F5 Networks (FFIV - Free Report) delivered robust first-quarter fiscal 2022 results wherein both earnings and revenues not only surpassed the Zacks Consensus Estimate but also registered double-digit year-over-year growth.
The company’s fiscal first-quarter non-GAAP earnings per share of $2.89 beat the Zacks Consensus Estimate of $2.79. The figure increased 11.6% from the year-ago quarter and was well above management’s guidance of $2.71-$2.83 per share.
During the fiscal first quarter, non-GAAP revenues climbed 10% year on year to $687 million surpassing the Zacks Consensus Estimate of $679 million. The top line was slightly higher than F5 Networks’ guided range of $665-$685 million.
Top Line Details
Product revenues (49.9% of total revenues), which comprise Software and Systems sub-divisions, surged 19% year on year to $343 million. Software sales jumped 47% year over year to $163 million, accounting for approximately 47.5% of the total Product revenues. System revenues inched up 1% to $180 million, making up the remaining 52.5% of the total Product revenues.
Global Service revenues (50.1% of total revenues) increased 2% to $344 million.
F5 Networks registered sales growth across the Americas and APAC witnessing year-over-year increase of 17% and 2%, respectively. Meanwhile, it registered no growth in the EMEA region. Revenue contributions from the Americas, EMEA and APAC regions were 59%, 24% and 18%, respectively.
Customer wise, Enterprises, Service providers and Government represented 71%, 15% and 14% of product bookings, respectively.
Margins
The GAAP gross margin contracted 130 basis points (bps) to 80.3%. The non-GAAP gross margin shrunk 140 bps to 83%.
The GAAP operating expenses flared up 11.7% year over year to $437.9 million, while the non-GAAP operating expenses rose 7.4% to $345.2 million. F5 Networks’ GAAP and non-GAAP operating margins contracted 230 bps to 16.6% and 30 bps to 32.7%, respectively.
Balance Sheet & Cash Flow
F5 Networks exited the October-December quarter with cash and short-term investments of $859 million compared with the previous quarter’s $911 million.
During the fiscal first quarter, the company generated $90.4 million of operating cash flow compared with $197 million reported in the previous quarter. This downside was mainly due to solid multi-year subscription sales and significant prepayments to contract manufacturers.
F5 Networks repurchased shares worth $125 million during the quarter reported.
Guidance
F5 Networks anticipates that supply-chain disruptions caused by the pandemic might restrict its ability to meet high demand for its solutions across on-premise and cloud environments. Hence, the company issued a downbeat business outlook for the second quarter of fiscal 2022.
F5 Networks projects non-GAAP revenues to be $610-$650 million (mid-point of $630 million) for the second quarter of fiscal 2022, reflecting a $60-80 million shortfall in its ability to ship. The Zacks Consensus Estimate for revenues is pegged at $694.2 million.
The company anticipates non-GAAP earnings per share in the $1.75-$2.15 band (mid-point of $1.95). The Zacks Consensus Estimate for the same stands at $2.79.
For fiscal 2022, F5 Networks now expects revenues to grow 4.5-8% on a year-over-year basis compared with the previous range of 8-9% year-over-year growth. However, it expects increase in software sales to remain in-line with its prior guidance of 35-40%.
Zacks Rank & Other Stocks to Consider
F5 Networks currently flaunts a Zacks Rank #2 (Buy).
Some other top-ranked stocks from the broader computer and technology sector include the largest global Customer Relationship Management vendor Salesforce (CRM - Free Report) flaunting a Zacks Rank #1 (Strong Buy), the graphic processing unit maker NVIDIA Corporation (NVDA - Free Report) and Advanced Micro Devices (AMD - Free Report) , both carrying a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Salesforce’s fourth-quarter fiscal 2022 earnings has been revised downward by 7.6% to 73 cents per share over the past 60 days. For fiscal 2022, earnings estimates have moved upward by 0.43% to $4.68 per share in the last 60 days.
Salesforce’s earnings beat the Zacks Consensus Estimate in each of the preceding four quarters, the average surprise being 44.2%. CRM stock has depreciated 5.8% in the past year.
The Zacks Consensus Estimate for NVIDIA’s fourth-quarter fiscal 2022 earnings has been revised upward by 13 cents to $1.22 per share over the past 90 days. For fiscal 2022, earnings estimates have moved north by 19 cents to $4.33 per share in the past 90 days.
NVIDIA’s earnings beat the Zacks Consensus Estimate in each of the preceding four quarters, the average surprise being 7.7%. Shares of NVDA have soared 68.2% in the past year.
The Zacks Consensus Estimate for Advanced Micro Devices’ fourth-quarter 2021 earnings has been revised upward by 7 cents to 75 cents per share over the past 90 days. For 2021, earnings estimates have moved north by 0.38% to $2.65 per share in the last 60 days.
Advanced Micro Devices’ earnings beat the Zacks Consensus Estimate in each of the preceding four quarters, the average surprise being 14%. Shares of AMD have rallied 22.2% in the past year.
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F5 Networks (FFIV - Free Report) delivered robust first-quarter fiscal 2022 results wherein both earnings and revenues not only surpassed the Zacks Consensus Estimate but also registered double-digit year-over-year growth.
The company’s fiscal first-quarter non-GAAP earnings per share of $2.89 beat the Zacks Consensus Estimate of $2.79. The figure increased 11.6% from the year-ago quarter and was well above management’s guidance of $2.71-$2.83 per share.
During the fiscal first quarter, non-GAAP revenues climbed 10% year on year to $687 million surpassing the Zacks Consensus Estimate of $679 million. The top line was slightly higher than F5 Networks’ guided range of $665-$685 million.
Top Line Details
Product revenues (49.9% of total revenues), which comprise Software and Systems sub-divisions, surged 19% year on year to $343 million. Software sales jumped 47% year over year to $163 million, accounting for approximately 47.5% of the total Product revenues. System revenues inched up 1% to $180 million, making up the remaining 52.5% of the total Product revenues.
Global Service revenues (50.1% of total revenues) increased 2% to $344 million.
F5 Networks registered sales growth across the Americas and APAC witnessing year-over-year increase of 17% and 2%, respectively. Meanwhile, it registered no growth in the EMEA region. Revenue contributions from the Americas, EMEA and APAC regions were 59%, 24% and 18%, respectively.
Customer wise, Enterprises, Service providers and Government represented 71%, 15% and 14% of product bookings, respectively.
Margins
The GAAP gross margin contracted 130 basis points (bps) to 80.3%. The non-GAAP gross margin shrunk 140 bps to 83%.
The GAAP operating expenses flared up 11.7% year over year to $437.9 million, while the non-GAAP operating expenses rose 7.4% to $345.2 million. F5 Networks’ GAAP and non-GAAP operating margins contracted 230 bps to 16.6% and 30 bps to 32.7%, respectively.
Balance Sheet & Cash Flow
F5 Networks exited the October-December quarter with cash and short-term investments of $859 million compared with the previous quarter’s $911 million.
During the fiscal first quarter, the company generated $90.4 million of operating cash flow compared with $197 million reported in the previous quarter. This downside was mainly due to solid multi-year subscription sales and significant prepayments to contract manufacturers.
F5 Networks repurchased shares worth $125 million during the quarter reported.
Guidance
F5 Networks anticipates that supply-chain disruptions caused by the pandemic might restrict its ability to meet high demand for its solutions across on-premise and cloud environments. Hence, the company issued a downbeat business outlook for the second quarter of fiscal 2022.
F5 Networks projects non-GAAP revenues to be $610-$650 million (mid-point of $630 million) for the second quarter of fiscal 2022, reflecting a $60-80 million shortfall in its ability to ship. The Zacks Consensus Estimate for revenues is pegged at $694.2 million.
The company anticipates non-GAAP earnings per share in the $1.75-$2.15 band (mid-point of $1.95). The Zacks Consensus Estimate for the same stands at $2.79.
For fiscal 2022, F5 Networks now expects revenues to grow 4.5-8% on a year-over-year basis compared with the previous range of 8-9% year-over-year growth. However, it expects increase in software sales to remain in-line with its prior guidance of 35-40%.
Zacks Rank & Other Stocks to Consider
F5 Networks currently flaunts a Zacks Rank #2 (Buy).
Some other top-ranked stocks from the broader computer and technology sector include the largest global Customer Relationship Management vendor Salesforce (CRM - Free Report) flaunting a Zacks Rank #1 (Strong Buy), the graphic processing unit maker NVIDIA Corporation (NVDA - Free Report) and Advanced Micro Devices (AMD - Free Report) , both carrying a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Salesforce’s fourth-quarter fiscal 2022 earnings has been revised downward by 7.6% to 73 cents per share over the past 60 days. For fiscal 2022, earnings estimates have moved upward by 0.43% to $4.68 per share in the last 60 days.
Salesforce’s earnings beat the Zacks Consensus Estimate in each of the preceding four quarters, the average surprise being 44.2%. CRM stock has depreciated 5.8% in the past year.
The Zacks Consensus Estimate for NVIDIA’s fourth-quarter fiscal 2022 earnings has been revised upward by 13 cents to $1.22 per share over the past 90 days. For fiscal 2022, earnings estimates have moved north by 19 cents to $4.33 per share in the past 90 days.
NVIDIA’s earnings beat the Zacks Consensus Estimate in each of the preceding four quarters, the average surprise being 7.7%. Shares of NVDA have soared 68.2% in the past year.
The Zacks Consensus Estimate for Advanced Micro Devices’ fourth-quarter 2021 earnings has been revised upward by 7 cents to 75 cents per share over the past 90 days. For 2021, earnings estimates have moved north by 0.38% to $2.65 per share in the last 60 days.
Advanced Micro Devices’ earnings beat the Zacks Consensus Estimate in each of the preceding four quarters, the average surprise being 14%. Shares of AMD have rallied 22.2% in the past year.
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
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