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For the fiscal first quarter, F5 estimates revenues in the range of $675-$695 million ($685 million at the midpoint). The Zacks Consensus Estimate for revenues is pegged at $687.1 million, suggesting a 1.9% decline from the year-ago quarter’s sales of $700.4 million.
The company anticipates non-GAAP earnings in the range of $2.97-$3.09 per share ($3.03 at the midpoint). The Zacks Consensus Estimate stands at $3.03 per share, indicating a year-over-year increase of approximately 22.7%. Earnings estimates for the quarter have remained unchanged over the past 60 days.
F5’s earnings surpassed estimates in all the trailing four quarters, the average beat being 7.8%.
Let’s see how things are shaping up for this earnings announcement.
The persistent macro uncertainty and its impact on customer spending are likely to have negatively impacted F5’s first-quarter top line, particularly the Product segment, which comprises Software and Systems sub-divisions. Our estimate of $319.4 million for the Product segment’s revenues indicates a year-over-year decline of 6.2%.
The decrease in the Product division’s first-quarter revenues is likely to be mainly due to the soft demand for its Systems products. Our estimate of $149.3 million for Systems’ revenues indicates a 13.7% year-over-year decrease.
However, the F5 Product segment’s first-quarter performance is likely to have benefited from the improving demand for its software solutions, which had been hurt by tightened IT spending amid persistent macroeconomic uncertainties for the past few quarters.
The company’s Software revenues increased 11% year over year in the fourth quarter of fiscal 2023, following a decline of 2.8% and 13% registered for the third and second quarters, respectively. Our estimate for Software’s first-quarter fiscal 2024 revenues is currently pegged at $170.1 million, indicating a year-over-year increase of 1.5%.
The acceleration in BIG-IP and NGINX subscription software deals is expected to have remained a major growth driver during the to-be-reported quarter. BIG-IP’s data point performance, automation capabilities and the lower cost of ownership are likely to have helped F5 win multiple deals in the first quarter. Moreover, FFIV is anticipated to have witnessed strong demand for its NGINX subscription as large enterprises continue to adopt the solution for their cloud and Kubernetes workloads.
Furthermore, high-maintenance renewals and a positive impact of the price increase introduced in the fourth quarter of fiscal 2022 are expected to have boosted F5’s Services segment revenues in the first quarter. Our estimate for the Services division’s first-quarter revenues is pegged at $366.1 million, suggesting an expected 1.7% increase from the year-ago quarter’s $359.8 million.
Additionally, the company’s cost-saving initiatives, which include headcount reduction, eliminating portions of its facilities footprint and travel reduction, are likely to have boosted the bottom line in the to-be-reported quarter.
What Our Model Says
Our proven model does not conclusively predict an earnings beat for F5 this time. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. However, that’s not the case here.
F5 currently carries a Zacks Rank #3 and has an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Stocks With the Favorable Combination
Per our model, Amazon.com (AMZN - Free Report) , Apple (AAPL - Free Report) and Meta Platforms (META - Free Report) have the right combination of elements to post an earnings beat in their upcoming releases.
Amazon carries a Zacks Rank #2 and has an Earnings ESP of +1.58%. The company is scheduled to report fourth-quarter 2023 results on Feb 1. Its earnings beat the Zacks Consensus Estimate in the preceding four quarters, with the average surprise being 54.9%. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Amazon’s fourth-quarter earnings stands at 80 cents per share, indicating a year-over-year improvement of 281%. It is estimated to report revenues of $166.19 billion, which suggests an increase of approximately 11.4% from the year-ago quarter.
Apple is slated to report first-quarter fiscal 2024 results on Feb 1. The company has a Zacks Rank #3 and an Earnings ESP of +1.96% at present. Apple’s earnings beat the Zacks Consensus Estimate thrice in the trailing four quarters while missing on one occasion, the average surprise being 3.5%.
The Zacks Consensus Estimate for first-quarter earnings is pegged at $2.09 per share, suggesting an increase of 11.2% from the year-ago quarter’s earnings of $1.88. Apple’s quarterly revenues are estimated to improve marginally to $117.52 billion from $117.15 billion in the year-ago quarter.
Meta carries a Zacks Rank #2 and has an Earnings ESP of +1.46%. The company is scheduled to report fourth-quarter 2023 results on Feb 1. Its earnings surpassed the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 27.5%.
The Zacks Consensus Estimate for Meta’s fourth-quarter earnings is pegged at $4.80 per share, indicating a year-over-year increase of 60%. The consensus mark for revenues stands at $38.82 billion, calling for a year-over-year increase of 20.7%.
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F5 (FFIV) to Report Q1 Earnings: What's in the Offing?
F5, Inc. (FFIV - Free Report) is scheduled to report first-quarter fiscal 2024 results on Jan 29.
For the fiscal first quarter, F5 estimates revenues in the range of $675-$695 million ($685 million at the midpoint). The Zacks Consensus Estimate for revenues is pegged at $687.1 million, suggesting a 1.9% decline from the year-ago quarter’s sales of $700.4 million.
The company anticipates non-GAAP earnings in the range of $2.97-$3.09 per share ($3.03 at the midpoint). The Zacks Consensus Estimate stands at $3.03 per share, indicating a year-over-year increase of approximately 22.7%. Earnings estimates for the quarter have remained unchanged over the past 60 days.
F5’s earnings surpassed estimates in all the trailing four quarters, the average beat being 7.8%.
Let’s see how things are shaping up for this earnings announcement.
F5, Inc. Price and EPS Surprise
F5, Inc. price-eps-surprise | F5, Inc. Quote
Factors to Note
The persistent macro uncertainty and its impact on customer spending are likely to have negatively impacted F5’s first-quarter top line, particularly the Product segment, which comprises Software and Systems sub-divisions. Our estimate of $319.4 million for the Product segment’s revenues indicates a year-over-year decline of 6.2%.
The decrease in the Product division’s first-quarter revenues is likely to be mainly due to the soft demand for its Systems products. Our estimate of $149.3 million for Systems’ revenues indicates a 13.7% year-over-year decrease.
However, the F5 Product segment’s first-quarter performance is likely to have benefited from the improving demand for its software solutions, which had been hurt by tightened IT spending amid persistent macroeconomic uncertainties for the past few quarters.
The company’s Software revenues increased 11% year over year in the fourth quarter of fiscal 2023, following a decline of 2.8% and 13% registered for the third and second quarters, respectively. Our estimate for Software’s first-quarter fiscal 2024 revenues is currently pegged at $170.1 million, indicating a year-over-year increase of 1.5%.
The acceleration in BIG-IP and NGINX subscription software deals is expected to have remained a major growth driver during the to-be-reported quarter. BIG-IP’s data point performance, automation capabilities and the lower cost of ownership are likely to have helped F5 win multiple deals in the first quarter. Moreover, FFIV is anticipated to have witnessed strong demand for its NGINX subscription as large enterprises continue to adopt the solution for their cloud and Kubernetes workloads.
Furthermore, high-maintenance renewals and a positive impact of the price increase introduced in the fourth quarter of fiscal 2022 are expected to have boosted F5’s Services segment revenues in the first quarter. Our estimate for the Services division’s first-quarter revenues is pegged at $366.1 million, suggesting an expected 1.7% increase from the year-ago quarter’s $359.8 million.
Additionally, the company’s cost-saving initiatives, which include headcount reduction, eliminating portions of its facilities footprint and travel reduction, are likely to have boosted the bottom line in the to-be-reported quarter.
What Our Model Says
Our proven model does not conclusively predict an earnings beat for F5 this time. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. However, that’s not the case here.
F5 currently carries a Zacks Rank #3 and has an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Stocks With the Favorable Combination
Per our model, Amazon.com (AMZN - Free Report) , Apple (AAPL - Free Report) and Meta Platforms (META - Free Report) have the right combination of elements to post an earnings beat in their upcoming releases.
Amazon carries a Zacks Rank #2 and has an Earnings ESP of +1.58%. The company is scheduled to report fourth-quarter 2023 results on Feb 1. Its earnings beat the Zacks Consensus Estimate in the preceding four quarters, with the average surprise being 54.9%. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Amazon’s fourth-quarter earnings stands at 80 cents per share, indicating a year-over-year improvement of 281%. It is estimated to report revenues of $166.19 billion, which suggests an increase of approximately 11.4% from the year-ago quarter.
Apple is slated to report first-quarter fiscal 2024 results on Feb 1. The company has a Zacks Rank #3 and an Earnings ESP of +1.96% at present. Apple’s earnings beat the Zacks Consensus Estimate thrice in the trailing four quarters while missing on one occasion, the average surprise being 3.5%.
The Zacks Consensus Estimate for first-quarter earnings is pegged at $2.09 per share, suggesting an increase of 11.2% from the year-ago quarter’s earnings of $1.88. Apple’s quarterly revenues are estimated to improve marginally to $117.52 billion from $117.15 billion in the year-ago quarter.
Meta carries a Zacks Rank #2 and has an Earnings ESP of +1.46%. The company is scheduled to report fourth-quarter 2023 results on Feb 1. Its earnings surpassed the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 27.5%.
The Zacks Consensus Estimate for Meta’s fourth-quarter earnings is pegged at $4.80 per share, indicating a year-over-year increase of 60%. The consensus mark for revenues stands at $38.82 billion, calling for a year-over-year increase of 20.7%.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.