F5 Networks Beats Estimates Yet Again

Seth Jayson, The Motley Fool
Updated

F5 Networks (NAS: FFIV) reported earnings on Jan. 18. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended Dec. 31 (Q1), F5 Networks beat slightly on revenues and beat slightly on earnings per share.

Compared to the prior-year quarter, revenue expanded significantly, and earnings per share expanded significantly.

Gross margins grew, operating margins grew, net margins contracted.

Revenue details
F5 Networks booked revenue of $322 million. The 33 analysts polled by S&P Capital IQ looked for a top line of $319 million. Sales were 20% higher than the prior-year quarter's $269 million

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Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions.

EPS details
Non-GAAP EPS came in at $1.03. The 33 earnings estimates compiled by S&P Capital IQ predicted $1.01 per share on the same basis. GAAP EPS of $0.83 for Q1 were 22% higher than the prior-year quarter's $0.68 per share.

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Source: S&P Capital IQ. Quarterly periods. Figures may be non-GAAP to maintain comparability with estimates.

Margin details
For the quarter, gross margin was 82.8%, 100 basis points better than the prior-year quarter. Operating margin was 30.9%, 120 basis points better than the prior-year quarter. Net margin was 20.6%, 10 basis points worse than the prior-year quarter.

Looking ahead
Next quarter's average estimate for revenue is $331 million. On the bottom line, the average EPS estimate is $1.05.

Next year's average estimate for revenue is $1.4 billion. The average EPS estimate is $4.41.

Investor sentiment
The stock has a three-star rating (out of five) at Motley Fool CAPS, with 676 members out of 733 rating the stock outperform, and 57 members rating it underperform. Among 232 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 215 give F5 Networks a green thumbs-up, and 17 give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on F5 Networks is outperform, with an average price target of $115.88.

At the time thisarticle was published Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor ofMotley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. 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.

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