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F5 Reports Record Fourth Quarter and Fiscal Year 2000 Results

Fifth consecutive quarterly profit; 25 percent sequential revenue growth helps drive annual revenue up 290 percent

F5 Networks, Inc. (NASDAQ: FFIV), the leading provider of internet traffic and content management products, today announced record revenue for the fourth quarter and the fiscal year ended September 30, 2000. Strong sales of the company's core products and growing demand for services drove fourth quarter revenue to $36.6 million, up 25 percent from the prior quarter and 166 percent from the fourth quarter of 1999. After taxes and before non-recurring expenses, quarterly net income was $3.7 million ($0.16 per share on a diluted basis).

Reflecting strong sequential growth throughout the year, fiscal 2000 revenue of $108.6 million was nearly four times 1999 revenue of $27.8 million. After taxes and before non-recurring expenses taken in the fourth quarter, net income for the year was $16.0 million ($0.69 per share on a diluted basis).

John McAdam, who joined F5 Networks as president and chief executive officer in July, said the company's growth and profitability are indicators of a broad, expanding market for products and services that enable a wide variety of enterprises to optimize the flow of traffic and manage content efficiently on their networks. "While many companies offer competing products that represent a wide range of functions and performance characteristics, F5 has claimed the lead in delivering intelligent, high-performance controllers capable of making complex decisions about where to route individual service requests for optimal network performance. In addition, recent benchmarks have shown that our products can make those complex decisions three to four times faster than competing products.

"As the Internet continues to thread its way into every aspect of our lives, exponential growth in network traffic and the kinds of files and applications accessed on the Internet are compelling network managers to deploy intelligent and effective traffic and content management solutions to limit the need for more expensive servers and to keep their existing networks from bogging down. With our aggressive product roadmap and our knowledge of network infrastructure, we believe F5 is positioned to be the premier provider of products and services for this rapidly growing market. Our challenge in the coming year is to deliver superior technology at a price point that will enable us to dramatically expand our market share. The introduction of our EDGE-FX™ Cache Server, which began shipping in mid-September and generated just under a million dollars in sales during the fourth quarter, was a major step in that direction. During fiscal 2001, we will continue to broaden our market opportunity in traffic management by adding port density to our BIG-IP® product line"

McAdam said the company's aggressive pursuit of market share is calculated to accelerate revenue growth during fiscal 2001, but will likely not impact the rate of earnings growth as investments in channels and technology put pressure on operating margins. "Our target for the first quarter of fiscal 2001 is revenue in the range of $41 million to $43 million with earnings in the range of $0.16 to $0.18 per diluted share. For fiscal 2001, our target is to achieve $200 million in revenue with earnings in the range of $0.85 to $0.90 per diluted share."

F5 also announced today that its board of directors has authorized a repurchase of up to 1,000,000 shares of the company's common stock, depending on market conditions.

McAdam and chief financial officer Robert Chamberlain will hold a conference call today, October 26, at 4:30 p.m. EDT. The dial in number for the call is (888) 368-4281. A telephone replay of the conference call will be available for 24 hours at (800) 642-1687. The conference call ID number is 584424 for the live call and the replay. The webcast of the call will be available at for two weeks.

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 organizations, 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 targeted revenue and earnings for the first quarter of fiscal 2001, targeted revenue for fiscal 2001, expansion of the internet traffic and content management market, F5's product roadmap and positioning in the market for internet traffic and content management solutions, F5's intent to continue to invest heavily in building its sales channels, F5's broadening of its market opportunity by adding port-density to its BIG-IP® product line, 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: F5's ability to compete effectively in the internet traffic and content management market; possible decreases in the average selling prices of F5's products in response to competitive pricing pressures, increased sales discounts, the introduction of 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 expand in the international markets; unpredictability of F5'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.