Slide 1: Q3FY22 Results
Q3FY22 Results PERIOD ENDING June 30, 2022 Published July 25, 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 Q321 Q322 Revenue $651.5M $674.5M Gross margin 81.4% 80.6% Operating margin 14.8% 15.9% Net income $89.6M $83.0M EPS $1.46 $1.37 5 © 2022 F5
Slide 6: Continued strong software growth and supply chain-related systems declines
Continued strong software growth and supply chain-related systems declines Q3FY22 Results +5% +2% Product Global Services Growth Growth +38% -18% Software Systems Growth Growth 6 © 2022 F5
Slide 7: Strong Q3 demand from customers adding, scaling and securing their applications
Strong Q3 demand from customers adding, scaling and securing their applications Security Hybrid SaaS Service Providers Customers are Customers are turning Customers are using Customers are using leveraging both F5’s to F5 to unite their F5 Distributed Cloud F5 to scale and software and systems tradi
Slide 8: Q3FY22 Results
Q3FY22 Results Frank Pelzer, CFO & EVP 8 © 2022 F5
Slide 9: Q3FY22 revenue mix
Q3FY22 revenue mix $700 $652 $674 +4% $600 Total revenue $129 $179 growth $326M $310M product $500 product revenue Revenue $ in millions revenue $180 +5% +2% $148 $400 Product Global Services $300 revenue revenue growth growth $200 $342 $348 $100 +38% -18% $0 Software Systems revenue revenue Q3FY21
Slide 10: Subscriptions are a growing contributor to our software revenue
Subscriptions are a growing contributor to our software revenue 22% 18% $129M $179M total total software software revenue revenue 78% 82% Subscription Perpetual Q3FY21 Q3FY22 SUBSCRIPTION REVENUE INCLUDES TERM SUBSCRIPTIONS, BOTH MULTI-YEAR AND ANNUAL, AS WELL AS SAAS-BASED REVENUE. 10 © 2022 F5
Slide 11: Revenue from recurring sources continues to grow
Revenue from recurring sources continues to grow 34% 28% 66% 72% Recurring Non-recurring Q3FY21 Q3FY22 RECURRING REVENUE INCLUDES SUBSCRIPTIONS, SAAS-BASED AND UTILITY-BASED REVENUE AND THE MAINTENANCE PORTION OF OUR GLOBAL SERVICES REVENUE.. 11 © 2022 F5
Slide 12: Q3FY22 revenue contribution by geography
Q3FY22 revenue contribution by geography Regional revenue growth 18% 19% $114M $131M +15% Revenue growth 26% APAC 23% contribution by geo $168M $156M % of revenue -7% Revenue growth EMEA 57% 57% $387M $369M +5% Revenue growth AMER Q3FY21 Q3FY22 Americas EMEA APAC TOTALS MAY NOT ADD TO 100% DUE TO RO
Slide 13: Q3FY22 customer verticals as a % of product bookings
Q3FY22 customer verticals as a % of product bookings 15% 18% 17% 12% % of total product bookings 69% 70% Q3FY21 Q3FY22 Enterprise Government Service Provider TOTALS MAY NOT ADD TO 100% DUE TO ROUNDING. 13 © 2022 F5
Slide 14: Q3FY22 non-GAAP gross and operating margin
Q3FY22 non-GAAP gross and operating margin Non-GAAP Gross Margin Non-GAAP Operating Margin 100.0% 40.0% 84.1% 83.2% 80.0% 30.5% 28.8% % of non-GAAP revenue % of non-GAAP revenue 30.0% 60.0% 20.0% 40.0% 10.0% 20.0% 0.0% 0.0% Q3FY21 Q3FY22 Q3FY21 Q3FY22 SEE APPENDIX FOR GAAP TO NON-GAAP RECONCILIATION
Slide 15: Q3FY22 non-GAAP net income and EPS
Q3FY22 non-GAAP net income and EPS Reflects 17.4% Q3FY22 non-GAAP effective tax rate Non-GAAP Net Income Non-GAAP EPS $200.0 $3.00 $2.76 $169.1 $2.57 $155.1 $150.0 $2.00 $ in millions $100.0 $1.00 $50.0 $0.0 $0.00 Q3FY21 Q3FY22 Q3FY21 Q3FY22 SEE APPENDIX FOR GAAP TO NON-GAAP RECONCILIATION 15 © 2022
Slide 16: Q3FY22 cash flow from operations
Q3FY22 cash flow from operations $250 • Q3’s cash flow from operations is net of more than $30 million of $197 $200 payments to partners related to $182 securing component inventory to support future hardware builds and $150 expedite fees. $ in millions $127 • Cash flow is also impacted by strong mu
Slide 17: Q3FY22 cash and investments
Q3FY22 cash and investments $1,043 $133 $936 $922 $863 $77 $35 $95 $757 $330 $301 $19 $184 $347 $ in millions $196 $584 $581 $587 $542 $512 Q3FY21 Q4FY21 Q1FY22 Q2FY22 Q3FY22 Cash and cash equivalents Short-term investments Long-term investments 17 © 2022 F5
Slide 18: Board authorized an additional $1B for share repurchases
Board authorized an additional $1B for share repurchases We will continue to take a Share Repurchases ($ in millions) balanced approach to capital $700 deployment and are committed $600 to returning cash to $600 shareholders $500 $500 $500 • Today we announced our Board has authorized an additional
Slide 19: Business Outlook
Business Outlook 19 © 2022 F5
Slide 20: Our Q4FY22 outlook
Our Q4FY22 outlook Q4FY22 FY22 Guidance Guidance Total revenue $680 to $700 Global services revenue growth 1.5% to 2% Toward high end of 35% Non-GAAP gross margin 82% to 83% Software revenue growth to 40% growth target Non-GAAP operating expenses $374 to $386M Non-GAAP operating margin ~29% Share-ba
Slide 21: Q&A
Q&A 21 © 2022 F5
Slide 22: Slide 22
Slide 23: Appendix
Appendix 23 © 2022 F5
Slide 24: GAAP to non-GAAP reconciliation
GAAP to non-GAAP reconciliation Gross Profit Reconciliation ($ in thousands) Q3FY22 Q3FY21 GAAP gross profit $543,755 $530,611 Stock-based compensation $7,203 $7,209 Amortization of purchased intangible assets $9,960 $9,507 Facility-exit costs $62 $770 Acquisition-related charges $96 $0 Total adjust
Slide 25: GAAP to non-GAAP reconciliation (continued)
GAAP to non-GAAP reconciliation (continued) Net Income Reconciliation ($ in thousands except per share data) Q3FY22 Q3FY21 GAAP net income $83,019 $89,604 Total adjustments to gross profit $17,321 $17,486 Total adjustments to operating expenses $69,229 $84,969 Exclude tax effect on above items ($14,
Slide 26: 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
Slide 27: Slide 27