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F5 Networks Hits Estimates, But GAAP Results Lag Last Year's

By Seth Jayson - Updated Apr 10, 2017 at 12:42PM

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Just the facts, Fool.

F5 Networks (Nasdaq: FFIV) reported earnings on April 24. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended March 31 (Q2), F5 Networks met expectations on revenues and met expectations on earnings per share.

Compared to the prior-year quarter, revenue expanded. Non-GAAP earnings per share dropped. GAAP earnings per share dropped.

Margins dropped across the board.

Revenue details
F5 Networks reported revenue of $350.2 million. The 31 analysts polled by S&P Capital IQ anticipated revenue of $350.2 million on the same basis. GAAP reported sales were the same as the prior-year quarter's.

Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.

EPS details
EPS came in at $1.07. The 32 earnings estimates compiled by S&P Capital IQ anticipated $1.06 per share. Non-GAAP EPS of $1.07 for Q2 were 0.9% lower than the prior-year quarter's $1.08 per share. GAAP EPS of $0.80 for Q2 were 7.0% lower than the prior-year quarter's $0.86 per share.

Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.

Margin details
For the quarter, gross margin was 82.8%, 20 basis points worse than the prior-year quarter. Operating margin was 26.4%, 440 basis points worse than the prior-year quarter. Net margin was 18.1%, 210 basis points worse than the prior-year quarter. (Margins calculated in GAAP terms.)

Looking ahead
Next quarter's average estimate for revenue is $366.2 million. On the bottom line, the average EPS estimate is $1.11.

Next year's average estimate for revenue is $1.47 billion. The average EPS estimate is $4.51.

Investor sentiment
The stock has a three-star rating (out of five) at Motley Fool CAPS, with 692 members out of 752 rating the stock outperform, and 60 members rating it underperform. Among 188 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 173 give F5 Networks a green thumbs-up, and 15 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 $112.76.

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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. The Motley Fool recommends F5 Networks. The Motley Fool owns shares of F5 Networks. 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.

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