F5 warns breach that alarmed governments will weigh on sales

F5 has forecast annual revenue below Wall Street estimates, warning that a recent systems breach that triggered alarm over potential risks to US and UK government systems would hurt demand for its services.

The security vendor disclosed earlier this month that hackers had "long-term, persistent access" to certain company systems, including the source code for one of its key cyber security services.

Reuters later reported that two people briefed on the investigation attributed the breach to state-backed hackers from China.

US officials have said federal government networks were among those targeted in the hack's aftermath and have urged immediate action.

"F5 anticipates some near-term disruption to sales cycles as customers focus on assessing and remediating their environments following the recent security incident," it said on Monday.

The company has not seen any impact to demand yet, executives said on a post-earnings call.

The incident primarily affected BIG-IP customers in two ways. Some had to rapidly upgrade to latest releases following the disclosure of the incident, CEO Francois Locoh-Donou said on the call.

The other was a small subset of customers that faced limited data exfiltration and were notified with details. Initial feedback indicated the data was not sensitive, Locoh-Donou said.

F5 forecast full-year revenue growth of zero percent to four percent, with any demand impacts expected to be more pronounced in the first half, before normalising in the second half of fiscal year 2026.

That was below the average analyst estimate of a 4.8 percent increase, according to data compiled by LSEG.

It forecast first-quarter revenue between US$730 million and US$780 million ($1.1 to $1.2 billion), including potential disruption from the US government shutdown. That was also below the estimate of US$791 million.