Core Insights - F5, Inc. reported strong second-quarter fiscal 2025 results, with non-GAAP earnings of $3.42 per share, exceeding estimates by 10.3% and management's guidance [1] - Revenues for the quarter reached $731 million, surpassing the consensus mark by 2% and increasing 7.3% year-over-year [2] Financial Performance - Product revenues, accounting for 46.1% of total revenues, grew 12% year-over-year to $337.2 million, driven by a 27% increase in Systems revenues to $179 million [3] - Software revenues remained flat at $158 million compared to the previous year [4] - Global Services revenues, making up 53.9% of total revenues, increased 3% year-over-year to $393.9 million [4] - Non-GAAP gross margin expanded by 100 basis points to 83.1% from 82.1% a year ago [5] Balance Sheet & Cash Flow - F5 ended the quarter with cash and short-term investments of $1.26 billion, up from $1.16 billion in the previous quarter [6] - The company generated operating cash flow of $257 million, an increase from $203 million in the prior quarter [6] - F5 repurchased shares worth $252.1 million during the quarter [6] Guidance - F5 raised its fiscal 2025 revenue growth forecast to 6.5-7.5%, up from the previous 6-7% estimate [7] - Non-GAAP earnings per share growth is now projected at 8-10%, compared to the earlier estimate of 6.5-8.5% [8] - For the third quarter of fiscal 2025, F5 expects revenues between $740 million and $760 million [8] - The projected non-GAAP EPS for the third quarter is in the range of $3.41-$3.53 [9]

Group 1 - Michael Wiggins De Oliveira is an inflection investor, focusing on buying undervalued companies at pivotal moments when their profitability is expected to increase significantly over the next year [1] - The investment strategy emphasizes technology and the Great Energy Transition, including uranium, with a concentrated portfolio of approximately 15 to 20 stocks and an average holding period of 18 months [1] - Michael has over 10 years of experience in analyzing companies, particularly in the tech and energy sectors, and has built a following of over 40,000 on Seeking Alpha [2] Group 2 - The Investing Group Deep Value Returns, led by Michael, offers insights through its concentrated portfolio of value stocks, timely updates on stock picks, and a weekly webinar for live advice [3] - The group provides "hand-holding" support for both new and experienced investors, fostering an active and vibrant community accessible via chat [3] - Seeking FCF is associated with Michael Wiggins De Oliveira, indicating a collaborative approach in investment strategies [3]

Financial Data and Key Metrics Changes - F5 reported a total revenue growth of 7% year-over-year, reaching $731 million, with product revenue growing by 12% [6][29] - Non-GAAP EPS for Q2 was $3.42, reflecting an 18% increase year-over-year, exceeding guidance by $0.28 [6][37] - GAAP gross margin was 80.7%, while non-GAAP gross margin improved to 83.1%, up 98 basis points year-over-year [34][35] Business Line Data and Key Metrics Changes - Systems revenue grew by 27% year-over-year, totaling $179 million, driven by hardware refresh activities [30][31] - Software revenue remained flat at $158 million, with subscription-based software revenue down 2% year-over-year [30][32] - Global services revenue increased by 3% to $394 million, representing 54% of total revenue [29][30] Market Data and Key Metrics Changes - Revenue from The Americas grew by 3%, accounting for 54% of total revenue, while EMEA saw a 20% growth, representing 29% of revenue [33] - APAC revenue also grew by 3%, making up 17% of total revenue [33] Company Strategy and Development Direction - F5 is focusing on hybrid multi-cloud solutions to address customer challenges related to high costs, complexity, and cyber risks [44] - The introduction of the F5 Application Delivery and Security Platform (ADSP) aims to consolidate delivery and security functionalities into a single platform [8][10] - The company is leveraging AI technologies to enhance customer experiences and drive business growth, with a focus on AI for application delivery and security [12][16] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the Q3 pipeline, expecting revenue between $740 million and $760 million, implying an 8% growth at the midpoint [7][40] - The FY 2025 revenue growth guidance was raised to 6.5% to 7.5%, reflecting strong first-half performance and current business dynamics [7][42] - Management noted that there are no immediate signs of demand erosion despite macroeconomic uncertainties [70][72] Other Important Information - F5 generated a record $257 million in cash flow from operations in Q2, with cash and investments totaling approximately $1.27 billion [37][38] - The company repurchased $125 million worth of shares during the quarter, equivalent to 57% of its free cash flow [38][39] Q&A Session Summary Question: Software performance in Q2 and future growth - Management acknowledged underperformance in Q2 but highlighted a strong renewal pipeline for the second half, expecting double-digit growth [48][50] Question: Hardware revenue drivers and refresh cycle - Management confirmed that hardware growth was driven by a refresh cycle and ongoing investments in hybrid multi-cloud architectures [53][56] Question: Competitive displacement opportunities - Management indicated that significant opportunities remain in displacing competitors and consolidating functionalities within existing accounts [61][64] Question: Federal government business performance - Management reported that the federal business performed in line with expectations, but there are concerns about potential disruptions in the second half [100][102]

Market Overview - The Dow gained 114 points (+0.28%) after hitting session lows of -244 points, while the S&P 500 finished nearly flat at +0.06%. The Nasdaq decreased slightly by -0.10%, and the Russell 2000 rose by +0.41% [2] - Since the imposition of tariffs, the Dow is down -4.8%, the S&P 500 is down -2.55%, the Russell 2000 is down -2.3%, and the Nasdaq is down -1.36% [2] Earnings Reports - Cybersecurity company F5 reported earnings of $3.42 per share, exceeding the Zacks consensus of $3.10 and the previous year's $2.91. Revenues of $731 million also surpassed the anticipated $717 million. Next-quarter guidance is slightly lower on earnings but ahead on sales [4] - Cadence Design Systems reported earnings of $1.57 per share, beating the projected $1.49, while meeting revenue estimates of $1.24 billion. The company noted no changes in customer behavior and maintained revenue guidance for the next quarter [5] - NXP Semiconductors reported earnings of $2.64 per share, exceeding expectations, with quarterly sales of $2.84 billion, slightly above the anticipated $2.83 billion. CEO Kurt Sievers announced his upcoming resignation [6] - Steel producer Nucor posted earnings of 77 cents per share on revenues of $7.83 billion, surpassing estimates of 68 cents per share and $7.22 billion in sales. The company experienced gains across all three segments [7]

F5 Networks (FFIV) came out with quarterly earnings of $3.42 per share, beating the Zacks Consensus Estimate of $3.10 per share. This compares to earnings of $2.91 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of 10.32%. A quarter ago, it was expected that this computer networking company would post earnings of $3.37 per share when it actually produced earnings of $3.84, delivering a surprise of 13.95%.Over the last four quarte ...

Financial Data and Key Metrics Changes - F5 reported a total revenue growth of 7% year-over-year, reaching $731 million, with product revenue growing by 12% [8][30] - Non-GAAP EPS for Q2 was $3.42, reflecting an 18% increase year-over-year, exceeding guidance by $0.28 [9][38] - The company raised its FY 2025 revenue growth guidance to a range of 6.5% to 7.5%, up from the previous range of 6% to 7% [10][43] Business Line Data and Key Metrics Changes - Systems revenue grew by 27% year-over-year, totaling $179 million, driven by hardware refresh activities [30][31] - Software revenue remained flat at $158 million, with subscription-based software revenue down 2% year-over-year [31][38] - Global services revenue increased by 3%, amounting to $394 million, contributing 54% of total revenue [30] Market Data and Key Metrics Changes - Revenue from the Americas grew by 3%, representing 54% of total revenue, while EMEA saw a 20% growth, accounting for 29% of revenue [35] - APAC revenue also grew by 3%, making up 17% of total revenue [35] - Enterprise customers represented 69% of product bookings, with government customers at 20% and service providers at 11% [35] Company Strategy and Development Direction - F5 is focusing on hybrid multi-cloud solutions to address customer challenges related to high costs, complexity, and cyber risks [11][45] - The introduction of the F5 Application Delivery and Security Platform (ADSP) aims to consolidate delivery and security functionalities into a single platform [12][66] - The company is leveraging AI technologies to enhance customer experiences and drive business growth, with innovations in both AI for ADC and ADC for AI [13][19] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the strong demand for F5 solutions, particularly in data center modernization and AI preparation [10][41] - There are no immediate signs of demand erosion, despite macroeconomic uncertainties [41][72] - The company anticipates continued growth in both systems and software revenue, with expectations for double-digit growth in FY 2025 [43][44] Other Important Information - F5 generated a record $257 million in cash flow from operations in Q2, with cash and investments totaling approximately $1.27 billion [38][39] - The company repurchased $125 million worth of shares during the quarter, with $1.2 billion remaining on its authorized repurchase program [39] Q&A Session Summary Question: Software performance in Q2 and future growth - Management acknowledged underperformance in Q2 but highlighted a strong renewal pipeline for the second half, expecting growth to align with double-digit guidance [48][50] Question: Hardware revenue drivers and customer upgrades - Management noted that hardware growth was driven by a refresh cycle and ongoing investments in hybrid multi-cloud architectures, with expectations for continued momentum [54][56] Question: Competitive displacement opportunities - Management characterized the competitive displacement cycle as still in early stages, with significant opportunities ahead in both new accounts and consolidating existing functionalities [61][64] Question: AI use cases and growth potential - The largest current opportunity is in data delivery for AI models, with security and AI factory load balancing also seen as future growth areas [74][75] Question: Federal government performance and potential impacts - Management reported strong performance in the federal sector but noted potential nervousness among customers regarding future budget disruptions [100]

[Executive Summary](index=1&type=section&id=Executive%20Summary) [Q2 FY2025 Highlights](index=1&type=section&id=Second%20Quarter%20Performance%20Summary) F5 reported strong Q2 FY2025 results with 7% revenue growth year-over-year, driven by a significant 12% product revenue increase, including 27% systems revenue growth, with both GAAP and non-GAAP metrics showing improvements in profitability **Q2 FY2025 Revenue Performance:** | Metric | Q2 FY2025 | Q2 FY2024 | YoY Growth | | :-------------------- | :--------- | :--------- | :--------- | | Total Revenue | $731 million | $681 million | 7% | | Systems Revenue | $179 million | N/A | 27% | | Software Revenue | $158 million | $158 million | 0% | | Global Services Revenue | $394 million | N/A | 3% | **Q2 FY2025 GAAP Financial Performance:** | Metric | Q2 FY2025 | Q2 FY2024 | | :-------------------- | :--------- | :--------- | | Gross Profit | $590 million | $540 million | | Gross Margin | 80.7% | 79.3% | | Income from Operations | $159 million | $140 million | | Operating Margin | 21.7% | 20.5% | | Net Income | $146 million | $119 million | | Diluted EPS | $2.48 | $2.00 | **Q2 FY2025 Non-GAAP Financial Performance:** | Metric | Q2 FY2025 | Q2 FY2024 | | :-------------------- | :--------- | :--------- | | Gross Profit | $607 million | $559 million | | Gross Margin | 83.1% | 82.1% | | Income from Operations | $233 million | $210 million | | Operating Margin | 31.9% | 30.9% | | Net Income | $201 million | $173 million | | Diluted EPS | $3.42 | $2.91 | [CEO Commentary](index=1&type=section&id=CEO%20Commentary) CEO François Locoh-Donou attributed strong Q2 results to F5's continuous innovation, technology leadership, and ability to solve hybrid multicloud challenges, highlighting the new F5 Application Delivery and Security Platform as key to addressing IT costs, complexity, and cyber risks - F5's Q2 results were driven by continuous innovation, technology leadership, and addressing hybrid multicloud challenges, with **product revenue growing 12%** and **systems revenue up 27%**[3](index=3&type=chunk) - The recently introduced F5 Application Delivery and Security Platform aims to alleviate high costs, complexity, and cyber risks in an AI-driven hybrid multicloud world by enabling consistent policies, full visibility, and AI-driven insights from a single, flexible platform[3](index=3&type=chunk) [Business Outlook](index=2&type=section&id=Business%20Outlook) [Q3 FY2025 Guidance](index=2&type=section&id=Q3%20FY2025%20Guidance) F5 anticipates continued growth for Q3 FY2025, projecting revenue between $740 million and $760 million, representing 8% annual growth at the midpoint, driven by strong subscription software renewals and systems demand, with non-GAAP earnings per diluted share expected between $3.41 and $3.53 **Q3 FY2025 Financial Guidance:** | Metric | Range | Midpoint Growth (YoY) | | :----------- | :------------ | :-------------------- | | Revenue | $740M - $760M | 8% | | Non-GAAP EPS | $3.41 - $3.53 | N/A | - Expected Q3 FY2025 revenue growth is driven by a substantial subscription software renewal base in the quarter and continued strong systems demand[11](index=11&type=chunk) [FY2025 Full Year Guidance](index=2&type=section&id=FY2025%20Full%20Year%20Guidance) F5 raised its full fiscal year 2025 revenue growth guidance to 6.5% to 7.5% (up from 6% to 7%) and non-GAAP EPS growth to 8% to 10% (up from 6.5% to 8.5%), reflecting increased confidence in its performance **FY2025 Full Year Guidance Update:** | Metric | New Guidance | Prior Guidance | | :------------------ | :----------- | :------------- | | Revenue Growth | 6.5% - 7.5% | 6% - 7% | | Non-GAAP EPS Growth | 8% - 10% | 6.5% - 8.5% | - On a tax-neutral basis, the midpoint of F5's fiscal year 2025 non-GAAP earnings per share guidance reflects **better than 10% growth** year over year[12](index=12&type=chunk) [Forward-Looking Statements & Non-GAAP Exclusions](index=2&type=section&id=Forward%20Looking%20Statements) This section outlines the forward-looking nature of the business outlook, subject to various risks and uncertainties, and details the specific items excluded from non-GAAP measures, such as amortization of intangibles, share-based compensation, and non-recurring tax adjustments, due to their variability and low visibility - Forward-looking non-GAAP measures exclude estimates for amortization of intangible assets, share-based compensation expenses, significant tax effects, non-recurring tax adjustments, valuation allowance on deferred tax assets, and the income tax effect of non-GAAP exclusions[13](index=13&type=chunk) - F5 is unable to provide a reconciliation of forward-looking non-GAAP earnings guidance to GAAP measures without unreasonable effort due to the overall high variability and low visibility of most excluded items[13](index=13&type=chunk) - Actual results could differ materially from projections due to risk factors including customer acceptance of offerings, disruptions to the global supply chain, global economic conditions, competitive factors, and potential security flaws or cybersecurity attacks[16](index=16&type=chunk) [Company Information](index=1&type=section&id=Company%20Information) [About F5](index=5&type=section&id=About%20F5) F5, Inc. is a global leader in delivering and securing applications, leveraging three decades of expertise to provide the F5 Application Delivery and Security Platform (ADSP), which secures apps and APIs across various environments to deliver fast, available, and secure digital experiences - F5, Inc. (NASDAQ:FFIV) is the **global leader** that delivers and secures every app, backed by three decades of expertise[25](index=25&type=chunk) - F5 has built the industry's premier platform—F5 Application Delivery and Security Platform (ADSP)—to deliver and secure every app, every API, anywhere: on-premises, in the cloud, at the edge, and across hybrid, multicloud environments[25](index=25&type=chunk) [Investor Relations & Media Contacts](index=1&type=section&id=Contacts) This section provides contact information for F5's investor relations and media inquiries, along with details for accessing the live webcast and conference call reviewing financial results and outlook - Investor Contact: **Suzanne DuLong, +1 (206) 272-7049, s.dulong@f5.com**[2](index=2&type=chunk) - Media Contact: **Rob Gruening, +1 (206) 272-6208, r.gruening@f5.com**[2](index=2&type=chunk) - F5 hosted a live webcast and conference call to review financial results and outlook on **April 28, 2025, at 4:30 pm ET**, accessible from the investor relations page of F5.com[14](index=14&type=chunk) [GAAP to Non-GAAP Reconciliation Principles](index=3&type=section&id=GAAP%20to%20non-GAAP%20Reconciliation) [Basis for Non-GAAP Adjustments](index=3&type=section&id=Basis%20for%20Non-GAAP%20Adjustments) F5's management uses non-GAAP measures to evaluate core business performance, excluding specific items like stock-based compensation, amortization of purchased intangibles, facility-exit costs, acquisition-related charges, and restructuring charges, justified by their non-cash nature, non-recurring status, or lack of direct reflection on ongoing operations - Management evaluates and makes operating decisions using non-GAAP net income, which excludes stock-based compensation, amortization and impairment of purchased intangible assets, facility-exit costs, acquisition-related charges, restructuring charges, and certain non-recurring tax expenses and benefits[17](index=17&type=chunk)[18](index=18&type=chunk) - Stock-based compensation is excluded to better understand the long-term performance of the core business and facilitate comparison of results to peer companies, despite being an important aspect of employee compensation[18](index=18&type=chunk) - Amortization and impairment of purchased intangible assets, facility-exit costs, acquisition-related charges, and restructuring charges are excluded because they are generally non-recurring, not reflective of ongoing operations, or cannot be influenced by management after acquisition[19](index=19&type=chunk)[20](index=20&type=chunk)[21](index=21&type=chunk)[22](index=22&type=chunk) [Management's Use and Investor Considerations](index=4&type=section&id=Management%27s%20Use%20and%20Investor%20Considerations) While non-GAAP measures offer supplemental insight into core business operations and historical comparisons, management acknowledges their limitations due to the material effect excluded items could have on GAAP earnings, encouraging investors to consider non-GAAP measures in addition to, not as a substitute for, GAAP results - Management finds non-GAAP net income per share useful for evaluating core business performance and historical comparisons, but acknowledges that excluded items could materially affect GAAP earnings[23](index=23&type=chunk) - Investors should consider non-GAAP measures in addition to, and not as a substitute for, financial performance measures in accordance with GAAP, as GAAP results are considered the best measure of financial performance[23](index=23&type=chunk)[24](index=24&type=chunk) [Consolidated Financial Statements](index=6&type=section&id=Consolidated%20Financial%20Statements) [Consolidated Balance Sheets](index=6&type=section&id=Consolidated%20Balance%20Sheets) As of March 31, 2025, F5's total assets increased to $5.91 billion from $5.61 billion at September 30, 2024, primarily driven by an increase in cash and cash equivalents, with total liabilities and shareholders' equity also seeing increases **Consolidated Balance Sheet Highlights (March 31, 2025 vs September 30, 2024):** | Metric | March 31, 2025 (in thousands) | September 30, 2024 (in thousands) | Change | | :-------------------------- | :------------------------------ | :-------------------------------- | :------- | | Total Assets | $5,906,577 | $5,613,004 | +$293,573 | | Cash and cash equivalents | $1,259,282 | $1,074,602 | +$184,680 | | Total Current Assets | $2,336,174 | $2,109,471 | +$226,703 | | Total Current Liabilities | $1,524,100 | $1,489,653 | +$34,447 | | Deferred Revenue (Current) | $1,200,580 | $1,121,683 | +$78,897 | | Deferred Revenue (Long-term) | $722,019 | $676,276 | +$45,743 | | Total Shareholders' Equity | $3,314,045 | $3,129,378 | +$184,667 | [Consolidated Income Statements](index=7&type=section&id=Consolidated%20Income%20Statements) For the three months ended March 31, 2025, F5 reported total net revenues of $731.1 million, a 7.3% increase year-over-year, driven by product revenue growth, with significant increases in gross profit, net income, and diluted EPS for both the three and six-month periods **Three Months Ended March 31, 2025 vs 2024 (GAAP):** | Metric | 2025 (in thousands) | 2024 (in thousands) | YoY Change | YoY Growth | | :-------------------- | :------------------ | :------------------ | :--------- | :--------- | | Net Revenues | $731,123 | $681,354 | +$49,769 | 7.3% | | Products Revenue | $337,196 | $300,162 | +$37,034 | 12.3% | | Services Revenue | $393,927 | $381,192 | +$12,735 | 3.3% | | Gross Profit | $590,164 | $540,241 | +$49,923 | 9.2% | | Income from Operations | $158,897 | $139,960 | +$18,937 | 13.5% | | Net Income | $145,530 | $119,021 | +$26,509 | 22.3% | | Diluted EPS | $2.48 | $2.00 | +$0.48 | 24.0% | **Six Months Ended March 31, 2025 vs 2024 (GAAP):** | Metric | 2025 (in thousands) | 2024 (in thousands) | YoY Change | YoY Growth | | :-------------------- | :------------------ | :------------------ | :--------- | :--------- | | Net Revenues | $1,497,612 | $1,373,951 | +$123,661 | 9.0% | | Products Revenue | $705,693 | $606,021 | +$99,672 | 16.4% | | Services Revenue | $791,919 | $767,930 | +$23,989 | 3.1% | | Gross Profit | $1,216,143 | $1,096,449 | +$119,694 | 10.9% | | Income from Operations | $363,979 | $304,476 | +$59,503 | 19.5% | | Net Income | $311,975 | $257,403 | +$54,572 | 21.2% | | Diluted EPS | $5.30 | $4.32 | +$0.98 | 22.7% | [Consolidated Statements of Cash Flows](index=8&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) For the six months ended March 31, 2025, net cash provided by operating activities increased to $459.4 million from $387.0 million in the prior year, primarily driven by higher net income and a significant increase in deferred revenue, while net cash used in investing activities decreased and financing activities remained substantial due to common stock repurchases **Six Months Ended March 31, 2025 vs 2024 (Cash Flow Highlights):** | Metric | 2025 (in thousands) | 2024 (in thousands) | Change | | :------------------------------------ | :------------------ | :------------------ | :------- | | Net cash provided by operating activities | $459,379 | $386,955 | +$72,424 | | Net cash used in investing activities | $(30,576) | $(47,022) | +$16,446 | | Net cash used in financing activities | $(244,280) | $(236,139) | -$8,141 | | Net increase in cash, cash equivalents | $184,523 | $103,794 | +$80,729 | | Deferred revenue (change in operating liabilities) | $124,640 | $36,855 | +$87,785 | | Payments for repurchase of common stock | $(252,068) | $(250,029) | -$2,039 | [Detailed GAAP to Non-GAAP Reconciliation](index=9&type=section&id=GAAP%20to%20Non-GAAP%20Reconciliation) This section provides a detailed reconciliation of GAAP to non-GAAP financial measures for gross profit, income from operations, net income, and diluted EPS for both the three and six months ended March 31, 2025 and 2024, with key adjustments including stock-based compensation, amortization of purchased intangibles, facility-exit costs, acquisition-related charges, restructuring charges, and their associated tax effects **Three Months Ended March 31, 2025 vs 2024 (Non-GAAP Adjustments - Selected):** | Adjustment Type | Q2 FY2025 (in thousands) | Q2 FY2024 (in thousands) | | :------------------------------------------ | :----------------------- | :----------------------- | | Stock-based compensation (Gross Profit) | $7,393 | $7,447 | | Amortization of intangibles (Gross Profit) | $9,283 | $11,633 | | Stock-based compensation (Income from Operations) | $58,884 | $55,141 | | Amortization of intangibles (Income from Operations) | $10,095 | $13,622 | | Facility-exit costs (Income from Operations) | $4,264 | $(732) | | Acquisition-related charges (Income from Operations) | $1,214 | $2,390 | | Tax effects related to above items (Net Income) | $(18,893) | $(16,369) | **Six Months Ended March 31, 2025 vs 2024 (Non-GAAP Adjustments - Selected):** | Adjustment Type | 6M FY2025 (in thousands) | 6M FY2024 (in thousands) | | :------------------------------------------ | :----------------------- | :----------------------- | | Stock-based compensation (Gross Profit) | $14,793 | $15,131 | | Amortization of intangibles (Gross Profit) | $18,567 | $22,866 | | Stock-based compensation (Income from Operations) | $116,792 | $111,143 | | Amortization of intangibles (Income from Operations) | $20,238 | $27,937 | | Restructuring charges (Income from Operations) | $11,321 | $8,562 | | Tax effects related to above items (Net Income) | $(39,649) | $(31,152) |

Core Viewpoint - F5 Inc. (FFIV) is expected to exceed earnings expectations for the second quarter of fiscal 2025, with projected non-GAAP EPS in the range of $3.02-$3.14, and a consensus estimate of $3.10 indicating a year-over-year increase of 6.5% [1][2]. Financial Projections - F5 anticipates non-GAAP revenues between $705 million and $725 million, with a consensus estimate of $716.9 million, reflecting a year-over-year growth of 5.2% [2]. Performance Drivers - The Product segment is likely to benefit from recovering demand for software solutions, despite IT budget cuts due to macroeconomic uncertainties, with estimated Software revenues at $173.1 million [3]. - Technology refresh activities are expected to enhance Systems segment sales, with estimated revenues of $151.2 million, contributing to an overall Product revenue estimate of $324.3 million, indicating an 8% year-over-year increase [4]. - The growth in BIG-IP and NGINX subscription software deals is anticipated to be a significant driver, with strong demand from large enterprises for cloud and Kubernetes workloads [5]. Cost Management - Cost-saving initiatives, including headcount reduction and facility footprint elimination, are likely to positively impact the bottom line [6]. Earnings Prediction - The combination of a positive Earnings ESP of +0.69% and a Zacks Rank of 3 suggests a strong likelihood of an earnings beat for F5 [7][8].

Core Insights - F5 Networks (FFIV) is expected to report quarterly earnings of $3.10 per share, reflecting a year-over-year increase of 6.5% [1] - Anticipated revenues for the quarter are projected to be $716.85 million, indicating a 5.2% increase compared to the same quarter last year [1] Earnings Projections - The consensus EPS estimate has been revised 0.2% lower over the last 30 days, indicating a reevaluation by analysts [2] - Changes in earnings projections are crucial for predicting investor reactions, with empirical studies showing a strong correlation between earnings estimate trends and short-term stock price movements [3] Revenue Breakdown - Analysts estimate 'Net revenues- Services' at $390.56 million, representing a 2.5% increase year-over-year [4] - 'Net revenues- Products' are forecasted to reach $326.29 million, suggesting an 8.7% year-over-year change [5] - 'Net product revenues- Software' are expected to be $178.08 million, indicating a 12.4% increase year-over-year [5] - 'Net product revenues- Systems' are projected at $148.45 million, reflecting a 4.8% increase from the prior-year quarter [5] Stock Performance - F5 shares have decreased by 7.4% over the past month, compared to a 6.6% decline in the Zacks S&P 500 composite [6] - F5 holds a Zacks Rank 3 (Hold), suggesting it is expected to closely follow overall market performance in the near term [6]

Core Viewpoint - F5 Networks (FFIV) is anticipated to report a year-over-year increase in earnings and revenues for the quarter ended March 2025, with a consensus EPS estimate of $3.10, reflecting a 6.5% increase, and revenues expected to reach $716.85 million, up 5.2% from the previous year [1][3]. Earnings Expectations - The upcoming earnings report is scheduled for April 28, and the stock may rise if the actual results exceed expectations, while a miss could lead to a decline [2]. - The consensus EPS estimate has been revised down by 0.06% over the last 30 days, indicating a slight reassessment by analysts [4]. Earnings Surprise Prediction - The Zacks Earnings ESP model indicates a positive Earnings ESP of +1.71% for F5, suggesting analysts have recently become more optimistic about the company's earnings prospects [10]. - A positive Earnings ESP is a strong predictor of an earnings beat, especially when combined with a Zacks Rank of 1, 2, or 3 [8]. Historical Performance - F5 has a history of exceeding consensus EPS estimates, having beaten expectations in the last four quarters, including a surprise of +13.95% in the most recent quarter [12][13]. Industry Comparison - AppFolio (APPF), another player in the Zacks Internet - Software industry, is expected to report earnings of $1.22 per share, reflecting a year-over-year increase of 16.2%, with revenues projected at $221.56 million, up 18.2% [17]. - AppFolio's consensus EPS estimate has remained unchanged, but its Earnings ESP of 0.61% combined with a Zacks Rank of 4 (Sell) complicates predictions for an earnings beat [18].