F5 warns breach that alarmed governments will weigh on sales, shares slide 10%

(Reuters) -Cybersecurity firm F5 forecast annual revenue below Wall Street estimates on Monday, warning that a recent systems breach that triggered alarm over potential risks to U.S. and UK government systems would hurt demand for its services. Shares of the company were down 10% in after-hours trading, on track to erase most of the stock's gains so far this year. F5 disclosed earlier this month that hackers had "long-term, persistent access" to certain company systems, including the source code for one of its key cybersecurity services. Reuters later reported that two people briefed on the investigation attributed the breach to state-backed hackers from China. The company's website says it serves more than four in five Fortune 500 companies in some capacity, and U.S. officials have said that federal 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," the company said on Monday. It forecast full-year revenue growth of 0% to 4%, with any demand impacts expected to be more pronounced in the first half, before normalizing in the second half of fiscal year 2026. That was below the average analyst estimate of 4.8%, according to LSEG-compiled data. Its first-quarter revenue forecast of $730 million to $780 million was also came in below estimates of $791 million. (Reporting by Nithyashree R B in Bengaluru; Editing by Anil D'Silva and Maju Samuel)

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