On July 29, 2024, F5 Inc (FFIV, Financial) released its 8-K filing for the third quarter of fiscal year 2024, reporting revenue and earnings that surpassed analyst estimates. F5 Inc, a market leader in the application delivery controller market, provides products for security, application performance, and automation. The company serves enterprises, service providers, and government entities, with revenue evenly split between its services and products businesses.
Third Quarter Performance Summary
F5 Inc reported third-quarter revenue of $695 million, slightly below the $703 million reported in the same quarter last year but above the analyst estimate of $686.06 million. The company's earnings per share (EPS) for the quarter were $2.44 on a GAAP basis and $3.36 on a non-GAAP basis, significantly exceeding the analyst estimate of $2.96.
Software revenue grew by 3% year-over-year to $179 million, while systems revenue declined by 16% to $130 million. Global services revenue also saw a 3% increase, reaching $387 million. The company's GAAP gross profit was $559 million, with a gross margin of 80.4%, compared to $561 million and a gross margin of 79.8% in the same period last year.
Financial Achievements and Metrics
F5 Inc's non-GAAP gross profit for the third quarter was $578 million, representing a gross margin of 83.1%. The company's GAAP operating profit was $163 million, with an operating margin of 23.4%, compared to $104 million and a margin of 14.7% in the previous year. Non-GAAP operating profit remained steady at $233 million, with a margin of 33.4%.
GAAP net income for the quarter was $144 million, or $2.44 per diluted share, compared to $89 million, or $1.48 per diluted share, in the third quarter of fiscal year 2023. Non-GAAP net income was $199 million, or $3.36 per diluted share, compared to $194 million, or $3.21 per diluted share, in the same period last year.
| Metric | Q3 FY2024 | Q3 FY2023 |
|---|---|---|
| Revenue | $695 million | $703 million |
| GAAP Gross Profit | $559 million | $561 million |
| Non-GAAP Gross Profit | $578 million | $579 million |
| GAAP Operating Profit | $163 million | $104 million |
| Non-GAAP Operating Profit | $233 million | $233 million |
| GAAP Net Income | $144 million | $89 million |
| Non-GAAP Net Income | $199 million | $194 million |
| GAAP EPS | $2.44 | $1.48 |
| Non-GAAP EPS | $3.36 | $3.21 |
Analysis and Outlook
F5 Inc's strong performance in the third quarter was driven by growth in its software and global services segments. The company's ability to deliver earnings per share well above the high end of its guidance demonstrates effective operating discipline and strategic focus on high-growth areas.
“We delivered third quarter revenue at the top end of our guidance range fueled by software growth and continued growth of our global services offerings,” said François Locoh-Donou, F5’s President and CEO. “In addition, our continued operating discipline enabled us to deliver earnings per share well above the high end of our guidance.”
Looking ahead, F5 Inc expects to deliver revenue in the range of $720 million to $740 million for the fourth quarter of fiscal year 2024, with non-GAAP earnings per share between $3.38 and $3.50. The company has raised its earnings growth outlook for the fiscal year, now expecting approximately 12% non-GAAP earnings per share growth compared to fiscal year 2023.
F5 Inc's performance underscores its role as a critical partner for large enterprises modernizing their IT infrastructures and optimizing application security, delivery, management, and performance across hybrid, multicloud environments. The company's strategic focus on software and services positions it well for continued growth and value creation.
Explore the complete 8-K earnings release (here) from F5 Inc for further details.
