F5(US:FFIV)2022-08-04 16:00Financial Position - The balance of capitalized contract acquisition costs at the end of June 30, 2022, was $76.674 million, a slight decrease from $75.604 million at the end of June 30, 2021[45]. - The balance of deferred revenue at the end of June 30, 2022, was $1.637 billion, compared to $1.441 billion at the end of June 30, 2021, reflecting an increase of 13.6%[47]. - Cash and cash equivalents as of June 30, 2022, were $541.88 million, down from $580.98 million as of September 30, 2021[85]. - Unbilled receivables increased to $277.77 million as of June 30, 2022, from $215.40 million as of September 30, 2021[87]. - Intangible assets decreased to $211.67 million as of June 30, 2022, from $237.18 million as of September 30, 2021[88]. - Accrued liabilities decreased to $291.61 million as of June 30, 2022, from $341.49 million as of September 30, 2021[90]. - The company reported total debt investments of $296.396 million as of June 30, 2022, with unrealized losses of $2.252 million[58]. - As of June 30, 2022, the outstanding principal amount under the Term Loan Facility was $355.0 million, with a weighted average interest rate of 2.092% for the three months ended June 30, 2022[97]. - The Company had no outstanding borrowings under the Revolving Credit Facility as of June 30, 2022, maintaining an available borrowing capacity of $350.0 million[99]. Revenue and Performance - The total non-cancelable remaining performance obligations under contracts with customers as of June 30, 2022, was approximately $1.6 billion, with an expected revenue recognition of 64.1% over the next 12 months[48]. - The company expects to recognize revenues on approximately 22.0% of remaining performance obligations in year two and the remaining balance thereafter[48]. - Total net product revenue for the three months ended June 30, 2022, was $326.5 million, compared to $309.9 million for the same period in 2021, representing a 5.1% increase[132]. - Revenue from the Americas for the three months ended June 30, 2022, was $387.1 million, an increase from $369.4 million in the same period of 2021[131]. Acquisitions - The Company acquired Threat Stack for approximately $68.9 million in cash, enhancing its cloud security capabilities[69]. - The total assets acquired from Threat Stack amounted to $79.5 million, with goodwill of $43.96 million[71]. - The Company acquired Volterra for approximately $427.2 million in cash, creating an edge platform for enterprises[77]. - The total assets acquired from Volterra amounted to $432.37 million, with goodwill of $350.86 million[80]. Debt and Financing - The Term Loan Facility matures on January 24, 2023, with quarterly installments of 1.25% of the original principal amount[94]. - The Company incurred $2.2 million in debt issuance costs related to the Term Loan Facility, reducing the carrying value of the debt[92]. - The margin for LIBOR-based loans was 1.125% as of June 30, 2022[93]. - The Term Loan Facility requires a leverage ratio financial covenant, which may affect future interest rates on outstanding borrowings based on company performance[181]. Tax and Compliance - The effective tax rate for the three months ended June 30, 2022, was 18.0%, up from 4.9% for the same period in 2021[117]. - The Company had $69.5 million of unrecognized tax benefits as of June 30, 2022, which could affect the effective tax rate if recognized[118]. - The Company anticipates changes in its existing liabilities for unrecognized tax benefits within the next twelve months, but does not expect these changes to be material[118]. - The Company is currently under audit by various states and foreign jurisdictions for multiple fiscal years, which may impact its financial condition[119]. - As of June 30, 2022, the Company was in compliance with all financial covenants related to its debt facilities[95]. Shareholder Activities - The Company repurchased a total of 2.5 million shares of common stock at an average price of $199.90 per share through Accelerated Share Repurchase agreements[121]. - The Company has $272 million remaining authorized for share repurchases under its current program as of June 30, 2022[129]. - The company maintains a share repurchase program that allows for acquisitions in private transactions or open market purchases, with no minimum purchase requirement[137]. Operational Insights - The Company recorded a restructuring charge of $7.9 million in the first quarter of fiscal 2022 due to a reduction in force affecting approximately 70 positions[133]. - The total lease expense for the three months ended June 30, 2022, was $17.7 million, compared to $19.1 million for the same period in 2021[101]. - The Company expects to receive approximately $14.3 million in sublease income, with $1.9 million to be received for the remainder of fiscal 2022[103]. - The future operating lease payments total $354.6 million, with the largest payment of $48.3 million due in 2023[103]. - The weighted average remaining lease term was 9.5 years as of June 30, 2022[103]. Risk Management - The company is actively monitoring inflation but does not believe it has had a material effect on its business or financial condition[182]. - The company is subject to interest rate risk, with potential adverse impacts on the fair value of its fixed income portfolio due to market interest rate fluctuations[179]. - The company has not noted any adverse impacts to interest rates that would materially affect interest owed on principal borrowings as of June 30, 2022[181]. - The company has not experienced significant foreign currency transaction gains or losses, as most sales and expenses are in U.S. dollars[183]. Internal Controls - There were no changes in internal control over financial reporting during the quarter ended June 30, 2022, that materially affected the company's reporting[187]. - The company’s disclosure controls and procedures were evaluated as effective as of June 30, 2022, ensuring timely decision-making regarding required disclosures[186].