10-QPeriod: Q1 FY2025

F5, INC. Quarterly Report for Q1 Ended Dec 31, 2024

Filed February 7, 2025For Securities:FFIV

Summary

F5, Inc. (FFIV) reported a strong first quarter for fiscal year 2025, with total net revenues increasing by 10.7% year-over-year to $766.5 million. This growth was primarily driven by a significant 20.5% increase in net product revenues, fueled by both software and systems sales, indicating a rebound in demand for its core offerings. Service revenues also saw a modest increase of 2.9%, supported by maintenance contract renewals. The company's profitability improved, with net income rising to $166.4 million from $138.4 million in the prior year period, resulting in a healthy increase in diluted EPS to $2.82 from $2.32. Financially, F5 maintains a robust balance sheet with total assets growing to $5.9 billion. Cash and cash equivalents increased to $1.15 billion, demonstrating strong operating cash flow generation of $202.8 million for the quarter. The company actively returned capital to shareholders through share repurchases totaling $125 million, while still holding $1.3 billion remaining under its authorized repurchase program. The strong revenue growth, improved profitability, and healthy cash flow position suggest positive momentum for F5 heading into the rest of fiscal year 2025.

Financial Highlights

48 data points
Beta

Revenue

$766.49M

81.7% Gross Margin

Net Income

$166.44M

21.7% Net Margin

EPS (Diluted)

$2.82

Total Assets

$5.90B

Cash & Equivalents

$1.15B

Free Cash Flow

$194.71M

Financial Statements
Beta
Revenue$766.49M
Cost of Revenue$140.51M
Gross Profit$625.98M
R&D Expenses$130.52M
Operating Expenses$420.90M
Operating Income$205.08M
Net Income$166.44M
EPS (Basic)$2.85
EPS (Diluted)$2.82
Shares Outstanding (Basic)58.30M
Shares Outstanding (Diluted)59.06M

Key Highlights

  • 1Total net revenues grew 10.7% to $766.5 million, driven by a 20.5% increase in product revenues.
  • 2Net income increased to $166.4 million, up from $138.4 million in the prior year's comparable quarter.
  • 3Diluted earnings per share (EPS) rose to $2.82 from $2.32, reflecting improved profitability.
  • 4Operating cash flow remained strong at $202.8 million for the quarter.
  • 5Cash and cash equivalents increased to $1.15 billion.
  • 6The company repurchased $125 million of common stock, with $1.3 billion remaining under its share repurchase authorization.
  • 7Gross margin improved to 81.7% from 80.3% in the prior year period.

Frequently Asked Questions

The primary driver of F5's revenue growth was a significant 20.5% increase in net product revenues, which was fueled by strong performance in both software and systems sales. This was complemented by a 2.9% increase in service revenues, primarily from maintenance contract renewals.

F5 generated strong operating cash flow of $202.8 million and maintained a healthy cash balance of $1.15 billion. The company actively repurchased $125 million of its common stock during the quarter, underscoring its commitment to returning capital to shareholders, with $1.3 billion still available under its share repurchase program.

Profitability saw a notable improvement, with net income increasing to $166.4 million and diluted EPS rising to $2.82. The gross margin also expanded to 81.7% from 80.3%, indicating efficient cost management and strong pricing power.

F5 is involved in a legal proceeding, Lynwood Investment CY Limited v. F5 Networks et al., related to NGINX software intellectual property. While the Court of Appeals partially affirmed the dismissal and remanded a portion of the copyright claim, it is ongoing. The company believes it has meritorious defenses but cannot currently estimate potential losses, and any unfavorable outcome could materially affect its business.