F5(US:FFIV)2026-02-05 20:07Financial Performance - Total revenues for the three months ended December 31, 2025, were $822.465 million, an increase from $766.489 million in 2024[86]. - Basic net income per share increased to $3.12 for the three months ended December 31, 2025, compared to $2.85 for the same period in 2024[82]. - Systems revenue rose to $218.356 million in the three months ended December 31, 2025, compared to $159.708 million in 2024, while software revenue decreased to $191.927 million from $208.789 million[86]. - The Americas region generated $439.788 million in revenue for the three months ended December 31, 2025, up from $431.973 million in 2024[86]. Revenue Recognition and Deferred Revenue - As of December 31, 2025, the total non-cancelable remaining performance obligations under the Company's contracts with customers was $2.1 billion, with an expectation to recognize revenues on 60.8% of these obligations over the next 12 months[34]. - The balance of deferred revenue increased to $2.1 billion as of December 31, 2025, up from $1.8 billion at the beginning of the period, reflecting an addition of $493.8 million during the quarter[33]. Acquisitions and Goodwill - The acquisition of CalypsoAI Corp. was completed for $145.2 million in cash, enhancing the Company's capabilities in enterprise AI security[43]. - The goodwill related to the CalypsoAI acquisition was primarily due to expected synergies and was not deductible for tax purposes[44]. - The Company completed three additional acquisitions during fiscal 2025, resulting in $17.4 million of goodwill, although these acquisitions did not materially impact operating results[47]. Cash and Investments - Cash and cash equivalents decreased to $1.2 billion as of December 31, 2025, from $1.3 billion at the end of September 2025[48]. - The Company recognized interest income of $8.9 million for the three months ended December 31, 2025, compared to $10.3 million for the same period in 2024[39]. Inventory and Assets - Finished goods inventory increased to $35,302,000 from $26,933,000, while raw materials decreased to $44,593,000 from $50,296,000, resulting in total inventories of $79,895,000 compared to $77,229,000[49]. - Unbilled receivables rose to $512,595,000 from $498,288,000, and prepaid expenses increased to $145,388,000 from $86,346,000, leading to total other current assets of $742,163,000, up from $682,766,000[50]. - Total other assets decreased to $509,782,000 from $552,280,000, primarily due to a decline in intangible assets from $96,266,000 to $84,206,000[51]. Liabilities and Commitments - Accrued liabilities decreased to $305,188,000 from $315,383,000, with payroll and benefits liabilities dropping from $189,337,000 to $167,096,000[52]. - The Company’s total operating lease liabilities increased to $267,718,000 from $261,791,000, with a weighted average remaining lease term of 7.8 years and a discount rate of 3.33%[58]. - The Company has a commitment to purchase $10.0 million of component inventory annually under a four-year agreement, totaling $40.0 million, with no remaining commitments as of December 31, 2025[63]. Legal and Regulatory Matters - The Company is engaged in ongoing legal proceedings, including a putative class action complaint alleging false statements regarding cybersecurity capabilities[69]. - The Company is currently evaluating the impact of new accounting standards on its disclosures, including ASU 2023-09 and ASU 2024-03, which will affect future financial reporting[28][29]. Taxation - The effective tax rate for the three months ended December 31, 2025, was 19.2%, down from 20.4% for the same period in 2024, primarily due to changes in unrecognized tax benefits[9]. - As of December 31, 2025, the company had $80.9 million in unrecognized tax benefits, which may change within the next twelve months due to audit settlements[76]. Share Repurchase - The company repurchased 1,203 thousand shares at an average price of $249.33 per share, totaling $300.024 million during the three months ended December 31, 2025[80]. - The company has $622.4 million remaining authorized for share repurchases under its program as of December 31, 2025[80]. Cybersecurity Incident - The Company incurred $17.5 million in costs related to a Cyber Incident for the three months ended December 31, 2025[74].