UPDATED 17:49 EST / JANUARY 28 2025

SECURITY

F5 reports better-than-expected earnings results with double-digit revenue growth

Shares in F5 Inc. leaped more than 12% in late trading today after the application security firm reported strong earnings and revenue beats in its fiscal 2025 first quarter.

For the quarter that ended on Dec. 31, F5 reported adjusted earnings per share of $3.84, up from $3.43 in the same quarter of the previous year, on revenue of $766 million, up 10.5% year-over-year. Both figures were ahead of the $3.36 per share and revenue of $715.45 million expected by analysts.

The company saw its software revenue grow 22% year-over-year in the quarter to $209 million and systems revenue was up 18% to $160 million. F5’s global services revenue was up 3% year-over-year in the quarter to $398 million.

F5’s non-adjusted operating profit came in at $205 million, up from $165 million in the first quarter of the previous fiscal year, with the operating margin coming in at 26.8%, up from 23.8%. Adjusted net income in the quarter was $227 million, up from $205 million.

Business highlights in the quarter included F5 allowing customers in November to use advanced artificial intelligence algorithms to simplify the integration of new AI applications in their corporate networks.

The offering, called F5 AI Gateway, streamlines interactions between various components of AI systems, such as applications, application programming interfaces and large language models. The service is containerized and can automate the way network components interact to boost performance, enable superior visibility and better protect against security threats.

“We are seeing new opportunities emerge in two main areas: hybrid multicloud and Al,” François Locoh-Donou, president and chief executive officer of F5, said in the company’s earnings release.”F5’s innovation in anticipation of widespread hybrid multicloud adoption means we can simplify the crushing complexity of these environments in ways competitors cannot and is leading to new revenue potential. Additionally, our unique ability to rapidly and securely move the large amounts of enterprise data necessary for Al inferencing and retrieval-augmented generation positions F5 as a crucial player as businesses start to implement Al on a large scale.””

For its fiscal 2025 second quarter, the company expects adjusted earnings per share of $3.02 to $3.14 on revenue of $705 million to $725 million. The earnings-per-share outlook fell short of the $3.22 expected by analysts, but the revenue was ahead of an expected $703.6 million.

For the full 2025 fiscal year, F5 expects to see revenue growth of 6% to 7% from fiscal 2024. The company also raised its adjusted earnings per share outlook to see 6.5% to 8.5% growth versus its previous guidance of 5% to 7%.

Photo: F5

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