Slide 1: Q1FY24 Results
Q1FY24 Results PERIOD ENDING December 31, 2023 Published January 29, 2024
Slide 2: Forward-looking statements
Forward-looking statements This presentation contains forward-looking statements including, among other things, statements regarding F5’s future financial performance including revenue, revenue growth, earnings growth, future customer demand and spending, markets, and the performance and benefits of
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: Business Overview
Business Overview François Locoh-Donou, President & CEO 4 © 2023 F5
Slide 5: GAAP & Non-GAAP results
GAAP & Non-GAAP results GAAP results Non-GAAP results Q1FY24 Q1FY23 Q1FY24 Q1FY23 Revenue $693M $700M Gross profit $556M $545M Gross profit $575M $563M Gross margin 80.3% 77.9% Gross margin 83.1% 80.4% Operating profit $165M $91M Operating profit $246M $185M Operating margin 23.8% 13.0% Operating ma
Slide 6: Q1FY24 performance highlights
Q1FY24 performance highlights $693MTotal Q1FY24 revenue 39% Non-GAAP EPS v. guide of $675 to $695 million growth Y/Y +900bps $3.43 Non-GAAP operating margin Non-GAAP EPS improvement Y/Y v. guide of $2.97 to $3.09 See appendix for GAAP to non-GAAP reconciliation 6 © 2024 F5, INC
Slide 7: This is where customers thought they would be
This is where customers thought they would be... Data Public Center cloud and this is where 9 in 10 7 © 2024 F5, INC customers have ended up
Slide 8: The only company that secures, delivers, and optimizes any app, any API, anywhere
The only company that secures, delivers, and optimizes any app, any API, anywhere. 8 © 2024 F5, INC
Slide 9: Q124 use case examples
Q124 use case examples F5 BIG-IP F5 NGINX Serves traditional apps on-premises, co-located or in cloud environments Serves modern, container-native and microservices-based apps and APIs • BIG-IP’s data plane performance, automation capabilities and • Large enterprises adopting NGINX for cloud and Kub
Slide 10: Q124 use case examples (cont'd)
Q124 use case examples (cont’d) F5 Distributed Cloud Services - WAAP F5 Distributed Cloud Services – API Security Protect apps and APIs deployed across clouds and edge sites Auto discover endpoints mapped to apps, monitor for anomalous behavior • Industry-leading SaaS-based WAF and bot protection, a
Slide 11: Q124 use case examples (cont'd)
Q124 use case examples (cont’d) F5 Distributed Cloud – Multi-Cloud Networking F5’s Converged Portfolio Advantage Securely connect apps between on-premises, multi-cloud, and edge Secure apps & APIs consistently across multiple environments with F5 • F5’s ability to package networking, security, and d
Slide 12: Q1FY24 Results
Q1FY24 Results Frank Pelzer, CFO & EVP 12 © 2023 F5
Slide 13: Revenue mix and year-over-year change
Revenue mix and year-over-year change Revenue mix Year/Year change $800 $700 $703 $703 $707 $693 $700 $600 $168 $132 $174 $191 $170 -1% Total revenue Revenue $ in millions growth $500 $209 $155 $135 $173 $134 $400 $300 -10%Product +7% Global Services revenue revenue $200 $387 growth growth $360 $363
Slide 14: Software revenue mix
Software revenue mix Software revenue mix commentary • 73% $210 F5 provides consumption $191 model flexibility, a strategic $180 $174 $25 $170 advantage over competitors $168 who restrict customer choice. of Q1FY24 total software $22 revenue from subscriptions $150 $38 $46 • Certain customers, inclu
Slide 15: 73% of our Q1FY24 revenue is recurring
73% of our Q1FY24 revenue is recurring 32% 27% 68% 73% Q1FY23 Q1FY24 Recurring Non-recurring Recurring revenue includes term subscriptions, SaaS & managed services, utility-based revenue and the maintenance portion of our global services revenue. 15 © 2024 F5, INC
Slide 16: Revenue contribution by geography
Revenue contribution by geography Y/Y regional revenue growth Q1FY24 16% +8% 18% 18% 17% 18% growth APAC 26% 26% 26% contribution by geo 27% 28% % of revenue +5% growth EMEA 57% 54% 57% 57% 54% -6% growth AMER Q1FY23 Q2FY23 Q3FY23 Q4FY23 Q1FY24 Totals may not add to 100% due to rounding. Americas EM
Slide 17: Customer verticals as a % of product bookings
Customer verticals as a % of product bookings 13% 13% 9% 21% 17% 19% 20% 21% % of total product bookings 19% 17% 67% 72% 62% 66% 64% Q1FY23 Q2FY23 Q3FY23 Q4FY23 Q1FY24 Enterprise Government Service Provider Totals may not add to 100% due to rounding. 17 © 2024 F5, INC
Slide 18: Non-GAAP gross and operating margins
Non-GAAP gross and operating margins Non-GAAP Gross Margin Non-GAAP Operating Margin 90.0% 40.0% 35.5% 33.2% 33.9% 82.5% 82.7% 83.1% % of non-GAAP revenue % of non-GAAP revenue 80.4% 80.4% 80.0% 30.0% 26.5% 27.2% 70.0% 20.0% 60.0% 10.0% Q1FY23 Q2FY23 Q3FY23 Q4FY23 Q1FY24 Q1FY23 Q2FY23 Q3FY23 Q4FY23
Slide 19: Non-GAAP net income and EPS
Non-GAAP net income and EPS Reflects 19.9% Q1FY24 and 21.4% Q1FY23 non-GAAP effective tax rate Non-GAAP Net Income Non-GAAP EPS $250 $4.00 $3.50 $3.43 $209 $205 $194 $3.21 $200 $3.00 $154 $2.47 $2.53 $149 $150 $ in millions $2.00 $100 $1.00 $50 $0 $0.00 Q1FY23 Q2FY23 Q3FY23 Q4FY23 Q1FY24 Q1FY23 Q2FY
Slide 20: Cash flow from operations
Cash flow from operations $200 $190 $165 $165 $158 $150 $141 $ in millions $100 $50 $0 Q1FY23 Q2FY23 Q3FY23 Q4FY23 Q1FY24 20 © 2024 F5, INC
Slide 21: Cash and investments
Cash and investments $1,000 $808 $832 $6 $5 $760 $3 $696 $6 $750 $21 $5 $6 $668 $13 $8 $54 $ in millions $500 $797 $823 $735 $677 $606 $250 $0 Q1FY23 Q2FY23 Q3FY23 Q4FY23 Q1FY24 Cash and cash equivalents Short-term investments Long-term investments 21 © 2024 F5, INC
Slide 22: Deferred revenue
Deferred revenue $2,000 $1,796 $1,791 $1,830 $1,760 $1,775 $1,500 +4% $ in millions $1,000 Q1FY24 Y/Y Growth $500 $0 Q1FY23 Q2FY23 Q3FY23 Q4FY23 Q1FY24 22 © 2024 F5, INC
Slide 23: Consistently delivered on our repurchase commitments
Since committing to return cash to shareholders in FY21, we have consistently delivered on our repurchase commitments Share Repurchases ($ in millions) $600 • We repurchased $150 million in FFIV shares during Q1FY24. $500 $500 $500 • We are committed to using at least 50% of annual free cash flow fo
Slide 24: Business Outlook
Business Outlook 24 © 2023 F5
Slide 25: Our Q2FY24 outlook
Our Q2FY24 outlook Q2FY24 Outlook Total revenue $675 to $695M Non-GAAP gross margin 82% to 83% Non-GAAP operating expenses $347 to $359M Share-based compensation $56 to $58M FY24 effective non-GAAP tax rate 21% to 22% Non-GAAP EPS $2.79 to $2.91 25 © 2024 F5, INC
Slide 26: Raising our FY24 non-GAAP EPS growth expectations
We are raising our FY24 non-GAAP EPS growth expectations given our updated annual tax rate outlook FY24 FY23A Outlook Flat to low-single- Total revenue 4% growth digit decline Non-GAAP gross margin 81.5% 82% to 83% Non-GAAP operating margin 30.2% 33% to 34% Effective non-GAAP tax rate 18.3% 21% to 2
Slide 27: The only company that secures, delivers, and optimizes any app, any API, anywhere
The only company that secures, delivers, and optimizes any app, any API, anywhere. 27 © 2024 F5, INC
Slide 28: Appendix
Appendix 28 © 2023 F5
Slide 29: GAAP to non-GAAP reconciliation
GAAP to non-GAAP reconciliation Gross Profit Reconciliation ($ in thousands) Q1FY23 Q2FY23 Q3FY23 Q4FY23 Q1FY24 GAAP gross profit $545,371 $547,521 $560,959 $566,010 $556,208 Stock-based compensation $7,636 $7,583 $7,297 $7,142 $7,684 Amortization and impairment of purchased intangible assets $9,959
Slide 30: GAAP to non-GAAP reconciliation
GAAP to non-GAAP reconciliation Income from Operations Reconciliation ($ in thousands) Q1FY23 Q2FY23 Q3FY23 Q4FY23 Q1FY24 GAAP operating income $91,212 $106,046 $103,569 $171,741 $164,516 Total adjustments related to gross profit $17,889 $17,766 $18,476 $18,560 $19,093 Total adjustments related to o
Slide 31: 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: Stock-based compensation. Stock-based compensation consists of expense for stock options, restricted stock, and employee stock purchases throu
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