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F5 Networks Reports Revenue in Line with Management Guidance, Pro Forma Results Ahead of Target

F5 Networks, Inc. (NASDAQ: FFIV) today announced that revenue for its second fiscal quarter, ended March 31, 2001, was $27.1 million, up 10 percent sequentially from the first quarter of 2001 and up 15 percent from the second quarter of 2000. On a pro forma basis, the company reported a loss of $4.1 million ($0.19 per share) before taxes and one-time charges, $0.03 per share better than the target the company announced in its January 30 release of first quarter financial results. Including taxes and one-time charges for excess inventory and conversion of the Edge-FX™ cache platform, the company reported a net loss of $8.7 million ($0.40 per share).

F5 president and chief executive officer John McAdam said the company's top-line performance reflected the success of its increased focus on enterprise customers. "As we announced last quarter, we have realigned our development, marketing and sales efforts to deliver best-in-class solutions for large enterprises.

"Individually, our products continue to distinguish themselves in independent, third-party evaluations," McAdam said. "During the second quarter, for example, F5's 3-DNS® controller was named 'Best-of-Breed' by InternetWeek magazine and selected as the 'Best Internet Product of the Year' by the Washington Software Alliance. In addition, our recently introduced iControlTM Architecture, which allows applications to communicate with our entire family of traffic and content management products, is being enthusiastically received by industry analysts and customers alike and recently won 'Best-of-Show' for infrastructure at InternetWorld Spring 2001.

"Combined with our stepped-up marketing efforts, the competitive strength of our offerings has raised awareness of F5 among large corporations and enabled us to win significant deals in a number of major new accounts, including BP/Amoco, Bertelsmann AG, DST, Deloitte Touche, Eli Lilly, Publix Supermarkets, SITA, Target, the Royal Bank of Canada and the Canadian House of Commons. We also continued to expand our business with existing enterprise customers, including Bank of America, Charles Schwab, Citigroup, Fidelity, Microsoft and Oracle."

Along with the introduction of iControl and the achievement of several other product development milestones during the quarter, the company has strengthened its Edge-FX cache offering through an agreement, announced earlier today, to license Inktomi's cache software. "The Inktomi software enables us to offer a robust, fully functional cache product that is completely integrated with our other products under the iControl umbrella," McAdam said. "Tight integration of cache with load balancing and other traffic and content management products is something enterprise customers increasingly want and none of our competitors currently offers."

With the slowdown in the economy appearing to continue unabated, McAdam said he remained cautious but confident about the company's near-term outlook. "Our OEM relationship with Dell continues to strengthen and we expect to add at least one new OEM partner within the next two quarters. Meanwhile, our efforts to expand our sales into the enterprise are gaining momentum. As a result, I'm increasingly confident that we can hit our current financial targets for the June quarter, and that the company can return to solid profitability in the September quarter."

McAdam said the company is aiming to achieve revenue of $28 - 30 million in its third fiscal quarter, ending June 30, with a net loss ranging from $0.05 to breakeven.

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 provides 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 throughout North America, Europe and Asia Pacific. F5 Networks is located on the web at

Forward Looking Statements

Statements in this press release concerning F5's near-term outlook, the continuing strength of the Dell relationship, the addition a new OEM partner, the expansion of our sales force into the enterprise, F5's return to profitability, the revenue and profitability forecasts for the quarter ending June 20, 2001 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: F5's ability to compete effectively in the internet traffic and content management market; the introduction and acceptance of the iControl API, the new edge-FX cache and other new products by F5 or its competitors or other factors; F5's ability to sustain or develop distribution relationships; F5's ability to timely develop new products and features; F5's ability to attract, train and retain qualified marketing and sales and professional services and customer support personnel; F5's ability to manage its growth, F5's ability to expand in the enterprise market and 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, 2000, and other public filings with the Securities and Exchange Commission.

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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.