[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 Points - ePlus has been recognized as F5's 2024 North America BeF5 Partner of the Year for its significant contributions to corporate social responsibility, community engagement, and customer success [1][3] - The award was presented at F5's AppWorld 2025 conference, which took place from February 25-27 in Las Vegas, highlighting partners that achieve meaningful business outcomes through innovative solutions and customer engagement [2] - ePlus's commitment to corporate social responsibility includes support for various initiatives such as NMDP, Habitat for Humanity, and the GRIT: Girls Re-Imagining Tomorrow® program, showcasing its role in leveraging technology for community betterment [3][4] Company Overview - ePlus is a customer-first, services-led industry leader providing transformative technology solutions across various sectors, including artificial intelligence, security, cloud, and data center services [5] - The company has over 2,200 employees and operates in multiple regions, including the United States, United Kingdom, Europe, and Asia-Pacific, with a focus on navigating business challenges for its clients [5]