What happened
Shares of cloud security company F5 (FFIV -2.24%) tumbled on Wednesday. The tech stock fell as much as 14.8%. But as of 11:15 a.m. ET, the stock was down about 11%.
F5 stock's decline follows the company's earnings report on Tuesday afternoon. While the company's revenue and non-GAAP (adjusted) earnings per share for the period were both higher than analysts' consensus forecasts, the company's move to cut its fiscal 2022 revenue growth outlook likely spooked some investors.
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So what
F5's total fiscal first-quarter revenue increased 10% year over year to $687 million. Analysts, on average, were expecting revenue of $676 million. Adjusted earnings per share increased from $2.59 in the year-ago period to $2.89, beating a consensus analyst forecast for $2.78.
Looking ahead to the full year, management said it expects fiscal 2022 revenue to grow 4.5% to 8%, down from a previous forecast for 8% to 9% growth.
"While demand for its solutions remains robust, the Company expects that its ability to meet customers' continued strong demand for systems will be restricted by supply chain constraints for the remainder of fiscal year 2022," management explained on the company's earnings call.
Now what
But the silver lining is that the company is seeing high demand. Indeed, F5 CEO François Locoh-Donou said, "Demand drivers across our business are as strong as they have ever been."
Also worth noting, the company now expects its fiscal 2022 software revenue growth rate to be "near the top end of its previously provided 35% to 40% guidance range" so the weakness in F5's outlook is in its global services revenue, which is expected to grow just 1% to 2%.
