The shares of F5, Inc. (NASDAQ: FFIV) garnered the market’s attention after the company reported better-than-anticipated fiscal 2024 first-quarter results. The leader in network traffic administration and security also issued an upbeat second-quarter revenue outlook. However, the Q2 adjusted earnings guidance was below analysts’ consensus. The company also upwardly revised its FY24 adjusted earnings per share guidance. The stock of F5 Networks ended Wednesday’s trading session at $186.84, up $1.47, or 0.79%, from the prior close. Notably, the stock has gained roughly 21% in the past three months.
The Seattle, Washington-based company reported fiscal 2024 first quarter revenues of $693 million, a decrease of 1% from $700 million in the similar quarter of fiscal 2023.
In the first quarter ending December 31, 2023, F5 Networks reported a net income of $138.38 million, or $2.32 per share, as opposed to $72.40 million, or $1.20 per share, in the corresponding period of 2022.
Excluding stock-based compensation expense, amortization and impairment of purchased intangible assets, facility-exit costs, acquisition-related charges, and restructuring charges, among others, the 1Q 2023 non-GAAP adjusted income was $204.73 million, or $3.43 per share, up from $149.27 million, or $2.47 per share, in 1Q 2022.
Analysts surveyed by LSEG had anticipated F5 Networks to report earnings of $3.04 per share on revenues of $684.77 million.
Commenting on the quarterly results, François Locoh-Donou, president and CEO of F5 Networks, stated “Our team delivered solid first-quarter results, including revenue near the high end and earnings per share above the high end of our guidance ranges.”
Segment wise:
- Products revenues were $305.86 million, down 10.20% on a y-o-y basis.
- Services revenues rose by 7.50% y-o-y to $359.82 million.
The company posted a gross margin of 80.30% in 1Q 2024, an increase from 77.90% in 1Q 2023.
F5 Networks anticipates second-quarter revenues ranging from $675 million to $695 million, with projected non-GAAP earnings per share between $2.79 and $2.91. Analysts’ consensus for Q2 2023 was an adjusted earnings estimate of $2.97 per share on revenues of $674.30 billion, slightly surpassing the company’s forecast.
Furthermore, F5 Networks also upwardly revised its FY 2024 non-GAAP earnings per share growth in the range of 6% to 8% from the prior guidance level of 5% to 7%. The amendment was made based on a lower-than-anticipated tax rate for FY24.
The quarterly earnings beat and upward revision of the FY 2024 EPS growth estimate are expected to keep the stock of F5 Networks slightly bullish in the near term.
The historical price chart indicates that the stock of F5 has broken the ascending triangle formation. The base of the triangle, formed at $180, is expected to act as support. Additionally, the Chakin Money Flow indicator shows a positive reading. Therefore, we anticipate the stock of F5 to remain in an uptrend in the near term.
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