F5 Networks (FFIV) could be a solid addition to your portfolio given its recent upgrade to a Zacks Rank #2 (Buy). An upward trend in earnings estimates -- one of the most powerful forces impacting stock prices -- has triggered this rating change.The sole determinant of the Zacks rating is a company's changing earnings picture. The Zacks Consensus Estimate -- the consensus of EPS estimates from the sell-side analysts covering the stock -- for the current and following years is tracked by the system.Individua ...

F5 (FFIV) FY Conference May 14, 2025 10:40 AM ET Speaker0 Good morning everyone. Thank you for coming to the conference. I'm Samik Chatterjee and I cover hardware and networking stocks at JPMorgan. I have the pleasure of hosting the F5 team for the next session. Cooper Werner, who's the EVP and CFO of the company, Konal Anand, Chief Innovation Officer, Thank you both for coming to the conference, and thank you to the audience as well. Cooper, maybe this is for you, but Kunal, feel free to chime in if you ha ...

Have you assessed how the international operations of F5 Networks (FFIV) performed in the quarter ended March 2025? For this computer networking company, possessing an expansive global footprint, parsing the trends of international revenues could be critical to gauge its financial resilience and growth prospects.In today's increasingly interconnected global economy, a company's ability to tap into international markets can be a pivotal factor in shaping its overall financial health and growth trajectory. Fo ...

Revenue and Performance Obligations - As of March 31, 2025, the total non-cancelable remaining performance obligations under the Company's contracts with customers was $1.9 billion, with an expected revenue recognition of 62.4% over the next 12 months[38]. - The Company recognized revenues of $726.1 million related to the opening balance of deferred revenue during the six months ended March 31, 2025[37]. - The Company expects to recognize 22.9% of the remaining performance obligations in year two following the reporting date[38]. - The Company’s total revenues for the six months ended March 31, 2025, were $1,497.6 million, up from $1,373.9 million in the same period of 2024[89]. Deferred Revenue and Cash Flow - The balance of deferred revenue increased to $1.92 billion as of March 31, 2025, up from $1.81 billion at the end of the previous period[37]. - As of March 31, 2025, the Company reported total cash, cash equivalents, and restricted cash of $1,261,257,000, an increase from $1,078,340,000 as of September 30, 2024, representing a growth of approximately 16.9%[56]. Investments and Financial Instruments - Interest income from cash, cash equivalents, and investments was $9.3 million for the three months ended March 31, 2025, compared to $8.3 million for the same period in 2024[50]. - The fair value of total investments as of March 31, 2025, was $636.6 million, including $624.1 million in debt investments[47]. - The Company reported no credit losses on any investments within its portfolio as of March 31, 2025[51]. - The Company has updated its accounting policies for investments and fair value of financial instruments to include equity investments with no readily determinable fair value[28]. Acquisitions and Goodwill - The Company recorded $7.5 million of goodwill from an acquisition completed in the second quarter of fiscal 2025, which did not materially impact operating results[54]. - For the second quarter of fiscal 2024, the Company completed two acquisitions, resulting in $23.6 million of goodwill, with no material impact on operating results[55]. Inventory and Assets - Total inventories decreased from $76,378,000 as of September 30, 2024, to $67,880,000 as of March 31, 2025, reflecting a reduction of approximately 11.2%[57]. - Other current assets increased from $569,467,000 as of September 30, 2024, to $629,394,000 as of March 31, 2025, marking an increase of approximately 10.5%[58]. - The Company’s intangible assets decreased from $111,576,000 as of September 30, 2024, to $92,651,000 as of March 31, 2025, reflecting a decline of approximately 17%[59]. Liabilities and Lease Obligations - The Company’s total operating lease liabilities as of March 31, 2025, were $266,818,000, compared to $249,564,000 as of September 30, 2024, indicating an increase of approximately 6.9%[66]. - The Company’s accrued liabilities decreased from $300,076,000 as of September 30, 2024, to $279,910,000 as of March 31, 2025, a reduction of approximately 6.7%[60]. - Operating lease expenses for the three months ended March 31, 2025, were $16,656,000, slightly down from $16,779,000 for the same period in 2024[65]. - The Company expects to receive sublease income of $9.5 million, with $1.9 million expected for the remainder of fiscal 2025 and $7.6 million over the following eight fiscal years[67]. Tax and Audit - The effective tax rate for the three and six months ended March 31, 2025, was 15.0% and 18.0%, respectively, compared to 18.4% and 19.6% for the same periods in 2024, primarily due to non-recurring benefits related to foreign operations and stock-based compensation[80]. - As of March 31, 2025, the Company had $90.9 million of unrecognized tax benefits that could affect the effective tax rate if recognized[81]. - The Company is currently under audit by the Internal Revenue Service for fiscal year 2019 and various states for fiscal years 2018 through 2023, which may impact its financial condition[82]. Net Income and Share Repurchase - For the three months ended March 31, 2025, the Company reported net income of $145.5 million, resulting in a basic net income per share of $2.51 and diluted net income per share of $2.48[86]. - The Company repurchased 481,000 shares for $125.0 million at an average price of $259.46 per share during the three months ended March 31, 2025, with a total of $1,172.4 million remaining authorized for share repurchases[84]. Revenue by Region - Revenues from the Americas for the three months ended March 31, 2025, totaled $396.1 million, compared to $385.6 million in the same period of 2024, with the U.S. contributing $373.8 million[89]. Restructuring Charges - The Company recorded restructuring charges of $11.3 million for the three months ended December 31, 2024, compared to $9.8 million for the same period in 2023[90]. Major Customers - Major customers Ingram Micro, Inc. and Synnex Corporation accounted for 16.9% and 17.4% of total net revenue for the three months ended March 31, 2025, respectively[89].

2 ©2025 F5 GAAP to non-GAAP presentation In addition to financial information prepared in accordance with U.S. GAAP, this presentation also contains adjusted financial measures that we believe provide investors and management with supplemental information relating to operating performance and trends that facilitate comparisons between periods and with respect to projected information. These adjusted financial measures are non-GAAP and should be considered in addition to, but not as a substitute for, the inf ...

Group 1 - The core thesis on F5, Inc. (NASDAQ: FFIV) is neutral, highlighting strong systems growth in 2Q25 and an optimistic outlook for FY25, but concerns about reliance on 2H25 performance [1] - Management's positive sentiment regarding FY25 suggests potential for continued growth, yet the dependency on the latter half of the year raises caution [1] Group 2 - The analysis emphasizes a blend of value investing principles with a focus on long-term growth, indicating a strategy of purchasing quality companies at a discount to their intrinsic value [1]

Group 1 - The ongoing earnings season has seen only a third of S&P 500 companies report their Q1 2025 results, with 73% of those exceeding Wall Street's expectations according to FactSet [1] - The analysis covers various sectors, including Technology, Commodities, and Energy, reflecting the industry's adaptation to the energy transition [1] Group 2 - No specific stock positions or plans to initiate positions in the mentioned companies are disclosed, indicating an unbiased analysis [2] - The article emphasizes that past performance does not guarantee future results, highlighting the importance of independent evaluation for investors [3]

F5, Inc. (FFIV) reported second-quarter fiscal 2025 non-GAAP earnings of $3.42 per share, which surpassed the Zacks Consensus Estimate by 10.3% and came ahead of management’s guidance of $3.02-$3.14 (midpoint of $3.08). The bottom line increased 17.5% year over year.F5’s revenues of $731 million for the second quarter of fiscal 2025 surpassed the consensus mark by 2%. The top line increased 7.3% on a year-over-year basis. Revenues also came ahead of management’s guidance of $705-$725 million (midpoint of $7 ...

Group 1 - Michael Wiggins De Oliveira is an inflection investor, focusing on buying undervalued companies at pivotal moments when their profitability is expected to increase significantly over the next year [1] - The investment strategy emphasizes technology and the Great Energy Transition, including uranium, with a concentrated portfolio of approximately 15 to 20 stocks and an average holding period of 18 months [1] - Michael has over 10 years of experience in analyzing companies, particularly in the tech and energy sectors, and has built a following of over 40,000 on Seeking Alpha [2] Group 2 - The Investing Group Deep Value Returns, led by Michael, offers insights through its concentrated portfolio of value stocks, timely updates on stock picks, and a weekly webinar for live advice [3] - The group provides "hand-holding" support for both new and experienced investors, fostering an active and vibrant community accessible via chat [3] - Seeking FCF is associated with Michael Wiggins De Oliveira, indicating a collaborative approach in investment strategies [3]

Financial Data and Key Metrics Changes - F5 reported a total revenue growth of 7% year-over-year, reaching $731 million, with product revenue growing by 12% [6][29] - Non-GAAP EPS for Q2 was $3.42, reflecting an 18% increase year-over-year, exceeding guidance by $0.28 [6][37] - GAAP gross margin was 80.7%, while non-GAAP gross margin improved to 83.1%, up 98 basis points year-over-year [34][35] Business Line Data and Key Metrics Changes - Systems revenue grew by 27% year-over-year, totaling $179 million, driven by hardware refresh activities [30][31] - Software revenue remained flat at $158 million, with subscription-based software revenue down 2% year-over-year [30][32] - Global services revenue increased by 3% to $394 million, representing 54% of total revenue [29][30] Market Data and Key Metrics Changes - Revenue from The Americas grew by 3%, accounting for 54% of total revenue, while EMEA saw a 20% growth, representing 29% of revenue [33] - APAC revenue also grew by 3%, making up 17% of total revenue [33] Company Strategy and Development Direction - F5 is focusing on hybrid multi-cloud solutions to address customer challenges related to high costs, complexity, and cyber risks [44] - The introduction of the F5 Application Delivery and Security Platform (ADSP) aims to consolidate delivery and security functionalities into a single platform [8][10] - The company is leveraging AI technologies to enhance customer experiences and drive business growth, with a focus on AI for application delivery and security [12][16] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the Q3 pipeline, expecting revenue between $740 million and $760 million, implying an 8% growth at the midpoint [7][40] - The FY 2025 revenue growth guidance was raised to 6.5% to 7.5%, reflecting strong first-half performance and current business dynamics [7][42] - Management noted that there are no immediate signs of demand erosion despite macroeconomic uncertainties [70][72] Other Important Information - F5 generated a record $257 million in cash flow from operations in Q2, with cash and investments totaling approximately $1.27 billion [37][38] - The company repurchased $125 million worth of shares during the quarter, equivalent to 57% of its free cash flow [38][39] Q&A Session Summary Question: Software performance in Q2 and future growth - Management acknowledged underperformance in Q2 but highlighted a strong renewal pipeline for the second half, expecting double-digit growth [48][50] Question: Hardware revenue drivers and refresh cycle - Management confirmed that hardware growth was driven by a refresh cycle and ongoing investments in hybrid multi-cloud architectures [53][56] Question: Competitive displacement opportunities - Management indicated that significant opportunities remain in displacing competitors and consolidating functionalities within existing accounts [61][64] Question: Federal government business performance - Management reported that the federal business performed in line with expectations, but there are concerns about potential disruptions in the second half [100][102]