The 10-second takeaway
For the quarter ended March 31 (Q2), F5 Networks beat slightly on revenue and met expectations on earnings per share.
Compared to the prior-year quarter, both revenue and GAAP earnings per share grew significantly.
Margins improved across the board.
F5 Networks reported revenue of $339.6 million. The 37 analysts polled by S&P Capital IQ wanted to see net sales of $335.4 million on the same basis. GAAP reported sales were 22% higher than the prior-year quarter's $277.6 million.
Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.
Non-GAAP EPS came in at $1.08. The 37 earnings estimates compiled by S&P Capital IQ averaged $1.07 per share on the same basis. GAAP EPS of $0.86 for Q2 were 26% higher than the prior-year quarter's $0.68 per share.
Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.
For the quarter, gross margin was 83.0%, 130 basis points better than the prior-year quarter. Operating margin was 30.8%, 80 basis points better than the prior-year quarter. Net margin was 20.2%, 20 basis points better than the prior-year quarter.
Next quarter's average estimate for revenue is $352.7 million. On the bottom line, the average EPS estimate is $1.14.
Next year's average estimate for revenue is $1.39 billion. The average EPS estimate is $4.49.
The stock has a three-star rating (out of five) at Motley Fool CAPS, with 661 members rating the stock outperform and 64 members rating it underperform. Among 228 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 212 give F5 Networks a green thumbs-up, and 16 give it a red thumbs-down.
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on F5 Networks is outperform, with an average price target of $131.28.
Internet software and services are being consumed in radically different ways, on increasingly mobile devices. Does F5 Networks fit in anymore? Check out the company that Motley Fool analysts expect to lead the pack in "The Next Trillion Dollar Revolution." Click here for instant access to this free report.
- Add F5 Networks to My Watchlist.
Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor of Motley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.