Exhibit 99.1
FOR IMMEDIATE RELEASE
CONTACT: | Investor Relations | |
| John Eldridge (206) 272-6571 | ||
| j.eldridge@f5.com | ||
| Public Relations | ||
| Alane Moran | ||
| (206) 272-6850 | ||
| a.moran@f5.com |
F5 Networks Announces Results for Second Quarter of Fiscal 2007
Strength of core business drives 17th consecutive quarter of revenue growth
SEATTLE, WA—April 24, 2007—For the second quarter of fiscal 2007, F5 Networks announced revenue of $127.6 million, up 6 percent from $120.0 million in the prior quarter and 36 percent from $94.1 million in the second quarter of fiscal 2006. Net income was $20.0 million ($0.47 per diluted share), compared to $22.4 million ($0.53 per diluted share) in the prior quarter, which included a one-time tax benefit of $0.04 per share. Net income was $16.1 million ($0.39 per diluted share) in the second quarter a year ago.
The company’s solid revenue gains reflect the continuing strength of its core application delivery networking business, which grew 8 percent during the quarter and accounted for 92 percent of total revenue. John McAdam, F5 president and chief executive officer, said the strength of the company’s core business relative to its WAN optimization and security offerings was no surprise and further validated the company’s plans to port WANJet and FirePass to TMOS and integrate their functionality into its application delivery networking solutions. TMOS-based versions of both products are scheduled for delivery in late summer.
“In the meantime, the rich functionality of BIG-IP’s TMOS-based solution set, coupled with the flexibility of iRules and the high-performance of our integrated hardware platforms, is continuing to open new market opportunities,” McAdam said. “Along with growing demand in large enterprises, changes in the technology landscape are driving telecommunications companies and internet service providers to look for new and better ways to manage the complex array of data, information and services they are attempting to provide their customers. From the perspective of both functionality and performance, our family of BIG-IP products offers these organizations the widest array of fully-integrated solutions to meet their needs, and we are continuing to invest in all areas of our business to take advantage of these opportunities.”
In addition to its solid operating results, F5 continued to strengthen its balance sheet during the second quarter. Reflecting the strong growth of its services business, deferred revenue
increased 10% to $75.2 million at quarter end. Cash flow from operations was $37.0 million, and the company ended the quarter with $586 million in cash and investments.
For the current quarter, ending June 30, 2007, McAdam said management has set a revenue goal of $131 million to $133 million with an earnings target of $0.48 to $0.50 per diluted share.
About F5 Networks
F5 Networks is the global leader in Application Delivery Networking. F5 provides solutions that make applications secure, fast and available for everyone, helping organizations get the most out of their investment. By adding intelligence and manageability into the network to offload applications, F5 optimizes applications and allows them to work faster and consume fewer resources. F5’s extensible architecture intelligently integrates application optimization, protects the application and the network, and delivers application reliability — all on one universal platform. Over 10,000 organizations and service providers worldwide trust F5 to keep their applications running. The company is headquartered in Seattle, Washington with offices worldwide. For more information, go to www.f5.com.
Forward Looking Statements
Statements in this press release concerning the continuing strength of F5’s business, sequential growth, the target revenue and earnings range, demand for application delivery networking and other statements that are not historical facts are forward-looking statements. Such forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the company, or industry results, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Such factors include, among others: customer acceptance of our new traffic management, security, application delivery and WAN optimization offerings; the timely development, introduction and acceptance of additional new products and features by F5 or its competitors; competitive pricing pressures; increased sales discounts; F5’s ability to sustain, develop and effectively utilize distribution relationships; F5’s ability to attract, train and retain qualified product development, marketing, sales, professional services and customer support personnel; F5’s ability to expand in international markets; and the unpredictability of F5’s sales cycle.
F5 has no duty to update any matters discussed in this press release. More information about potential risk factors that could affect F5’s business and financial results is included in the company’s annual report on Form 10-K for the fiscal year ended September 30, 2006, and other public filings with the Securities and Exchange Commission.
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F5 Networks, Inc.
Condensed Consolidated Balance Sheets
(unaudited, in thousands)
Condensed Consolidated Balance Sheets
(unaudited, in thousands)
| March 31, | September 30, | |||||||
| 2007 | 2006 | |||||||
Assets | ||||||||
| Current assets | ||||||||
| Cash and cash equivalents | $ | 46,834 | $ | 37,746 | ||||
| Short-term investments | 384,426 | 336,427 | ||||||
| Accounts receivable, net of allowances of $2,809 and $2,858 | 73,142 | 62,750 | ||||||
| Inventories | 7,915 | 5,763 | ||||||
| Deferred tax assets | 4,479 | 4,682 | ||||||
| Other current assets | 21,746 | 15,607 | ||||||
| Total current assets | 538,542 | 462,975 | ||||||
| Restricted cash | 4,147 | 3,929 | ||||||
| Property and equipment, net | 31,693 | 29,951 | ||||||
| Long-term investments | 154,834 | 118,003 | ||||||
| Deferred tax assets | 11,572 | 18,657 | ||||||
| Goodwill | 81,701 | 81,701 | ||||||
| Other assets, net | 13,611 | 14,295 | ||||||
| Total assets | $ | 836,100 | $ | 729,511 | ||||
Liabilities and Shareholders’ Equity | ||||||||
| Current liabilities | ||||||||
| Accounts payable | $ | 23,012 | $ | 13,174 | ||||
| Accrued liabilities | 32,863 | 31,583 | ||||||
| Deferred revenue | 67,411 | 54,880 | ||||||
| Total current liabilities | 123,286 | 99,637 | ||||||
| Other long-term liabilities | 8,488 | 7,976 | ||||||
| Deferred revenue, long-term | 7,805 | 5,440 | ||||||
| Total long-term liabilities | 16,293 | 13,416 | ||||||
| Commitments and contingencies | ||||||||
| Shareholders’ equity | ||||||||
| Preferred stock, no par value; 10,000 shares authorized, no shares outstanding | — | — | ||||||
| Common stock, no par value; 100,000 shares authorized, 41,505 and 40,778 shares issued and outstanding | 559,435 | 521,791 | ||||||
| Accumulated other comprehensive loss | (928 | ) | (1,038 | ) | ||||
| Retained earnings | 138,014 | 95,705 | ||||||
| Total shareholders’ equity | 696,521 | 616,458 | ||||||
| Total liabilities and shareholders’ equity | $ | 836,100 | $ | 729,511 | ||||
F5 Networks, Inc.
Condensed Consolidated Statements of Operations
(unaudited, in thousands, except per share amounts)
Condensed Consolidated Statements of Operations
(unaudited, in thousands, except per share amounts)
| Three Months Ended | Six Months Ended | |||||||||||||||
| March 31, | March 31, | |||||||||||||||
| 2007 | 2006 | 2007 | 2006 | |||||||||||||
| Net revenues | ||||||||||||||||
| Products | $ | 96,126 | $ | 72,775 | $ | 188,188 | $ | 141,366 | ||||||||
| Services | 31,479 | 21,341 | 59,447 | 40,837 | ||||||||||||
| Total | 127,605 | 94,116 | 247,635 | 182,203 | ||||||||||||
| Cost of net revenues (1) | ||||||||||||||||
| Products | 20,425 | 15,441 | 39,641 | 30,034 | ||||||||||||
| Services | 8,390 | 5,846 | 15,698 | 10,820 | ||||||||||||
| Total | 28,815 | 21,287 | 55,339 | 40,854 | ||||||||||||
| Gross Profit | 98,790 | 72,829 | 192,296 | 141,349 | ||||||||||||
| Operating expenses (1) | ||||||||||||||||
| Sales and marketing | 43,177 | 31,162 | 82,232 | 60,027 | ||||||||||||
| Research and development | 17,086 | 12,276 | 31,625 | 22,754 | ||||||||||||
| General and administrative | 12,867 | 7,148 | 25,685 | 14,545 | ||||||||||||
| Total | 73,130 | 50,586 | 139,542 | 97,326 | ||||||||||||
| Income from operations | 25,660 | 22,243 | 52,754 | 44,023 | ||||||||||||
| Other income, net | 7,230 | 3,877 | 13,661 | 6,847 | ||||||||||||
| Income before income taxes | 32,890 | 26,120 | 66,415 | 50,870 | ||||||||||||
| Provision for income taxes | 12,934 | 10,053 | 24,106 | 19,582 | ||||||||||||
| Net Income | $ | 19,956 | $ | 16,067 | $ | 42,309 | $ | 31,288 | ||||||||
| Net income per share — basic | $ | 0.48 | $ | 0.40 | $ | 1.03 | $ | 0.79 | ||||||||
| Weighted average shares — basic | 41,417 | 40,120 | 41,222 | 39,636 | ||||||||||||
| Net income per share — diluted | $ | 0.47 | $ | 0.39 | $ | 1.00 | $ | 0.76 | ||||||||
| Weighted average shares — diluted | 42,390 | 41,627 | 42,244 | 41,278 | ||||||||||||
| (1) Amounts include stock-based compensation, as follows: | ||||||||||||||||
| Cost of net revenues | $ | 584 | $ | 349 | $ | 1,193 | $ | 698 | ||||||||
| Sales and marketing | 4,400 | 2,200 | 7,838 | 4,289 | ||||||||||||
| Research and development | 2,651 | 1,535 | 4,979 | 2,978 | ||||||||||||
| General and administrative | 4,070 | 1,508 | 6,425 | 2,878 | ||||||||||||
| $ | 11,705 | $ | 5,592 | $ | 20,435 | $ | 10,843 | |||||||||