F5 Inc. (FFIV) reported broadening growth across its product lines at the Goldman Sachs Communacopia + Technology Conference on Wednesday, painting a picture of expanding demand for its application delivery and security stack.
Systems revenue rose 32% year-over-year in the most recent quarter, while direct artificial-intelligence bookings generated approximately $50 million in the first half of fiscal 2026. The company maintained its full-year revenue growth guidance of 9% to 10%, extending a streak of eight consecutive quarters of double-digit product growth.
Software revenue is forecast to post mid-single-digit growth in fiscal 2026 before accelerating to double digits in fiscal 2027. Gross margin is expected to land in the 80% to 82% range in FY2027, up from a historical gross profit margin of 81.87% over the trailing twelve months.
Distributed cloud services, which the company launched four years prior, have surpassed 1,700 customers and achieved 33% penetration among the top 1,000 — up from 24% a year earlier. Customers using more than one cloud deployment modality are growing 25% faster than single-modality users, said executives at the conference.
Tom Fountain, F5's chief operating officer, described the current demand environment as stronger than at any point during his tenure. "The setup for the next 12 to 24 months, I think, is better than I've seen it ever in my time at F5," Fountain said. "We sit at the front door of the most mission-critical applications of the largest enterprises, service providers, and governments in the world. As a consequence of that, we see every request, every API call, and as we go forward, every agentic call, in and through these organizations."
The company also highlighted structural tailwinds in the market. A 140% increase in application-layer attacks over the past year underscores demand for F5's security offerings, while 90% of organizations now operate hybrid multi-cloud architectures across an average of 22 different environments. F5 serves 80% of the Fortune 500.
On the product roadmap, F5 confirmed the transition from its iSeries to rSeries infrastructure, with customer fill rates and appliance-lineup migrations scaling up. The company announced the acquisition of SurePath AI in the third quarter, adding guardrails, red teaming, and discovery capabilities for generative-AI deployments. A partnership with Nvidia leverages BIG-IP capabilities on DPUs for AI-factory load balancing.
Fountain identified three direct AI use cases for F5: AI data delivery, described as the most mature and largest; AI runtime security, still emerging; and AI factory load balancing, the earliest stage.
Cooper Werner, F5's chief financial officer, noted an inflection in opportunity tied to competitors neglecting the systems side of the technology stack. On capital allocation, F5 committed to directing at least 50% of free cash flow toward share repurchases.
F5 shares rose 52.6% year-to-date through the conference, trading at $406.49 with the live ticker later showing $411.71.
