Investors looking for stocks in the Internet - Software sector might want to consider either StoneCo Ltd. (STNE) or F5 Networks (FFIV) . But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.Everyone has their own methods for finding great value opportunities, but our model includes pairing an impressive grade in the Value category of our Style Scores system with a strong Zacks Rank. The Zacks Rank is a proven strategy that targets companies with p ...

Summary of F5 (FFIV) 2025 Conference Call Company Overview - **Company**: F5 (FFIV) - **Date**: June 04, 2025 - **Focus**: Discussion on F5's outlook, growth, and business model migration from hardware to software solutions Key Points Industry and Market Dynamics - F5 operates in a competitive landscape with a significant shift towards software solutions, moving away from traditional hardware appliances [2][3] - The company is experiencing strong growth in system sales, with a notable increase of 2718% in the last two quarters, attributed to customer refresh activities [15][16] Revenue Guidance and Growth Drivers - Initial revenue growth guidance for fiscal 2025 was 4% to 5%, later raised to 6% to 7% due to strong Q1 performance [6][7] - Q2 revenue guidance was updated to 6.5% to 7.5%, driven by strong system sales, while software business remained flat [7][8] - The software growth rate was revised from upper single digits to double digits for the year, reflecting strong renewal rates and expansion into new use cases [8][9] Customer Behavior and Spending - Customers are cautious about spending due to macroeconomic uncertainties, including potential impacts from tariffs [12][13] - F5's exposure to tariffs is minimal, allowing the company to absorb cost impacts through efficiency initiatives [14] - There is a shift in customer attitudes towards application deployment, with a preference for hybrid and multi-cloud environments [24][26] Competitive Landscape - F5 competes primarily with Citrix in the hardware space, with strong competitive displacements noted [31] - The company faces competition from point solution security vendors and public cloud providers, but maintains a unique position by supporting multiple deployment models [49][50] Software Offerings and Technology Synergy - F5's software offerings include BIG IP and NGINX, catering to both traditional and modern workloads [40][43] - There is a focus on creating a consistent experience across different environments, leveraging AI and centralized management [48] Future Growth Opportunities - F5 aims to enhance growth through expansion rates across its portfolio and innovations in AI for application delivery and security [56][57] - The company is optimistic about the long-term prospects for hardware sales, driven by data center modernization and AI-related growth [34][35] Renewal and Expansion Dynamics - The largest component of F5's renewal cycle involves flexible consumption agreements, allowing customers to adjust their contracts based on actual consumption [62][63] - Expansion during renewals is often driven by increased application growth and the introduction of new F5 solutions [65][66] Risks and Challenges - Uncertainty in macroeconomic conditions and customer environments can lead to pauses in deployments, impacting growth [59][60] - The company is focused on providing flexibility and agility in its offerings to help customers navigate uncertainties [61] Conclusion F5 is positioned well in the market with strong growth in system sales and a strategic shift towards software solutions. The company is navigating macroeconomic uncertainties while capitalizing on customer refresh activities and expanding its software offerings. The focus on hybrid and multi-cloud environments presents significant opportunities for future growth.

Core Viewpoint - Bumble Inc. (BMBL) and F5 Networks (FFIV) are being compared to determine which stock offers better value for investors at the current time [1] Group 1: Valuation Metrics - BMBL has a forward P/E ratio of 7.14, while FFIV has a forward P/E of 19.47 [5] - BMBL's PEG ratio is 0.26, indicating a favorable valuation compared to FFIV's PEG ratio of 2.83 [5] - BMBL's P/B ratio is 0.47, significantly lower than FFIV's P/B of 4.91, suggesting BMBL is undervalued relative to its book value [6] Group 2: Investment Grades - Both BMBL and FFIV currently hold a Zacks Rank of 2 (Buy), indicating a positive earnings outlook [3] - BMBL has a Value grade of A, while FFIV has a Value grade of D, highlighting BMBL as the superior value option based on valuation metrics [6]

Core Viewpoint - F5 Networks (FFIV) shares have increased by approximately 9.1% since the last earnings report, outperforming the S&P 500, but there are concerns about whether this positive trend will continue leading up to the next earnings release [1] Estimates Movement - Estimates for F5 Networks have trended downward over the past month, indicating a negative shift in expectations [2] VGM Scores - F5 Networks currently holds a Growth Score of B, but has a low Momentum Score of D and a Value Score of D, placing it in the bottom 40% for the value investment strategy. The overall aggregate VGM Score is C, which is relevant for investors not focused on a single strategy [3] Outlook - The downward trend in estimates suggests a negative outlook for F5 Networks, although it holds a Zacks Rank of 2 (Buy), indicating expectations for an above-average return in the coming months [4]

Core Viewpoint - F5 has demonstrated strong performance in the market, with a notable increase in share price and robust fiscal results, indicating strong investor confidence and growth potential in the AI and multicloud sectors [1][2][13] Financial Performance - F5's revenues for fiscal Q2 2025 increased by 7% year over year to $731 million, surpassing the Zacks Consensus Estimate by 2% [2] - Earnings per share reached $3.42, an 18% increase from the previous year, exceeding expectations by 10.3% [2] - For Q3 fiscal 2025, F5 anticipates revenues between $740 million and $760 million, reflecting approximately 8% year-over-year growth at the midpoint [10] - The projected non-GAAP EPS for Q3 fiscal 2025 is between $3.41 and $3.53, with a consensus estimate of $3.49, indicating a year-over-year increase of 3.87% [11] - F5 raised its fiscal 2025 revenue growth guidance to 6.5-7.5% from the previous 6-7% [12] Strategic Initiatives - F5 is focusing on its Application Delivery and Security Platform (ADSP), which integrates load balancing, traffic management, and security to address modern IT challenges [4] - The company is advancing its platform strategy with "AI for ADC" and "ADC for AI," enhancing application delivery management and supporting next-generation AI workloads [5] - F5 has launched the ADC 3.0 framework, enabling more intelligent AI interactions through the Model Context Protocol [6] - Partnerships with NVIDIA and Red Hat are enhancing F5's AI infrastructure capabilities and accelerating the deployment of AI-powered applications [7][8] Market Position and Outlook - F5's stock has appreciated 12.8% over the past six months, outperforming the broader technology sector and its industry peers [1] - The company has a solid pipeline visibility entering Q3 fiscal 2025, driven by demand for data center modernization and a large base of software subscriptions [9] - The Zacks Consensus Estimate for fiscal 2025 revenues is $3.01 billion, indicating a year-over-year growth of 6.98% [12] - F5's expanding capabilities in AI and multicloud, along with a strong subscription base, position it as a compelling investment opportunity [13]

Core Viewpoint - F5 Networks (FFIV) has received an upgrade to a Zacks Rank 2 (Buy) due to an upward trend in earnings estimates, indicating a positive earnings outlook that may lead to increased stock price [1][3]. Earnings Estimates and Stock Price Movement - The Zacks rating system is based on changes in a company's earnings picture, which significantly influences stock prices [2][4]. - Rising earnings estimates are correlated with near-term stock price movements, as institutional investors adjust their valuations based on these estimates [4][5]. Recent Performance and Projections - F5 is projected to earn $14.55 per share for the fiscal year ending September 2025, reflecting a year-over-year increase of 8.8% [8]. - Over the past three months, the Zacks Consensus Estimate for F5 has risen by 1.8%, indicating a positive trend in earnings expectations [8]. Zacks Rank System - The Zacks Rank system classifies stocks into five groups based on earnings estimates, with only the top 20% receiving a 'Strong Buy' or 'Buy' rating [9][10]. - F5's upgrade to Zacks Rank 2 places it in the top 20% of Zacks-covered stocks, suggesting potential for market-beating returns in the near term [10].

Summary of F5 (FFIV) FY Conference Call - May 14, 2025 Company Overview - **Company**: F5, Inc. (Ticker: FFIV) - **Industry**: Hardware and Networking Key Points Macro Economic Outlook - The company raised its revenue guidance by 50 basis points for the year, reflecting strength in the first half, despite macroeconomic uncertainties [4][6] - No indicators of demand slowdown were observed in the business, with consistent performance through April [4][6] Tariff Management - Majority of products are manufactured in Mexico, minimizing tariff exposure to low single-digit millions [8][9] - No significant impact on demand due to tariffs, as pricing practices remain unchanged [10] Product Refresh Cycle - The end of software support for Viprion and I Series hardware presents a significant opportunity for tech refresh, affecting over half of the customer base [11][12] - Demand is driven by capacity expansion and modernization of data centers, particularly related to AI applications [13][19] AI Integration - F5 is positioned to support enterprise AI adoption through three use cases: data retrieval, securing access, and load balancing for AI clusters [20][21] - The introduction of BIG IP Next for Kubernetes enhances delivery and security within AI environments [22] Competitive Landscape - F5 differentiates itself by integrating security with delivery, unlike traditional competitors like Citrix and Radware [37][38] - The company sees significant share gain opportunities, particularly from Citrix, due to its larger installed base [61] Software Revenue Dynamics - Software revenue growth is expected to be low double digits, with reliance on renewals and expansion into new use cases [51][53] - The company emphasizes annualized growth rates over quarterly variability due to the nature of multi-year contracts [44][46] Total Addressable Market (TAM) Growth - The TAM is considered healthy, with growth driven by both new projects and expansions with existing customers [55][56] Cash Flow and Capital Allocation - F5 generates $700 million to $800 million in free cash flow, with a commitment to repurchase over 50% of it [68] - The company is open to M&A opportunities, focusing on tuck-in acquisitions to enhance capabilities [71][72] Operating Margin and Growth Potential - Operating margin stands at 35%, with potential for further operating leverage while balancing revenue growth opportunities [73][74] Federal Spending Exposure - Federal revenue constitutes 5% to 10% of total revenue, with no significant changes in demand observed despite budget uncertainties [66][67] Additional Insights - The company is actively monitoring the competitive landscape and customer needs, particularly in relation to AI and multi-cloud environments [34][40] - F5's focus on innovation and customer satisfaction is expected to drive long-term growth and market share gains [14][19]

Core Viewpoint - Bumble Inc. (BMBL) is currently viewed as a more attractive investment option compared to F5 Networks (FFIV) based on valuation metrics and earnings outlook [1][3][7] Valuation Metrics - BMBL has a forward P/E ratio of 7.12, significantly lower than FFIV's forward P/E of 19.32 [5] - The PEG ratio for BMBL is 0.26, indicating better value relative to its expected earnings growth compared to FFIV's PEG ratio of 2.80 [5] - BMBL's P/B ratio stands at 0.46, while FFIV has a P/B ratio of 4.86, further highlighting BMBL's undervaluation [6] Earnings Outlook - BMBL is currently experiencing an improving earnings outlook, which contributes to its strong Zacks Rank of 1 (Strong Buy) [3][7] - In contrast, FFIV holds a Zacks Rank of 3 (Hold), indicating a less favorable earnings estimate revision trend [3]

Core Insights - F5 Networks' international operations are crucial for assessing its financial resilience and growth prospects [1][2] - The company's total revenue for the quarter ended March 2025 was $731.12 million, reflecting a 7.3% increase [4] International Revenue Breakdown - Asia Pacific contributed $121.03 million, accounting for 16.55% of total revenue, with a surprise increase of 0.6% compared to expectations [5] - The "Other" segment generated $22.34 million, representing 3.06% of total revenue, which was a slight miss of 0.77% against projections [6] - Europe, Middle East, and Africa generated $213.97 million, making up 29.27% of total revenue, exceeding expectations by 12.86% [7] Future Revenue Expectations - Analysts anticipate total revenue of $747.72 million for the current fiscal quarter, a 7.5% increase year-over-year, with expected contributions from Asia Pacific (16.5%), Other (3.1%), and Europe, Middle East, and Africa (26.2%) [8] - For the full year, expected total revenue is $3.01 billion, marking a 6.9% increase, with projected contributions from Asia Pacific (16.7%), Other (3.2%), and Europe, Middle East, and Africa (26.4%) [9] Market Context - F5's reliance on international markets presents both opportunities and risks, making it essential to monitor international revenue trends for forecasting [10] - The company's stock has appreciated by 6.7% over the past four weeks, while the broader market and sector have seen higher increases [12]

Revenue and Performance Obligations - As of March 31, 2025, the total non-cancelable remaining performance obligations under the Company's contracts with customers was $1.9 billion, with an expected revenue recognition of 62.4% over the next 12 months[38]. - The Company recognized revenues of $726.1 million related to the opening balance of deferred revenue during the six months ended March 31, 2025[37]. - The Company expects to recognize 22.9% of the remaining performance obligations in year two following the reporting date[38]. - The Company’s total revenues for the six months ended March 31, 2025, were $1,497.6 million, up from $1,373.9 million in the same period of 2024[89]. Deferred Revenue and Cash Flow - The balance of deferred revenue increased to $1.92 billion as of March 31, 2025, up from $1.81 billion at the end of the previous period[37]. - As of March 31, 2025, the Company reported total cash, cash equivalents, and restricted cash of $1,261,257,000, an increase from $1,078,340,000 as of September 30, 2024, representing a growth of approximately 16.9%[56]. Investments and Financial Instruments - Interest income from cash, cash equivalents, and investments was $9.3 million for the three months ended March 31, 2025, compared to $8.3 million for the same period in 2024[50]. - The fair value of total investments as of March 31, 2025, was $636.6 million, including $624.1 million in debt investments[47]. - The Company reported no credit losses on any investments within its portfolio as of March 31, 2025[51]. - The Company has updated its accounting policies for investments and fair value of financial instruments to include equity investments with no readily determinable fair value[28]. Acquisitions and Goodwill - The Company recorded $7.5 million of goodwill from an acquisition completed in the second quarter of fiscal 2025, which did not materially impact operating results[54]. - For the second quarter of fiscal 2024, the Company completed two acquisitions, resulting in $23.6 million of goodwill, with no material impact on operating results[55]. Inventory and Assets - Total inventories decreased from $76,378,000 as of September 30, 2024, to $67,880,000 as of March 31, 2025, reflecting a reduction of approximately 11.2%[57]. - Other current assets increased from $569,467,000 as of September 30, 2024, to $629,394,000 as of March 31, 2025, marking an increase of approximately 10.5%[58]. - The Company’s intangible assets decreased from $111,576,000 as of September 30, 2024, to $92,651,000 as of March 31, 2025, reflecting a decline of approximately 17%[59]. Liabilities and Lease Obligations - The Company’s total operating lease liabilities as of March 31, 2025, were $266,818,000, compared to $249,564,000 as of September 30, 2024, indicating an increase of approximately 6.9%[66]. - The Company’s accrued liabilities decreased from $300,076,000 as of September 30, 2024, to $279,910,000 as of March 31, 2025, a reduction of approximately 6.7%[60]. - Operating lease expenses for the three months ended March 31, 2025, were $16,656,000, slightly down from $16,779,000 for the same period in 2024[65]. - The Company expects to receive sublease income of $9.5 million, with $1.9 million expected for the remainder of fiscal 2025 and $7.6 million over the following eight fiscal years[67]. Tax and Audit - The effective tax rate for the three and six months ended March 31, 2025, was 15.0% and 18.0%, respectively, compared to 18.4% and 19.6% for the same periods in 2024, primarily due to non-recurring benefits related to foreign operations and stock-based compensation[80]. - As of March 31, 2025, the Company had $90.9 million of unrecognized tax benefits that could affect the effective tax rate if recognized[81]. - The Company is currently under audit by the Internal Revenue Service for fiscal year 2019 and various states for fiscal years 2018 through 2023, which may impact its financial condition[82]. Net Income and Share Repurchase - For the three months ended March 31, 2025, the Company reported net income of $145.5 million, resulting in a basic net income per share of $2.51 and diluted net income per share of $2.48[86]. - The Company repurchased 481,000 shares for $125.0 million at an average price of $259.46 per share during the three months ended March 31, 2025, with a total of $1,172.4 million remaining authorized for share repurchases[84]. Revenue by Region - Revenues from the Americas for the three months ended March 31, 2025, totaled $396.1 million, compared to $385.6 million in the same period of 2024, with the U.S. contributing $373.8 million[89]. Restructuring Charges - The Company recorded restructuring charges of $11.3 million for the three months ended December 31, 2024, compared to $9.8 million for the same period in 2023[90]. Major Customers - Major customers Ingram Micro, Inc. and Synnex Corporation accounted for 16.9% and 17.4% of total net revenue for the three months ended March 31, 2025, respectively[89].