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F5 Networks Announces Record Third Quarter Results

Company reports fourth consecutive quarter of profitability and 24% revenue increase over Q2 2000

F5 Networks, Inc. (NASDAQ: FFIV), the leading provider of high-performance, integrated content delivery and traffic management solutions that improve the availability and scalability of Internet infrastructure, today announced results for the third quarter of fiscal 2000, which ended June 30, 2000.

Third Quarter Highlights:

  • Third quarter net revenue increased 284 percent over the prior year and 24 percent sequentially over the second quarter to $29.2 million.
  • Income before tax was $5.2 million, or $0.22 per diluted share compared to $4.1 million or $0.18 per diluted share in the second quarter.
  • Net income was $3.8 million, or $0.17 per diluted share, compared to a net loss of $1.5 million or $(0.15) per diluted share for the third quarter of 1999.
  • F5 products continued to receive prestigious industry awards and recognition worldwide.
    • 3-DNS was awarded best distributed load balancing product by Network Computing at Networld + Interop Las Vegas.
    • BIG-IP received widespread honors, including:
      - Best new product for communication hardware at FOSE 2000.
      - Outstanding infrastructure product at Internet World Sydney 2000.
    • A combined solution of all F5 products was awarded Best of ShowNet at Japan Interop 2000.
  • F5 delivered new products to address the needs of small to large businesses: BIG-IP Content Switch, special purpose products (e.g. Akamaizer, BIG-IP Fireguard, SSL Accelerator, etc.)
  • F5 signed OEM license agreement with iMimic Networking, Inc.
  • Continued strong momentum in reseller program, establishing 21 partners in Q3, including a division of British Telecommunications.

"Our third quarter results are consistent with our strategy to provide end-to-end, scalable Internet Traffic and Content Management solutions that support customers' short and long-term needs on a global scale," said Jeffrey S. Hussey, chairman of F5 Networks. "We continue to deliver significant revenue and earnings growth while we continue to invest in product and resource development to support our growth. The addition of John McAdam, F5's new president and chief executive officer, further strengthens our ability to lead in the rapidly growing Internet Traffic and Content Management market."

Net revenue for the third quarter of fiscal 2000 totaled $29.2 million, up 284 percent from $7.6 million in the prior year third quarter, and up 24 percent sequentially from the second quarter. For the fiscal year to date, net revenue totaled $72.0 million, up 412 percent from the first nine months of fiscal 1999. 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 sales internationally.

The Fiscal 2000 third quarter was F5's fourth consecutive quarter of profitability. As a result, F5 began recording income taxes in the current quarter. Net income was $3.8 million, or $.17 per diluted share, in the third quarter of fiscal 2000 compared to a loss of $(1.5) million, or $(0.15) per share, in the prior-year third quarter. Net income for the first nine months of fiscal 2000 totaled $12.2 million, or $0.53 per diluted share, compared to a net loss of $(6.7) million, or $(0.88) per diluted share in the prior-year same period.

About F5 Networks

F5 Networks is the leader in Internet Traffic and Content Management (iTCM). Our award winning integrated suite of high-performance best of breed products provide an end-to-end solution for automatically and intelligently managing Internet content and traffic - globally. Our products remove bandwidth congestion and optimize the availability and speed of mission-critical Internet servers and applications, including web publishing, content delivery, e-commerce, caching, firewalls and more. 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 better control and predict the performance of their e-Business infrastructure. Our products 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 in Atlanta, Boston, Chicago, Dallas, Los Angeles, New York, Phoenix, San Diego, San Francisco, Toronto, Washington, D.C., Australia, China, Hong Kong, Japan, Korea, Germany, Singapore, Sweden, India 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 from 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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