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F5 Networks Announces Fourth Quarter and Fiscal 2007 Results

Annual revenue tops half-billion dollar mark on 33 percent growth

F5 Networks, Inc. (NASDAQ: FFIV) today announced revenue of $145.6 million for the fourth quarter of fiscal 2007, up 10 percent from $132.4 million in the prior quarter and 30 percent from $111.7 million in the fourth quarter of fiscal 2006. Fourth quarter net income of $12.9 million ($0.15 per diluted share) included a one-time charge of $14 million ($0.16 per diluted share) stemming from the company's recent acquisition of Acopia Networks. Net income was $21.8 million ($0.26 per diluted share) in the third quarter of 2007 and $17.8 million ($0.21 per diluted share) in the fourth quarter a year ago. For fiscal 2007, revenue was $525.7 million, up 33 percent from $394.0 million in fiscal 2006. Net income for the year was $77.0 million ($0.90 per diluted share) compared to net income of $66.0 million ($0.80 per diluted share) in fiscal 2006.

F5 president and chief executive officer John McAdam said the company's fourth consecutive year of strong revenue growth reflects the continuing strength of F5's core business in the context of stepped-up organizational investments in fiscal 2007. "Excluding Acopia, our single biggest investment during the year, we added approximately 385 employees across the organization, the majority in sales and marketing, product development and service. We continue to believe that our investments in sales and marketing will have a significant impact on our revenue growth in the coming year and enable us to further expand our share of the growing application delivery networking market. Meanwhile, we are seeing returns on our investment in R&D in the delivery of market-expanding products like WANJet on TMOS, announced today, and in our progress toward the delivery of our next generation chassis platform code named Montreal by calendar year end. Equally important, our investments in our service business have enabled us to provide a growing array of services and to respond more quickly to customers' needs. As a result, we believe F5 is well-positioned to extend its leadership in application delivery networking and to become a leader in the emerging file virtualization market through our newly acquired data solutions business."

During the fourth quarter, F5 continued to strengthen its balance sheet. Deferred revenue, principally from service maintenance contracts, grew 21% to $100.5 million. Cash flow from operations was $47.7 million, and following the purchase of Acopia for $210 million, the company ended the year with $475 million in cash and investments.

For the first quarter of fiscal 2008, McAdam said the company's revenue target is $154 million to $156 million. Earnings for the first quarter are expected to be $0.20 to $0.21 per diluted share.

Analyst/Investor Meeting

On Friday, November 2, F5 Networks will hold a meeting for analysts and investors at the InterContinental The Barclay, 111 East 48th Street, New York, from 8:00am to noon. To register for this meeting, contact Carolyn Burkhardt (206.272.6590) or send email to analystmeeting@f5.com. The meeting will also be webcast live and an archived version will be available through Monday, November 5. The link for the live webcast and the archived version is http://www.f5.com/about/investor-relations/events-calendar.html.

About F5 Networks

F5 Networks is the global leader in Application Delivery Networking. F5 provides solutions that make applications secure, fast and available for everyone, helping organizations get the most out of their investment. By adding intelligence and manageability into the network to offload applications, F5 optimizes applications and allows them to work faster and consume fewer resources. F5's extensible architecture intelligently integrates application optimization, protects the application and the network, and delivers application reliability-all on one universal platform. Over 16,000 organizations and service providers worldwide trust F5 to keep their applications running. The company is headquartered in Seattle, Washington with offices worldwide. For more information, go to www.f5.com.

Forward Looking Statements

Statements in this press release concerning the continuing strength of F5's business, sequential growth, the target revenue and earnings range, demand for application delivery networking and file virtualization products and other statements that are not historical facts are forward-looking statements. Such forward-looking statements involve 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, but are not limited to: customer acceptance of our new traffic management, security, application delivery, WAN optimization and data solutions offerings; the timely development, introduction and acceptance of additional new products and features by F5 or its competitors; competitive pricing pressures; increased sales discounts; F5's ability to sustain, develop and effectively utilize distribution relationships; F5's ability to attract, train and retain qualified product development, marketing, sales, professional services and customer support personnel; F5's ability to expand in international markets; the unpredictability of F5's sales cycle; and and other risks and uncertainties described more fully in our documents filed with or furnished to the Securities and Exchange Commission. All forward-looking statements in this press release are based on information available as of the date hereof and qualified in their entirety by this cautionary statement. F5 assumes no obligation to revise or update these forward-looking statements.

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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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