F5, Inc. (Nasdaq: FFIV) reported better-than-anticipated fiscal 2024 third-quarter earnings and revenues. The tech giant also issued a higher-than-expected fourth-quarter outlook. The stock of F5 ended Tuesday’s trading session at $200.66, up $23.07, or 12.99%, from the prior close.
The company, based in Seattle, Washington, announced third-quarter revenues of $695.50 million, showing a 1% decline from $702.64 million in the corresponding quarter ending June 30, 2023.
For the third quarter, which ended June 30, 2024, F5 posted net income of $144.08 million, or $2.44 per share, compared with $88.98 million, or $1.48 per share, in the quarter that ended on June 30, 2023.
Excluding expenses related to stock-based compensation, amortization and impairment of purchased intangible assets, costs associated with facility exits, charges related to acquisitions, and restructuring expenses, among others, F5 recorded 3Q 2024 net income of $198.84 million, or $3.36 per share, an increase from $193.65 million, or $3.21 per share, in 3Q 2023.
Analysts surveyed by LSEG anticipated F5 would report earnings of $2.97 per share, alongside revenues amounting to $686.10 million.
Commenting on the results, François Locoh-Donou, F5’s President and CEO, stated “We delivered third-quarter revenue at the top end of our guidance range fueled by software growth and continued growth of our global services offerings. In addition, our continued operating discipline enabled us to deliver earnings per share well above the high end of our guidance.”
Segment wise:
- Product revenues amounted to $308.49 million, showing a 6% year-over-year decline.
- Services revenues increased by 3.30% year-over-year to $387.01 million.
Regarding the business nature:
- Software revenues increased by 3% year-over-year to $179 million.
- Systems revenue decreased by 16% year-over-year to $130 million.
- Global services revenues reached $387 million, marking a 3% increase compared to the previous year.
For the third quarter of 2024, F5 recorded a non-GAAP gross margin of 83.10%, up from 82.50% last year.
Looking ahead, F5 expects fourth-quarter revenues to range from $720 million to $740 million. The company also forecasts fourth-quarter earnings to be between $3.38 and $3.50 per share.
Wall Street analysts anticipate F5 to report earnings of $3.33 per share on revenues of $717.40 million.
The earnings for the quarter beat and robust Q4 outlook are expected to keep the stock in F5 slightly bullish in the short term.
The historical price chart indicates that the stock of F5 has broken the resistance at $195. The stock is also trading above its 50-day moving average, while the MACD indicator is showing a positive reading. Therefore, we anticipate F5’s stock to remain in an uptrend in the near term.
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