10-KPeriod: FY2011

F5, INC. Annual Report, Year Ended Sep 30, 2011

Filed November 22, 2011For Securities:FFIV

Summary

F5 Networks, Inc. (FFIV) reported strong financial performance for the fiscal year ended September 30, 2011, with total net revenues reaching $1.15 billion, 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 million, 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.

Financial Highlights

51 data points
Beta

Revenue

$1.15B

81.9% Gross Margin

Net Income

$241.40M

21.0% Net Margin

EPS (Diluted)

$2.96

Total Assets

$1.57B

Cash & Equivalents

$216.78M

Free Cash Flow

$386.49M

Financial Statements
Beta
Revenue$1.15B
Cost of Revenue$208.00M
Gross Profit$943.83M
R&D Expenses$138.91M
Operating Expenses$593.17M
Operating Income$350.66M
Net Income$241.40M
EPS (Basic)$2.99
EPS (Diluted)$2.96
Shares Outstanding (Basic)80.66M
Shares Outstanding (Diluted)81.48M

Key Highlights

  • 1Total net revenues increased by 30.6% to $1.15 billion in fiscal year 2011.
  • 2Net income grew significantly to $241.4 million, with diluted EPS of $2.96.
  • 3Strong growth in both product (28.7%) and service (34.0%) revenues.
  • 4Continued investment in R&D, with expenses of $138.9 million.
  • 5Significant share repurchase program, with $271.5 million used for repurchases in FY2011.
  • 6Healthy cash position with $1.01 billion in cash and investments.
  • 7International sales represented 41.2% of net revenues, indicating global reach.

Frequently Asked Questions

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.

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.

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.