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F5 Networks Announces Fiscal First Quarter Profit

F5 Networks, Inc. (NASDAQ: FFIV) F5 Networks today announced net income of $520,000 ($0.02 per share) on revenue of $27.1 million for the first quarter of fiscal 2003. In the first quarter of fiscal 2002 the company reported a net loss of $2.1 million ($0.08 per share) on revenue of $27.0 million.

F5 president and chief executive officer John McAdam said the company's return to profitability was a result of continuing improvements in its business model, reflected in several key metrics including improved gross margin and lower operating expenses. In addition, he said, the company generated positive cash flow from operations for the seventh consecutive quarter, increasing cash and investments to $85.2 million.

"During the first quarter, the products we announced in late October got off to a strong start and were well-accepted by our customer base. These new products include the BIG-IP® 5100 and BIG-IP 2400 application switches, featuring faster processors and improved SSL performance, and the BIG-IP 1000, a new line of entry-level application switches. The BIG-IP 2400 also features our new Packet Velocity ASIC which leads the industry in Layer 4 performance. All three products began shipping in early December with version 4.5 of our BIG-IP Application Traffic Management software incorporating Universal Inspection Engine (UIE), which can identify any value in a TCP/IP header or payload, and iRules, which can direct, persist, or filter traffic based on values identified by UIE," McAdam said.

"In conjunction with continued successful execution of our iControl™ strategy, we believe the superior performance and functionality of our new products will be primary drivers of our revenue growth over the next three quarters. In the first quarter, more than 20 percent of product sales were iControl-related. On January 15, we announced our new Solution Center, designed to demonstrate online how customers can obtain increased ROI from existing applications by using F5 products. Accessible through the F5 Web site, the Solution Center's Test Lab allows customers, partners and prospects to conduct application integration and interoperability testing with third-party applications, then try out various interoperability and integration scenarios using our products and leading infrastructure software, such as BEA WebLogic, Microsoft .NET, Oracle9i Application Server, and Siebel 7, as well as other applications such as Intrusion Detection Systems," McAdam said.

Underpinned by the strength of its current product line and the unique capabilities of its new Solution Center, McAdam added, F5 is well-positioned, both financially and from a market perspective, to take advantage of opportunities in the emerging markets for blade servers, Web services and wireless Internet applications, which could begin to impact the company's results in the second half of fiscal 2003.

For the second quarter of fiscal 2003, he said the company has set a target of $27.0 million to $28.5 million in revenue with net income of $0.02 to $0.04 per share.

About F5 Networks

F5 Networks is the industry leader in Application Traffic Management, enabling enterprises and service providers to optimize any mission-critical application or web service, providing secure and predictable delivery of application traffic in an unpredictable environment. Through F5's unique open iControl™ API, third party applications and network devices can take an active role in shaping network traffic, delivering application aware networks that allow customers to direct traffic based on their exact business requirements. Our solutions optimize the availability, security and speed of mission-critical servers and applications, including enterprise applications, web services, mobile IP applications, web publishing, content delivery, e-commerce, caching, firewalls and more. F5's solutions are widely deployed in large enterprises, the top service providers, financial institutions, government agencies, healthcare, and portals throughout the world. The company is headquartered in Seattle, Washington, and has offices throughout North America, Europe, Japan and Asia Pacific. F5 Networks is located on the web at www.f5.com.

Forward Looking Statements

Statements in this press release concerning drivers of revenue growth over the next three quarters, positioning relative to the emerging markets for blade servers, Web services and wireless Internet applications, whether this positioning will impact results, the target revenue and net income for the second quarter of fiscal 2003 and other statements that are not historical facts are forward-looking statements. Such forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company, or industry results, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Such factors include, among others: the acceptance of the new BIG-IP application traffic switch products and the company's iControl architecture; competitive pricing pressures; increased sales discounts; the timely development and introduction of additional new products and features by F5 or its competitors or other factors; F5's ability to sustain or develop distribution relationships; F5's ability to attract, train and retain qualified marketing, sales, professional services and customer support personnel; F5's ability to expand in the international markets and the unpredictability of F5's sales cycle. More information about potential risk factors that could affect F5's business and financial results is included in the Company's annual report on Form 10K for the fiscal year ended September 30, 2002, and other public filings with the Securities and Exchange Commission.

About F5

F5 (NASDAQ: FFIV) makes apps go faster, smarter, and safer for the world’s largest businesses, service providers, governments, and consumer brands. F5 delivers cloud and security solutions that enable organizations to embrace the application infrastructure they choose without sacrificing speed and control. For more information, go to f5.com. You can also follow @f5networks on Twitter or visit us on LinkedIn and Facebook for more information about F5, its partners, and technologies.

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This press release may contain forward looking statements relating to future events or future financial performance that involve risks and uncertainties. Such statements can be identified by terminology such as "may," "will," "should," "expects," "plans," "anticipates," "believes," "estimates," "predicts," "potential," or "continue," or the negative of such terms or comparable terms. These statements are only predictions and actual results could differ materially from those anticipated in these statements based upon a number of factors including those identified in the company's filings with the SEC.

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