F5 (FFIV) 8-K F5 Networks Announces Results for Second Quarter of Fiscal 2012

Exhibit 99.1

FOR IMMEDIATE RELEASE

CONTACT:	InvestorRelations
	John   Eldridge
	(206)  272-6571
	j.eldridge@f5.com
	PublicRelations
	Alane Moran
	(206)  272-6850
	a.moran@f5.com

F5 Networks Announces Results for Second Quarter of Fiscal 2012

SEATTLE, WA—April 18, 2012— For the second quarter of fiscal 2012, F5 Networks, Inc. (NASDAQ: FFIV) announced revenue of $339.6 million, up 5.3 percent from $322.4 million in the prior quarter and 22.4 percent from $277.6 million in the second quarter of fiscal 2011.

GAAP net income was $68.6 million ($0.86 per diluted share), compared to $66.5 million ($0.83 per diluted share) in the prior quarter and $55.6 million ($0.68 per diluted share) in the second quarter a year ago.

Excluding the impact of stock-based compensation, amortization of purchased intangible assets and acquisition-related charges and related tax effects, non-GAAP net income for the second quarter was $87.1 million ($1.09 per diluted share), compared to $82.2 million ($1.03 per diluted share) in the prior quarter and $71.5 million ($0.88 per diluted share) in the second quarter of last year.

A reconciliation of GAAP net income to non-GAAP net income is included on the attached Consolidated Statements of Operations.

John McAdam, F5 president and chief executive officer, said strong demand for VIPRION platforms, F5’s industry leading Virtual Clustered Multiprocessing technology (“vCMP”), and the full range of BIG-IP software modules contributed to solid gains in product revenue, which grew more than 18 percent year over year. Bookings growth was solid in APAC, especially in Japan, and sales growth in EMEA was in line with overall growth during the quarter. Solid growth in the Americas was driven by strong service provider sales.

“During the quarter we continued to see growing demand for both VIPRION 2400, our midrange chassis-based application delivery controller, and VIPRION 4400, the high end of our ADC product family,” McAdam said. “In early April, we introduced a new chassis, VIPRION 4480, with new blades that effectively double the performance of VIPRION 4400.”

“VIPRION 4480 is the highest performing ADC on the market. Like all of our VIPRION and BIG-IP products it is also an ICSA–certified network firewall, delivering twelve times the performance of the nearest competing product. In the second quarter we saw increasing demand for all of our security products, including our security modules, Application Security Manager (ASM) and Access Policy Manager (APM), and our EDGE Gateway appliance. As the number and complexity of security threats continues to grow, we anticipate that our integrated security solutions will be an increasingly important component of our revenue stream.”

During the quarter, F5 added approximately 190 employees worldwide, including 60 from Traffix Systems. Following the acquisition of Traffix Systems on February 22, 2012 and the repurchase of 404,106 shares of its outstanding common stock, the company ended the quarter with $1.03 billion in cash and investments.

For the current quarter, ending June 30, management has set a revenue goal of $350 million to $355 million with a GAAP earnings target of $0.88 to $0.90 per diluted share. Excluding the impact of stock-based compensation and amortization of purchased intangible assets and related tax effects, the company’s non-GAAP earnings target is $1.12 to $1.14 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, 2012
Reconciliation of Expected Non-GAAP Third Quarter Earnings **	Low			High
Net income	$	70.7		$	72.3
Stock-based compensation expense	$	24.5		$	24.5
Amortization of purchased intangible assets	$	1.9		$	1.9
Acquisition-related charges	$	—		$	—
Tax effects related to above items	($	7.2	)	($	7.2	)
Non-GAAP net income excluding stock-based compensation expense and amortization of purchased intangible assets	$	89.9		$	91.5
Net income per share —diluted	$	0.88		$	0.90
Non-GAAP net income per share — diluted	$	1.12		$	1.14

** Beginning with the second quarter of fiscal 2012, the company will exclude amortization of purchased intangible assets and acquisition-related charges in addition to stock-based compensation expense as a non-GAAP financial measure.

About F5 Networks

F5 Networks, Inc., the global leader in Application Delivery Networking (ADN), helps the world’s largest enterprises and service providers realize the full value of virtualization, cloud computing, and on-demand IT. F5^® solutions help integrate disparate technologies to provide

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greater control of the infrastructure, improve application delivery and data management, and give users seamless, secure, and accelerated access to applications from their corporate desktops and smart devices. An open architectural framework enables F5 customers to apply business policies at “strategic points of control” across the IT infrastructure and into the public cloud. F5 products give customers the agility they need to align IT with changing business conditions, deploy scalable solutions on demand, and manage mobile access to data and services. Enterprises, service and cloud providers, and leading online companies worldwide rely on F5 to optimize their IT investments and drive business forward. 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, share amount and share price assumptions, demand for application delivery networking and storage virtualization products and other statements that are not historical facts are forward-looking statements. Such forward-looking statements involve risks and uncertainties, as well as assumptions and other factors that, if they do not fully materialize or prove correct, could 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, but are not limited to: customer acceptance of our new traffic management, security, application delivery, WAN optimization and storage virtualization offerings; the timely development, introduction and acceptance of additional new products and features by F5 or its competitors; competitive pricing pressures; increased sales discounts; uncertain global economic conditions which may result in reduced customer demand for our products and services and changes in customer payment patterns; 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; the unpredictability of F5’s sales cycle; the share repurchase program; future prices of F5’s common stock; and other risks and uncertainties described more fully in our documents filed with or furnished to the Securities and Exchange Commission. All forward-looking statements in this press release are based on information available as of the date hereof and qualified in their entirety by this cautionary statement. F5 assumes no obligation to revise or update these forward-looking statements.

Use of non-GAAP Financial Information

F5’s management evaluates and makes operating decisions using various operating measures. These measures are generally based on the revenues of its products, services operations and certain costs

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of those operations, such as cost of revenues, research and development, sales and marketing and general and administrative expenses. One such measure is net income excluding stock-based compensation, which is a non-GAAP financial measure under Section 101 of Regulation G under the Securities Exchange Act of 1934, as amended. This measure consists of GAAP net income excluding, as applicable, stock-based compensation. Net income excluding stock-based compensation (non-GAAP) is adjusted by the amount of additional taxes or tax benefit that the company would accrue if it used non-GAAP results instead of GAAP results to calculate the company’s tax liability. Stock-based compensation is a non-cash expense that F5 has accounted for since July 1, 2005 in accordance with the fair value recognition provisions of Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 718 Compensation—Stock Compensation (“FASB ASC Topic 718”).

The non-GAAP financial information for the second quarter of fiscal 2012 in this press release and the attached Consolidated Statements of Operations, and the reconciliation of the company’s GAAP and non-GAAP earnings for the three months ended June 30, 2012 set forth above, also exclude from net income the amortization of purchased intangible assets and acquisition-related charges, net of taxes. Amortization of intangible assets is a non-cash expense. Investors should note that the use of intangible assets contribute to revenues earned during the periods presented and will contribute to revenues in future periods. Acquisition-related expenses consist of professional services fees incurred in connection with acquisitions.

Management believes that non-GAAP net income per share provides useful supplemental information to management and investors regarding the performance of the company’s core business operations and facilitates comparisons to the company’s historical operating results. Although F5’s management finds this non-GAAP measure to be useful in evaluating the performance of the core business, management’s reliance on this measure is limited because items excluded from such measures could have a material effect on F5’s earnings and earnings per share calculated in accordance with GAAP. Therefore, F5’s management will use its non-GAAP earnings and earnings per share measures, in conjunction with GAAP earnings and earnings per share measures, to address these limitations when evaluating the performance of the company’s core business. Investors should consider these non-GAAP measures in addition to, and not as a substitute for, financial performance measures in accordance with GAAP.

F5 believes that presenting its non-GAAP measure of earnings and earnings per share provides investors with an additional tool for evaluating the performance of the company’s core business and which management uses in its own evaluation of the company’s performance. Investors are encouraged to look at GAAP results as the best measure of financial performance. However, while the GAAP results are more complete, the company provides investors this supplemental measure since, with reconciliation to GAAP, it may provide additional insight into the company’s operational performance and financial results.

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F5 Networks, Inc.

Condensed Consolidated Balance Sheets

(unaudited, in thousands)

	March 31, 2012			September 30, 2011
Assets
Current assets
Cash and cash equivalents	$	209,459		$	216,784
Short-term investments		280,152			325,766
Accounts receivable, net of allowances of $3,121 and $2,898		184,043			165,676
Inventories		17,023			17,149
Deferred tax assets		8,612			8,391
Other current assets		47,229			29,907
Total current assets		746,518			763,673
Property and equipment, net		52,279			47,998
Long-term investments		543,932			470,203
Deferred tax assets		35,872			34,762
Goodwill		347,901			234,691
Other assets, net		31,769			17,222
Total assets	$	1,758,271		$	1,568,549
Liabilities and Shareholders’ Equity
Current liabilities
Accounts payable	$	29,904		$	33,525
Accrued liabilities		78,618			67,902
Deferred revenue		325,364			270,880
Total current liabilities		433,886			372,307
Other long-term liabilities		19,683			18,388
Deferred revenue, long-term		87,484			72,418
Total long-term liabilities		107,167			90,806
Commitments and contingencies
Shareholders’ equity
Preferred stock, no par value; 10,000 shares authorized, no shares outstanding		—			—
Common stock, no par value; 200,000 shares authorized 79,035 and 79,145 shares issued and outstanding		357,026			380,737
Accumulated other comprehensive loss		(6,062	)		(6,422	)
Retained earnings		866,254			731,121
Total shareholders’ equity		1,217,218			1,105,436
Total liabilities and shareholders’ equity	$	1,758,271		$	1,568,549

F5 Networks, Inc.

Condensed Consolidated Statements of Operations

(unaudited, in thousands, except per share amounts)

	Three Months Ended March 31,						Six Months Ended March 31,
	2012			2011			2012			2011
Net revenues
Products	$	205,165		$	173,710		$	401,719		$	345,202
Services		134,457			103,862			260,335			201,304
Total		339,622			277,572			662,054			546,506
Cost of net revenues (1)(2)
Products		33,668			31,423			66,868			63,037
Services		23,926			19,250			46,332			36,599
Total		57,594			50,673			113,200			99,636
Gross Profit		282,028			226,899			548,854			446,870
Operating expenses (1)(2)(3)
Sales and marketing		110,995			89,332			217,233			176,157
Research and development		43,568			34,507			82,690			67,113
General and administrative		22,785			19,846			44,462			40,530
Total		177,348			143,685			344,385			283,800
Income from operations		104,680			83,214			204,469			163,070
Other income, net		1,428			1,568			3,289			4,113
Income before income taxes		106,108			84,782			207,758			167,183
Provision for income taxes		37,467			29,207			72,625			55,945
Net Income	$	68,641		$	55,575		$	135,133		$	111,238
Net income per share—basic	$	0.87		$	0.69		$	1.71		$	1.38
Weighted average shares—basic		79,156			80,809			79,214			80,726
Net income per share—diluted	$	0.86		$	0.68		$	1.69		$	1.36
Weighted average shares—diluted		79,775			81,622			79,853			81,670
Non-GAAP Financial Measures
Net income as reported	$	68,641		$	55,575		$	135,133		$	111,238
Stock-based compensation expense (4)		23,345			21,766			45,468			44,706
Amortization of purchased intangible assets (5)		1,339			—			1,339			—
Acquisition-related charges (5)		750			—			750			—
Tax effects related to above items		(6,964	)		(5,854	)		(13,339	)		(12,258	)
Net income excluding stock-based compensation, amortization of purchased intangible assets and acquisition-related charges (non-GAAP)—diluted	$	87,111		$	71,487		$	169,351		$	143,686
Net income per share excluding stock-based compensation, amortization of purchased intangible assets and acquisition-related charges (non-GAAP)—diluted	$	1.09		$	0.88		$	2.12		$	1.76
Weighted average shares — diluted		79,775			81,622			79,853			81,670
(1) Includes stock-based compensation as follows:
Cost of net revenues	$	2,584		$	2,167		$	5,122		$	4,395
Sales and marketing		9,354			8,359			18,408			17,092
Research and development		6,510			5,589			12,336			11,477
General and administrative		4,897			5,651			9,602			11,742
	$	23,345		$	21,766		$	45,468		$	44,706
(2) Includes amortization of purchased intangible assets as follows:
Cost of net revenues	$	1,199		$	—		$	1,199		$	—
Sales and marketing		140			—			140			—
	$	1,339		$	—		$	1,339		$	—
(3) Includes acquisition-related charges as follows:
General and administrative	$	750		$	—		$	750		$	—
	$	750		$	—		$	750		$	—

(4) Stock-based compensation is accounted for in accordance with the fair value recognition provisions of Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 718, Compensation – Stock Compensation (“FASB ASC Topic 718”)

(5) Beginning with the second quarter of fiscal 2012, the company will exclude amortization of purchased intangible assets and acquisition-related charges in addition to stock-based compensation expense as a non-GAAP financial measure

F5 Networks, Inc.

Condensed Consolidated Statements of Cash Flows

(unaudited, in thousands)

	Six Months Ended March 31,
	2012			2011
Operating activities
Net income	$	135,133		$	111,238
Adjustments to reconcile net income to net cash provided by operating activities:
Realized loss (gain) on disposition of assets and investments		457			(182	)
Stock-based compensation		45,468			44,706
Provisions for doubtful accounts and sales returns		633			(14	)
Depreciation and amortization		14,935			10,536
Deferred income taxes		(1,645	)		(1,080	)
Changes in operating assets and liabilities, net of amounts acquired:
Accounts receivable		(18,139	)		(30,757	)
Inventories		125			661
Other current assets		(17,252	)		(7,798	)
Other assets		688			(140	)
Accounts payable and accrued liabilities		3,933			13,253
Deferred revenue		69,147			53,945
Net cash provided by operating activities		233,483			194,368
Investing activities
Purchases of investments		(482,403	)		(441,160	)
Maturities of investments		427,671			261,230
Sales of investments		24,519			80,977
(Increase) decrease in restricted cash		(25	)		38
Acquisition of intangible assets		(250	)		(80	)
Acquisition of businesses, net of cash acquired		(128,335	)		—
Purchases of property and equipment		(12,818	)		(11,704	)
Net cash used in investing activities		(171,641	)		(110,699	)
Financing activities
Excess tax benefit from stock-based compensation		5,456			16,286
Proceeds from the exercise of stock options and purchases of stock under employee stock purchase plan		10,093			9,218
Repurchase of common stock		(84,776	)		(71,526	)
Net cash used in financing activities		(69,227	)		(46,022	)
Net (decrease) increase in cash and cash equivalents		(7,385	)		37,647
Effect of exchange rate changes on cash and cash equivalents		60			(186	)
Cash and cash equivalents, beginning of period		216,784			168,754
Cash and cash equivalents, end of period	$	209,459		$	206,215