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F5 Networks Announces Record Second Quarter Results

F5 Networks, Inc. (NASDAQ: FFIV), the leading provider of integrated content delivery and traffic management solutions that improve the availability and scalability of Internet infrastructure, today announced results for the second quarter of fiscal 2000, which ended March 31, 2000.

Second Quarter Highlights:

  • Year-to-date net revenue increased 562 percent over the prior year and 23 percent sequentially to $23.6 million for the second quarter.
  • Net income was $4.1 million, or $0.18 per diluted share, compared to a net loss of $3.0 million or $(0.45) per diluted share for the second quarter of 1999.
  • Cash flow from operations totaled $2.8 million in the quarter, $5.8 million year-to-date
  • Announced an OEM agreement with Dell Computer to sell F5's products

"Our second quarter results demonstrate that we are on track for a solid performance in 2000," said Jeffrey S. Hussey, chairman, president and chief executive officer of F5 Networks. "We continue to execute on our strategies of investing in technology to anticipate our customers' needs and to grow our customer base, expanding sales and marketing efforts globally, building on and enhancing our relationships with strategic partners, leveraging the F5 brand and evaluating strategic acquisitions."

Net revenue for the second quarter of fiscal 2000 totaled $23.6 million, up 527 percent from $3.8 million in the prior year second quarter, and up 23 percent from the first quarter. Net revenue growth was driven by increased sales of all of the company's products, to both new and existing customers, and by a significant increase in service revenue and sales internationally.

Net income was $4.1 million, or $.18 per diluted share, in the second quarter of fiscal 2000 compared to a loss of $(3.0) million, or $(0.45) per share, in the prior-year second quarter. For the fiscal year to date, net revenue totaled $42.8 million, up 562 percent from the first six months of fiscal 1999. Net income for the first six months of fiscal 2000 totaled $8.4 million, or $0.36 per diluted share, compared to $(5.2) million, or $(0.82) per diluted share in the prior-year same period.

"Sales growth momentum and strong margins have enabled F5 to sustain profitability despite a continuing ramp-up in infrastructure to support our growth," added Mr. Hussey. "We expect that F5 will deliver sequential quarterly sales growth in the low to mid teens, and continue to post profits and positive cash flow in the second half of fiscal 2000."

On April 5, 2000, F5 announced a major OEM agreement with server manufacturer Dell Computer to bring to market F5 Networks' suite of products, commencing with the Company's BIG-IP software, on Dell's PowerApp appliance server. This appliance server product will be targeted for service providers, dot-coms, brick-to-click businesses and other organizations building out their Internet infrastructure.

During the second quarter, F5 announced that Carlton G. Amdahl was named Chief Technical Officer. Mr. Amdahl brings more than 20 years of experience as a senior executive and consultant in the computer and networking industry and will be instrumental in driving F5's technology to the next level.

About F5 Networks

F5 Networks is the leading provider of integrated Internet content delivery infrastructure and traffic management solutions. The company's integrated suite of high-performance products automatically and intelligently manage Internet traffic and content to improve the availability and performance of mission-critical Internet servers and applications. F5 Networks helps companies avoid the risk of being burdened with ill-performing networks that do not meet end user expectations, while enabling network administrators to boost the control and predictability of their infrastructure. F5 Networks' products are designed to provide a new level of fault tolerance by shielding users from system failure; optimizing response times to user requests and data flow; and cost-effectively managing an organization's Internet infrastructure. The company is headquartered in Seattle, Washington, and has offices in Atlanta, Boston, Chicago, Dallas, Columbus, Los Angeles, New York, San Francisco, Toronto, Washington, D.C., Australia, Hong Kong, Japan, The Netherlands, Singapore, Sweden and the United Kingdom. F5 Networks is located on the web at www.f5.com.

Statements in this press release concerning future activities under F5's strategic alliance agreements, continued development of F5's product portfolio and future enhancements to F5's products, continued growth in the market for Internet traffic and content management solutions, and other statements which 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 form any future results, performance or achievements expressed or implied by such forward-looking statements. Such factors include, among others: the company's limited operating history; variability of the company's operating results; market acceptance of the company's Internet traffic operating results; market acceptance of the company's Internet traffic and content management products; the company's timely development of new products and features; the company's ability to manage its growth; the company's ability to maintain and develop distribution relationships; competition in the Internet traffic and content market; the company's ability to expand in the international markets; unpredictability of the company's sales cycle and other risk factors referenced in the company's public filings with the Securities and Exchange Commission (SEC). In particular, see the section entitled "Risk Factors" in the company's annual report on Form 10-K filed with the SEC on December 28, 1999.

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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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