Summary
F5, INC. (FFIV) reported solid financial results for the quarter ended December 31, 2018. The company demonstrated revenue growth driven by its services segment, which benefited from an expanding installed base of products. Profitability also saw a significant increase, with net income rising substantially year-over-year, partly attributable to a lower effective tax rate following the Tax Cuts and Jobs Act. The company maintained a strong liquidity position with substantial cash and investments and continued its commitment to shareholder returns through a robust share repurchase program. Management expressed confidence in the company's ability to meet operating requirements and noted ongoing investments in research and development to support future growth.
Financial Highlights
49 data points| Revenue | $543.77M |
| Cost of Revenue | $86.71M |
| Gross Profit | $457.06M |
| R&D Expenses | $92.04M |
| Operating Expenses | $298.84M |
| Operating Income | $158.22M |
| Net Income | $130.91M |
| EPS (Basic) | $2.17 |
| EPS (Diluted) | $2.16 |
| Shares Outstanding (Basic) | 60.22M |
| Shares Outstanding (Diluted) | 60.65M |
Key Highlights
- 1Total net revenues increased by 3.9% to $543.77 million compared to the prior year's quarter, driven by a 4.7% increase in services revenue.
- 2Net income surged by 48.0% to $130.9 million from $88.4 million in the prior year's quarter, leading to a significant increase in diluted EPS to $2.16 from $1.41.
- 3The effective tax rate decreased substantially to 20.8% from 38.7% in the prior year, largely due to the impact of the Tax Cuts and Jobs Act.
- 4The company repurchased $101.0 million of its common stock during the quarter, demonstrating a continued commitment to returning capital to shareholders.
- 5Cash, cash equivalents, and investments remained strong, totaling $1,546.3 million, with a net increase of $95.7 million during the quarter, primarily from operating activities.
- 6Research and development expenses increased by 7.2% to $92.0 million, indicating continued investment in product innovation.
- 7The company adopted the new revenue recognition standard (ASC 606) on October 1, 2018, which had an immaterial impact on the income statements and cash flows for the quarter.