Slide 1: Q2FY21 Results
Q2FY21 Results PERIOD ENDING MARCH 31, 2021 Published April 27, 2021
Slide 2: Forward-looking statements
Forward-looking statements This presentation and associated commentary forward-looking statements including, among other things, statements regarding the continuing strength and momentum of F5’s business, past and future financial performance including revenue, operating targets, earnings and earnin
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 Q2FY20 Q2FY21 Revenue $583.4M $645.3M Gross margin 82.7% 80.1% Operating margin 14.3% 8.3% Net income $61.4M $43.2M Diluted EPS $1.00 $0.70 5 | ©2021 F5
Slide 6: Escalating demand for applications and application growth is driving demand for F5
Escalating demand for applications and application growth is driving demand for F5 Q2FY21 Growth Drivers +20% +17% +4% Software Systems Global Services *GROWTH MEASURES ARE NON-GAAP. SEE APPENDIX FOR GAAP-TO-NON-GAAP RECONCILIATIONS. 6 | ©2021 F5
Slide 7: Q2FY2021 Results
Q2FY2021 Results Frank Pelzer, CFO & EVP 7 | ©2021 F5
Slide 8: Q2FY21 revenue mix
Q2FY21 revenue mix $700 Growth $645 10% $586 $600 $108 $90 +20% Revenue $ in millions $500 +17% $201 $400 $171 $300 $200 +4% $336 $324 $100 $0 Q2FY20* Q2FY21 Global Services Systems Software *Q2FY20 REVENUE IS NON-GAAP. SEE APPENDIX FOR GAAP-TO-NON-GAAP RECONCILIATIONS. TOTALS MAY NOT ADD DUE TO ROU
Slide 9: Growing software revenue from subscriptions
Growing software revenue from subscriptions 27% 21% 79% 73% Q2FY20* Q2FY21 Subscription Perpetual *Q2FY20 REVENUE IS NON-GAAP. SEE APPENDIX FOR GAAP-TO-NON-GAAP RECONCILIATIONS. 9 | ©2021 F5
Slide 10: Q2FY21 revenue contribution by geography
Q2FY21 revenue contribution by geography Revenue growth Non-GAAP 10% $ in millions $ in millions 19% $110 +15% 20% $127 contribution by geo 25% $148 +16% 27% $172 % of revenue 56% $327 +6% 54% $346 Total Total $586 $645 Q2FY20* Q2FY21 North America EMEA APAC *Q2FY20 REVENUE IS NON-GAAP. SEE APPENDIX
Slide 11: Q2FY21 customer verticals as a % of product bookings
Q2FY21 customer verticals as a % of product bookings 16% 16% % of total product bookings 69% 68% 15% 16% Q2FY20 Q2FY21 Service Providers Enterprise Government TOTALS MAY NOT ADD TO 100% DUE TO ROUNDING. 11 | ©2021 F5
Slide 12: Q2FY21 non-GAAP gross and operating margins
Q2FY21 non-GAAP gross and operating margins NON-GAAP GROSS MARGIN NON-GAAP OPERATING MARGIN 100.0% 40.0% Q2FY21 gross margin reflects 84.9% 83.4% As a % of non-GAAP revenue stronger systems contribution, 80.0% 30.3% 29.1% a larger impact from managed services offerings compared to 60.0% the year-ago
Slide 13: Q2FY21 non-GAAP net income and EPS
Q2FY21 non-GAAP net income and EPS NON-GAAP NET INCOME NON-GAAP EPS $2.60 Q2FY21 non-GAAP effective $160.0 $155.1 $2.50 tax rate of 20.2% $2.50 Non-GAAP Net Income $150.0 Non-GAAP EPS in $ $2.40 $ in millions $140.0 $135.9 $2.30 $130.0 $2.23 $120.0 $2.20 $110.0 $2.10 $100.0 $2.00 Q2FY20 Q2FY21 Q2FY2
Slide 14: Q2FY21 cash flow from operations
Q2FY21 cash flow from operations $200 $182 $180 $175 $159 $160 $137 $140 $128 $120 $ in millions $100 $80 $60 $40 $20 $0 Q2FY20 Q3FY20 Q4FY20 Q1FY21 Q2FY21 14 | ©2021 F5
Slide 15: Q2FY21 cash and investments
Q2FY21 cash and investments $1,600 $1,462 $1,400 Q2FY21 cash balance reflects: $1,313 $1,206 • ~$440M cash paid for Volterra $1,200 acquisition $1,026 $ in millions $1,000 • Initiation of $500M accelerated $800 stock repurchase $662 F5 also holds ~$380M in debt $600 associated with Shape $400 acquis
Slide 16: We will take a balanced approach to capital deployment
We will take a balanced approach to capital deployment We are committed to returning capital to shareholders SHARE REPURCHASES ($ IN MILLIONS) • In Q2FY21 we initiated an accelerated share repurchase of $700 $500M. $600 ▪ During Q2FY21, we retired ~$400M of shares, reflecting 2.1 million $600 shares
Slide 17: Business Outlook
Business Outlook 17 | ©2021 F5
Slide 18: Q3FY21 outlook
Q3FY21 outlook PROVIDED APRIL 27, 2021 Q3 FY21 Revenue $620 - $650M Non-GAAP gross margin 84% - 84.5% Non-GAAP operating expense $338 - $352M Non-GAAP diluted EPS $2.36 - $2.54 Non-GAAP effective tax rate ~21% for FY21 Share-based compensation $63 - $65M 18 | ©2021 F5
Slide 19: Business Overview
Business Overview François Locoh-Donou, CEO & President 19 | ©2021 F5
Slide 20: F5 growth drivers in FY2021
F5 growth drivers in FY2021 Software Transformation Application Security Systems Ongoing software and Growing demand for Escalating application growth subscription momentum application security fueling systems demand 20 | ©2021 F5
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Slide 22: Appendix
Appendix 22 | ©2021 F5
Slide 23: GAAP to non-GAAP reconciliation
GAAP to non-GAAP reconciliation Gross Profit Reconciliation ($ in thousands) Q2FY20 Q2FY21 GAAP revenue $583,449 $645,287 Acquisition-related write-downs of assumed deferred revenue $2,191 $0 Non-GAAP revenue $585,640 $645,287 GAAP gross profit $482,211 $516,702 Stock-based compensation $6,434 $7,35
Slide 24: GAAP to non-GAAP reconciliation
GAAP to non-GAAP reconciliation Income from Operations Reconciliation ($ in thousands) Q2FY20 Q2FY21 GAAP operating income $83,698 $53,501 Total adjustments related to revenue $2,191 $0 Total adjustments related to gross profit $12,580 $21,555 Total adjustments related to operating expense $71,969 $
Slide 25: 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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