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F5, Inc. is a leading provider of multi-cloud application security and delivery solutions, enabling customers to develop, deploy, operate, secure, and govern applications across various architectures, from on-premises to the public cloud . The company's enterprise-grade application services are available as cloud-based, software-as-a-service (SaaS), and software-only solutions optimized for multi-cloud environments, with modules that can run independently or as part of an integrated solution on high-performance appliances . F5 markets and sells its products primarily through indirect sales channels across the Americas, Europe, the Middle East, and Africa (EMEA), and the Asia Pacific region (APAC) .
- Application Security and Delivery Solutions - Provides comprehensive solutions for securing and delivering applications, including BIG-IP software and systems, which are available on both a perpetual license and subscription basis.
- BIG-IP Software - Offers a range of application services that enhance security, performance, and availability.
- F5 NGINX Software - Delivers high-performance application delivery and API management solutions, sold on a subscription basis.
- F5 Distributed Cloud Services - Offers security, multi-cloud networking, and edge-based computing solutions under a unified SaaS platform, available on a subscription basis.
- Global Services - Includes annual maintenance contracts, training, and consulting services to support and enhance the use of F5 products.
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Are you experiencing increased attrition in your sales team due to competitors poaching your staff, and how is this affecting your go-to-market strategy?
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The shift from hardware to software seems slower than expected, with customers preferring hardware solutions; do you anticipate a more rapid shift to software in the upcoming upgrade cycle, or will hardware continue to be a significant part of your revenue mix?
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With the $65 million headwind from retiring legacy SaaS businesses and migrating Silverline to Distributed Cloud Services, are you on track with this transition, and how are you mitigating the associated revenue impact?
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Given the challenges in your bot manager business, including customer churn due to preference for lower-cost or platform-based solutions, what strategies are you implementing to improve its performance and address competitive pressures?
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While you expect hardware demand to stabilize or grow next year due to tech refresh cycles and AI opportunities, how confident are you in this outlook considering industry trends toward software and cloud solutions, and what risks could affect this hardware demand?
Competitors mentioned in the company's latest 10K filing.
- Citrix and Broadcom: Compete against F5's BIG-IP offerings in application delivery .
- Amazon Web Services (AWS), Google Cloud Platform, Envoy, and HAProxy: Compete against F5's NGINX offerings in optimizing Kubernetes traffic management and load balancing cloud-native and hybrid cloud applications .
- Akamai, Cisco, Cloudflare, Fortinet, Juniper Networks, Palo Alto, Radware, and Thales: Compete in application security, offering web application firewall, bot detection and mitigation, API protection, carrier-grade firewall, carrier-grade network address translation (NAT), SSL orchestration, access policy management, and DDoS mitigation .
- Akamai, Cloudflare, Fastly: Traditional edge players competing with F5 Distributed Cloud Services in application and API security delivered as SaaS, as well as multicloud networking .
- Broadcom and Cisco: Networking vendors competing with F5 Distributed Cloud Services .
- Aviatrix: Pure-play vendor competing with F5 Distributed Cloud Services .
Recent developments and announcements about FFIV.
Financial Reporting
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Revenue and Profit Performance: F5 reported an 11% increase in total revenue, reaching $766 million. This growth was driven by a 20% increase in product revenue and a 3% increase in global services revenue. Software revenue grew by 22%, and systems revenue increased by 18%.
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Management’s Forward Guidance: The company has raised its fiscal year 2025 revenue growth forecast to 6% to 7%, up from the initial guidance of 4% to 5%. This adjustment reflects the strong Q1 performance and a healthy pipeline heading into Q2. F5 also expects its software revenue to grow at least 10% in fiscal year 2025.
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Market Conditions and Strategic Initiatives: F5 is benefiting from trends such as the expansion of software subscriptions and increased technology refresh activity. The company is also seeing opportunities in AI, particularly in moving data securely and at speed for AI model training and inferencing.
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Analyst Questions and Management Responses: Analysts inquired about the sustainability of growth and the impact of price increases. Management indicated that while there was some demand pull-in due to price increases, the underlying growth drivers are sustainable, particularly the expansion in software subscriptions and the hybrid multi-cloud environment.
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Significant Comments: F5 emphasized its unique position in addressing the complexity of hybrid multi-cloud environments, which is a significant growth driver. The company is also seeing strong demand for its distributed cloud services, with over 1,000 customers now using these services.
- Revenue: $766 million, an 11% increase year-over-year, driven by:
- Software Revenue: $209 million (22% growth).
- Systems Revenue: $160 million (18% growth).
- Global Services Revenue: $398 million (3% growth).
- GAAP Gross Profit: $626 million (81.7% gross margin), up from $556 million (80.3% gross margin) in Q1 FY2024.
- Non-GAAP Gross Profit: $643 million (83.9% gross margin), up from $575 million (83.1% gross margin) in Q1 FY2024.
- GAAP Net Income: $166 million ($2.82 per diluted share), compared to $138 million ($2.32 per diluted share) in Q1 FY2024.
- Non-GAAP Net Income: $227 million ($3.84 per diluted share), compared to $205 million ($3.43 per diluted share) in Q1 FY2024.
- Q2 FY2025 Guidance:
- Revenue: $705 million to $725 million.
- Non-GAAP EPS: $3.02 to $3.14.
- FY2025 Guidance:
- Revenue Growth: Revised to 6%-7% (up from 4%-5%).
- Non-GAAP EPS Growth: Revised to 6.5%-8.5% (up from 5%-7%).
- On a tax-neutral basis, the midpoint reflects better than 10% year-over-year growth.
- Hybrid Multicloud and AI: F5 is capitalizing on opportunities in hybrid multicloud environments and AI, positioning itself as a leader in simplifying complex environments and enabling secure, large-scale enterprise data movement for AI applications.
- A live webcast to discuss the results will be held on January 28, 2025, at 4:30 PM ET. The webcast can be accessed via the investor relations page on F5's website.
Earnings Call
F5 Networks has released its Q1 fiscal year 2025 earnings call transcript, highlighting several key points:
Earnings Report
F5, Inc. (FFIV) Q1 FY2025 Earnings Results
F5, Inc. has released its financial results for the first quarter of fiscal year 2025, ending December 31, 2024. Below are the key highlights:
Financial Performance
Business Outlook
Key Trends and Strategic Focus
Conference Call Details
For more details, visit F5's official website or refer to the full earnings release.
Corporate Leadership
CFO Change
Frank Pelzer, the Executive Vice President and Chief Financial Officer of F5, Inc., is set to retire. His official resignation will occur at the end of the day when the company files its Form 10-K for the 2024 fiscal year, expected around November 18, 2024. Following his resignation, Pelzer will transition to a consulting role, acting as a senior advisor to his successor from December 1, 2024, through May 31, 2025 .