FFIV

MKT CAP $26BP/E 36.5DIV YIELD —FCF YIELD 3.73%REV TTM $3.3B +9.4%NET INCOME $726.5M +8.9%NET CASH $1.6B52W 223.99 – 479.83SEC XBRL · TTM TO Invalid Date

How FFIV rewrote its risk factors

10-K ITEM 1A · FY2024 → FY2025

Text kept

35%

of sentences unchanged

Added

332

new sentences

Dropped

332

sentences removed

Length

−1,190

words, now 23,047

New in FY2025

Overview F5 is a global leader in application delivery and security solutions which enables its customers to deploy, operate, secure, optimize, and govern every application and API across on-premises architectures, in the cloud, and at the network edge.
Our cloud, software, and hardware solutions enable our customers to deliver fast, available, and secure digital experiences to their customers at scale.
Our application services are available as hardware, software, SaaS, and software-only solutions optimized for hybrid, multicloud environments, with modules that can run independently, or as part of an integrated solution on our high-performance appliances.
We market and sell our products primarily through multiple indirect sales channels in our Americas; Europe, the Middle East, and Africa ("EMEA"); and Asia Pacific ("APAC") regions.
Enterprise customers (Fortune 1000 or Business Week Global 1000 companies) in the technology, financial services, transportation, education, manufacturing, and health care industries, along with government customers, and service providers continue to make up the largest percentage of our customer base.
Our revenue is derived from the sales of both products and services.
The majority of our product revenues are derived from sales of our application delivery and security solutions including our F5 BIG-IP software and systems, F5 NGINX software, and our F5 Distributed Cloud Services offerings.
Our F5 BIG-IP software solutions are sold both on a subscription and perpetual license basis.
We sell F5 NGINX on a subscription basis as deployable software or SaaS.
F5 Distributed Cloud Services provides security, multicloud networking, and edge-based computing solutions and are offered on a subscription basis, under a unified SaaS platform and managed service platform.
Our services revenue includes annual maintenance contracts, training and consulting services.
In fiscal 2025, we benefited from improving customer demand, which began to stabilize and improve following macroeconomic uncertainties at the start of fiscal 2024. • Cost of revenues and gross margins.
Significant items impacting cost of revenues are hardware costs paid to our contract manufacturers, third-party software license fees, technology costs, including cloud hosting and software licenses expenses, amortization of developed technology and personnel and overhead expenses.
Other significant operating expenses that we monitor include costs associated with cyber and enterprise-wide security, marketing and promotions, travel, professional fees, technology costs, including cloud hosting and software licenses expenses, related to the development of new products and provision of services, facilities and depreciation expenses. • Liquidity and cash flows.
The increase in cash and investments for fiscal year 2025 was primarily due to cash provided by operating activities of $949.7 million, partially offset by $502.1 million of cash used for the repurchase of outstanding common stock under our stock repurchase program, including the payment of related excise taxes.
In addition, $171.1 million of cash was used for the acquisition of businesses during fiscal 2025, and $43.3 million of cash was used for capital expenditures related to the expansion of our facilities to support our operations worldwide, as well as investments in technology, including cloud hosting and software licenses, and equipment purchases to support our core business activities.
Going forward, we believe the primary driver of cash flows will continue to be net income from operations.
On January 31, 2025, the Revolving Credit Facility expired.
At the time of expiration, there were no outstanding borrowings under the Revolving Credit Facility. • Balance sheet.
Deferred revenues continued to increase in fiscal 2025 due to an increase in deferred subscription contracts, including SaaS and maintenance associated with licensed-based subscriptions, which includes sales as part of our Flexible Consumption Program.
Our days sales outstanding for the fourth quarter of fiscal year 2025 was 46.
Cyber Incident On October 15, 2025, we disclosed information about a Cyber Incident in which a highly sophisticated nation-state threat actor had gained unauthorized long-term, persistent access to certain Company systems, and exfiltrated certain files, some of which contained certain portions of our BIG-IP source code and information about undisclosed vulnerabilities that our engineering teams were working on in BIG-IP.
Upon identifying the threat, we immediately activated our incident response process and took extensive actions to contain the threat actor, which included engaging leading external cybersecurity experts.
Our investigation, monitoring, and related activities related to the incident are ongoing.
To date, we believe our containment actions have been successful, and since the initiation of these efforts, we have not observed any evidence of new unauthorized activity.
To date, we are not aware of any undisclosed critical or remote code vulnerabilities, and we are not aware of active exploitation of any undisclosed vulnerabilities within our products.
Further, to date, we have no evidence of modification to our software supply chain, including our source code and our build and release pipelines.
This assessment has been validated through independent reviews by leading cybersecurity research firms.
We have no evidence that the threat actor accessed or modified the NGINX source code or product development environment, nor do we have evidence they accessed or modified our F5 Distributed Cloud Services or Silverline systems.
In response to the incident, we have prioritized delivering reliable software release updates to address all undisclosed high vulnerabilities in BIG-IP source code, with a significant number of our largest customers having completed these updates with minimal disruption.
We have, and will continue to prioritize steps to bolster our security posture in implementing further measures to strengthen our security environment and protect our customers.
To date, this incident has not had a material impact on our operations.
As a result of the incident, we anticipate near-term disruption to our sales cycles with demand impacts more pronounced in the early part of the fiscal year and normalizing in the second half of the fiscal year 2026.
These disruptions may also lead to a near term impact on our operating margin within fiscal year 2026.
We expect to continue to incur additional professional services and other expenses associated with incident response during fiscal year 2026.
As of the date of this filing these expenses were not material.
Commitments and Contingencies in the Notes to Consolidated Financial Statements included in Item 8 of Part II of this Annual Report on Form 10-K for more information.
Critical Accounting Estimates Our consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America.
The majority of our contracts with our customers include various combinations of our products and subscriptions and support.
Our hardware products and software licenses are distinct from our subscriptions and support services as the customer can benefit from the product without these services and such services are separately identifiable within the contract.

and 292 more.

Gone since FY2024

Overview F5 is a leading provider of multicloud application security and delivery solutions which enable our customers to develop, deploy, operate, secure, and govern applications in any architecture, from on-premises to the public cloud.
Our enterprise-grade application services are available as cloud-based, software-as-a-service, and software-only solutions optimized for multicloud environments, with modules that can run independently, or as part of an integrated solution on our high-performance appliances.
We market and sell our products primarily through multiple indirect sales channels in the Americas; Europe, the Middle East, and Africa ("EMEA"); and the Asia Pacific region ("APAC").
Enterprise customers (Fortune 1000 or Business Week Global 1000 companies) in the technology, telecommunications, financial services, transportation, education, manufacturing, and health care industries, along with government customers, continue to make up the largest percentage of our customer base.
Our revenue is derived from the sales of both global services and products.
Our global services revenue includes annual maintenance contracts, training and consulting services.
The majority of our product revenues are derived from sales of our application security and delivery solutions including our BIG-IP software and systems, F5 NGINX software, and our F5 Distributed Cloud Services offerings.
Our BIG-IP software solutions are sold both on a perpetual license and a subscription basis.
We sell F5 NGINX on a subscription basis.
F5 Distributed Cloud Services provides security, multicloud networking, and edge-based computing solutions and are offered on a subscription basis, under a unified software-as-a-service ("SaaS") platform.
In fiscal 2023 and as we entered fiscal 2024, continued customer budget constraints brought on by uncertainties in the macroeconomic environment led to delays in customer purchase decisions.
The impact of these buying patterns led to softer demand for both our software and systems products and services.
Over the course of fiscal 2024, we have seen customer demand stabilizing, however, we will continue to closely monitor the macroeconomic environment and its impacts on our business. • Cost of revenues and gross margins.
Significant items impacting cost of revenues are hardware costs paid to our contract manufacturers, third-party software license fees, software-as-a-service infrastructure costs, amortization of developed technology and personnel and overhead expenses.
Other significant operating expenses that we monitor include marketing and promotions, travel, professional fees, computer costs related to the development of new products and provision of services, facilities and depreciation expenses. • Liquidity and cash flows.
The increase in cash and investments for fiscal year 2024 was primarily due to cash provided by operating activities of $792.4 million, partially offset by $500.6 million of cash used for the repurchase of outstanding common stock under our stock repurchase program and the payment of related excise taxes.
Going forward, we believe the primary driver of cash flows will be net income from operations.
We have the option to increase commitments under the Revolving Credit Facility from time to time, subject to certain conditions, by up to $150.0 million.
As of September 30, 2024, there were no outstanding borrowings under the Revolving Credit Facility, and we had available borrowing capacity of $350.0 million. • Balance sheet.
Deferred revenues continued to increase in fiscal 2024 due to an increase in deferred subscription contracts, including SaaS and maintenance associated with licensed-based subscriptions, which includes sales as part of our Flex Consumption Program.
Our days sales outstanding for the fourth quarter of fiscal year 2024 was 47.
Critical Accounting Policies and Estimates Our consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America.
We sell products through distributors, resellers, and directly to end users.
Revenue related to our contracts with customers is recognized by following a five-step process: • Identify the contract(s) with a customer.
Performance obligations are identified in our contracts and include hardware, hardware-based software, software-only solutions, cloud-based subscription services as well as a broad range of service performance obligations including consulting, training, installation and maintenance. • Determine the transaction price.
We offer several programs in which customers are eligible for certain levels of rebates if certain conditions are met.
When determining the transaction price, we consider the effects of any variable consideration. • Allocate the transaction price to the performance obligations in the contract.
We satisfy performance obligations either over time or at a point in time as discussed in further detail below.
Shipping and handling fees charged to our customers are recognized as product revenue in the period shipped and the related costs for providing these services are recorded as a cost of sale.
The following is a description of the principal activities from which we generate revenue: Product Revenue from the sale of our hardware and perpetual software products is generally recognized at a point in time when the product has been fulfilled and the customer is obligated to pay for the product.
We also offer several products by subscription, either through term-based license agreements or as SaaS offerings.
Revenue for term-based license agreements is recognized at a point in time when we deliver the software license to the customer and the subscription term has commenced.
For our SaaS offerings, revenue is recognized ratably as the services are provided.
Perpetual or subscription software offerings that are, or have the ability to be deployed on a standalone basis, along with our SaaS offerings, are considered software revenue.
When rights of return are present and we cannot estimate returns, revenue is recognized when such rights of return lapse.
Global Services Revenues for post-contract customer support ("PCS") are recognized on a straight-line basis over the service contract term.
Consulting services are customarily billed at fixed hourly rates, plus out-of-pocket expenses, and revenues are recognized as the consulting is completed.
Flexible Consumption Program We enter into certain contracts with customers, including flexible consumption programs and multi-year subscriptions, with non-standard terms and conditions.
Contract Acquisition Costs Sales commissions earned by our sales force are considered incremental and recoverable costs of obtaining a contract with a customer.
Sales commissions on the initial PCS for hardware, perpetual software, and for term-based license subscription offerings are deferred and then amortized as an expense on a straight-line basis over the period of benefit.

and 292 more.

Sentence-level comparison of Item 1A in the two most recent 10-Ks (FY2024 ↗, FY2025 ↗). A reworded sentence counts as one dropped and one added, so heavy edits read as low “kept”. Headings and page furniture are stripped; nothing is summarised by a model.

Watch FFIV. Know when insiders buy.

One email the day a filing lands. Free.