10-KPeriod: FY2010

F5, INC. Annual Report, Year Ended Sep 30, 2010

Filed November 23, 2010For Securities:FFIV

Summary

F5, INC. (FFIV) filed its 2010 10-K report on November 23, 2010, covering the fiscal year ended September 30, 2010. The company operates as a leading provider of application delivery networking (ADN) solutions, which optimize the security, performance, and availability of applications and network resources. Their core product, BIG-IP, acts as an application delivery controller, managing traffic and offloading complex functions from servers. F5 also offers data solutions, specifically file virtualization products under the ARX family, aimed at simplifying storage management and reducing costs. For the fiscal year 2010, F5 reported significant revenue growth of 35.0%, reaching $881.97 million, a substantial increase from $653.08 million in fiscal year 2009. This growth was driven by strong demand for their ADN products, particularly in application security and WAN optimization. The company demonstrated solid financial health, with net income growing to $151.15 million from $91.54 million in the prior year. F5 continues to invest heavily in research and development to maintain its technology leadership in the rapidly evolving IT infrastructure market.

Financial Highlights

49 data points
Beta

Revenue

$881.97M

80.5% Gross Margin

Net Income

$151.15M

17.1% Net Margin

EPS (Diluted)

$1.86

Total Assets

$1.36B

Cash & Equivalents

$168.75M

Free Cash Flow

$300.99M

Financial Statements
Beta
Revenue$881.97M
Cost of Revenue$171.95M
Gross Profit$710.02M
R&D Expenses$118.31M
Operating Expenses$480.02M
Operating Income$230.00M
Net Income$151.15M
EPS (Basic)$1.90
EPS (Diluted)$1.86
Shares Outstanding (Basic)79.61M
Shares Outstanding (Diluted)81.05M

Key Highlights

  • 1Total net revenues increased by 35.0% to $881.97 million in fiscal year 2010, up from $653.08 million in fiscal year 2009.
  • 2Net income grew significantly to $151.15 million in fiscal year 2010, compared to $91.54 million in fiscal year 2009.
  • 3The company's core Application Delivery Networking (ADN) products drove strong revenue growth, representing 95.4% of total product revenues.
  • 4International sales represented a substantial portion of revenue, accounting for 41.4% of net revenues in fiscal year 2010.
  • 5F5 continues to invest in R&D, with expenses totaling $118.31 million in fiscal year 2010, reflecting a commitment to innovation.
  • 6The company maintained a strong cash position, with $862.1 million in cash and investments as of September 30, 2010.
  • 7F5 actively repurchased shares under its stock repurchase program, demonstrating a commitment to returning value to shareholders.

Frequently Asked Questions

F5's core business is providing application delivery networking (ADN) solutions that optimize application security, performance, and availability. They generate revenue primarily from the sale of their BIG-IP application delivery controllers and related software modules, as well as services such as maintenance contracts, training, and consulting.

In fiscal year 2010, F5 saw strong top-line growth with total net revenues increasing 35.0% to $881.97 million. Net income also saw substantial growth, reaching $151.15 million. The company maintained healthy gross margins and continued to invest in research and development ($118.31 million) and sales and marketing ($293.20 million).

Key risks identified include the potential for fluctuations in quarterly operating results, the dependency on timely new product development and market acceptance, intense competition from established players like Cisco and emerging companies, potential decreases in average selling prices and increases in costs impacting gross profits, and the unpredictability of sales cycles, especially within the enterprise market.

F5's product strategy is designed to address these trends. Their BIG-IP controllers are crucial for managing virtualized environments by offloading server functions and managing traffic flow to both physical and virtual servers. They also offer virtual editions of their products, enabling deployment within virtual infrastructure and cloud environments, enhancing flexibility and scalability for their customers.