01—Abstract
Summary
Summary of the 10-K filed November 23, 2010. Cited figures are marked; the original filing is the authoritative source.
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 milliona, 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 millionb 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.
02—Key points
Key Highlights
- Total net revenues increased by 35.0% to $881.97 million in fiscal year 2010, up from $653.08 million in fiscal year 2009.
- Net income grew significantly to $151.15 million in fiscal year 2010, compared to $91.54 million in fiscal year 2009.
- The company's core Application Delivery Networking (ADN) products drove strong revenue growth, representing 95.4% of total product revenues.
- International sales represented a substantial portion of revenue, accounting for 41.4% of net revenues in fiscal year 2010.
- F5 continues to invest in R&D, with expenses totaling $118.31 million in fiscal year 2010, reflecting a commitment to innovation.
- The company maintained a strong cash position, with $862.1 million in cash and investments as of September 30, 2010.
- F5 actively repurchased shares under its stock repurchase program, demonstrating a commitment to returning value to shareholders.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2010, F5, Inc. kept $0.17.
- Revenue$882.0M100.0%
- Cost of revenue−$172.0M19.5%
- Gross profit$710.0M80.5%
- Operating costs−$480.0M54.4%
- Operating income$230.0M26.1%
- Interest, other & tax−$78.8M8.9%
- Net income$151.2M17.1%
Where FY2010 revenue went
$882.0M- Other operating costs: $361.7M, 41% of revenue
- Cost of revenue: $172.0M, 19% of revenue
- Net income: $151.2M, 17% of revenue
- R&D: $118.3M, 13% of revenue
- Interest, other & tax: $78.8M, 8.9% of revenue
Kept 17% as net income
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2010filed November 23, 2010Financial Statements
FY2010 against FY2009
| Line item | FY2010FY2009 | Change |
|---|---|---|
| Revenue | $881.97M$653.08M | +35.0% |
| Cost of Revenue | $171.95M$142.73M | +20.5% |
| Gross Profit | $710.02M$510.35M | +39.1% |
| R&D Expenses | $118.31M$103.66M | +14.1% |
| Operating Expenses | $480.02M$388.43M | +23.6% |
| Operating Income | $230.00M$121.92M | +88.6% |
| Net Income | $151.15M$91.53M | +65.1% |
| EPS (Basic) | $1.90$1.16 | +63.8% |
| EPS (Diluted) | $1.86$1.14 | +63.2% |
| Shares Outstanding (Basic) | 79.61M78.84M | +1.0% |
| Shares Outstanding (Diluted) | 81.05M80.07M | +1.2% |
05—Questions
Frequently Asked Questions
What is F5's core business and how does it generate revenue?
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.
What were the key financial performance indicators for F5 in fiscal year 2010?
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).
What are the main risks and challenges F5 identified in its 2010 10-K filing?
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.
How is F5 addressing the evolving IT landscape, particularly virtualization and cloud computing?
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.
06—Continue