F5, Inc. · NASDAQ:FFIV
F5 — F5 Networks — Merger or Acquisition (January 2021)
30 slides from F5's merger presentation, Jan 7, 2021
Slide 1: F5 to Acquire Volterra
F5 to Acquire Volterra January 7, 2021 All rights reserved. F5, F5 Networks, and the F5 logo are trademarks of F5 Networks, Inc. in the U.S. and in certain other countries. Other F5 trademarks are identified at F5.com. Any other products, services, or company names referenced herein may be trademark
Slide 2: Forward-looking statements
Forward-looking statements This presentation and accompanying remarks contain forward-looking statements including, among other things, statements regarding the completion and timing of the Volterra acquisition, continuing strength and momentum of F5’s and Volterra’s business, past and future financ
Slide 3: Use of non-GAAP
Use of non-GAAP Unless otherwise indicated in the presentation, all financial measures are presented on a non-GAAP basis. Available GAAP measures are being provided in the attached reconciliation table for comparison. All forward-looking non-GAAP measures included in the outlook exclude estimates fo
Slide 4: Q1 FY2021 preliminary results
F5 will report complete Q1 FY 2021 results on January 26, 2021 1. F5 is currently working through the accounting close process for the quarter ended December 31, 2020 and therefore an estimate of GAAP earnings, as well as a reconciliation of revenue, net income and earnings per share on a GAAP to no
Slide 5: F5 + Volterra: Transaction overview
F5 + Volterra: Transaction overview Strategic rationale F5 + Volterra will create the first Edge 2.0 platform for enterprises and service providersEnterprise-grade Edge 2.0 will be security-first and app-driven with unlimited scale Transaction consideration Approximately $440M in cash Approximately
Slide 6: F5 and Volterra at a glance
18K enterprise customers globallyServe 48 of Fortune 50Enable 450 million apps and websites including 70% of the largest websites | ©2020 F5 6 $750M+ app security business with best-in-class suite of solutionsPrimary application security and fraud defense for leading banks, airlines, federal agencie
Slide 7: Transaction benefits for F5
Brings F5’s app security as a service to our 18K enterprise customers globallyAccelerates revenue growth in Horizon 2 and long-termNo impact to Horizon 2 operating margin or EPS growth targetsNo impact to share repurchase plansMaintain ‘Rule-of-40’ commitment Immediately additive to near-term perfor
Slide 8: Apps run the world
Apps run the world 98% of organizations report that applications are essential or critical to their business.1 Products, services or company names referenced herein may be trademarks of their respective owners with no endorsement or affiliation, express or implied1 Source: State of application Servi
Slide 9: Apps use multiple networks, clouds and edges, manually stitched together
Apps use multiple networks, public clouds, and edges, but…they are manually stitched together with great pain CDNs DATA CENTERS PUBLIC CLOUD DEVICES & CLIENTS EDGES (CLOUD, CDN) APP LOGIC APP LOGIC CONTENT APP LOGIC BIG-IP Traditional apps Modern apps DIGITAL EXPERIENCE END-USER
Slide 10: Closed edge platforms increase the pain for enterprises
For enterprises, closed edge platforms increase the pain of building, running, and securing apps Which edge do I develop for? What languages can we maintain? How do I switch CDNs? How do I provide effective security? How do I create consistent security policies across environments? How do I fix netw
Slide 11: Volterra: unlimited global edge capacity
Unlimited global edge capacity combining all public clouds and enterprise data centers Ankur, previously CEO of Contrail Systems (#1 mobile networking platform used in Tier 1 telcos), leads a company of >75% senior-level engineers and scientists VoltMeshtransparently delivering networking and securi
Slide 12: Volterra offers unprecedented edge capabilities for customers
Volterra offers unprecedented edge capabilities for our customers We are excited to work with Volterra to architect an unprecedented edge computing environment across our 5G network. Volterra has demonstrated that it solves critical operational challenges within existing telco cloud service offering
Slide 13: F5 + Volterra: The first Edge 2.0 platform
F5 + VolterraThe first Edge 2.0 platform for enterprises and service providers
Slide 14: Enterprises require a new edge paradigm
Enterprises require a new edge paradigm for their apps Edge 1.0 Edge “1.5” Edge 2.0 CDNSpecific services run on specialized CDN serversFocused on static contentCommodity security, fragmented from appLimited to CDN hardware CDN → Closed edgeEvery service runs on every CDN serverCustom code per edgeCo
Slide 15: F5 + Volterra will create the first Edge 2.0 platform
F5 + Volterra will create the first Edge 2.0 platform, built for enterprises and service providers Our Edge 2.0 platform will be: Security-firstIndustry-leading security instead of commodity security added to a CDN or cloud App-drivenUniversal, “build once, deploy globally” app delivery; software-de
Slide 16: Edge 2.0 will be security-first
Our Edge 2.0 platform will be security-first, not “good enough” commodity security Edge 2.0 Edge “1.5” Edge 1.0 App security features F5 + Volterra + Clouds NewCDNs TraditionalCDNs SaaS security, close to user Multi-cloud security Multi-CDN security Hybrid infrastructure security DDoS protection Adv
Slide 17: Edge 2.0 will be app-driven
Our Edge 2.0 platform will be app-driven, enabling developers to focus on great digital experiences, instead of fighting their tech stack Apps combine services delivered by a multitude of clouds, edges, CDNs, and data centers into a single digital experience Why app-driven?The edge must serve the ne
Slide 18: Apps limited at the edge by CDN server cages
Today’s enterprise apps are limited at the edge by their CDN’s server cagesEdge 2.0 will let apps break out of the cage.
Slide 19: Edge 2.0 will deliver unlimited scale
Our Edge 2.0 platform will deliver unlimited scale, operating across full capacity of AWS + Azure + GCP + data centers vs. a single CDN Able to move workloads between clouds, POPs, and data centers, Edge 2.0 connects enterprise apps to the User Edge for the first time Why unlimited scale?Confinement
Slide 20: Volterra advances F5's Adaptive Applications vision
Volterra advances F5’s Adaptive Applications vision
Slide 21: Edge 2.0 advances our Adaptive Applications vision
Edge 2.0 advances our Adaptive Applications vision CDNs DATA CENTERS PUBLIC CLOUD DEVICES & CLIENTS EDGES (CLOUD, CDN) APP LOGIC APP LOGIC CONTENT APP LOGIC BIG-IP Traditional apps Modern apps DIGITAL EXPERIENCE END-USER CDNs DATA CENTERS PUBLIC CLOUD DEVICES & CLIENTS EDGES (CLOUD, CDN) APP LOGIC A
Slide 22: Edge 2.0 ties together delivery of modern and traditional apps
CDNs DATA CENTERS PUBLIC CLOUD DEVICES & CLIENTS EDGES (CLOUD, CDN) APP LOGIC APP LOGIC CONTENT APP LOGIC Our Edge 2.0 platform will tie together app delivery of modern and traditional apps through the edge BIG-IP Traditional apps Modern apps DIGITAL EXPERIENCE END-USER
Slide 23: Edge 2.0 delivers security and telemetry in every environment
CDNs DEVICES & CLIENTS EDGES (CLOUD, CDN) Our Edge 2.0 platform will transparently deliver security and collect telemetry in every environment through the edge DIGITAL EXPERIENCE END-USER DATA CENTERS PUBLIC CLOUD BIG-IP Traditional apps Modern apps SECURITY +TELEMETRY SECURITY +TELEMETRY SECURITY +
Slide 24: Edge 2.0 connects each component of Adaptive Applications
Our Edge 2.0 platform will connect each component of our Adaptive Applications vision App Security App Insights App Delivery Simplify traditional app delivery for multi-cloud environments Enable modern app delivery at scale Secure every app anywhere Unlock the value of app insights Traditional apps
Slide 25: Deliberate value creation roadmap
We will execute against a deliberate value creation roadmap Bring F5 securityto the edge Reach moreapplications Gain platformbenefits Reach new edge computing customers Integrate F5’s best-in-class app security into Volterra platformImpact: Accelerate F5’s growth in $5B edge security TAM1 Simplify B
Slide 26: Volterra accelerates our total revenue growth
Horizon 2 (FY21-22) Long-Term Targets (circa 2025) Total revenue growth 6% to 7% CAGR 8% to 9% Non-GAAP gross margin ~85% Mid-to-upper 80s% Non-GAAP operating margin FY21: 31% to 32%FY22: 32% to 34% Mid 30s% Non-GAAP EPS / growth Double-digit growth Double-digit growth “Rule of 40” (revenue growth +
Slide 27: Q&A
Q&A
Slide 28: Slide 28
Slide 29: Appendix
Appendix
Slide 30: Non-GAAP adjustments
F5 is currently working through the accounting close process for the quarter ended December 31, 2020 and therefore an estimate of GAAP earnings, as well as a reconciliation of revenue, net income and earnings per share on a GAAP to non-GAAP basis is not yet available. The company expects to provide