10-KPeriod: FY2009

F5, INC. Annual Report, Year Ended Sep 30, 2009

Filed November 20, 2009For Securities:FFIV

Summary

F5 Networks, Inc. (FFIV) reported its fiscal year 2009 results, showcasing resilience in a challenging economic climate. The company's core business in Application Delivery Networking (ADN) remained robust, despite a slight decline in product revenues year-over-year, which was offset by significant growth in service revenues. This diversification highlights the recurring revenue stream from maintenance contracts, driven by an expanding installed base. F5 continues to focus on technological innovation, particularly with its TMOS architecture and the BIG-IP product family, aiming to meet evolving customer needs in application delivery, security, and data management. The company also emphasizes its channel sales strategy and strategic technology partnerships to maintain its competitive edge. While acknowledging the impact of the economic downturn on IT spending, F5 remains committed to investing in R&D and product development to drive future growth and maintain its leadership position in the market.

Financial Highlights

49 data points
Beta

Revenue

$653.08M

78.1% Gross Margin

Net Income

$91.53M

14.0% Net Margin

EPS (Diluted)

$1.14

Total Assets

$1.07B

Cash & Equivalents

$110.84M

Free Cash Flow

$190.31M

Financial Statements
Beta
Revenue$653.08M
Cost of Revenue$142.73M
Gross Profit$510.35M
R&D Expenses$103.66M
Operating Expenses$388.43M
Operating Income$121.92M
Net Income$91.53M
EPS (Basic)$1.16
EPS (Diluted)$1.14
Shares Outstanding (Basic)78.84M
Shares Outstanding (Diluted)80.07M

Key Highlights

  • 1Total net revenues remained relatively flat year-over-year in fiscal 2009 ($653.1 million vs. $650.2 million in fiscal 2008), indicating resilience amidst economic challenges.
  • 2Product revenues saw a decline of 10.2% to $406.5 million, mainly due to a decrease in sales of ADN and FirePass products.
  • 3Service revenues grew by 25.0% to $246.5 million, driven by increased maintenance contracts from a growing installed base of products.
  • 4Research and development expenses remained stable at $103.7 million, underscoring a continued commitment to innovation.
  • 5The company repurchased approximately $87.4 million of its common stock under its share repurchase program.
  • 6International sales accounted for a significant 44.7% of net revenues, demonstrating global reach.

Frequently Asked Questions

In fiscal year 2009, F5 Networks reported total net revenues of $653.1 million, a slight increase from $650.2 million in fiscal year 2008. While product revenues declined by 10.2%, this was largely offset by a 25.0% increase in service revenues, indicating a growing recurring revenue base. The company maintained stable research and development spending, reflecting its commitment to innovation.

F5's core offerings are in Application Delivery Networking (ADN), including its BIG-IP product family, and its ARX product family for file virtualization. The company's strategy focuses on offering a complete, integrated application delivery product suite, investing in technology to meet evolving customer needs, enhancing its channel sales and distribution model, building strategic technology partnerships, leveraging its online community (DevCentral), and enhancing its brand.

Key risks highlighted include the dependence on timely new product development and market acceptance, intense competition in the rapidly evolving ADN and file virtualization markets, the unpredictability of quarterly operating results due to sales cycles, potential decreases in average selling prices, reliance on contract manufacturers, and the impact of adverse general economic conditions and reduced IT spending.