Why F5 Stock Popped Today
Key Points
F5 is benefitting from rising demand for multicloud services.
The app platform's earnings growth is accelerating.
- 10 stocks we like better than F5 ›
Shares of F5 (NASDAQ: FFIV) rose on Wednesday after the application delivery and security provider's sales and profits surpassed investors' expectations.
As of 2:11 p.m. EST, F5's stock price was up more than 8%.
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Artificial intelligence (AI)-driven gains
F5's revenue grew 7% year over year to $822 million in its fiscal 2026 first quarter, which ended on Dec. 31. This growth was propelled by a 37% surge in the cloud services purveyor's systems revenue to $218 million.
"This strong performance underscores F5's alignment with durable market demand drivers, including the shift to hybrid multicloud architectures, enterprise adoption of AI, and the growing need for converged platforms," CEO Francois Locoh-Donou said in a press release.
Moreover, F5's adjusted operating income jumped 10% to $314 million, as its operating margin improved to 38.2% from 37.4% in the prior-year quarter.
F5's adjusted net income, in turn, climbed 14% to $259 million, or $4.45 per share. That was well above Wall Street's estimates, which had called for adjusted per-share profits of $3.65.
Management lifted its full-year outlook
These strong results prompted F5 to boost its sales and profit guidance. The company now sees its revenue growing by 5% to 6% in fiscal 2026, up from a prior forecast of 0% to 4%.
F5 also raised its adjusted earnings per share target to between $15.65 and $16.05, up from $14.50 to $15.50.
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Joe Tenebruso has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
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