F5 (NASDAQ: FFIV)

These 3 Tech Stocks Plunged After Earnings: Buy the Dip?

Herve Blandin  |  May 3, 2021

Each company recently posted disappointing quarterly earnings despite having vast, and growing, market opportunities.

Why F5 Networks Stock Crashed 10% After Earnings

Rich Smith  |  Apr 28, 2021

Pro forma profits were great, but F5's GAAP number was less impressive.

F5 Networks Is Getting an Unexpected Boost

Herve Blandin  |  Jan 31, 2021

The company's legacy hardware business is poised to perform better than anticipated.

Should Cloudflare and Fastly Fear F5 Networks' Foray Into Edge Computing?

Herve Blandin  |  Jan 12, 2021

F5 Networks agreed to acquire an innovative edge-computing start-up.

Why F5 Networks Stock Jumped 8.5% on Tuesday

Anders Bylund  |  Oct 27, 2020

The application delivery expert smashed Wall Street's estimates in the fourth quarter.

Never Heard of Adaptive Applications? It's F5 Networks' Long-Term Vision

Herve Blandin  |  Jul 29, 2020

Adaptive applications leverage the tech specialist's various technologies.

Why Is F5 (FFIV) Up 5.8% Since Last Earnings Report?

It has been about a month since the last earnings report for F5 Networks (FFIV). Shares have added about 5.8% in that time frame, outperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is F5 due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.

F5 reported second-quarter fiscal 2023 results, wherein the top and the bottom lines surpassed the Zacks Consensus Estimate.

This Seattle-based company’s non-GAAP earnings of $2.53 per share beat the Zacks Consensus Estimate of $2.42. The bottom line increased 18.8% from the year-ago quarter’s $2.13 per share and was way higher than management’s guided range of $2.36-$2.48 per share.

During the reported quarter, F5 Networks witnessed a 11% increase in its revenues amid a global chip shortage scenario in the semiconductor industry. The company’s non-GAAP revenues were $703.2 million, which beat the Zacks Consensus Estimate of $700.7 million. The top line was above the mid-point of the guided range of $690-$710 million.

Product revenues (48.4% of total revenues), which comprise Software and Systems sub-divisions, increased 14% year over year to $340.6 million. System sales jumped 43% year over year to $209 million, accounting for approximately 61.3% of the total Product revenues. However, Software revenues slumped 13% to $132 million, making up the remaining 38.7% of the total Product revenues.

Global Service revenues (51.6% of total revenues) grew 8% to $362.6 million.

F5 Networks registered sales growth across the Americas, EMEA and APAC regions, witnessing a year-over-year increase of 7%, 22% and 9%, respectively. Revenue contributions from the Americas, EMEA and APAC regions were 54%, 27% and 18%, respectively.

Story continues

Customer-wise, Enterprises, Service providers and Government represented 67%, 13% and 20% of product bookings, respectively.

GAAP and non-GAAP gross margins contracted 220 basis points (bps) and 250 bps to 77.9% and 80.4%, respectively.

GAAP and non-GAAP operating expenses went up 1.9% and 4.6%, respectively, to $441.5 million and $374.1 million. F5 Networks’ GAAP and non-GAAP operating margins expanded 330 bps and 70 bps to 15.1% and 27.2%, respectively.

F5 Networks exited the March-ended quarter with cash and short-term investments of $755.3 million compared with the previous quarter’s $660 million.

During the fiscal second quarter, the company generated $141 million of operating cash flow compared with the $158 million reported in the previous quarter. The operating cash flow remained under pressure due to strong multi-year subscription sales, which impacted the cash collection process.

F5 Networks projects non-GAAP revenues in the $690-$710 million (mid-point of $700 million) and non-GAAP earnings per share in the $2.78-$2.90 band (mid-point of $2.84) for third-quarter fiscal 2023. Non-GAAP gross margin is forecast to be around 82%.

For fiscal 2023, F5 Networks expects low-to-mid-single digit revenue growth.The company anticipates non-GAAP earnings to grow in 7-11% band. Non

GAAP operating margin is forecasted to be roughly 30%.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed a downward trend in fresh estimates.

VGM Scores

At this time, F5 has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with an F. However, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.

Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, F5 has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

F5, Inc. (FFIV) : Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research

5G Open Innovation Lab Teams with F5, GXC, and Spirent Communications to Lay the Groundwork for Faster Deployment of Private Mobile Networks

5G Open Innovation Lab Teams with F5, GXC, and Spirent Communications to Lay the Groundwork for Faster Deployment of Private Mobile Networks

New collaboration delivers improved performance for private cellular networks in hard-to-reach locations

Today, 5G Open Innovation Lab (5G OI Lab) along with ecosystem partners F5, GXC and Spirent Communications announced a new collaboration to showcase a leading-edge enterprise Private Mobile Network (PMN) solution that not only delivers PMNs in hard-to-reach locations, but offers greater security, control, and resilience with improvements to operational costs.

As 5G infrastructure becomes more mainstream, enterprises and organizations are subsequently deploying more private networks and telco clouds into strategic locations to leverage newly available connectivity, lower latency, and agility. The consistent throughput and capacity on these PMNs bring the promise of 5G to revenue-driven use cases such as IoT and network slicing, while being mindful that security must expand accordingly beyond legacy policies and be thoroughly tested. Especially in edge use cases, one of the requirements most in demand is the need for local breakout to route traffic to as part of a Mobile Edge Compute (MEC) infrastructure or hosted within a data center.

F5, a hybrid and multi-cloud application services and security company, deployed carrier-grade BIG-IP Virtual Editions. These security functions were consolidated with an N6/SGi-LAN solution adding another layer of speed and security at the network level. Critical functions such as Firewall, DDoS, Secure DNS, CGNAT, TCP and Video Optimization with this consolidated N6 configuration are already running in high-volume Tier 1 providers.

GXC, a NaaS communications early-stage tech company which is part of the 5G OI Lab ecosystem, contributed their unique distributed mesh configuration for easier and faster deployment of a private network while providing full coverage and capacity of a cellular network.

This collaboration was validated using Spirent’s Landslide test and emulation platform. The multinational telecom testing company’s solution provided device and RAN emulation to create a diversity of traffic flows across multiple data networks through the 5G core which is monitored and managed by F5 behind the UPF. This delivers UE QoS, Network Slice Management, and offers multi-application monitoring at scale to validate the benefits of a packet core and N6 LAN solution working in tandem in a controlled production environment.

Finally, the entire solution was pressure-tested through technology made available through the 5G OI Lab and its enterprise and operator partners deployed with GXC’s ONYX Portal.

How the solution works:

-F5’s BIG-IP Virtual Editions will optimize these traffic flows between the 5GC and the content network helping to enable end-to-end visibility of user activity and security against unwarranted traffic ingress.

-Spirent’s Landslide AMF Nodal application will bring real-world traffic modelling into the 5G OI Lab to emulate 5G Mobile subscribers and 5G Access Nodes (gNBs) performing a realistic distribution of traffic flows across slices and DNNs towards emulated content servers supported by the core.

About GXC

GXC, previously known as GenXComm, is an Austin, Texas-based company that provides groundbreaking technology for enterprise 5G networks, based on a cellular mesh architecture. This private network platform provides high levels of resiliency, flexible deployments, strong coverage in hard-to-reach areas, and a powerful distributed application platform. The company was founded in 2016 to commercialize years of research and development in interference technology out of the University of Texas at Austin. Enabling full-duplex, high-speed communication, GXC’s powerful technology has the capacity to double the world’s available frequency spectrum. Follow us on LinkedIn and Twitter and contact us here for inquiries.

About Spirent

Spirent Communications plc. (LSE: SPT) is a leading global provider of automated test and assurance solutions for networks, cybersecurity, and positioning. The company provides innovative products, services and managed solutions that address the test, assurance, and automation challenges of a new generation of technologies, including 5G, cloud, autonomous vehicles and beyond. From the lab to the real world, Spirent helps companies deliver on their promise to their customers of a new generation of connected devices and technologies. For more information, please visit www.spirent.com and follow us on LinkedIn, Twitter and Facebook.

About 5G Open Innovation Lab

The 5G Open Innovation Lab is a new global innovation ecosystem that brings together multi-stage startups, enterprise and global technology platforms and investors to connect and collaborate on developing disruptive new enterprise technologies and solutions that capitalize on the power of edge computing connected to public and private 5G networks.

In just four years, the Lab has attracted a roster of world-class corporate and industry partners including Accenture, Amdocs, Avanade, Dell Technologies, Deloitte, Ericsson, F5, GAF (Standard Industries), Intel, Microsoft, Nokia, Palo Alto Networks, SK Telecom, Spirent, T-Mobile and VMware as well as 101 multi-stage enterprise startups who have collectively raised $1.641B of venture capital. Through 5G OI Lab’s unique model of open collaborative innovation, corporate partners work directly with ecosystem startups to accelerate commercialization through proof of concept, go-to-market, and other engagements and opportunities.

F5 and BIG-IP are trademarks, service marks, or tradenames of F5, Inc., in the U.S. and other countries. All other product and company names herein may be trademarks of their respective owners. The use of the words “partner,” “partnership,” or “joint” does not imply a legal partnership relationship between F5 and any other company.

Ellyn Winters-Robinson Ignition Communications (PR for 5G Open Innovation Lab) ellyn@ignition.ca 519-574-2196

View source version on businesswire.com: https://www.businesswire.com/news/home/20230531005119/en/