Slide 1: Q2FY22 Results
Q2FY22 Results PERIOD ENDING March 31, 2022 Published April 26, 2022
Slide 2: Forward-looking statements
Forward-looking statements This presentation contains forward-looking statements including, among other things, statements regarding the continuing strength and momentum of F5’s business, future financial performance including revenue, revenue growth and earnings growth; demand for application secur
Slide 3: GAAP to non-GAAP presentation
GAAP to non-GAAP presentation In addition to financial information prepared in accordance with U.S. GAAP, this presentation also contains adjusted financial measures that we believe provide investors and management with supplemental information relating to operating performance and trends that facil
Slide 4: Introduction & Business Overview
Introduction & Business Overview François Locoh-Donou, CEO & President 4 © 2022 F5
Slide 5: GAAP results
GAAP results Q221 Q222 Revenue $645.3M $634.2M Gross margin 80.1% 80.1% Operating margin 8.3% 11.8% Net income $43.2M $56.2M EPS $0.70 $0.92 5 © 2022 F5
Slide 6: Strong software growth and supply chain-related systems declines
Strong software growth and supply chain-related systems declines Q2FY22 Results -4% +0% Product Global Services Growth Growth +40% -27% Software Systems Growth Growth 6 © 2022 F5
Slide 7: Semiconductor component shortages continue to restrict our ability to meet customers' strong demand for systems
Semiconductor component shortages continue to restrict our ability to meet customers’ strong demand for systems Q2’s standard electronic component Semiconductor shortages persist challenge successfully resolved • We designed in and requalified an alternative source, • We are successfully shifting iS
Slide 8: F5 is enabling customers to secure and manage increasingly complex application estates
F5 is enabling customers to secure and manage increasingly complex application estates CUSTOMER DEMAND TRENDS Hybrid architectures are Customers are operating Customers are operating here to stay and apps are both traditional and in multiple clouds increasingly containerized modern architectures and
Slide 9: Q2FY22 Results
Q2FY22 Results Frank Pelzer, CFO & EVP 9 © 2022 F5
Slide 10: Q2FY22 revenue mix
Q2FY22 revenue mix $700 $645 $634 -2% $600 Total revenue $108 $152 growth $500 $309M $298M Revenue $ in millions product $201 product $400 revenue revenue $146 -4% +0% Product Global Services $300 revenue revenue growth growth $200 $336 $337 $100 +40% -27% $0 Software Systems revenue revenue Q2FY21
Slide 11: Subscriptions will represent a growing contributor to our software revenue
Subscriptions will represent a growing contributor to our software revenue $108M 21% $152M 25% total total software software revenue revenue 79% 75% Subscription Perpetual Q2FY21 Q2FY22 SUBSCRIPTION REVENUE INCLUDES TERM SUBSCRIPTIONS, BOTH MULTI-YEAR AND ANNUAL, AS WELL AS SAAS-BASED REVENUE. 11 ©
Slide 12: Revenue from recurring sources continues to grow
Revenue from recurring sources continues to grow 36% 31% 64% 69% Recurring Non-recurring Q2FY21 Q2FY22 RECURRING REVENUE INCLUDES SUBSCRIPTIONS, SAAS-BASEDUTILITY-BASED REVENUE AND THE MAINTENANCE PORTION OF OUR GLOBAL SERVICES REVENUE.. 12 © 2022 F5
Slide 13: Q2FY22 revenue contribution by geography
Q2FY22 revenue contribution by geography Regional revenue growth 20% 19% $127M $119M -6% Revenue growth APAC 25% contribution by geo 27% $172M $156M % of revenue -9% Revenue growth EMEA 54% 57% $346M $359M +4% Revenue growth AMER Q2FY21 Q2FY22 Americas EMEA APAC TOTALS MAY NOT ADD TO 100% DUE TO ROU
Slide 14: Q2FY22 customer verticals as a % of product bookings
Q2FY22 customer verticals as a % of product bookings 16% 15% % of total product bookings 16% 20% 68% 65% Q2FY21 Q2FY22 Enterprise Government Service Provider TOTALS MAY NOT ADD TO 100% DUE TO ROUNDING. 14 © 2022 F5
Slide 15: Q2FY22 non-GAAP gross and operating margin
Q2FY22 non-GAAP gross and operating margin Non-GAAP Gross Margin Non-GAAP Operating Margin 100.0% 40.0% 83.4% 82.9% 80.0% 30.3% % of non-GAAP revenue % of non-GAAP revenue 30.0% 26.5% 60.0% 20.0% 40.0% 10.0% 20.0% 0.0% 0.0% Q2FY21 Q2FY22 Q2FY21 Q2FY22 SEE APPENDIX FOR GAAP TO NON-GAAP RECONCILIATION
Slide 16: Q2FY22 non-GAAP net income and EPS
Q2FY22 non-GAAP net income and EPS Reflects 21.3% Q2FY22 non-GAAP effective tax rate Non-GAAP Net Income Non-GAAP EPS $200.0 $3.00 $2.50 $155.1 $150.0 $2.13 $130.8 $2.00 $ in millions $100.0 $1.00 $50.0 $0.0 $0.00 Q2FY21 Q2FY22 Q2FY21 Q2FY22 SEE APPENDIX FOR GAAP TO NON-GAAP RECONCILIATION 16 © 2022
Slide 17: Q2FY22 cash flow from operations
Q2FY22 cash flow from operations $250 $197 $200 $182 $150 $ in millions $128 $127 $100 $90 $50 $0 Q2FY21 Q3FY21 Q4FY21 Q1FY22 Q2FY22 17 © 2022 F5
Slide 18: Q2FY22 cash and investments
Q2FY22 cash and investments $1,043 $133 $936 $922 $863 $77 $35 $95 $330 $301 $662 $347 $184 $ in millions $19 $111 $584 $581 $587 $532 $512 Q2FY21 Q3FY21 Q4FY21 Q1FY22 Q2FY22 Cash and cash equivalents Short-term investments Long-term investments 18 © 2022 F5
Slide 19: Taking a balanced approach to capital deployment
Taking a balanced approach to capital deployment We are committed to returning Share Repurchases ($ in millions) $700 capital to shareholders • YTD FY22 we have repurchased $600 $600 $250M in shares $500 $500 • During FY22, we are committed to $500 $500M in share repurchases $400 • Beginning in FY23
Slide 20: Business Outlook
Business Outlook 20 © 2022 F5
Slide 21: Our FY22 outlook
Our FY22 outlook FY22 Guidance Near top end Software growth of 35% to 40% growth target Services growth 1% to 1.5% Total revenue growth 1.5% to 4% Non-GAAP operating margin 27% to 28% Non-GAAP effective tax rate 20% to 21% 21 © 2022 F5
Slide 22: Our Q3FY22 outlook
Our Q3FY22 outlook Q3FY22 Guidance Total revenue $660 to $680 Non-GAAP gross margin ~82% Non-GAAP operating expenses $368 to $380M Share-based compensation $63 to $65M Non-GAAP EPS $2.18 to $2.30 22 © 2022 F5
Slide 23: Q&A
Q&A 23 © 2022 F5
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Slide 25: Appendix
Appendix 25 © 2022 F5
Slide 26: GAAP to non-GAAP reconciliation
GAAP to non-GAAP reconciliation Gross Profit Reconciliation ($ in thousands) Q2FY22 Q2FY21 GAAP gross profit $507,865 $516,702 Stock-based compensation $7,341 $7,352 Amortization of purchased intangible assets $9,959 $8,799 Facility-exit costs $611 $984 Acquisition-related charges $108 $32 Impairmen
Slide 27: GAAP to non-GAAP reconciliation (continued)
GAAP to non-GAAP reconciliation (continued) Net Income Reconciliation ($ in thousands except per share data) Q2FY22 Q2FY21 GAAP net income $56,236 $43,241 Total adjustments related to revenue $0 $0 Total adjustments to gross profit $18,019 $21,555 Total adjustments to operating expenses $75,444 $120
Slide 28: GAAP to non-GAAP reconciliation (continued)
GAAP to non-GAAP reconciliation (continued) The non-GAAP adjustments, and F5's basis for excluding them from non-GAAP financial measures, are outlined below: Acquisition-related write-downs of assumed deferred revenue. Included in its GAAP financial statements, F5 records acquisition-related write-d
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