, 2025.
MD&A states that overall performance depends on worldwide economic and geopolitical conditions, and specifically flags inflation, tariffs and other duties, higher interest rates, slower growth, and fluctuations in foreign exchange rates as factors that may adversely affect results. International revenues were 47.3% of total net revenues for the three months ended June 30, 2025, exposing results to these pressures.
The company has an unconditional purchase commitment with one component supplier requiring $10 million of annual purchases over a four-year term, with $10.0 million of non-cancelable long-term purchase commitments outstanding as of June 30, 2025. It also must purchase inventory components procured by its primary contract manufacturer under an annual build forecast, and may prepay that manufacturer, creating obsolescence and demand-forecast risk.
Product gross margin declined to 22.8% for the three months ended June 30, 2025 from 26.2% in the prior-year quarter, even as systems revenue grew 39.3% and total product revenue grew 26.0%. Cost of net product revenues rose 9.9% for the quarter, and MD&A cites component price increases, product and services mix, and inventory obsolescence as factors that could further pressure gross margins.
The company recorded restructuring charges of $11.3 million for the nine months ended June 30, 2025, up from $8.7 million in the prior-year period, tied to workforce reductions under plans to align strategic and financial objectives. Continued restructuring execution risk could disrupt operations and talent retention.
MD&A notes the worldwide effective tax rate may fluctuate due to variations in projected taxable income by geography, stock-based compensation, changes in valuation of net deferred tax assets, resolution of tax exposures, and new tax laws. Net deferred tax assets were $421.9 million at June 30, 2025, including $32.1 million of valuation allowances, and recorded tax exposure liabilities could be adjusted if resolutions differ from estimates.
SaaS KPIs
All quarters →Summary, forecast, risks and KPIs are extracted from F5, INC.'s SEC filings for Q3 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 2, 2026.