On October 28, 2024, F5 Inc (FFIV, Financial) released its 8-K filing detailing the financial results for the fourth quarter and fiscal year 2024. The Seattle-based company, a leader in the application delivery controller market, reported significant growth in software revenue and earnings per share (EPS), exceeding analyst expectations.
Company Overview
F5 Inc (FFIV, Financial) specializes in products for security, application performance, and automation, serving enterprises, service providers, and government entities. The company's revenue is evenly split between its services and products businesses, with a trend towards increased software adoption. Incorporated in 1996, F5 operates globally with a workforce of approximately 6,500 employees, generating 55% of its revenue from the Americas, 25% from EMEA, and 20% from APAC/Japan.
Performance Highlights
F5 Inc (FFIV, Financial) reported fourth-quarter revenue of $747 million, a 6% increase from the previous year, surpassing the analyst estimate of $730.39 million. This growth was driven by a 19% increase in software revenue, reaching $228 million. Despite a 3% decline in systems revenue, global services revenue grew by 2% to $388 million.
For the fiscal year 2024, F5 achieved total revenue of $2.82 billion, slightly above the analyst estimate of $2.8 billion. Software revenue grew by 11% to $735 million, while systems revenue declined by 20% to $537 million. Global services revenue increased by 4% to $1.54 billion.
Financial Achievements and Metrics
F5's GAAP gross profit for Q4 was $603 million, with a gross margin of 80.8%, compared to $566 million and 80.1% in the previous year. Non-GAAP gross profit was $619 million, with a margin of 83.0%. The company's GAAP operating profit was $191 million, representing a margin of 25.6%, while non-GAAP operating profit was $257 million, with a margin of 34.4%.
GAAP net income for Q4 was $165 million, or $2.80 per diluted share, exceeding the analyst estimate of $2.45. Non-GAAP net income was $217 million, or $3.67 per diluted share. For the fiscal year, GAAP net income was $567 million, or $9.55 per diluted share, surpassing the annual estimate of $9.29.
| Metric | Q4 FY2024 | Q4 FY2023 | FY2024 | FY2023 |
|---|---|---|---|---|
| Revenue | $747M | $707M | $2.82B | $2.81B |
| Gross Profit | $603M | $566M | $2.26B | $2.22B |
| Operating Profit | $191M | $172M | $659M | $473M |
| Net Income | $165M | $152M | $567M | $395M |
| EPS | $2.80 | $2.55 | $9.55 | $6.55 |
Analysis and Outlook
F5 Inc (FFIV, Financial)'s strong performance underscores the effectiveness of its strategic shift towards software and security solutions. The company's ability to achieve double-digit EPS growth despite macroeconomic challenges highlights its operational resilience and innovative product portfolio.
“Our results speak to the power of our portfolio and innovation, the strength of our operating model, and the resilience of our business,” said François Locoh-Donou, F5’s President and CEO.
Looking ahead, F5 anticipates revenue growth of 4% to 5% for fiscal year 2025, with non-GAAP EPS growth of 5% to 7%. The company's board has also authorized an additional $1 billion for share repurchases, reflecting confidence in its financial health and future prospects.
Explore the complete 8-K earnings release (here) from F5 Inc for further details.
