01—Abstract
Summary
Summary of the 10-K filed November 6, 2015. Cited figures are marked; the original filing is the authoritative source.
F5, Inc. (FFIV) demonstrated robust growth in its fiscal year ending September 30, 2015, with total net revenues increasing by 10.8% year-over-year to $1.92 billiona.
This growth was primarily driven by strong performance in both its product and service segments. The company's core business remains centered around its TMOS (Traffic Management Operating System) platform, which underpins a comprehensive suite of application delivery services. F5 continues to invest heavily in research and development, with R&D expenses rising to $296.6 millionb, reflecting a commitment to innovation and adaptation in the rapidly evolving technology landscape.
Financially, F5 maintained a strong position with significant cash reserves and no long-term debt. The company repurchased $606.9 millionc in its own stock during the fiscal year, underscoring its financial health and commitment to returning value to shareholders.
Despite increasing operating expenses, particularly in sales and marketing and R&D, the company achieved a healthy net income of $365.0 milliond. F5's strategy focuses on expanding its addressable market through technology investments and strategic partnerships, positioning it to capitalize on the growing demand for secure, fast, and available application delivery services across hybrid IT infrastructures.
02—Key points
Key Highlights
- Total net revenues grew by 10.8% to $1.92 billion in fiscal year 2015.
- Product revenues increased by 5.9%, driven by core Application Delivery Networking (ADN) products.
- Service revenues saw robust growth of 16.6%, fueled by maintenance contracts and consulting services.
- Research and Development expenses increased by 12.4% to $296.6 million, indicating a strong focus on innovation.
- The company maintained a strong liquidity position with $1.17 billion in cash and investments and no long-term debt.
- F5 repurchased $606.9 million of its common stock, demonstrating a commitment to shareholder returns.
- Net income reached $365.0 million, a significant increase from the previous year.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2015, F5, Inc. kept $0.19.
- Revenue$1.92B100.0%
- Cost of revenue−$332.3M17.3%
- Gross profit$1.59B82.7%
- Operating costs−$1.03B53.9%
- Operating income$552.9M28.8%
- Interest, other & tax−$187.9M9.8%
- Net income$365.0M19.0%
Where FY2015 revenue went
$1.92B- Other operating costs: $738.1M, 38% of revenue
- Net income: $365.0M, 19% of revenue
- Cost of revenue: $332.3M, 17% of revenue
- R&D: $296.6M, 15% of revenue
- Interest, other & tax: $187.9M, 9.8% of revenue
Kept 19% as net income
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2015filed November 6, 2015Financial Statements
FY2015 against FY2014
| Line item | FY2015FY2014 | Change |
|---|---|---|
| Revenue | $1.92B$1.73B | +10.8% |
| Cost of Revenue | $332.26M$309.96M | +7.2% |
| Gross Profit | $1.59B$1.42B | +11.6% |
| R&D Expenses | $296.58M$263.79M | +12.4% |
| Operating Expenses | $1.03B$928.53M | +11.4% |
| Operating Income | $552.90M$493.56M | +12.0% |
| Net Income | $365.01M$311.18M | +17.3% |
| EPS (Basic) | $5.07$4.13 | +22.8% |
| EPS (Diluted) | $5.03$4.09 | +23.0% |
| Shares Outstanding (Basic) | 71.94M75.39M | −4.6% |
| Shares Outstanding (Diluted) | 72.55M76.09M | −4.7% |
05—Questions
Frequently Asked Questions
What is F5's core technology and product offering?
F5's core technology is its TMOS (Traffic Management Operating System) platform. This programmable, scalable software platform supports a wide array of application services including traffic management, security, access management, and web acceleration. These services are offered on F5's purpose-built hardware appliances (BIG-IP and VIPRION), as software-only Virtual Editions, and through cloud-based Silverline SaaS offerings.
How is F5 generating revenue, and which segments are growing fastest?
F5 generates revenue from both product sales (hardware and software) and services (maintenance, consulting, training). In fiscal year 2015, product revenues increased by 5.9% to $991.5 million, while service revenues grew by 16.6% to $928.3 million. The faster growth in services, coupled with strong demand for core ADN products, contributed to an overall 10.8% increase in total net revenues.
What is F5's approach to research and development and its impact on the business?
F5 demonstrates a strong commitment to R&D, as evidenced by a 12.4% increase in R&D expenses to $296.6 million in FY2015. The company invests in developing new features and functions on its TMOS platform and also considers acquisitions to broaden its offerings. This focus on innovation is crucial for F5 to maintain its technology leadership and address the evolving needs of its customers in the dynamic IT infrastructure market.
What is F5's financial health and capital allocation strategy?
F5 maintained a strong financial position in FY2015, with $1.17 billion in cash and investments and no long-term debt. The company generated significant cash from operations and actively engaged in share repurchases, spending $606.9 million on stock buybacks during the fiscal year. This indicates a strategy focused on financial flexibility, operational investment, and shareholder returns.
06—Continue