01—Abstract
Summary
Summary of the 10-K filed November 22, 2011. Cited figures are marked; the original filing is the authoritative source.
F5 Networks, Inc. (FFIV) reported strong financial performance for the fiscal year ended September 30, 2011, with total net revenues reaching $1.15 billiona, a 30.6% increase year-over-year.
This growth was driven by robust demand across both product and service segments, particularly in its core Application Delivery Networking (ADN) solutions. The company demonstrated effective cost management, leading to a significant increase in net income to $241.4 millionb, or $2.96 per diluted share. F5's strategic focus on innovation, expanding its integrated product suite, and cultivating strong technology partnerships appears to be paying off, positioning it well within the dynamic IT infrastructure market.
Investors should note F5's continued investment in research and development, a key component of its strategy to maintain technology leadership. The company also continues its commitment to returning value to shareholders through a substantial share repurchase program.
Despite its strong performance, the company operates in a rapidly evolving market with significant competition, and it faces risks related to economic conditions, technological changes, and potential supply chain disruptions. However, its solid financial position, with substantial cash reserves and no long-term debt, provides a strong foundation to navigate these challenges and pursue future growth opportunities.
02—Key points
Key Highlights
- Total net revenues increased by 30.6% to $1.15 billion in fiscal year 2011.
- Net income grew significantly to $241.4 million, with diluted EPS of $2.96.
- Strong growth in both product (28.7%) and service (34.0%) revenues.
- Continued investment in R&D, with expenses of $138.9 million.
- Significant share repurchase program, with $271.5 million used for repurchases in FY2011.
- Healthy cash position with $1.01 billion in cash and investments.
- International sales represented 41.2% of net revenues, indicating global reach.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2011, F5, Inc. kept $0.21.
- Revenue$1.15B100.0%
- Cost of revenue−$208.0M18.1%
- Gross profit$943.8M81.9%
- Operating costs−$593.2M51.5%
- Operating income$350.7M30.4%
- Interest, other & tax−$109.3M9.5%
- Net income$241.4M21.0%
Where FY2011 revenue went
$1.15B- Other operating costs: $454.3M, 39% of revenue
- Net income: $241.4M, 21% of revenue
- Cost of revenue: $208.0M, 18% of revenue
- R&D: $138.9M, 12% of revenue
- Interest, other & tax: $109.3M, 9.5% of revenue
Kept 21% as net incomeR&D $138.9M · 12%
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2011filed November 22, 2011Financial Statements
FY2011 against FY2010
| Line item | FY2011FY2010 | Change |
|---|---|---|
| Revenue | $1.15B$881.97M | +30.6% |
| Cost of Revenue | $208.00M$171.95M | +21.0% |
| Gross Profit | $943.83M$710.02M | +32.9% |
| R&D Expenses | $138.91M$118.31M | +17.4% |
| Operating Expenses | $593.17M$480.02M | +23.6% |
| Operating Income | $350.66M$230.00M | +52.5% |
| Net Income | $241.40M$151.15M | +59.7% |
| EPS (Basic) | $2.99$1.90 | +57.4% |
| EPS (Diluted) | $2.96$1.86 | +59.1% |
| Shares Outstanding (Basic) | 80.66M79.61M | +1.3% |
| Shares Outstanding (Diluted) | 81.48M81.05M | +0.5% |
05—Questions
Frequently Asked Questions
What was F5 Networks' primary driver of revenue growth in fiscal year 2011?
F5 Networks' primary driver of revenue growth in fiscal year 2011 was increased demand for its core Application Delivery Networking (ADN) products, including application security and WAN optimization solutions, coupled with growth in its service revenues, which were boosted by a larger installed base of products and renewals of maintenance contracts.
How is F5 Networks managing its capital and shareholder returns?
F5 Networks maintained a strong financial position with $1.01 billion in cash and investments and no long-term debt as of September 30, 2011. The company actively returned capital to shareholders through a significant share repurchase program, utilizing $271.5 million for repurchases in fiscal year 2011. They do not currently pay dividends and do not anticipate doing so in the foreseeable future, preferring to reinvest in growth and share repurchases.
What are the key risks identified by F5 Networks in its 2011 10-K filing?
Key risks identified include fluctuations in quarterly and annual operating results due to economic volatility and sales cycle unpredictability, the dependency on timely product development and market acceptance in a rapidly evolving tech landscape, intense competition in the ADN and file virtualization markets, potential decreases in average selling prices, and reliance on contract manufacturers for product supply. There's also exposure to international commerce risks and potential impacts from changes in government regulations.
06—Continue