F5 Networks Announces Fourth Quarter and Fiscal 2010 Results
Strong Product Sales Drive Quarterly Revenue up 10 Percent Sequentially, 45 Percent Year over Year
Oct. 26, 2010
SEATTLE--(BUSINESS WIRE)-- F5 Networks, Inc. (NASDAQ:FFIV) today announced revenue of $254.3 million for the fourth quarter of fiscal year 2010, up 10 percent from $230.5 million in the prior quarter and 45 percent from $175.1 million in the fourth quarter of fiscal year 2009. For fiscal year 2010, revenue was $882.0 million, up 35 percent from $653.1 million in fiscal year 2009.
GAAP net income for the fourth quarter was $48.2 million ($0.59 per diluted share) compared to $40.5 million ($0.50 per diluted share) in the third quarter of 2010 and $28.4 million ($0.36 per diluted share) in the fourth quarter a year ago. GAAP net income for the year was $151.2 million ($1.86 per diluted share) versus $91.5 million ($1.14 per diluted share) in fiscal year 2009.
Excluding the impact of stock-based compensation and a one-time charge related to a legal settlement, non-GAAP net income for the fourth quarter was $63.9 million ($0.79 per diluted share), compared to $53.3 million ($0.66 per diluted share) in the prior quarter and $40.0 million ($0.50 per diluted share) in the fourth quarter of fiscal 2009. For fiscal year 2010, non-GAAP net income was $203.8 million ($2.51 per diluted share) versus $134.6 million ($1.68 per diluted share) in fiscal year 2009.
A reconciliation of GAAP net income to non-GAAP net income is included on the attached Consolidated Statements of Operations.
F5 president and chief executive officer John McAdam said that during the fourth quarter the company continued to benefit from several key trends that drove demand for its products throughout fiscal 2010. “As enterprises and other large organizations confront the new realities of today’s global economy, they are turning increasingly to technologies that enable them to operate more efficiently and compete more successfully by giving them flexible, on-demand access to more resources while reducing overall costs. This shift is reflected broadly in the trend towards data center consolidation and the widespread adoption of server virtualization and new infrastructure models such as cloud computing.
“Within the past year, these trends have accelerated, and our products have been increasingly deployed as strategic points of control in new data center architectures, integrating disparate resources and managing the flow of traffic within and between data centers. In addition, we have continued to see growing demand for our products among service providers grappling with the proliferation of mobile devices, the explosion of mobile applications and the corresponding increase in mobile data traffic. As a result, our product revenues grew 12 percent sequentially in Q4 and 38 percent during fiscal 2010,” said McAdam.
During the fourth quarter, further improvement in gross margins combined with strong revenue growth to drive the company’s GAAP operating margin to 30 percent and the non-GAAP operating margin to just under 38 percent.
On the company’s balance sheet, deferred revenue grew 8 percent sequentially to $259.4 million, up nearly 42 percent from the fourth quarter of fiscal 2009. Cash flow from operations was $86 million in the fourth quarter and $314 million for the full year. After repurchasing $75 million of F5 common stock in fiscal 2010, the company ended the year with $862 million in cash and investments.
“In general, Q4 was a strong finish to a strong year,” McAdam said. “Barring another broad economic setback, the strength of our current business and our growing pipeline are encouraging signs that the positive trends that drove our business in fiscal 2010 will continue through fiscal 2011.”
For the first quarter of fiscal 2011, ending December 31, the company has set a revenue target of $265 million to $270 million and a GAAP earnings target of $0.62 to $0.64 per diluted share. Excluding stock-based compensation expense, our non-GAAP earnings target is $0.80 to $0.82 per diluted share.
A reconciliation of the company’s expected GAAP and non-GAAP earnings is provided in the following table:
Three months ended
December 31, 2010
Reconciliation of Expected Non-GAAP First Quarter Earnings
Low
High
Net income $ 50.7 $ 52.3
Stock-based compensation expense, net of tax 14.6 14.6
Non-GAAP net income excluding stock-based compensation expense $ 65.3 $ 66.9
Net income per share - diluted $ 0.62 $ 0.64
Non-GAAP net income per share - diluted $ 0.80 $ 0.82
Share Repurchase Program
The company also announced today that its board of directors approved a new program to repurchase up to $200 million of the company's outstanding common stock.
Acquisitions for the share repurchase program will be made from time to time in private transactions or open market purchases as permitted by securities laws and other legal requirements. The program may be modified or discontinued at any time.
Analyst/Investor Meeting
F5 will hold a meeting for analysts and investors at the Sofitel Hotel in New York City, from 8:00 a.m. to noon Eastern Time on Tuesday, November 16, 2010.
To register online, please visit: f5.com
For more information contact Darlene Henderson (206.272.6170) or email 2010AIM@f5.com.
The meeting will also be webcast live and an archived version will be available through January 21, 2011. The link for the live webcast and the archived version is f5.com. |
