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F5 Networks (FFIV) is sharply higher after a strong Q1 (Dec) report last night. The application delivery and security company delivered a sizable EPS beat, its biggest in the last five years, while revenue increased 7.3% yr/yr to $822 mln, well ahead of expectations. Just as important, FFIV raised FY26 guidance, now expecting EPS of $15.65-16.05, up from $14.50-15.50, and revenue growth of 5-6%, up from 0-4%, both above consensus. Q2 guidance was also strong, with revenue above and EPS above at the midpoint.

• Growth remains supported by demand tailwinds tied to hybrid multicloud adoption, enterprise AI buildouts, and a move toward more unified delivery and security platforms.
• Management highlighted three infrastructure forces accelerating in parallel: hybrid multicloud as the dominant operating model, AI driving sharper demands on data movement and security, and consolidation away from point products to reduce complexity and risk.
• Product revenue grew 11% yr/yr to $410 mln, marking a sixth straight quarter of double-digit growth, powered by a 37% jump in systems revenue as customers refresh hardware and add capacity to support hybrid multicloud architectures and rising AI traffic needs. Services revenue increased 4% yr/yr to $412 mln.
• Regionally, Americas grew 2% yr/yr and represented about 53% of revenue, while APAC slipped 1%. EMEA was the clear standout, up 24% yr/yr to 31% of revenue, aided by demand tied to digital sovereignty initiatives.
• The FY26 raise reflects stronger close rates and better pipeline visibility, helped by healthy systems refresh activity, a steady cadence of large wins, and AI traction accelerating, with nearly as many AI customers added in Q1 as in all FY25.

Briefing.com Analyst Insight

This was a strong beat-and-raise report from FFIV. There was some concern around the data security incident early in the quarter, but management said demand disruption was minimal, and it ultimately reinforced FFIV's importance inside customer infrastructure. The standouts in Q1 were the sharp jump in systems revenue tied to tech refresh and capacity adds, outsized strength in EMEA, and solid government demand that made up a meaningful share of product bookings. EMEA in particular looks notable given management's view that the momentum may prove durable. Customer wins and accelerating AI traction further highlight FFIV's expanding relevance across modern application delivery and security use cases. After a sharp decline since mid-October, the stock appears to be regaining its footing as it moves past the security incident and benefits from a more supportive customer upgrade backdrop.