F5 Networks, Inc. (FFIV) Q4 Fiscal 2024 Financial Results

F5 Networks, Inc. (FFIV) reported a strong finish to fiscal year 2024, with Q4 revenues increasing by 6% year-over-year to $747 million, exceeding expectations.

The company's focus on software and security has paid off, with software now making up 58% of product revenue. Recurring revenue climbed to $2.1 billion, representing 76% of the total revenue. F5's non-GAAP earnings per share (EPS) reached $3.67, reflecting significant growth in software revenue by 19%. For the full fiscal year, revenues hit the high end of guidance, with software growth at 11%.

Looking Forward

F5 is optimistic about fiscal year 2025, projecting 4-5% revenue growth and 5-7% earnings growth, underpinned by strong renewal opportunities and a robust pipeline. The company is actively positioning itself in the AI landscape, enhancing security offerings for AI applications.

Key Takeaways

• F5 reported a 6% increase in Q4 revenue, reaching $747 million, and a non-GAAP EPS of $3.67.
• Software revenue grew by 19%, comprising 58% of product revenue, with recurring revenue reaching $2.1 billion.
• Total FY 2024 revenue aligned with expectations, with software growth at 11%.
• FY 2025 revenue growth expected at 4-5%, with earnings growth of 5-7%.
• F5 is focusing on AI opportunities, including data ingestion and load balancing for AI applications.
• A new $1 billion stock repurchase program has been initiated.

Company Outlook

• FY 2025 revenue projected at 4-5% growth with non-GAAP gross margins of 83-84%.
• Q1 FY 2025 revenue expected between $705 million and $725 million, with non-GAAP EPS between $3.29 and $3.41.

Market Dynamics

• Software revenue growth is driven by increased subscription renewals and expansion.
• Subscription revenue anticipated to decline in the first half of FY 2025 due to timing.
• Innovations in AI and a robust customer base provide strong future opportunities.

Summary

F5 transitioned from hardware to a software-centric model, showing robust financial growth and planning to leverage AI in future deployments.