AI interpretation based on checked source excerpts. Issuer assertions and evidence limitations remain explicit.
Policy quality-scores-2: six equally weighted categories. The overall score requires full coverage. Missing inputs are not zero. Qualitative grades are sourced interpretations, not probabilities. 2/6 · 18/10/2026
Moat—
Insufficient evidence for every rubric criterion; no category score is inferred.
structural advantage · — · Core deployment integration supports potential switching costs, but material replacement burdens or another structural advantage are not established.
durability · — · Multi-year service commitments establish contracted demand, not durable protection after expiry or through technological change.
customer dependency · — · Support, updates and integration suggest dependency, but the passages do not establish its economic strength or customers' ability to substitute.
erosion resilience · — · Demand growth after the breach is encouraging, but aggregate results cannot establish resilience of a structural advantage that remains unproven.
Pricing power—
Insufficient evidence for every rubric criterion; no category score is inferred.
realized pricing · — · Revenue and margins do not separate prices from volume, mix and costs. Prospective price-pressure warnings establish neither realized increases nor realized erosion.
retention · 2/4 · Indirect evidence is mixed but positive: $2.2 billion of mainly service-related non-cancelable obligations and subscription sales growth demonstrate ongoing contracted demand. They do not identify repeat customers or renewal rates, and breach-related non-renewal remains a risk.
margin resilience · 3/4 · Gross margin improved to 82.2% from 81.0% for the quarter and to 81.7% from 81.1% for nine months, with improvement in both product and service margins. This demonstrates recent resilience, without proving price causation or durability under substantial cost inflation.
contractual freedom · 2/4 · Contractual protection is mixed: substantial non-cancelable service obligations coexist with product orders cancelable before fulfillment without significant penalty. Prices are agreed in purchase orders; unrestricted repricing or unilateral term-setting is not demonstrated.
Predictability97
Five consecutive annual periods. Equal weights: nondeclining revenue frequency; revenue-growth volatility (5–40pp); positive FCF frequency; FCF-margin volatility (3–20pp). Stability indicator, not a growth forecast.
- Nondeclining revenue years (%)
- 100.00
- Revenue growth volatility (pp)
- 3.42
- Positive FCF years (%)
- 100.00
- FCF margin volatility (pp)
- 4.92
Financial strength—
Missing required inputs: debtFcfGrade, netDebtEbitGrade. Equal-weight grades: debt/FCF (1–8x), net debt/earnings before interest and tax (0–5x), interest service (1–12x), current ratio (0.75–2x). Earnings use reported operating income, or reported pretax profit plus reported interest expense when operating income is unavailable. Interest service uses earnings/interest expense; if unavailable, it uses reported operating cash flow/cash interest paid, without relabeling cash paid as accrued expense. Nonpositive cash flow/earnings score 0 for their service component; reported zero interest with a positive numerator scores 100. Net cash scores 100 for net leverage. Missing disclosures remain unavailable. General nonfinancial-company rubric, not a credit rating; exceptional and nonoperating gains are not normalized out. IFRS finance-cost and cash-flow classifications retain their reported scope.
- interestCoverageGrade
- 100.00
- currentRatioGrade
- 64.95
- Current ratio (x)
- 1.56
- cashInterestPaid
- 0.00
Capital allocation—
Missing required inputs: operatingReturn. Three-year equal-weight indicators: pretax return on average invested capital (0–25%; equity + debt − cash, each year and its prior year), share-count growth (0–5%, lower better), share-based cost/revenue (2–20%, lower better), consolidated FCF/net income (0–1x). Return uses reported operating income or, if unavailable, EBIT calculated from reported pretax profit plus reported interest expense; exceptional/nonoperating gains are not normalized out. Share-based cost uses the reported cash-flow add-back or, if absent, separately reported recognized compensation expense; the latter never becomes an FCF adjustment. Nonpositive net income scores 0 for cash conversion; absent income/FCF stays unavailable. Nonpositive invested capital has no defined return and remains unavailable. Does not establish acquisition quality or buyback timing.
- 3-year average dilution (%)
- -1.33
- 3-year average SBC / revenue (%)
- 7.90
- cashConversionGrade
- 100.00
Management63
Equal-weight average of four evidence-backed rubric grades (0–4), scaled to 100.
capital discipline · 3/4 · Nine-month operating cash flow of $841.4 million covered $63.7 million of capital spending, $47.6 million of acquisition payments and $501.1 million of repurchases including excise taxes, while cash increased. Equity compensation of $193.5 million and the expanded share reserve temper the assessment; repurchase value creation and acquisition returns are unproven.
incentive alignment · 3/4 · Actual executive awards use revenue, EPS and relative shareholder-return metrics with minimum thresholds. Ownership requirements, clawbacks and hedging restrictions provide substantive alignment mechanisms. Actual ownership compliance and realized award outcomes are not established.
execution · 2/4 · Systems and software growth, improved margins and cash generation demonstrate commercial execution indirectly. Persistent unauthorized access and exfiltration are a material execution failure. Planned AI acquisition integration is not counted as a demonstrated achievement.
governance · 2/4 · Annual director elections, majority voting, independent oversight and clawbacks establish substantive safeguards. Management reported effective disclosure controls, but that conclusion does not validate cybersecurity controls. The breach limits confidence in operational risk oversight; nominee independence is not assumed to prove subsequent election results.
Evidence
Systems integrators. We also market our products through strategic relationships with systems integrators, including Dell Services, DXC, HP Enterprise Services, and IBM Global Services, who include our products as core components of application deployments or network-based solutions they deploy for their customers.
Business — systems integrators and core deployment components · Filed 18/11/2024
Instead, they typically recommend and/or manage our products as a part of broader solutions supporting enterprise applications and internet facing systems that incorporate our technology for security, high availability, and enhanced performance.
Business — management of products within enterprise application solutions · Filed 18/11/2024
PCS includes a limited period of telephone support, updates, repair or replacement of any failed product or component that fails during the term of the agreement, bug fixes and rights to upgrades, when and if available.
Revenue recognition — post-contract support deliverables · Filed 25/11/2025
The composition of unsatisfied performance obligations consists mainly of deferred service revenue, and to a lesser extent, deferred product revenue, for which the Company has an obligation to perform, and has not yet recognized as revenue in the consolidated financial statements.
Revenue recognition — composition of remaining performance obligations · Filed 06/08/2026
As of June 30, 2026, the total non-cancelable remaining performance obligations under the Company's contracts with customers was $2.2 billion and the Company expects to recognize revenues on 58.8% of these remaining performance obligations over the next 12 months, 24.9% in year two, and the remaining balance thereafter.
Revenue recognition — June 30, 2026 non-cancelable obligations and recognition schedule · Filed 06/08/2026
With the F5 ADSP, customers can leverage the full strength of our broad portfolio with capabilities to enhance security, scalability, and operational efficiency while enabling key capabilities such as policy management, analytics, and automation.
Competition — management description of platform benefits · Filed 25/11/2025
The Company's enterprise-grade application services are available as hardware, software, and SaaS solutions optimized for hybrid, multicloud environments, with modules that can run independently, or as part of an integrated solution on its high-performance appliances.
Business — independent and integrated deployment options · Filed 06/08/2026
Our BIG-IP offerings compete against Citrix and Broadcom.
Competition — named BIG-IP competitors in the 2024 filing · Filed 18/11/2024
Our lightweight, agile, developer-friendly F5 NGINX offerings, which provide capabilities like optimizing Kubernetes traffic management and load balancing cloud-native and hybrid cloud applications compete against Amazon Web Services ("AWS"), Google Cloud Platform, Envoy, and HAProxy.
Competition — named NGINX alternatives in the 2024 filing · Filed 18/11/2024
Cyber Incident On October 15, 2025, the Company disclosed a security incident, (referred to as the “Cyber Incident”) in which a threat actor maintained long-term, persistent access to F5 systems, and certain files were exfiltrated.
Commitments and contingencies — persistent access and file exfiltration · Filed 06/08/2026
There is a risk that AI technologies could automate or simplify functions currently performed by our application delivery and security solutions.
Risk factors — potential AI automation or simplification of existing functions · Filed 06/08/2026
Customers may in the future defer purchasing or choose to cancel or not renew their agreements or subscriptions with us.
Cyber Incident risks — possible future cancellations and non-renewals · Filed 25/11/2025
24 Table of Contents The following presents net product revenues by systems and software: Three Months Ended June 30, Nine Months Ended June 30, 2026 2025 2026 2025 (in thousands, except percentages) Net product revenues Systems revenue $ 239,519 $ 180,855 $ 684,264 $ 519,968 Software revenue 223,310 207,983 599,363 574,563 Total net product revenue $ 462,829 $ 388,838 $ 1,283,627 $ 1,094,531 Percentage of net product revenues Systems revenue 51.8 % 46.5 % 53.3 % 47.5 % Software revenue 48.2 53.5 46.7 52.5 Total net product revenue 100.0 % 100.0 % 100.0 % 100.0 % Total systems revenue increased 32.4% and 31.6% for the three and nine months ended June 30, 2026, respectively, from the comparable periods in the prior year.
MD&A — systems and software revenue results through June 30, 2026 · Filed 06/08/2026
The increase in systems revenue was primarily due to increases in customer demand.
MD&A — attribution of systems revenue growth to customer demand · Filed 06/08/2026
The increase in software revenue was primarily due to increased sales of subscription offerings.
MD&A — attribution of software growth to subscription sales · Filed 06/08/2026
Three Months Ended June 30, Nine Months Ended June 30, 2026 2025 2026 2025 (in thousands, except percentages) Cost of net revenues and gross profit Products $ 93,498 $ 88,782 $ 276,659 $ 252,905 Services 60,066 59,846 179,590 177,192 Total 153,564 148,628 456,249 430,097 Gross profit $ 711,513 $ 631,742 $ 2,042,993 $ 1,847,885 Percentage of net revenues and gross margin (as a percentage of related net revenue) Products 20.2 % 22.8 % 21.6 % 23.1 % Services 14.9 15.3 14.8 15.0 Total 17.8 19.0 18.3 18.9 Gross margin 82.2 % 81.0 % 81.7 % 81.1 % 25 Table of Contents Cost of Net Product Revenues.
MD&A — comparative product, service and consolidated gross margins · Filed 06/08/2026
The average selling price of our products may decrease and our costs may increase, which may negatively impact revenues and profits It is possible that the average selling prices of our products will decrease in the future in response to competitive pricing pressures, increased sales discounts, including responses to inflationary pressures, new product introductions by us or our competitors, or other factors.
Risk factors — prospective selling-price pressure · Filed 25/11/2025
If our costs were to become subject to significant inflationary pressures, we may not be able to fully offset such higher costs through price increases.
Inflation risk — possible limitations on cost pass-through · Filed 06/08/2026
Although we believe that the backlog orders are firm, purchase orders may be canceled by the customer prior to fulfillment without significant penalty.
Business — product purchase-order cancellation without significant penalty · Filed 25/11/2025
The purchase price stated in an agreed upon purchase order is generally representative of the transaction price.
Revenue recognition — agreed purchase-order transaction prices · Filed 25/11/2025
CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited, in thousands) Nine Months Ended June 30, 2026 2025 Operating activities Net income $ 536,017 $ 501,887 Adjustments to reconcile net income to net cash provided by operating activities: Stock-based compensation 193,535 174,243 Depreciation and amortization 72,613 67,608 Non-cash operating lease costs 22,377 23,727 Deferred income taxes (38,644) (56,308) Other (3,300) 3,918 Changes in operating assets and liabilities (excluding effects of the acquisition of businesses): Accounts receivable (14,262) 26,834 Inventories (49,661) 9,458 Other current assets (101,005) (54,523) Other assets 5,618 (68,332) Accounts payable and accrued liabilities 50,995 (19,031) Deferred revenue 192,266 159,003 Lease liabilities (25,176) (26,886) Net cash provided by operating activities 841,373 741,598 Investing activities Purchases of investments (4,850) (4,400) Maturities of investments 402 — Sales of investments 1,575 — Acquisition of businesses, net of cash acquired (47,619) (24,170) Purchases of property and equipment (63,705) (27,119) Net cash used in investing activities (114,197) (55,689) Financing activities Proceeds from the exercise of stock options and purchases of stock under employee stock purchase plan 59,596 59,018 Payments for repurchase of common stock, including excise taxes (501,109) (377,077) Taxes paid related to net share settlement of equity awards (22,664) (19,601) Net cash used in financing activities (464,177) (337,660) Net increase in cash, cash equivalents and restricted cash 262,999 348,249 Effect of exchange rate changes on cash, cash equivalents and restricted cash (1,375) 2,442 Cash, cash equivalents and restricted cash, beginning of period 1,346,368 1,078,340 Cash, cash equivalents and restricted cash, end of period $ 1,607,992 $ 1,429,031 Supplemental disclosures of cash flow information Cash paid for amounts included in the measurement of operating lease liabilities $ 31,490 $ 34,121 Supplemental disclosures of non-cash activities Right-of-use assets obtained in exchange for lease obligations $ 15,744 $ 37,198 The accompanying notes are an integral part of these consolidated financial statements.
Unaudited cash-flow statement — cash generation, investment, repurchases and equity compensation · Filed 06/08/2026
The Company's Talent and Compensation Committee has adopted a set of metrics for the performance stock awards, including (1) 50% of the annual performance stock grant is based on achieving certain annual revenue targets; (2) 25% of the annual performance stock grant is based on achieving certain annual earnings per share targets; and (3) 25% of the annual performance stock grant is based on relative total shareholder return ("TSR") benchmarked to the S&P 500 index.
Stock-based compensation — adopted executive performance-award metrics · Filed 25/11/2025
In each case, no vesting or payment with respect to a performance goal shall occur unless a minimum threshold is met for the applicable goal.
Stock-based compensation — minimum performance thresholds · Filed 25/11/2025
Stock ownership guidelines Directors and executives are subject to stock ownership requirements that encourage alignment with the interests of shareholders.
Proxy — executive and director ownership requirements · Filed 26/01/2026
4 Fiscal Year 2025 Proxy Statement Table of Contents Proxy Summary Clawback policy In the event of a restatement of any financial measure used in determining performance-based compensation for executives, the Company shall recover any payments to an executive in excess of what would have been received if determined based on the restated financial measure subject to limited exceptions.
Proxy — existing executive compensation clawback policy · Filed 26/01/2026
Incentive-based compensation at risk if threshold performance metrics not achieved Executive compensation is reviewed annually by an independent compensation consultant retained by the Talent and Compensation Committee Stock ownership guidelines that encourage alignment with the interests of shareholders Incentive compensation clawback policy Shareholder engagement and annual advisory vote on named executive officer compensation Change of Control Agreements require a double-trigger event for cash severance 40 Fiscal Year 2025 Proxy Statement Table of Contents Executive Compensation What We Don’t Do No “golden parachute” excise tax reimbursement or gross-ups upon a change in control No hedging or pledging or otherwise engaging in short sales of common stock of the company No re-pricing of stock options No excessive perquisites No dividends/dividend equivalents paid on equity awards prior to vesting UPDATES TO THE COMPENSATION PROGRAM FOR FISCAL YEAR 2025 The Compensation Committee implemented a change to the short-term cash incentive program payout calculation for fiscal year 2025 to further align executive compensation with the creation of long-term shareholder value and expectations of our shareholders.
Executive compensation — existing compensation safeguards and prohibited practices · Filed 26/01/2026
OUR VALUES BOARD & GOVERNANCE HIGHLIGHTS Established Robust Lead Independent Director Role 7 of 8 Board Nominees are Independent Declassified Board — All Directors Elected Annually Share Ownership Guidelines for Executives & Directors Clawback Policy for Named Executive Officers Majority Voting for All Directors Independent Directors Meet Without Management Present Prohibition on Hedging, Pledging and Short Sale of Company Stock Third-Party Led Board Self-Assessment Process Implemented Political Contributions Policy Refreshed the Corporate Governance Guidelines Five New Independent Board Members Added in Last Four Years Fiscal Year 2025 Proxy Statement 3 Table of Contents Proxy Summary AWARDS AND COMPANY RECOGNITION F5's BIG-IP and Distributed Cloud Services Received 2025 TrustRadius Top Rated Awards F5 Recognized in 25 Hottest AI Companies for Data Center and Edge: The 2025 CRN AI 100 CRN Named F5 in Top 25 IT Innovators of 2025 F5 Listed in CRN's 20 Coolest Application Security Companies of 2025: The 2025 Security 100 F5 Employee Awarded CRN’s The Most Powerful Women of the Channel 2025: Power 100 KuppingerCole Recognized F5 as Overall Market Leader in WAAP FISCAL YEAR 2025 PERFORMANCE HIGHLIGHTS Annual revenue Cash flow from operations 3.1 950 BILLION MILLION GAAP net income Cash returned to shareholders through share repurchases 692 500 MILLION MILLION $ $ $ $ COMPENSATION POLICIES AND PRACTICES LINKED TO SHAREHOLDER VALUE CREATION AND RISK MITIGATION Pay for performance We emphasize pay for performance and align executive compensation with the Company’s business objectives and performance, and the creation of long-term shareholder value.
Proxy summary — governance arrangements, nominee independence and fiscal 2025 results · Filed 26/01/2026
Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures as of June 30, 2026 and, based on this evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that our disclosure controls and procedures were effective as of June 30, 2026.
Controls and procedures — management's June 30, 2026 effectiveness conclusion · Filed 06/08/2026
The 2026 Plan authorizes the issuance of up to 5.4 million shares of the Company's common stock, which includes 1.9 million shares that remained available for issuance under the Plan and were transferred to the 2026 Plan.
Shareholders' equity — adopted 2026 plan share authorization · Filed 06/08/2026
SurePath’s technologies will be integrated into the F5 AI Security Platform to safeguard enterprise AI deployments.
Business combinations — planned integration of acquired AI technology · Filed 06/08/2026
The acquisition did not have a material impact to the Company's operating results.
Business combinations — acquisition's immaterial operating impact · Filed 06/08/2026
