Slide 1: Q4 & FY21 Results
Q4 & FY21 Results PERIOD ENDING SEPTEMBER 30, 2021 Published October 26, 2021
Slide 2: Forward-looking statements
Forward-looking statements This presentation and associated commentary 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; de
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
Introduction François Locoh-Donou, CEO & President 4 | ©2021 F5
Slide 5: GAAP results
GAAP results Q420 Q421 FY20 FY21 Revenue $614.8M $682.0M $2.35B $2.60B Gross margin 81.8% 81.1% 82.7% 81.1% Operating margin 16.0% 18.5% 16.7% 15.1% Net income $77.7M $110.7M $307.4M $331.2M EPS $1.26 $1.80 $5.01 $5.34 5 | ©2021 F5
Slide 6: Four consecutive quarters of double-digit revenue growth
We’ve delivered four consecutive quarters of double-digit revenue growth Total Revenue Growth (% year over year growth*) 11% 11% 10% 10% Q1FY21 Q2FY21 Q3FY21 Q4FY21 *FY20 AND Q1FY21 IS NON-GAAP REVENUE. SEE APPENDIX FOR GAAP TO NON-GAAP RECONCILIATION 6 | ©2021 F5
Slide 7: Escalating demand for applications is driving strong F5 demand
Escalating demand for applications and application growth is driving strong F5 demand Q4FY21 Growth Drivers* +21% +2% Product Global Services Growth Growth +35% +12% Software Systems Growth Growth *Q4FY20 REVENUE IS NON-GAAP. SEE APPENDIX FOR GAAP-TO-NON-GAAP RECONCILIATIONS. 7 | ©2021 F5
Slide 8: Q4 FY2021 Results
Q4 FY2021 Results Frank Pelzer, CFO & EVP 8 | ©2021 F5
Slide 9: Q4FY21 revenue mix
Q4FY21 revenue mix $800 $700 $682 +11% Total revenue $617 growth $600 $152 $113 Revenue $ in millions $280M $340M $500 product product revenue revenue $400 $168 $188 +21% +2% Product Global Services $300 revenue revenue growth growth $200 $336 $342 $100 +35% +12% $0 Software Systems Q4FY20* Q4FY21 r
Slide 10: Growing software revenue from subscriptions
Growing software revenue from subscriptions 24% 20% $113M $152M total total software software revenue revenue 76% 80% Q4FY20* Q4FY21 Subscription* Perpetual *SUBSCRIPTION REVENUE INCLUDES TERM SUBSCRIPTIONS, BOTH MULTI-YEAR AND ANNUAL, AS WELL AS SAAS-BASED REVENUE. Q4FY20 REVENUE IS NON-GAAP. SEE A
Slide 11: Expanding SaaS and managed services offerings and customer base
We are expanding our SaaS and managed services offerings & customer base 600+ SaaS and managed services 50% SaaS & managed services customer growth customers as of Q4FY21 year over year 11 | ©2021 F5
Slide 12: Growing non-GAAP revenue from recurring sources
Growing non-GAAP revenue from recurring sources 34% 33% 66% 67% Q4FY20 Q4FY21 Recurring Non-recurring SEE APPENDIX FOR GAAP-TO-NON-GAAP RECONCILIATIONS. 12 | ©2021 F5
Slide 13: Q4FY21 revenue contribution by geography
Q4FY21 revenue contribution by geography 18% 17% $118M +9% $108M Revenue growth APAC 24% 24% contribution by geo $148M $165M % of revenue +11% Revenue growth EMEA 58% 59% $360M $399M +11% Revenue growth AMER Q4FY20* Q4FY21 North America EMEA APAC *Q4FY20 REVENUE IS NON-GAAP. SEE APPENDIX FOR GAAP-TO
Slide 14: Q4FY21 customer verticals as a % of product bookings
Q4FY21 customer verticals as a % of product bookings 16% 18% % of total product bookings 70% 69% 15% 13% Q4FY20 Q4FY21 Service Providers Enterprise Government TOTALS MAY NOT ADD TO 100% DUE TO ROUNDING. 14 | ©2021 F5
Slide 15: Q4FY21 non-GAAP gross and operating margins
Q4FY21 non-GAAP gross and operating margins NON-GAAP GROSS MARGIN NON-GAAP OPERATING MARGIN 100.0% 40.0% 84.4% 83.7% 32.4% 80.0% 30.1% % of non-GAAP revenue 30.0% 60.0% 20.0% 40.0% 10.0% 20.0% 0.0% 0.0% Q4FY20 Q4FY21 Q4FY20 Q4FY21 SEE APPENDIX FOR GAAP-TO-NON-GAAP RECONCILIATIONS. 15 | ©2021 F5
Slide 16: Q4FY21 non-GAAP net income and EPS
Q4FY21 non-GAAP net income and EPS Q4FY21 non-GAAP effective NON-GAAP NET INCOME NON-GAAP EPS tax rate of 15.0% $200.0 $3.50 $185.2 $3.01 $3.00 Non-GAAP Net Income $149.6 Non-GAAP EPS in $ $150.0 $2.43 $2.50 $ in millions $2.00 $100.0 $1.50 $1.00 $50.0 $0.50 $0.0 $0.00 Q4FY20 Q4FY21 Q4FY20 Q4FY21 SE
Slide 17: Q4FY21 cash flow from operations
Q4FY21 cash flow from operations $250 $197 $200 $182 $175 $150 $137 $ in millions $128 $100 $50 $0 Q4FY20 Q1FY21 Q2FY21 Q3FY21 Q4FY21 17 | ©2021 F5
Slide 18: Q4FY21 cash and investments
Q4FY21 cash and investments $1,600 $1,462 $1,400 Q4FY21 cash balance $1,313 reflects completed $500M $1,200 Initiated $500M accelerated stock ASR & acquired $1,043 $ in millions Volterra for repurchase initiated in Q221 $1,000 $410 million $863 F5 holds ~$370M in debt $800 $662 associated with our S
Slide 19: FY2021 Results
FY2021 Results 19 | ©2021 F5
Slide 20: FY21 revenue mix
FY21 revenue mix $3,000 $2.60B +10% $2,500 $2.36B Total revenue $500 growth $365 Revenue $ in millions $2,000 $1.03B $1.25B product product revenue revenue $748 $1,500 $668 +21% +2% Product Global Services revenue revenue $1,000 growth growth $1,325 $1,356 $500 +37% +12% $0 Software Systems FY20* FY
Slide 21: Subscription-based consumption driving software growth
Subscription-based consumption driving software growth $600 $500 $109 49% Total software $400 revenue growth $ in millions (3-yr CAGR) $300 $107 $200 $391 $108 $100 $110 $132 $257 115% Subscription* software -1% Perpetual software $40 revenue growth revenue growth $- (3-yr CAGR) (3-yr CAGR) FY18 FY1
Slide 22: FY21 non-GAAP gross and operating margins
FY21 non-GAAP gross and operating margins NON-GAAP GROSS MARGIN NON-GAAP OPERATING MARGIN 100.0% 40.0% 84.9% 83.9% As a % of non-GAAP revenue 31.6% 80.0% 30.4% 30.0% 60.0% 20.0% 40.0% 10.0% 20.0% 0.0% 0.0% FY20 FY21 FY20 FY21 SEE APPENDIX FOR GAAP-TO-NON-GAAP RECONCILIATIONS. 22 | ©2021 F5
Slide 23: FY21 non-GAAP net income and EPS
FY21 non-GAAP net income and EPS Our FY21 non-GAAP effective NON-GAAP NET INCOME NON-GAAP EPS tax rate was 17.7% $800.0 $12.00 $10.81 $671.0 $10.00 $9.37 Non-GAAP Net Income $575.0 Non-GAAP EPS in $ $600.0 $ in millions $8.00 $400.0 $6.00 $4.00 $200.0 $2.00 $0.0 $0.00 FY20 FY21 FY20 FY21 SEE APPENDI
Slide 24: App security is a fast growing part of our revenue
App security is a fast growing part of our revenue Standalone App Security1 Mix (% of Non-GAAP Product Revenue) 28% 38%App security 14% revenue2 growth (3-yr CAGR) FY18 FY21 1 COMPRISES STANDALONE APP SECURITY OFFERINGS INCLUDING SYSTEMS, STANDALONE SOFTWARE LICENSES AND SECURITY SUBSCRIPTION SERVIC
Slide 25: App security is a large and growing percentage of total revenue
App security is a large and growing percentage of our total revenue $2.36B ~32% $2.60B ~35% total total revenue revenue ~68% ~65% FY20* FY21 App Security Other APP SECURITY INCLUDES STANDALONE PRODUCTS, SHAPE SECURITY, SILVERLINE, ATTACHED SECURITY, AND SECURITY SERVICES. FY20 REVENUE IS NON-GAAP. S
Slide 26: Business Outlook
Business Outlook 26 | ©2021 F5
Slide 27: Our Q1FY22 outlook
Our Q1FY22 outlook Q122 Guidance Total revenue $665 to $685M Non-GAAP gross margin ~84% Non-GAAP operating expense $342 to $354M Non-GAAP EPS / growth $2.71 to $2.83 Shares outstanding ~62M Share-based compensation $64 to $66M 27 | ©2021 F5
Slide 28: Our FY22 outlook
Our FY22 outlook FY22 Guidance Software growth 35% to 40% Systems growth Flat-to-slight growth Services growth Low single-digit growth Total revenue growth 8% to 9% Non-GAAP gross margin 83.5% to 84% Non-GAAP operating margin 32% to 33% “Rule of 40” (revenue growth + Achieve in FY22 non-GAAP operati
Slide 29: A balanced approach to capital deployment
We will take a balanced approach to capital deployment We are committed to returning capital SHARE REPURCHASES ($ IN MILLIONS) to shareholders $700 • In FY21 we completed a $500M accelerated share $600 repurchase initiated in Q2FY21 and completed in $600 Q3FY21 $500 $500 • During FY22, we are commit
Slide 30: Business Overview
Business Overview François Locoh-Donou, CEO & President 30 | ©2021 F5
Slide 31: F5 is well positioned to benefit from emerging secular trends
F5 is differentiated and well positioned to benefit from significant emerging secular trends SECULAR TRENDS On-premise applications continue to grow Traditional apps are generating more traffic and more revenue than ever IMPLICATIONS FOR F5 BIG-IP demand will continue to grow, in both software & sys
Slide 32: F5 is well positioned to benefit from emerging secular trends
F5 is differentiated and well positioned to benefit from significant emerging secular trends SECULAR TRENDS On-premise applications Most traditional apps are continue to grow not being refactored Traditional apps are generating They are either remaining on more traffic and more revenue premise or, t
Slide 33: F5 is well positioned to benefit from emerging secular trends
F5 is differentiated and well positioned to benefit from significant emerging secular trends SECULAR TRENDS On-premise applications Most traditional apps are Apps continue rapid pace continue to grow not being refactored of growth Traditional apps are generating They are either remaining on Cloud-na
Slide 34: F5 is well positioned to benefit from emerging secular trends
F5 is differentiated and well positioned to benefit from significant emerging secular trends SECULAR TRENDS On-premise applications Most traditional apps are Apps continue rapid pace Application security has continue to grow not being refactored of growth taken on new significance Traditional apps a
Slide 35: F5 is benefiting from strong and sustainable customer trends
F5 is benefiting from strong and sustainable customer trends Enterprise customers’ developers and dev ops teams are using NGINX to insert security earlier 1 in the application life cycle Heightened security concerns and high-profile ransomware attacks are escalating demand for 2 top-notch security a
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Slide 37: Appendix
Appendix 37 | ©2021 F5
Slide 38: GAAP to non-GAAP reconciliation
GAAP to non-GAAP reconciliation Gross Profit Reconciliation ($ in thousands) Q4FY20 Q4FY21 FY20 FY21 GAAP revenue $614,816 $681,997 $2,350,822 $2,603,416 Acquisition-related write-downs of assumed deferred revenue $1,963 $0 $6,824 $1,283 Non-GAAP revenue $616,779 $681,997 $2,357,646 $2,604,699 GAAP
Slide 39: GAAP to non-GAAP reconciliation
GAAP to non-GAAP reconciliation Income from Operations Reconciliation ($ in thousands) Q4FY20 Q4FY21 FY20 FY21 GAAP operating income $98,613 $126,364 $392,267 $394,025 Total adjustments related to revenue $1,963 $0 $6,824 $1,283 Total adjustments related to gross profit $15,729 $17,361 $51,711 $73,7
Slide 40: GAAP to non-GAAP reconciliation
GAAP to non-GAAP reconciliation 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-downs of assu
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