F5 Networks, Inc. Earnings Cheat Sheet: Beats Analysts’ Estimates

S&P 500 (NYSE:SPY) component F5 Networks, Inc. (NASDAQ:FFIV) reported net income above Wall Street’s expectations for the third quarter. F5 Networks, Inc. provides technology that optimizes the security and performance of servers, data storage devices and other network resources.

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F5 Networks Earnings Cheat Sheet for the Third Quarter

Results: Net income for the application software company rose to $62.5 million (77 cents per share) vs. $40.5 million (50 cents per share) in the same quarter a year earlier. This marks a rise of 54.5% from the year earlier quarter.

Revenue: Rose 26.1% to $290.7 million from the year earlier quarter.

Actual vs. Wall St. Expectations: FFIV reported adjusted net income of 97 cents per share. By that measure, the company beat the mean estimate of 91 cents per share. Analysts were expecting revenue of $290.7 million.

Quoting Management: “Strong sales in APAC and Japan, in particular of our high-end products, accounted for most of the revenue growth during the quarter,” said John McAdam, F5 president and chief executive officer. “EMEA revenue was down from the prior quarter, and Americas revenue was up only slightly, due in part to a slowdown in U.S. Federal sales. “In June we began shipping VIPRION 2400, our new chassis-based application delivery controller that offers scalable performance and other advanced features of the VIPRION architecture at a price in the mid-range of our ADC product family. Both enterprise customers and service providers have expressed growing interest in this product, and we expect sales to ramp steadily over the next several quarters. This quarter, we are on track to release version 11.0 of our TMOS operating system, which includes user-friendly application templates, support for virtual clustered multi-processing, and more than 150 new features, many of them geared toward service providers.”

Key Stats:

The company has enjoyed double-digit year-over-year percentage revenue growth for the past five quarters. Over that span, the company has averaged growth of 38.5%, with the biggest boost coming in the third quarter of the last fiscal year when revenue rose 45.7% from the year earlier quarter.

Last quarter marked the fifth consecutive quarter of gross margins expanding as the company’s gross margin expanded 1.3 percentage points to 82% from the year earlier quarter. Over that span, margins have grown on average 1.9 percentage points per quarter on a year-over-year basis.

The company has now seen net income rise in three straight quarters. In the second quarter, net income rose 67.7% and in the first quarter, the figure rose 90.1%.

The company has now topped analyst estimates for the last four quarters. It beat the mark by one cent in the second quarter, by 3 cents in the first quarter, and by 5 cents in the fourth quarter of the last fiscal year.

Competitors to Watch: Blue Coat Systems, Inc. (NASDAQ:BCSI), Radware Ltd. (NASDAQ:RDWR), Riverbed Technology, Inc. (NASDAQ:RVBD), Cisco Systems, Inc. (NASDAQ:CSCO), Procera Networks, Inc. (AMEX:PKT), Juniper Networks, Inc. (NYSE:JNPR), Dialogic Inc (NASDAQ:DLGC), NetScout Systems, Inc. (NASDAQ:NTCT), Brocade Communications Systems, Inc. (NASDAQ:BRCD), and Hewlett-Packard Company (NYSE:HPQ).

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(Source: Xignite Financials)