F5 Networks Q2 Earnings In Line, Falls On Soft Revenue View

F5 Networks Inc. (FFIV - Snapshot Report) reported second-quarter fiscal 2015 adjusted earnings per share (excluding amortization and other one-time items but including stock-based compensation) on a proportionate tax basis of $1.21, which came in line with the Zacks Consensus Estimate. Earnings however increased from 93 cents reported in the year-ago quarter.

F5 Networks Inc. - Earnings Surprise | FindTheCompany

The year-over-year surge was driven by higher operating margin, favorable impact of foreign currency and a more encouraging tax rate during the quarter.

However, shares of this network equipment maker plunged 2.8% in after-hour trading due to lower-than-expected revenue forecasts for the third quarter.

Revenues

F5 Networks’ revenues grew 12.4% year over year to $472.1 million and remained toward the higher end of its guidance range of $465 to $475 million. Moreover, it came ahead of the Zacks Consensus Estimate of $471 million. The company’s revenues increased on a year over year basis, primarily due to better-than-expected sales to U.S. service providers and enterprise customers. Also, increase in the number of deals worth more than $1 million aided quarterly revenues.

Revenues were also boosted by an 8.4% increase in Product revenues and a 17% increase in service revenues on a year-over-year basis.

Notably, F5 Networks’ “Good, Better, Best” (GBB) pricing strategies and higher competencies of BIG-IQ platform also helped to streamline its product portfolio and drive year-over-year revenue growth.

Geographically, on a year-over-year basis, revenues from the Americas increased 14% and contributed 57% of total revenue. EMEA also increased 14% and accounted for 24% of total revenue. Asia-Pacific was up 11% on a year over year basis, representing 14% of total revenue while Japan revenues decreased 3% and represented 5% of total revenue.

By verticals, Enterprise, Service providers and Government (including 5% from the U.S. federal) accounted for 65%, 24% and 12% of total revenue, respectively.

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