Share in F5 Networks Inc. rose nearly 9% in late trading today after the network traffic management and security firm surprised with revenue and earnings beats in its fiscal 2024 first quarter.

For the quarter that ended Dec. 31, F5 reported earnings of $3.43 per share, up from $2.47 in the same quarter of the previous year, on revenue of $693 million, down 1% year-over-year. Analysts were expecting earnings of $3.04 on revenue of $684.77 million.

F5 reported an adjusted gross profit of $556 million in the quarter, up from $545 million in the same quarter of fiscal year 2023, with gross margin coming in at 80.3%, up from 77.9%. The company saw global services revenue grow 7% in the quarter, while product revenue fell 10%.

“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,” François Locoh-Donou, president and chief executive officer of F5 Networks, said in the company’s earnings release.

“Customers continue to watch their budgets closely,” Locoh-Donou added. “However, as we look ahead, we are encouraged by signs of stabilizing demand trends across all of our major geographic theaters.”

For its fiscal second quarter, F5 said it expects to deliver adjusted earnings of $2.79 to $2.91 per share on revenue of $675 million to $695 million. The earnings projection is below the $2.97 expected by analysts, but the revenue outlook was higher than an expected $674.3 million.

F5 Networks is a leading company in the network security and traffic management industry, primarily serving large enterprises and medium-sized businesses. As well as selling networking gear, F5 also provides software and services as part of an ongoing effort to move beyond its traditional hardware sales-based business model.

Image: F5 Networks