10-QPeriod: Q2 FY2025

F5, INC. Quarterly Report for Q2 Ended Mar 31, 2025

Filed May 6, 2025For Securities:FFIV

Summary

F5, Inc. reported solid financial results for the second quarter of fiscal year 2025, with total net revenues increasing by 7.3% year-over-year to $731.1 million. This growth was driven by a strong performance in product revenues, particularly systems, which saw a 26.7% increase, alongside a more moderate but steady rise in services revenue. The company maintained healthy gross margins, reflecting effective cost management despite increased investments in research and development. Net income also saw a significant increase, up 22.3% to $145.5 million, indicating improved profitability and operational efficiency. The balance sheet remains robust, with total assets growing to $5.9 billion, supported by a substantial increase in cash and cash equivalents. The company continues to actively return capital to shareholders through its share repurchase program, repurchasing $125.0 million in the current quarter. While F5 faces ongoing legal proceedings, management remains confident in its defenses and has not accrued any loss contingencies. The company's strategic focus on application delivery and security solutions, coupled with its diverse customer base and expanding cloud offerings, positions it well for continued growth.

Financial Highlights

50 data points
Beta

Revenue

$731.12M

80.7% Gross Margin

Net Income

$145.53M

19.9% Net Margin

EPS (Diluted)

$2.48

Total Assets

$5.91B

Cash & Equivalents

$1.26B

Free Cash Flow

$246.09M

Financial Statements
Beta
Revenue$731.12M
Cost of Revenue$140.96M
Gross Profit$590.16M
R&D Expenses$136.56M
Operating Expenses$431.27M
Operating Income$158.90M
Net Income$145.53M
EPS (Basic)$2.51
EPS (Diluted)$2.48
Shares Outstanding (Basic)57.89M
Shares Outstanding (Diluted)58.76M

Key Highlights

  • 1Total net revenues increased 7.3% year-over-year to $731.1 million for the quarter ended March 31, 2025.
  • 2Product revenues, driven by a 26.7% increase in systems revenue, grew 12.3% year-over-year, while service revenues saw a 3.3% increase.
  • 3Gross margin improved to 80.7% compared to 79.3% in the prior year's comparable quarter.
  • 4Net income rose by 22.3% to $145.5 million for the three months ended March 31, 2025.
  • 5The company repurchased $125.0 million of its common stock during the quarter.
  • 6Cash and cash equivalents increased to $1.26 billion as of March 31, 2025.
  • 7Research and development expenses increased by 11.7% to support ongoing innovation.

Frequently Asked Questions

Revenue growth was primarily driven by an increase in product revenues, specifically from systems, which saw a substantial year-over-year increase of 26.7%. Services revenue also contributed with a 3.3% increase, fueled by maintenance contracts.

While research and development expenses increased by 11.7% to support innovation, F5 has managed overall operating expenses effectively. Sales and marketing expenses saw a modest increase of 3.4%, and general and administrative expenses increased by 14.1%, partly due to professional services. The company is balancing investment in growth areas with overall cost control, reflected in the improved gross margins.

F5 is actively defending itself in the Lynwood Investment case and other legal proceedings. Management is confident in its defenses and has not recorded any accrual for loss contingencies, indicating they believe an unfavorable outcome is not probable or reasonably estimable at this time. The company intends to vigorously defend its position.

F5 continues to return capital to shareholders primarily through its share repurchase program. In the current quarter, the company repurchased $125.0 million of its common stock, and has approximately $1.17 billion remaining authorization under its program, indicating a commitment to enhancing shareholder value.