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F5 reported its first quarter results
F5 beats Wall Street expectations, warns of supply chain constraints in 2022

Network traffic management and security firm F5 Networks Inc. delivered strong fiscal first-quarter results today, but its stock fell sharply on a warning about supply chain constraints throughout the rest of the year.

F5 Networks Recruitment 2021 Hiring Freshers As Data Engineer

Image: Cyber Tecz

This quarterly report represents an earnings surprise of 3.58%. A quarter ago, it was expected that this computer networking company would post earnings of $2.77 per share when it actually produced earnings of $3.01, delivering a surprise of 8.66%.

Over the last four quarters, the company has surpassed consensus EPS estimates four times.

F5 expects to deliver Q2 revenue in the range of $610 to $650 million. François Locoh-Donou, F5’s president and CEO, said the company saw strong demand for their application security and delivery solutions, leading to the 10% revenue growth in Q1.

“Demand for software solutions was particularly strong, with non-GAAP software revenue growing 47% compared to the same period in the prior year,” Locoh-Donou said.

Financial Highlights

First quarter fiscal year 2022 GAAP revenue was $687 million, up 10% from GAAP revenue of $625 million and non-GAAP revenue of $626 million in the year-ago period.

First quarter fiscal year 2022 GAAP and non-GAAP revenue growth was driven by 19% product revenue growth and 2% global services revenue growth over the prior year. Non-GAAP product revenue was driven by 47% software revenue growth and 1% systems revenue growth compared to the year ago period.

GAAP net income for the first quarter of fiscal year 2022 was $94 million, or $1.51 per diluted share compared to first quarter fiscal year 2021 GAAP net income of $88 million, or $1.41 per diluted share.

Non-GAAP net income for the first quarter of fiscal year 2022 was $179 million, or $2.89 per diluted share, compared to $161 million, or $2.59 per diluted share, in the first quarter of fiscal year 2021.

A reconciliation of revenue, net income, earnings per share, and other measures on a GAAP to non-GAAP basis is included in the attached Consolidated Income Statements. Additional information about non-GAAP financial information is included in this release.

Financial  Statement

F5, Inc.
Consolidated Income Statements
(unaudited, in thousands, except per share amounts)
Three Months Ended
December 31,

2021

2020

Net revenues
Products (1)

$

343,149

$

288,045

Services

343,951

336,572

Total

687,100

624,617

Cost of net revenues (2)(3)(4)(5)
Products

81,662

67,038

Services

53,411

47,941

Total

135,073

114,979

Gross profit

552,027

509,638

Operating expenses (2)(3)(4)(5)
Sales and marketing

234,035

214,546

Research and development

130,271

114,191

General and administrative

65,661

63,153

Restructuring charges

7,909

Total

437,876

391,890

Income from operations

114,151

117,748

Other expense, net

(2,431

)

(683

)

Income before income taxes

111,720

117,065

Provision for income taxes

18,161

29,387

Net income

$

93,559

$

87,678

Net income per share – basic

$

1.54

$

1.43

Weighted average shares – basic

60,810

61,440

Net income per share – diluted

$

1.51

$

1.41

Weighted average shares – diluted

61,882

62,282

Non-GAAP Financial Measures
Net income as reported

$

93,559

$

87,678

Acquisition-related write-downs of assumed deferred revenue

1,283

Stock-based compensation expense

63,757

58,069

Amortization and impairment of purchased intangible assets

19,437

10,706

Facility-exit costs

2,742

1,336

Acquisiton-related charges

16,891

17,665

Restructuring charges

7,909

Tax effects related to above items

(25,264

)

(15,273

)

Net income excluding acquisition-related write-downs of assumed deferred revenue, stock-based compensation expense, amortization and impairment of purchased intangible assets, facility-exit costs, acquisition-related charges and restructuring charges (non-GAAP) – diluted

$

179,031

$

161,464

Net income per share excluding acquisition-related write-downs of assumed deferred revenue, stock-based compensation expense, amortization and impairment of purchased intangible assets, facility-exit costs, acquisition-related charges and restructuring charges (non-GAAP) – diluted

$

2.89

$

2.59

Weighted average shares – diluted

61,882

62,282

(1) GAAP net product revenues

$

343,149

$

288,045

Acquisition-related write-downs of assumed deferred revenue

1,283

Non-GAAP net product revenues

343,149

289,328

GAAP net service revenues

343,951

336,572

Acquisition-related write-downs of assumed deferred revenue

Non-GAAP net service revenues

343,951

336,572

Total non-GAAP net revenues

$

687,100

$

625,900

(2) Includes stock-based compensation expense as follows:
Cost of net revenues

$

7,545

$

7,342

Sales and marketing

26,753

25,243

Research and development

18,583

14,987

General and administrative

10,876

10,497

$

63,757

$

58,069

(3) Includes amortization and impairment of purchased intangible assets as follows:
Cost of net revenues

$

9,959

$

7,382

Sales and marketing

8,915

2,749

General and administrative

563

575

$

19,437

$

10,706

(4) Includes facility-exit costs as follows:
Cost of net revenues

$

482

$

172

Sales and marketing

749

406

Research and development

912

334

General and administrative

599

424

$

2,742

$

1,336

(5) Includes acquisition-related charges as follows:
Cost of net revenues

$

87

$

2,490

Sales and marketing

6,164

4,771

Research and development

5,994

4,393

General and administrative

4,646

6,011

$

16,891

$

17,665

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