Where F5 Networks Is Finding Its Growth

Before you go, we thought you'd like these...
Before you go close icon

In today's world, most companies span several regions and sell across the world. As Foolish colleague Morgan Housel notes, 10 years ago, less than a third of S&P 500 revenue came from abroad. Today, that makes up half the S&P's sales and continues to grow.

And that number is growing. The truth is, investors regularly underestimate how much demand comes from abroad. More importantly, for large, multinational corporations that have already established a presence in their home markets, much of their future growth comes from abroad.

With that in mind, today we're looking at F5 Networks (NAS: FFIV) . We'll examine not only where its sales and earnings come from, but how its sales abroad have changed over time.

Where F5 Network's sales were four years ago
Four years ago, F5 Networks collected 83% of its sales from the Americas.

anImage

Source: S&P Capital IQ.

Where F5's sales are today
Today, F5 Networks is bucking the trend of global sales outpacing sales to the United States. The company now sees 59% of its sales to the U.S.

anImage

Source: S&P Capital IQ.

Segment

4-Year Sales Growth

Americas

129%

EMEA

185%

Japan

15%

Asia Pacific

129%

Source: S&P Capital IQ.

Overall, F5 has seen exceptional growth rates across almost all geographies. The sole laggard is Japan, where sales increased only 15% over the past four years. With Europe -- along with the Middle East and Africa -- still contributing only 23% of sales F5 should be able to continue making in-roads in the region in spite of broader macroeconomic worries.

Competitor checkup
One last point to check is how F5's footprint compares with some of its peers and industry rivals:

Company

Geography With Most Sales

Percent of Sales

F5 Networks

Americas

59%*

Juniper (NYS: JNPR)

United States

46%

Cisco (NAS: CSCO)

United States

53%

Riverbed (NAS: RVBD)

United States

53%

Source: S&P Capital IQ. *Fiscal Year 2010.

Overall, F5 has slightly lower exposure than its peers in the broader networking industry. That should present an opportunity as international rivals are few and far between, and exploding levels of data are common across all geographies. As the best-in-breed player in load balancing, F5 should continue seeing high growth rates not just in the United States, but across the world.

Keep searching
If you're looking to stay updated on F5 Networks or any other companies listed above, make sure to add them to our free watchlist service, My Watchlist. It's free, and it helps you constantly stay updated on news and analysis on your favorite companies.

At the time this article was published Eric Bleeker owns shares of no companies listed above. You can follow him on Twitter to see all of his technology and market commentary. The Motley Fool owns shares of Cisco Systems. The Fool owns shares of and has created a bull call spread position on Cisco Systems. The Fool owns shares of and has created a bull call spread position on. Motley Fool newsletter services have recommended buying shares of Cisco Systems and Riverbed Technology. Motley Fool newsletter services have recommended writing puts in Riverbed Technology. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Copyright © 1995 - 2011 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

Read Full Story

Want more news like this?

Sign up for Finance Report by AOL and get everything from business news to personal finance tips delivered directly to your inbox daily!

Subscribe to our other newsletters

Emails may offer personalized content or ads. Learn more. You may unsubscribe any time.

From Our Partners