Summary
F5, Inc. (FFIV) reported its financial results for the quarter ended December 31, 2019. Total net revenues saw a healthy increase of 4.7% year-over-year, driven primarily by growth in software and services. The company's strategic focus on multi-cloud application services appears to be resonating with customers, as evidenced by the revenue growth, particularly in services which now represent a larger portion of the revenue mix at 58.8% compared to 57.0% in the prior year's quarter. Operating expenses increased significantly, largely due to investments in sales and marketing, research and development, and general and administrative functions, including costs associated with the NGINX acquisition and relocation of its corporate headquarters. Despite the rise in operating expenses, the company maintained a strong gross profit margin of 84.4% and demonstrated solid cash flow generation from operations.
Financial Highlights
52 data points| Revenue | $569.30M |
| Cost of Revenue | $88.64M |
| Gross Profit | $480.66M |
| R&D Expenses | $96.00M |
| Operating Expenses | $358.33M |
| Operating Income | $122.33M |
| Net Income | $98.53M |
| EPS (Basic) | $1.62 |
| EPS (Diluted) | $1.62 |
| Shares Outstanding (Basic) | 60.65M |
| Shares Outstanding (Diluted) | 60.81M |
Key Highlights
- 1Total net revenues increased by 4.7% to $569.3 million compared to the prior year's quarter, driven by software and services growth.
- 2Services revenue grew by 8.0% to $334.8 million, now representing 58.8% of total revenue, indicating a shift towards recurring revenue streams.
- 3Gross profit margin remained strong at 84.4%, indicating effective cost management in revenue-generating activities.
- 4Operating expenses increased by 19.7% to $358.3 million, reflecting strategic investments in sales & marketing and R&D, alongside costs related to the NGINX acquisition and headquarters relocation.
- 5Net income decreased by 24.7% to $98.5 million ($1.62 per diluted share) compared to the prior year's quarter ($130.9 million, $2.16 per diluted share), impacted by higher operating expenses and a higher effective tax rate.
- 6Cash, cash equivalents, and investments totaled $1.47 billion as of December 31, 2019, showing a robust liquidity position.
- 7The company adopted new lease accounting standards (ASC 842), resulting in the recognition of significant operating lease right-of-use assets and liabilities on the balance sheet.