F5 Networks Announces Results for Second Quarter of Fiscal 2010
Continuing Strength in Product Sales Drives Record Revenue, up 8 Percent Sequentially, 34 Percent Year-over-Year
SEATTLE--(BUSINESS WIRE)-- For the second quarter of fiscal 2010, F5 Networks, Inc. (NASDAQ: FFIV) announced revenue of $206.1 million, up 7.8 percent from $191.2 million in the prior quarter and 33.7 percent from $154.1 million in the second quarter of fiscal 2009.
GAAP net income was $33.1 million ($0.41 per diluted share), compared to $29.3 million ($0.36 per diluted share) in the prior quarter and $19.0 million ($0.24 per diluted share) in the second quarter a year ago.
Excluding the impact of stock-based compensation net of tax, non-GAAP net income was $45.2 million ($0.56 per diluted share), compared to $41.4 million ($0.52 per diluted share) in the prior quarter and $30.3 million ($0.38 per diluted share) in the second quarter of fiscal 2009.
A reconciliation of GAAP net income to non-GAAP net income is included on the attached Consolidated Statements of Operations.
“Demand for our BIG-IP family of application delivery controllers continued to strengthen in the second quarter,” said John McAdam, F5 president and chief executive officer. “Total product revenue increased 9 percent compared to the prior quarter and 38 percent year-over-year. Revenues were up sequentially across all regions. Revenue from EMEA and the Americas grew 37 percent and 40 percent respectively on a year-over-year basis.”
Reflecting both the high number of service maintenance contracts generated by new product sales and the high renewal rate on existing maintenance contracts, deferred revenue increased to $226.5 million, up 7 percent from the prior quarter and 41 percent from the second quarter a year ago.
As a result of continued strong revenue growth and stable gross margins, the company was able to add 80 employees in the second quarter while increasing its non-GAAP operating margin to just over 32 percent.
During the second quarter, the company generated $78 million in cash from operations. After repurchasing 364,958 shares of its outstanding common stock the company ended the quarter with $712 million in cash and investments.
“Looking out to the second half of fiscal 2010, we continue to see strong demand for our products as the economy recovers and customers look to enhance their productivity and competitiveness by leveraging technologies that require more intelligence and greater control in their networks,” McAdam said.
For the current quarter, ending on June 30, management has set a revenue goal of $214 million to $219 million with a GAAP earnings target of $0.42 to $0.44 per diluted share. Excluding stock-based compensation expense, the company’s non-GAAP earnings target is $0.57 to $0.59 per diluted share.
A reconciliation of the company’s expected GAAP and non-GAAP earnings is provided in the following table:
Three months ended
June 30, 2010
Reconciliation of Expected Non-GAAP Third Quarter Earnings
Low
High
Net income $ 33.8 $ 35.5
Stock-based compensation expense, net of tax $ 12.5 $ 12.5
Non-GAAP net income excluding stock-based compensation expense $ 46.3 $ 48.0
Net income per share - diluted $ 0.42 $ 0.44
Non-GAAP net income per share - diluted $ 0.57 $ 0.59
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